This article first appeared in The Edge Malaysia Weekly on February 16, 2026 - February 22, 2026

When RimbaWatch filed a greenwashing complaint against a fossil fuel company with two Malaysian ministries last September, both claimed the matter was beyond their jurisdiction.

The Ministry of Domestic Trade and Cost of Living (KPDN) said the matter fell under the Ministry of Natural Resources and Environmental Sustainability (NRES), while NRES said it belonged with KPDN.

The environmental watchdog took both ministries to court, filing Malaysia’s first climate litigation case of its kind in December.

RimbaWatch is asking the court to decide whether KPDN, NRES, or both are legally obligated to investigate environmental marketing claims related to petroleum products.

The case could set a precedent for how Malaysia handles green claims, forcing the government to clarify regulatory responsibilities and establish clearer enforcement mechanisms.

A ruling in RimbaWatch’s favour would give consumers clear legal recourse to challenge misleading green claims and establish which government agency is responsible for enforcement, say interviewees.

Even if the court finds that the current legal framework grants neither KPDN nor NRES regulatory authority over such green claims, a legal gap would be identified.

KPDN, which is responsible for consumer protection, should have acted because false “carbon neutral” claims harm consumers, says Kuberan Hansrajh Kumaresan, head of legal advocacy at RimbaWatch. He says consumers pay premiums for products with no environmental benefit, and they are deprived of informed choice when seeking genuinely sustainable products.

NRES, which is responsible for environmental protection, should have investigated because carbon neutrality is inherently an environmental claim, he says.

When approached for comment, NRES responded: “NRES respects the right of any party to file legal action. NRES will wait and see the progress of the case first while studying this matter.”

KPDN did not respond to requests for comment.

The case also marks the first time the International Court of Justice’s climate change advisory opinion has been cited in a Malaysian court. The opinion established that states have a stringent duty of due diligence to protect the climate.

RimbaWatch argues that the ministries’ refusal to investigate the greenwashing complaint is a failure of that vigilance.

Kiu Jia Yaw, partner of Kiu & Co, a sustainable development law firm, says both ministries should have investigated within their respective mandates rather than deflecting responsibility.

“By saying ‘this is not our case, it’s for the other ministry’, and then both simultaneously telling the complainant the same thing, it shows an absolute lack of responsibility. They don’t even know it’s their official duty to take on the case,” he says.

The ministerial responses raise serious questions about government capacity, Kiu adds. “Can we trust that our ministries have the ability to discern which products to certify and incentivise, which ones to give tax deductions under green financing schemes?” he asks.

Kiu adds that the government, which has signalled serious climate and decarbonisation ambitions, must possess two fundamental capabilities.

One is the ability to discern which products are genuinely carbon neutral or sustainable, and secondly, the capacity to shape the market so that industry players can distinguish between more and less sustainable products.

“If Malaysia is serious about decarbonising its market, then it’s very important to ensure that the market players cannot muddy the waters by falsely describing their products,” says Kiu.

Malaysia has no greenwashing-specific law, but there are existing laws that can be used to address it.

The Consumer Protection Act 1999 prohibits misleading advertisements, while the Environmental Quality Act 1974 gives the minister of natural resources and environmental sustainability the power to control labels describing products as environmentally friendly.

KPDN has the power to investigate under the Consumer Protection Act, which prohibits misleading conduct and advertisements in sections 9 and 10, says Kuberan.

“There’s no reason why misleading advertisements relating to the environment are outside the jurisdiction of this act. Those types of advertisements are a subspecies of the general prohibition in the act. We don’t think it’s outside the jurisdiction in the way KPDN seems to suggest it is,” he says.

NRES has authority under the Environmental Quality Act. Section 30A gives the ministry a duty to control labels describing products as environmentally friendly, and the act explicitly includes climate in its definition of “environment”, says Kuberan.

“This carbon neutral designation is a label of that kind — a description of a product as environmentally friendly that the ministry needs to regulate and investigate accordingly, if necessary,” he says.

Crucially, Kiu says existing laws are sufficient to pursue businesses that misrepresent sustainability claims in their products or marketing. The idea that no applicable law exists is wrong, he says.

Laws don’t become obsolete just because new problems emerge, but what matters is how they are implemented, he points out.

