EUMCCI Trade Issues and Recommendations 2013 · 2019. 4. 19. · EU-Malaysia Chamber of Commerce...

EUMCCI

Trade Issues and

Recommendations

2013

For all editorial enquiries, or to order a copy of this publication, please call: (+60) 03-2162 6298 or contact us at: [email protected].

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, without the prior written permission of EUMCCI.

Whilst every effort has been made to ensure the accuracy of the information contained in this book, the authors and publisher accept no responsibility for any errors it may contain, or for any loss, financial or otherwise, sustained by any person using this publication.

EU-Malaysia Chamber of Commerce and IndustrySuite 3.03, Level 3, Menara Atlan161B Jalan Ampang50450 Kuala LumpurTelephone: +603-2162 6298Fax: +603-2162 6198E-mail: [email protected]: www.eumcci.com

Introduction ...................................................................................................... 4

1. EU-Malaysia Chamber of Commerce and Industry ...................................... 5

2. Overview of Malaysian Economy ................................................................. 12 2.1 Economic Outlook for Malaysia 2013 ............................................. 13 2.2 ASEAN Economic Outlook ............................................................. 14

3. Key Measures ................................................................................................ 15

4. Cross Sectoral ............................................................................................... 19 4.1 Corporate Social Responsibility ...................................................... 20 4.2 Intellectual Property Rights ............................................................. 24

5. Issues by Sector ............................................................................................. 39 5.1 Aerospace ..................................................................................... 40 5.2 Automotive .................................................................................... 42 5.3 Education ...................................................................................... 47 5.4 Energy, Environment and Green Technology................................... 53 5.4.1 Renewable Energy (RE) .................................................................. 55 5.4.2 Energy Efficiency ............................................................................ 57 5.5 Green Building ............................................................................... 58 5.6 Healthcare ..................................................................................... 61 5.7 Human Resources ......................................................................... 64 5.8 Logistics & Transport...................................................................... 67 5.9 Oil & Gas ....................................................................................... 71 5.10 Wines And Spirits ........................................................................... 72

6. Appendix ...................................................................................................... 76 Table A1. The Global Competitiveness Index ..................................................... 77 Table A2. Malaysia’s Total Trade ........................................................................ 79 Table A3. Malaysia’s Trade with European Union ............................................... 80 Table A4. Malaysia’s Exports by Sector ............................................................. 81 Table A5. Malaysia’s Imports by Sector ............................................................. 82 Table A6. Malaysia’s Exports to EU - 27 by Product Sector ............................... 83 Table A7. Malaysia’s Imports from EU - 27 by Product Sector ........................... 84 Table A8. Malaysia-EU Trade Figures by Member State ..................................... 85 Table A9. Malaysia-EU Trade Figures by Member State ..................................... 86 Table A10. Doing Business in Malaysia ............................................................ 87 Table A11. Services Sector Performance at Constant 2005 prices .................. 87

Table of Contents

4 EUMCCI Trade Issues and Recommendations 2013

Introduction

Introduction

In line with EUMCCI’s mission of facilitating business and investment relations and opportunities between the EU and Malaysia, I am pleased to present our EUMCCI Trade Issues and Recommendations 2013.

This Trade Issues and Recommendations publication focuses on the current status of EU business in Malaysia and presents a compilation of industry specific issues and recommendations, composed by our sectoral committees, to further improve the business environment from a corporate standpoint.

Providing an overview of EU Trade with Malaysia and the viewpoint of European and Malaysian businesses, we offer key recommendations that touch on all the major points of the Malaysian trade economy. It is noted that whilst in certain areas there has been marked progress, for many issues there has been more limited advancement. The developments to the Government Transformation Programme and the Economic Transformation Programme are clearly aimed at furthering the efforts to create a paradigm shift in Malaysia’s advancement and it is with this in mind that the recommendations in this publication are made, to support the continuing drive to make Malaysia more competitive within the region, also in view of AEC 2015.

In 2013 the EUMCCI Sectoral Committees continue to provide input on the of the Free Trade Agreement (FTA) negotiations being progressed between both the EU and Malaysia, putting forward issues and recommendations that could impact or assist both the EU and Malaysian businesses at the conclusion of these agreements.

The publication has come together as a collaboration between the Committees and Chamber staff and I trust that it may serve as both valuable insight and support for investors from both Europe and Malaysia, EUMCCI corporate partners and our stakeholders.

Fermin FautschEUMCCI ChairmanApril 2013

EU-Malaysia Chamber of Commerce and Industry

EUMCCI Trade Issues and Recommendations 2013 5

About Us

The EU-Malaysia Chamber of Commerce and Industry (EUMCCI) is a non-profit, private sector organisation that emerged in May 2003 from the former European Union Business Council (EUBC).

EUMCCI is one of the leading chambers in Malaysia, representing approximately 1200 corporations.

Our Mission

To promote, support and develop EU business interests in Malaysia as well as facilitate trade, commerce and investments between EU and Malaysia. In order to fulfill its mission, EUMCCI carries out activities that will catalyze and stimulate networking of European companies in Malaysia with the Malaysian business community, business associations, relevant ministries, official representations and other Chambers in Asia.

Objectives

• Highprofilelobbying/dialoguewithInstitutions,Government• Speedupdecisionsandactionswithintheministriesandauthorities• PromoteandmarketEUtechnologies,SMEsproductsandservicesinMalaysia• FacilitatethedialoguebetweentheEuropeanprivatesectorandMalaysiangovernment• TodevelopandenhanceEUpositionandimageinMalaysia

EUMCCI Committees – Strong Lobbying Tool

The EUMCCI Committees are platforms for EUMCCI members of specific sectors. The Committees meet regularly to discuss issues affecting their particular industries, to hold seminars with guest speakers from the government, academia and business and to lobby with the government. Each committee is responsible for writing a Trade Issues and Recommendations paper outlining the most pressing business problems and recommendations for the government to reduce these issues. Every year all papers drafted by the Committees are compiled into a EUMCCI ‘Trade Issues & Recommendations’ paper. This document is circulated among Government administrations, relevant authorities in Malaysia and the European Commission in Brussels. At the moment, EUMCCI has 14 Committees covering the following sectors:

1. EU-Malaysia Chamber of Commerce and Industry

At the moment EUMCCI has 14 active committees. More information about these committees can be found by clicking on ‘Committees’ in the main menu.

If you are interested in joining one of our committees, please email [email protected].



Aerospace

Head of Committee: Mr. David A Jones, General Manager, RUAG Aviation Malaysia Sdn Bhd

The EUMCCI Aerospace Committee offers members a platform to discuss and raise key issues in the sector. The Committee provides members the space to exchange, brainstorm and develop new ideas to improve the industry as well as draft relevant guidelines and most of all, enhance our cooperation with Malaysian and European authorities and representatives.

The Committee aims:1. To promote improved aviation safety and European safety standards2. To raise awareness of European aviation practices3. Development of routes between the EU and Malaysia4. To cooperate with EU environmental initiatives5. Education and technical training6. To promote Malaysia as an Asian Aerospace Hub

Automotive

Head (Interim) of Committee: Mr. Klaus Landhaeusser, Regional Head, External Affairs and Governmental Relations, South East Asia (RBAS/GOV), Robert Bosch (SEA) Pte Ltd

The goals of the EUMCCI Automotive Committee are to raise the issues related to automotive industry with the Malaysian authorities, and build a constructive working relationship to ensure a cooperative approach with market access or regulatory issues.

Committee aims:• ToreviewthecurrentimportdutiesandtariffsimposedonimportedandCKDvehicles.Thisisimportant

given the opening of the ASEAN market under AFTA.

• Toreviewcurrentnon-tariffbarriers-localstandards,specificationsandtestsimposed

• Toreviewcurrentprotectionoflimitedsparepartmanufacturers(suchaslightmanufacturersetc)

• Improvingthesafetystandardofallvehiclese.gcrashtesting

• To debate imposition of CO2 emission regulations and other ‘green’ regulation anomalies includingdefinition of a hybrid vehicle

• Workingwiththegovernmenttoreviewroadsafetymeasures

Corporate Social Responsibility (CSR)

Head of Committee: Prof. Dr. Geoffrey Williams, Deputy Vice Chancellor of Universiti Tun Abdul Razak

The EUMCCI CSR committee with representatives from several European and Malaysian companies is focusing on more attention for CSR in Malaysia.

• TheCSRCommitteeprovidesmembersandotherstakeholderswithaccess to relevantCSRrelatedcourse materials to assist in developing an understanding and appreciation of CSR, both conceptually and in practice. This enables members to better incorporate CSR into their organizations and foster more responsible business practices.



• The CSR Committee provides a forum for advocacy with key stakeholders to facilitate an enablingenvironment that encourages private sector investment in CSR related activities.

• TheCSRCommitteeisworkingwithitsmembersthroughoutreachforums,workshops,andmeetingsto assist in the implementation of CSR activities and initiatives that strategic in nature, in line with their core business practices and focused towards sustainable development.

Defence and Security

Head of Committee: Mr. Krzysztof J. Splawiec, Director of Regional Office, Bumar Sp. Zo.o Regional OfficeDeputy Head: Mr. Andrin Raj, Managing Director, Stratad Sdn Bhd

The EUMCCI Defence & Security Committee offers a platform for members to network, discuss and raise issues in the Defence & Security sector. The committee organises talk sessions with guest speakers from the government to talk about the development in the sector and new regulations. The Committee also promotes European SMEs in defense sector.

The Committee will focus on activities both within the Chamber and linking in with external bodies:

InternallyThe Committee will provide the focus in the Chamber for providing information and dealing with policy issues concerning Defence, and Security Materials. The working group will influence the formulation and implementation of the Chamber’s policies to meet the needs of members in this sector. It will also promote the subject area of Defence and Security issues at Chamber supported events.

ExternallyThe Committee will act as the Defence, and Security Committee face of the Chamber to link in with industry, academia, research, trade associations, Government, and key stakeholders. It will also promote professional activities relevant to the career development and job needs of workers in the sectors and provide the opportunity for them to enter into membership of the Chamber.

Education

Head of Committee: Prof. Dr. Geoffrey Williams, Deputy Vice Chancellor of Universiti Tun Abdul RazakDeputy Heads: Olivia Draeger, University of Nottingham and Mahadi Sibon, University of Malaya

The EUMCCI Education Committee fosters dialogue, promotes initiatives and recommends and implements strategies, creating awareness and facilitating active engagement between members, educational institutions and the business sector in Malaysia. The Committee has engaged with 12 Malaysian Universities concentrating on facilitating industry-academia linkages in R&D, placement of academia at EUMCCI member companies and EUMCCI Industry captains placed on Curriculum Boards of Universities.



Environment, Energy and Green Technology

Head of Committee: Mr. Thomas Brandt, General Manager, Malaysian German Chamber of Commerce & IndustryDeputy Heads: En. Rosman Hamzah, Director of Business Development, Alstom Asia Pacific Sdn Bhd Ms. Marina Yong, CEO, Sustainability Momentum Sdn Bhd

The Environment, Energy and Green Technology (EEGT) Committee was created in order to provide memberswith information,aswellascreatingawarenessconcerningenvironmentalmattersandgreen/clean energy issues. The Committee functions as a forum and regular meetings are held, providing dialogue with opinion leaders and highly ranked government officials involved in environmental and energy policy making processes. These speakers address and inform our members about the structure, the regulations and the prospects of the sector. The Committee addresses issues of concern with the relevant government authorities for further action through its position paper, lobbying and face-to-face interaction with government officials and facilitates trade, business opportunities and investment for EU companies in Malaysia as well as Malaysian companies.

The four EEGT Sub-Committees; Water, Waste, Energy Efficiency, Renewable Energy are the most active and co-operative partners for exchange of information and a solution provider to the private sector, the Malaysian Government and further related stakeholders.

Heads of Sub-Committees:

Energy Efficiency: Ms. Marina Yong, CEO, Sustainability Momentum Sdn Bhd

Renewable Energy: Ms. Huey Yee YOONG, Business Development Manager, BIODOME® ASIA

Water: Vacant

Waste: Vacant

Green Building

Head of Committee: Dr. Stellios Plainiotis, Managing Director, Neapoli Sdn Bhd

• PromoteandencouragethegreenbuildingpracticeinMalaysiaamongtheconstructionindustry

• AssisttheGovernmentorganizationsbyprovidingconsultationformarkettransformationtowardsgreenbuilding

• Coordinate with the Malaysian Government and Stakeholders to develop green building guidelines,standards, rating systems that suite the Malaysian conditions.

• Organizegreenbuildingevents,conferences,exhibitions,workshops.

• Promote the environmental, economic, health and community benefits of sustainability to EUMCCImembers and the general public.

• Continue to build relationships with local, sustainable construction entities, as well as governmentalentities.



Healthcare

Head of Committee: Dr. Maxim Mamin, Head of Healthcare Sector, Siemens MalaysiaDeputy Head: Mr. Thomas Steffen, Country Division Head, Bayer Healthcare Pharmaceuticals

• TobethecentreofdebatetoidentifyandprioritizekeyissuesintheHealthcareIndustry.

• WealsodiscussissuesrelevanttotheEU-MalaysiaFTAnegotiations(Dataexclusivity,IPR,procurement).

• To be a forum to facilitate business, discuss and propose an environment to improve the businessconditions.

• TobeachanneltoraiseissuestoGovernmentauthoritiestocreateaclearandtransparentrelationshipwith Malaysian Government and to build up a lobbying tool for the European companies to improve interrelation and communication with the stakeholders and other related government agencies.

• In line with NKEA to develop the medical technology sub-sector such as medical devices, diagnostic equipment and healthcare information technology.

• The Medical Devices Authority has been established to oversee the implementation of the medical devices regulatory system. It has been agreed in principle that the regulations would be aligned to the guidelines drawn up by the ASEAN Harmonisation Working Party (AHWP) and the Global Harmonisation Work Force (GHTF).

Human Resources

Head of Committee: Ms. Chan Swee Hwa, Human Resources Director, TNT Express Worldwide (M) Sdn BhdDeputy Head: Mr. R. Ravindra Kumar, Partner Raja Darryl & Loh – Advocates and Solicitors

The EUMCCI HR Committee aims to promote the importance of human capital in trade in general and among member companies specifically.

The Committee acts as:• aLobbyGroup-WeactivelygatherfeedbackandviewsfrommembersonimportantandpressingHR

issues and channel them to the relevant Government authorities for discussion and due consideration

• a Resource Group - We work to provide member companies with current and useful HR relatedknowledge, skills and information through appropriate channels such as workshops, seminars, surveys and training program

• aNetworkingGroup -Wework to raiseawarenessofHRmatters throughmeaningful activities andevents and to contribute to other Committees in EUMCCI through regular networking or social events



Intellectual Property Rights

Head of Committee: Ms. Wong Jin Nee, Partner, Wong Jin Nee & Teo - Advocates & SolicitorsDeputy Head: Mr. Chew Phye Keat, Senior Partner, Raja, Darryl & Loh - Advocates & Solicitors

The EUMCCI Intellectual Property Rights (IPR) Committee reviews IPR related matters with the Royal Malaysian Customs and with other relevant authorities. The Committee is organising a regional IPR capacity building and exchange of best practices workshop, with the aim to reduce the amount of counterfeit goods entering Malaysia. It is also cooperating with the Royal Malaysian Customs and member companies by conducting specific product identification training workshops.

Logistics and Transportation

Head of Committee: Mr. Bjarne Foldager, Managing Director, Maersk Line in Malaysia and Singapore

Committee aims to:• Develop understanding of environmental impact of economic transformation from the transport and

logistic perspective in Malaysia

• Share case studies of EU best practices for promoting and developing sustainable logistic andtransportation solutions that reduce GHG emissions

• Engage governmental stakeholders in promoting long term sustainable logistics policies andinfrastructure to give Malaysia a competitive edge in ASEAN

Oil & Gas

Head of Committee: Mr. Fermin Fautsch, EUMCCI ChairmanDeputy Head: Mr. Luis Ochoa, General Manager, Anchor Chain Sinar Malaysia Sdn Bhd

The Committee provides a platform for members to discuss and lobby industry issues as well as focus on the following topics:• Manpowersourcingandtraining

• Cooperation:EU-Environmentalinitiatives

• Upstream:DeepwaterandMarginalFields

• TopromoteMalaysiaasanOilandGasDeepwaterHub

The vision of the Oil & Gas Committee is to be the central, focal point for all issues related to the oil and gas industry in Malaysia.

The Committee aims:• TobeacentreofdebatetoidentifyandprioritizekeyissuesintheOilandGasIndustry

• To be a forum to facilitate business, discuss and propose an environment to improve the businesscondition

• Tobeachanneltoraiseissuestogovernmentauthoritiestocreateaclearandtransparentrelationshipwith Malaysian Government and to establish a lobbying tool for European companies to improve interrelation and communication with Petronas and subsidiaries



Smart Technologies (Smart Grid) Committee

Head of Committee: Mr. Anand Menon, Vice President, Head of Engineering and CTO, Smart Grid of Siemens Infrastructure & Cities Sector in ASEAN ClusterDeputy Head: Mr. Peter Cave, Country Director, Schneider Electric (Malaysia) Sdn Bhd

Committee aims:• The goal is to produce a status paper, identify potential areas in line with the country’s development

plans, support preparation of a road map, participate in national conferences with related topics, initiate dialogues with key stake-holders and give clarity on necessary and relevant technologies.

Wines and Spirits

Head of Committee: Mr. Mathieu Duchemin, Managing Director, Moët Hennessy Diageo Malaysia Sdn BhdDeputy Head: Mr. CK Tan, Managing Director, Pernod Ricard Malaysia Sdn Bhd

The EUMCCI Wines and Spirits Committee is comprised of market leading companies engaged in the importing and selling of wines and spirits in Malaysia. The members represent more than 50 premium brands of wines and spirits that represent a significant proportion of wines and spirits imported and consumed in Malaysia.

The Committee aims are:• To promote and establish a regular communication and well-informed relationship with Government

authorities and other interested parties in order to create optimum acceptability of the branded alcohol products amongst Government authorities and other interested parties

• Toadvocatethedistributionindustryofimportedspirits,champagnesandwinestobecompetitiveandto participate in activities of common interest for the well being of the distribution industry; to assist to overcome any prejudice arising from any misunderstanding or misconception relating the said distribution industry and to promote safe and responsible consumption of the imported spirits, champagnes and wines

• Tocollateallinformationrelatingtoalcoholicbeveragesconsumptionissues;toprovideaforumforthevarious Malaysian distributors to facilitate the exchange of ideas and information on matters of common interest and to promote better relationship and understanding amongst themselves; to enhance the image of the distribution industry of imported spirits, champagnes and wines by dealing with issues in one voice

EU-MALAYSIA BUSINESS

Overview of Malaysian Economy




2.1 Economic Outlook for Malaysia 2013

GDP growth forecasts vary between 4.5% and 6%, while current circumstances suggest a number around 5%. As in 2012, domestic demand will drive the economic growth in 2013, however at a lower rate than we have seen in 2012. Private consumption, sustained by continued income growth and a good labour market environment, will however continue to grow at a slightly slower rate. At the same time, the main contributor to the private sector expenditure from 2012, private investment, is forecasted to see growth reduced from 22% to 15.6%.

Public investment expansion, a substantial contributor to growth in 2012, mainly due to the upcoming elections, is expected to moderate this year from 2.4% to 1.3%. Amongst others, the main reason for the declining public spending growth in 2013 is the government’s commitment to a fiscal consolidation.

Despite the reduced growth in both the private and the public sectors, Malaysia’s stable GDP growth outlook is regarded to rely mainly on an improved trade balance. A negative growth of imports (falling from 4.5% to 3.9%), will face an increase in export growth (up from 0.1% to 1.8%), resulting in an improved negative contribution to GDP growth of -1.7%, up from 2012’s -3.8%.

Furthermore, as mentioned above, the labour market will meet the status quo somewhat, with an unemployment rate almost unchanged at 3.1%.

Projections for inflation show an increase from 1.6% to a number in the range between 2% and 3%. While this increase seems to be significant, it remains at an acceptable and manageable level. The Malaysian government is anticipated to manage Inflation with certain policy measures, namely price adjustments of administered items. For it is still uncertain when some measures will be realised, a more precise inflation forecast cannot be given. Another reason for the wide forecast range lies in the uncertainty about the price development of certain food commodities.

The instability of the developed economies in Europe remains the biggest concern, with regards to negative external influence on Malaysia’s economy. However, a continuing decline in the importance of Europe as a trade partner (total trade declined by 2.4% in 2012, with expectations to see the trend continue) can limit the severance of the influence of an economic downturn. On the other hand, the ongoing household issues in the US are regarded to be a minor threat. Supportive policy measures undertaken make it more likely for the US to see a positive development, with all positive side-effects for Malaysia’s economy.

Sources:• MITI(Presentation“Malaysia’sTradePerformance2012”)• BNM(OPRDecisionsandStatements–pressreleases,andAnnualReport2012)• MIER(MalaysianEconomicOutlookhttp://www.mier.org.my/outlook/)• IMF(http://www.imf.org/external/pubs/ft/survey/so/2013/car021913a.htm)

2. Overview of Malaysian Economy




2.2 ASEAN Economic Outlook

As we were observing a slowdown in growth in Asia over the past two years, in 2012 many economies in ASEAN were showing robust growth performances, partly driven by government initiatives, and strong domestic demand. Thereby, selected countries, including Malaysia, outperformed the forecasts. However, the aggregate GDP growth of developing Asia saw a slowdown from 8% in 2011 to 6.6% in 2012. In aggregate, GDP growth forecasts for developing Asia in 2013 are around the 7% mark, after having faced a small dent in the previous year.

Private demand will remain the main driver of growth also in 2013 and beyond, while the growth contribution of exports will remain limited. Currently, the countries see a shift of the private demand towards a more “westernised” expenditure scheme. This materialises in increased spending on consumer goods, healthcare and education. With reference to this, the IHS has a very positive view for 2013, as it sees “domesticdemandgrowth[...]fairlystrongand[...]thereisscopeformorestimulus,ifneeded”.

Generally, researchers divide ASEAN into two groups: The first group, consisting of the further developed nations (including Malaysia, Brunei, Indonesia, the Philippines, Singapore and Thailand), and a second group, consisting of the four weaker nations (Cambodia, Laos, Myanmar and Vietnam). Over the span of the next years, the local governments will tackle the existing disparities, what is considered to be a very important process towards a more unified common economy. Apart from all efforts of the weaker country set undertaken to decrease the gap, the domestic disparities are a major concern in view of the OECD. As it sees development gaps in several dimensions, it has been encouraging the governments heavily to push at this end as well.

The challenges for several economies of the bigger set differ substantially. Given their later stage of development, their main goal will be to further increase their productivity. Furthermore, for the five-year-period 2013-2017, GDP growth of ASEAN is expected to average 5.5% annually.

Sources: • BNM(AnnualReport)• IMF(WorldEconomicOutlookUpdatehttp://www.imf.org/external/pubs/ft/weo/2013/update/01/)• OECD(SoutheastAsianEconomicOutlook2013-WithPerspectivesonChinaandIndiahttp://www.oecd-ilibrary.org/

development/southeast-asian-economic-outlook-2013_saeo-2013-en)• IHS(http://www.ihs.com/info/ecc/a/economic-predictions-2013.aspx)• TheGuardian(http://www.guardian.co.uk/global-development/datablog/2012/nov/18/oecd-south-east-asia-economic-

outlook#data)


Key Measures

Key Measures


EUMCCI continues to play an active role in raising issues of concern for our members in the areas of trade, investment and economics and we are pleased that the Malaysian Government at national level and State Governments at local level are receptive to our suggestions. We are grateful for this engagement since it fosters a strong sense of commitment from the Government to the concerns of EU and Malaysian businesses. Reflecting this spirit of cooperation our 2013 recommendations are related to areas which build on the successes already achieved by Malaysia in recent years.

1. Fostering innovation and protecting intellectual property

Innovation and Research and Development (R&D) are essential to Malaysia’s goal of achieving sustainable growth and competitiveness.We particularly support specific measures to boost investment in R&D in order to reach a target of 5% of GDP. These include

1. Expanding the scope of permitted investments and grants under the Malaysian Government research funding schemes;

2. Tax relief for goods or services derived from R&D in universities or public research centres;

3. Tax relief in the form of investment incentives and tax relief for research centres and researchers brought in;

4. Investment incentives for successfully commercialised Malaysian R&D products and;

5. The creation of a national innovation fund to strengthen the protection of IPR and innovation capital and to promote the commercialization of ideas and inventions

Beginning in January 2014 the European Union will launch Horizon 2020, a new framework programme for innovation and research. This will be important for Malaysia since many projects will be international in scope and Malaysia already enjoys the benefits of existing EU R&D projects.

