EU-MALAYSIA BUSINESS · and the business sector in Malaysia. The Committee has engaged with 12...

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EUMCCI Trade Issues and Recommendations 2011

EU-MALAYSIABUSINESS

charles

Sticky Note

inside front coverblank

EUMCCI

Trade Issues and

Recommendations

2011

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This document has been produced with partial financial assistance of the European Union. The contents of this document are the sole responsibility of EUMCCI and can under no circumstances be regarded as reflecting the position of the European Union.

Table of Contents

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

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

2. Overview of Malaysian Economy ................................................................. 11 2.1 Malaysian Economy in 2010........................................................... 12 2.2 Forecast for 2011 .......................................................................... 13 2.3 Services Sector .............................................................................. 14 2.4 EU-Malaysia FTA ............................................................................ 14 2.5 International Economic Outlook 2011............................................. 15

3. Key Measures ................................................................................................ 16 3.1. Economic Transformation Programme - Propelling Malaysia Towards Becoming A High-Income Developed Nation ................... 17 3.2 Key Measures ................................................................................ 17

4. Cross Sectoral Issues ................................................................................... 21 4.1 Corporate Social Responsibility ...................................................... 22 4.2 Intellectual Property Rights ............................................................. 25 4.3 Legal Systems and Taxation ........................................................... 32

5. Issues by Sector ............................................................................................ 35 5.1 Construction and Building Materials ............................................... 36 5.2 Education ...................................................................................... 38 5.3 Energy, Environment and Green Technology................................... 41 5.3.1 Energy Efficiency ............................................................................ 43 5.3.2 Green Building and Sustainable Communities ................................ 45 5.3.3 Renewable Energy ......................................................................... 48 5.3.4 Solid Waste .................................................................................... 48 5.3.5 Water ............................................................................................. 50 5.4 Healthcare ..................................................................................... 52 5.5 Human Resources ......................................................................... 56 5.6 Information & Communication Technology ..................................... 58 5.7 Logistics ........................................................................................ 61 5.8 Oil & Gas ....................................................................................... 64 5.9 Wines and Spirits ........................................................................... 70

6. Appendix ...................................................................................................... 75 Table A1. The Global Competitiveness Index ................................................ 76 Table A2. Malaysia’s Total Trade ................................................................... 78 Table A3. Malaysia’s Trade with European Union .......................................... 79 Table A4. Malaysia’s Export by Sector .......................................................... 80 Table A5. Malaysia’s Imports by Sector ........................................................ 81 Table A6. Malaysia’s Export to EU - 27 by Product Sector ........................... 82 Table A7. Malaysia’s Imports from EU - 27 by Product Sector ...................... 83 Table A8. Malaysia-EU Trade Figures by Member State ................................ 84 Table A9. Malaysia-EU Trade Figures by Member State ................................ 85 Project Description “Enhancing the EU-Malaysia Dialogue ........................... 86 and Business Cooperation in Services Sector”

Introduction

4 EUMCCI Trade Issues and Recommendations 2011

EU-Malaysia Chamber of Commerce and Industry

In line with EUMCCI’s mission of enhancing business and investment relations and opportunities between the EU and Malaysia, I am pleased to present our EUMCCI Trade Issues and Recommendations 2011.

This position paper focuses on the current status of EU business in Malaysia and offers a collection of industry specific issues and recommendations, composed by our sectoral committees, to further improve the business environment from a corporate perspective.

The position paper provides an overview of EU trade with Malaysia and from the viewpoint of European and Malaysian business, we offer key recommendations. It is noted that whilst in certain areas there has been some progress, for many issues there has been limited advancement. The Government Transformation Plan and the Economic Transformation Plan are clearly aimed at creating a paradigm shift in the development of the nation and it is felt that the recommendations in this paper will support the continuing drive to make Malaysia more competitive within the region.

EUMCCI’s prime focus remains on the services sector through the ‘Enhancing Business Dialogue and Cooperation in the Services Sector’ project, co-financed by the European Commission. This year the EUMCCI Sectoral Committees have also focused on the Free Trade Agreement (FTA) negotiations that are being progressed between the EU and Malaysia. The position paper puts forward issues and recommendations that could impact or assist both EU and Malaysian businesses with the successful completion of this FTA.

Our Committees and staff have worked hard to compose the contents of this publication and I trust that it may serve as both valuable insight and support for European investors, our member companies and our stakeholders.

EUMCCI, April 2011David JonesChairman

EUMCCI Trade Issues and Recommendations 2011 5


In May 2003 the EU-Malaysia Chamber of Commerce and Industry (EUMCCI) emerged from the former European Union Business Council (EUBC). The EU presence in Malaysia commenced through the European Community Business Council incorporated under the Registry of Companies on 8 May 1993. The Chamber is a non-profit private sector organisation.

Mission

The mission of EUMCCI is 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 catalyse 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

• To contribute to trade and investment flows between the European Union and Malaysia and fosterbusiness cooperation between these countries and Malaysia

• Toraiseissueswiththeauthoritiesandcontributetopolicyconsultations• To collect and disseminate key market statistics and other information on trade and industry to its

members• Topromoteuniformityandclarityofrulesandpracticesconcerningcommerce,industryandtradeandact

on particular issues that affect the European and Malaysian business and industrial relations• To increase and sustain member interests in trade and industry and assist companies in Europe and

Malaysia to establish long-term commercial links and partnerships• Toprovideaforumforthediscussionandexchangeofideasoncommerce,industryandtradebetween

Malaysian and EU member countries• ToexchangeopinionsandviewswithotherChambersofCommerceandsimilarassociationsinMalaysia,

the Asian region, and the Member States of the EU

EUMCCI Committees – Strong Lobbying Tool

EUMCCI aims to highlight trade issues of concern faced by our member companies. The backbone of the EUMCCI, the industry Committees are also the EUMCCI’s main lobbying tool. The Committees raise issues and provide recommendations that establish the EUMCCI’s overall position on relevant matters in each industry. The Committees are essential in outlining the main trade issues for our annual dialogue with the Minister of Trade and for the EUMCCI Trade Issues and Recommendation publication.

The EUMCCI Committees are platforms for EUMCCI members from 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.

1. EU-Malaysia Chamber of Commerce and Industry

EUMCCI Committees are platforms for members to raise issues to relevant authorities, organise joint events and work on joint projects. Membership to the Committees is open to senior level representatives of member companies. Applications to join a Committee should be made to EUMCCI. For more information visit: www.eumcci.com



Each Committee is responsible for writing its Trade Issues and Recommendations Position Paper outlining the most pressing business problems and recommendations for the government on how to reduce these issues. Every year all Position Papers drafted by the Committees are compiled into the ‘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 13 Committees covering the following sectors:

Air Transport

Head of Committee: Mr. Fabrice Godeau, Sales Director Asia Pacific | SAFRAN National Executive Malaysia, SAFRAN - Snecma

Deputy Head of Committee: Ms. Laurence Lagriffoul, Business Development, Turbomeca, Asia Pacific Pte Ltd

The EUMCCI Air Transport 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 stated objectives of the Committee are:1. Promote improved aviation safety and European safety standards2. 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 Asia Aerospace Hub

Construction and Building Materials

Head of Committee: Mr. Aat van der Horst, General Manager, Victor Buyck Sdn Bhd

The EUMCCI Construction and Building Materials Committee is the lobbying partner for EU construction and building materials companies, architects and engineering companies. The Construction Committee aims to assist its members in addressing current issues to the government and to act as a network forum to exchange best practices. The Committee addresses issues to Pemudah, Ministry of Works, CIDB and other authorities relevant to the industry.

Corporate Social Responsibility (CSR)

Head of Committee: Mr. Loong Caesar, Partner, Raslan LoongDeputy Heads: Dr Geoffrey Williams, Managing Director & CEO, OWW Consulting Sdn Bhd Mr. Arno Thöny, General Manager, Meliá Kuala Lumpur

The EUMCCI CSR Committee with representatives from several European and Malaysian companies is focusing on gaining more attention for CSR in Malaysia. The CSR Committee has published a book; a compilation of case studies featuring good CSR practices and episodes in Malaysia. It also covers the development of CSR in Malaysian companies, especially those with business links to the EU.



The CSR book, entitled ‘Budi di Semai, Jasa di Tuai’ (Benevolence is Rewarded in Return), contains a collection of stories told by EUMCCI member companies that have implemented CSR programmes. Our CSR Committee believes this is the best way to demonstrate what CSR really means and to inspire others to do the same.

Our CSR mission statement: A platform to foster closer cooperation and engagement with governmental agencies to further enhance the protection and enforcement of CSR in Malaysia.

Defence and Security

Head of Committee: Mr. Juan Carlos Portillo, Regional Manager, Navantia SA (Malaysia)Deputy Heads: Mr. Alberto Ciaramicoli, Chief Operating Officer, Comlenia Sdn Bhd Mr. Andrin Raj, Managing Director, Stratad Sdn Bhd

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

Education

Head of Committee: Dr. Geoffrey Williams, Managing Director and CEO, OWW Consulting Sdn Bhd

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 & Industry

Deputy Heads: En. Rosman Hamzah, Director of Business Development, Alstom Asia Pacific Sdn Bhd Ms Marina Yong, CEO, Perunding Good Earth Sdn Bhd

The Environment, Energy and Green Technology (EEGT) Committee was created in order to provide members with information, as well as creating awareness concerning environmental matters and green/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 five EEGT Sub-Committees; Water, Waste, Energy Efficiency, Renewable Energy and Green Building 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:Water: Mr. Oliver Harrison, Sr Trade Manager, British High CommissionWaste: Mr. Graham Martin, Director, Profea (M) Sdn BhdEnergy Efficiency: Ms Marina Yong, CEO, Perunding Good Earth Sdn BhdRenewable Energy: En. Rosman Hamzah, Director of Business Development, Alstom Asia Pacific Sdn BhdGreen Building: Dr. Stellios Plainiotis, Managing Director, Neapoli Sdn Bhd

Financial Services

The EUMCCI Financial Services Committee conducts lobbying activities and discusses issues related to the liberalisation of the sector with the Malaysian Government. The Committee organises talks with topics regarding the financial services sector.

Healthcare

The aim of the EUMCCI Healthcare Committee is to be at the centre of debate in order to identify and prioritize key issues in the Healthcare industry, including issues relevant to the EU-Malaysia FTA negotiations. The Committee acts as a forum to discuss and facilitate business and to propose an environment in which to improve business conditions as well as acting as a conduit, raising issues and creating a clear and transparent relationship with Malaysian Government. The Committee also functions as a lobbying tool for European companies to improve interrelation and communication with the stakeholders and other related government agencies.

Human Resources

Head of Committee: Ms Chan Swee Hwa, Human Resources Director, TNT Express Worldwide (M) Sdn Bhd

Deputy Head of Committee: Mr. R. Ravindra Kumar, Partner Raja Darryl & Loh – Advocates and Solicitors

Formed in November 2009, 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 related

knowledge, skills and information through appropriate channels such as workshops, seminars, surveys and training program

• a Networking Group - We work to raise awareness of HR matters through meaningful activities andevents and to contribute to other Committees in EUMCCI through regular networking or social events



Information & Communication Technology

Head of Committee: Mr. Krishnakumar Guda, President & Country Manager, Ericsson (Malaysia) Sdn Bhd

The EUMCCI ICT Committee offers a platform for members to network, discuss and raise issues in the ICT sector. The Committee organises talk sessions with guest speakers from the government to discuss the developments in the sector and new regulations.

