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Johor has positioned itself at the centre of the global digital economy, emerging as Southeast Asia's leading destination for data-centre investment. While this has attracted billions in investment, it has also raised questions about water, electricity, land use, and who ultimately benefits. With the state election approaching, should voters be asking harder questions about the trade-offs? On this episode of #ConsiderThis Melisa Idris speaks with Charles Santiago, Director of research and advocacy organisation, Monitoring Sustainability of Globalisation, Co-Chair of the ASEAN Parliamentarians for Human Rights & Former Chairperson the National Water Service Commission (SPAN).
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00:10Hello and good evening. I'm Melissa Idris. Welcome to Consider This. This is the show
00:15where we want you to consider and then reconsider what you know of the news of the day.
00:19Johor has positioned itself at the centre of the global digital economy. It's emerged
00:25as Southeast Asia's leading destination for data centre investment. While this has attracted
00:31billions in terms of investment, it has also raised questions about water, electricity,
00:38land use and who ultimately benefits. With the state elections approaching, should voters
00:44be asking harder questions about the trade-offs? Joining me on the show now is Charles Santiago,
00:50Director of the Research and Advocacy Organisation Monitoring Sustainability of Globalisation.
00:56He's also the co-chair of the ASEAN Parliamentarians for Human Rights and if you remember, he's
01:01also the former chairperson of the National Water Service Commission, better known as SPAN.
01:07Charles, thank you so much for joining me on the show today. So as I mentioned in my introduction,
01:11Johor is Southeast Asia's fastest growing data centre hub. I'm curious to know where you stand
01:16on this. Charles, what do you make of the data centre investment boom in Johor and how do you make
01:23sense of
01:24what is hype versus what are legitimate concerns?
01:28Well, first, thanks for this kind invitation and talking about what I think is a very important
01:34question on data centres and I wish this becomes an issue for discussion while Johor is experiencing its
01:42state elections. So people should actually listen to some of the things that are coming on from your
01:48segment and consider this as a way to jumpstart a discussion in Johor. I think talking about the hype,
01:57the hype or the push for building to develop a data centre in Johor has been taking place since five
02:05years ago.
02:06And this is largely coming from Singapore, especially after the government of Singapore imposed restrictions
02:13on new data centres. And that is because of high cost of energy together with high cost of land.
02:22So a lot of companies were raising concerns about the future development in Singapore of data centres,
02:29and therefore there was a decision to move to Johor Boru. And Johor Boru is not that far away though.
02:36So the demand in Johor Boru is actually spilled over from Singapore. Again, back to your concern about the hype,
02:45when we listen to our leaders, our ministers talk, we're always talking in terms of foreign direct investment,
02:52the artificial intelligence growth, the expansion of the digital economy,
02:57and, you know, making Johor a regional hub, regional technology hub. I think all of this is welcome.
03:05All of this is welcome. But I think there is an important element, a series of important elements
03:11that we need to consider as we look at Johor and Malaysia in a larger perspective on the issue of
03:18FDI, AI growth,
03:19and data centres. The key issue that comes up is the issue of governance and infrastructure readiness.
03:27The growth has moved, has become larger, has moved faster than the governance and infrastructure readiness.
03:37The core issue is not whether data centres are inherently good or bad, it is whether Johor can sustain
03:44the scale of development without placing excessive pressure on water resources, locking Malaysia to use
03:53more fossil fuels and also land and sustainability of the environment. I think these four issues are really
04:01quite important and already you can see somewhat of a very minimal backlash from local communities.
04:07Okay. Charles, I'm just going to jump in here and interrupt you. When you say it is about infrastructure
04:14readiness, how do we know if Johor is infrastructure ready? How transparent is the government with this
04:23information? How much does the public need to know about projected water and energy consumption before
04:28projects are approved and whether or not infrastructure is in fact ready to sustain the scale?
04:34Okay. I think there are two ways of answering the question. The first is whether
04:40the plan or the committed amount of water is being given to data centres. And as you can see from
04:49paper, news cuttings, statements from a variety of leaders from the state and the federal, you begin to
04:55see that there's a scaling down of the commitment made especially on the availability of water.
05:01infrastructure. And therefore, the infrastructure in my view is not ready.
05:07And the infrastructure actually is coming, it's a top-down relationship. And I think at the core level,
05:16at the most important level between the digital ministry and MITI, they are not really thought,
05:22they have not thought through very carefully on the infrastructure on the ground. Because the approving
05:30authority is actually the local council. So the local council has to ensure that there are sufficient
05:35amounts of water.
05:38Just a quick interruption, Charles. When you talk about these different layers of government,
05:44how do we think that through? Because is it state or federal powers? I'm thinking land is largely a
05:50state matter, but energy, water regulation, national investment policies, infrastructure,
05:54wouldn't that be under federal agencies? No, land and water comes under state.
05:59Okay. It's energy that comes at the federal level.
06:03So who is doing the policy planning for data centres?
06:06So basically, it appears to me, it appears to me from the various statements that are coming out,
06:13the guys at the MITI level as well as the digital level, they give the go-ahead. They say,
06:18okay, we can actually accommodate it. But the person who is actually, or the agency that is giving the
06:22approval is at the local council. So the local council has to secure a guarantee from SPAN, for
06:30example, or in this case, Ren Hill or Sharekat IA Joho, whether there is sufficient amounts of water.
06:37Now, going forward, you begin to see the utilisation of the data centre increasing.
