KUALA LUMPUR, Malaysia (MNTV) — As intensifying China-U.S. competition reshapes global supply chains, Malaysia is finding it increasingly difficult to remain on the sidelines, reports The Diplomat.
A recent rare earths agreement between Australia’s Lynas Corporation and the U.S. Department of Defense has sparked domestic backlash, highlighting how middle powers like Malaysia are being drawn into strategic – and potentially military-linked economic networks.
Earlier, a coalition of 57 Malaysian civil society organizations issued a joint memorandum opposing the approximately $96 million rare earths supply deal between Lynas and the U.S. Department of Defense.
The groups warned that the agreement could link rare earth processing operations in Malaysia directly to foreign military supply chains, and urged Prime Minister Anwar Ibrahim to intervene.
In their April 14 memorandum, the coalition argued that recent U.S. military actions have been associated with alleged violations of international law. Given that rare earth oxides are essential inputs in advanced weapons systems, they warned that allowing Lynas to process materials at its Gebeng facility in the state of Pahang for supply to the U.S. defense sector would effectively make Malaysia part of that military supply chain.
In an interview, Meenakshi Raman, president of Sahabat Alam Malaysia (Friends of the Earth Malaysia), said the coalition’s primary concern is that the agreement directly links rare earth processing on Malaysian soil to foreign military supply chains, thereby implicating Malaysia in U.S. military operations.
She noted that there are credible allegations that some U.S. military engagements involve serious violations of international humanitarian law and international human rights law. Linking Malaysia to such operations, she argued, would fundamentally contradict the country’s longstanding commitment to peace and its consistent opposition to the use of force in international relations.
“Allowing such arrangements to proceed would undermine Malaysia’s credibility as an independent voice in multilateral forums and could weaken its principled positions on conflicts involving Palestine, Iran, and elsewhere,” Raman said.
The coalition also stressed that economic activity must be grounded in ethics and legality. “Any agreement that could lend support to war crimes, genocide, or crimes against humanity cannot be justified on the basis of economic gain. Such arrangements are unconscionable and must be condemned,” Raman added.
She further emphasized that adherence to international humanitarian and human rights law is fundamental to maintaining Malaysia’s non-aligned and neutral foreign policy stance. “Clear legal and regulatory safeguards are needed to ensure that companies operating in Malaysia are not complicit in international wrongdoing, particularly in supply chains linked to military or conflict contexts,” she said.
She also pointed to Malaysia’s obligations under international law, including the Articles on Responsibility of States for Internationally Wrongful Acts (ARSIWA), adopted by the United Nations General Assembly in 2001.
“Malaysia must ensure that all actors operating within its jurisdiction respect and uphold international law, including international humanitarian law and international human rights law. Under Article 16 of ARSIWA, Malaysia must not knowingly aid or assist another state in committing acts that would be unlawful if carried out by Malaysia itself, including war crimes, crimes against humanity, or genocide,” she said.