“What if Social and Environmental Impact Assessments were used not only to address regulatory concerns, but as a problem-solving opportunity, to work out differences among the relevant stakeholders?”

Forest City is a luxury real estate mega-project by the Chinese firm, Country Garden Holdings Ltd. The $100 billion project that seeks to house 700,000 people and capitalize on linkages between Malaysia and Singapore. It involves nearly 14 square kilometers of reclaimed land spread across four islands in the Straits of Johor, the narrow waterway that separates Malaysia from Singapore. The area is home to the largest seagrass bed in peninsular Malaysia and planned for environmental protection. Land around the project is dominated by small-scale agriculture, fishing villages, large mangrove reserves, and an industrial cluster at the Port of Tanjung Pelepas.

 

 

 

Having pursued a handful of international ventures, Country Gardens approached real estate development as it would in China, only to run into local resistance in Malaysia and Singapore. As a result, Forest City has suffered a number of financial and physical setbacks that have pitted its eco-friendly branding effort against harmful impacts on the livelihoods of Malaysian fishermen and threats to local ecosystems.

Construction began in January 2014. Pressure from Singapore and local protests led the Malaysia Department of the Environment to stop all work on the project. Country Garden was required to complete a Detailed Environmental Impact Assessment (DEIA) and substantially redesign and scale down its project. The overall development area was reduced by about 30%, cutting the project’s gross development value by 25%. In public meetings, local stakeholders harangued Country Garden. Subsequent negotiations have resulted in still further project modifications and the fact that the project is aimed primarily at the mainland Chinese market has become an issue in Malaysia’s national politics.

The developer’s initial strategy, its exchanges with local and international stakeholders, and its subsequent responses illustrate the complexity of launching a mega-project in a foreign country.