The ICT Committee mission is to build a stronger, bigger, louder and better forum to deliver our stated objectives to enhance our cooperation with Malaysian and European authorities for the deliverance of innovative ICT solutions and services.

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

Head of Committee: Mr. Marco Tieman, Chief Executive Officer, LBB Teams (M) Sdn BhdDeputy Head of Committee: En. Kamarul Azman, Customs and Regulatory Affairs Manager,

National Operations, DHL Express (M) Sdn Bhd

The EUMCCI Logistics Committee, formed by representatives from both large and small logistics companies, regularly discusses relevant issues and means to resolve them or at least minimise their impact. The Committee lobbies the appropriate authorities and organises seminars and sector-related events. In addition, the Committee acts as a forum for exchanging information about logistics in Malaysia and has conducted a regional survey on logistics processes and costs.

The mission of the Logistics Committee is to be the representative body of the logistics industry in Malaysia. To promote, support and develop logistics in Malaysia as well as facilitate trade, logistics and investments between EU and Malaysia.

Oil & Gas

Head of Committee: Mr. Robert Jaimond, Senior Business Consultant, i3M Asia PacificDeputy Head of Committee: 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 will accomplish this vision through the following mission:• TobeacentreofdebatetoidentifyandprioritizekeyissuesintheOilandGasIndustry• To be a forum to facilitate business, discuss and propose an environment to improve the business

condition• Tobeachanneltoraiseissuestogovernmentauthoritiestocreateaclearandtransparentrelationship

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

Wines and Spirits

Head of Committee: Mr. Frédéric Noyere, Managing Director, Möet Hennessy Diageo Malaysia Sdn BhdDeputy Head of Committee: Mr. CK Tan, Managing Director, Pernod Ricard Malaysia Sdn Bhd

The Wines and Spirits Committee was introduced at the start of 2011. 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 primary objectives of the Committee 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,champagnesandwinestobecompetitiveandtoparticipate 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

• Tocollateall informationrelatingtoalcoholicbeveragesconsumptionissues;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 Malaysian Economy in 2010

Malaysia’s economy experienced a deep V-shaped pattern of growth during the span of the global recession and subsequent recovery. In the period of mid-2008 to mid-2010, the economy sustained a sharp downturn, followed by a recovery phase of high GDP growth. That strong growth in the beginning of 2010 was moderated in the second half of the year to a more sustainable, normal level. The annual growth amounted to just above 7%. Malaysia’s economic upturn in the past year can be attributed to a rise in private investment, robust domestic consumption, and improved external demand. Trade made a marked recovery by increasing with close to 20%. With the global recovery, both domestic and foreign investors increased spending.ThisisreflectedintheaccelerationofinvestmentsinMalaysiainthepastyear,thelargestoffshoreinflowsoriginating inSingapore (RM2.9billion),Japan(RM0.7billion),andSwitzerland(RM0.5billion).ThegrowthofFDI inflow is impressive-astaggering409% increasecompared to2009.Nevertheless, inFDIvolume Malaysia is lagging behind the regional leaders. The government has made it a prime target to attract more private investments in the coming years.

FDI Inflows in comparison (in $ billions)

2009 2010 Growth rate (%)

Malaysia 1.4 7.0 409.7

Indonesia 4.9 12.8 162.7

Singapore 16.8 37.4 122.7

Thailand 5.9 6.8 14.2

Source: UNCTAD- Global Investment Trends Monitor 2010

Themarketwasfurthersupportedbyrelativelystableemployment,moderateinflation,strongbusinessandconsumer confidence. The government is still running a budget deficit, however the fiscal policy is showing signs of normalization with a reduction of the deficit from 7% of GDP in 2009 to 5.6% in 2010. These numbers are quite low compared to the deficits of European countries, the US, Brazil, and Japan. The regional perspective is less favorable for Malaysia though, as the government spending of its neighbors is approximately twice as low. In an effort to cut spending, a systematic reform of subsidies has been implemented. The first step was taken mid-July with the raising of energy prices, including gasoline, household gas, and even a moderate increase in the price of sugar.

Malaysia would have to sustain an annual growth rate of 6% in the next 10 years if it wants to become a developed country by 2020. However, the historical engines of growth are producing insufficient results. The need for improvements is pressing and the government is responding by formulating new strategies. The two noteworthy policy platforms that were produced in 2010 are the Tenth Malaysian Plan (10MP), the Government Transformation Programme (GTP), and the Economic Transformation Programme (ETP). The former represents the government’s development plan for the period 2011-2015 in twelve National Key Economic Areas (NKEAs) and especially targets the private investments sector. GTP focuses on improving the effectiveness of delivery of government services in several key areas. The ETP is an ambitious, comprehensive attempt to steer Malaysia towards the achievement of a high-income status and the result of impressive collaborative work of top specialists from the public and private sector.

2. Overview of Malaysian Economy



The government has recognized the pivotal role that the private sector must have in order to achieve tangible, feasible solutions. The involvement of the business in the conception of the ETP, as well as its part in the implementation phase, are indicative of the significance of the private sector’s responsibility for economic growth. By design, the government should only play the role of facilitator in the ETP, while the private sector is entrusted to lead the transformative process. The overwhelming majority of the funding (92%, or RM120 billion a year from 2010 to 2020) will be coming from the private sector. Instead of merely theorizing about solutions, the ETP identifies specific actions - it begins with 131 entry point projects to boost the economy. Mid-term growth of the Malaysian economy depends on the implementation and effectiveness of the envisioned reforms.

ETP:

Source: PEMANDU- Performance Management and Delivery Unit

2.2 Forecast for 2011

Following the trend of the second half of 2010, economic expansion is expected to further decelerate during 2011. Forecasts of the World Bank fix the GDP growth at 4.8% but this number is subject to changes in the global demand, markedly from the G3* and China. Growth in the upcoming year will be spearheaded by domestic demand. The government relies on stronger domestic consumption in light of low unemployment and bigger disposable household income. On the downside, this could lead to higher inflation. Privateinvestment should lead growth as public expenditure is decreased. However, domestic market sentiment will be impacted by the progress of the reforms undertaken in 2010.

The budget deficit is predicted to have a marginal reduction of 0.2% and reach the level of 5.4% of GDP. The future of the fiscal consolidation is dependent on several factors - the will of the government to continue with subsidy reductions, the restructuring of the social safety programmes and the possible changes in the tax landscape.

One of the biggest challenges facing the Malaysian economy is attracting private investments. It is a one of the primary aims of the 10MP and the ETP. Over the past decade, Malaysia has endured a steady decline in investments due to shortage of skilled human capital, low innovation and productivity, and deficiencies in public services provision. The emerging of low-cost producers in the Asian region is causing further migration of FDI away from Malaysia. Government strategies for the improvement of the investment climate, as well as the greater availability of capital during the global economic recovery, are already producing results. However,

Incremental GNI impact (2020)

Greater KL/KV

RM Billions

392

29

34

35

36

53

59

67

108

121

125

131

Agriculture

Education

Healthcare

CCI

E & E

Business Service

Tourism

Wholesale & Retail

Financial services

Palm Oil

Oil, Gas & Energy

EPPs per key area

Oil, Gas & Energy - 12Financial services - 10Tourism - 12E & E - 15Healthcare - 6Agriculture - 16

13

169 12

8

10

13

12615

10

6

Palm Oil - 8Wholesale & Retail - 13Business Services - 6CCI - 10Education - 13Greater KL/KV - 9

* US, Japan and Germany.



the most encouraging sign to foreign investors would be to liberalize protectionist regulations. Opportunity for change is present - the FTA with the EU could provide the impetus for Malaysia to dismantle decades-old discriminatorypracticesandopenupitsmarkettofreshinflowsofFDI.

2.3 Services Sector

The services sector grew by 6.5% in 2010 and currently comprises 57.3% of Malaysia’s GDP. The level of growth was high in the first part of the year and eased down in the second. Sectoral forecasts estimate that in 2011 the upturn will moderate to 5.3%.

Services Sector Performance 2009-2011 (at constant 2000 prices)

Change (%) Share of GDP (%)

2009 20101 20112 2009 20101 20112

Intermediate Services

Transport and Storage -2.8 7.0 6.2 3.8 3.8 3.8

Communication 6.0 7.3 8.9 4.1 4.2 4.3

Finance and Insurance 5.1 6.3 5.6 11.7 11.7 11.7

Real Estate and Business Services 2.4 5.6 4.9 5.4 5.4 5.3

Final Services

Utilities (Electricity, Water, Gas) 0.4 8.5 5.6 3.0 3.0 3.0

Wholesale and Retail Trade 1.2 7.4 5.6 13.3 13.4 13.4

Accommodation and Restaurant 2.8 4.7 5.2 2.5 2.4 2.4

Other Services 4.4 4.2 5.4 6.1 5.9 5.9

Government Services 2.0 6.7 1.9 7.6 7.6 7.3

Total 2.6 6.5 5.3 57.6 57.3 57.3

1 Estimate 2 Forecast

2.4 EU-Malaysia FTA

In December 2010, negotiations for a Free Trade Agreement (FTA) between the European Union and Malaysia were officially opened. When successfully completed, the FTA will become the long-term framework for economic relations, promising many opportunities for both partners. The FTA is an ambitious endeavor that could ultimately remove tariffs on all trade in goods. Equally groundbreaking would be the liberalization of the Malaysian services sector to levels exceeding WTO commitments. The FTA negotiations have put sensitive areas, such as government procurement, competition, and sustainable development, on the discussion table. This means that European companies will benefit from greatly improved market access conditions and will gain a firmer foothold in the growing Asian market. The advantages of this agreement for the Malaysian market are substantial - granting lucrative preferential access to the EU which is the largest market in world. Studies have predicted an 8% GDP growth for Malaysia by 2020 if a comprehensive FTA is forged. The conclusion of an EU-Malaysia FTA would be a landmark step in the fostering of bilateral trade between the two partners and will deepen their economic integration.



2.5 International Economic Outlook 2011

After the broad recovery of the global economy in 2010, the expectations for 2011 can be characterized as moderately optimistic. Economic growth will continue to increase, albeit at a decelerated pace. The pronounced, bounce-back phase of recovery from 2010 will be replaced by a slower, sustainability-paced tempo. In 2010, the volume of trade reached its pre-crisis levels and a strong global growth (GDP increase of 3.9%) was recorded. The engines of economic recovery have been the developing countries - approximately half of the global growth can be attributed to them. Emerging economies (China, Brazil, India) will maintain strong growth, mainly due to their increasing domestic demand and continue to be the driving force of the world economy. On the other hand, developed economies are expected to be a hampering factor to the recovery as their growth will stay sluggish. Although the US and Germany will fare better, the rest of the advanced economies are forecast to make little progress. Their governments are going through an unprecedented change in their scaling back of fiscal stimuli to a policy of fiscal austerity as the worst of the recession seems to be behind us.

Many problems linger in the aftermath of the global financial crisis and pose a threat to the speed of recovery in the short and the long term. The repayment of public and private debt is an ongoing challenge. Persistently high unemployment will continue to be an issue, especially in the US and Europe. The emerging economies face theirownsetofproblems,e.g. rising inflation,overheating, anddevelopmentof assetbubbles.Thepolicy of ‘cheap money’ (low interest rates and quantitative easing) is maintained by high-income countries as they attempt to help their financial sectors cope with the phasing out of fiscal stimuli. Negative consequences of this policy are the greater exchange-rate volatility between major currencies and the surge oflargebutvolatilecapitalflowstoemergingmarkets.Theresultingtensionandmistrustwillfurtherimpedethe already difficult co-ordination of trade and regulation at the international level. The lack of co-operation between governments is leaving many of the fundamental structural problems that led to the recession unaddressed.

