Environmental Governance In Transition: Evaluating Stakeholder Participation In Terengganu’s Coastal Development

Environmental Governance in Transition: Evaluating Stakeholder Participation in Terengganu’s Coastal Development

Zainuddin Zakaria, Nur Rahmas Mohd Saman, Mohd Ariff Kamaludin^*

Faculty of Business and Management, University Technology MARA, UiTM Terengganu, 23000 Dungun, Terengganu Malaysia

*Corresponding author

DOI: https://dx.doi.org/10.47772/IJRISS.2025.906000189

Received: 03 June 2025; Accepted: 06 June 2025; Published: 07 July 2025

ABSTRACT

Coastal development in Malaysia increasingly pits economic growth against environmental sustainability and social equity, with Terengganu emerging as a critical case study of these tensions. This study examines stakeholder engagement processes in Terengganu’s coastal governance, focusing on how power imbalances, institutional weaknesses, and competing priorities shape environmental decision-making. Through qualitative interviews and focus groups with government officials, private developers, NGOs, and local community leaders (n=20), the research reveals that despite participatory mandates, decision-making remains dominated by state and corporate actors, marginalizing vulnerable groups such as small-scale fishers and indigenous communities. NGOs play a watchdog role but face limited enforcement power, while developers prioritize short-term economic gains over long-term ecological resilience. The findings support two key hypotheses: (1) greater stakeholder inclusivity leads to more sustainable outcomes, and (2) power asymmetries systematically hinder equitable participation. Drawing parallels with governance innovations in Malaysia’s Halal supply chains, where certification standards and accountability mechanisms have enhanced compliance, this study proposes policy reforms to strengthen participatory frameworks. Recommendations include establishing independent oversight bodies, institutionalizing benefit-sharing mechanisms, and integrating traditional ecological knowledge into planning processes. The study contributes to global debates on environmental governance by demonstrating how top-down development models exacerbate social-ecological conflicts while offering pathways for more inclusive and adaptive coastal management. Future research should explore digital tools (e.g., AI, blockchain) for enhancing transparency and the potential for scaling these reforms across Southeast Asia’s rapidly developing coastal zones.

Keywords : Stakeholder Engagement, Coastal Governance, Environmental Justice, Participatory Decision-Making, Sustainable Development

INTRODUCTION

Background to the Research

Environmental protection has emerged as a pressing issue in Malaysia, where rapid industrialization and urbanization increasingly encroach upon fragile ecosystems, particularly in coastal zones. These regions, which host vital marine biodiversity and support the livelihoods of fishing communities, face unprecedented threats from large-scale development projects, including land reclamation, port expansions, and tourism infrastructure (Goh & Chou, 2020). Terengganu, a state renowned for its pristine beaches, mangrove forests, and vibrant coral reefs, exemplifies this tension between economic progress and ecological preservation. The state’s strategic location along the South China Sea has made it a focal point for both tourism-driven development and industrial growth, particularly in oil and gas sectors (Mustafa et al., 2021). However, these activities have raised significant environmental concerns, including habitat destruction, coastal erosion, and declining fish stocks, which directly impact local communities dependent on marine resources (Tan et al., 2022).

The Malaysian government has introduced various policies to mitigate environmental degradation, such as the National Policy on Biological Diversity (2016-2025) and the Environmental Quality Act 1974. However, enforcement remains inconsistent, and stakeholder engagement, particularly involving marginalized groups, is often superficial (Aziz et al., 2023). While developers and government agencies prioritize economic gains, local communities and environmental NGOs frequently find themselves excluded from meaningful participation in decision-making processes (Hasan & Ismail, 2021). This exclusion exacerbates conflicts, as seen in disputes over projects like the Kuala Nerus land reclamation, where insufficient consultation led to protests and legal challenges (Yusoff et al., 2022).

Effective stakeholder engagement is not merely a procedural formality but a cornerstone of sustainable governance. Research demonstrates that inclusive decision-making leads to more equitable outcomes, enhances policy legitimacy, and reduces implementation resistance (Reed, 2008). In Terengganu’s context, where competing interests between developers, policymakers, and local communities are stark, a structured approach to stakeholder engagement could help reconcile economic ambitions with environmental and social well-being (Ansell & Gash, 2008). This study seeks to explore how participatory governance mechanisms can be strengthened to ensure that development in Terengganu’s coastal zones is both ecologically sustainable and socially just.

Problem Statement

Despite Malaysia’s progressive environmental policies, including the *National Policy on Biological Diversity (2016-2025)* and the Environmental Quality Act 1974, a persistent disconnect exists between legislative intentions and on-the-ground implementation, particularly in coastal development projects (Aziz et al., 2023). Terengganu, a state celebrated for its ecological richness, has become a microcosm of this tension, where large-scale infrastructure projects, such as land reclamation in Kuala Nerus, port expansions in Kemaman, and resort developments along Redang Island, have proceeded with insufficient stakeholder consultation (Yusoff et al., 2022). The consequences are multifaceted: environmental degradation, including mangrove deforestation and coral reef destruction, threatens marine biodiversity (Tan et al., 2022); declining fish stocks undermine small-scale fishers’ livelihoods (Hasan & Ismail, 2021); and marginalized communities, often excluded from decision-making, bear the brunt of ecological and economic disruptions (Mustafa et al., 2021).

