Penang govt has no power to approve reclamation, court rules

PUTRAJAYA: The Court of Appeal has found that the state planning authorities acted beyond their powers in approving the reclamation for the Penang South Reclamation project.

A three-member bench, comprising Federal Court Justice Azimah Omar and Court of Appeal Justices Wong Kian Kheong and Ismail Brahim, held that state planning authorities can only approve projects within areas under their jurisdiction.

Wong, in delivering the court’s written grounds of judgment, released today, said: “We are of the view that the first and/or second respondents had no power to issue the planning permission (for the reclamation)”.

The first and second respondents are the director of the Penang town and country planning department and the state planning committee, which granted the planning permission on Aug 21, 2023.

The other respondents are the Penang government, SRS Consortium Sdn Bhd, and Silicon Island Development Sdn Bhd.

The court made this point in dismissing an appeal by seven fishermen and two environmental groups seeking to quash the planning permission granted for the Penang South Reclamation project.

Although the appeal was dismissed – on grounds that the judicial review application was filed out of time on Dec 29, 2023, instead of by the Dec 1, 2023 deadline – the court addressed a novel legal question on whether a local planning authority could approve land reclamation in the territorial waters off southern Penang island.

Territorial seas are under federal jurisdiction

The court said the Territorial Sea Act 2012 was the applicable law because it specifically governed the territorial sea, unlike the broader town planning legislation.

Wong noted that the proposed reclamation site lay in the territorial sea off Penang island’s southern coast. Citing the Territorial Sea Act, he said sovereignty over the territorial sea, including its seabed and subsoil, was vested in the Yang di-Pertuan Agong.

As such, the area earmarked for reclamation did not fall within the state’s jurisdiction and, until the reclamation was completed, the seabed and subsoil remained under the federal government’s control.

The applicants had contended, among others, that there was a failure to comply with town planning laws, errors in project referrals, the absence of fresh environmental assessments, and neglect of the project’s impact on the environment and fishermen’s livelihoods.

The project was first proposed as a 1,821ha (4,500 acres) reclamation involving three man-made islands off southern Penang. It was later scaled down in 2023 to 930ha (2,300 acres), with only Island A, now known as Silicon Island, to be built, while Islands B and C were shelved.

The court made no order as to costs, saying the appeal raised matters of public importance.

Applicants to review decision

Separately, Mageswari Sangaralingam of Sahabat Alam Malaysia, one of the applicants, said the group was “deeply disappointed” that the appeal was dismissed on a technicality.

“We are confused by the court decision and will study it with our lawyers before deciding our next step,” she told FMT.