From a long-term perspective, one of the biggest pitfalls could be the emerging economies’ restructuring of their growth model. The leading developing countries will have to transition in the next years from an export-dependent model of economy to one that is based on domestic demand. Other underlying risks relate to the future of the eurozone. Presently, the leaders of most European countries display a commitment to the euro project.However,intheyearstocome,themountingpressureofwagedeflation,risingunemploymentandthe difficult choice between raising taxes or cutting expenditure may herald a change in the political consensus. A shift in domestic politics could, eventually, lead to the break up of the fiscal union.

Source: Davos World Economic Forum, The Economist, United Nations, World Bank



Key Measures


Key Measures

In order for Malaysia to gain and attract investor confidence, EUMCCI applauds the government’s efforts to put in place policies and actions that are supportive of business.

3.1. Economic Transformation Programme - Propelling Malaysia Towards Becoming A High-Income Developed Nation

EUMCCI commends the Government and Economic Transformation Programmes launched by the Prime Minister and looks forward to their impact. Successful implementation of the ETP would see Malaysia’s economy undergo significant changes and move towards a service-based economy, with the services sector contribution growing from 58 percent to 65 percent by 2020.

3.2 Key Measures

Many of the issues EUMCCI has previously brought attention to in its annual Trade Recommendations and advocacy activities, are now recognized in government strategies. We consistently continue to review the business environment in Malaysia in light of our roadmap of key measures. Reflecting the spirit of co-operation between the Chamber and Malaysian policy makers, our ongoing recommendations are related to the most recent government development programmes - the GTP and ETP.

1. Ensure policy consistency and provide clear direction in development of policiesThe smooth operation of business requires that the regulatory environment in the country is reliable, easy to navigate through and inclusive of the stakeholders. The Malaysian government has recognized that deficiencies exist in its internal processes and these are hampering the economy from attracting much-needed private investments. Improving government services is at the core of the GTP. The ongoing FTA negotiations can also be used as a platform for bringing more transparency, clarity and policy predictability to the regulatory framework. Regular consultation, engaging in meaningful dialogue with all stakeholders is also key to the introduction of policy changes. For example, EUMCCI proposes to become involved in the ETP so thatthereisacontinuousflowoffeedbackbetweengovernmentandbusiness.

(3.0-1)

Source: World Bank, 2010

3. Key MeasuresD

ays

900800700600500400300200100

0

Regulatory issues in comparison

Deal withconstruction

permits

265144

25 5

585

840

292

150

Registerproperty

Enforcecontracts

Close abusiness

Malaysia

Singapore


Key Measures

2. Develop IPR protection and enforcementMalaysia’s legislation on intellectual property rights in the main, conforms with international standards. The three issues which are identified as most problematic in this field are: i) problems with enforcement, ii) border measures, and iii) territoriality of trademarks. EUMCCI proposes an array of measures to help address these issues. Awareness campaigns to familiarize the public with the negative effects of piracy are needed. More efficient legal action would encourage IPR holders to pursue their infringed rights more often. Specialized training of customs officers will prepare them to adequately deal with seizing of counterfeits. Better inter-agencies cooperation and intelligence-sharing is required. This is particularly important for the multiple cases where Malaysia is only a transit country for counterfeit goods originating from China, Vietnam, and Indonesia. One of the focal points of the EU-Malaysia FTA will be the strengthening of IPR protection. As barriers to trade between the two markets are lowered, it must be ensured that counterfeits become subject to stricter control.

3. Review the equity conditionsThe government has identified as a policy priority, the strengthening of private investments and the attraction of FDIs. At the same time, the cap on foreign ownership and the Bumiputra participation in a number of sectors continues to be upheld. In particular, restrictions in the service sector (telecommunication, logistic, financial, environmental, professional and business etc.) should be reassessed. Malaysia should seize the opportunity provided by the currently negotiated Free Trade Agreement with the EU to liberalize its equity regulations.

4. Develop a competitive taxation and tax incentive climateMalaysia needs to develop a more competitive tax system if it wants to gain an advantage over its neighbours. Compared to the regional frontrunner, Singapore, Malaysia still offers a less favorable tax regime. In 2011, taxes will remain to a great extent unchanged. The most notable exception is the 1% increase of the service tax which now amounts to 6%. However, the introduction of a goods and services tax (GST) is anticipated in the near future, perhaps in late 2012, early 2013. The preparations for companies to adapt and adopt GST need to be in place well in advance.

5. Develop human capitalLack of a qualified workforce is one of the biggest impediments that investors identify with doing business in Malaysia. The demand for talent is growing while academic institutions struggle to provide graduates with practical skills. There seems to be a disconnect between the curriculum and the requirements of employers. Better co-ordination between industry and universities, more focus on internships and language training are some of the requisites for preparing graduates for the real world and making them more employable. At present, the government is reforming its education system by, among other things, introducing a new curriculum for primary and secondary schools and promoting significant growth of the private education sector.

6. Improve security level in MalaysiaSecurity is an important factor in inspiring investors’ confidence. The crime rate in Malaysia has risen in recent years and the inclusion of crime reduction as a priority area in the GTP is a sign of the need for stringent measures. The main trust of the government’s anti-crime policy was to increase number of policemen in hotspots. This policy seems to be delivering results and the national crime rate has been declining since 2009. Sustained efforts should be made to further this trend. Moreover, studies show that crime levels have an inverted relationship to economic performance, hence, a more holistic approach to security should be considered.


Key Measures

7. Liberalization of servicesThe services sector is the largest contributor to Malaysia’s GDP. Therefore the development of this sector is of paramount importance to the health of the entire economy. Despite some previous advances toward relaxing the equity restrictions and market access for foreign companies, currently Malaysia’s services sector remains highly protected. The country is currently facing a rare opportunity in the form of the EU-Malaysia FTA. It can bring its protectionist regime into conformity with the demands of a globalized world. By doing that, Malaysia will gain lucrative, preferential access to the world’s largest market - the European Union. EUMCCI strongly supports a review of the main barriers to FDI and the establishment of Malaysia’s services sector. Among these, although the list is non-exhaustive, are:• RestrictionsonacquisitionsofMalaysiancompanies• Restrictionsonthepurchaseofland,propertyandrealestate• Obligationtoenterthemarketthroughjointventure• Limitationsoncapitalownership(thecountrytoallow51%ownershiptoforeigninvestors,hencecontrol

of the company, a necessary condition to trigger real investment in the services sectors, that would initiate transfer of know-how and management expertise, creating local growth and local jobs)

• Limitationsonlicensesallottedtoforeigncompanies• Restrictionsonbranching• LackofNationalTreatmentinmanyservicessectors• Localemploymentrequirements(whenthepercentageistoohigh,itcanpreventforeigncompaniesthat

usually start with small operations)• Longandburdensomeadministrativeprocedures• PublicprocurementpracticesgivebetteraccesstoBumiputra,tothedetrimentofforeigninvestors,the

Malaysian budget, and ultimately the Malaysian citizens. The lack of transparency in the bidding system needs to be addressed

8. Enhance transparency and minimize the level of corruptionCorruption is still present in Malaysia. According to PEMUDAH estimations, inefficiencies resulting from corruption cost the country around RM10 billion a year. Legislative measures against corrupt officials do exist, however, there is much to be desired on the implementation side. A 2010 survey by Transparency International revealed that the situation is not significantly improving. The government now recognises the necessity in delivering better results in the 3 most problematic areas - regulatory and enforcement agencies, government procurement and political corruption. EUMCCI encourages the implementation of the GTP policies aimed at combating corruption.

9. Create a more conducive environment for innovation and creativityThe European Union has long since recognized the importance of innovation in achieving sustainable growth and competitiveness. In the Europe 2020 strategy, launched by the European Commission in March 2010, innovation is singled out as one of the motors of the economy. Malaysia aims to become a high-income nation through inclusive and sustainable growth, not through short-term progress (ETP). It also tries to gain a competitive edge in the region. Creating an environment that is conducive to innovation is a means to accomplish these goals. EUMCCI suggests taking policy measures in the following directions:• Taxincentives• Removingbureaucraticobstaclesandcreatingahassle-freeenvironmentforprivatesectoractivity• Liberalizationofvarioussectorstoallowthemostefficient(andinnovative)businessestothrive;thereis

now extensive evidence that multinational companies are more innovative and productive; this could lead to ‘spill-over’ benefits for domestic business

• HaveanefficientfinancialservicessectorwhichcanprovidecapitalforR&Dactivities• Ensureprotectionofintellectualpropertyrights• Supportastrongsciencebase-universitiesareoftenthecradleofR&D• Encouragepublic-privatepartnerships


Key Measures

The NKEAs of the ETP can be a suitable vehicle for executing innovation-promoting projects. Special attention must be devoted to enforcing IP rights, making it more profitable for companies to invest in R&D.

10. Foster awareness of climate change and incentivize and speed up implementation of green technology

Reliance of fossil energy is not a sustainable solution. Currently, Malaysia is falling far behind developed countries and even behind some of the less advanced neighbouring economies, in its share of grid-connected renewable energy. It amounts to only 1% of Malaysia’s energy mix. With a mere 5% of the waste being recycled, there is much room for improvement if the country wants to reach developed nations’ recycling rate of approximately 50%.

Europe is the renowned global leader in green technology and the fight against climate change. Co-operation between the EU and Malaysia in this field can thus bring significant benefits.

Creating a broad awareness of environmental issues and business opportunities in the growing green sector is one of the future challenges. In this respect, initiatives such as the International Green technology and Eco-Product Exhibition (IGEM) can play an important role. The government should also consider more incentives for the private sector to develop in a nature-friendly manner (e.g. energy and water efficiency, green building, production of renewable energy). Raising awareness among the population will create a demand for green solutions, boost a new, profitable sector of the economy, and ensure that Malaysia’ growth into a high-income country is not at the expense of its nature.

Sources:

• EuropeanServicesForum,Brussels-2010Non-PaperonMainbarrierstoFDI/EstablishmentinServicesSectorsin

Malaysia;

• Ernst&Young-UpdateonMalaysianTaxLandscape(February2011);

• PEMANDU-PerformanceManagementandDeliveryUnit,Malaysia-EconomicTransformationProgramme:A

Roadmap for Malaysia (2010);

• PEMANDU-PerformanceManagementandDeliveryUnit,Malaysia-GovernmentTransformationProgramme:The

Roadmap (2010);

• TransparencyInternational-GlobalCorruptionBarometer2010.



Cross Sectoral Issues



4.1 Corporate Social Responsibility

Transparency and Ethics in Procurement

The Malaysian government’s focus on CSR often touches on soft issues. CSR is seen mainly as a private sector corporate initiative to promote good environmental, community, labour and trade practices. Whilst the government’s support of CSR in the private sector is laudable, it also needs to review 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.

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.

RecommendationsWe believe CSR practices should equally apply to the way in which 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 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. The Chamber believes that a lack of transparency in government procurement 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 can not offer that differentiation. Malaysia must therefore bolster its governance structures and institutions with good CSR practices.

The Chamber notes that the government sees CSR as an integral part of developing a high income society. However the corporate sector cannot do this alone. The government must urgently move CSR to become a priority.