The root of these challenges lies in governance gaps. While Malaysia’s policies advocate participatory planning, in practice, stakeholder engagement is frequently reduced to tokenistic public hearings or opaque bureaucratic processes that favor developers and government agencies over local communities (Goh & Chou, 2020). For instance, in the case of the Setiu Wetlands development, environmental impact assessments (EIAs) were criticized for lacking meaningful community input, leading to legal disputes and delayed projects (Abdullah et al., 2023). Such conflicts reveal systemic issues: power imbalances between stakeholders, weak enforcement of participatory mandates, and a prioritization of short-term economic gains over long-term sustainability (Reed, 2008).

This study seeks to address these gaps by critically examining how stakeholder engagement mechanisms in Terengganu’s coastal governance can be restructured to foster more inclusive, transparent, and effective decision-making. Key questions include: Why do existing participatory frameworks fail to prevent conflicts? How can marginalized groups, such as indigenous communities and small-scale fishers, gain meaningful influence in development planning? And what policy reforms could bridge the divide between top-down governance and grassroots environmental stewardship? By investigating these issues, the research aims to contribute practical insights for improving environmental governance not only in Terengganu but also in other rapidly developing coastal regions facing similar challenges.

LITERATURE REVIEW

Stakeholder Engagement in Environmental Governance

Stakeholder engagement has emerged as a fundamental pillar of participatory environmental governance, serving as a critical mechanism for incorporating diverse perspectives into policy decisions (Reed, 2008). At its core, this process recognizes that environmental management is not merely a technical exercise but a socio-political endeavor requiring the inclusion of all affected parties, from government agencies and private developers to local communities and civil society organizations (Newig & Fritsch, 2009). The theoretical foundation of stakeholder engagement can be traced back to Arnstein’s (1969) seminal “ladder of participation,” which delineates varying degrees of public involvement, ranging from mere tokenism to genuine citizen power. When implemented effectively, inclusive engagement fosters transparency, builds trust in institutions, and enhances the legitimacy of environmental policies (Beierle & Cayford, 2002). Moreover, research demonstrates that participatory approaches lead to better compliance with environmental regulations, as stakeholders who feel heard are more likely to support and adhere to management decisions (Koontz & Thomas, 2006).

However, the practical application of stakeholder engagement often falls short of these ideals. One persistent challenge is the inherent power asymmetry between different stakeholder groups (Few et al., 2007). In many cases, economically and politically powerful actors, such as government bodies and corporate developers, dominate decision-making processes, while marginalized communities, indigenous groups, and small-scale resource users are relegated to symbolic roles (Larson & Lach, 2008). This dynamic is particularly evident in developing regions, where limited access to information, financial resources, and legal representation further disenfranchises vulnerable populations (Reed et al., 2018). Additionally, engagement processes frequently suffer from “consultation fatigue,” where stakeholders become disillusioned by repetitive, superficial participation opportunities that yield no tangible influence over outcomes (Connelly et al., 2006).

The quality of stakeholder engagement is also undermined by institutional weaknesses, including inconsistent enforcement of participatory mandates and a lack of clear mechanisms for integrating public input into final decisions (Stringer et al., 2006). For example, while environmental impact assessments (EIAs) theoretically require public consultation, in practice these processes are often treated as bureaucratic checkboxes rather than meaningful opportunities for dialogue (Baker & McLelland, 2003). Furthermore, the absence of long-term engagement strategies means that many initiatives fail to sustain stakeholder involvement beyond the planning stages, leading to implementation failures and conflicts (Innes & Booher, 2004).

Despite these challenges, successful models of stakeholder engagement demonstrate its transformative potential. Collaborative governance approaches, such as co-management arrangements in fisheries and community-based forest management, have shown that equitable power-sharing can lead to more sustainable and socially just outcomes (Berkes, 2009). Similarly, the use of deliberative democracy tools, including citizen juries and participatory budgeting, has proven effective in leveling the playing field between stakeholders (Dryzek, 2000). These examples underscore that when engagement processes are properly designed, resourced, and institutionalized, they can reconcile competing interests and foster adaptive, context-sensitive environmental governance (Emerson et al., 2012).

Coastal Development and Environmental Conflicts in Malaysia

Malaysia’s coastal zones have become flashpoints for intensifying conflicts between economic development and environmental sustainability, with rapid industrialization and tourism expansion placing unprecedented pressure on fragile marine ecosystems (Goh & Chou, 2020). These conflicts are particularly acute in states like Terengganu, where large-scale projects, including land reclamation, port expansions, and resort developments, have frequently proceeded without adequate environmental safeguards or meaningful community consultation (Mustafa et al., 2021). The consequences are stark: mangrove deforestation, which has occurred at an estimated rate of 1.2% annually in Peninsular Malaysia, has not only reduced biodiversity but also removed critical natural barriers against coastal erosion and storm surges (Selvam et al., 2022). Similarly, the degradation of seagrass beds and coral reefs, often due to sedimentation from dredging activities, has disrupted fish breeding grounds, leading to declining catches that threaten the livelihoods of traditional fishing communities (Tan et al., 2023).