2. Creating an efficient and equitable tax system

In our Trade Recommendations 2012, EUMCCI called for the creation of a competitive tax system in Malaysia which will encourage growth and opportunities for all. We have seen some changes in taxes overall which are welcome in many respects but which do not appear to be part of a structured tax policy. So in 2013 we again call for a full review of the Malaysian tax system to provide a comprehensive and integrated approach which looks at all areas of taxation in a rational and measured way to create an efficient and equitable system.

There is a need to carry out a comprehensive review of tax incentives as failure to do so will result in loss of considerable revenue without achieving the objectives .The incentives should correspond to the benefits to the country as much infrastructure costs have to be incurred. A revamp of the tax system would be incomplete if a study is not made of the subsidy system which is believed to cost billions in leakages due to inefficient control system.

3. Key Measures

Key Measures


Any review of the tax system should aim to broaden the tax base and balance issues of efficiency with equity so that the impact of any new taxes is fairly distributed across the people who will pay it.

Even if the tax system is able to widen the tax base and increase revenue ,the end objective will not be achieved if there is no effective monitoring system to ensure that every ringgit produces a corresponding benefit to the nation.There is therefore a need to measure the benefit achieved from each expenditure and to take effective measures to control loss.

3. Enhance transparency and minimize level of corruption.

The 19th June 2012 saw the signing of the Malaysian Corporate Integrity pledge by 19 EU companies at the EUMCCI Integrity Pledge luncheon. The keynote speech at the event was made by Mr. Michael Hershman, co-founder of Transparency International, and an address was also made by the Malaysian Anti-Corruption Commission (MACC) Chief Commissioner Dato Sri Haji Abu Kassim bin Mohamad.

EUMCCI encourages the implementation of the GTP policies aimed at combating corruption at all levels and we are keen to collaborate with relevant authorities on this.

4. Develop Human Capital

Talent is a critical enabler for economic growth. Lack of qualified workforce is one of the biggest impediments that investors identify with doing business in Malaysia and demand for talent is growing. According to Talentcorp it takes 2-3 times longer to fill a professional posting in Malaysia as compared to ASEAN. We applaud Talentcorp’s efforts in attracting and retaining talent in Malaysia. Initiatives like Resident Pass have been welcomed by qualified foreign professionals but focus to nurture Malaysian talent needs to be strengthened by more awareness of career opportunities, holistic scholarship management, comprehensive exposure to real life work and problem-solving situations. Greater focus on vocational training and establishment of Technical Universities would offer more opportunities for those that don’t pursue traditional University education. Moreover current examination-oriented education system should be revamped to empower each student according to their interests, strengths and individual uniqueness fostering creativity and innovation.

5. Action on crime, safety and security

We have been pleased to see that Royal Police Force of Malaysia (PDRM) have taken the effort to engage with us on issues and we look forward to positive working relationships. Despite the published statistics which show falling crime levels there is a wide perception that there has been a significant increase in crimes throughout the country, whether in urban or rural areas. There are many victims: private individuals as well as businesses. The persistence of this problem, which has been raised repeatedly by EUMCCI and our members, illustrates points that need to be strengthened in the policing system in Malaysia.

Key Measures


Currently Defense & Security Committee of EUMCCI engages with MOHA and PDRM on issues pertaining to the above. It is necessary to further restore the PDRM to a position of respect in public perception. We support the following types of measures:

• Rationalisemanpowerandresourceallocationbytransferringandretrainingofpersonneltoincreasethestrength of the Crime Investigation Department (CID), including reducing the size of General Task Force (PGA) and other non-core task forces;

• Allocation of extra funds to build police posts in places of high public concentration to promoteawareness of police presence and to help the police engage actively with members of the public;

• ProvideextraresourcestoincreasePDRM’scapabilitiesandeffectivenessinforensicinvestigationandcommercial crimes

• Increasepolicesalariesstages,createefficiencies inspendingand look for reallocationopportunitiesfrom non-core duties to core duties of crime solving and ensuring people’s safety;

6. Providing a clear social safety net

The recent announcement by the Government of help for the poor with direct grants through BR1M 2.0 and other schemes has been welcomed by the recipients. EUMCCI and its members have, like many other companies, done our part in helping people in need through our Corporate Social Responsibility (CSR) programmes which have also been very well received.

Nonetheless the schemes themselves reveal a deeper concern about the level of need across the country. There is a view that it is time for Malaysia to provide a clear and equitable social safety net, which will ease the burden of the poor and protect everyone in times of need. Such a system will also relieve the burden on companies by providing them with an easy national scheme for healthcare, pensions and unemployment insurance rather than ad hoc private sector provision which fails to cover the population in a comprehensive way.

We support moves to create a cost-effective, national, comprehensive system of healthcare, welfare assistance, unemployment insurance, pensions and help for senior citizens. We also believe that issues related to social care and protection are not well covered by CSR initiatives alone and require a fresh approach which brings together companies, communities and NGOs.

7. More open trade and shared markets

The relationship between the European Union and Malaysia has grown and strengthened over many years and EUMCCI looks forward to continuing to play a part in this. The EU-Malaysia FTA negotiations have made good progress in the recent past but have been placed on hold recently due to the election cycle. We very much hope that the FTA negotiations will resume with new vigour and that a successful conclusion will be reached by the end of 2013. Further, already announced liberalisation on services sector, is a welcomed step.

Efforts to speed up the building of ASEAN Economic Community by end of 2015 need to be carried out. AEC will transform ASEAN into single market with free movement of goods, services, investments, skilled labour and freer flow of capital. This opens opportunities for growth but presents also challenges. The impact on local SMEs, local labour market and transport sector needs to be further discussed as well as opportunities opened for EU companies, to use Malaysia as gateway to ASEAN market.


Cross Sectoral

Cross Sectoral


4.1 Corporate Social Responsibility

As part of the EUMCCI CSR Programme 2012 was the first year that the Chamber held the Social Responsibility Week and the accompanying EUMCCI Europa Gala and Sustainability Awards ceremony.

The awards aim to highlight the work of local community groups and promote them as potential partners for EUMCCI members. The sponsors of the event and the sponsors of the awards - Academy of Responsible Management, Malaysian Institute of Management and SPRG - provided complimentary training packages to the community group winners.

This new approach aims to promote a more structured and engaging approach to CSR from the EUMCCI and its members reflecting the idea that CSR is about everything that a company does not just about charity events and donations.

Issue: Traditional CSR vs Shared Value Strategic CR

There is still a misconception in the country that CSR is more about charity that about creating shared value, i.e. where a company carries out its Corporate Responsibility in a manner that creates value for itself as well as society and environment at large.

RecommendationsAs Malaysia transforms to a higher income, inclusive and sustainable nation, it is important for corporations and the government to recognise that Corporate Responsibility must be integrated and aligned to an organisation’s business goals, and at the same time addresses key issues in our society. CSR cannot be a standalone nice-to-have activity that is merely promotional or PR in nature. The government may also consider making CSR a compulsory subject in university syllabus, to ensure that graduates have a more CSR-conscious mind-set as they join the workforce, and later as they become future leaders of the nation.

Issue: CSR reporting and disclosure

EUMCCI would propose the Government implement a compulsory non-financial disclosure to all foreign direct investment projects (FDI), multinational company (MNC) projects and major public listed companies investments in Malaysia. The non-financial disclosures commonly refer to Environment Social Governance (ESG) are important to attract Socially Responsible Investments (SRI) which amount to US$13 trillion globally. Currently Malaysia loses out on such investments because of lack of ESG information.

We also propose that the reporting requirements for companies listed on Bursa Malaysia should be extended to all companies large and small. We recommend that Bursa Malaysia reviews its preference for the Global Reporting Initiative (GRI) reporting guidelines because they are becoming too onerous and expensive even for larger more experienced companies. Instead we propose a scaled down version based on international guidelines that is useful for all Malaysian companies.

For SMEs we suggest that a simple set of CSR indicators, such as energy use, training budgets and community contributions should be collected by auditors and reported in every annual financial statement under SSM requirements.

4. Issues

Cross Sectoral


Issue: Inculcating employee engagement into CSR policies

There is still a misconception that CSR is more about external charity contributions rather than internal issues such as employee engagement. In Malaysia a lot of HR policies are functional or compliance issues and they do not add-value in the workplace for a company’s most important resource, its staff.

RecommendationsThe EUMCCI CSR Committee has compiled a list of best practices to inculcate among employers which includes:

1. Provide Nurseries for children of employees - This will help families with young children to achieve their work and family commitments more easily.

2. Be receptive to staff participation in the decision-making process - A more intensive involvement of the staff in the decision-making process is an important cornerstone of success.

3. Establish a long-term program to improve staff competences - This will allow consistent development of human potential which will contribute to the company’s overall effectiveness and at the same time providing the employees a sense of security and work stability.

4. Improve employees’ benefits - Providing medical or health insurance including a group personal accident or death benefits to all employees. This will provide a sense of security to the employees and their families. There should also be an improvement on the EPF scheme. When an employee retires it is quite common to hear that the retired employee uses up the money as he has to settle debts, and provide for education of his children apart from the rising health costs and health issues that comes with aging. A better system or an improved version of the EPF should be introduced. The Socso scheme could be improved to provide a supplementary pension scheme as well.

Issue: Better Disabled Facilities

Whilst Malaysia is a signatory to the 2008 UN Convention on the Rights of Persons with Disabilities, very little has been done across the country to ensure that the same opportunities of access are granted to venues and buildings for people with impaired movement, motor skills, hearing or sight impairments, in terms of signage and public audio information. The EU looks favourably on equality for all citizens and in 2010 announced a 10 year European Disability Strategy. The aim of this strategy is to provide help for disabled people to live their lives with as little disruption as possible, whilst enjoying the benefits of EU citizenship just as people without disabilities are able to.

RecommendationMore efforts should be made to provide better facilities for the disabled both at the work premises and in general. The installation of step free access to all government buildings would be an example for other businesses and public facilities to follow.

Issue: Transparency and Ethics in Procurement

The Malaysian government’s focus on CSR often touches on soft issues that tend not to be controversial. Hence CSR is seen mainly as a private sector corporate initiative to promote good environmental, community, labour and trade practices, and so on. Whilst the government’s support of CSR in the private sector is laudable, it also needs to look at government agencies and their internal practices. This is important particularly where the work of government agencies intersects with private sector initiatives and where government makes business decisions.

Cross Sectoral


In an economy where private sector initiatives play a significant role in nation building it is no longer possible to disassociate corporate commercial practices from good governance in general. As such government procurement activities must also endeavour to conform to CSR best practices.

The widespread privatization of public services and procurement of goods and services, means that the government itself has become deeply involved in commercial transactions and negotiations, which like other corporate activities, can no longer be above scrutiny with CSR lenses. The power of government to award contracts also comes with the power to favour, and this concern is heightened where contracts are lucrative.

RecommendationsCSR must equally dictate the way in which the Malaysian government agencies manage and award contracts for goods and services. In other words, having good CSR practices in the corporate sector alone does not take us very far, particularly where transparency is lacking in the award of procurement contracts. It is noted that in Malaysia, it is still relatively common to find sizable government contracts being awarded to newly formed entities with no track record and that may be owned by persons with no relevant corporate history. Bidding for government contracts also does not always favour companies that have the necessary technical expertise but may instead be awarded on criteria that are neither objective nor transparent.

These are major concerns of EU investors. The Chamber considers that a lack of transparency will not promote confidence in the economy as it prevents European enterprises with the appropriate expertise from bidding in a fair way. The Chamber believes that a lack of transparency in government procurement also promotes “middlemen” and increases the cost of delivery and ultimately reduces the value offered to Malaysian taxpayers.

The Chamber accepts that Malaysia is not the only country with these systemic weaknesses, but it also feels that European companies weigh up Malaysia’s relative advantages as a nation regulated by laws, with other countries in the region which though less developed in their legal jurisprudence, offer far greater business opportunities in terms of market size and penetration. Malaysia loses its comparative advantage when it cannot offer that differentiation. Malaysia must therefore bolster its governance structures and institutions with good SR practices.

The Chamber notes that the government sees CSR as an integral part of developing a high income society. However it cannot depend on the corporate sector to do this alone and must lead by example. It must urgently move SR up the government’s list of priorities.

Issue: Reducing the income gap

The income gap between rich and poor in Malaysia is widening. Whilst Malaysia tries to find its way out of the middle income trap, it has to be careful that a portion of the population is not left behind. Of vital importance are improved productivity, education and skills. The current trend and intention to increase wages to compensate for increased prices and simplify the curriculum to ensure graduation targets are met will make the Malaysian labour market less competitive and prevent incentives to improve skills if not linked to real productivity. This will create a burden for business requiring productivity improvements to remain competitive.

Cross Sectoral


Income will not be determined by what people control but what they know. This can only be brought about through effective education and an allocation of resources that is merit based. Licensing regimes that see wealth creation as a function of monopolies and privileged access to resources must end. They stand directly in the way of a higher income society, benefiting only a small segment.

Whilst the government appears to be promoting education and training, it is questionable if the focus is on business rather than education. A general complaint is that whilst there are many “graduates,” they lack basic knowledge and skills and are therefore are unable to compete in a real way and prevented from moving up the income ladder.

A narrow political agenda also prevents important changes being made, that would help those at the lowest end of the income scale from improving themselves. This is seen in the dramatic decline in the level of English which has far reaching consequences for those unable to speak it well. This agenda gives priority to politics not nation building.

In future, a high income level will be dictated by those who best exploit talent and knowledge. That can only be brought about by a competitive meritocratic environment. The longer the government delays in bringing about this transformation in Malaysian society, the greater the loss will be to those who need it most.

RecommendationsInstead of only increasing wages, focus should shift towards productivity and teaching important skills such as English. A productivity increase can be achieved through formal education programs, e.g. apprenticeship schemes, industrial training and higher industry specific education. As most programs are privatized, establishing quality standards issued by government authorities and monitored for compliance by an independent institution could drive the quality of many of those programs to gradually increase the skill level and the competitiveness of the workforce while at the same time addressing issues related to labor law and employment codes.

The government must commit to promoting competition and merit both at the skills level as well as at the reward level. This is crucial to increasing productivity and ultimately creating a high income society.

Issue: Transformation of labour laws

The labour laws should favour employees. However, when they work against promoting a strong and efficient business sector, they ultimately work against the employee by making Malaysia less competitive and therefore less able to generate wealth.

Labour laws in Malaysia have become so lopsided that companies are often punished whether they are right or wrong. There is a need for labour laws to be balanced so that they provide incentives for performance and development but at the same time are flexible enough for employers to remove employees who do not meet reasonable standards of work and ethics.

More equitable employment laws will bring about greater efficiencies and productivity. Not only would employees have to be more pro-active to be relevant, businesses will have to improve the remuneration package and work environment to keep good employees. This would transform the labour market.

Cross Sectoral


RecommendationDecisions are arbitrary and although designed to protect the weak they should also be fair and relevant to present conditions. Employees should shoulder responsibility if they bring a wrongful claim against their employer. This will discourage frivolous claims. The mediation process should be improved so that the process is more substantive than superficial, with employees with weak claims being warned of the cost consequences if they proceed with their claims and lose.

Issue: Charitable sponsorship

Orphanages and retirement homes in Malaysia are charitable organisations often solely dependent on the donations of generous individuals and fundraising activities. Whilst these are valid income revenues they cannot be relied upon and as a result the institutions cannot guarantee consistent levels of service.

RecommendationGreater effort should be made by corporations to adopt retirement homes, shelters and orphanages. Government could provide better incentives to corporations to encourage and promote the effort.

4.2 Intellectual Property Rights

IPR issues are an important component in Malaysia’s current Free Trade Agreement (FTA) negotiations with EU. The FTA with its intention to establish open trading conditions would encourage inflow of private sector investment for research in pharmaceuticals and other fledging sectors, namely heavy duty industries, chemical and electronics into Malaysia. The coming into force of the Competition Act 2010 on 1st January 2012 is another legislation which will bring Malaysia in line with over 100 jurisdictions worldwide with the aim of encouraging economic development by supporting and protecting the process of competition thus promoting competitive prices, wider choices and improvement in the quality of products and services.

One of the conditions at the forefront of the FTA would be the need to further strengthen the protection and enforcement of intellectual property rights in Malaysia and to tackle various unresolved intellectual property rights issues in the country.

Malaysia’s legal system is fundamentally based on the English common law. Historically, Malaysia’s intellectual property laws are closely linked to the evolution of such laws in the United Kingdom. Before identifying the challenges encountered and issues to be addressed, it should be emphasised that Malaysia’s intellectual property laws are generally in conformity with international standards, particularly with regard to the amendments made due to Malaysia’s obligations under the TRIPs Agreement.Malaysia is a member of the following treaties and conventions:

• WorldIntellectualPropertyOrganisation(WIPO)

• BerneConventionfortheProtectionofLiteraryandArtisticWorks(1886)

• ParisConventionfortheProtectionofIndustrialProperty(1883)

• AgreementonTradeRelatedAspectofIntellectualPropertyRights(TRIPs)signedundertheauspicesofthe World Trade Organisation (WTO)

• PatentCooperationTreaty(PCT).

Cross Sectoral


There is also a move for Malaysia to join the Madrid Protocol in 2013 which would allow member countries to use the Madrid international filing system to file trade marks around the world. In addition, Malaysia intends to accede to the Budapest Treaty in the near future. The Budapest Treaty is the Agreement on the International Recognition of the Deposit of Microorganisms at the Deposit Centre (International Depository Authority) for the purposes of patent procedure.

This is evident through the various intellectual property related legislations and regulations which include the following:• ThePatentsAct1983,thePatentRegulations1986,Patent(Amendment)Regulations2011;

• TheTradeMarksAct1976andTradeMarksRegulations1997,TradeMarks(Amendment)Regulations2011;

• TheCopyrightAct1987, theCopyrightAmendmentAct2012 (whichcame Intoeffecton1st March 2012), and the Copyright (Voluntary Notification) Regulations 2012;

• WIPOCopyrightTreaty(WCT)andWIPOPerformances&PhonogramsTreaty(WPPT),whichbothcameinto force on 27th December 2012

• IndustrialDesignsAct1996andIndustrialDesigns(Amendment)Regulations2012;

• GeographicalIndicationsAct2000;

• Layout-DesignsandIntegratedCircuitsAct2000;

• TradeDescriptionsAct2011;

• ConsumerProtectionAct1999;

• OpticalDiscsAct2000;

• ProtectionofNewPlantVarietiesAct2004.

• TradeDescription(OriginalLabel)order2002

• PriceControl(LabellingbyManufacturers,Importers,ProducersorWholesalers)Order1980

The presence of these fundamental laws goes to demonstrate Malaysia’s continuing interest and commitment in pursuing the development of IPR-related issues in the country.

What are the salient Intellectual Property Rights (IPR) issues in Malaysia?

Although there are various issues that could arise, the following seem to be regularly in the forefront for foreign investors when dealing with IPR issues in Malaysia:1. Enforcement

2. Border Measures

3. Prosecution

Cross Sectoral


Enforcement

Although Malaysia does have fairly advanced and comprehensive laws on the protection of IPR, the issue and extent of enforcement of these rights often cause concern to the IPR holder. With the advent of the internet and its widespread use, the sale of counterfeit goods online is now the trend and the way forward surpassing the conventional counterfeiting methods. Due to the global nature of the internet, identifying counterfeiters behind the operation of websites selling such offending products is a huge task and enforcement becomes tedious in view of the borderless nature of this trade and the grey areas that are found in the cyber laws.

There are essentially the civil and criminal methods of enforcement in Malaysia and they are as set out below.

Civil Action

The civil action mode suggests a dispute resolution mechanism between the parties, in conflict. This action is usually commenced through an exchange of demands, and if unresolved, would result in litigation. The majority of the statutes governing IP laws prescribe that any action for infringement be brought, at the first instance, in the High Court. For the enforcement of IP rights under common law, given that the principal remedy in an IP related action involves injunctive and other equitable relief, actions are almost always commenced at the High Court. The other remedies that avail to the IPR holder would include damages (or an account of profits), discovery, delivery-up and cost. As IPR related disputes often result in the degeneration and dilution of the rights, interim relief would often be required while the dispute is pending a final disposition after trial. Such interim relief is available to the court of equity through interlocutory injunctions and Anton Piller Orders.

There is a move to enact a common set of procedural rules for the High Court and Subordinate Courts. The proposed combined court rules are currently being reviewed b the Attorney General’s Chambers in consultation with a task force set up by the Malaysian Bar. It is expected that the combined rules will be tabled for discussion in Parliament at some point in 2012.

Criminal Enforcement

Although this is essentially a state action, criminal enforcement is usually initiated by filing an official complaint with the Enforcement Division of the Ministry of Domestic Trade, Co-operatives and Consumerism (MDTCC). Complaints in the IPR field are almost always premised on offences under either the Copyright Act 1987 (which deals with copyright related offences) or the Trade Descriptions Act 2011 (TDA) (which deals with trade mark and trade descriptions related offences). The enforcement actions that would be taken by the MDTCC, include conducting raids at identified premises, seizing the offending goods and collation of evidence. Criminal prosecution can follow such actions if there is sufficient evidence to warrant such an action. The MDTCC alternatively has the option of imposing compound on the target under the TDA and upon payment of the compound, the seized goods are likely to be forfeited for destruction.

Cross Sectoral


The Trade Descriptions Act 2011 (“the new TDA”) came into force on 1 November 2011, repealing the Trade Descriptions Act 1972 (“the old TDA”).

Some of the salient changes made in the new TDA include:

Scope of definition and offences have been widenedA “trade description” has now been clearly defined in the new TDA to include a registered trade mark. It has also included a provision to provide that an oral statement may also amount to a use of a trade description. The new TDA has omitted the requirement for an offence to be committed in the course of trade or business, as required under the old TDA. It is now an offence for a person to expose for supply or has in his possession, custody or control or control for supply any goods to which a false trade description is applied.

Increased PenaltyThe new TDA has introduced significantly increased penalties for the offences.New provisions have been introduced in the new TDA to provide for fines based on the number of infringing goods found. A body corporate shall be liable to a fine of not more than RM15,000 for each goods bearing the false trade description and for a second or subsequent the fine is doubled to not more than RM30,000 for each goods bearing the false trade description. This is a departure from the previous penalty of a fine not exceeding RM250,000 and, for a second or subsequent offence, to a fine not exceeding RM500,000.

An individual is liable to a fine not exceeding RM10,000 for each goods bearing the false trade description or to imprisonment for a term not exceeding three years or to both and for a second subsequent offence a fine not exceeding RM 20,000 for each goods bearing the false trade description or to imprisonment for a term not exceeding 5 years or to both. Previously the penalty for an offence committed by an individual is a fine not exceeding RM100,000 or to imprisonment for a term not exceeding 3 years or to both.

Scope and life span of a Trade Description Order have been narrowed significantlyWhile the new TDA retains the right of a registered trade mark owner to file an application to the High Court for a Trade Description Order (TDO), it appears that a trade mark owner’s right to make an application for a TDO based on the ground of passing off (which was clearly provided for under Section 16 of the old TDA) has been removed.

In addition, the life span of a TDO has been reduced to 1 year as compared to the previous 5 years. Even so, it may be the case that the High Court may allow an extension for a further year or more if the High Court is of the view that such a term is reasonable.

The MDTCC has been very active over the past few years in combating piracy and counterfeiting activities in Malaysia as can be seen from the statistics set out below.

