Learn about water policy

Understand the state of water policy in Malaysia and the policy options we have to ensure water security in our country.

Picture of a lone old person standing in a field of crops

What are some requirements to achieve water security?

This section will discuss three requirements for water security: political security, cooperation (between countries and states), and financing.

Political stability

Conflict such as wars can result in less water being available and at lower quality, as well as damaged water infrastructure. With less manpower as well as social and political instability, important services like water and wastewater management may not be able to operate normally.

Cooperation between countries

148 countries have territory in a transboundary river basin. (For context, 193 countries are members of the United Nations.) Therefore, achieving water security for all depends on discussion and coordination between countries to meet their interests. 1 The international cooperation can also support political dialogue on broader issues such as regional economic integration, environmental conservation, and sustainable development.

Research has supported links between human-caused climate change and drought, as well as between climate change, conflict and migration. For example, Syria experienced severe drought in 2007-2010 before the civil war in the country started in 2011. Observations and climate modelling in Syria strongly suggest that climate change made that drought two to three times more likely to happen. 2 A study also supports a link between climate change (more frequent droughts), conflict and migration in 2010-2012, which was a period with significant migration from Syria, Arab Spring countries, and Sub-Saharan countries. 3

In Malaysia’s case, we share several river basins with our neighbours.

  • Singapore: Malaysia has a Water Agreement with Singapore which will expire in 2061. Under the Agreement, Singapore is entitled to use 250 million gallons of raw water per day from the Johor River, and must provide Johor with treated water up to 2% of the volume supplied to Singapore. 4 A study showed that both the frequency and intensity of drought in both Singapore and Johor have increased over time, and suggests that improved water governance could reduce potential political tension due to the more frequent droughts. 5
  • Thailand: Malaysia shares the Golok River basin with Thailand at the eastern end of their common border. The two countries have organised a number of joint projects to develop the river since the Golok River Basin Commission was established in 1979. 6

Cooperation between states

Transboundary basins may not only be a source of conflict between countries, but also between regions of a country. River basins located in Malaysia’s main growth regions - especially Kedah, Perlis, Penang, Selangor, and Malacca - have had water demand that is more than the basins can supply, resulting in a need for water transfers from one river basin to another. An Akademi Sains Malaysia (ASM) report recommended in 2016 that the government implement a National Integrated Water Resources Management Plan (NIWRMP) which would bring water-related stakeholders together on a common platform and help address transboundary issues through cooperation. 7


The processes that provide reliable access to water and sanitation - infrastructure, water services, water-related ecosystem services, and training - all require some amount of investment. The majority of financing for water security initiatives typically comes from the public sector, because investors are reluctant to invest in water-insecure areas, even though these places are often the most in need of investment for development 9 8 .

Making progress towards water security thus needs new investment opportunities and an environment that encourages local entrepreneurs to get involved. Policies that ensure that investments are protected and that provide secure options for long-term financing could also stimulate new and innovative sources of financing, such as increased investment from the private sector, micro-financing schemes, and crowdsourcing.

What is the state of water governance in Malaysia?

In Malaysia, there is an overlap between the federal and state governments in water governance.

  • Since 1957, water policies in Malaysia have been made by individual states on an ad-hoc basis. There are therefore numerous Acts and guidelines on water 10 .
  • The Federal agencies have been overseeing planning, research and development of water resources, while State agencies have been overseeing water supply infrastructure development, including financing, operation and maintenance 11 .

Several studies have highlighted that there is a need to shift from water supply management to water demand management to minimise use of new water sources and meet the increasing water demand. 12 13 14

  • Water supply management focuses on infrastructure improvement to ensure the continuous supply of water (i.e. creating new water sources via new dams or interstate water transfer). Water supply management may not guarantee water security as climate change will continue to impact the water sector 13 .
  • Water demand management aims to increase the efficiency of water use, such as through the adoption of water policies, implementation of rainwater harvesting measures and use of water-saving devices (Khalid, 2018). However, Malaysia’s current low water tariff/tax makes it difficult to implement a water demand management system as it does not encourage efficient water use 13 .

The Water Services Industry Act of 2006 established a national Water Asset Management Company called PAAB (Pengurusan Aset Air Berhad), and a Water Forum (Forum Air) to represent consumers. The National Water Services Commission Act of 2006 established a National Water Services Commission called SPAN (Suruhanjaya Perkhidmatan Air Negara).

The National Water Resources Policy (NWRP) was launched in 2012, focussing on water resources security, water resources sustainability and collaborative governance.

  • Water resources security means ensuring that the available resources can meet demand from both man and nature, by optimising their use and minimising any damaging impacts.
  • Water resources sustainability means that the resources can satisfy both present and future requirements.
  • Collaborative governance means the inclusion of a variety of stakeholders in ensuring water resources security and sustainability 13 .