The Kuala Nerus land reclamation project exemplifies these tensions. Spanning over 1,000 hectares, this development was intended to boost Terengganu’s economic growth through new commercial and residential spaces (Yusoff et al., 2022). However, environmentalists and local fishers raised alarms about its impacts, including the loss of fishing grounds, disruption of turtle nesting sites, and increased vulnerability to flooding in adjacent areas (Abdullah et al., 2023). While the project underwent formal environmental impact assessment (EIA) processes, critics argue that consultations were perfunctory, with limited avenues for affected communities to voice concerns or propose alternatives (Hasan & Ismail, 2021). Such cases reflect a broader pattern in Malaysia, where EIAs, though legally mandated, are often criticized as rubber-stamp exercises that prioritize project approval over rigorous environmental or social due diligence (Goh et al., 2021).

Underlying these conflicts are systemic governance challenges. First, Malaysia’s federal-state division of environmental responsibilities creates coordination gaps, with state governments frequently prioritizing short-term economic gains over long-term sustainability (Aziz et al., 2023). Second, enforcement of environmental regulations remains inconsistent, with limited monitoring of approved projects and weak penalties for non-compliance (Tan et al., 2022). Third, and perhaps most critically, marginalized stakeholders, particularly small-scale fishers and indigenous communities, often lack the political influence or technical capacity to effectively challenge development plans (Mustafa et al., 2021). This power imbalance is exacerbated by the absence of legally binding mechanisms to ensure that public feedback translates into actual policy changes (Reed et al., 2020).

However, alternative models of coastal governance are emerging. In Setiu Wetlands, for instance, a coalition of NGOs, academics, and local communities successfully advocated for the area’s designation as a state park, demonstrating how grassroots mobilization can influence policy (Ibrahim et al., 2023). Similarly, community-based mangrove restoration initiatives in Marang District have shown that involving locals as stewards, rather than passive observers, can yield both ecological and socioeconomic benefits (Ismail et al., 2022). These cases suggest that reconciling development and conservation requires not just stronger regulations, but fundamentally rethinking governance structures to empower local stakeholders in decision-making processes (Berkes, 2021).

Theoretical Perspectives on Stakeholder Engagement

Understanding stakeholder engagement in environmental governance requires grounding in key theoretical frameworks that explain power dynamics, decision-making processes, and equity considerations. Three particularly relevant theories, Stakeholder Theory, Collaborative Governance, and Environmental Justice, provide complementary lenses for analyzing participatory environmental management in Terengganu’s coastal development context.

Stakeholder Theory, pioneered by Freeman (1984), fundamentally challenges traditional top-down governance models by asserting that organizations, including governments and corporations, must account for the interests of all parties affected by their decisions. In environmental governance, this means recognizing that coastal development impacts multiple stakeholders asymmetrically: while developers and state agencies may prioritize economic growth, local communities and environmental NGOs often bear the ecological and social costs (Mitchell et al., 1997). The theory’s emphasis on balancing interests rather than privileging shareholders (e.g., profit-driven developers) aligns with sustainable development principles, yet critics note its implementation often falters when power disparities enable “stakeholder management” (instrumental engagement) rather than genuine “stakeholder democracy” (empowering marginalized voices) (Reed et al., 2009). In Terengganu, for instance, fishers excluded from Kuala Nerus reclamation discussions exemplify how weak operationalization of stakeholder theory can exacerbate inequities (Yusoff et al., 2022).

Collaborative Governance (Ansell & Gash, 2008) addresses these limitations by prescribing structured mechanisms for inclusive decision-making. The theory posits that effective environmental governance requires deliberative dialogue, trust-building, and shared ownership of outcomes among stakeholders with divergent interests. Its “collaborative loop” framework emphasizes iterative communication, where initial conflicts, such as those between Terengganu’s tourism developers and conservationists, are mediated through transparent negotiations and adaptive compromises (Emerson et al., 2012). Case studies demonstrate that collaborative governance succeeds when preconditions like institutional support (e.g., legal mandates for participation) and facilitative leadership exist (Ulibarri et al., 2020). However, challenges arise when power imbalances persist; for example, Malaysia’s federal-state governance structure often sidelines community voices in favor of state economic agendas (Aziz et al., 2023).

Environmental Justice (Schlosberg, 2013) critiques both preceding theories for inadequately addressing systemic inequities. Expanding beyond distributional justice (fair allocation of environmental harms), the framework highlights procedural justice (inclusive participation) and recognition justice (respect for marginalized knowledge systems). In Terengganu, indigenous Orang Asli fishing communities’ exclusion from coastal planning, despite their traditional ecological knowledge, illustrates violations of these principles (Hasan & Ismail, 2021). Environmental justice scholars argue that stakeholder engagement must actively dismantle structural barriers (e.g., language gaps in EIA documents, bureaucratic hurdles to legal recourse) that perpetuate exclusion (Walker, 2012). Applied to Malaysia, this demands reforms like culturally appropriate consultation protocols and community-led monitoring of approved projects (Tan et al., 2023).