Cross Sectoral


NUMBER OF CASES BASED ON THE ACT IN 2012

MONTHACT TOTAL

(RM)PCAPA CSA HPA WMA DSAAPS CPA CA TDA ODA

JANUARY 223 119 1 117 0 130 38 235 0 863

FEBRUARY 79 184 2 86 2 74 44 212 0 683

MARCH 105 130 0 150 1 98 61 209 0 754

APRIL 87 117 4 87 3 82 28 272 0 680

MAY 52 113 6 96 5 61 38 390 0 761

JUNE 50 126 3 47 1 53 19 247 0 546

JULY 37 86 9 21 0 78 24 191 0 446

AUGUST 103 83 1 25 2 38 6 76 0 334

SEPTEMBER 33 124 5 35 1 56 11 159 0 424

OCTOBER 43 101 9 42 1 52 84 149 0 481

NOVEMBER 107 108 1 64 0 80 17 127 0 504

DECEMBER 58 39 0 46 1 76 17 100 0 337

TOTAL 977 1330 41 816 17 878 387 2367 0 6813

VALUE OF SEIZED GOODS BASED ON THE ACT IN 2012

MONTHACT TOTAL

(RM)PCAPA CSA HPA WMA DSAAPS CPA CA TDA ODA

JANUARY 37,770 246,508 - 326141 - 6953 319661 782173 - 1719206

FEBRUARY 17,790 96130 - 82801 3970 582 610098 738208 - 1551579

MARCH 47,018 64255 - 52453 603625 3527 493429 797807 - 2062113

APRIL 157,144 23763 - 30804 14288 4911 92979 1698313 - 2022202

MAY 19,361 8650 - 34555 157895 1501 354565 4565953 - 5142480

JUNE 11,650 971477 - 29820 377 5171 7060873 1761135 - 9840502

JULY 36,776 190135 - 11820 - 3032 432936 6786028 - 7460727

AUGUST 21,420 227131 - 3105 449 27 7584 302848 - 562563

SEPTEMBER 14,026 667163 - 66310 3798 23904 1285191 1311286 - 3371678

OCTOBER 24,474 869260 - 50566 116000 2927 1119454 717500 - 2900181

NOVEMBER 23,307 493303 - 51325 - 3194 150884 629054 - 1351067

DECEMBER 44,714 509820 - 6910 - 765 111461 394825 - 1068494

TOTAL 457,449 4367596 - 746610 900402 56493 12039115 20485129 - 39052794

PCAPA - Price Control and Anti-Profiteering Act 2011CSA - Control of Supplies Act 1961HPA - Hire Purchase Act 1967TDA - Trade Descriptions Act 1972WMA - Weights and Measures Act 1972

CA - Copyright Act 1987DSAAPS - Direct Sale and Anti-Pyramid Scheme Act 2011CPA - Consumer Protection Act 1999ODA - Optical Disc Act 2000

Cross Sectoral


NUMBER OF CASES AND AMOUNT OF COMPOUND PAID IN 2012

MONTH PCAAPA2011 CPS 1961 HPA 1967 TDA 1972WMA 1972

DSAAPSA 2011

CPA 1999 TOTAL

JANUARY 148 28580 2 23000 0 0 30 14600 0 0 0 0 6 20500 146 73480

FEBRUARY 57 12000 0 0 0 0 24 6200 0 0 0 0 10 24000 76 36200

MARCH 74 15000 0 0 0 0 61 13050 0 0 0 0 8 10500 130 32850

APRIL 76 12300 1 2000 0 0 39 6950 0 0 0 0 2 7000 98 22650

MAY 28 5700 0 0 0 0 47 9000 0 0 0 0 6 9100 80 21300

JUNE 31 6200 2 2000 0 0 14 1900 0 0 0 0 1 4500 47 14000

JULY 26 6300 2 7000 0 0 6 1350 0 0 0 0 1 8000 33 22150

AUGUST 78 12850 0 0 0 0 7 1400 0 0 0 0 0 0 69 12050

SEPTEMBER 14 2800 2 9000 0 0 14 14560 0 0 0 0 0 0 27 24860

OCTOBER 28 4200 0 0 0 0 13 7612 0 0 0 0 1 1500 35 10612

NOVEMBER 92 16750 0 0 0 0 25 5850 0 0 0 0 0 0 72 14200

DECEMBER 44 11950 0 0 0 0 21 4500 0 0 0 0 0 0 65 16450

TOTAL 696 134630 9 43000 0 0 301 86972 0 0 0 0 50 118000 1057 387602

PREMISES CHECKED DURING OPERATIONS TO COMBAT COUNTERFEIT PRODUCTS IN 2012

MONTH

TYPES OF BUSINESS PREMISES

TOTALNIGHT

MARKETFOOD

STALLSFIVE FOOT

STALLSCOMPLEX

CONCOURSE

SHOPS SELLING/COMPACT

DISCS

OPTICAL DISCS

FACTORY

STORE/ STORAGE

AREA

COMPUTER SHOPS

OTHERS

JANUARY 1737 334 671 211 251 0 565 76 1328 5173

FEBRUARY 1821 368 405 322 346 0 27 86 1215 4590

MARCH 4260 925 426 547 527 1659 131 123 1539 10137

APRIL 4356 1106 947 832 1150 45 236 504 1676 10852

MAY 4650 1012 1151 1123 1306 54 421 717 1828 12262

JUNE 4007 702 698 715 951 537 214 429 1613 9866

JULY 2667 1100 765 966 945 1260 216 409 1567 9895

AUGUST 2957 1120 1009 974 1085 48 435 615 1685 9928

SEPTEMBER 2113 328 227 118 262 17 7 75 1094 4241

OCTOBER 1270 528 551 533 877 37 232 367 1500 5895

NOVEMBER 1980 441 528 599 896 35 215 327 1480 6501

DECEMBER 1596 428 483 578 763 31 227 331 1502 5939

TOTAL 33414 8392 7861 7518 9359 3723 2926 4059 18027 95279

NUMBER OF CASES FOR ANTICOUNTERFEITING CASES IN 2012ACTS

MONTHTDA

CA 1987 ODA 2000 TOTALTDO (OL) TDO(ODL)

JANUARY 0 129 38 0 167

FEBRUARY 0 110 44 0 154

MARCH 0 106 61 0 167

APRIL 0 149 28 0 177

MAY 0 160 38 0 198

JUNE 0 130 19 0 149

JULY 0 81 24 0 105

AUGUST 0 34 6 0 40

SEPTEMBER 0 80 11 0 91

OCTOBER 0 77 84 0 161

NOVEMBER 0 63 17 0 80

DECEMBER 0 35 17 0 52TOTAL 0 1154 387 0 1541

Note:TDO - Trade Description OrderOL - Original LabelODL - Optical Disc Label

Cross Sectoral


VALUE OF SEIZED PRODUCTS IN ANTICOUNTERFEITING OPERATIONS IN 2012

MONTHACTS

TDA (ODL) 2010 CA 1987 ODA 2000SEIZURE VALUE

(RM)

JANUARY 410755 319661 0 730416

FEBRUARY 476696 610098 0 1086794

MARCH 323916 493429 0 817345

APRIL 763122 92979 0 856101

MAY 560247 354565 0 914812

JUNE 457084 7060873 0 7517957

JULY 388168 432936 0 821104

AUGUST 151818 7584 0 159402

SEPTEMBER 348602 1285191 0 1633793

OCTOBER 459836 1119454 0 1579290

NOVEMBER 348115 150884 0 498999

DECEMBER 181782 111461 0 293243

TOTAL 4870141 12039115 0 16909256

NUMBER OF COUNTERFEIT CASES BASED ON TYPE IN 2012

NO TYPE OF PRODUCT

MONTH/DIVISION OF CASES NUMBEROF CASESJAN FEB MAC APR MAY JUN JUL AUG SEP OCT NOV DEC

FOOD/HEALTH

1 FOOD 13,780 11,520 11216 119 3288 - 4712 6830 21600 - - - 73064

2 MEDICINE - - - - 400 - - - - - - - 400

3 COSMETICS - - 208 - 0 9150 - - 3650 314 - - 13322

4 CIGARETTES - - - 1424 14613 83262 13154 - 432 324 60 - 113268

5 LIQUOR/BEER - - 108000 67300 14250 4000 4114324 - - 1030 5600 2100 4316604

SAFETY

6 PETROLEUM PRODUCTS - - 13000 - 78473 - 4588 - - - - 70000 166061

7 ELECTRICAL PRODUCTS 30030 956 294 - 240 12770 - - - - - - 44290

8 COMM. EQUIP. 1050 3050 700 700 836 12587 42358 - 2000 - 8938 - 72219

9 COMPUTER ACCESSORIES - 99350 - 11550 93619 - 592650 - - 10500 - - 807669

10 VEHICLE SPARE PARTS - 6832 9262 674997 4686 2950 69591 - - - - - 768318

OTHERS

11 CLOTHES 89737 17764 50053 76670 3274664 1135115 1115582 54576 678016 78114 182470 112422 6865182

12 WRIST WATCHES 10520 60 90 15141 3349 3700 - 1190 - - - - 34050

13 STATIONERY - - - - - - - - - - - - -

14 LEATHER GOODS 7433 3520 6100 13740 190543 3185 21695 28018 28635 700 31050 6280 340899

15 SHOES 4333 447 1573 25980 1660 1508 16542 2570 1417 43504 875 760 101169

16 GLASSES - - 180 - 640 - - - 1920 - 0 130 2870

17 OTHERS 32591 44787 14273 14244 270608 13709 200537 31568 135974 33077 20820 12234 824419

TOTAL 189474 188286 214948 901864 3951870 1281935 6195733 124752 873643 167563 249813 203926 14543805

Cross Sectoral


ARRESTS PURSUANT TO THE COPYRIGHT ACT 1987 IN 2012

MONTHLOCATIONS OF ARRESTS

TOTALOPEN PREMISES

MOBILE TRADER

WITH VEHICLE

FIXED PREMISES

STORE/STORAGE AREA

EXPORTER TONTOPOLICE

ARRESTS

JANUARY 4 0 0 4 0 0 0 0 0

FEBRUARY 4 1 0 7 0 0 0 0 3

MARCH 8 0 0 3 0 0 0 0 3

APRIL 6 0 0 1 0 0 0 0 0

MAY 2 0 0 4 0 0 0 0 40

JUNE 1 0 0 6 0 0 0 0 5

JULY 3 0 0 2 0 0 0 0 5

AUGUST 0 0 0 1 0 0 0 0 1

SEPTEMBER 3 0 0 4 0 0 0 0 7

OCTOBER 0 0 0 4 0 0 0 0 46

NOVEMBER 0 0 0 1 0 0 0 0 1

DECEMBER 0 0 0 2 0 0 0 0 2

TOTAL 31 1 0 39 0 0 0 0 113

ERADICATION OF COUNTERFEIT PRODUCTS YEAR TOTAL NUMBER OF CASES TOTAL VALUE OF SEIZED ITEMS (RM)

2004 3,914 98,166,687.27

2005 2,606 12,212,808.55

2006 2,018 42,686,237.69

2007 1,936 56,169,682.09

2008 1,528 23,463,304.88

2009 409 3,570,857.51

2010 870 9,425,568.17

Table3

ERADICATION OF COPYRIGHT PIRACY ACTIVITIESYEAR TOTAL NUMBER OF CASES TOTAL VALUE OF SEIZED ITEMS (RM) PREMISES INSPECTED

2004 4,390 59,216,259.00 25,508

2005 3,812 100,370,598.00 38,069

2006 3,792 120,001,103.00 38,166

2007 2,720 54,907,108.49 70,863

2008 1,942 20,680,942.20 150,310

2009 902 33,537,375.81 112,799

2010 1,728 30,425,070.00 93,180

Table 4

ACTION TAKEN ON BUSINESS OWNERSYEAR TOTAL NUMBER OF CASES TOTAL VALUE OF SEIZED ITEMS (RM)

2004 15,534 177,597,239.12

2005 16,792 188,058,574.84

2006 15,066 271,919,968.54

2007 11,902 145,262,739.99

2008 10,188 111,347,914.45

2009 4130 43,854,325.73

2010 7,564 60,812,645.00

Table 5

Cross Sectoral


Despite the extensive number of raid actions taken, there are various challenges in the enforcement of IPR both on the civil and criminal sides which are set out below.

MDTCC also launched the Basket of Brands (BOB) in 2011. One of the reasons cited by MDTCC for initiating BOB was the difficulty in obtaining prompt and full cooperation from certain brand owners in the past to verify the seizures made by them. BOB is essentially a database system identifying a list of owners of the registered marks and their representatives who have agreed in writing to fully cooperate with the MDTCC in their enforcement actions and the MDTCC will only take proactive actions against counterfeit products bearing these lists of registered trade marks listed in the BOB and MDTCC has specified the timeframe for thebrandownersand/or their representativestoverifyandsubmit theverificationreport. In theevent thebrand owners or their representatives fail to carry out such verification or submit the verification report within the stipulated timeframe, MDTCC shall have the right to take any of the following actions:• Toissuereminders/showcauseletters;

• Torefrainfromtakinganyactionsproactivelyorbasedoncomplaintslodgedbythebrandowners;

• Toceasetheactionstaken;and/or

• Todisposeofftheseizedgoodsasitdeemsfit.

TherearecurrentlyongoingdiscussionsandengagementsbetweentheMDTCCandbrandownersand/ortheir representatives to work out the various kinks of this new mechanism.

Challenges of Enforcement of IPRs

1. Due to the technical nature of IP laws and lack of familiarity, there is a possibility that misunderstandings / miscomprehensions of IPR and the law could occur in court which also adds to the delay in thedisposition of cases.

2. In certain instances, IPR holders fail to provide full co-operation to the prosecution of the case in Court, commonly in the form of providing expert witnesses, proper lab analysis reports or professional assistance to facilitate the prosecution.

3. After raids are conducted, prosecution of offenders is slow to commence or does not happen at all. As a result of which, IPR holders may have lost interest in the case by the time an action is commenced due to the delay involved – stagnation of court process.

4. Barriers faced by the MDTCC in the prosecution of IP cases include:• lackofcooperationfromIPholders;• lackoforinsufficientevidencetoprosecutethemastermindsorkeyplayersinvolved;• failureofwitnessestoattendCourt;• questionablerights(highercourtstendtochallengetherightsownedbytheIPRholder.

5. Investigations are sometimes not conducted thoroughly enough.

6. Lenient sentences imposed on offenders and the low fines or compounds imposed are not acting as strong enough deterrents. Custodial sentences are rarely given.

7. Counterfeiting and piracy have now become organised crimes controlled by syndicates and currently there are lack of effective legislations to combat this new approach.

8. A continuing perception that IPR infringements are not serious crimes or are victimless crimes.

9. Expensive and protracted proceedings involved.

10. A special agency needs to be set up in Malaysia, to track down such websites selling counterfeit products and at the same time work closely with the ISP’s.

Cross Sectoral


11. The backlog of trade mark applications which are in the process of being examined at the Malaysian Intellectual Property Office would need to be addressed and resolved particularly as Malaysia has imminent plans to accede to the Madrid Protocol.

EUMCCI Recommendations1. Additional judges are appointed to specifically deal with IP matters alone. The establishment of the IP

Court on 17 July 2007 through the renaming and officiating of the Criminal Session Court 4 in Kuala Lumpur as the first Intellectual Property Sessions Court, and the establishment of a High Court of Malaya dedicated to IPR related disputes in Kuala Lumpur on the same day, has certainly been a more efficient and systematic approach in resolving IPR disputes. It is clear from the number of cases involved that additional judges should be appointed to expedite the disposal of cases.

2. Dedicated team of public prosecutors specialising in IP crime should be established. We are given to understand that MDTCC has plans to enlist the assistance of deputy public prosecutors from the Attorney General’s Chambers to prosecute IP cases. Such plans would definitely address the challenges encountered and are highly commendable.

3. Some form of encouragement for IPR holders to generate interest in pursuing their claims, for example:

• Createawarenessoftheadverseconsequenceofcounterfeitingactivitiesinmonetaryvalue;

• Informationdisseminated topubliconcounterfeiting throughadcampaignsand roadshows formore effective IP enforcement including awareness activities in schools;

• Rewardschemeofferedtoinformants.

4. The industries, recognising and appreciating the challenges encountered by the enforcement officers in carrying out their duties, should conduct regular and periodic capacity building programs for enforcement officers. Such capacity building programs would include product identification techniques, assisting the enforcement authorities to develop and establish standard operating procedures in conducting search and seizures, investigation skills and techniques in gaining, gathering and managing evidence as well as enhancing the prosecutors’ advocacy skills and techniques.

5. The loopholes and shortcomings found in the IP legal framework should be tightened.

For example, there should be imposition of minimum fines or depending on the amount of goods seized or if the value of seized goods exceeds a certain amount, the Court must impose a custodial sentence. Any burdensome documentary requirements and method of proving subsistence and ownership should be addressed. MDTCC should consider accepting verification by way of digital images and if they believe that such practices would be challenged in court, they should consider the inclusion of an express provision in the relevant laws such as the TDA and CA to specifically cater for the acceptance of digital images in a court of law. This would definitely result in win-win situation for both MDTCC and the IP holders in getting their cases completed and prosecuted expeditiously.

6. Enforcement officers could be given a wider scope of power, for example:

• Toworkhandinhandwithothergovernmentalagenciesundertaskforces(formanpowerpurposesto reduce delay);

• Theexchangeofinformationandintelligencebetweenthesetaskforces/governmentalagencies;

• Encouragecooperationamonggovernmentalagencies;

• Providepolicepersonnelwithsupport&training.

7. MDTCC should use other means and laws including Anti-Money Laundering and Anti-Terrorism Financing Act 2001 to tackle counterfeiting activities, adopting various strategies that to hit the targets where it hurts the most, i.e. their wallets.

8. CollaborationbetweenIPholdersandenforcement/taskforcebyholdingregularmeetings/forumstoshare information and assist in combating counterfeiting and piracy.

Cross Sectoral


9. In addition to the issues raised and recommended in the IPR section, there are other specific IP issues of concern which have been highlighted in the Healthcare section.

Border Measures

With the advent of globalisation, the movement of infringing goods through the borders of various countries have been on the rise. Developing countries continue to be a hot bed for such activities particularly where the infrastructure for transhipment is good. Malaysia, in dealing with this issue and in fulfilling their treaty obligations, has enacted various border provisions, particularly into the Trade Marks Act 1976. The Border provisions allow the proprietor of a registered trade mark or an agent of the proprietor to make the requisite complaint or request (by filling in the prescribed forms) to invoke these border provisions. Once approval for such action has been granted, necessary measures are undertaken to notify the authorised officer, being a proper officer of customs as defined under the Customs Act 1967. The officer then has the power to restrain and prohibit the importation of such the goods identified in the Registrar’s notice and shall seize and detain the infringed goods at the point of entry into the country. However, in light of the availability of this avenue, border measures suffer the following drawbacks that result in the difficulty to rely upon it as a protective measure for IPR holders.

Setbacks / Problems of Border Measures

• Bordercontrol isonlyavailableforcounterfeitgoodswheretrademarksareregisteredMalaysia.Theseactions would not avail common law owners.

• TheprovisionsundertheTradeMarksAct1976providesfortherestrictionandprohibitiononimportationofcounterfeit trademarkgoodsoncetriggeredbyacomplaint/applicationbyan IPowner.Whileex-officio powers are provided by the Act, these are rarely utilised by the relevant authorities. Due to the highly onerous requirements imposed in the Act, these border measures are rarely invoked by IP holders.

• Bulkofcounterfeitgoods–Thegrowthofindustrialisationoflowcostmanufacturingcountries,i.e.China,Vietnam, Indonesia, generate an increase of infringing products entering the country. The tracking of these goods are difficult, because:

• Sometimes,partsofproductsarebroughtintothecountrytobeassembledlocally;

• Localcontacts;

• Packagingandlabellingdoneinthecountry;

• Identificationoftherelevantdetailsofapossibleinfringingimportersuchastheregistrationnumberoftheship/aircraft/vehicle,nameoftheplaceofthecounterfeittrademarkgoodsexpectedtobeimported,expected date and time of arrival, is difficult. The gathering of such intelligence information, being a requirement under the Act, is not practical as this information, in most instances, would be unavailable to the IP owner;

• Evidencegatheringmaybetime-consuminginnature.

• Air travel – training provided to customs at the airports does not include training to detect / identifycounterfeit goods.

• Due to the absence of training with regards to counterfeit goods, the level of awareness amongstcustoms officers needs to be improved as they currently are not provided with substantive amounts of motivationtocombatpiracy/counterfeiting.

• CustomsofficersdonotviewIPRasapriorityoftenfocusingontheirmoretraditionalroleofdealingwithprohibited items and duties chargeable on imported products.

• EnforcementofficersmustalsobegivenjurisdictioninFreeTradeZonesandcounterfeitproductsheldinthese areas should be subject to seizures.

Cross Sectoral


EUMCCI Recommendations• Training for customs officers should include training to enforce IPRs at all borders and/or more

involvement from MDTCC officials in dealing with border enforcement.

• Sharingof information iscrucial– intelligencesharing,customshandshake (agreementwithcustomsofficials from other countries).

• Cooperationbetweenagenciesiscrucial–INTERPOL,WTO,WIPO.

• RightsholdersmustsupporttheCustomsinfarmoreefficientenforcementofrights.

• RecordIPrightswithCustomsinordertoassistinup-keepingaregularmonitoringsystem–“tokeepon the lookout”.

• Verificationofimporters.

• Identificationofimporters/highriskcompanies.

• Conductjointenforcementactions.

• Brandowners/industrytotrainfrontlineofficersinidentifyingcounterfeit/piratedgoods.

• Usethemedia(throughpressreleasesandpressconferences)whencounterfeitgoodsareseized.Thiswouldactasawarning/deterringfactor.

• ThereisalsoacriticalneedtoaddresslackofexpressauthorityandpoweronthepartoftheCustomsadministrations under the Customs Act 1967 to prevent/prohibit the importation and exportation ofcounterfeit goods at the border, and to put in place the required laws and procedures to facilitate the exercise of this authority and power. This will also change the mindset of the Customs officers to deviate from their traditional role of collection of taxes and revenues to the fact that they could play a pivotal role in effective enforcement of IPR.

Prosecution Issues

• PrioritydatesandTermofrights.AtpresentthetermofaMalaysianpatentis20yearsfromthefilingdate, irrespective of whether or not it claims priority to an earlier application. This is consistent with the Paris convention. However, for Trade Marks and Designs the term is instead calculated from the priority date if available. For Trade marks this may conflict with practice under the Madrid Protocol as the term of an international trade mark is calculated from the filing date irrespective of any priority claim. An international trade mark is effective in multiple states, but is renewed in a single instance. Similar issues may arise in respect of Designs if Malaysia wishes to accede to the corresponding Hague Agreement.

• Patent renewals.Atpresentonlyanagentauthorisedby theapplicant (viaForm17) canhandle theprosecution of a patent application or pay a renewal fee. However, as a fee was introduced in 2011 for this form, if an agent refuses to take action, moves firm, retires, or dies, the applicant may have to pay a large amount of fees unexpectedly to transfer their portfolio to a new agent even though it is not something they have instructed. Clearly this is detrimental to the applicant’s rights, particularly for renewal cases.

• In2012,theHighCourtdeterminedthatitcouldnotmakeamendmentsitselftoapatent(astheyActonly provides for MyIPO to do this under s79A). However, amendments cannot be made by the Registrar during litigation - s79A(3). Thus the patentee may be in a situation where instead of the court allowing a simple amendment, his only option is to abandon a claim, but cannot reinstate an amended version of the claim through the Registrar due to s79A(2). This severely restricts the rights of patent owners litigation compared to other jurisdictions.

Cross Sectoral


• ThePatentRegisterisincomplete,forexampleonlyshowingthemostrecentrecordentryratherthanthehistory of a file (which can be important for determining the correct chain of assignment); and not indicating whether an application is a divisional or has been reinstated. This may lead to uncertainty in various areas.

• First-filingPCT.Pursuanttos23Aands78FofthePatentsAct,aPCTapplication(withoutpriority)cannotbe first-filed in Malaysia unless written authority is obtained (because it is considered to be a foreign application as well as a national application). This seems to be an unnecessary burden especially as penalties (s62A) can be harsh.

• WhenthePatentsActwas lastupdated in2011to indicatethatpatentswerepublishedat18monthsfrom priority (previously published at grant), s14(2b) was not updated. Therefore the law now indicates that an earlier filed patent application (which was not published at the time of filing the application in suit) can retrospectively become prior art when it is granted. This leads to uncertainty with regard to validity.

• Availabilityofpublishedpatentspecifications.AtpresentMyIPOchargesRM30toviewapublishedpatent application or granted patent, and a significant proportion of cases are unavailable even when they are paid for. This calls into question whether or not the patents are truly publicly available in some jurisdictions (as the payment requirement means the specification is not searchable), which therefore means that earlier rights in Malaysia may not supersede later rights in other countries. In conclusion the payment requirement is detrimental to Malaysian rights.

EUMCCI Recommendations• Correct term for Industrial Designs. No change to Designs Act required but interpretation by MyIPO

appears to be inconsistent therewith

• AmendTradeMarksActtoensurethattermiscalculatedfromlocalfilingdatenotprioritydate(sothatperiod defined by priority claim is not subtracted from term) and be in line with Madrid Protocol

• AbolishthefeeforForm17(inlinewithUKpractice),orissueanoteindicatedthatanyonecanrenewapatent, not just the agent of record (in line with the Patent Law Treaty).

• AmendthePatentsActtostatethatthecourthasjurisdictiontoallowamendmentstotheclaimsduringlitigation.

• Update thePatentRegister tocomplete themissingfields,andprovideanadditional tab toshow thecomplete history of the case.

• UpdatethePatentsActorRegulationstoindicatethatforeign-filingauthorisationisnotrequiredforaPCTfirst-filed in Malaysia

• Updates14(2b)ofthePatentsActsothattheearlierpatentiseffectivefrompublication,notgrant(inlinewith the UK and EPC on which this section was originally based).