4. Cross Sectoral Issues



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.

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 access to resources must end. They stand directly in the way of a higher income society, benefiting only a small segment.

Whilst the government may appear to be promoting education and training, it is questionable whether 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. The dramatic decline in the level of English has far reaching consequences for those unable to speak it well. This agenda gives priority to politics not nation building. Through improved education Malaysia would be able to encourage productivity and move up the technology ladder.

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.

RecommendationsThe focus should move towards productivity and teaching important professional and technological skills and improving the standard of 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.

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 one-sided that companies are often seen to be punished. 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 reasonablestandards of work and ethics.



RecommendationsDecisions 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.

Changes should also be made to the employment laws. Employers should be provided with the tools to ensure that they are able to remove employees who do not meet reasonable standards of work and ethics, making the employment landscape fairer for all parties.

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 remuneration packages and the work environment to keep good employees. This would transform the labour market.

Environment

The Prime Minister indicated at the Copenhagen Summit that Malaysia will commit to up to a 40% Carbon Intensity reduction target by 2020. In order to meet this target, companies (and individuals) need to know their current carbon footprint in order to develop strategies to reduce CO2 emissions from their activity.

RecommendationsGreenhouse Gas (GHG) and Carbon Dioxide (CO2) audits should be compulsory for all large companies and strongly encouraged for SMEs. The Government should also provide grants for GHG and CO2 audits and assist Standards Malaysia and SIRIM to develop courses for locally based GHG and CO2 auditors to help companies at lower cost than using overseas auditors.

Also, the Government should reduce the import tariff on low-carbon technology such as solar panels from overseas to allow Malaysian companies to retro-fit their buildings quickly as well as offering grants for such purpose.

Land Acquisition

With the increase in construction and development within Malaysia, the issue of land acquisition is one that is a constant concern. In rural areas in particular the acquisition of land can often be seen to be to the disadvantage of the displaced peoples if fair compensation is not made.

RecommendationLand acquisition must be done in a fair manner where displaced people are provided fair compensation for their land and homes or provided reasonable alternatives. It is important that the companies involved (construction, property developers, town/city councils, etc) should not just pay “lip-service” by promoting CSR based policies.

Charitable sponsorship

Orphanages and retirement homes in Malaysia are charitable organisations dependant often 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.



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

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 to ensure that the same opportunities of access are granted to venues and buildings across the country, for people with impaired movement or motor skills or for those with 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.

RecommendationsMore effort should be made to provide better facilities for the disabled both at 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.

Intermediary Refugee Employment

The treatment of refugees in Malaysia is a subject that has been highlighted by human rights organisations in the last year. Currently refugees and asylum seekers from countries such as Myanmar are detained prior to repatriation, but denied legal recognition, protection or the right to work. In February 2010, Malaysian Home Secretary Hishamuddin Hussein proposed that refugees be issued government identification cards that would allow them to gain employment. There has been no move towards this suggestion.

RecommendationsGovernment to make it easier for refugees to find gainful employment in companies until such time as they are repatriated to a third-country.

4.2 Intellectual Property Rights

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

One of the conditions at the forefront of the EU-Malaysia 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 that of 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 generally conform 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:1. World Intellectual Property Organisation (WIPO)2. Berne Convention for the Protection of Literary and Artistic Works (1886)3. Paris Convention for the Protection of Industrial Property (1883)4. Agreement on Trade Related Aspect of Intellectual Property Rights (TRIPs) signed under the auspices of

the World Trade Organisation (WTO)5. Patent Cooperation Treaty (PCT)

This is evident through the various intellectual property related legislations and regulations which include the following:1. The Patents Act 1983 and the Patent Regulations 19862. The Trade Marks Act 1976 and Trademarks Regulations 19973. The Copyright Act 19874. Industrial Designs Act 1996 and Industrial Designs Regulations 19975. Geographical Indications Act 20006. Layout-Designs and Integrated Circuits Act 20007. Trade Descriptions Act 19728. Consumer Protection Act 19999. Optical Discs Act 200010. Protection of New Plant Varieties Act 200411. Trade Description (Original Label) order 200212. Price Control (Labelling by Manufacturers, Importers, Producers or Wholesalers) Order 1980

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.

There is also a move for Malaysia to join the Madrid Protocol in 2012, which would allow member countries to use the Madrid International Filing System to file trademarks around the world.

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 at the forefront for foreign investors when dealing with IPR issues in Malaysia:1. Enforcement2. Border Measures

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 causes concern to the IPR holder. With the advent of the internet and the widespread use of the same, the sale of counterfeit goods online is now the trend, surpassing conventional counterfeiting methods. Due to the global nature of the internet, identifying the counterfeiters behind the operation of websites selling the offending products is a huge task and enforcement becomes complicated in light of the borderless nature of this trade especially due to the grey areas that are found within cyber laws.



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

Civil Action

Thecivilactionmodesuggestsadisputeresolutionmechanismbetweenthepartiesinconflict.Thisactionisusually commenced through an exchange of demands, and if unresolved, generally results in litigation. 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 the IPR holder would avail himself of 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.

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). In the IPR field, these are almost always premised on offences under either the Copyright Act 1987 (which deals with copyright related offences) or the Trade Descriptions Act 1972 (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 and upon payment of the compound, the seized goods are likely to be forfeited for destruction.

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.

ERADICATION OF COUNTERFEIT PRODUCTSYEAR TOTAL NUMBER OF CASES TOTAL VALUE OF SEIZED ITEMS (RM)2004 3,914 98,166,687.272005 2,606 12,212,808.552006 2,018 42,686,237.692007 1,936 56,169,682.092008 1,528 23,463,304.882009 409 3,570,857.512010 870 9,425,568.17

ERADICATION OF COPYRIGHT PIRACY ACTIVITIESYEAR TOTAL NUMBER OF CASES TOTAL VALUE OF SEIZED ITEMS (RM) PREMISES INSPECTED2004 4,390 59,216,259.00 25,508 2005 3,812 100,370,598.00 38,0692006 3,792 120,001,103.00 38,1662007 2,720 54,907,108.49 70,8632008 1,942 20,680,942.20 150,3102009 902 33,537,375.81 112,7992010 1,728 30,425,070.00 93,180



ACTION TAKEN ON BUSINESS OWNERSYEAR TOTAL NUMBER OF CASES TOTAL VALUE OF SEIZED ITEMS (RM)2004 15,534 177,597,239.122005 16,792 188,058,574.842006 15,066 271,919,968.542007 11,902 145,262,739.992008 10,188 111,347,914.452009 4130 43,854,325.73 2010 7,564 60,812,645.00

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

Challenges of Enforcement of IPRs

1. Due to the technical nature of IP laws and lack of familiarity, there is a possibility that misunderstandings or miscomprehensions of IPR and the law could occur in court which also adds to the delay in the disposition 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, IPR holders may have lost interest in the case by the time any court action commences, due to the delay involved – stagnation of court process

4. Barriers faced by the MDTCC in the prosecution of IP cases include:• lackofcooperationfromIPholders• lackof,orinsufficientevidencetoprosecutethemastermindsorkeyplayersinvolved• failureofwitnessestoattendCourt• questionablerights(highercourtstendtochallengetherightsownedbytheIPRholder)

5. Investigations are sometimes not conducted thoroughly enough6. Lenient sentences imposed on offenders and the low fines are not acting as strong enough deterrents.

Custodial sentences are rarely given7. Counterfeiting and piracy have now become organised crimes controlled by syndicates and currently

there is a lack of effective legislation to combat this new approach8. A continuing perception that IPR infringements are not serious crimes or are victimless crimes9. Expensive and protracted proceedings involved10. Specific laws need to be established to deal directly with on-line piracy and counterfeiting activities. The

Copyright (Amendment) Bill 2010 when passed included provisions to limit the liability of Internet Service Providers

11. 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

Recommendations1. Additional judges appointed to specifically deal with IP matters alone.

As indicated above, this to a certain extent has been addressed by the establishment of the IP Court on 17 July 2007, resulting from the launching of the Criminal Session Court 4 in Kuala Lumpur being renamed and officiated 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. Since then, there



has certainly been a more efficient and systemised approach in resolving IPR disputes. It is clear from the number of cases involved that there should be additional judges being appointed to address the substantial backlog of cases and significant delay currently encountered

2. A 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:• Createawarenessoftheconsequenceofcounterfeitinmonetaryvalue• Informationdisseminatedtopubliconcounterfeitingthroughadcampaignsandroadshowsformore

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 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 addressed6. Enforcement officers could be given a wider scope of power, for example:

• Toworkhandinhandwithothergovernmentalagenciesundertaskforces(formanpowerpurposesto reduce delay)

• Theexchangeofinformationandintelligencebetweenthesetaskforces/governmentalagencies• Encouragecooperationamonggovernmentalagencies• Providepolicepersonnelwithsupport&training

7. Collaboration between IP holders and enforcement/task force by holding regular meetings/forums to share information and assist in combating counterfeiting and piracy.

Border Measures

With the advent of globalisation, the movement of infringing goods through the borders of various countries has been on the rise. Developing countries continue to be a hotbed 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 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 resulting in difficulty relying upon this as a protective measure for IPR holders.



Setbacks / Problems of Border Measures

1. Border control is only available for counterfeit goods where trademarks are registered in Malaysia. These actions would be of no avail to common law owners

2. The provisions under the Trade Marks Act 1976 provides for the restriction and prohibition on importation of counterfeit trade mark goods once triggered by a complaint or application by an IP owner. While ex-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

3. The growth in industrialisation of low cost manufacturing countries, i.e. China, Vietnam, Indonesia, has generated an increase of infringing products entering the country.

The tracking of these goods is difficult, because:• Sometimespartsofproductsarebroughtintothecountrytobeassembledlocally• Localcontactsareutilised• Packagingandlabelingisdoneinthecountry• Identificationoftherelevantdetailsofapossibleinfringingimporter,suchastheregistrationnumberof

the ship/aircraft/vehicle, location that the counterfeit trade mark goods are expected to be imported to, expected date and time of arrival, is difficult. The gathering of such intelligence, being a requirement under the Act, is not feasible as this information in most instances, would be unavailable to the IP owner

• Evidencegatheringmaybetime-consuminginnature

4. Training provided to Customs officers at the airports does not include training to detect and identify counterfeit goods

5. Due to the absence of training in regard to counterfeit goods, the level of awareness amongst Customs officers needs to be improved as they currently are not provided with substantive amounts of motivation to combat piracy and counterfeiting

6. Customs officers do not view IPR as a priority often focusing on their more traditional role of dealing with prohibited items and duties chargeable on imported products

7. Enforcement officers must also be given jurisdiction in Free Trade Zones and counterfeit products held in these areas should be subject to seizure

Recommendations1. Training for Customs officers should include training to enforce IPRs at all borders and more involvement

from MDTCC officials in dealing with border enforcement2. Sharing of information is crucial - intelligence sharing, customs handshake (agreement with Customs

officials from other countries)3. Cooperation between agencies is crucial – INTERPOL, WTO, WIPO4. Rights holders must support Customs to facilitate a more efficient enforcement of rights.5. Record IP rights with Customs in order to assist in maintaining a regular monitoring system – “to be on

the lookout”6. Verification of importers7. Identification of importers and high risk companies8. Conduct joint enforcement actions9. Brand owners and industry to train front line officers in identification of counterfeit or pirated goods10. Use of the media (through press releases and press conferences) when counterfeit goods are seized.