Integrating these theories reveals tensions and synergies: while stakeholder theory identifies who should be engaged, collaborative governance outlines how, and environmental justice interrogates whether processes rectify or reproduce inequities. For Terengganu, this triad suggests that effective coastal governance requires:

• Legally binding mechanisms to enforce balanced stakeholder representation (Freeman, 1984);
• Iterative dialogue platforms to co-create solutions (Ansell & Gash, 2008); and
• Targeted empowerment of marginalized groups to redress historical inequities (Schlosberg, 2013).

Theoretical and Conceptual Framework

Theoretical Framework

This study is anchored in the integration of Stakeholder Theory (Freeman, 1984) and Collaborative Governance (Ansell & Gash, 2008), two complementary theoretical lenses that together provide a robust foundation for analyzing the complexities of environmental decision-making in Terengganu’s coastal governance. Stakeholder Theory offers a critical perspective on who should be involved in governance processes, emphasizing that sustainable outcomes require the recognition and balancing of diverse interests, ranging from government agencies and private developers to local communities and environmental NGOs (Freeman et al., 2010). In the context of Terengganu, where rapid coastal development has often sidelined marginalized groups such as small-scale fishers and indigenous communities, this theory helps illuminate the power asymmetries that shape whose voices are prioritized in policy decisions (Hasan & Ismail, 2021). For instance, while developers and state actors may dominate planning processes due to their economic and political clout, Stakeholder Theory demands accountability to all affected parties, including those with less formal power but significant ecological and cultural stakes (Mitchell et al., 1997).

However, identifying stakeholders is only the first step; the how of engagement is equally critical. This is where Collaborative Governance (Ansell & Gash, 2008) provides essential insights, focusing on the processes that enable meaningful participation and collective problem-solving. The theory’s “collaborative loop” framework highlights the importance of iterative dialogue, trust-building, and shared decision-making, elements often missing in top-down governance models (Emerson et al., 2012). In Terengganu, for example, conflicts over projects like the Kuala Nerus reclamation reveal how fragmented consultations, conducted as one-off public hearings rather than sustained dialogues, fail to build the mutual understanding needed for durable solutions (Yusoff et al., 2022). Collaborative Governance thus underscores the need for institutionalized platforms where stakeholders can negotiate trade-offs, such as balancing economic growth with mangrove conservation, in a transparent and adaptive manner (Ulibarri et al., 2020).

Together, these theories address both the structural and procedural dimensions of environmental governance. Stakeholder Theory ensures that all relevant actors are “at the table,” while Collaborative Governance provides a roadmap for how their interactions can lead to equitable and effective outcomes. This dual framework is particularly relevant in Terengganu, where the tension between development and conservation demands governance models that are both inclusive and action-oriented. By applying these lenses, the study seeks to answer key questions: How do power imbalances manifest in stakeholder interactions? What institutional conditions foster or hinder collaborative decision-making? And how can governance frameworks be redesigned to amplify marginalized voices while delivering tangible environmental benefits?

Conceptual Framework

Building upon the theoretical foundations of Stakeholder Theory and Collaborative Governance, this study’s conceptual framework systematically examines the relationships between three interconnected variable clusters that shape environmental decision-making in Terengganu’s coastal zone (see Figure 1). The framework adopts a systems perspective that recognizes the dynamic interplay between actors, processes, and outcomes in environmental governance (Ostrom, 2009).

The first variable cluster, Stakeholder Roles, categorizes key actors into four distinct but overlapping groups: (1) Government entities including state planning agencies and environmental regulators; (2) Private Sector actors such as developers and tourism operators; (3) NGOs encompassing environmental organizations and research institutions; and (4) Local Communities including fisherfolk, indigenous groups, and coastal residents (Reed et al., 2009). Each group brings different forms of capital to decision-making processes – government wields regulatory authority, private sector controls financial resources, NGOs contribute technical expertise, and local communities possess place-based knowledge (Berkes, 2007). The framework particularly examines how power differentials between these groups manifest in Terengganu’s context, where government-business alliances frequently marginalize community voices (Hasan et al., 2021).

Engagement Mechanisms form the second variable cluster, representing the institutional channels through which stakeholders interact. The framework analyzes three critical mechanisms: (1) Public Consultations as mandated by Environmental Impact Assessment (EIA) procedures; (2) Legal Frameworks including environmental laws and participatory governance policies; and (3) Conflict Resolution processes for addressing disputes (Arnstein, 1969; Dietz & Stern, 2008). In Terengganu, these mechanisms often function suboptimally – consultations frequently occur too late in planning processes, legal frameworks lack enforcement provisions, and conflicts escalate due to absent mediation structures (Goh & Chou, 2020). The framework assesses how strengthening these mechanisms could transform tokenistic participation into meaningful co-management (Carlsson & Berkes, 2005).

Environmental Outcomes, the third variable cluster, evaluates decision-making effectiveness through three dimensions: (1) Policy Effectiveness measured by implementation rates and compliance; (2) Ecological Impact assessed through biodiversity indicators and ecosystem health; and (3) Social Equity examining benefit distribution and vulnerability reduction (Lockwood, 2010). The framework hypothesizes feedback loops whereby negative outcomes (e.g., fishery decline from reclamation projects) trigger stakeholder mobilization, potentially leading to improved engagement mechanisms (Olsson et al., 2004).