• Abolishpaymentrequirementforobtainingpublished/grantedpatentspecifications.

Cross Sectoral


Various IP Actions taken so far

1. IP and innovation are recognised by the Government as playing a significant role in transforming the country into a high income economy under the Economic Transformation Programme (ETP). In achieving this objective, the Government recently passed the Malaysian Innovation Agency Act 2010 which provides the legal framework to enable the implementation of the Government’s innovation agenda in order to stimulate and develop the innovation eco-system in the country. A National Innovation Policy is also in the midst of being drafted which will set out amongst others, the policies and guidelines in order to regulate IP administration and management with a framework in place to meet the innovation needs of the country.

2. With the establishment of IP Courts and the implementation of the ‘fast-track’ system in the Malaysian courts, the time taken for an IP suit from filing to completion of a full trial can be as short as 9 months.

3. Public awareness and interest in IP rights has been boosted with 26th April being earmarked as National IP Day, to cultivate and increase the awareness in Intellectual Property rights amongst the public.

4. The Copyright (Amendment) Act 2012 which came into force on 1st March 2012 provides for various additional provisions including the following:

• Limiting the liability of Internet Service Providers (ISP) and protecting ISP from liability of anytransient storage of copyright work

• ProvisionswherebytheISPistoremove/disableaccessuponnoticefromthecopyrightowner;

• VoluntaryregistrationofcopyrightandcreatingaRegisterofCopyright;

• Amendmentsdealingwithremunerationrightsofperformers;

• Provisionsonanti-camcordingactivities

5. The Copyright (Voluntary Notification) Regulations 2012 were introduced with effect from 1st June 2012 and allows the owner of a work eligible for copyright to deposit a copy with MyIPO, as evidence of ownership.

6. Malaysia has acceded to the WIPO Copyright Treaty (WCT) and WIPO Performances & Phonograms Treaty (WPPT).

7. The Trade Descriptions Act 2011 came into effect on 1 November 2011 repealing the Trade Description Act 1972. One of the significant features of the TDA 2011 is that only the owners of registered trade marks can apply for a Trade Description Order (TDO) to declare that the infringing mark is a false trade description. Another feature of the TDA 2011 is that the life span of a TDO is now one year from the date on which it is made instead of five years under the TDA 1972.

8. The Trade Mark (Amendment) Regulations 2011 and Patent (Amendment) Regulations 2011 came into force on 15 February 2011. One of the significant amendments to the regulations is the provision of expedited examination which will allow an applicant of a patent or trade mark application to request for an expedited examination of the application. This would help the owners to enforce their rights against infringers at a quicker pace as the patent or trade mark registration process can be expedited. In addition, patent applications are now made public at 18 months (rather than on grant), harmonising Malaysian law with other major jurisdictions.

9. The Industrial Designs (Amendment) Regulations 2012 came into force on 15 February 2012. The current Industrial Designs Regulations 1999 is repealed and replaced by this new Regulation. Some of the changes include an increase in official fees, the requirement to file an appointment of agent form and the provision for online filing of industrial designs.

Cross Sectoral


10. In line with the Government’s drive to stimulate IP based transactions, there are proposals to amend the IP legislation to include provisions to allow for the monetisation and securitization of IP rights in order to provide a legal basis for various IPR including trade marks and patents to be accepted as collaterals by financial institutions.

11. The Prime Minister YAB Dato’ Sri Najib Tun Abdul Razak announced in the 2013 budget speech that the following initiatives will be implemented:

• ToestablishanIPFinancingFundschemeamountingtoRM200millionwhichwillbeofferedthroughMalaysian Debt Ventures Berhad. The Government will provide a 2% interest rate subsidy and guarantee of 50% through Credit Guarantee Corporation Malaysia Berhad; and

• ToallocateRM19millionfortrainingprogrammesforlocalintellectualpropertyevaluatorsconductedby MyIPO as well as to create an intellectual property right market platform.

12. Malaysia is expected to accede to the Madrid Protocol in 2014. The Madrid Protocol provides a centralised international filing system for the registration of trade marks.

13. The Competition Act 2010 came into force on 1st January 2012. The Act prohibits anti-competitive practices which include both anti competitive agreements and abuse of a dominant position. The Act targets commercial activities which would have an effect on competition in any market in Malaysia, irrespective of whether the activities were carried out within or outside of Malaysia.

14. The Personal Data Protection Act 2010 came into force on 1st January 2013. The Act comprises seven principles that must be abided by to safeguard the integrity of personal data.

15. MyIPO is working on a code of conduct to help regulate IP agents and improve training thereof, to ensure the expectations of the public are met.



Issues by Sector

Issues by Sector


5. Issues by Sector

5.1 Aerospace

Aerospace activity in Malaysia continues to strengthen its presence in the global market and its importance within the domestic economy. The intention to create a strong aerospace industry was first conceived with the launching of the National Aerospace Blueprint in 1997. This was followed by the establishment of the Malaysian Aerospace Council in 2001 chaired by the Prime Minister with the vision for Malaysia to become a major aerospace player by 2015. To drive industry growth four sectors of the industry were given greater focus, namely parts and components manufacturing; maintenance, repair and overhaul; avionics and systems integration; and aerospace training. To encourage industry development the Malaysia International Aerospace Centre at Subang was established.

There are more than 150 organisations in Malaysia involved in a variety of aerospace activities. In addition to the NADI group of companies and MAS Aerospace Engineering a significant number of large multinational companies have invested in Malaysia including Parker Hannifin, Honeywell, GE, AAR, BES, CAE and Hamilton Sundstrand. From Europe we have also seen sizeable investment being made including that of EADS through both Eurocopter and Airbus, Agusta Westland, Spirit Aero Systems, Airfoil Services and Strand Aerospace. More recently Messier Bugatti Dowty, Altran and RUAG Aviation have all chosen to invest in Malaysia.

Moving forward, Malaysia’s intent is to be the preferred global aerospace outsourcing centre through participation in design and build activities in future international aircraft programs. In addition, Malaysia wishes to secure more of the MRO market as well as developing its capability in avionics and systems integration. These promoted areas provide opportunities for foreign aerospace players to invest in Malaysia either through joint-venture with local companies or 100% foreign direct investment. In 2011 the aerospace industry contributed RM26.7bn or around 4% of national GDP and employed more than 53000 personnel. Aerospace manufacturing is valued at around RM1.2bn per annum and MRO around RM4.8bn with a plan to grow this to RM13.4bn by 2020.

The Aerospace Committee through various meetings, forums and seminars promotes the activities of the aerospace community in Malaysia. It provides the platform to bring together the private sector, agencies and associations and academics to engage in open dialogue and provide opportunities to submit relevant concerns and recommendations. The Committee’s key activities focus on sectors including MRO, Air Transport, Aviation Training and Manufacturing. The Committee encourages dialogue with a range of key stakeholders, including the relevant government bodies addressing aerospace trade issues building consensus in support of its recommendations. The EUMCCI Aerospace Committee is currently reviewing the following areas:

1. Promotion of improved aviation safety and European safety standards

2. Concepts to raise awareness of European aviation practices

3. Mechanisms of cooperation on EU-Environmental initiatives

4. Development of education and technical training to standards equivalent to those in Europe

5. Promotion of Malaysia as an Asia Aerospace Hub

6. Development of air transport routes between the EU and Malaysia

Issues by Sector


Issue: Aerospace manufacturing development

To further develop the aerospace manufacturing industry it is important that the necessary processing support services are readily available. In this regard there is a lack of process capability development to support the industry. Through capability development it ois considered that this would encourage more foreign investment as significant savings would be realised in much of the start up and on-going costs. Through identification of these capability gaps this would encouarge foreign investors to invest in additional manufacturing technologies and capabilities.

It is also considered essential in order for Malaysia to become a centre of excellence and to move up the value chain and achieve its goal to become a hub for design and build that Malaysian companies be encouraged to further collaborate on various programs. There is also a need to assist companies become more productive through automation and mechanisation.

Recommendations1. A dialogue is required between EUMCCI Aerospace Committee and MIDA together with MiGHT to

review mechanisms to progress enhancement of process capability. A joint review in this regard is planned for October 2013 at the forum to be arranged by the Aerospace Committee.

2. In order to assist in greater industry collaboration it is considered important to create an aerospace industry association in Malaysia. This is also planned to be reviewed at the October 2013 forum.

3. Programs need to be established to support process led productivity improvements through various government grants and tax breaks.

Issue: Foreign investment in the MRO sector

At this time within the MRO market much of the work is still being exported and performed by foreign based organisations when a business case may exist to perform such work in country. In order to encourage additional foreign investment in Malaysia for MRO services and particularly where there are gaps in existing capability it is considered that preference be given to encourage capability development by such investors over those of foreign based companies performing such work. It is considered that these companies should be given preferential access to government contracts over foreign based organisations.

In addition these companies also find it difficult to obtain suitable financing during the initial commencement of operations. This coupled with the market access restrictions make the business case much more challenging. Furthermore, it is felt that OEM’s during the sales of large capital products should be further encouraged to support and develop local industry not only through offset programs.

Recommendations1. Financial institutions should be encouraged to offer assistance to companies during the first 2 years of

their operation for high technology business such as aerospace. It is considered that MIDA and the Ministry of Finance together with the banking community review whether such a program could be initiated.

2. It is considered that government policy be reviewed in respect of managing offset programs for significant procurement programs and in direct procurement agreements to encourage the development of local industry. In this respect the Committee wishes to arrange through MITI together with PEMANDU to facilitate a meeting with the relevant government departments and agencies.

Issues by Sector


Issue: Availability of engineering talent in Malaysia

There is a growing need for available technician and engineering talent in Malaysia to support the growth of the aerospace industry. The development of technicians with international (EASA) qualifications is essential to encourage further foreign investment in MRO. In addition there is a need to develop a critical skill base in manufacturing of composites, sheet metal fabrication and precision machining instead of being overly dependent on foreign labour. Engineering graduates with a broader knowledge base with the ability for critical thinking and to be more innovative are required if Malaysia is to achieve it aim to become a hub for design and build programs. There is also a need for continuous development of technicians and engineers skill base within the industry.

Recommendations1. A roadmap between industry and academic institutions needs to be developed. This should be

through engagement with various government ministries including MOHR and MOHE. A forum is planned in 2013 to encourage the various technical colleges and universities to participate in a debate with industry as to how to close the gap and also how both should work together to ensure availability of suitable local talent.

Issue: Procurement

During large capital acquisition programs where the technical and commercial specifications are detailed there often appears to be a lack of structure and in some instances transparency in the government procurement process. Foreign companies often need to work with many government bodies and stakeholders which may lead to confusion. Furthermore and whilst it is understood the technical specification may and often will be amended it is important that any such change be communicated to all parties. In addition to encourage local industry development the tender document for such procurement should clearly detail the form of local participation and that such development of local industry should be a prerequisite.

Recommendations1. It is considered that a formal standardised procurement process needs to be developed for all such

projects which is well understood by all

2. It is considered that improved coordination across various government departments and government linked organisations should be encouraged so as to benefit Malaysia by maximising the opportunity for transfer of technology and development where practical of local industry.

5.2 Automotive

Background

With the implementation of AEC 2015, ASEAN will reach a prominent position to attract foreign investment. As ASEAN is set to become the world’s sixth-largest automotive market by 2018, it is expected that regional sales will double to nearly 4.7 million vehicles from 2.4 million last year. Therefore, its 10 member-states continue to facilitate significant investments to flow into this region. A harmonization of standards and regulations has to be seen as essential step to the success of AEC 2015. Only with such a harmonization can the creation of a single manufacturing base as well as free movement of goods be ensured.

Issues by Sector


According to the “CEO 360 Degree Perspective of the Automotive Industry in ASEAN”, Indonesia, Malaysia, Thailand and Vietnam are demonstrating a compound annual growth rate (CAGR) of 10.1 percent. Sales in Thailand and Indonesia have reached over 1 million vehicles each, and a significant increase in production is expected based on local demands, with Thai dominance of nearly 2.5 million vehicles produced last year alone.

Production of Motor Vehicles

CountryPassenger Vehicles

Commercial Vehicles

2012 2011 Variant (%)

Indonesia 743,501 322,056 1,065,557 837,948 27%

Malaysia 509,621 59,999 569,620 533,515 7%

Philippines 26,340 49,073 75,413 64,906 16%

Thailand 957,623 1,496,094 2,453,717 1,457,795 68%

Vietnam 41,488 32,185 73,673 100,465 -27%

TOTAL 2,278,573 1,959,407 4,237,980 2,994,629 42%

(Source:ASEANAutomotiveFederation,2012)

In addition to serving the regional market, ASEAN has assumed a greater role as a global supplier of automotive, and is expected to grow in importance due to a competitive production base with strong competencies in certain product ranges. This will increase substantially not only in terms of economic growth, but also employment and technological advancement.

Since the last ASEAN-EU Business Summit in 2012, the automotive sector has seen significant improvements by the various governments, particularly in regulations and incentives to encourage adoption of low-emission vehicles. While there has been progress in many areas, others still need to see further improvement.

Key recommendations:• AlignmentofautomotiveproductswithinternationalUNECEstandards

• Consolidationofapprovalandhomologationprocesses

• Adoptionofhigherfuelqualityandemissionstandards

• Harmonizationofrulesoforigin

• Technology-neutralvehicletaxationscheme

• Availabilityandqualityofskilledworkforce

The EU-ASEAN Business Council (EABC) has identified key areas in order to raise ASEAN global competitiveness:

Issues by Sector


Recommendations

1. Alignment of automotive products with international UNECE standards

The harmonization of automotive product standards is essential as basis for a single manufacturing base. As work has begun within ASEAN on the alignment of technical requirements, 50 UNECE regulations have been identified where 19 of those have been prioritized and will form part of the Mutual Recognition Arrangement (MRA) for automotive products in ASEAN.

The 19 Priority UNECE Regulations for Harmonization are:

Regulation number TopicECE R13 Heavy vehicle brakingECE R13H Braking of passenger carsECE R14 Safety-belt anchoragesECE R16 Safety-beltsECE R17 Strength of seats, their anchorages and head restraintsECE R25 Head restraints (headrests)ECE R30 Tires for passenger cars and their trailersECE R39 Speedometer ECE R40 Exhaust EmissionECE R41 Noise emissions (L Category)ECE R43 Safety glassECE R46 Devices for indirect vision (Rear view mirror)ECE R49 Diesel EmissionECE R51 Noise Emissions of M and N categories of vehiclesECE R54 Tires for commercial vehicles and their trailersECE R60 Driver Operated ControlsECE R75 Tiresformotorcycles/mopedsECE R79 Steering EquipmentECE R83 Exhaust Emissions of M1 and N1 vehicles

While discussion within Automotive Product Working Group (APWG) under the ASEAN Consultative Committee on Standards & Quality (ACCSQ) is ongoing, 19 regulations have been identified but have yet to be agreed among APWG members. On this priority, regulations of their respective local agencies have been implemented according to their domestic industrial standards. Hence, this non-uniform progress is hindering the advancement of these priorities to be harmonized, where a different pace of adoption is observed within each market. More importantly, an identical methodology is yet to be seen when implementing UNECE standards across ASEAN.

Alignment with Global Technical Regulations (GTRs) will help increase ASEAN’s competitiveness, and will enable the export of automotive technologies to countries following the UNECE standards. The alignment with international standards will furthermore ensure global automotive competiveness as these standards not only serve local demand; they also fulfil more stringent global requirements for road safety and environmental protection.

Issues by Sector


RecommendationASEAN to adopt UNECE regulations for automotive products and to work closely with all member countries in the region to align the 19 priority UNECE standards. Target is to achieve a single regulatory regime in ASEAN by 2015. ASEAN should implement identical testing procedures using the same metrology method, standards and application regulations.

2. Consolidation of approval and homologation processes

Depending on domestic requirements, different approval and homologation processes have been observed. Local agencies (mostly a member of APWG under ACCSQ) require manufacturers to comply with local mandatory certification standards on top of the international standards that need to be adhered to.

This redundancy has a substantial impact on the cost and time spent due to unnecessary duplication of processes, as one test report and/or plant audit accepted by one agency is not accepted by otheragencies. More importantly, this will have a direct impact on the development of the concept of a single manufacturing base in ASEAN to allow free flow of automotive products within the region. Hence this will further hinder the investment opportunity for ASEAN to become a global automotive player as it would only serve domestic markets. This consolidation of approval and homologation processes will also facilitate the formation of a single regime for future regional agreements with other key trade partners such as the EU.

RecommendationASEAN to create a single regulatory regime for approval and homologation processes to improve time and cost efficiency. We strongly advocate relevant authorities to accept test reports by qualified foreign bodies and align their standards in order to facilitate exports based on UNECE-approved regulations.

3. Adoption of higher fuel quality and emission standards

Globally, automakers have already moved towards modern low carbon emission technologies to comply with Euro V/VI standards and to reduce vehicle emission significantly. In order to become a singlemanufacturing base for the global automotive market, it is essential that ASEAN is harmonizing emission regulations and fuel quality standards across the region and comply with international standards and best practises.

A higher fuel quality with low sulphur content for both petrol and diesel fuel is essential for the introduction of modern low emission technologies. The low fuel quality in most of the ASEAN countries (except Singapore and Thailand) is the biggest hurdle for the introduction of such modern low emission technologies. Low fuel quality standards are not only having an adverse impact on the environment, but also cause a serious disadvantage to the end-consumer since they do not have access to the latest innovations available since the technical requirement of such modern technologies require fuel of higher quality.

While ASEAN countries are encouraging and developing policies on fuel economy improvements for vehicles that are manufactured, assembled or sold in their respective countries, the availability of high quality fuel is actually one of the most effective means to reduce fuel consumption, leading to less dependency on crude oil imports and lowering fuel subsidies (where applicable). Currently, there is no clear plan to align those fuel quality standards across the ASEAN region.

Issues by Sector


Recommendation

The introduction of higher fuel quality and emission standards is the pre-requisite for the introduction of environmental-friendly low emission technologies. In order to prepare for the AEC 2015 and to enable free movement of goods, ASEAN will have to implement more stringent fuel quality and emission standards and harmonize those standards across the region. A concrete roadmap of implementation is urged by automotive manufacturers and the oil companies.

4. Harmonization of the Rules of Origin

Rules of Origin and local content are differently defined across ASEAN countries despite promoting local content requirements (40%). Without harmonized rules, local OEMs encounter higher production costs. As such, cheaper imported parts are preferred as compared to those produced locally, and this adversely impacts the local manufacturers and hence local employment.

In addition, different certification processes by different local authorities have resulted in complexity in applying the Rule of Origin. This impedes the integration of ASEAN to become a single manufacturing hub and market.

RecommendationThe Automotive sector recommends a harmonization of related implementing procedures for local content and Rules of Origin application as part of the approval and homologation processes in order to become a single manufacturing hub by 2015.

5. Technology-neutral vehicle taxation scheme

Environmental issues are becoming a major factor in general and in the automotive industry in particular. Therefore, we strongly advocate that vehicle taxation schemes should be based on the effective carbon dioxide (CO2) emission levels of vehicles, with technology-neutral regulations across the ASEAN countries. With a clear focus on the emission output of vehicles, the best (cleanest) vehicle technologies will be incentivized; and not by selected drive types only. This will enhance competitiveness and productivity between all market players and gives the end-consumer a wide range of options.With such a taxation scheme, the consumers will be more likely to choose environmentally friendly vehicles, which would lead to a gradual decrease the usage of old, high-pollution vehicles - a shift towards clean, green vehicles a reduction in overall fuel consumption and fuel subsidies (where applicable).

RecommendationASEAN to promote to member countries the introduction of a technology-neutral emission based taxation scheme, such that vehicles with low CO2 emissions would receive a tax relief whereas high fuel consumption and high CO2 emission vehicles would be taxed higher, independent of their power train technology.

Issues by Sector


6. Availability and quality of skilled workforce

As growth in the automotive industry area is expected to continue, an increasing shortage in labour and skilled workforce is being experienced at all levels across ASEAN, particularly in the highly-skilled and technology-intensive manufacturing sector.

Despite an increase in the number of graduates and qualified engineers, ASEAN continues to experience a shortage of labour as these graduates do not meet the increased industrial standard requirements.

For these reasons, ASEAN productivity in industrial sectors, particularly in the automotive industry, has yet to realize its full capacity.

Recommendation

ASEAN Governments to facilitate public/private partnerships in engineering and technical trainings toensure that the workforce meets industrial demand, as well as allowing free movement of unskilled workforce where appropriate. In the longer term, the improvement of educational standards that incorporates industrial trainings as part of the academic curriculum should be considered in order to improve the quality of workforce.

5.3 Education

In order to grow, develop and compete, Malaysia must create a world-class educational system which leads through research and development, as well as through top-quality teaching. This will produce the human capital and human resources required for sustainable socio-economic development and create a workforce that is immediately employable, skilled, hard working, creative, inventive, productive, adaptable and flexible.

In reality the Malaysian education system, from primary to tertiary education, is widely perceived to have a number of persistent deficiencies. These have been acknowledged by the Government and are now a key focus of widely supported reforms within the Economic Transformation Programme (ETP).

The Malaysian education system is divided into three levels: primary, secondary and tertiary. Most Malaysians have completed the second level and the Malaysian government aspires to increase the number of students aged between 17 and 23 in higher education from 30% to 40% by 2020.

By the end of 2012, Malaysia educated around 950,000 students in 20 public universities, 33 private universities and university colleges, 6 foreign university branch campuses, 22 polytechnics, 37 community colleges and about 500 private colleges. The number of local and international universities has been increasing and recently two new foreign university branch campuses have been established or announced by University of Reading, and Heriott-Watt University both from the United Kingdom with more expected in 2013.

Three ministries are primarily responsible for providing education services, the Ministry of Education, the Ministry of Higher Education and the Ministry of Human Resources. According to the 2012 budget, the government has allocated RM37 billion for the Education sector which is equivalent to almost 16% of the total budget to the Ministry. This demonstrates the very real commitment the Government has to education as a national priority.

Issues by Sector


The education sector is one of the key sectors in which the Malaysian government has decided to invest, in accordance with the goals set by the Vision 2020 project, the Industrial Master Plan 3 (IMP3) 2006 – 2020 and the Economic Transformation Programme (ETP) 2009-2020. Under the ETP, education has been designated one of the 12 National Key Economic Areas (NKEAs). Within the Education NKEA there are 13 Entry-Point Projects (EPP) ranging from early child education through to higher education, with key focus areas on creating a strong brand for Malaysian education and in developing a number of key education hubs and clusters in strategic areas such as Islamic Business and Hospitality. There will also be an emphasis on developing new online education processes and distance learning alternatives to traditional study methods.

The Education NKEA focuses on five areas of transformation covering industry structure, student internationalisation, new ways of working, regulatory transformation and shifts in funding. Education is targeted to raise its total contribution to Gross National Income (GNI) from RM27.1 billion in 2009 (around 4% of GNI) to RM60.7 billion in 2020 (around 6% of GNI). The target for 2020 is to create 535,000 new jobs in education and to increase student enrolment by 200,000 in higher education. Internationalisation will be a key driver of this growth with plans to increase international students from 16,000 in 2009 to 74,000 by 2020.

Despite these very positive developments, we believe that there are many areas which require attention in terms of policy development and implementation and these are outlined below.

1). Primary and Secondary education

Issue: Curricula and Teaching Methods

Many educationalists point to rote learning, under-developed and out-dated curricula and a grading and reward system that appears to be compromised by reluctance to fail underperformance in students and institutions. Students are not taught lateral or creative thinking in schools. Teaching by rote creates employees who are often incapable of working without direction or arriving at conclusions independently.

RecommendationsGreater focus must be placed on issues in curricula and teaching methods in primary and secondary education. These are critical for child development and successful preparation for further study at vocational level or higher education level.

Child creativity and innovation develops primarily from the education provided in primary and secondary schools. Schools should encourage students to be more pro-active and to be involved in extra-curriculum activities beyond their academic studies. There should be a wide range and mix of extra-curriculum activities for students.

A wider curriculum is needed that encourages lateral and creative thinking that can be applied to solving real world problems in the future. Critical appreciation for subjects such as art, music and global issues can engender independent thinking and new approaches to problem solving and so creating a dynamic and innovative workforce of the future.

Issues by Sector


Issue: English Language Proficiency

There is also a persistent and unresolved issue in the use of English language and the problems of striking a balance with Bahasa Malaysia (BM) in the education system as a whole. English is a language of communication knowledge in most areas of study and there is often a lack of high quality BM materials in many areas. The Malaysian economy has become reliant on English speaking Malaysians who are educated abroad while the local graduates from public universities are often unemployable due to poor command of these important language skills.

