As Brunei is moving towards the diversification of its economy away from an overdependence on the oil and gas industry, the country is now putting much effort into developing additional industrial activities. At the same time, the country is also committed to develop sustainably without putting pressure on the environment and without harming the population. The SPARK project development in the petrochemical industry is one of the diversification efforts carried out by Brunei by adding value to the main economic sources i.e. oil and gas. Because developing sustainably is also important in line with the importance of diversifying the economy, this research investigates the issues involved in developing the SPARK, and to find out whether this economic diversification effort by Brunei can be developed economically, while making sure that the environment is protected and that the health and safety of the population is still prioritised. A range of methods of data collection were employed during the study, which include 1) an initial exploratory forum and meeting; 2) direct observation of the industrial area and the surrounding areas; 3) site visits to the industrial park; 4) questionnaire interviews with the local communities living near to the development; 5) formal in-depth and semi-structured interviews with the project proponent of the petrochemical industry, government officials and village heads; and 6) secondary sources using EIS of the SPARK project, SLA’s reports, investment incentives booklets for FDI to Brunei were also used for references and other unpublished information about SPARK from internal presentations. Data collected during the fieldwork were analysed qualitatively in order to find themes in the study. Based upon the data analysis, it can be said that more challenges than benefits are posed from the socio-economic impacts of petrochemical development at SPARK. The main challenges are 1) the development may require a long period to receive back revenues because of the small GDP contribution from the industrial project, the lengthy tax holiday, and high level of government subsidies; 2) little benefit from spin-off activities; 3) substantial competition from other petrochemical industries in the ASEAN states; and 4) possible impacts upon the health and safety of the local communities and industrial workers. There is also a minimal level of awareness and understanding about SPARK as well as a low level of public participation in the development project. In addition, there are differing priorities of various stakeholders at and around the industrial area which leads to the occurrence of some conflict over resources present at SPARK such as conflict over priorities and the space surrounding the industrial area as well as disputes over the opinions regarding the impacts from the project. To date, there are no serious environmental impacts that are occurring at and around SPARK. However, there is potential for the development to affect the local population and the environment near to it as there is a likelihood of emissions of environmental pollutants, presence of vibration or noise pollution, risk of industrial accidents from the handling and storage of petrochemicals. This is exacerbated by the lack of competence of an environmental agency to manage and monitor SPARK and also up until now there is an absence of environmental law in Brunei.