The framework’s schematic representation (Figure 1) visualizes these relationships as an iterative cycle where stakeholder roles influence engagement mechanisms, which in turn shape environmental outcomes, with feedback effects modifying subsequent interactions. This conceptualization builds on adaptive governance literature that emphasizes learning and adjustment in social-ecological systems (Folke et al., 2005). Applied to Terengganu, the framework helps diagnose why certain development projects generate conflict while others achieve sustainability, offering pathways for institutional reform.

Below are the clear visualization of the conceptual framework for the study on stakeholder engagement in Terengganu’s coastal governance

Key Components:

Input Variables (Left Side of Diagram)

• Stakeholder Roles (4 groups):
• Government (Regulators/Planners)
• Private Sector (Developers/Investors)
• NGOs (Advocacy Groups)
• Local Communities (Fisherfolk/Indigenous)

Process Variables (Center)

• Engagement Mechanisms:
• Public Consultations (EIAs)
• Legal Frameworks (Policies/Laws)
• Conflict Resolution (Mediation/Appeals)

Output Variables (Right Side)

• Environmental Outcomes:
• Policy Effectiveness
• Ecological Impact
• Social Equity

Contextual Factors (Surrounding Box)

• Political Economy
• Ecological Vulnerability
• Cultural Norms

Feedback Loops (Curved Arrows)

• From Outcomes back to Stakeholder Roles
• From Outcomes back to Engagement Mechanisms

The diagram visually demonstrates:

• How stakeholder roles influence engagement mechanisms
• How mechanisms shape environmental outcomes
• How outcomes feedback to modify future engagement
• How contextual factors moderate all relationships

 Research Questions, Objectives, and Hypotheses

This section establishes the study’s guiding inquiries, aims, and testable assumptions, ensuring a structured investigation into stakeholder engagement in Terengganu’s coastal governance.

 Research Questions

Three central questions drive this research:

How do stakeholder engagement processes influence environmental decision-making in Terengganu’s coastal projects?
This question probes whether participatory approaches lead to more ecologically sound and socially equitable outcomes, or if they merely legitimize pre-determined agendas (Reed, 2008). Terengganu’s contentious projects, like the Kuala Nerus reclamation, serve as critical case studies (Yusoff et al., 2022).

What are the key challenges in achieving inclusive and effective stakeholder participation?
Here, the focus shifts to systemic barriers—such as power imbalances, bureaucratic inertia, and limited community capacity—that undermine participatory ideals (Few et al., 2007).

How can governance frameworks be improved to enhance environmental protection?
This question seeks actionable reforms, drawing from successful models of co-management and adaptive governance (Berkes, 2009).

Research Objectives

Aligned with the questions, the study pursues three objectives:

To analyze stakeholder roles and interactions, mapping how government, businesses, NGOs, and communities negotiate competing interests (Freeman, 1984).

To identify engagement barriers, particularly institutional weaknesses and socio-political inequities (Arnstein, 1969).

To propose policy recommendations, advocating for legally binding participation mechanisms and conflict-resolution platforms (Ansell & Gash, 2008).

Hypotheses

Two hypotheses ground the analysis in testable claims:

• H1: Greater stakeholder inclusivity leads to more sustainable decisions.
  Supported by evidence that diverse input improves policy legitimacy and compliance (Lockwood, 2010).
• H2: Power asymmetries hinder equitable participation.
  Reflects observed marginalization of fishers and indigenous groups in Malaysian coastal planning (Hasan et al., 2021).

Justification for the Research

This study addresses critical gaps in both scholarly and practical domains of environmental governance. While stakeholder engagement is widely advocated in sustainability literature (Reed, 2008), empirical studies from Southeast Asia particularly Malaysia’s rapidly developing coastal states like Terengganu, remain scarce (Goh & Chou, 2020). By focusing on Terengganu’s contested coastal projects, this research enriches theoretical debates about participatory governance with context-specific evidence, challenging assumptions about stakeholder inclusivity that often derive from Western contexts (Ansell & Gash, 2008).

Practically, the timing is pivotal: Terengganu faces escalating conflicts between blue economy ambitions and ecological limits (Mustafa et al., 2021). The study’s findings will equip policymakers with evidence to reform engagement processes for instance, by advocating for legally mandated community representation in Environmental Impact Assessments (EIAs), a recurring weakness in Malaysian practice (Aziz et al., 2023). For NGOs and activists, the analysis of power asymmetries provides a toolkit to challenge tokenistic consultations, while private developers may leverage insights to preempt conflicts through earlier, more transparent dialogue (Hasan et al., 2021).

Ultimately, the research transcends academic exercise by offering actionable pathways to reconcile development and sustainability in coastal zones—a urgency underscored by Terengganu’s shrinking fisheries and eroding livelihoods (Tan et al., 2023).

RESEARCH METHODOLOGY

Research Design

This study adopts a qualitative case study approach, an ideal methodology for exploring complex, real-world phenomena within their socio-political contexts (Yin, 2018). By focusing on Terengganu’s coastal development projects as bounded cases, the research captures the nuanced interplay between stakeholder dynamics, governance structures, and environmental outcomes. The case study design is particularly suited to this investigation because it allows for an in-depth examination of “how” and “why” questions specifically, how engagement processes function (or fail) in practice, and why certain participatory approaches yield more sustainable results than others (Stake, 1995). This approach aligns with similar studies on coastal governance in Southeast Asia (Goh & Chou, 2020), while providing localized insights specific to Terengganu’s unique ecological and cultural landscape.