RecommendationGreater focus must be placed on developing English language proficiency in primary and secondary education for students. These are critical for development and success in further study at vocational level or higher education level. In addition, the need for the competent English language teachers is required to ensure the proficiency is in accordance with international standards.

Issue: Compulsory Secondary Education

Primary education in Malaysia begins at age seven and lasts for six years, referred to as Year 1 to 6 and currently students are promoted to the next year regardless of their academic performance. Currently this poses two challenges, secondary school is not compulsory and the absence of performance standards for entry into secondary school.

RecommendationThe government must ensure secondary education is mandatory with all students leaving formal schooling with a minimum SPM or equivalent vocational qualification. This means that compulsory schooling will increase from 6 to 11 years and the introduction of entrance standards into secondary education.

Issue: Improving Access to Education

The best school systems deliver the best possible education for every student, regardless of ethnicity, geographical location, or socio-economic background. Students from indigenous and other minority groups, as well as students with physical or learning disabilities, should be given more support in order to level the playing field.

RecommendationThe government should make available suitable educational facilities and equipment needed to create a conducive and supportive learning environment for all students as well providing additional training to teachers that understand their students’ specific needs and challenges, and have teaching strategies relevant to the target groups.

2). tertiary and HigHer education

Issue: Entry-level Qualifications, Aptitude and Suitability for Higher Education

As a consequence of deficiencies in primary and secondary education, there is a view amongst many academics that universities are not getting the right type of students. This results in a mismatch between the abilities of students and the academic and non-academic programmes offered by the education system. The result is a shortage of skilled labour.

Issues by Sector


RecommendationsThere should be a progressive process of “raising the bar” to have more stringent screening for entry level into university. This should include entrance examinations for all students and interviews for the most demanding courses. Within the university system higher marking thresholds are needed with a strict policy of failing students who are inadequate or not up to the mark. This will help to overcome the preoccupation with quantity and place greater emphasis on quality. In preparation for the 2013 intake, University of Malaya has introduced interview as compulsory entry requirement as well as raising the minimum CGPA for candidates applying for entry.

Issue: Pressures on the Development of University Staff

The reliance on mass tertiary education as the primary or only response to these issues has created a system in which education has become a commodity rather than an effective investment in creating a world-class workforce. In turn the high enrolment of students has put pressure on academics and teacher education at university level. A lack of good quality teachers has arisen in many universities because of the great demand for lecturers. This has lead to weak selection processes for potential teachers and doctoral students as universities try to expand the teaching cohort with under-qualified candidates.

For well qualified candidates with an aptitude for research or these who want to gain career advancement the demands of university rankings with an almost obsessive focus on research publications has compromised teaching in many instances.

Recommendation

Issue: Under-performing universities

Malaysian universities, especially in the public sector have recently under-performed in relation to their peers in international assessments of teaching, research and output. During 2012 the EUMCCI will be discussing and researching these issues with workshops from leading academics from Malaysia and overseas to evaluate the usefulness on Malaysian University Rankings to complement international ratings and act as a stepping stone to higher levels of achievement.

RecommendationVice-Chancellors and senior managers must fully understand the processes used for international ratings of higher education institutions. Universities must establish management responsibility to respond to criteria in order to improve the overall ratings of Malaysian universities. Private higher education specialists from Europe should be called upon as consultants to the higher education institutions to share best practices on strategy, management and implementation issues related to international ratings. There should be very clear targets for improvement and an intolerance of under-performance and excuses for poor results.

Issue: Poor quality private higher education institutions

There are a large number of Private Higher Education Institutions (PHEIs) in Malaysia, which offer marginal or limited course options of low value to the students involved. The assessment of staff in such institutions is also poor and often under-qualified teachers using out-dated material continue to be the mainstay of the faculty at some PHEIs.

Issues by Sector


RecommendationThe government should review the performance of PHEIs more effectively as part of the national efficiency programmes such as the GTP and ETP. A clear and transparent framework for reform of the PHEI Sector should be created and introduced. Under-performing PHEIs should be required to reform, merge or open up for acquisition by public universities, other PHEIs and specialist education companies. In extreme cases their licences should be revoked.

PHEIs should also be subject to regular reviews of their course content, teaching approaches and success as measured by pass rates and student satisfaction. Under performing staff should be required to retrain. The assessments should be independent of the PHEIs and should use external assessors from the public and private sectors to provide a comprehensive and objective assessment system.

Issue: Lack of transferable skills among graduates

EU and other foreign companies find it difficult to employ potential recruits as they do not possess the required skills; one of the main concerns, as mentioned above, is the level of English language amongst jobseekers. A common comment made by companies is that recent graduates do not have the appropriate real world business skills necessary to tackle even the most basic roles without substantial retraining.

RecommendationA greater emphasis should be placed on teaching English language and on the basic real world skills that are required in modern executive roles, at a secondary and higher education level so that graduates are prepared to hit the ground running when they secure employment.

Increase emphasis on critical thought in the curriculum and employable skills should be embedded in all courses as many degree courses do not help students to develop vital core work skills. It is crucial that the higher education experience prepares students to take control of their own learning, career and life.

Issue: Managing Internationalisation in Higher Education

Recruitment of both teachers and students at a tertiary level is hindered by an adherence to quota filling rather than filling the available positions with the highest calibre candidates. This has lead to a mass exodus of students, graduates and teachers to either private institutions in country or educational institutions overseas in search of quality education in their desired fields, despite the increased cost.

RecommendationThe introduction of a placement system based more on meritocracy to ensure that the most talented members of society receive the appropriate level of education, remain within the country and utilise their skills locally. Public universities and Private Higher Education Institutions (PHEIs) should accelerate the process of encouraging and offering incentives to open up faculty places to overseas academics on Visiting Professor Schemes, contract appointments and full-time tenure track positions.

Issue: Lack of Engagement between Education Institution and the Private Sector

Engagement between business and education needs to improve. Business should communicate with universities and engage in discussion on the latest developments in both academic and business advances. Miscommunication of intent, opportunities and availability of both students and placements occurs when contact between business and universities do not take place at the appropriate level.

Issues by Sector


RecommendationA more coordinated engagement between industry and universities should take place at a national level and additional emphasis should be made between recruitment or HR departments and the specific faculties and faculty members as relevant, so that opportunities for placements or visits by industry to talk to students are directed towards the correct students. In this way relationships are built between institutions that can be nurtured and maintained to the benefit of all parties.

3). tecHnical education and Vocational training

Issue: Technical Education and Vocational Training

There appears to be a stigma associated with technical education and vocational training (TEVT) in Malaysia which pushes students into the academic stream or forces them to drop-out without any effective skills to place them in productive employment.

RecommendationsProfessionalization of technical and vocational education is essential to change the mindset of this important component of the education system. Efforts must be made to promote technical and vocational education and to de-stigmatize vocational professions by giving them professional status, higher wages and professional certification.

Malaysia should look to build a coordinated system that integrates vocational education with secondary school leavers, as early as at SPM level as well as strengthening the recognition of higher training institutes and technical universities as an alternative to further education at the tertiary level. Investigating and learning from other education systems especially that of Germany will help to develop a suitable Malaysian model.

Issue: Encouragement of Industry Placement for Academia

In the past, for academics, time taken away from academia and spent in industry is not given the same value as traditional sabbatical leave engaged in research. Academic and career credit is often not granted for industrial placements meaning that fewer academics chose to take this option and so miss out on the opportunity to gain more ‘up to date’ working knowledge. In the same way, very few workers take the opportunity to spend time in academia due to a similarly negative perception. However steps are being taken to facilitate this process in the public higher education institutions.

RecommendationThe current program allowing academic staff to spend their industry sabbatical should be enhanced to enable services and industry personnel to spend a period of time at university and vice versa. The time spent should form part of an academic’s KPIs and performance indicators and should be valued in promotion, remuneration and career development as other forms of placement and sabbatical activity.

Issue: Length of internships

Whilst work placements and internships are a part of many vocational courses, the amount of time allowed by the majority of programmes with less than 3 months in many cases, is seen as an inefficient use of resources by industry as by the time students have found their feet in a placement it is time for them to return to college.

Issues by Sector


RecommendationIndustry placements as part of the academic course should ideally be for 6 months at least, giving both businesses and students time to create a meaningful and effective programme. Many EU university programmes that involve time in business often offer a ‘sandwich year’ – a year spent in industry, usually experiencing time in more than one role to gain a rounded and accurate view of what is expected in the relevant field of work. Businesses in Malaysia would also be more open to student placements if they had a guarantee of a rolling programme of interns every 6 months – this would also create an opportunity to grow relations between universities and industry.

Additionally, EUMCCI will assist in the process of engagement, sharing of best practices and the commercialization of R&D by encouraging faculty to establish linkages with industry through participation in selected Committees e.g. Oil & Gas, ICT and EEGT.

5.4 Energy, Environment and Green Technology

The Country’s Future Lies in the Green Field

Malaysia’s abundance and good supply of fossil energy resources have served the country for decades in attracting foreign investments, thus becoming a benchmark example for many others. The attractive infrastructure of low-priced energy have served the country to a large extent in becoming an international centre of excellence for the manufacturing industries, with many of the world’s largest corporations establishing their (largest) production facility in the country. Therefore, the country has enjoyed a period of tremendous wealth and prosperity. During this dynamic period of rapid economic growth, however, the shadowsideofthedevelopment,forinstanceanappropriatewaste,waterand/orseweragemanagementsystem and long-term energy security has been largely neglected. Depleting oil and gas resources will push energy prices considerably higher and Malaysia will not be spared. This is already an accepted certainty which is of considerable concern because Malaysia is heavily reliant on hydrocarbon fuel for powering its industries and services. In 2011, Peninsular Malaysia’s electricity supply was generated from gas (45.1%), oil (2.5%), distillate (2.5%), hydro (5.8%), coal (~43%) and renewable energy (~1%). Hence the energy sector is one of the most urgent topics. In addition, per capita CO2 emission has increased by 226% since 1990, with Malaysia waste recycling rate standing at between 6 – 8 %% extremely low compared to many developed countries with recycling rates of often more than 60%.

Lost chances and opportunities in recent decades

The great proverb ‘We do not inherit the Earth from our ancestors. We borrow it from our children.’ has been in fact overlooked in the past: During the recent few decades of prosperity, the country’s most valuable assets, the fossil resources of Oil and Gas, are nearing depletion. Incomes from these assets have been used in consumptive ways and government budgets are largely dependent on this soon depleted source. The country and its current generation lives on yesterday-built energy resources and hardly any of this income have been invested to secure a sustainable energy supply and security for future generations.

The ‘Fifth Fuel Policy’ targeting to diversify energy resources for power regeneration was successfully introduced in 2001 with the aim of having a higher share of Renewable Energy (RE). Nevertheless, the results during the first years were very much disappointing.

Until today, Malaysia, with only about 1% share of grid-connected renewable energy in the country’s energy mix, is far behind the RE levels of most industrial countries and even most of the less developed neighbours

Issues by Sector


in the region. Nevertheless the overall targets with 6% of Renewable Energy (RE) by 2015 and 15% RE share by 2020 are perfectly set.

Next to it another challenge remains, as the FIT-policy when introduced, was only applicable for West Malaysia; the larger land part Sabah and Sarawak were not yet part of it. Meanwhile Sabah is “on-board” but still the challenge remains to implement the FIT policy on national level, covering entire nation.

Green Technology as key driver of the future economic growth in Malaysia

Europe’s development of an entire new industry segment with immense future potential, the Green Technology field, is a great example for Malaysia to likewise develop a new future growth industry. This is consistent with the country’s aims to achieve a high-income status and to focus more strongly on the services sector. Green technologies could and should become a new future growth sector to generate sustainability, secure economic growth as well as to solidify the country’s international position and reputation. To become outstanding in the field of Green Technology and to claim, at least, a regional leadership, Malaysia needs to gain much ground. We believe that next to KETTHA all the other relevant ministries, especially MITI, MIDA and the relevant industry associations like FMM, the ones for the palm oil industry as the solar industry have to feel now the chances and responsibility to develop a new green corporate sector with great employment opportunities.

Introduction of the FIT-system

The introduction of the FIT-system by December 2011 is the right move by the government to increase a more sustainable energy future and allow a higher share of Renewable Energy. That some of the given quota was taken up in some area within hours should be understood as a strong industry votum to increase the quota quickly or to abolish the quota entirely. The later would require a courageus political backing and a strong financial commitment.

Energy Efficiency (EE) A key contributor to the energy sustainability of the country.

It is gratifying to note that the developments have addressed some of the recommendations that were made in the previous years’ position papers. It is recognised and imperative that the drive to an EE economy is facilitated by a holistic roadmap where the national EE framework and targets are established like in the energy supply side, we believe that European partners could contribute at large towards an energy efficient Malaysian economy.

Year to Year Results

Looking into recent years, the “Green Agenda” has advanced significantly with KETTHA and many others spearheading the development. Many major political and legal frameworks have been established or are still in the process of being drafted during the coming months. Amongst it the Green Tech Malaysia Corporation is trusted to foster the private sector development. Its Green Technology Financing Scheme (GTFS) has received an increasing number of applications.

The International Green Technology & Eco Products Exhibition & Conference (IGEM) had its inaugural launch in 2010, officiated by the Prime Minister himself, became a major platform for exchange whereby the EU with its active member states demonstrated its leadership in RE & EE technologies and expertise. The EU-Pavilion contributed the largest overall number of exhibitors in 2010 as well as 2011 and peaking in 2012. A special and very positive new government initiative is the “1Malaysia Biomass Alternative Strategy

Issues by Sector


(1MBAS) Initiative established in March 2012. Coordinated by Agensi Inovasi Malaysia, which is directly under the Prime Minister, the initiative has proven some promising results to materialize on the great biomass potential along with the National Biomass Strategy by 2020.

On the flip side of the coin, neither the tremendous increase in various green tech-related symposia, workshops and seminars, nor the given policies and acts have resulted in a considerable increase of renewable energy share. In this respect, Malaysia lags behind its regional neighbours. Being the No 4 in the global production of Solar Cells and modules, it has not built up a world-class supply chain for the renewable energy industry. And it is particularly striking when visiting last year’s world largest Solar Trade Fair in Munich, Germany; that of the 2100 exhibitors listed, just a few Malaysian companies were registered. This year MATRADE’s support scheme is the first step into the right direction

Europe: A global Green Tech leader and partner

Europe is considered overall world leader in Green Technology policy incentive schemes, products and services and therefore the perfect match for Malaysia. European technologies are much admired and in the highest demand around the globe. Thus, Europe is committed to contribute a great deal to the identification and development of Green Technology as a key driver of future economic growth in Malaysia.

Another great challenge for Malaysia is the capacity building in all the relevant Greentech areas, private sector as in relevant ministries and industry associations and we believe this education sector has great potential for partnerships with partners from the EU.

The EEGT sub Committees ‘ Energy Efficiency, Renewable Energy, Waste and Water’ of the EUMCCI are the most active and cooperative partners for exchange of information and a solution provider to the private sector, the Malaysian Government and further related stakeholders. The EUMCCI-EEGT builds on the great partnership with Malaysia’s green tech partners with a wide spectrum of activities ranging from accompanying the Minister in Europe as organizing Delegations to Europe and business luncheons, exchange of information and expertise with Malaysian ministries, as well as the IGEM and many more activities. The EU-Malaysia Greentech Business Platform is a perfect example for the good exchange between the EU’s side with Malaysia’s match, be it from the government or the corporate sector.

Please find the sub committees positions as follows:

5.4.1 Renewable Energy (RE)

Continuation of FIT sustainability

IssueImbalance of quota for certain resources of renewable energy and limited RE fund. For example, solar PV quota for the period 2012-2014 was almost fully taken up while the high capacity generation sectors of biogas and biomass are still available, even though the latter sectors are much more easily administrated & contribute towards fulfilling the 5% of RE mix in our national electricity generation as well as significantly contribute to the target of 40% reduction of greenhouse gas emissions from 2005 levels.

Issues by Sector


RecommendationIncrease the given quota and address the balance between the four technologies in the short term. We propose to increase quotas for popular technologies, such as solar PV, as the adoption rate increases amongst both small & large scale producers. The digression rate of the FiT is also a point of concern, considering many of the project financing are based on current tariff rates. With a high digression rate, it would render a lot of projects not viable and this would certainly not be conducive to encourage the growth of the industry.

Inorder to indirectlypush formoreadoptionofbiogas/biomasspowerplants, thegovernmentcanalsotightentheregulationsintermsofwastewater/solidwastetreatmentrequiredbythefacilities inordertoensure compliance. This is also beneficial for the companies as their products, often exported, are all requiring sustainability criteria in all supply chain steps to be fulfilled in order to be accepted into the foreign markets. There are also increasingly higher value for the biomass, as identified in the National Biomass Strategy 2020 by the Innovation Agency Malaysia (AIM), which can be freed up by utilising another means of generating energy (eg. biogas, where the feedstock are located in the same place, minimising transportation cost) & result in a zero-waste scenario for the plants.

For the medium term, we propose to increase overall quota with increased funding for RE power generation by increasing levy from the current 1% of the electricity bills or possibly impose tax on “polluting” technologies. We hope this will be further bolstered by removal of subsidies for electricity, as this is not a real reflection of the market price which significantly discourages other efforts like energy efficiency projects. We commend the effort initiated by the government to remove the subsidies gradually with a target to have fully removed them by 2016. This would prove to be a huge boost to encourage energy efficiency & renewable energy projects to take off with a way more feasible return of investment period.

Capacity building / lack of talent / lack of standards as an industry

With any emerging industries, transfer of expertise to capable workforce is crucial in ensuring industry growth & long term sustainability of the sector. It is also important to have standards applicable to industries to ensure safety & performance benchmarks are established and met for future replication of projects.

There is a shortage of qualified and knowledgeable workforce to service the RE industry in Malaysia given it is a new industry. This is further compounded by lack of industry standards and regulations for the new workforce to adhere to as well. With other established industries, the standards for safety, site conditions, testing & qualifying procedures are all there but with the RE industries, this is still an issue. For example, the qualified personnel that are allowed to operate biogas plants are rare in Malaysia and at times, there are

RecommendationAs Malaysia is gearing towards attracting its overseas talent back to home ground, this could be an area to begin capacity building of new graduates by returning talent who are experts in the fields. Organizations like TalentCorp have begun to work with local RE companies who are struggling to find suitable talent for this area with focused partnerships with higher education institutions to produce graduates who can fill this void. However, it is also crucial that the overall education system is providing the knowledge foundation in science & math, so the students can move more easily into technical fields of EE & RE. Without a supporting workforce, it would be difficult & costly to build up these new industries.

With international standards for the industries adopted, this could also be a guideline in training the talent pool to produce qualified candidates which are able to serve the growing industry.

Issues by Sector


Other recommendations for RE

EUMCCI would also like to recommend that we revisit some of the recommendations made in recent years that have yet to be realized;• Encourageutilisationoflatesttechnologiesbyprovidingattractiveincentivesandtoincreaseeligibility

of incentives to the entire value chain of the project.

• ConsiderSmartGridtechnologythatintelligentlyregulatesthepowergenerationdispatch,inviewofamore complex generation network when more small RE plants come online and explore Micro grid implementation in educational institutions, up-coming townships, tourist areas, islands etc.

• FacilitatefinancingofREprojectsutilisingnewtechnologiesthatarenotyetpresent inMalaysiabutthat already have successful reference in other countries

5.4.2 Energy Efficiency

Malaysia announced a Five Fuel Diversification Energy Policy (coal, gas, oil, hydro, renewables) in 2000 but it is now timely to consider Energy Efficiency (EE) for inclusion as a Sixth Fuel in the Energy Policy. It is not hype, but stands firmly on proven ground that EE can reduce dependency on the non-renewable fuels. Energy efficiency is proving itself to be the lowest cost pathway to a low-carbon economy by reducing carbon emissions, ensuring power system reliability and security of supply, and more importantly cutting the required amount of new generation capacity.

Applied together with the Fifth Fuel, renewables, EE becomes a powerful catalyst for change. This is a macroeconomic driver now appreciated by many of the OECD and non-OECD countries, resulting in increasing competitiveness and job creation. Governments are clueing in to the advantages of setting Energy Intensity or Energy Efficiency targets not only as a stimulus for long-term economic sustainability but also for mitigating climate change impacts. For example, the Europe 2020 target of 20% energy efficiency is a directive that the EU27 member nations will attempt to meet by setting their respective national targets. However early indications are that the 20% target may not be fully met. In response, the European Climate Foundation has initiated a major study and produced the Roadmap 2050 for decarbonising the European economy. The Roadmap 2050 indicates that decarbonisation is economically viable with energy efficiency playing a large role.

Despite the apparent advantages of adopting energy efficiency full scale, Malaysia is still in a state of flux on the direction it should pursue for energy efficiency. The long-awaited National Energy Efficiency Masterplan (NEEMP) which was to cover demand side management of electricity consumption is still not released yet. Early indications on a potential energy effiency target is a very modest single digit figure to be achieved within a 10 year period. Bear in mind that this target only involves electricity consumption and excludes other efficiencies needed in the transport fuel sector, industrial fuel use, power generation, etc. The proposed Energy Efficiency Act (EEA) may never see the light of day as the current thinking is that the objectives of the proposed act may be achieved by amending existing electricity laws.

The longer it waits to commit to significant and aggressive energy efficiency targets, Malaysia’s industrial competitiveness will be outpaced by neighbouring economies who have embarked on a committed path to energy efficiency. This has become increasingly apparent over the last several years.

More worrisome is that Malaysia is planning new generation capacity based on a business as usual (BAU) demand projection and that the new generation capacity is largely coal dependent. Malaysia had awarded

Issues by Sector


the contract for the plant-up of two coal power plants in late 2012 and is planning for two more coal power plants to be tendered in 2013. If Malaysia incorporates energy efficiency into its demand projections and increase the share of renewables dramatically, it is highly likely that even these two coal power plants may not need to be tendered.

Many of the recommendations for energy efficiency policy, strategies and instruments that have been put forward in previous editions of this publication have yet to be realized in a holistic and strategic manner. The move towards energy efficiency (and its pseudo identity – Green Technology) largely remains uncoordinated. The newest entrant to the Green Technology scene is the Clean Tech and Environment Management Division in MIDA, a laudable move but only if they can help bring clarity to the decarbonisation of this country.

The EUMCCI and other EU member chambers have carried out many activities in support of the government’s Green Technology aspirations and contributed expertise in resolving issues, more recently in the area of Green Financing. The EUMCCI is committed to continuing these efforts but the support from EU businesses is getting tenuous because there hasn’t been enough traction to sustain their business objectives in Malaysia compared with other regional neighbours. Therefore, our recommendations largely remain the same as in previous editions but with a crucial emphasis i.e. the government of Malaysia must implement a holistic energy efficiency strategy and action plan before it’s too late.

5.5 Green Building

Introduction

Green Building aims to embody the principles of sustainable development i.e. environmental responsibility, social awareness and economic profitability, in the siting, design, building, maintenance, operation and renovation of buildings. EUMCCI endorses the Green Building movement as a great opportunity for Malaysia to make and accelerate changes in construction practice and technology, to reduce the environmental impacts of the built environment while creating places that are healthier and more satisfying for the Malaysian society. Furthermore, with the increasing worldwide demand for green building space, the green building movement gives Malaysia has the opportunity to become more competitive in the international property market.

Status

Over the last years, Malaysia has experienced a concerted shift towards the development of green buildings, driven mainly by market demand. A study published in 2012 by the Malaysian National Property Information Centre, Finance Ministry reported that the green office buildings can achieve higher rental rates by 0.50 to 2.25 RM/ft2 and higher rental growth by 0.50 to 1.00 RM/ft2 compared to conventionalbuildings. The demand continues to rise as environmental awareness grows and more companies embrace the practice of corporate social responsibility. Other drivers are governmental support in the form of fiscal incentives and the growing evidence of green building operational cost and occupant health and comfort benefits.

The Malaysia Green Building Confederation (MGBC) is a not-for-profit, non-governmental organisation established in April 2009. It is supported by the two professional organisations the Malaysian Institute of Architects (PAM) and the Association of Consulting Engineers Malaysia (ACEM). In May 2009, PAM and ACEM launched the Green Building Index (GBI), a voluntary scoring method for residential (RNC) and non-

Issues by Sector


residential new construction (NRNC) projects. GBI classify construction projects in four categories i.e. Platinum, Gold, Silver or Certified, depending on the scores achieved. Evaluation is based on six key criteria: Energy Efficiency, Indoor Environment Quality, Sustainable Site Planning & Management, Material & Resources, Water Efficiency and Innovation. The Non-Residential Existing Buildings (GBI-NREB) rating tool was launched in April 2010. To achieve GBI-NREB certification, old buildings need to improve their sustainability credentials after major renovations. Year 2011 saw the release of various green building assessment methods. In March 2011, Green Building Index Sdn Bhd released “GBI Township”, a tool that aims to facilitate discussions on how sustainable townships are planned, designed, built, operated and maintained. Core categories include: Climate, Energy and Water, Ecology & Environment, Community Planning & Design, Transportation & Connectivity, Building & Resources, Business & Innovation. The GBI Industrial tools for existing (GBI-IEB) and new constructions (GBI-INC) were also released in June 2011. In November 2011 the Cabinet of Malaysia approved a “Green Neighbourhood and Low Carbon City” framework and assessment system. The new assessment system targets to address climate change effectively via urban planning system and was developed by Ministry of Energy, Green Technology and Water (keTTHa) with support from Malaysia Green Technology Corporation and Malaysian Institute of Planners.