In 2009, the Ministry of Energy, Green Technology and Water (MEGTW) introduced the National Green Technology Policy (NGTP) which promotes a green building index. Through this policy, the use of rainwater harvesting and other efficient appliances entitled the developers to cash rebates and tax redemption 13 .

In Malaysia’s Second Biennial Update Report to the UNFCCC, rainwater harvesting for commercial buildings and high-cost housing developments is said to be compulsory in several states across Peninsular Malaysia, to reduce consumption of tap water. It also mentions that a policy on cleaner and climate-friendly sewage treatment plants was proposed for development 15 .

What is climate change adaptation planning and how is it relevant to Malaysia?

Climate change adaptation includes actions or planning done to respond to the impacts of climate change which we are currently experiencing, as well as to prepare for future impacts 16 .

The threats that climate change poses to Malaysia has implications for its water management. For example, increased rainfall due to climate change are causing a rise in dam water levels which leads to downstream flooding. Tube wells in Sabah and Sarawak may be vulnerable to saltwater intrusion due to sea level rise in 2030 and 2050 15 .

  • 57 water supply dams have been constructed to ensure continuous water supply during dry seasons in the country. Guidelines and legislation are being developed to ensure the safety of these dams.
  • The National Water Balance Management System (NAWABS) is being implemented to provide a quantitative approach to water savings efforts and flood management, in order to improve reservoir storage and dam security concerns during extreme weather events arising from climate change.
  • Integrated Flood Management (IFM) has been adopted where efficient use of flood plains is adopted to minimise the occurrence of floods. 15

What are nature-based solutions and how are they relevant to Malaysia?

Nature-based solutions are actions to protect, sustainably manage and restore ecosystems or natural infrastructure to address societal challenges. They are based on the concept that ecosystems produce services with benefits to the community such as addressing climate change, food security or natural disasters. For example, conservation, restoration and sustainable management of forests allows them to continue serving as carbon sinks (which means they absorb more carbon than they release). 17

In flood risk management, built infrastructure for flood control such as levees and dams could negatively impact aquatic habitat by affecting the natural river flow and isolating connection to the floodplains. A nature-based solution would include preserving floodplains and reconnecting them to rivers, which would provide flood management benefits and conserve the ecosystem 18 19

Floodplains along a river during normal and flood conditions (Source: Romans, B. (2011), Flooding Creates Floodplains)
Floodplains along a river during normal and flood conditions

Several other examples of natural or nature-based solutions and built infrastructure solutions are:

Examples of natural and built infrastructure that provide similar benefits (Source: WISE-UP)
Examples of natural and built infrastructure that provide similar benefits

Source: IUCN (as part of ‘WISE-UP to Climate’ project).

Some examples of nature-based solutions implemented in Malaysia are:

  • Mangrove conservation in Kertih River, Terengganu
  • Mangroves were replanted to preserve the river ecosystem, and protect coastal terrain and biodiversity. This allowed the locals to continue using the river for livelihood (including fishing, ecotourism, water source) while the trees planted would act as a carbon sink 20 .
  • Constructed wetland for wastewater treatment in Frangipani Resort, Langkawi
  • Wetlands usually consist of a wide range of floating and submerged plants which would treat the water in lakes and rivers. A constructed wetland is a man-made system that imitates the function and structure of natural wetland. Constructed wetlands have been shown to treat wastewater as well as a conventional wastewater treatment system, so they can provide an inexpensive and effective wastewater treatment while also serving as a habitat for animals and plants. Wetlands can also act as a greenhouse gas sink, which would mitigate climate change. 21

What is integrated water resources management and how is it relevant to Malaysia?

Integrated water resources management (IWRM) is a process which promotes the coordinated development and management of water, land and related resources to create a positive impact economically, in an equitable and sustainable manner 22 .

The process involves reallocation of water, allocation of financial resources and implementation of environmental goals which would collectively contribute towards climate change mitigation and adaptation efforts. IWRM steers away from the conventional fragmented and sectoral approaches in water management 7 .

An example of an IWRM project that has been conducted locally is the rehabilitation of lakes in Kelana Jaya Municipal Park.

  • Some of the issues that were faced at the site included polluted ponds, reservoirs and lakes due to tin mining activities. Rapid development caused solid waste, wastewater and storm water overflow to the main lake, which was used for recreation and as a non-drinking water supply. The lake ecosystem was significantly affected due to poor water quality and the loss of wetland plants and animal life.
  • Some of the IWRM actions undertaken included a stakeholder forum which was formed by Friends of Kelana Jaya Park and a steering committee. An awareness programme was introduced in three schools. Communities and local authorities were brought together to implement actions integrating urban and environment planning.
  • As a result, the solid waste and wastewater from storm drains reduced by 60% and the lake water quality improved. This eventually benefitted the lake ecosystem and health of the lakeside communities.