This would act as a warning and deterring factor11. There is also a critical need to address the lack of overt authority and power on the part of the Customs

administrations under the Customs Act 1967, to prevent and prohibit the importation and exportation of counterfeit goods at the border and to put in place the required laws and procedures to facilitate the



implementation of this authority and power. This will also adjust the mindset of the Customs officers; encourage them to look outside their traditional role of collecting tax and revenues and recognise that they can play a pivotal role in effective enforcement of IPR.

Various IP Actions taken so far

1. Malaysia launched the National Intellectual Property Policy on 27 April 2007. The programme’s goal is to harness IP as a new engine of growth to enhance economic and social prosperity. This project has been allocated a budget of RM5 million to be utilised over the next 5 years

2. IP Courts in Malaysia: Since the IP Courts have been established, there has been a more efficient disposition of IP related disputes particularly in civil actions in the Kuala Lumpur High Court. Furthermore, 15 Sessions Courts have been earmarked to deal with IP matters, one in each state including Putrajaya, and 6 High Courts have been earmarked to deal with IP matters in Kuala Lumpur, Selangor, Johor, Perak, Sabah and Sarawak

3. Courts have taken a stricter approach in arriving at their decisions concerning IP infringement4. Public awareness and interest in IP rights have been boosted through the following:

• April 26th earmarked as National IP day to cultivate and increase the awareness in Intellectual Property Rights amongst the public

• NationalBudget2010–(i) Formulation of Creative Industry Fund(ii) RM3 million grant for a welfare fund for artists/actors(iii) Under the Income Tax Act 1967 (as amended), expenses incurred on the registration of patents

and trademarks in the country are deemed to be capital expenditure and not allowed as a deduction for tax purposes. Now however, it has been proposed that expenses incurred in the registration of patents and trademarks in Malaysia be allowed a tax deduction for the purposes of computing the chargeable income of small and medium sized enterprises

• The ‘Malaysia Innovative2010’programme launchedon27January2010tomovethe innovationagenda in Malaysia forward and increase the competitiveness in this field to a higher level. This was launched to increase the public’s awareness and appreciation over intellectual property rights in this sector

7. The Copyright (Amendment) Bill 2010 provides for the following:• LimitstheliabilityofInternetServiceProviders(ISP)andprotectsISP’sfromliabilityofanytransient

storage of copyright work• TheamendmentscontainprovisionswherebytheISPistoremove/disableaccessuponnoticefrom

the copyright owner• Providesforvoluntaryregistrationofcopyright• Amendmentsdealingwithrenumerationrightsofperformers• Theamendmentsincludeprovisionsonanti-camcordingactivities

8. The Trade Mark (Amendment) Regulations 2011 and Patent (Amendment) Regulations 2011 came into force on 15th February 2011. One of the significant amendments to the regulations is the provision for expedited examination, which will allow an applicant of a patent or trademark application to request an expedited examination of the application. This will help the owners enforce their rights against infringers at a quicker pace as the patent or trademark registration process can be expedited.



4.3 Legal Systems and Taxation

Legal system

Malaysia is a constitutional monarchy headed by a Yang Di PertuanAgong (‘King’) who is elected every 5 years by a council of Rulers. A federal system of government links together 13 states and the federal territories of Kuala Lumpur, Labuan and Putrajaya. Malaysia’s legal system is based upon English common law.

The Civil Law Act, 1956 incorporated principles of English common law as at 1957, Malaysia’s year of independence. Malaysian commercial law comprises of case law and statute law. Case law is based upon the doctrine of ‘stare decisis’ where courts are bound by precedence. This means that a decision of a superior court is binding upon itself as well as upon inferior courts. Statute law is passed in accordance with the constitution and becomes law upon receiving the royal assent of the King. The constitution of Malaysia guarantees the rule of law and also establishes the separation of powers between parliament, the Executive and the Judiciary. All matters relating to land and religion are the prerogative of State Governments. Islamic jurisprudence is predominantly limited to Muslims and their property and seldom enters the realm of corporate commercial transactions except where Islamic financing instruments are used.

CourtsThe courts in Malaysia are divided into Subordinate Courts and Superior Courts. The Subordinate Courts have limited jurisdiction and comprise the Magistrate Courts and the Sessions courts. The Superior Courts comprise the High Court of Malaya, the High Court of Sabah, the High Court of Sarawak, the Court of Appeal and the Federal Court. English is predominantly used in the Superior Courts but Bahasa Malaysia is more commonly used in the Subordinate Courts.

Contracts and legal documentationCommercial contracts are mainly written in English although certain government related contracts may be written in Bahasa Malaysia as well as in English. Malaysian courts will recognize contracts regulated by a foreign law provided that the foreign law can be clearly presented and explained. Malaysian courts will generally also recognise a valid judgement of a foreign court.

Taxation

Malaysian tax system comprises direct and indirect taxes. The direct taxes include Individual Income Tax, Corporate Tax and Real Property Gains Tax whereas the indirect taxes include Import Duties, Excise Duties, Sales tax and Service tax.

All income of companies and individuals accrued in or derived from Malaysia is taxable. Foreign income received in Malaysia by individuals and companies (other than a resident company carrying on the business of banking, insurance or sea or air transport) is exempt from Malaysian income tax. Sources of income that are liable to income tax are:• Gainsorprofitsfromtrade,professionandbusiness• Gainsorprofitsfromemployment(salaries,remuneration,etc.)• Interest,dividendsordiscounts• Rents,royaltiesorpremiums• Pensions,annuitiesorotherperiodicalpayments• Othergainsorprofitsofanincomenature



Individual income taxIncomes of resident individuals are taxed at graduated rates ranging from 0% to 26%. As for non-resident individuals,theyaretaxedattheflatrateof26%.Residentsareeligibleforpersonaldeductionswhicharedenied to non-residents.

Corporate taxA company, resident or not, is liable to corporate income tax. The corporate tax rate is currently 25% on income derived from Malaysia. The tax rate for small scale companies with RM2.5 million share capital or less is 20% on the first RM500,000 of chargeable income and 25% on the balance of the chargeable income. A company is considered resident in Malaysia if the control and management of its business are exercised in Malaysia.

Real Property Gains TaxAll persons, whether Malaysian or non-Malaysian, who dispose of real property situated in Malaysia or of shares in real property companies are liable to real property gains tax. Real property companies are those with 50 or less shareholders and which own real property or shares in real property companies or both such that their value exceeds 75% of the total tangible assets of the company. Gains from the disposal of these properties or shares in real property companies are liable to real property gains tax only if the disposal takes place within 5 years of acquisition and at the rate of 5% on the gains.

Import Duties and Excise DutiesImport duties are levied at the time of importation and the rates vary with the type of goods imported. Generally, the import duties are levied on an ad valorem basis ranging from 0% to 60% or on a specific basis.

Excise duties are imposed on certain specific goods such as cigarettes, alcohol and automobiles when the goods leave the place of manufacture or any other place under Customs control. The excise duty rates vary with the type of product.

Sales TaxThe sales tax in Malaysia is imposed on imports at the time of importation and on locally manufactured goods at the time of sale. The sales tax is calculated at the rate of 10% on the value of most goods and at 5% on certain categories of goods.

Service taxService tax is a consumption tax imposed on certain prescribed services provided by taxable persons at the rate of 6% on the services. The establishments which are liable to the service tax include hotels, restaurants, nightclubs and similar establishments, private clubs, golf courses, private hospitals (on accommodation, food and drinks only) and service providers for services such as insurance, telecommunications, parking, customs clearance, courier, motor vehicle servicing or repairs, security, consultancy or management, and services by public accountants, advocates and solicitors, professional engineers, licensed surveyor/valuers, registered appraisers and estate agents, architects and advertising companies.

It has been proposed that the sales tax and the service tax be replaced by a new Goods and Services Tax (GST). GST was supposed to come on stream in July 2011, but the government has since postponed its implementation to a date to be announced.



Tax incentivesA number of tax incentives are available for companies that produce promoted products or are engaged in promoted activities. These incentives include the grant of pioneer status, investment tax allowance, reinvestment allowance, export incentives, research and development incentives and abatement of tax for training and R&D activities.

Foreign companies are not permitted to advice on host or third country law and may only establish commercial presences within the territory of Labuan. They are allowed to supply their services only to offshore corporations established in the Federal Territory of Labuan, which further restrict the access to a very small potential clientele. The territorial restrictions for establishment should be eliminated and Malaysia should extend its commitments to allow EU lawyers/firm to provide advice on third country law of qualification in the whole territory of Malaysia.

• Accounting,AuditingandBookkeepingServices–Commercialpresence is limitedby theobligation toform a locally registered partnership of which the foreign provider can hold only 30%. Residence is required for registration of professionals

• TaxationServices–Alocallyregisteredpartnershipwithaforeigninvestmentcapof30%isagainrequiredaccess as is residency for registration of professionals wishing to offer these services



Issues by Sector


Issues by Sector

5.1 Construction and Building Materials

Introduction

According to the CIDB data, over the past 5 years investments in the Malaysian construction sector have showed little growth. This position should improve when the 10th Malaysian Plan is implemented. The construction industry therefore transferred its focus from Malaysia to the Far and Middle East regions, exporting building materials and sourcing construction projects outside Malaysia. It suddenly found itself exposed to competition from China, Thailand and Vietnam. To compete successfully, sourcing cheap hard working labour, efficient and automated production, having a competent well educated management staff and access to competitively priced building materials are essential.

Issues

Licensing and Registration SystemsOne of the National Key Economic Areas is Oil and Gas. The Malaysian oil and gas sector is mainly operated by Petronas. Petronas requires construction companies to be registered or licensed. The registration and licensing scheme requires companies to fulfill certain quota requirements on Bumiputra participation within all levels of the company, from equity to staffing. Additionally, the release of major construction licenses is frozen. This virtually eliminates the chances for European based construction companies to participate in tenders for major off-shore construction projects. For European off-shore construction companies willing to invest in Malaysia and set-up factories in Malaysia, the above limitations will reduce the chances successfully getting return on their investment and will make them defer to other countries.

RecommendationOpen-up the off-shore construction market for European companies by allowing adequately experienced European companies situated in Malaysia to obtain licenses and converting the existing licensing and registration systems to competency based systems.

Hiring and firing local staffDuring the global recession, Malaysia finds itself competing with the reduction in the prices of products and services offered by outside competition. This, combined with the government’s efforts to convert Malaysia into a knowledge based, high-tech economy, make it essential to be able to release redundant and inadequately functioning staff, in order to reduce prices and improve efficiency and the competitive position. Locally hired staff are extremely well protected by labour laws and dismissal costs are substantially higher than in the surrounding countries. This increases the cost of conversion to high-tech, less labour intensive production technologies and will hamper the progress of established companies with plans to upgrade.

RecommendationPrioritizing the measures promised under the 10 tenth Malaysian plan to improve the speed in which labour disputes are settled and bring the costs to dismiss staff to a level compliant with surrounding countries.

5. Issues by Sector


Issues by Sector

Development of Building Codes and enforcement of its implementation in buildingsThe quality and technical application of building materials continuously improves. An example is fire resistant materials. When the latest materials are applied to current specifications, public safety, in the case of fire, can bedramatically improved.TheMalaysianBuildingCodedatesback to1984anddoesnot reflectcurrentbuilding material standards, therefore the use of the latest technological developments in building materials is not stipulated.

RecommendationUpdate the building codes to the most recent standards and ensure implementation and enforcement.