To increase certifications in the years ahead, the Malaysian Government has introduced incentives for building owners obtaining GBI Certification for buildings from 24 October 2009 until 31 December 2014. The incremental costs which qualify for tax exemption refer to the additional construction costs of a building, alteration, renovation, extension or improvement of an existing building. In addition, buyers who purchase GBI certified commercial buildings and residential properties from property developers are eligible for stamp duty exemption on the portion of the cost attributable to the acquisition of the GBI certificate.

EUMCCI supports the adoption and ongoing development of GBI as a market-based green building transformation system that meets Malaysia’s requirements. The transition to sustainable construction practices is as much a business opportunity as a crucial response to the urgency and importance of environmental concerns and could alter the face of the Malaysian construction industry for the better.

Issues• GBI is a powerful tool in its ability to guide and accelerate the green building market and to create

paradigms in green construction. However, experience in the EU and the US has shown that similar rating systems (eg BREEAM, LEED) are not effective as tools to be used by Governments for industry transformation and policy making.

• Complicated,non-standardizedmeasurementandverification(M&V)ofenergysavingsdoesn’ttranslateto key decision makers, such as lenders, owners and tenants.

• GreenbuildinginMalaysiafocusestoooftenonnewconstructionsratherthanexistingbuildings.Thisisevident by the number of GBI certified renovations representing only 7% of the overall GBI certified projects despite the fact that old buildings represent the bulk of Malaysia’s commercial space

• TheGBIisdevelopedspecificallyfortheMalaysiantropicalclimate,environmentalanddevelopmentalcontext, culture and social needs. However it neglects focusing on Malaysia’s specific sustainability concerns i.e. urban sprawl, deforestation, flooding, air and water pollution, the pedestrian network and highway traffic problems

• GBI isapointbasedsystemwherebuildingprojectsearnpoints forsatisfyingspecificgreenbuildingcriteria. Special attention should be taken in the application to ensure that the guidance and recommendations provided do not replace innovation in design and do not undervalue non-quantifiable sustainability domains such as society and human comfort

Issues by Sector


• Thefinancialviabilityofenergyefficiencyinbuildingisoftencompromisedbytheprovisionofthevarioussubsidies for fossil fuels

• LackofdiversityinrenewableenergytechnologiesapplicabletoMalaysianGreenBuildings

• Improvingtheefficiencyofindividualbuildingsandisolateddevelopmentsrepresentsonlythetipofthegreen building “iceberg”. A stronger focus should be put on improving the sustainability of communities - especially communities in which Malaysians can work, shop, worship, learn and play near their homes; without having to drive long distances from residential areas to business districts, shopping centres, schools and other facilities

• TheGBIincentivescheme,whileprovidingtaxexemptionontheincrementalcoststoallgreenbuildingowners, it:1. is not sufficiently attractive for Gold and Platinum GBI buildings.

2. is effective only after the GBI Completion and Verification stage, which is 6 months after the building competition and long after the capital expenditure has been incurred.

3. will expire in 31 December 2014.

• The building services sector represented by designers, engineers and business consultants has animportant role in green building practice; developing & disseminating information in passive design, resource efficient & clean technologies, healthy buildings and procurement of products & materials. However the GBI fiscal incentives cover only manufacturing and the supply chain (e.g. additional cost for materials), failing to mobilize R&D and capacity building

Recommendations• Create and implement anEnergyEfficiencyPassport (EEP) scheme for all newbuildings, aswell as

overhaul, reconstruction, disposition or lease (rent) of buildings. The EEP has been particularly successful scheme in the EU and it can become a strong tool in Malaysia to set minimum requirements for energy efficiency of buildings. Moreover, it would give tenants and property buyers a clearer idea of the energy costs that they will face.

• Providecomprehensive training,exchangeofexperienceandresearchonsustainableconstruction inhigher education and for industry professionals, in order to ensure that this new market has appropriate supply of skills and knowledge

• Exchange experience and knowledge of European rating standards and within the sustainableconstruction industry. Foster international co-operation between higher education institutions, including between the EU and Malaysian Academic institutions. Take advantage of the enormous European knowledge in creating quality spaces, with 4000 years’ experience in creating sustainable cities.

• ContinuouslyreviewtheexperiencewithGBIratingsandthepointallocationsfordifferentcategoriesinterms of their effectiveness

• Promotesolarthermaltechnologiestocoverhotwaterrequirementsintheresidential,industrialhealthand hospitality sectors

• Extend the tax incentivesbeyond2015andenhance it forPlatinum ratedGBIbuildings, to supportgreen building R&D by the development of world class green building benchmark projects

• AcceleratepaceofimprovingexistingbuildingsbymakingGBIincentivesapplicablealsototenantswhodo not own the building but have incurred the expenses to transform the building into a GBI complied building

• Extend the GBI incentive scheme to include all incremental costs such as Environmental Design &Engineering Consultancy fees and GBI facilitator fees in order to mobilise R&D, innovation and capacity building in Malaysia

Issues by Sector


• Extendthegreenbuildingconceptstoanurbanplanningandsocialorganisationlevel:achievegreatersustainability by using a combination of local public policy, planning, design and technology.

• MalaysiacouldallowEuropeanprofessionalsintheconstructionsectorwithforeignqualificationstobeable to register in Malaysia and become shareholders and directors in their respective professional practices

• Increase environmental performance requirements for public buildings to set the benchmarkingparadigm for the construction industry. Define a roadmap for retrofitting all existing public buildings into the GBI Platinum standard

5.6 Healthcare

Malaysia remains a relatively new market with strong perspectives for the pharmaceutical industry. The Malaysian healthcare market is very dynamic continues to grow:

• Pharmaceuticals: MYR5.55bn (US$1.81bn) in 2011 to MYR6.1bn (US$1.93bn) in 2012; +10.2% in local currency and +6.2% in US dollars. Forecast unchanged from Q412.

• Healthcare: MYR36.35bn (US$11.88bn) in 2011 to MYR38.85bn (US$12.24bn) in 2012; +6.9% in local currency and +3.0% in US dollars. Forecast lowered from Q412 on account of macroeconomic factors.

• Medical devices: MYR3.97bn (US$1.30bn) in 2011 to MYR4.29bn (US$1.35bn) in 2012; +8.2% in local currency and +4.3% in US dollars. Forecast lowered from Q412 on account of new historical data.

The government has engaged in significant attempts to introduce administrative reforms in the healthcare system. However, the current healthcare environment is characterized by under investment and currently fails to meet the demand. The European pharmaceutical industry remains a key contributor to the economic growth of Malaysia and is committed to helping address these health policy objectives.

However, despite Malaysia’s commitments to the WTO, the research based pharmaceutical companies continues to face long-standing market access barriers and substandard intellectual property protection in Malaysia.

Issue: HealthCare Reform

• Discussions and plans to reform the current healthcare system have increased significantly both inintensity and frequency over the last decade.

• The initiatives include consideration of a consolidated healthcare delivery system, a single-payerfinancing scheme amongst others.

• In recentyears, theyhavegainedmore tractionandmomentum throughvariousprojectsatdifferentorganizational levels as the Ministry of Health Malaysia (MOH) pursues to achieve equity of access to medicines whilst challenged with affordability and limited resources.

Issues by Sector


Recommendations• TheindustryfullysupportsinitiativesthataimtoimprovetheMalaysianhealthcareenvironment.

• The industry strongly recommends careful assessment and implementation in order to preserve thehonourable intention of improving access to better healthcare.

• TheindustryhopesthattheMOHembraceaholisticstrategythatvisitsallanglesofhealthcaredeliveryin its assessment and decision on implementations.

• TheindustryhopestobealwaysengagedasapartnertotheMOHinsuchinitiativesaswesharethesame goal of improving the citizen’s health outcomes.

• Movingforward,theindustrywouldliketoseefairandtransparentevidence-basedlisting,pricingandprocurement decisions on health technologies by providing adequate compensations which commensurate with the value that the innovation contributes to the patient outcomes.

Intellectual Propriety Rights of Pharmaceuticals

Issue: Regulatory Data Protection• The MOH Directive for Data Exclusivity was officially published in March 2011. Provision for protection

period remains effective from date of approval in country of origin up to 5 years for a New Chemical Entity and 3 years for a new indication.

• Due to the current regulatory approval timelines for pharmaceuticals by MOH, such provision will result in significant loss of the protection period.

• The Data Protection does not include biopharmaceuticals.

Recommendations• Regulatory Data Protection for pharmaceuticals need to be on par with international standards to

continuously recognize and reward the considerable effort to bring innovation into the country e.g. the effective period of data protection is to start from approval in Malaysia, and not from country of origin.

• IndustrywouldliketheMOHtoconsiderincludingbiopharmaceuticalsintheprovisionofregulatorydataprotection.

Issue: Patent Linkage• Thereisanongoingdisengagementbetweenthepatentanddrugapprovalauthoritiesduringdisputes

on the patent status of pharmaceuticals leaving aggrieved innovators in dilemma, resulting in undue delays, additional resources and unresolved legal discourse.

Recommendations• Industrycontinuestoseekfortheestablishmentofanefficientandmeaningfulpatent linkagesystem

between the patent and drug approval authorities.• An effective system of patent linkage could enhance the environment for innovative pharmaceutical

development by: I. providing transparency and predictability to the process for both the pioneer and the generic

company;

II. creating a more predictable and hence reassuring environment for investment decisions;

III. ensuring timely redress of genuine disputes.

IV. conditions that allow better-informed and more efficient investment decisions can encourage new product introduction and development of life-saving inventions.

Issues by Sector


Issue: Protection and EnforcementPatent:• Registration of generic product is allowed prior to patent expiry of innovator products. However, there is

a gap in understanding the patent law where sale of generic products is not allowed before patent expiry. As a result, innovators are sometimes facing the following issues prior to patent expiry:1) unfair promotion of generic products; and

2) unfair competition (sale) of generic products.

• The innovators often have to bring this to civil court, where the process is lengthy and costly. Having to compete unfairly with generic products before court decision will be a loss of business opportunities.

Counterfeit medicines:• The industry applauds MOH for recognising the importance to penalise offenders for counterfeit

medicines by introducing a provision with higher deterrent penalties, including mandatory jail sentence and more deterrent fines, under the proposed Pharmacy Bill.

• However, there remains a great need to adequately resource the enforcement and legal systems to effectively exercise this law.

Recommendations• Industryadvocatesanenhancedprotectionandenforcementmechanismforpharmaceuticalproducts,

e.g.amendmentofacttoallowaneffectiveandstructuredenforcementguidelines/mechanismtoavoiddelay, additional burdens and resources for court cases.

• Theenforcementmechanismwillhelptocurbunfairpromotionandsaleofgenericdrugspriorto:I. Patent expiry of innovator drugs; and

II. Court decisions on patent disputes.

• Industry supports the provision to introduce higher deterrent penalties against offenders involved incounterfeit medicines under the Pharmacy Bill and request for the rapid passage of Pharmacy Bill.

Halal Pharmaceuticals

• MS2424wasofficiallyannouncedin2011astheofficialstandardsformanufacturingandhandlingofhalal pharmaceuticals .

• TheguidelinessuggestthattheapprovedHalalpharmaceuticalscanbearthehalallogo;thisiscontraryto the current MOH directive which prohibits the affixation of this logo.

• Theaffixationofthehalallogoonpharmaceuticalpackagingmayraiseconcerns:I. patients may make personal preference for halal medicines which may compromise patient

treatment or even refusal to take their medicines, particularly those with chronic illness, over their physician’s recommended prescription.

II. possible implications that may arise in the government procurement procedures moving away from clinical consideration.

III. companies participating in this voluntary measure for halal certification may be prioritized in procurement selection.

• Thereremainsambiguityinseveralareas:I. Implementation of the guidelines toward pharmaceuticals-prescriptive medicines.

II. Jurisdiction of the national Islamic authority JAKIM under this guideline and how it will work in partner with the Ministry of Health who is the official governor of healthcare in Malaysia.

Issues by Sector


Recommendations• Werecommendanexpressclausetobeincludedtoindicatethattheseguidelinesareentirelyvoluntary,

not mandatory, and hence only apply to companies participating on a voluntary basis only.

• The industry calls for caution on the recommendation for halal logo affixation on pharmaceuticalpackaging as it may lead to non-compliance issue amongst patients.

• Theindustryrecommendsthattheguidelineand/orhalalmedicinesnotbeusedtodiscriminateothermedicines in government procurement and should not be a part of procurement criteria for selection.

• The industry also recommends that MOH engages with other relevant healthcare professionals,particularly the clinicians, so as to ensure healthcare management is maintained.

Industry recommends a dialogue between all stakeholders on the guideline to effectively clarify its applicability and implications on healthcare

5.7 Human Resources

EUMCCI continues to highlight two major issues affecting the labour market (i) insufficient supply of labour to meet the demands of the market and (ii) the lack of quality labour to meet the requirements of employers.

Issue: Insufficient supply of labour to meet the demands of the market

EUMCCI is very concerned with the labour shortage problem affecting its member companies, particularly in industries that are heavily dependent on foreign labour. With the government restricting the intake of foreign workers in a move to reduce Malaysia’s dependency on foreign manpower, and the slow legalisation process of foreign workers under the 6P program, many industries are faced with serious manpower issues, especially for jobs at the elementary level and unskilled labour category. This problem is further exacerbated by the perceived unreliability of Malaysian workers.

RecommendationsFacilitate employers’ access to school leavers every year. This can be done through local Labour Offices, implementing a registration system for school leavers (post-PMR, SPM or STPM) who are unable to qualify for further education, particularly in the rural areas of the country. Commitment from the corporate sector can be gained in providing employment and the necessary skill training to this group. In the long run, this will help school leavers join the labour force quickly and efficiently.

Revive apprenticeships, vocational schools and technical training schemes for youth. For those who do not excel academically and do not qualify for tertiary or further education, this will be a good alternative for their future careers. Skills for the manufacturing and construction sectors, as well as hotel and restaurant industries could be taught under such schemes to help meet the labour demands there. Partnerships with companies in the corporate sector can be formed to provide the necessary practical training for students under these schemes. Implement internships for school students prior to their graduation to better prepare them for employment. Companies in the private sector can be encouraged to offer this program to students as a corporate responsibility commitment.

Issues by Sector


Increase the labour force participation rate of women, retirees and students by introducing less stringent and employer-friendly labour laws that encourage the hiring of these groups. The recent proposal of a higher retirement age is perhaps one of the government’s answers to addressing the labour shortage issue. In this respect, EUMCCI maintains that the proposed higher retirement age should not be mandatory but instead, flexibility should be given to employers to re-employ retirees up to a higher age and under less stringent employment laws.

Issue: Lack of quality labour to meet requirements of employers

To cope with their labour needs, many EUMCCI companies have been replacing foreign labour with Malaysian workers. Instead of providing much needed workforce stability, companies are generally having to cope with the unreliability and low competence of local hires. The most common complaint of employers is the lack of work ethics, i.e. unpredictable attendance, tardiness and breach of employment contract which make resource planning difficult on a daily basis.

In terms of competence, while many initiatives have been undertaken to prepare the younger generation to meet the demands of a knowledge based and technology intensive economy, the large pool of school leavers and fresh graduates that enter the labour market every year are still found wanting in certain areas. Poor verbal and written communication in the English language, lack of critical thinking and analytical skills seem to be the general observations of employers.

Another issue that employers are constantly having to battle is the trend of job-hopping. According to statistics released by the Malaysian Employers Federation (MEF) recently, the staff turnover rate of Malaysian companies is high with an average of 18.8% in the manufacturing sector and 20.8% in the non-manufacturing sector. Companies are having to pay high salaries to retain employees due to market forces, but employers are questioning if the skills, knowledge, experience and work ethics of workers have increased in tandem. The cost of labour is spiraling upwards but the return on investment is questionable.

EUMCCI’s position is that while employers should play an active role in developing the competencies of the workforce, greater efforts should be directed to the development of essential skills and to increase their employability prior to them entering the labour market.

RecommendationsIncrease the quality of the teaching of the English language in our country’s education system, focusing on grammar and verbal communication. English is a common business language and a higher level of proficiency is desired among our younger generation. For a large number of jobs, particularly in the service industry, employers need workers who can converse in decent English. Many job seekers now fail to meet the requirements in this area even during job interviews.

Make industrial training or attachment with companies mandatory for tertiary education students and introduce this concept at secondary level education in schools, as an extra-curricular activity which students can earn merit points from. This will better prepare them for the demands of the working environment when they join the labour force in the future.

Curb the job-hopping trend and rampant breach of contract incidents among workers by introducing a law that mandates a minimum term, e.g. one year, in contracts of service, with clear and enforceable penalties for both parties if breached. This is aimed at ensuring a greater stability in the workforce and preventing workers from abandoning their jobs with little or no notice to employers.

Issues by Sector


Revamp the education system to focus more on experiential and self-discovery learning among our school children and reduce instructional style teaching at all levels of education. Include syllabus that prepare them for the demands of the working environment, e.g. work ethics, personal discipline and commitment to excellence. Creative teaching methods such as workplace simulation, business games and role playing should be included in the system to inculcate awareness and develop skills for the workplace even at a young age.

Involve companies and employers in dialogues with the Ministry of Education to improve the country’s education system. EUMCCI applauds the recent announcement by the Deputy Prime Minister that the Education Ministry will be holding a nationwide National Education Dialogue series to obtain views from various stakeholders. EUMCCI stresses that it is imperative for the private sector and employers to be involved in this process.

In industries that critically require talents for the advancement of knowledge and capabilities in the country, for example in the IT and Communication industry, EUMCCI recommends that the hiring of foreign talents be made easier, and even encouraged for the purpose of knowledge transfer.

In summary, EUMCCI reiterates that labour supply and labour productivity in Malaysia are our main concerns and we maintain that the EUMCCI is committed to collaborative efforts with the Malaysian government in addressing these labour issues.

Minimum Wage ActThe objectives of minimum wage is aiming for Malaysia to become a high‐income economy nation, to reduce poverty and to reduce nation’s dependence on unskilled foreign labor.

Current Scenario• MalaysianTradesUnionCongress(MTUC)isinfavourofonlyonenationalminimumwage,notsector

based minimum wages, and they want it to cover all workers, including foreigners.

• ThereisalackoflawscoveringthewelfareofworkersinMalaysia

• TheMTUChassuggestedRM900as the rate for theminimumwage,basedon theminimumdailyexpenditure of an average worker, with an additional RM 300 as the cost of living allowance (COLA)

• Manycompaniescomplaintohavetooashorttimeframe/transitionperiodtoimplementthenewact.

• Since this is a new act and as such there are bound to be some teething issues. This is unavoidable as some matters may not have been anticipated by the Government while drafting the legislation.

• Many sectors in Malaysia are foreign worker dependent

• There is existence of Monopsony in Malaysia Labour Market

• Labor market in Malaysia is not fully competitive

IssuesSMEs risk being badly affected by the minimum wage rule as it would have an adverse impact on the operational costs of the companies. SMEs do not have large financial reserves to cushion the high operative cost. Hence if our workforce in the country is not sufficiently trained, they could be too expensive to hire compared to other countries in the region.• It will be costlier for employers to hire workers; will reduce Malaysia’s competitiveness for FDI

• does not guarantee job creation, but may instead increase unemployment

Issues by Sector


• foreign labour spending power is not in Malaysia: they send their money back to their home country, results to huge outflow of money “hyperinflation”

• It may also result that “desperate companies” may hire illegal workers : increase informal labour

Recommendations• minimum wage should take into account the type of employment, location, and the economic sector

involved

• companies should be given a reasonable grace period for its implementation

• efforts should be made to raise incomes overall; any increase to wages must be determined by the productivity of workers

5.8 Logistics & Transport

Logistics & transport is the economic backbone of a country, which facilitates efficient and cost effective international trade and furthermore provides a competitive advantage for industries located in Malaysia. Malaysia’s logistics industry is expected to grow 9.5% to RM139.74billion in 2013 as compared to an estimated RM127.66 billion in 2012. Positive outlook on foreign direct investments (FDI) inflows is expected to drive the transportation and logistics market. Trade for Malaysia remains resilient and is expected to increase 6.5% to RM1.42trillion in 2012. Malaysia’s seaports have claimed a substantial market share of transshipment traffic for the South East Asia region, which was made possible through its strategic location in Asia, its logistics infrastructure and operational performance. Malaysia’s total cargo volumes were estimated at to grow moderately at 5 per cent, reaching 530.67 million tons in 2013 as compared to 505.26million tons iin 2012.. Cargo volume by sea is expected to grow 5% to 523.3 million tons in 2013. Containerized cargo represents more than 70% of total cargo throughput by sea in the country, of which about 47% is handled by Port Klang, Malaysia’s busiest container port, Malaysia’s role as a transshipment hub is growing due to the country’s strategic geographical location. In 2012 transshipment accounted for 22.5% of total sea cargo throughput.

Integration under The Association of Southeast Asian Nations (ASEAN) will create an ASEAN Economic Community by the end of 2015 (a single market), where ASEAN will be a region with free movement of goods, services, capital, investment and skilled labour. The next few years will be critical for Malaysia in preparation for the ASEAN Free Trade Agreement (AFTA). With an increase in importance and its strategic location in ASEAN, it is crucial to qualify and quantify Malaysia’s key strengths in logistics.

The EUMCCI 2012 Key Logistics Spots nationwide survey shows that Malaysia is particularly strong in the availability of general warehouse space; accessibility and connectivity of logistics locations and availability of logistics education. However, areas of improvement are the transparency, efficiency and facilitating role of Government and ICT infrastructure.

Particularly for Malaysia, the logistics sector, strengthened by the capitalization on the country’s competitive advantages (good quality of infrastructure, solid manufacturing and growing services industries, competitive pricing and introduction of ICT enhancements in numerous nodal points), could make Malaysia an attractive logistics hub in ASEAN.

Issues by Sector


Preparing the Logistics Sector for AFTA

AFTA brings a single market and production base, turning the diversity that characterizes the region into opportunities for business complementation and making the ASEAN a more dynamic and stronger player in global supply chains. It seeks to accelerate regional integration in priority sectors, such as: (i) air travel, automotives, e-commerce, electronics amongst others; (ii) facilitate movement of business persons, free flow of skilled labour and talents and (iii) efforts to create zero tariffs on intraregional trade to create a fully integrated market. This also allows other Asian countries to provide logistic services (like transportation) in Malaysia and allowing Malaysia to provide logistics service in neighbouring countries.

Learning from the experience of the European unification, new logistics clusters emerged in various countries, based on static comparative advantages such as location, availability of land and dynamic advantages such as facilitating role of customs, subsidies, education, etc.

As other countries like Thailand and Vietnam are strongly improving their logistics infrastructure and network among ASEAN countries, Malaysia will most likely face high competition from these manufacturing hubs in becoming an attractive logistics hub under AFTA. The pertinent issues to be addressed are this: What happens if the above is not addressed? Malaysia will receive less foreign direct investment (FDI) in regional distribution centres as compared to other ASEAN countries and investment of local logistics companies more in neighbouring countries as compared to Malaysia.

Issues1. High cost of labour in Malaysia as compared to other ASEAN countries;

2. Regulatory function of customs, leads to complexities in efficient third party and fourth party logistics operations;

3. ICT infrastructure not strong enough and with sufficient coverage;

4. Transport and warehouse security needs to be enhanced;

5. Lack of availability of labour that meets the demands of the logistics industry;

6. Lack of longterm integrated planning between the various modes of transportation.

Malaysia wants to attract local and foreign investments in Integrated Logistics Services under AFTA and aims to become an important hub for manufacturing and services. However, Malaysia will be up and against neighbouring countries like Thailand’s and Vietnam’s logistics sector, facilitated by the Government who has been preparing the logistics sector for AFTA over the last 5 years. Further, Singapore has a strong logistics hub with growth targets, heavily supported by the Government.

The core question that needs to be addressed is how Malaysia can leverage its strong logistics infrastructure and logistics service providers in creating a competitive advantage of the logistics sector in AFTA.

