UUM Repository

Osman, Nazariah

Malaysia Sedia Landasan Kukuh Sidang Kemuncak ASEAN Ke-46

Md Dahlan, Nuarrual Hilal

Undang Undang Lemah Punca Rakyat Kelantan Terus Terdedah Banjir

Integrating Islamic Land Law in the Malaysian Housing Governance: A  Solution to Abandoned Housing Projects

Reformasi Keselamatan Kebakaran Jamin Masa Hadapan Selamat

Abdul Rani, Muhammad Nazrul

Segera Gubal Akta Kualiti Air Tangani Pencemaran Sumber Air

Mohd Suki, Norazah

Hari Raya Lights Hide Grim Debts

Shutterstock.GorondekoffProfessor Dr. Nuarrual Hilal Md DahlanSchool of Law, Universiti Utara MalaysiaCan ASEAN build a sustainable data centre future?Malaysian legal lessons may offer a wake-up callPublished: June 2, 2025 9:35pm EDTSoutheast Asia is embracing a digital revolution. With the meteoric rise of artificial intelligence, e-commerce,and cloud computing, the region is now home to some of the most ambitious data centre developments in theworld.But while digital technology is transforming Southeast Asia’s economy, ASEAN’s legal and regulatory systemsremain stuck in the pre-digital era.This raises a critical question: Can ASEAN truly build a sustainable, resilient data centre industry withoutmodernising its laws?Malaysia: Digital ambition vs outdated lawsMalaysia offers a vivid case in point. In 2024, Malaysia attracted more than US$23.3 billion in data centreinvestments from Microsoft, Google, and Amazon Web Services.These investments are seen as driving Malaysia’s modern digital economy. This new development is set to placeMalaysia firmly in place as Southeast Asia’s tech hub. However, while the infrastructure may be cutting-edge,the laws behind it are far from ready.THE CONVERSATIONTechnology hologram over panorama city view of Kuala Lumpur. KL is the largest tech hub in Malaysia, Asia.The concept of developing coding and high-tech science. Shutterstock/VideoFlowHere where the problems lie:The Conversation Reader Survey 20251. Malaysia’s National Land Code (Revised 2020)–which governs zoning, land use planning, landadministration and registration, was drafted in a time when the concept of data centres didn’t even exist – Thelaw gives state and land authorities greater power than the planning authority over conditions and restrictions.2. The Town and Country Planning Act 1976 (Act 172) gives local planning authorities wide control, evenover the technical professional agencies such as the Department of Environment, Department of Public Works,Department of Irrigation and Drainage and Department of Mineral and Geoscience creating approval bottlenecksand confusion for developers. Bypassing the process can result in fines or demolition.This law needs a revision to better reflect today’s planning priorities and public needs. Today, investors mayencounter regulatory challenges in Johor, as evidenced by the state’s recent rejection of nearly 30% of datacentre applications to conserve water and electricity.3. Environmental Impact Assessments (EIA), as required under the Environmental Quality Act 1974 (Act127), are critical for large-scale developments, including data centres which have potential environmentalimpact. While enforcement is generally consistent, challenges can arise in ensuring compliance across allprojects due to weak oversight and different standards or interpretations from one state to another in Malaysia.4. Data centres must also meet 1974 and 1984 rules on street, drainage, building and fire safety to besustainable and operationally safe. Ongoing commitments to modernise these regulations cater to the evolvingneeds of contemporary infrastructure, public needs and national aspirations.5. The Planning Guidelines for Data Centres introduced in 2024 to address the environmental shortcomings,provide clearer direction on land use, energy, and water requirements– but they remain advisory and are notlegally binding.Worse still, it cannot overcome the country’s dual governance structure, where federal and state authorities oftenwork in silos—especially on administrative matters—due to how powers are divided under the FederalConstitution. The conflicting legal environment has caused uncertainty for investors, bottlenecks for regulatorsand developers, and extra economic costs.For the public, this can mean slower progress in building digital infrastructure, which affects internet speed,access to services, and job opportunities in the tech industry.Similar issues across ASEANOther ASEAN countries face similar problems. Indonesia, Thailand, and the Philippines struggle withfragmented regulations, outdated zoning laws, and weak environmental oversight.This concern is highlighted in the ASEAN Digital Masterplan 2025, which warns that without legal andregulatory reform, ASEAN could fall behind in the global digital race. Similarly, the ASEAN EconomicCommunity Blueprint 2025 calls for predictable, transparent, and harmonised regulations to attract infrastructureinvestments. Yet progress has been glacial.The ASEAN Smart Cities Framework also calls for more sustainable digital infrastructure. It urges memberstates to break down bureaucratic silos by adopting cross-sector governance models.The ASEAN Environmental Rights Framework is starting to promote environmental fairness in infrastructureplanning—including data centres.But these regional policies will only work if member states are fully committed to enforcing them. Without this,they remain aspirational rather than actionable.Aerial view of the construction site for a new Microsoft data centre in Holland. The huge building is locatedalong Highway A7 between greenhouses and the agricultural environment. Shutterstock/AerovistaLuchtfotografieSingapore has enforced sustainability through its Code for Environmental Sustainability of Buildings, adaptingcooling systems to tropical climates.Meanwhile, Abu Dhabi uses the Estidama Pearl Rating System, ensuring high energy and water efficiency in alllarge-scale developments.These examples show that sustainable data centres are possible—but only with clear rules, strong enforcement,and cooperation across all levels of government.A strategic move for ASEANSo, what can ASEAN do?First, ASEAN should align its laws on land administration, planning, environment, and construction to make iteasier for data systems to connect across borders and attract international investment. This would help ASEANmove closer to the goals set in the ASEAN Digital Masterplan 2025 and the ASEAN Economic CommunityBlueprint.Second, countries like Malaysia and Indonesia need better coordination between federal/central, state and localgovernments to accelerate land approvals and give investors more clarity.Third, ASEAN could create shared sustainability standards for data centres, linking them to its land use planningand environmental rights goals and aligning them with global ESG benchmarks.Data centres are fast becoming the beating heart of ASEAN’s digital economy. But this heart cannot besupported by legal frameworks that belong to a bygone era. If ASEAN wants a truly sustainable digital future, itneeds laws that balance growth, environmental concerns, and public interests.If ASEAN learns from Malaysia’s experience, it could become a global model for smart, sustainable digitalinfrastructure. But ignoring these lessons could lead to long-term costs—for its people, investors, and theenvironment.