Building contractsBuildingmaterialpriceshavebeenfluctuatingheavilyoverthepast5years.Localstandardcontractformslike the currently used CIDB contract form or the PAM form do not offer compensation for building material pricefluctuationduringcontractexecution.Thispreventsthegovernmentbenefittingfromdroppingmaterialprices or protecting contractors from unexpected and unforeseen material costs increases. The consequences of this are more expensive building projects as contractors will build in contingencies, or bankruptcy of contractors during the execution of works.

RecommendationSimilarly to most European governments, the Malaysian government could take an exemplary role for the constructionindustrybyfactoringmaterialpricefluctuationformulasintogovernmentalcontracts.

Registration of foreign professionals in the construction sectorFor foreign professionals it is not possible to register as independent professional engineers, architects or quantity surveyors etc. with local registration boards. Registration is limited to temporary annual permits for working on single projects only. By so doing, foreigners are effectively prevented from legally establishing or investing in locally incorporated consulting engineering/architectural/quantity surveyor practices, as they are prevented from being partners and directors of such organisations, due to the requirement of full-time local registration for practices registered with the various professional boards. This is an unfair restriction of trade and investment in service industries in Malaysia.

Current statusAccording to MITI, professionals such as architects, engineers and quantity surveyors are regulated under their respective legislations. Temporary registration for some professions such as architects and engineers is allowed and this registration is renewable on an annual basis. For example, registration for engineers is under the Registration Engineers Act 1967 which is under the purview of the Ministry of Works. Malaysia’s commitments in the WTO for engineering services (multidisciplinary) only provides for foreign equity up to 10 per cent for joint ventures by professionals who are registered in the country of origin. Nevertheless, foreign directorship is not allowed.

RecommendationThe government should allow foreign professionals in the construction sector with foreign qualifications to be able to register in Malaysia and become shareholders and directors in their respective professional practices. Foreign qualifications can be defined as consulting engineers, architects and quantity surveyors. In this way increased foreign investment in the professional services sector would be stimulated in line with the government’s stated aspirations.


Issues by Sector

5.2 Education

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. In 2010, Malaysia hosted 20 public universities, 24 local private universities, 21 private university colleges, 5 branch campuses of overseas universities and 416 private colleges and institutes of higher education. 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 government wants to position Malaysia as an international centre for high quality education, therefore it is an important sector for investment. The sector is also important in light of the fact that more Malaysians are trying to acquire further knowledge and skills. For these reasons the Malaysian government has committed itself to improve the education supply. Education has been included in the Industrial Master Plan 3 (IMP3) period, which is 2006 - 2020, as a service sub-sector in which to boost growth and development. The priority areas are focused on improving the business environment, raising the quality and the standards of education, increasing training capacities, promoting investments and encouraging the export.

Education was also a key area of the Ninth Malaysian Plan (2006 – 2010), and the recipient of approximately RM50 billion worth of investment addressed to enhance its infrastructure. Another initiative of the Malaysian government in the education field was taken in August 2007, when it launched the ‘Higher Education Strategic Plan’. This aimed at producing first class human capital through the improvement of the higher education institutions.

The Malaysian government has allocated RM12 billion of the 2008 budget for higher education projects, including the enhancement of research, development of the main research universities operating in the country and the establishment of new colleges. The use of multimedia in business is another factor pushing towards the improvement of the technology skills of the Malaysian population, as a more technologically literate workforce will be needed. This creates an opportunity for the creation of technologically advanced schools, where the information and communication technology will be applied for teaching, learning, staff training and management.

Issues

Lack of skills among graduatesEU and other foreign companies find it difficult to employ potential recruits as they do not possess the required skills; one of the main concerns 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.

Lack of creative thinkingStudents 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.


Issues by Sector

RecommendationA wider curriculum is needed that encourages lateral and creative thinking that can in the future be applied to solving real world problems. 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.

Loss of students to other learning avenuesRecruitment 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 be encouraged and offered incentives to open up faculty places to overseas academics on Visiting Professor schemes, contract appointments and full-time tenure track positions.

Under-performing universitiesMalaysian universities, especially in the public sector have recently under-performed in relation to their peers in international assessments of teaching, research and output.

RecommendationVice-Chancellors and senior managers should be encouraged to fully understand the processes used for international ratings of higher education institutions and to 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 appointed as consultants to the higher education institutions to advise them 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.

Lack of public-private communicationEngagement 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 takes place at an inappropriate level.

RecommendationA more coordinated dialogue between industry and universities should be engaged upon at a national level and additional contact 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.


Issues by Sector

Lack of industry placement recognitionTime 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.

RecommendationA programme should be instigated enabling services and industry personnel to spend a period of time at university and university teaching staff to spend time in industry and services. This time 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.

Length of internshipsWhilst work placements and internships are a part of many vocational courses, the amount of time allowed by the majority of programmes, no longer than 3 months in many cases, is seen as a 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.

RecommendationIndustry placements should 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 commercialization of R&D by encouraging faculty to establish linkages with industry through participation in selected Committees e.g. Oil & Gas, ICT and EEGT.

To address the employability of young Malaysians, EUMCCI through its Logistics Committee member company, UTi Worldwide (M) Sdn Bhd and partner German-Malaysian Institute has launched an innovative two year Apprenticeship Programme modelled on the highly successful German accredited programme targeted for the Logistics sector. This is a good example of a model that can be replicated by different sectors in industry.

Poor quality private higher education institutionsThere 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.

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 removed.


Issues by Sector

Staff at 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.

5.3 Energy, Environment and Green Technology

The country’s future lies in the green field

Malaysia’s abundant supply of fossil energy resources have served the country well in attracting foreign investments, becoming a benchmark example for many others. The attractive infrastructure of low-priced energy has helped the country to become an international centre of excellence for manufacturing industries, withmanyoftheworld’s largestcorporationsestablishingtheirflagshipproductionfacilities inthecountry.Subsequently the country has enjoyed a period of tremendous wealth and prosperity. During this dynamic period of rapid economic and population growth however, the less glamorous side of development, such as appropriate waste, water and sewerage management systems and long-term energy security have been largely neglected. In addition, the per capita CO2 emission has increased by 226% since 1990, with Malaysia’s waste recycling rate standing at 5%, compared to the recycling rates of many developed countries measured at approximately 50%. As in many other locations around the in the world, Malaysia’s recent years of prosperity and growth were unbalanced in terms of equivalent development in areas of sustainability.

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 in the past, been overlooked. During the recent few decades of prosperity, in less than one generation, Malaysia’s most valuable assets, the fossil resources of oil and gas have been mined to near depletion. Incomes from these assets have been used in consumptive ways and government budgets are largely dependent on this soon to be depleted source. The country and its current generation lives on yesterday-built energy resources and hardly any of this income has been invested in securing a sustainable energy supply for future generations.

The ‘Fifth Fuel Policy’ introduced to diversify energy resources for power regeneration was successfully introduced in 2001 with the aim of providing a higher share of Renewable Energy (RE). Despite this incentive, the results during the first years were very disappointing; the target of the 8th Malaysia Plan of attaining the planned share of renewable energy was not met, and the RE targets of the 9th Malaysia Plan were subsequently reduced.

The recently set target of a 5.5% renewable energy share of grid-connected electricity by the year 2015 would be a considerable increase from a 2009 level of less than 1%. Interestingly and contrary to the national results, private off-grid RE production in the country has experienced a strong increase mainly due to plantation players generating RE to power their operations. With this and impending scheduled feed-in-tariffs, the right pricing and quantity adjustments, the set targets could be reached or even surpassed.

Today, Malaysia, with only approximately a 1% share of grid-connected renewable energy in the country’s energy mix, is far behind the RE levels of most industrial countries and many of the less developed neighbours in the region.


Issues by Sector

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 following in developing 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 and 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 a regional leadership at the very least, Malaysia needs to gain much ground. Malaysia is the world’s No. 3 manufacturing hub for solar cells and solar modules. However, the country has hardly leveraged this great potential and has yet to take strategic measures to develop a world-level industry downstream.

High level policy: A perfect starting point

The formation of the National Green Technology Council chaired by Prime Minister YAB Datuk Seri Najib Tun Razak, comprising of 7 relevant sub-industry committees is an initial step in the right direction.

Apart from the drafted policies, the implementation and the outcomes are decisive and the relevant Acts need to provide the legislative security for long-term participation and investment from the private sector. Incentive schemes favouring ‘green’ sustainable investment will be of crucial importance and attractive Feed-In-Tariffs for Renewable Energy to be fed into the national grid-system are only one of the many upcoming ‘drivers’.

In this next phase it requires a consolidated and result-driven partnership by all stakeholders, each of the many relevant ministries, certification partners, industry associations and the relevant private industry players to introduce and implement a greener and sustainable future for Malaysia.

Year to Year Results

Looking into 2010, 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 in the process of being drafted over the coming months. Amongst them is Pusat Tenaga Malaysia (PTM) which has been renamed recently as Green Tech Malaysia Corporation, to fulfil the need for a national energy research centre.

The International Green Technology & Eco Products Exhibition & Conference (IGEM) had its inaugural launch in 2010, officiated by the Prime Minister himself and became a major platform for exchange; 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 and over 170 business matchings were organised with interestedMalaysiancounterparts.Theseresultswerewellreflectedinthemediareportingontheevent.Forthe 7-10 Sept 2011 IGEM, the EU Pavilion is expected to host an even greater number of exhibitors.

Despite the tremendous increase in various green tech-related symposia, workshops and seminars and the given policies and acts, there has not been a resulting increase of renewable energy share. In this respect, Malaysia lags behind its regional neighbours. In spite of being No. 3 in the global production of solar cells and modules, Malaysia has failed to build a world-class supply chain for the renewable energy industry. An omission that was particularly striking at the world’s largest Solar Trade Fair in Munich, Germany last year; of the 1900 exhibitors listed, not a single Malaysian company was registered.


Issues by Sector

Europe: A global Green Tech leader and partner

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

The EUMCCI EEGT Sub Committees ‘ Energy Efficiency, Green Buildings, Renewable Energy, Waste and Water’ 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, to organizing Solar-Delegations to Europe, business luncheons, exchange of information and expertise with KETTHA staff and the committee, as well as the IGEM and many more activities.

5.3.1 Energy Efficiency

Introduction

Energy efficiency on the part of the consumer is one of the key factors contributing to society’s sustainable energy consumption. Many energy efficiency measures require little capital investment and in all cases, upwards of 30% energy saving can be achieved. Where heavy capital investment is required, the returns of investment are reasonably achieved between 3 to 7 years.

Based on estimates carried out in a number of EU countries, it is possible that when energy efficiency on the part of the consumer is fully practiced, within 10 to 15 years the total projected energy demand of the country could be easily reduced to 50%.

StatusThe Energy Efficiency Act that is expected to be gazetted in 2013 is an encouraging move towards a sustainable energy future which recognizes the necessity in accommodating the energy needs of a growing population whilst minimizing the carbon footprint of the nation.

In the meantime, KETTHA and the Energy Commission have initiated energy efficiency measures such as:• EfficientManagementofEnergyRegulation2008• Energylabelingofelectricalhomeappliancessuchastelevision,refrigerators,fans,airconditionersand

lamps• Listingofhighefficiencymotorsandinsulationmaterials• LaunchingofEnergyEfficiencyandConservationGuidelinesin2007• FiscalincentivesintroducedinBudget2010fortheestablishmentofenergyservicecompanies• FiscalincentivesintroducedinBudget2010forthereplacementorretrofitsofequipmentforthepurpose

of energy saving

While these measures are useful, further work needs to be done to generate greater progress in energy efficiency on the consumption side.