Recommendations1. To focus on strengthening and attracting international logistics service providers that support existing

key clusters of Malaysia, like in oil and gas and palm oil.

2. Conduct dialogue sessions with the logistics industry to prepare the industry for AFTA and ensures its competitiveness(addressing issues relating to the Postal Act, Strategic Trade Act, Custom Law and not least the Competition Act)

Issues by Sector


3. Increase emphasis on education and research in logistics and supply chain management to increase the skills of the logistics sector.

4. Promote development and use of energy efficient solutions in the logistics and transportation industry in Malaysia through supply chains

5. To leverage its strength of its Halal brand, Halal industry, logistics infrastructure, Islamic education, Islamic financing and its people in creating investment opportunities for halal regional distribution centres in Malaysia.

6. Postal and courier services – we applaud Malaysia’s unilateral liberalisation of logistics services, including courier services. However, for the sake of transparency and predictability for investors, we would like to see that Malaysia reaffirms these commitments under the WTO/GATS”. Similarly, wehope that Malayisa can remove its bumiputra requirements in customs brokerage services so as to align it with the thresholds applicable to other logistics and supporting services.

Sustainable Logistics

Sustainability initiatives become more and more important to for global and local players and companies and authorities in Malaysia are starting to develop a sustainable logistics and mobility strategy. This means addressing environmental pollution, CO2 emission reduction, as well as the improvement in energy efficiency and the use of renewable sources of energy (like waves, wind and sunshine).

In some countries companies have started with initiatives such as better warehouse design, using daylight through the warehouse roofing, use of recycled materials in building materials and finishing, solar panels to reduce energy consumption, wind turbines, use of LED/LVD lights, collection of roof water, etc. Manycountries in Europe also have started with green transportation initiatives, by moving to cleaner fuels for their trucks (like bio-diesel or gas), promoting the use of lower polluting sea and river vessels instead of trucks, coordinated transport and starting in big cities, green city logistics schemes. With rising fuel cost many companies are investing heavily in both technology, ICT and operating procedures to improve energy efficiency for the benefit of both the profitability and environment.

Additional factors• Liberalizationofthelogisticssectorbyendof2015whichwillopentheASEANmarketsforthelogistics

industry, where one of the criteria for foreign investment will be the existence of and support for sustainable logistics;

• Singapore,JapanandHongKonghavemadestrongcommitmentstoasustainablelogisticsprogram;

• ExistenceofinternationalGreen/ECOstandardssuchasUSGBCLEED2009(forgreenbuildings)andISO 14001; and

Issues• ToaddresstheexistingincentivesgiventoMalaysiancompaniestostartadoptingsustainablelogistics

and their expectations from the Malaysian government to realize the sustainability initiatives;

• Toaddresspotentialofsustainable logistics inMalaysiawhentherehasbeenashifttomoreoffshoremanufacturing and more frequent Just in Time (JIT) deliveries resulting in negative impacts on environmentall performance of supply chain;

• ThecostseffectivenessofsustainablelogisticsinMalaysia;and

• VeryfewlocalplayersarechampioningsustainablelogisticsinMalaysiaandthereisalackofprimaryinfrastructures in place to develop sustainable logistics.

Issues by Sector


Recommendations• TheMalaysianLogisticsCounciltoestablishaSustainabilityLogisticsTaskForcetotableandadvocate

the sustainability incentives for the Malaysian Government Budget 2014. Experience from Europe underlines the effectiveness of centrally administered monetary incentive schemes to boost policy compliance among the industry. This would be an efficient way of rapidly promoting sustainable logistics and transport in the country.

• ToconductastudyhowtheEconomicTransformationProgrammewillimpacttheneedfortransportationin Malaysia and the potential environmental impact of increase use of existing modus operandi considering pollution from moving goods and people by various means of transport but also taking into account pollution from increasing congestion. This could potentially also look at the economic loss to Malaysia from delays and congestion.

• Preparealongtermroadmapforsustainabledevelopmentthatfitsintherespectiveindustry’sbusinessmodel which seeks to achieve a more efficient method in measuring carbon footprint and implementing diverse strategies to mitigate the environmental impact of operations and transport. Sustainability can take various forms – from large scale procedural revisions to simple improvements in enhancements in efficiency (kilometres driven or loading capacity usage). The development of infrastructure in Malaysia has been lacking an integrated view on the connectivity of the various modes of transportation and a clear roadmap for sustainable development taking both the AFTA and the economic development into consideration. Finally it’s critical to address how the various government subsidy programs influences the decision of transport and logistics and if it drives the desired behaviour.

• EuropeanexpertsandlocalchampionscouldassistotherMalaysiancompaniesinremodelinglogisticsprocesses in order to improve costs effectiveness and environmental impacts within an organization via EUMCCI’s Expert Transfer Sessions. For example: the introduction of fuel cell forklifts and hybrid trucks in a fleet and the maximization of loading factors, surface utilization and redesigning the distribution network without comprising JIT deliveries.

• MalaysiancompaniesshouldconsideradoptingavailableICTsolutionstooptimizethefuelefficiencybyoperating in smarter manner.

• FurtheringthecollaborationbetweentheMalaysiangovernment,thedomesticandinternationallogisticsindustry and non-governmental organizations to advocate sustainable logistics nationwide.

The above premises would be in line with statements made by the Honourable Prime Minister of Malaysia, Dato’ Sri Mohd Najib bin Tun Haji Abdul Razak that Malaysia will fulfil its pledge to achieve the 40% reduction in CO2 emission intensity by 2020 based on the 2005 levels. Europe as the global leader in green technology innovation, application and policy incentive schemes can lend a helping hand to Malaysia in its process to go green not just logistically. Enhanced dialogue and policy exchange can greatly accelerate the national efforts in sustainable and renewable energy as well as promote the supply and usage of green technologies.

Issues by Sector


5.9 Oil & Gas

Issue: Open and direct access

In many cases of engagement with PETRONAS, EU companies are encouraged to form a local company or joint venture or partner with agents who have majority Bumiputera shareholding and which are licensed with PETRONAS to undertake work with PETRONAS.

EU companies would like to have the option to deal directly with PETRONAS without necessarily having to consider joint ventures and agents.

RecommendationWe believe that direct access to PETRONAS for EU companies in Malaysia would benefit all parties and we recommend PETRONAS to review the process and consider options for companies to engage and conduct business directly with PETRONAS.

The efficiency of the business would increase if there is an open and direct engagement with PETRONAS .EUMCCI would be happy to engage with PETRONAS to consult and provide detailed feedback on improvements on the current processes.

Issue: Shortage of skilled manpower for the OG industry

A challenge for vendors is the integration of advanced information technologies and modern control systems into the automation platform. The lack of local personnel with control system and IT skills in end-user firms further hinders the installation and maintenance of automation systems.

RecommendationEngineers with both control systems knowledge and IT skills are needed. We recommend the MoHR to provide training facilities to train local automation engineers in-house and work with universities to create specific, industry-related courses. We need to shift our focus from producing semi-skilled workforce to highly skilled Malaysians.

Issue: Website registration and multi languages for license application and approval process (Bahasa Malaysia and English)

We applaud PETRONAS for its development of the supplier registration process. The move away from eLaris to the new Registration of Suppliers (ROS) and Supplier Self Service (SUS) sites, which are mostly in English, is a great step forward for facilitating trade and investment with the international communities.

Note: As of January 2012, PETRONAS implemented 2 new systems to for Registration of Suppliers (ROS) and Supplier Self Service (SUS). Assessment of these new systems in relation to this issue is in progress.

Issues by Sector


RecommendationIt is recommended that PETRONAS continue its development of its one-stop site for registration and licensing as well as to provide all relevant documentation in English. For example, the current supplier declaration details are currently in Bahasa Malaysia and could be detailed in English as well. This will encourage and facilitate participation by a wider range of industry players, increasing the potential for technology transfer and foreign direct investment in Malaysia.

4. EU companies’ access and partnerships with PETRONAS

PETRONAS’s leading position in Malaysia and globally affords it the privilege of being able to implement industry best practices that incorporate good governance, setting the stage for a more open and competitive business landscape.

While its implementation of iLINTAS (Integrated Licensing Information and Tendering Administration System) has greatly improved the process for potential vendors and partners to engage with PETRONAS, and with the push for more foreign direct investments in Malaysia, it is timely for PETRONAS to accelerate its engagement with a greater sphere of organisations that could assist in its growth as a global player.

In the current economic climate, EU companies are increasingly looking to this region to invest in and grow businesses. With competitiveness increasing within ASEAN itself, PETRONAS’ clarity and openness around the rules of stakeholder engagement and communications with PETRONAS will fundamentally improve and pave the way for EU companies to have more direct access to and trade with PETRONAS, facilitating more open and direct bilateral trade and partnerships, leading to a potential increase in foreign investment in Malaysia.

This position paper aims to address the issue of vendor engagement and communication in a professional and objective manner as it would help increase participation and competitiveness in the sector.

5.10 Wines And Spirits

The EUMCCI Wines & Spirits Committee comprises market leading companies engaged in the importing and selling of wines and spirits in Malaysia. The members represent more than 50 premium brands of wines & spirits that would constitute a significant proportion of wines & spirits imported and consumed in Malaysia.

All the members support the responsible consumption of alcohol as well as measures to ensure socially responsible drinking among the non-Muslim population in Malaysia.

Issues by Sector


Issues

Current Tariffs & Duty Structure and Market Distortions

Import TariffsCurrently, there are 8 different import tariff rates for spirits and 4 different rates for wines. The current rates are a combination of unitary and specific taxes as can be seen below:

Product Classification Import Duty

Spirits

Brandy and whisky 58 per litre

Rum, gin and vodka 55 per litre

Liqueurs and cordials

≤ 57° abv 93.5 per LPA

Other 64.5 per LPA

Other

Samsu (incl. Benedictine DOM) 26.5 per LPA

Arrack 20 per litre

Bitters 30 per litre

Other 0.5° <abv<1.14° 3 per litre

Other 64.5 per LPA

Product Classification Import Duty

Wine

Wine

Sparkling wine 23 per litre

Other wine 7 per litre

Other Fermented

Cider/perry 7 per litre

Rice wine 25.5 per LPA

Mead 23 per litre

Fruit juice wines 108.5 per LPA

Excise Tax Regime

The current excise structure has:• 13differentratesforwines&spirits;

• AcombinationofAd-Valorem,unitaryandspecifictaxes;

• Thismakesitoneofthemostadministrativelycomplexregimeintheworld;

• Thebulkofthevolume(over80%)falls inonecategoryforwines&spirits,makingtheexcisesystemunnecessarily complicated.

Issues by Sector


The complex excise structure and the high import duties and the resulting high tax burdens encourages proliferation of non-tax paid activities, i.e. contraband and counterfeiting. The very high taxation is creating an incentive for illicit traders to profit from avoiding tax and sell low priced alcohol to consumers. The high taxation is also encouraging production of counterfeited goods .This also encourages consumption of cheap and poor quality spirits, such as the locally produced compounded hard liquor (CHL).

Recommendationsa) Elimination of import tariffs on all wines and spirits from the entry into force of the Malaysia-

EU FTA.• The elimination of import tariffs would significantly reduce total burden of taxation on legally

imported goods and reduce incentive for smuggling which will contribute to increasing government revenue;

Issues by Sector


b) A holistic reform of the excise tax system through simplification and harmonisation of current excise regime to a unique specific rate per litre of pure alcohol (LPA) for all wines and spirits which will :• Improvetheeaseofdoingbusinessthroughsimplifyingandharmonisingthecurrentcomplexand

burdensome tax system for wines and spirits. It would also help reduce administrative burden and would be efficient in terms of tax computation and collection. The basis of taxation on alcohol content is an easily determined objective criteria;

• Ensureexcisetaxneutralityperlitreofalcohol;

• Ensurestableandconsistentrevenuesovertimeasalcoholiccontentisfarlessvolatilethanvalue;

• Reducethenon-taxactivitiesofcontrabandandcounterfeit;

• Beconsistentwith recommendationofWHOto introducespecific taxesasawayofdecreasingharmful misuse of alcohol thus addressing health policy goals;

The overall reduction in tax burden on wines and spirits will have positive spill over effects for tourism, retail and restaurant sectors. There will be increased government revenue through higher excise and service tax collections and from corporate tax earnings. Moreover, affordable good quality wines and spirits would also be in line with Malaysia’s strategy to shift to high yield tourists, and in establishing Malaysia as a leading business tourism destination.


Appendix


Appendix

Table A1.The Global Competitiveness Index 2012-2013 and 2011-2012 comparisons© 2011 World Economic Forum

Country/EconomyGCI 2012-2013 GCI 2011-2012

Rank Score Rank Change

Switzerland 1 5.72 1 0Singapore 2 5.67 2 0Finland 3 5.55 4 1Sweden 4 5.53 3 -1Netherlands 5 5.50 7 2Germany 6 5.48 6 0United States 7 5.47 5 -2United Kingdom 8 5.45 10 2Hong Kong SAR 9 5.41 11 2Japan 10 5.40 9 -1Qatar 11 5.38 14 3Denmark 12 5.29 8 -4Taiwan, China 13 5.28 13 0Canada 14 5.27 12 -2Norway 15 5.27 16 1Austria 16 5.22 19 3Belgium 17 5.21 15 -2Saudi Arabia 18 5.19 17 -1Korea, Rep. 19 5.12 24 5Australia 20 5.12 20 0France 21 5.11 18 -3Luxembourg 22 5.09 23 1New Zealand 23 5.09 25 2United Arab Emirates 24 5.07 27 3Malaysia 25 5.06 21 -4Israel 26 5.02 22 -4Ireland 27 4.91 29 2Brunei Darussalam 28 4.87 28 0China 29 4.83 26 -3Iceland 30 4.74 30 0Puerto Rico 31 4.67 35 4Oman 32 4.65 32 0Chile 33 4.65 31 -2Estonia 34 4.64 33 -1Bahrain 35 4.63 37 2Spain 36 4.60 36 0Kuwait 37 4.56 34 -3Thailand 38 4.52 39 1Czech Republic 39 4.51 38 -1Panama 40 4.49 49 9Poland 41 4.46 41 0Italy 42 4.46 43 1Turkey 43 4.45 59 16Barbados 44 4.42 42 -2Lithuania 45 4.41 44 -1Azerbaijan 46 4.41 55 9Malta 47 4.41 51 4Brazil 48 4.40 53 5Portugal 49 4.40 45 -4Indonesia 50 4.40 46 -4Kazakhstan 51 4.38 72 21South Africa 52 4.37 50 -2Mexico 53 4.36 58 5Mauritius 54 4.35 54 0Latvia 55 4.35 64 9Slovenia 56 4.34 57 1Costa Rica 57 4.34 61 4Cyprus 58 4.32 47 -11India 59 4.32 56 -3Hungary 60 4.30 48 -12Peru 61 4.28 67 6Bulgaria 62 4.27 74 12Rwanda 63 4.24 70 7Jordan 64 4.23 71 7Philippines 65 4.23 75 10Iran, Islamic Rep. 66 4.22 62 -4Russian Federation 67 4.20 66 -1Sri Lanka 68 4.19 52 -16Colombia 69 4.18 68 -1Morocco 70 4.15 73 3


Appendix

Country/EconomyGCI 2012-2013 GCI 2011-2012

Rank Score Rank Change

Slovak Republic 71 4.14 69 -2Montenegro 72 4.14 60 -12Ukraine 73 4.14 82 9Uruguay 74 4.13 63 -11Vietnam 75 4.11 65 -10Seychelles 76 4.10 n/a n/aGeorgia 77 4.07 88 11Romania 78 4.07 77 -1Botswana 79 4.06 80 1Macedonia, FYR 80 4.04 79 -1Croatia 81 4.04 76 -5Armenia 82 4.02 92 10Guatemala 83 4.01 84 1Trinidad and Tobago 84 4.01 81 -3Cambodia 85 4.01 97 12Ecuador 86 3.94 101 15Moldova 87 3.94 93 6Bosnia and Herzegovina 88 3.93 100 12Albania 89 3.91 78 -11Honduras 90 3.88 86 -4Lebanon 91 3.88 89 -2Namibia 92 3.88 83 -9Mongolia 93 3.87 96 3Argentina 94 3.87 85 -9Serbia 95 3.87 95 0Greece 96 3.86 90 -6Jamaica 97 3.84 107 10Gambia, The 98 3.83 99 1Gabon 99 3.82 n/a n/aTajikistan 100 3.80 105 5El Salvador 101 3.80 91 -10Zambia 102 3.80 113 11Ghana 103 3.79 114 11Bolivia 104 3.78 103 -1Dominican Republic 105 3.77 110 5Kenya 106 3.75 102 -4Egypt 107 3.73 94 -13Nicaragua 108 3.73 115 7Guyana 109 3.73 109 0Algeria 110 3.72 87 -23Liberia 111 3.71 n/a n/aCameroon 112 3.69 116 4Libya 113 3.68 n/a n/aSuriname 114 3.68 112 -2Nigeria 115 3.67 127 12Paraguay 116 3.67 122 6Senegal 117 3.66 111 -6Bangladesh 118 3.65 108 -10Benin 119 3.61 104 -15Tanzania 120 3.60 120 0Ethiopia 121 3.56 106 -15Cape Verde 122 3.55 119 -3Uganda 123 3.53 121 -2Pakistan 124 3.52 118 -6Nepal 125 3.49 125 0Venezuela 126 3.46 124 -2Kyrgyz Republic 127 3.44 126 -1Mali 128 3.43 128 0Malawi 129 3.38 117 -12Madagascar 130 3.38 130 0Côte d’Ivoire 131 3.36 129 -2Zimbabwe 132 3.34 132 0Burkina Faso 133 3.34 136 3Mauritania 134 3.32 137 3Swaziland 135 3.28 134 -1Timor-Leste 136 3.27 131 -5Lesotho 137 3.19 135 -2Mozambique 138 3.17 133 -5Chad 139 3.05 142 3Yemen 140 2.97 138 -2Guinea 141 2.90 n/a n/aHaiti 142 2.90 141 -1Sierra Leone 143 2.82 n/a n/aBurundi 144 2.78 140 -4

Source: The World Economic Forumwww.weforum.org/gcr


Appendix

Year Export Value RM

(Billion)

Export Growth

Rate

Import Value RM

(Billion)

Import Growth

Rate

Total Trade Value

RM (Billion)

Total Trade Growth

Rate

Trade Balance

Value RM (Billion)

1991 94.5 18.6% 100.83 27.4% 195.33 23.0% -6.33

1992 103.66 9.7% 101.44 0.6% 205.1 5.0% 2.22

1993 121.24 17.0% 117.4 15.7% 238.64 16.4% 3.83

1994 153.92 27.0% 155.92 32.8% 309.84 29.8% -2

1995 184.99 20.2% 194.34 24.6% 379.33 22.4% -9.36

1996 197.03 6.5% 197.28 1.5% 394.31 3.9% -0.25

1997 220.89 12.1% 220.94 12.0% 441.83 12.1% -0.05

1998 286.56 29.7% 228.12 3.3% 514.69 16.5% 58.44

1999 321.56 12.2% 248.48 8.9% 570.04 10.8% 73.08

2000 373.27 16.1% 311.46 25.3% 684.73 20.1% 61.81

2001 334.28 -10.4% 280.23 -10.0% 614.51 -10.3% 54.05

2002 357.43 6.9% 303.09 8.2% 660.52 7.5% 54.34

2003 397.88 11.3% 316.54 4.4% 714.42 8.2% 81.35

2004 481.25 21.0% 399.63 26.3% 880.89 23.3% 81.62

2005 536.23 11.4% 432.87 8.3% 969.1 10.0% 103.36

2006 589.24 9.9% 478.15 10.5% 1067.39 10.1% 111.09

2007 604.3 2.6% 502.04 5.0% 1106.34 3.6% 102.26

2008 663.01 9.7% 519.8 3.5% 1182.82 6.9% 143.21

2009 552.52 -16.7% 434.67 -16.4% 987.19 -16.5% 117.85

2010 638.82 15.6% 528.83 21.7% 1167.65 18.3% 109.99

2011 697.86 9.2% 573.63 8.5% 1271.49 8.9% 124.24

2012 702.19 0.6% 607.36 5.9% 1309.55 3.0% 94.82

Sources: Ministry of International Trade and Industry, Ministry of Finance, Department of Statistics, Malaysia

http://www.statistics.gov.my/portal/index.php?option=com_content&view=article&id=1895%3A-free-download-monthly-statistical-bulletin-malaysia-december-2012&catid=42%3Apublications&lang=en

Table A2.Malaysia's Total Trade 1991 - 2012


Appendix

Year Export Value RM

(Billion)

Export Growth

Rate

Import Value RM

(Billion)

Import Growth

Rate

Total Trade Value

RM (Billion)

Total Trade Growth

Rate

Trade Balance

Value RM (Billion)

1991 14.45 17.3% 15.55 22.6% 30 20.0% -1.11

1992 15.92 10.2% 13.97 -10.2% 29.89 -0.4% 1.95

1993 18.13 13.9% 15.12 8.2% 33.25 11.2% 3.01

1994 22.24 22.7% 23.29 54.0% 45.53 36.9% -1.05

1995 26.65 19.8% 30.27 30.0% 56.92 25.0% -3.63

1996 27.44 3.0% 28.94 -4.4% 56.38 -0.9% -1.5

1997 32.36 17.9% 31.87 10.1% 64.23 13.9% 0.49

1998 47.55 46.9% 27.62 -13.3% 75.17 17.0% 19.93

1999 51.56 8.4% 29.55 7.0% 81.11 7.9% 22

2000 52.22 1.3% 34.28 16.0% 86.5 6.6% 17.94

2001 47.35 -9.3% 36.52 6.5% 83.87 -3.0% 10.83

2002 45.43 -4.1% 35.28 -3.4% 80.71 -3.8% 10.15

2003 50.09 10.3% 37.76 7.0% 87.85 8.8% 12.32

2004 60.68 21.1% 47.89 26.8% 108.57 23.6% 12.78

2005 63.3 4.3% 50.37 5.2% 113.67 4.7% 12.93

2006 75.53 19.3% 54.62 8.4% 130.15 14.5% 20.9

2007 77.71 2.9% 59.84 9.6% 137.55 5.7% 17.87

2008 74.8 -3.7% 61.61 3.0% 136.41 -0.8% 13.19

2009 60.1 -19.7% 50.77 -17.6% 110.87 -18.7% 9.33

2010 68.96 14.7% 54.12 6.6% 123.08 11.0% 14.57

2011 72.05 4.5% 58.86 8.8% 130.91 6.4% 13.19

2012 62.18 -13.7% 65.53 11.3% 127.71 -2.4% -3.35

Sources: Ministry of International Trade and Industry, Ministry of Finance, Department of Statistics, Malaysia

http://www.statistics.gov.my/portal/download_External/download.php?file=ExternalTrade/2012/DEC/04JADUAL_DEC2012.xls

Table A3.Malaysia’s Trade with European Union 1991 - 2012


Appendix

Table A4.Malaysia's Exports by Sector 2011 - 2012

Description2012 2011

Value RM (Billion)

Share ChangeValue

RM (Billion)Share Change

MANUFACTURED GOODS 470.39 67.0% -0.1% 471 67.5% 2.2%Electrical & Electronic Products 231.23 32.9% -2.5% 237.26 34.0% -5.1%

Chemicals & Chemical Products 46.37 6.6% -1.7% 47.19 6.8% 16.0%

Machinery, Appliances & Parts 25.2 3.6% 6.1% 23.74 3.4% 11.8%

Optical & Scientific Equipment 22.92 3.3% 22.2% 18.76 2.7% 2.4%

Manufactures Of Metal 20.14 2.9% -6.2% 21.46 3.1% 16.8%

Rubber Products 20.14 2.9% 10.6% 18.21 2.6% 13.6%

Wood Products 14.9 2.1% 1.5% 14.68 2.1% -1.0%

Processed Food 13.44 1.9% -0.5% 13.5 1.9% 12.5%

Transport Equipment 10.21 1.5% 16.6% 8.76 1.3% -5.5%

Manufactures Of Plastics 10.01 1.4% 0.1% 10 1.4% 6.2%

Iron & Steel Products 9.93 1.4% -2.5% 10.18 1.5% 20.4%

Textiles & Clothings 9.51 1.4% -12.0% 10.81 1.5% 15.9%

Jewellery 7.13 1.0% -0.7% 7.17 1.0% 1.8%

Non-metallic Mineral Products 5.8 0.8% 1.2% 5.73 0.8% 14.9%

Beverages & Tobacco 3.51 0.5% 14.1% 3.07 0.4% 11.5%

Paper & Pulp Products 3.49 0.5% 3.8% 3.36 0.5% 7.1%

Petroleum Products 3.39 0.5% -5.2% 3.57 0.5% 6.2%

Other Manufactures 13.09 1.9% -3.3% 13.54 1.9% 13.7%AGRICULTURAL GOODS 80.26 11.4% -14.9% 94.29 13.5% 32.7%Palm Oil 56.09 8.0% -13.3% 64.7 9.3% 35.6%