What is integrated river basin management and how is it relevant to Malaysia?

A river basin refers to the land between the start (“source”) and the end (“mouth”) of a river, including all the areas that supply water to the river 23 . The diagram below shows the key features of a river basin:

Characteristics of a drainage basin (Source: BBC)
Characteristics of a drainage basin

Rivers provide water supply for domestic, industrial and agricultural uses and are also a source of food. Rivers also provide habitats, feeding and breeding ground for a wide range of plant and animal species residing in rivers. Human action such as water pollution and deforestation has resulted in a decline in the health of rivers 23 .

As river basins include every piece of land or water which supplies the river with water, the sustainable management of river basins relies on sustainable approaches to agriculture, forestry, land use planning and other uses between mountain to coastal regions. Therefore, river basins could benefit from integrated river basin management (IRBM). IRBM means the coordinated management and use of land, water and other natural resources within a river basin, to ensure their sustainability and productivity 24 .

In Malaysia, there are 191 river basins, 144 of which are prone to flooding 15 . River basins located in the main growth regions especially in Kedah, Perlis, Penang, Selangor, and Malacca have had water demands exceeding their respective carrying capacities requiring inter-basin water transfers. However, as of November 2014, IRBM had only been implemented in 12 river basins in Malaysia 7 .

The IRBM approach has been implemented in Kinabatangan River basin to resolve the needs of different sectors and conflicts between them. Some of the challenges faced there included protection of water resources and their quality, prevention of water shortage, flood mitigation, and sustaining the livelihood of riverine communities. Collaboration between the state Department of Irrigation and Drainage (DID), Sabah’s water authority and WWF was needed to develop the tools needed to resolve these basin management issues 24 .

Impacts of climate change, such as the increase in frequency of flood and droughts, are expected to negatively affect the functioning of river basins; IRBM and close monitoring could help to sustain the productivity of the basins and the health of river ecosystems as the climate changes.

What is limiting the implementation of IBRM?

  • Lack of uniform water law: The IWRM and IRBM approaches are currently entailed under various laws, such as the Environmental Quality, Forestry, Geological Survey and Fisheries Acts. There is also a lack of consistency between the states’ water laws, so a holistic water law could help to implement the IWRM and IRBM principles in the country.
  • Lack of institutional capacity to implement IRBM
  • Lack of financial support to states, to implement IRBM 7

What is water demand management and how is it relevant to Malaysia?

Several studies have highlighted that there is a need to shift to water demand management to minimise use of new water sources, to meet increasing water demand and to ensure long term water availability. 25 13 14 Water demand management aims to increase the efficiency of water use, such as through the adoption of water policies, implementation of rainwater harvesting measures, increased tariffs (particularly for high water users) and use of water-saving devices such as efficient showers and toilets 13 .

Water management in Malaysia is mainly based on a water supply management system which focuses on infrastructure improvement to ensure a continuous supply of water (i.e. creating new water sources via new dams or interstate water transfer). However, water supply management may not guarantee water security as climate change continues to impact the water sector 13 .

Some of the benefits of implementing water demand management include:

  • Allows more water to be retained in the environment, to sustain the health of ecosystems
  • Reduces capital expenditure for large infrastructure projects
  • Reduces cost for water treatment and distribution as well as for sewage treatment due to reduced water usage
  • Reduces energy use as less water will need to be treated, heated and pumped through the system
  • Minimises impacts on Orang Asli communities from the reduced need for new large-scale dam developments due to reduced water usage 14

What is technological innovation in the water sector and how is it relevant to Malaysia?

Research indicates that climate change will influence the quantity and quality of water resources 26 . If well-implemented, technological innovation may help reduce the impacts of climate change on the quality and quantity of the water supply.

Non-revenue water reduction

For urban areas in Malaysia, reducing non-revenue water (NRW) would help conserve water 15 . Non-revenue water refers to water that has been produced and lost before reaching the customer.

In 2019, 33% of water produced in Malaysia was found to be non-revenue water (33% NRW rate). Japan has successfully achieved a 6% NRW rate with the use of digital visualisation techniques to identify potential sources of water loss (Mokhtar & Ahmed, 2009) 27

Water recycling

Another technology that can help reduce fresh water consumption is water recycling technology, which has been implemented in Singapore. It has been found to generate water that is free of contaminants, microorganisms and solids, which can therefore be used as drinkable water supply 28 .

The Tun Razak Exchange (TRX) development in Kuala Lumpur has been equipped with an on-site water recycling facility to generate non-potable recycled water, which can be used for toilet flushing, irrigation and cooling. The development aims to recycle 100% of its wastewater and to reduce fresh water demand by over 50%. Veolia uses a smart technology method to help TRX monitor and stabilise water quality, prevent leakages and reduce expenditure on water bills. 29

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