Issues by Sector

Issues and Recommendations

Consumer appliancesEnergy labelling of electrical home appliances is currently in place on many items, however many consumers are unaware of this. This is only one of many reasons that uptake of energy efficient appliances is low. It is recommended that:• Awarenessprogramsforconsumersbeexpandedandintensified.Theseawarenessprogramswouldbe

designed with information that is easily understood and easily comparable to other energy labelling schemes around the world

• Rebateprogramsforconsumerscouldbeintroducedforthereplacementofexistingelectricalappliancesand lighting which do not have energy efficient labels or are not energy efficient

• Theenergylabellingshouldbeextendedtootherhomeapplianceproductssuchaswashingmachines,ovens, vacuum cleaners, kettles, etc. Manufacturers should be encouraged to display the energy consumption of appliances whilst waiting for the official labelling process to be completed

• Establish mandatory minimum efficiency standards in addition to energy labelling, with standardsincreasing over a period of time

• Createenergylabellingforpersonalcomputers,laptops,servers

Manufacturing Industry, Service IndustryWhile some of the fiscal incentives introduced in Budget 2010 were attractive, the response has been disappointing due to poor awareness of the potential benefits, the low number of energy service companies (ESCOs), the difficulty in accessing funding for the energy efficiency projects and the low energy tariff. These issues are particularly magnified for SMEs. It is recommended that:• KETTHAinconjunctionwithMITI/MIDAembarkongreaterawarenessprogramsfortheindustry• AspecialfundshouldbeestablishedtoassistSMEsintakingthefirststeptowardsenergyefficiency.This

may take the form of partial funding or providing a zero interest loan to carry out the energy audit within the period up to 2013. Beyond 2013, the energy audit should be mandatory for every industry without additional funding

• ThelargeindustrialconsumersarealreadycoveredbyaprogramestablishedbytheSuruhanjayaTenagaand would not need to be incentivized. However, disincentives should be reinforced for their non-participation

• Increasetheenergytarifffortheindustrialandcommercialsectoringraduatedquantumswhichwilldrivethe move to energy efficiency in a short time

• Createarequirementthatapplicationsforindustryordevelopmentloansmustincludeananalysisoftheenergy efficiency of the proposed project regardless of whether it is an entirely new facility built from ground-up or an expansion of the facility or a refurbishment of the facility. This would apply to both Large Enterprises and SMEs

• KETTHAandMITI/MIDAtodialoguewithfinancialinstitutionstoresolvetheirconcernsonapprovingloansfor energy efficiency projects

• Createincentivesforcombinedheat,coolingandpowerconversionprojectsattheconsumerend• Create mandatory program to replace all street lamps with energy efficient alternatives such as solar

powered LEDs


Issues by Sector

TransportThe energy efficiency of the transport sector is hampered by a number of factors including the continuing use of low Euro fuel, historic policies which favour car ownership versus public transportation and the subsidized price of transport fuel. However, it is appreciated that major policy commitments have recently been made to improve public transportation, for example, the expansion of the Klang Valley MRT systems, as well as the commitment to gradually remove the fuel subsidies for all except the economically disadvantaged. To further drive efficiency in the transport sector, the recommendations are to:• CommittograduatedtargetsforreducingtheaverageCO2emissionsofnewvehiclemodels• CommittoatargetfortheadoptionofEuro5fuelby2013• ExtendtheBudget2011taxincentivesforhybridvehiclestoincludefullyelectricvehicles• ProvideincentivesforconversiontoNGorhybridforfleetoperators• CompelallautomanufacturerstoprovideCO2emissiondata(usingstandardizedunits)fortheirvehicle

models as a condition for introduction to the market

Public institutionsPublic institutions are the ideal showcase to demonstrate the government’s commitment to energy efficiency (Green Technology). Therefore the recommendations are to:• Createenvironmentalprocurementpilotprojectswithatrialnumberoflocalauthoritiesandgovernment

departments. Publish the results in terms of technology used, procurement value and energy savings• Developselectioncriteriaforenergyefficientproductsandtechnologiesandmakethecriteriatransparent

on government procurement websites• Establishamandatoryprogramingovernmentinstitutions(governmentoffices,hospitals,universities,etc)

to replace lighting with energy efficient measures such as LEDs, improving efficiency of HVAC systems etc.

Information, Research and DevelopmentAdvancement in energy efficiency requires intentional creation and dissemination of information for public access. The recommendations are to:• Createadatabaseofenergyefficiencypracticesandcasestudieswhichiseasilyaccessibleviawebsite

portals such as Green Tech Corporation• Increasefundsforenergyefficiencyresearchanddevelopment• Publishupdated listofenergyefficiencyR&Dprojectsand theiroutcomesonwebsiteportalssuchas

Green Tech Corporation

5.3.2 Green Building and Sustainable Communities

Introduction

Green Building and Sustainable Communities aim 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.


Issues by Sector

Status

Over the last three years, Malaysia has experienced a concerted shift towards the development of green buildings. 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 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-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.

In December 2010, a pilot version of the upcoming “GBI Township” tool was released. The tool aims to facilitate discussions on how sustainable townships are planned, designed, built, operated and maintained. Core categories will include: Climate, Energy and Water, Ecology & Environment, Community Planning & Design, Transportation & Connectivity, Building & Resources, Business & Innovation.

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. This incentive applies to sales and purchase agreements executed from 24 October 2009 to 31 December 2014.

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

• 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

• AlthoughGBIhassectionsonIndoorEnvironmentQuality(i.e.daylighting,ventilation,filtrationsystems,and the selection of low-VOC products in the building process), the main emphasis remains on energy efficiency. Unfortunately, at times this is at the expense of the occupant’s health and comfort. GBI also neglects focusing on the selection of products (furnishings, cleaning products, etc) procured during occupancy, all of which impact the indoor air quality

• TheGBI is developed specifically for theMalaysian tropical climate, environmental anddevelopmentalcontext, culture and social needs. However it neglects focusing on Malaysia’s specific sustainability concerns i.e.urbansprawl,deforestation,flooding,airandwaterpollution,thepedestriannetworkandhighway traffic problems


Issues by Sector

• GBI isapowerfultool in itsabilitytoguideandacceleratetheGreenbuildingmarket.Specialattentionshould be taken in its application to ensure that the guidance and recommendations provided do not replace creativity in design

• The financial viability of green building projects is often compromised by the provision of the varioussubsidies for fossil fuels

• Improvingtheefficiencyof individualbuildingsandisolateddevelopmentsrepresentsonlythetipofthegreen building “iceberg”. Malaysia should put a stronger focus 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, is not sufficiently attractive for Gold and Platinum GBI buildings

• 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• Provide comprehensive training, exchange of experience and research on sustainable urban design

building in higher 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

• ContinuouslyreviewtheexperiencewithGBIratingsandthepointallocationsfordifferentcategoriesinterms of their effectiveness

• ExtendtheGBItooltocoverrenovationsofresidentialbuildings• Mandate that when residential and commercial properties are constructed or sold, a minimum green

building rating certificate must be made available. For Platinum rated GBI buildings, enhance tax incentives to support green 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

• Extendthegreenbuildingconceptstoanurbanplanningandsocialorganisation level:achievegreatersustainability by using a combination of local public policy, planning, design and technology and making the use of traditional energy saving measures just part of the solution.

• Increaseenvironmentalperformancerequirementsforpublicbuildingstosetthebenchmarkingparadigmfor the construction industry. Define a roadmap for retrofitting all existing public buildings into the GBI Platinum standard


Issues by Sector

5.3.3 Renewable Energy

Status

In last year’s report, EUMCCI strongly recommended a comprehensive policy or act for renewable energy. The Renewable Energy Bill tabled by the Ministry of Energy, Green Technology and Water in December 2010, was passed as the Renewable Energy Act by the Dewan Rakyat on 4th April 2011. The Bill to establish the Sustainable Energy Development Authority (SEDA) was also passed.

Issues

EUMCCI applauds the commendable efforts by the Government of Malaysia to introduce the Renewable Energy Act in an effort the boost the growth of renewable energy in Malaysia. Whilst the Act focuses on the Feed In Tariff and its mechanisms that are vital to motivate commercially viable renewable energy projects, it will significantly depend on the quantity and the price levels given, as well as on further incentives and policies to encourage rapid growth of the industry.

RecommendationsIncentives and policies that can encourage the rapid growth of the renewable energy industry are as follows:• Encouragetheutilizationofthelatesttechnologiesbyprovidingattractiveincentives• Regulatethesupplyofbiomassfuel• Exploreandpromotewastetoenergytechnologies• Imposeataxon“polluting”technologiesandpossiblytransferringthetaxtofundREprojects• ConsiderSmartGrid technologythat intelligently regulates thepowergenerationdispatch, inviewofa

more complex generation network when more small RE plants come online• Encourageenergyefficiency,onbothdemandandsupplyside• Toincreaseeligibilityofincentivestotheentirevaluechainoftheproject• AllowsignificantholdingofforeignequityindevelopmentofREprojects• Facilitate financing of RE projects utilizing new technologies that are not yet present in Malaysia but

already have successful references in other countries• ImporttaxanddutiesexemptionsforimportationofREtechnologyproductsandsolutions• IncentivesandgrantsforforeigncompaniessettingupR&DtechnologycentresinMalaysia

Saving Energy is an awareness of measures which involves design, architecture, materials, landscape and insulation throughout the building and construction industry. It also involves the change of infrastructure towards operation and maintenance, with the introduction of smart meters and monitoring, energy efficient plant and systems and awareness by all, in regards to energy consumption and the fundamental measures of its reduction (efficiency and avoidance).

5.3.4 Solid Waste

Introduction

As is frequently reported, Malaysia currently produces approximately 23,000 tonnes of solid municipal waste (MSW) daily. It is neither feasible nor practical for all the MSW to be reused, recycled or recovered into renewable energy (RE). Nevertheless, it is apparent that with the commitment of the government and local agencies (LA’s), a significant proportion of MSW can be recovered and prevented from being disposed as landfill.


Issues by Sector

With the introduction of the RE Bill and the incentive of the “Feed in Tariff” system therein scheduled mid-2011, international private funding mechanisms are prepared and waiting to bring in and finance technology and expertise. Under build-operate-transfer or build-operate-extend schemes, “Energy from Waste” (EfW), Biomass and Bio-gas plant and technology suppliers offer facilities under a 15-year Agreement, to supply clean, sustainable electricity to the grid at Government agreed rates for receipt of wastes and electrification supply.

In conjunction, the Solid Waste Act enforcement, which is being suggested for empowerment mid-2011 offers a good opportunity to establish the relevant parties and infrastructure for EfW in Malaysia.

Definition

The Solid Waste Framework Directive prioritises waste prevention before reuse, recycling, recovery and as a final resort, disposal to landfill.

Much confusion arises over what is recovery and what is disposal?

Recovery may be defined as:

any operation where in principal waste replaces other materials which otherwise would be used to serve a particular function orwaste being prepared to fulfil that function (re-processing)

Disposal may be defined as:

any operation which is not recovery, even where the operation has a secondary consequence to the reclamation of materials or energy.

Issues

The Solid Waste Directive, (2007) has increased the focus on the collection and movement of wastes “up the hierarchy”, with concerns regarding current landfill shortfalls and operations, recycling and greenhouse gas emissions still not clearly defined or allocated for.