Crude Rubber 7.86 1.1% -41.7% 13.48 1.9% 46.4%

Saw Logs & Sawn Timber 4.88 0.7% -6.2% 5.2 0.7% -3.4%

Other Vegetable Oil 3.05 0.4% -4.5% 3.2 0.5% 27.3%

Seafood, Fresh, Chilled Or Frozen 1.87 0.3% -11.8% 2.11 0.3% 5.8%

Live Animals & Meat 0.68 0.1% -6.4% 0.72 0.1% 12.2%

Vegetables, Roots, Tubers 0.47 0.1% -2.3% 0.48 0.1% 4.7%

Hides, Skins And Furskins, Raw 0.05 0.0% 47.4% 0.03 0.0% 23.2%

Cereal 0.02 0.0% 28.8% 0.02 0.0% 34.9%

Other Agricultures 5.29 0.8% 21.9% 4.34 0.6% 39.2%MINING GOODS 145.25 20.7% 13.6% 127.91 18.3% 24.7%LNG 55.53 7.9% 6.7% 52.05 7.5% 34.3%

Refined Petroleum Products 51.43 7.3% 40.8% 36.53 5.2% 27.2%

Crude Petroleum 32.25 4.6% -3.4% 33.39 4.8% 7.6%

Tin 2.62 0.4% -24.4% 3.47 0.5% 50.4%

Metalliferous Ores And Metal Scrap 2.41 0.3% 104.4% 1.18 0.2% 51.5%

Crude Fertilizers & Crude Minerals 0.88 0.1% -19.3% 1.09 0.2% 20.6%

Other Mining 0.12 0.0% -38.3% 0.2 0.0% 181.5%OTHERS 6.29 0.9% 35.0% 4.66 0.7% 11.9%Total Exports 702.19 100.0% 0.6% 697.86 100.0% 9.2%

Source: Ministry of International Trade and Industry, Department of Economic and Trade Relations


Appendix

Table A5.Malaysia’s Imports by Sector 2011 - 2012

Description2012 2011

Value RM (Billion)

Share ChangeValue


MANUFACTURED GOODS 462.68 76.2% 3.5% 447.12 77.9% 3.9%Electrical & Electronic Products 175 28.8% -1.8% 178.15 31.1% -5.9%

Machinery, Appliances & Parts 52.85 8.7% 12.5% 46.97 8.2% 7.0%

Chemicals & Chemical Products 52.03 8.6% 1.7% 51.14 8.9% 13.5%

Transport Equipment 39.2 6.5% 30.0% 30.16 5.3% 6.6%

Manufactures Of Metal 32.06 5.3% -2.4% 32.86 5.7% 13.2%

Iron & Steel Products 25.23 4.2% 1.6% 24.84 4.3% 16.6%

Optical & Scientific Equipment 18.25 3.0% -0.5% 18.35 3.2% 6.7%

Processed Food 14.22 2.3% 8.9% 13.06 2.3% 21.2%

Textiles & Clothings 6.73 1.1% 2.1% 6.59 1.1% 27.9%

Manufactures Of Plastics 6.65 1.1% 1.2% 6.58 1.1% 12.2%

Paper & Pulp Products 6.49 1.1% -1.8% 6.61 1.2% -1.0%

Rubber Products 6.41 1.1% 10.1% 5.82 1.0% 33.3%

Non-metallic Mineral Products 5.32 0.9% -9.1% 5.85 1.0% 23.2%

Jewellery 4.61 0.8% 5.9% 4.35 0.8% 25.5%

Beverages & Tobacco 2.69 0.4% 22.0% 2.2 0.4% 38.4%

Petroleum Products 1.65 0.3% 6.9% 1.54 0.3% -33.3%

Wood Products 1.49 0.2% 1.0% 1.47 0.3% 6.0%

Other Manufactures 11.81 1.9% 11.7% 10.57 1.8% 8.2%AGRICULTURAL GOODS 41.17 6.8% -2.0% 42.03 7.3% 26.3%Crude Rubber 7.7 1.3% 9.6% 7.03 1.2% 21.6%

Palm Oil 7.32 1.2% -19.7% 9.12 1.6% 59.5%

Cereal 5.91 1.0% -2.8% 6.08 1.1% 18.1%

Seafood, Fresh, Chilled Or Frozen 2.51 0.4% 4.7% 2.4 0.4% 20.2%

Live Animals & Meat 2.45 0.4% 9.4% 2.24 0.4% 14.6%

Vegetables, Roots, Tubers 2.09 0.3% -2.8% 2.15 0.4% -3.4%

Other Vegetable Oil 1.6 0.3% -13.4% 1.85 0.3% 33.4%

Saw Logs & Sawn Timber 0.67 0.1% 1.4% 0.66 0.1% 10.5%

Hides, Skins And Furskins, Raw 0.09 0.0% 12.9% 0.08 0.0% 66.9%

Other Agricultures 10.82 1.8% 3.8% 10.42 1.8% 23.6%MINING GOODS 90.53 14.9% 25.8% 71.95 12.5% 30.4%Refined Petroleum Products 49.79 8.2% 45.2% 34.29 6.0% 28.1%

Crude Petroleum 27.7 4.6% 15.4% 24.01 4.2% 31.4%

Metalliferous Ores And Metal Scrap 3.55 0.6% -6.6% 3.8 0.7% 35.1%

Crude Fertilizers & Crude Minerals 1.47 0.2% 20.5% 1.22 0.2% 3.7%

Tin 1.11 0.2% 0.5% 1.11 0.2% 37.1%

LNG 0 0.0% -100.0% 0.01 0.0% 30365.3%

Other Mining 6.91 1.1% -8.1% 7.52 1.3% 40.8%OTHERS 12.97 2.1% 3.5% 12.53 2.2% 24.2%Total Imports 607.36 100.0% 5.9% 573.63 100.0% 8.5%



Appendix

Table A6.Malaysia’s Exports To EU - 27 by Product Sector

Product Sectors2010 2011 2012

Value RM (Billion)

ShareValue


Value RM (Billion)

Share Change

TOTAL EXPORTS 68.69 100.0% 72.03 100.0% 4.9% 62.18 100.0% -13.7%

MANUFACTURED GOODS 58.31 84.9% 58.66 81.4% 0.6% 50.47 81.2% -14.0%

Electrical & Electronic Products 35.8 52.1% 32.78 45.5% -8.4% 26.9 43.3% -17.9%

Optical & Scientific Equipment 2.65 3.9% 3.19 4.4% 20.4% 3.73 6.0% 17.0%

Rubber Products 3.14 4.6% 3.45 4.8% 9.6% 3.41 5.5% -1.2%

Chemicals & Chemical Products 3.55 5.2% 4.24 5.9% 19.2% 3.36 5.4% -20.6%

Machinery, Appliances & Parts 2.42 3.5% 2.64 3.7% 8.9% 2.3 3.7% -12.8%

Transport Equipment 1.44 2.1% 1.54 2.1% 7.5% 1.61 2.6% 4.5%

Manufactures Of Plastics 1.27 1.9% 1.35 1.9% 5.9% 1.23 2.0% -8.4%

Textiles & Clothings 1.25 1.8% 1.58 2.2% 26.0% 1.2 1.9% -24.1%

Wood Products 1.78 2.6% 1.42 2.0% -20.2% 1.37 2.2% -3.6%

Manufactures Of Metal 1.71 2.5% 2.46 3.4% 43.7% 1.41 2.3% -42.4%

Processed Food 0.71 1.0% 0.78 1.1% 10.0% 0.7 1.1% -10.5%

Petroleum Products 0.2 0.3% 0.2 0.3% -2.7% 0.22 0.4% 11.0%

Non-metallic Mineral Products 0.17 0.3% 0.3 0.4% 76.4% 0.28 0.4% -9.0%

Iron & Steel Products 0.2 0.3% 0.34 0.5% 69.1% 0.33 0.5% -1.6%

Paper & Pulp Products 0.15 0.2% 0.14 0.2% -7.7% 0.16 0.3% 9.9%

Jewellery 0.03 0.0% 0.03 0.0% -7.4% 0.07 0.1% 180.9%

Beverages & Tobacco 0.04 0.1% 0.04 0.1% 0.4% 0.02 0.0% -49.3%

Other Manufactures 1.79 2.6% 2.2 3.1% 23.2% 2.17 3.5% -1.4%

AGRICULTURAL GOODS 9.18 13.4% 11.9 16.5% 29.6% 10.63 17.1% -10.7%

Palm Oil 5.25 7.7% 6.85 9.5% 30.3% 7.2 11.6% 5.2%

Crude Rubber 2.79 4.1% 3.91 5.4% 39.9% 2.41 3.9% -38.3%

Saw Logs & Sawn Timber 0.85 1.2% 0.84 1.2% -2.0% 0.69 1.1% -17.5%

Other Vegetable Oil 0.08 0.1% 0.11 0.2% 35.1% 0.15 0.2% 35.4%

Hides, Skins And Furskins, Raw 0 0.0% 0.01 0.0% 124.8% 0.01 0.0% 115.9%

Seafood, Fresh, Chilled Or Frozen 0.06 0.1% 0.04 0.1% -42.0% 0.02 0.0% -33.9%

Vegetables, Roots, Tubers 0.01 0.0% 0.01 0.0% 61.9% 0.01 0.0% 13.6%

Live Animals & Meat 0 0.0% 0 0.0% -91.9% 0 0.0% 1402.3%

Cereal 0 0.0% 0 0.0% -100.0% 0 0.0% ∞

Other Agricultures 0.12 0.2% 0.14 0.2% 16.1% 0.13 0.2% -12.1%

MINING GOODS 0.92 1.3% 1.16 1.6% 25.1% 0.66 1.1% -43.2%

Tin 0.29 0.4% 0.45 0.6% 53.9% 0.25 0.4% -42.8%

Crude Fertilizers & Crude Minerals 0 0.0% 0 0.0% 30.3% 0 0.0% -41.5%

Metalliferous Ores And Metal Scrap 0.08 0.1% 0.01 0.0% -86.8% 0.05 0.1% 363.0%

Refined Petroleum Products 0.55 0.8% 0.7 1.0% 26.6% 0.35 0.6% -49.7%

Other Mining 0 0.0% 0 0.0% -100.0% 0 0.0% ∞

OTHERS 0.27 0.4% 0.32 0.4% 17.2% 0.42 0.7% 33.2%



Appendix

Table A7.Malaysia’s Imports From EU - 27 by Product Sector

Product Sectors2010 2011 2012

Value RM (Billion)

ShareValue RM (Billion)

Share ChangeValue RM (Billion)

Share Change

TOTAL IMPORTS 54.12 100.0% 58.86 100.0% 8.8% 65.53 100.0% 11.3%

MANUFACTURED GOODS 52.83 97.6% 57.29 97.3% 8.4% 62.56 95.5% 9.2%

Electrical & Electronic Products 19.85 36.7% 17.75 30.2% -10.6% 15.59 23.8% -12.2%

Machinery, Appliances & Parts 8.24 15.2% 9.14 15.5% 11.0% 10.53 16.1% 15.2%

Chemicals & Chemical Products 6.84 12.6% 7.68 13.0% 12.2% 8.23 12.6% 7.2%

Transport Equipment 5.75 10.6% 8.87 15.1% 54.3% 13.26 20.2% 49.5%

Manufactures Of Metal 1.99 3.7% 2.18 3.7% 9.9% 2.1 3.2% -3.8%

Iron & Steel Products 1.7 3.1% 2.06 3.5% 21.6% 2.39 3.6% 15.7%

Processed Food 1.42 2.6% 1.62 2.8% 14.4% 1.78 2.7% 9.6%

Optical & Scientific Equipment 2.18 4.0% 2.25 3.8% 3.4% 2.55 3.9% 13.5%

Beverages & Tobacco 0.74 1.4% 1.06 1.8% 43.8% 1.25 1.9% 17.9%

Paper & Pulp Products 1.2 2.2% 1.1 1.9% -8.1% 1.11 1.7% 0.5%

Rubber Products 0.4 0.7% 0.44 0.8% 10.5% 0.56 0.9% 25.8%

Manufactures Of Plastics 0.5 0.9% 0.63 1.1% 27.0% 0.68 1.0% 7.8%

Textiles & Clothings 0.3 0.5% 0.35 0.6% 16.7% 0.37 0.6% 6.1%

Non-metallic Mineral Products 0.49 0.9% 0.63 1.1% 28.4% 0.44 0.7% -30.0%

Jewellery 0.06 0.1% 0.14 0.2% 114.7% 0.19 0.3% 38.1%

Wood Products 0.1 0.2% 0.09 0.2% -8.1% 0.1 0.2% 12.6%

Petroleum Products 0.15 0.3% 0.04 0.1% -74.1% 0.07 0.1% 69.5%

Other Manufactures 0.94 1.7% 1.25 2.1% 32.2% 1.38 2.1% 10.4%

AGRICULTURAL GOODS 0.51 0.9% 0.63 1.1% 23.6% 0.71 1.1% 12.9%

Live Animals & Meat 0.11 0.2% 0.13 0.2% 11.4% 0.13 0.2% 4.2%

Vegetables, Roots, Tubers 0.09 0.2% 0.09 0.1% -6.1% 0.09 0.1% 9.5%

Other Vegetable Oil 0.05 0.1% 0.06 0.1% 25.9% 0.06 0.1% 5.7%

Saw Logs & Sawn Timber 0.04 0.1% 0.06 0.1% 45.5% 0.06 0.1% -3.2%

Hides, Skins And Furskins, Raw 0.03 0.0% 0.05 0.1% 108.9% 0.07 0.1% 21.0%

Seafood, Fresh, Chilled Or Frozen 0.03 0.1% 0.03 0.1% -1.9% 0.03 0.0% 0.4%

Cereal 0.01 0.0% 0.01 0.0% -12.3% 0.02 0.0% 102.2%

Crude Rubber 0 0.0% 0 0.0% -15.9% 0 0.0% -84.6%

Palm Oil 0 0.0% 0 0.0% 866.0% 0 0.0% 97.4%

Other Agricultures 0.14 0.3% 0.2 0.3% 38.4% 0.24 0.4% 22.4%

MINING GOODS 0.29 0.5% 0.4 0.7% 37.0% 1.61 2.5% 307.4%

Refined Petroleum Products 0.07 0.1% 0.17 0.3% 129.0% 1.36 2.1% 712.7%

Metalliferous Ores And Metal Scrap 0.04 0.1% 0.03 0.1% -23.8% 0.05 0.1% 67.0%

Crude Fertilizers & Crude Minerals 0.15 0.3% 0.16 0.3% 4.0% 0.17 0.3% 8.7%

Tin 0.01 0.0% 0 0.0% -91.4% 0.02 0.0% 2608.4%

LNG 0 0.0% 0 0.0% -58.3% 0 0.0% -100.0%

Other Mining 0.02 0.0% 0.04 0.1% 129.3% 0.02 0.0% -63.0%

OTHERS 0.49 0.9% 0.55 0.9% 11.2% 0.64 1.0% 17.5%



Appendix

Country

Exports Value RM

(Million)

Export Share

Imports Value RM

(Million)

Import Share

Total Trade Value RM

(Million)

Total Trade Share

Bal of Trade Value RM

(Million)

Austria 391 0.54% 2,051 3.48% 2,442 1.87% - 1,660

Belgium 2,978 4.13% 2,135 3.63% 5,113 3.91% 843

Bulgaria 200 0.28% 79 0.13% 279 0.21% 121

Cyprus 97 0.13% 32 0.05% 129 0.10% 64

Czech Republic 1,453 2.02% 341 0.58% 1,793 1.37% 1,112

Denmark 759 1.05% 614 1.04% 1,373 1.05% 145

Estonia 186 0.26% 9 0.02% 196 0.15% 177

Finland 1,009 1.40% 939 1.60% 1,949 1.49% 70

France 8,066 11.20% 9,513 16.16% 17,579 13.43% - 1,446

Germany, Federal Republic of

18,456 25.62% 21,976 37.34% 40,432 30.89% - 3,521

Greece 265 0.37% 44 0.07% 309 0.24% 221

Hungary 1,248 1.73% 527 0.90% 1,775 1.36% 721

Ireland 581 0.81% 1,690 2.87% 2,271 1.73% - 1,108

Italy 3,610 5.01% 5,041 8.57% 8,652 6.61% - 1,431

Latvia 118 0.16% 33 0.06% 151 0.12% 85

Lithuania 190 0.26% 69 0.12% 259 0.20% 121

Luxembourg 259 0.36% 83 0.14% 342 0.26% 176

Malta 86 0.12% 35 0.06% 121 0.09% 51

Netherlands 19,296 26.78% 3,613 6.14% 22,909 17.50% 15,683

Poland 880 1.22% 418 0.71% 1,298 0.99% 462

Portugal 509 0.71% 58 0.10% 567 0.43% 451

Romania 352 0.49% 88 0.15% 440 0.34% 264

Slovak Republic 329 0.46% 98 0.17% 427 0.33% 231

Slovenia 101 0.14% 47 0.08% 148 0.11% 54

Spain 1,943 2.70% 1,211 2.06% 3,155 2.41% 732

Sweden 1,526 2.12% 1,974 3.35% 3,501 2.67% - 448

United Kingdom 7,157 9.93% 6,141 10.43% 13,298 10.16% 1,015

EU Total 72,046 100.00% 58,860 100.00% 130,906 100.00% 13,186

Source: Department of Statistics, Malaysia


Table A8.Malaysia-EU Trade Figures by Member StateYear 2011


Appendix

Country

Exports Value RM

(Million)

Export Share

Imports Value RM

(Million)

Import Share

Total Trade

Value RM (Million)

Total Trade Share

Bal of Trade Value RM

(Million)

Austria 204 0.33% 1,485 2.27% 1,689 1.32% - 1,281

Belgium 2,281 3.67% 2,661 4.06% 4,942 3.87% - 380

Bulgaria 119 0.19% 85 0.13% 204 0.16% 34

Cyprus 58 0.09% 35 0.05% 93 0.07% 23

Czech Republic 890 1.43% 348 0.53% 1,238 0.97% 541

Denmark 597 0.96% 645 0.98% 1,241 0.97% - 48

Estonia 158 0.25% 13 0.02% 171 0.13% 146

Finland 837 1.35% 825 1.26% 1,662 1.30% 12

France 5,464 8.79% 13,030 19.88% 18,494 14.48% - 7,565

Germany, Federal Republic of

16,020 25.76% 23,213 35.43% 39,233 30.72% - 7,193

Greece 376 0.60% 96 0.15% 472 0.37% 280

Hungary 682 1.10% 253 0.39% 935 0.73% 429

Ireland 532 0.86% 972 1.48% 1,504 1.18% - 440

Italy 2,986 4.80% 5,282 8.06% 8,268 6.47% - 2,296

Latvia 201 0.32% 58 0.09% 259 0.20% 142

Lithuania 168 0.27% 255 0.39% 423 0.33% - 87

Luxembourg 161 0.26% 101 0.15% 262 0.21% 59

Malta 100 0.16% 74 0.11% 175 0.14% 26

Netherlands 18,590 29.90% 5,011 7.65% 23,600 18.48% 13,579

Poland 935 1.50% 503 0.77% 1,438 1.13% 432

Portugal 432 0.69% 272 0.41% 703 0.55% 160

Romania 285 0.46% 72 0.11% 357 0.28% 213

Slovak Republic 247 0.40% 52 0.08% 298 0.23% 195

Slovenia 93 0.15% 65 0.10% 158 0.12% 28

Spain 1,567 2.52% 1,289 1.97% 2,856 2.24% 279

Sweden 1,393 2.24% 2,002 3.06% 3,395 2.66% - 609

United Kingdom 6,807 10.95% 6,830 10.42% 13,638 10.68% - 23

EU Total 62,181 100.00% 65,527 100.00% 127,708 100.00% - 3,346

Source: Department of Statistics, Malaysia


Table A9.Malaysia-EU Trade Figures by Member StateYear 2012


Appendix

Table A10.Doing Business in Malaysia

Table A11.Services Sector Performance at Constant 2005 prices

2008 2009 2010 2011 2012p 2008 2009 2010 2011 2012p

Annual change Share to GDP

Intermediate services 8.5% 3.2% 7.9% 6.2% 7.4% 20.6% 21.6% 21.8% 22.0% 22.4%

Finance and insurance 9.7% 4.4% 8.2% 6.5% 7.9% 8.5% 9.0% 9.1% 9.2% 9.4%

Real estate and business services 8.9% 3.6% 7.1% 5.5% 7.1% 5.1% 5.4% 5.4% 5.4% 5.5%

Transport and storage 6.0% -3.0% 6.9% 5.4% 4.9% 3.7% 3.7% 3.7% 3.7% 3.6%

Communication 8.0% 6.2% 9.1% 7.6% 9.1% 3.3% 3.6% 3.6% 3.7% 3.8%

Final services 8.6% 2.6% 6.8% 7.5% 5.7% 30.3% 31.6% 31.5% 32.2% 32.2%

Wholesale and retail trade 11.5% 1.7% 8.3% 7.1% 4.6% 13.5% 14.0% 14.1% 14.4% 14.3%

Accommodation and restaurant 7.4% 4.5% 6.8% 6.0% 5.4% 2.3% 2.4% 2.4% 2.5% 2.5%

Utilities 3.3% 2.0% 7.0% 3.1% 4.3% 2.5% 2.6% 2.6% 2.5% 2.5%

Government services 7.6% 3.4% 5.7% 12.4% 9.6% 7.0% 7.3% 7.2% 7.7% 8.0%

Other services 6.0% 3.8% 4.3% 4.7% 3.9% 5.0% 5.2% 5.1% 5.1% 5.0%

Services (aggregate) 8.6% 2.9% 7.2% 7.0% 6.4% 50.9% 53.2% 53.2% 54.2% 54.6%

Note: Numbers may not necessarily add up due to rounding Source: Department of Statistics, Malaysia

Topic Rankings DB 2013 Rank DB 2012 Rank Change in Rank

Starting a Business 54 42 -12

Dealing with Construction Permits 96 116 20

Getting Electricity 28 27 -1

Registering Property 33 62 29

Getting Credit 1 1 No Change

Protecting Investors 4 4 No Change

Paying Taxes 15 25 10

Trading Across Borders 11 12 1

Enforcing Contracts 33 31 -2

Resolving Insolvency 49 48 -1

Doing Business 2013 Rank 12 14 2

Source: World Bank, Doing Business Projecthttp://www.doingbusiness.org/data/exploreeconomies/malaysia


Appendix

WHY YOU SHOULD JOIN EUMCCI!

1. EUMCCI is one of the leading chambers in Malaysia with a membership reach of approx. 1200+ corporations – hence great visibility for our Corporate Partners

2. We provide a strong lobbying platform through our 14 industry sector committees for our members to raise issues impacting their business in Malaysia

3. As one of Malaysia’s largest trading partners, the EU and hence the Chamber is an important dialogue partnerwiththeMalaysiangovernmentinmappinggovernmentpolicies/strategiestowardsasuccessfulimplementation of the ETP Our committees play an important role in proposing recommendations.

As a Corporate Partner you will:

4. Enjoy high-level networking via our 30+ events annually.

5. Enjoy privileged pricing for advertising in our publications be it our quarterly REVIEW (circulation 3000) sent directly to Corporate Partners or the bi-monthly e-bulletin (6000+ emails) or on our website.

6. Can join all committees thereby widening their networks in all industry sectors

7. Get complimentary invitations to exclusive high-level events as our guest – average 5-6 events per year.

8. Are invited to insert short newsworthy articles in our REVIEW at no extra cost to them.

9. Will have their logos with a link to their website in our Member Directory on our website.

10. Have extended profile and logos in our EU-Malaysia Business Directory

11. Will receive free copies of our publications i.e. Trade Issues & Recommendations, CSR Book, Quarterly Review and Member Directory

12. Will have access to exclusive members’ promotions via login on the website

13. Will be sent the quarterly CEO Digest and e-reviews on key statistics and economic analysis to assist decision makers planning ahead

14 Will have access to EU sister chamber events in the region at members’ price.

For more information www.eumcci.com or please contact:Mary Lopez, Membership Manager at [email protected]

EUMCCI Trade Issues and Recommendations 2013 · 2019. 4. 19. · EU-Malaysia Chamber of Commerce...

Documents

Transcript of EUMCCI Trade Issues and Recommendations 2013 · 2019. 4. 19. · EU-Malaysia Chamber of Commerce...