Can ASEAN Build A Sustainable Data Centre Future? 

Malaysian Legal Lessons May Offer A Wake-Up Call /

Bisakah ASEAN Membangun Masa Depan Pusat Data Yang Berkelanjutan? Pelajaran Dari Malaysia Bisa Jadi Pengingat Keras

Northern University of Malaysia

Not a member yet

Malaysia Sedia Landasan Kukuh Sidang Kemuncak ASEAN Ke-46

Undang Undang Lemah Punca Rakyat Kelantan Terus Terdedah Banjir

Integrating Islamic Land Law in the Malaysian Housing Governance: A Solution to Abandoned Housing Projects

Reformasi Keselamatan Kebakaran Jamin Masa Hadapan Selamat

Segera Gubal Akta Kualiti Air Tangani Pencemaran Sumber Air

Hari Raya Lights Hide Grim Debts

Can ASEAN Build A Sustainable Data Centre Future? Malaysian Legal Lessons May Offer A Wake-Up Call / Bisakah ASEAN Membangun Masa Depan Pusat Data Yang Berkelanjutan? Pelajaran Dari Malaysia Bisa Jadi Pengingat Keras

'Remaja Strawberi' Semakin Bijak Mengurus, Berfikiran Rasional

Malaysia Bersedia Dengan Strategi Di Era Ketidaktentuan

Meriah Aidilfitri Seketika, Perit Hutang Berpanjangan

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