 Participants and Sampling

The study engages 20 key stakeholders, strategically selected through purposive sampling to represent the four primary actor groups involved in coastal governance:

• Government officials (5 participants from agencies like the Department of Environment and Terengganu State Planning Unit);
• Private developers (5 participants from firms involved in coastal infrastructure and tourism projects);
• NGO representatives (5 participants from environmental and community advocacy organizations);
• Local community leaders (5 participants, including fisherfolk and indigenous representatives).

This sampling strategy ensures information-rich cases that reflect the full spectrum of perspectives, from policy-makers to those most directly impacted by development decisions (Patton, 2002). The inclusion criteria prioritize individuals with: (1) direct involvement in coastal project decision-making, (2) at least five years of experience in their respective sectors, and (3) willingness to critically discuss both successes and failures in stakeholder engagement. While the sample size may appear modest, it enables deep, qualitative exploration a methodological strength when studying complex power dynamics (Creswell & Poth, 2018).

Data Collection

Three complementary methods triangulate data for enhanced validity:

Semi-structured interviews (60-90 minutes each): Conducted face-to-face or via secure video platforms, these interviews explore:

• Perceptions of existing engagement mechanisms (e.g., “How meaningful are current EIA consultations?”);
• Experiences of conflict or collaboration (“Can you describe a case where stakeholder input changed a project?”);
• Recommendations for improvement (“What would make participation more equitable?”).
• An interview guide ensures consistency while allowing flexibility to probe emergent themes (Brinkmann & Kvale, 2015).

Document analysis: Policy reports, EIA documents, and meeting minutes from 2015-2023 are scrutinized to:

• Identify gaps between participatory rhetoric and practice;
• Trace how stakeholder inputs are (or aren’t) incorporated into final decisions (Bowen, 2009).

Focus group discussions (2 sessions with 5 participants each): These deliberative forums mimic real-world negotiation settings, revealing how stakeholders interact when confronting trade-offs (e.g., “How should Terengganu balance port expansion with fishery protection?”). Sessions are audio-recorded with consent and transcribed verbatim (Krueger & Casey, 2015).

Data Analysis

Thematic analysis (Braun & Clarke, 2006) is employed to identify patterns across datasets:

• Familiarization: Repeated reading of transcripts and notes to immerse in the data.
• Initial coding: Using NVivo software to tag key concepts (e.g., “tokenism,” “power imbalance”).
• Theme development: Grouping codes into broader themes (e.g., “barriers to participation”).
• Review and refinement: Ensuring themes accurately reflect the dataset through peer debriefing.
• Interpretation: Contextualizing findings within Stakeholder Theory and Collaborative Governance frameworks.

To enhance rigor, the study incorporates:

• Member checking: Sharing preliminary findings with participants for validation (Lincoln & Guba, 1985);
• Inter-coder reliability: A second researcher codes 20% of data to minimize bias (O’Connor & Joffe, 2020).

This methodology not only captures what stakeholders say but also reveals underlying power structures shaping Terengganu’s coastal governance, a critical lens for proposing actionable reforms.

Delimitations and Key Assumptions

Every research study operates within boundaries and makes certain suppositions to ensure feasibility and focus. This section transparently outlines the delimitations (conscious scope limitations) and key assumptions (necessary premises) that shape the study’s design and interpretation of findings.

Delimitations: Defining the Boundaries

The study focuses specifically on coastal development projects in Terengganu between 2015 and 2024, a period marked by accelerated economic initiatives such as the East Coast Rail Link (ECRL) and large-scale tourism developments (Mustafa et al., 2021). This temporal scope captures recent policy shifts, including Malaysia’s adoption of the Sustainable Development Goals (SDGs), while excluding older projects where stakeholder engagement frameworks were less formalized. Geographically, the research concentrates on Terengganu’s coastline, excluding inland environmental governance issues, though some terrestrial impacts (e.g., upstream pollution affecting marine ecosystems) are acknowledged (Tan et al., 2023). The selection of 20 participants, while sufficient for qualitative depth, means findings may not fully represent all sub-groups (e.g., women or youth in fishing communities), a limitation mitigated by purposive sampling to include diverse voices (Creswell & Poth, 2018).

Key Assumptions: Foundational Premises

• The study operates under several methodological and contextual assumptions:
• Stakeholder honesty: It assumes participants provide truthful responses during interviews and focus groups, though social desirability bias (e.g., officials downplaying conflicts) is possible. To address this, data is triangulated with documentary evidence (Bowen, 2009).
• Governance stability: The analysis assumes no major disruptions (e.g., political regime changes) that would radically alter stakeholder dynamics during fieldwork. This is reasonable given Malaysia’s recent political continuity, though unexpected shifts would require methodological adaptation (Yin, 2018).
• Representative cases: The selected projects (e.g., Kuala Nerus reclamation) are assumed to typify broader challenges in Malaysian coastal governance, an assertion supported by prior studies (Goh & Chou, 2020).

These delimitations and assumptions do not undermine the study’s validity but instead clarify its context-specific contributions. By explicitly stating these parameters, the research invites future studies to test its transferability to other regions or timeframes (Lincoln & Guba, 1985).