“You shouldn’t lie about the description of your products. You shouldn’t over-exaggerate your claims about the benefits of your product. These remain the same if the lie relates to human health, the same if it relates to planetary health. Why should it be different? It should not be different, because you said something to influence the purchasing decision,” he says.

However, these laws lack specific definitions for key terms like “green claims”, “carbon neutral”, or “carbon offsets”, says Indrani Thuraisingham, vice-president and legal adviser of the Federation of Malaysian Consumers Associations. This leaves enforcement officers without clear guidance on how to identify and prosecute greenwashing.

In this regard, she hopes for the development of guidelines or regulations under the Consumer Protection Act.

Any guidelines that are developed should incorporate three principles, says Indrani. First, companies must clearly state why a product is green. Second, a product cannot be called green based on one stage of its production. The entire process from manufacturing through disposal must be evaluated. Sustainability claims must also be independently verified.

Kuberan says a guideline similar to Singapore’s guide on quality-related claims, issued by the Competition and Consumer Commission of Singapore, would benefit Malaysia. This would give enforcement officers clarity on how to handle greenwashing complaints, and also give businesses clarity on how to make environmental claims accurately and transparently, he adds.

At the centre of RimbaWatch’s complaint — according to court documents sighted by ESG — is Shell Malaysia. The watchdog alleges that Shell’s carbon neutral claims on several of its Helix engine oil products are false and misleading.

The products in question include Shell Helix Ultra 5W-30, Shell Helix Protect 0W-30, Shell Helix Power 5W-40 and Shell Helix Power 0W-40, all under the Helix engine oil series with a “carbon neutral” claim on its packaging, according to court documents.

RimbaWatch’s Kuberan says the carbon neutral claim is misleading because there is insufficient publicly available information to substantiate it. Critical information is missing from both product packaging and the company website such as the source of the carbon offsets used, the offset amount, and the methodology under which the offset is certified.

The only available information is that the offsets are “nature-based”.

“We say it’s misleading because carbon dioxide pollution through the burning of fossil fuels is something that’s scientifically certain. But the capacity of forests or other natural things to store this carbon over the coming decades is very uncertain and it’s very difficult to calculate accurately,” says Kuberan.

When approached for comment, Shell Malaysia responded in an email: “Shell is committed to clear advertising that complies with applicable regulatory requirements. We take particular care with communications related to the energy transition to ensure they are supported by research. We continue to comply with prevailing laws and regulations.”

When companies indulge in greenwashing, consumers pay premium prices for products that don’t deliver on their environmental promises, says Indrani. Most consumers lack the technical competency to determine whether a product is genuinely green and simply trust labels claiming “sustainable” or “eco-friendly”.

Consumers in Malaysia are unlikely to file greenwashing complaints, she says. They tend to become vigilant only after learning that a product has been removed from shelves or that a company has been held accountable abroad.

What’s next for Malaysia’ first-of-its-kind climate litigation case?

The case will have its first hearing on March 31. At this leave stage the judge will decide if the case is strong enough to proceed to a full hearing, where a final decision will be made on whether KPDN and NRES have jurisdiction to investigate greenwashing complaints.

A successful ruling would close the regulatory gap, says Kuberan. The court would confirm the ministries have power to investigate greenwashing complaints, compelling the government to act on future cases.

It could also reshape corporate behaviour. Companies would face real risk of having to remove misleading advertisements and the public embarrassment that follows.

“Our primary goal is to establish a system that works where there’s a clear rulebook for dealing with greenwashing claims and there’s an active referee. By taking legal action against the ministries, we are compelling the court to define the government’s statutory obligation and moving forward, compelling the government to fulfil that statutory obligation to prevent greenwashing,” says Kuberan.

“This has a multiplier effect because a successful outcome in this case wouldn’t just address one company’s advertisement, it would establish a precedent requiring the government to investigate all similar misleading claims which creates a deterrent for the entire market.”

But even a loss would serve a purpose, he says. The court’s reasoning would be published as a document explaining why the government has no duty to investigate greenwashing, thereby revealing the contours of the regulatory gap and guiding necessary legislative amendments.

“Win or lose, we are beginning the process of translating international climate law into Malaysian jurisprudence. We’re testing what arguments resonate with the judiciary and where the resistance lies. And so it provides a roadmap for the next case, because legal evolution can only happen to a series of cases. You have to build on precedent in order to advance a certain position,” says Kuberan.

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