06:42And the more you increase, the more water, the more energy will be required. Now, the challenge is,
06:50do you have sufficient amounts of water, when it goes 50%, where the data centre is already 50%,
06:57and what are the challenges? So this is something I think the government of Joho has to be transparent
07:03about, because this is a fundamental right. Access to water is a fundamental right, and people depend on
07:10it. And already you can see lots of complaints about water disruptions in Joho. And of course,
07:18I see that it is possible that the water disruptions are happening because of pipe leakages or pipe
07:26breakage, all of that is granted. But I'm sure some element of that is coming from data centres.
07:31Now, so this is where transparency is important. And the consultation with local communities is very,
07:38very crucial. And as you would have seen in the newspaper cuttings, both in Malaysia, as well as
07:45foreign newspapers are already recording protests in Joho, where local communities are coming out and
07:51saying, we don't have water and we think it's coming from the data centre. It's because of the data centres.
07:56Number two, there's too much of noise, because data centres are very close to housing estates. So there's so much
08:03of noise.
08:04So all of this is becoming, slowly becoming an issue. It hasn't hit the top of the agenda yet,
08:12but we can already see the elements of a problem emerging and the pushback from local communities.
08:19Right. Charles, why don't you think that data centres has become a bigger election issue? Why hasn't it
08:25moved up to the top of the agenda? I'm wondering whether you think voters heading into the Joho election should
08:31be asking the candidates, their candidates, where they stand on data centre future approvals or how to
08:39deal with some of the trade-offs of data centres operating their backyard.
08:43I completely agree with you that this is an issue that will have massive impact at a very personal level
08:53to households and individuals in Joho. But the hype is important. It is sold as a foreign direct investment.
09:03It is sold as a data centres create jobs, for example, as a place where jobs are created.
09:11But actually, if you look at data centres, and I visited some of them, both Malaysia as well outside,
09:18you know, you only employ double digit, you know, less than 80. I went to Singapore and this company is
09:26a
09:26co-location and they only employ 18 workers. And those 18 workers are from Ireland, they are from India,
09:37they are from Australia and so on so forth. So it is not the thousands of people that are being
09:42employed.
09:43And also the big numbers that has been thrown on FDI is largely for the service, the technology that is
09:52coming there.
09:53And the service are not made in Malaysia, they are made overseas. So they are brought in. So the big
09:59numbers are big.
10:00And of course, you know, you have to put up a building that will cost you some money, there will
10:04be spillover impact on the local economy.
10:06But once the building is put up after one year or less than one year, there is no new jobs.
10:13And the new jobs will be taken over by,
10:16you know, 17 people, 15 people, and so on, so forth, because it's highly automated. It is absolutely automated.
10:24I visited one in Singapore where they only have seven people.
10:27Did you say 18 people just now? One eight?
10:31Yeah, and I actually, when I was leaving the building, I forgot to ask, does the 18 include the Bangladeshi
10:39security guards?
10:41Okay, so here's my question about data centres heading into the Johor state elections. What is it you think that
10:50voters ought to be
10:53meaningfully scrutinising about data centres and their candidates' positions on it? What should they be thinking about
10:59as this hopefully becomes an issue in the elections?
11:03I think we have to be fair. I think the state government together, the federal government, are interested in developing
11:08Johor as a regional technological hub, which is a fair thing. And then there's a plan, there's a plan to
11:14do it.
11:14But the question to be asked is, is there sufficient support for that? Meaning, do you have sufficient amounts of
11:20water,
11:20sufficient amounts of energy? And, you know, as you know, data centres are guzzlers though.
11:27They just take in so much of water. And that will be a challenge given climate change.
11:34And also, the El Nino that is supposed to be coming to us is already here right now. And El
11:40Nino has got this
11:41very crazy phenomenon though. Either it rains or it just shines. And right now, we are going through this
11:48very crazy transition. I mean, it is, you sit in an air-con car, it is 42 degrees.
11:56That's hot. But can you imagine, in the air-con car, it's 42. What about outside? It's very hot.
12:02So what happens is, the more, people also will consume more water. And don't forget, data centres is not the
12:10only
12:12activity, economic activity that requires water. There are also other industries in the country.
12:18Agriculture also needs water. People need water to cook. I mean, everything requires water.
12:23So therefore, the over-dependent, the over-support data centres, I suspect, will have a major impact
12:35on the daily lives of people. And then you will begin to see the water disruption increasing. And
12:43that's for so long, you can say, you know, pipe burst, pipe burst, pipe burst, pipe burst. But actually,
12:47there is a problem with water. So I think, and in fact, the deputy prime minister, who is also
12:53prime minister for Petra said, at this time, there is no issue of water shortage. There is enough water,
12:58which is a good form of assurance. But can you say that in the next three years? Can you say
13:03that for
13:03the next two years though? Because as I said, these are guzzlers. And the more you use, the more capacity
13:15usage in the data centres will require more water. And if you have a three months of
13:24dry period, which no rain, then you're in trouble. And we're also using drinking water. We are not using
13:32reclaimed water. This is another problem. We should use reclaimed water for data centres, like what Singapore
13:39is doing. But unfortunately, we in Malaysia are using portable drinking water.
13:44Why? Why are we using portable drinking water and not drinking water?
13:47That's the whole point. I'm saying we are doing this very haphazardly, very poorly thought out.
13:52Okay. All right. Something to consider. Thank you so much, Charles, for being on the show with me
13:56today. I appreciate your insights. Charles Santiago there. We're going to take a quick break here on
14:00Consider This. We'll be back with more. Stay tuned to Consider This.
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