Data Analysis and Discussion

Preliminary findings from interviews and focus groups reveal critical tensions in Terengganu’s coastal governance, highlighting systemic imbalances in stakeholder influence, enforcement challenges, and competing priorities between economic and ecological sustainability. Below is a synthesis of key themes, supported by participant responses from all four stakeholder groups (G = Government, P = Private Developers, N = NGOs, L = Local Community Leaders), followed by an analysis of their implications.

Theme 1: Government Dominance in Decision-Making Marginalizes Local Communities

The data suggests that while participatory frameworks exist in policy, top-down decision-making remains entrenched, sidelining community voices in critical development approvals.

• G1 (State Planning Officer): “We conduct public hearings as required by law, but ultimately, development plans align with state economic visions. Not all suggestions can be accommodated.”
• G2 (Environmental Agency): “Communities often lack technical understanding of EIAs. We must simplify reports, but decisions can’t wait indefinitely for consensus.”
• L1 (Fisherman’s Association Leader): “They call us for meetings after projects are approved. Our objections? Filed away. Last year, dredging destroyed our crab breeding grounds—no one listened.”
• L2 (Indigenous Representative): “Our customary land rights are ignored. When we protest, they label us ‘anti-development.'”

This aligns with critiques of performative participation (Arnstein, 1969), where consultations serve as bureaucratic checkboxes rather than genuine dialogue. Government respondents acknowledge procedural compliance but reveal a paternalistic stance, while community leaders describe consultation fatigue (Few et al., 2007). The power asymmetry mirrors findings in other Global South coastal zones (Goh & Chou, 2020), where state-driven economic agendas override local ecological knowledge.

Theme 2: NGOs as Watchdogs with Limited Enforcement Power

NGOs emerge as critical accountability actors but face structural barriers to influencing outcomes.

• N1 (Marine Conservation NGO): “We document violations—illegal sand mining, mangrove clearing—but enforcement is weak. Fines are lower than profit margins.”
• N2 (Community Advocacy Group): “We helped communities sue over the Kuala Nerus reclamation. The court case drags on while dredging continues.”
• P1 (Property Developer): “NGOs delay projects with lawsuits. We comply with laws, but their demands are unrealistic—no development means no jobs.”
• G3 (Local Council): “NGOs exaggerate impacts. Their data lacks ‘balance.'”

NGOs operate within a “governance gap” (Berkes, 2007), where monitoring capacity outpaces legal authority. Their reliance on litigation and media campaigns reflects the absence of institutionalized co-management platforms (Ansell & Gash, 2008). Developers’ dismissiveness underscores a recurring tension between profit timelines and ecological safeguards (Mustafa et al., 2021).

Theme 3: Developers Prioritize Economic Gains Over Ecological Concerns

Private sector participants openly prioritize ROI (Return on Investment), while acknowledging community and NGO pushback.

• P2 (Tourism Resort CEO): “Our investors expect returns. We plant mangroves as ‘offsets,’ but seagrass loss? That’s harder to mitigate.”
• P3 (Port Developer): “If we followed every NGO’s demand, ports wouldn’t get built. Malaysia needs trade to compete.”
• L3 (Village Head): “They offer jobs during construction, then hire outsiders. Our fishermen lose income, get no compensation.”
• N3 (Environmental Lawyer): “Developers exploit loopholes—like ‘phased EIAs’ to hide cumulative impacts.”

The profit-conservation dichotomy reflects global patterns where blue growth narratives justify ecological trade-offs (Barbesgaard, 2018). While CSR (Corporate Social Responsibility) initiatives like mangrove planting exist, they often represent greenwashing (Tan et al., 2023), failing to address systemic habitat fragmentation.

Focus Group Discussion Excerpt

Topic: Balancing Development and Conservation in Setiu Wetlands

• Moderator: “How can Setiu’s new tourism zone proceed without harming fisheries?”
• P4 (Developer): “High-end resorts attract wealthier tourists—less crowding, more revenue for conservation fees.”
• L4 (Fisherwoman): “Where will we moor boats? Your ‘eco-resorts’ already block access to our best fishing spots!”
• N4 (Wetlands NGO): “We proposed buffer zones, but the draft masterplan ignores them.”
• G4 (Tourism Ministry): “We’ll form a committee to address access issues—but the project timeline won’t change.”

This exchange typifies asymmetrical negotiation, where communities and NGOs react to pre-set plans rather than co-design alternatives. The government’s proposed committee mirrors tokenistic conflict resolution (Arnstein, 1969), lacking binding authority.

CONCLUSION

This study set out to examine how stakeholder engagement processes influence environmental decision-making in Terengganu’s coastal development projects, with the aim of identifying barriers to inclusive participation and proposing pathways for more equitable governance. The findings reveal a persistent gap between policy rhetoric and practice, where government-led economic agendas dominate decision-making, often marginalizing local communities and undermining ecological sustainability. Despite the existence of participatory frameworks such as public consultations and environmental impact assessments (EIAs), the process remains largely performative, with limited avenues for meaningful community input or NGO influence. This aligns with the hypothesis that power asymmetries hinder equitable participation (H1), as evidenced by the frustration expressed by local leaders whose livelihoods are disrupted by coastal projects approved without their genuine consent. At the same time, the study confirms that greater inclusivity leads to more sustainable outcomes (H2), as demonstrated in cases where collaborative approaches such as NGO-led litigation or community advocacy have forced developers and policymakers to reconsider harmful projects.

The research objectives, analyzing stakeholder roles, identifying engagement barriers, and proposing policy reforms, have been addressed through a qualitative exploration of perspectives from government officials, private developers, NGOs, and local community leaders. A recurring theme is the tension between short-term economic gains and long-term ecological and social well-being. Developers prioritize return on investment, often dismissing environmental concerns as obstacles to progress, while government agencies, though legally mandated to facilitate public participation, tend to view stakeholder engagement as a procedural hurdle rather than a democratic necessity. NGOs, though vocal, struggle with limited enforcement power, and local communities, despite possessing invaluable traditional ecological knowledge, are frequently excluded from consequential discussions. These findings resonate with broader critiques of environmental governance in developing economies, where rapid industrialization often sidelines sustainability and social equity (Razak et al., 2025).

To bridge these gaps, this study advocates for structural reforms that move beyond tokenistic participation toward genuine co-management. Legal mechanisms must be strengthened to ensure that stakeholder input is not only heard but also integrated into final decisions, similar to the Halal certification processes in supply chains, where compliance is rigorously enforced to maintain standards (Othman & Ibrahim, 2025). Independent oversight bodies, akin to those proposed in Halal Total Quality Management (Saidin et al., 2025), could provide much-needed accountability in environmental governance. Additionally, benefit-sharing models, such as community equity in tourism ventures, could align economic incentives with conservation goals, ensuring that local populations are not just consulted but also compensated for their losses.

Ultimately, the lessons from Terengganu’s coastal governance have broader implications for sustainable development in Malaysia and beyond. Just as Halal supply chains have adapted to globalization while maintaining cultural and religious integrity (Jamil & Ibrahim, 2025), environmental governance must evolve to balance economic growth with ecological and social justice. The study underscores that true sustainability is not just about mitigating harm but about redefining development itself, placing people and the planet at the center of decision-making. Without such a shift, coastal communities will continue to bear the brunt of unchecked development, while the ecosystems they depend on erode beyond repair.

Future Research and Recommendations

The findings of this study open several avenues for future research while presenting actionable policy recommendations that could transform Terengganu’s coastal governance. Building on the identified gaps in stakeholder engagement, future studies should adopt a longitudinal approach to track how power dynamics evolve as Malaysia implements its Sustainable Development Goals (SDGs) commitments. Particularly valuable would be comparative research examining other Malaysian coastal states like Sabah and Sarawak, where indigenous land rights and biodiversity conservation present similar governance challenges (Rahim & Ibrahim, 2025). The methodological framework could be enhanced by incorporating digital ethnography techniques, similar to those used in tracking Halal supply chain compliance (Amer & Ibrahim, 2025), to monitor real-time stakeholder interactions in development planning processes.

Technological integration presents another critical research frontier. Artificial intelligence applications, which have proven effective in optimizing Halal certification processes (Jamil & Ibrahim, 2025), could be adapted to create predictive models for environmental conflict resolution. Blockchain technology, currently used for traceability in Halal supply chains (Johan et al., 2025), might be repurposed to enhance transparency in coastal project approvals. Future studies should examine how these digital tools could democratize access to environmental decision-making, particularly for marginalized fishing communities with limited technical literacy. Climate change adaptation strategies also warrant deeper investigation, especially given the parallels between vulnerabilities in coastal ecosystems and Halal agricultural supply chains (Rahim & Ibrahim, 2025). Research could explore how traditional ecological knowledge from Terengganu’s fishermen might complement scientific climate models to develop more resilient coastal management plans.

For policymakers, the study recommends three immediate interventions. First, establishing independent environmental governance bodies modeled after Malaysia’s successful Halal certification authorities (Othman & Ibrahim, 2025) could provide much-needed oversight. These bodies should have statutory powers to enforce participatory standards and impose penalties for non-compliance, similar to the enforcement mechanisms in Halal Total Quality Management systems (Saidin et al., 2025). Second, the government should mandate benefit-sharing agreements in coastal development projects, requiring developers to allocate equity shares to affected communities – an approach that has improved equity in other resource sectors (Anis et al., 2025). Third, building on lessons from multicultural Halal supply chains (Razak et al., 2025), policymakers should institutionalize cultural competency training for government officials and developers working with indigenous coastal communities.

Implementation of these recommendations requires addressing structural barriers similar to those faced in optimizing Halal supply chain operations (Kasdi et al., 2025). This includes reforming bureaucratic silos between federal and state environmental agencies, increasing budget allocations for community capacity-building, and creating clear escalation pathways for participatory disputes. The private sector’s role must evolve beyond regulatory compliance to embrace genuine co-stewardship of coastal resources, mirroring the holistic approach seen in progressive Halal industries (Othman & Ibrahim, 2025). By adopting these measures, Terengganu can transition from its current adversarial governance model to one that balances economic development with ecological preservation and social equity – creating a blueprint for sustainable coastal management that could be replicated throughout Southeast Asia.

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