Energy from Waste is very much at the forefront of the debate, certainly throughout western European and other developed nations’ strategies. Energy can be derived from gasification, anaerobic digestion or any other combustion process using waste as the process fuel. Certainly the energy balance of that technology must be positive in the sense that it must ensure that more power is generated compared to the consumption of power through the process itself.

To be considered a Renewable Energy, four criteria need to be met:• Themajorityofthewasteneedstobeconsumedduringorasaresultoftheoperation• Themajorityoftheenergyproducedmustbeuseableheatorpower• Thewastemustreplacetheuseofaprimaryenergy(fuel)source• Theenergyefficiencymustnotbelessthan65%


Issues by Sector

Energy from Waste processes have and continue to raise public and often government concerns over polluting emissions and the destruction of resources that could be reused or recycled. However, advanced alternatives under the EfW banner, including plasma inert gasification and anaerobic digestion offer significant advantages to three very important criteria in today’s environmental drivers:• Towardszerowastetolandfill• Viablerenewableenergysource• Significantreductionsingreenhousegasemissions

Benefits

Under this framework and in cooperation with international partners it would be realistic to forecast a potential of 15 – 20 bio-energy plants nationwide by 2020 or even more as total electrification from such plants would provide conservative power potential of 350 – 400MWh of Renewable Energy to the grid. This magnitude of commitment would also realise an 11,000 – 14,000 ton reduction (approx. 50% of total wastes produced) of MSW per day, ending up in a landfill or dumpsite by 2020.

Furthermore, government targets for greenhouse gas emissions would benefit greatly from an EfW strategy of scale, with some 40 million tonnes year (110,000t/day) of CO2 Equivalence from landfill gases alone. This equates to approximately 59% of the total pledged by the Government at the United Nations Climate Change summit 2009, in Copenhagen, compared to 2005 levels.

It should also be noted that further savings of some 2million tonnes year (5,500t/day) of CO2 Equivalence from the use of alternative fossil fuel fired power generators (taking estimations of shared 1/3 coal, oil & gas). This offers another 3% reduction of total greenhouse gas emissions, increasing total potential reduction to 62% of pledged.

RecommendationsImplementation of a more active “Energy from Waste” policy, along with attractive incentives and systems as well as adopting similar values as those being introduced and operated throughout Europe would benefit Malaysia’s profile, objectives and contribution to pledge obligations, through the next decade. Measurements can be:• Attractingforeigninvestmentandtechnology• Creatingjobsandlocalskillbase• Reducinginexcessof50%wastetolandfill• Reducinggreenhousegasemissionsbysome62%ofpledgedobligation• Providingupto400MWof“RenewableEnergy”tothegrid

*Methaneanditsfluoro&dichloro-equivalentsofmethaneandethanewerecalculatedtobe23timesmoreharmful to the environment than CO2

5.3.5 Water

Introduction

The clean water industry is still struggling to move forward with the re-structuring process that took place in 2010 and as a result there has not been a great deal of change to the report from the previous year. There has been considerable speculation over some of the fundamental issues suffering from a lack of progress which in turn causes delay to the restructuring. Consequently providing a single clear and concise answer on current status is difficult.


Issues by Sector

Status

Water pricing was discussed at some length in 2010 and a Paper has been presented to the Cabinet on this issue but no announcements have yet been made. It is likely that any outcome will affect the Selangor state negotiations, but should also improve the prospects of other operators to move under the new regulatory model.

PAAB have registered over 50 opportunities for tender on their website since 2008 and acquired assets in Perlis in 2010.

Selangor State Government (SSG) announced its consent of the Langat 2 Water Treatment Plant on the 30th August 2010; a caveat was placed on this statement by the SSG stating that it was dependant on the restructuring of SSG assets but since the 30th December 2010, the Pahang Water Transfer Tunnelling project has started, which indicates that some major projects are moving forward, irrespective of hold-ups to the re-structuring process.

Issues

The current situation makes it difficult for the regulator in its efforts to enforce the Water Industry Services Act. Restrictions by the regulator present a risk to needed water tariff hikes. The pressures facing the regulator need to be better understood.

There is an environmental cost associated with the treatment and supply of water that needs to be balanced with the cost of reducing Non-Revenue Water in conjunction with measures to reduce consumption. Evidence of this ‘Twin track’ approach towards managing both supply and demand needs to be seen. It will continue to remain a challenge whilst water is priced below value.

There is currently an industry wide (both water and wastewater) shortage of engineers. A lack in capacity will either mean greater reliance on more expensive overseas workers, or a hold up in the progress of much needed capital projects and operational maintenance.

The wastewater environmental compliance for discharges needs to be better enforced and the enforcement agency needs to be appropriately funded to ensure this happens. Polluting discharges have both a considerable health and environmental impact.

Recommendations• ConsiderdevelopingawaterandwastewaterpricingstructurethatislinkedtocomplianceunderKPI’sset

by SPAN, rather than attempting to apply a ‘one size fits all’ solution. Benchmark low performing operator KPI’s against high performing operators, allowing flexibility in determining KPI’s but also providing aframework for low performers to set goals against. An improved and transparent pricing structure will help to communicate the need to increase tariffs to a more sustainable level

• Providegrantstostudentsandorganisationslookingatdevelopingskillsaswater/wastewaterengineerseither through vocational training or Degree/Masters courses

• ImprovebillingintheWastewaterIndustrybydevelopingacombinedutilitybill–providingasinglechargefor both water and wastewater services

• Tightencontrolsover thepolluterpaysprinciple to industry,provide fineswhereeffluentdoesn’tmeetstandards set by SPAN and enforced by department of environment. Ensure consistent enforcement for on-sitetreatmentofeffluentbyindustrytoensurecompliance

• Providerebates/importduty/salestaxexemptionforswitchingtowaterefficientappliances• Providetaxexemptionsorrebatesforindustriesachievingaspecificlevelofwaterefficiency


Issues by Sector

5.4 Healthcare

Malaysia remains a relatively new market with strong perspectives for the pharmaceutical industry. The Malaysian pharmaceutical market is very dynamic: the total value in 2009 was an unprecedented E888 million and continues to grow.

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.

As part of that framework, European Federation of Pharmaceutical Industries and Associations (EFPIA) along with local industry colleagues have identified the following critical issues that the pharmaceutical industry (‘Industry’) would like to see addressed under the EU-Malaysia FTA in order to help strengthen Malaysia’s health system, benefit patients and promote our industry’s competitiveness. These are outlined below:

(i) Intellectual Property Protection and Enforcement(ii) The Trade & Investment Environment(iii) Regulatory Requirements for New Innovative Medicines(iv) Customs and Tariffs(v) FTA scope and enforcement

I. Intellectual property protection and enforcement

Effective protection and enforcement of Intellectual Property Rights (IPRs) are essential for the continued access to the ASEAN market for EU research based pharmaceuticals companies. Although Industry applauds Malaysia’s recent efforts to engage with member companies on strengthening intellectual property protections, it is not satisfied with the current conditions of protection and enforcement of IPRs in Malaysia.

(a) Regulatory Data Protection (RDP)Industry welcomes the Malaysian Government’s intention to implement RDP measures this year and the outreach to member companies for their input as implementing regulations are being crafted. While Malaysia seeks to abide by most international standards as it prepares to implement these RDP measures by March 2011, Industry has strong reservations towards the country’s proposal to end the period of data protection 5 years after the date of first marketing approval for the product anywhere in the world, rather than date of first marketing approval in Malaysia. If instituted, the effective duration of RDP protection in would be far less than 5 years and would be inconsistent with international norms.

Industry would aim for the FTA to ensure that the parties commit to a RDP mechanism and standard along the lines of the EU’s. i.e. that the period of protection is granted effective from local marketing approval not limited to first and second indications but considers any clinical claim for which the originator invested in clinical development. With protection encompassing biopharmaceuticals which are currently not defined in the draft guidance; do not accept filing of intended copies during the protection period; a clear provision to regulate RDP enforcement and legal recourse for the aggrieved innovator and standing in the judicial system.


Issues by Sector

(b) IP EnforcementAlthough Industry applauds Malaysia’s recent efforts to engage with member companies on strengthening intellectual property protections, the domestic system for enforcing intellectual property rights (patents, trademarks, copyrights) remains weak. Several government authorities enforce these rights with varying degrees of resources and expertise and with different procedures and powers. This ineffective collection of enforcement procedures is made worsen by the fact that many of these authorities can exercise their own discretion concerning whether or not to take action and can avoid doing so by referring complaints to another agency. The Malaysian courts have little or no experience in interpreting or enforcing IPRs. Moreover, it is difficult for courts to enforce their own judgments.

The government of Malaysia needs to engage in a comprehensive strengthening of its IPR enforcement regime. While the Malaysian government is making efforts to strengthen the system for enforcing intellectual property rights (patents, trademarks, copyrights), significant improvement is necessary. Industry’s hope is that the EU-Malaysia FTA could contribute to improving this situation by introducing IP enforcement standards in line with the EU’s and aims to support cooperation, including IP training, in this respect.

Patent and trademark laws

Proposed amendments to Malaysia’s patent and trademark laws that include provisions for disclosure of traditional knowledge and generic resources, as well as compulsory licensing, raise concerns for the research-based pharmaceutical and manufacturing industry.

The industry proposes a continued consultative process with stakeholders and with FTA negotiating partners before such amendments undergo implementation. These proposed amendments also include provisions for patent term restoration and Industry would like to be engaged in meaningful dialogue with Malaysian Regulatory Authorities as well as through the FTA to build a regime in accord with international best practices.

Patent linkage

The adoption of a meaningful patent linkage regime in Malaysia is crucial to the development of innovative pharmaceuticals and improved patient access.

Patent linkage describes the information exchange “linkage” between the patent authority in a country and the drug approval authority for products potentially covered by those patents. This mechanism prevents the registration of a generic form of a patented medicine while the patent on the originator’s drug is still in force. An effective system of patent linkage could enhance the environment for innovative pharmaceutical development by (1) providing transparency and predictability to the process for both the pioneer and the generic company (2) creating a more predictable environment for investment decisions (3) ensuring timely redress of genuine disputes. Conditions that allow better-informed and more efficient investment decisions can encourage new product introduction and development of life-saving inventions.

Industry aims that by establishing and ensuring adequate “linkage,” the Malaysian government could significantly enable an environment that attracts innovation and encourages growth in the life sciences sector.


Issues by Sector

Protection and enforcement of Patent Act

Efficient and effective enforcement of Patent Act in Malaysia will ensure fast and easy acquisition of protection and rights. A competent and practical enforcement mechanism provides redress and solutions to infringements of IP rights as well as deters the repetition of infringement. A quick and easy protection of patent gives owners better competitive advantage and a longer period to exploit the patent created and acquisitions from their efforts and investment.

Industry advocates an enhanced protection and enforcement mechanism for pharmaceutical products, i.e. a structured enforcement guidelines and mechanism to curb unfair promotion and sale of generic drugs prior to (1) patent expiry of innovator drugs and (2) court decisions on patent disputes.

Counterfeits and adulterations

Offendersofcounterfeitsandadulterationmedicineshouldbepunishedandpenaltiesimposedmustreflectthe seriousness of the crime.

Industry seeks that more resources are provided to improve enforcement capabilities of Malaysia’s IP court system, including enhanced penalties for offenders and training for regulatory and enforcement officials, to help Malaysia achieve world class status as a hub for biotechnology and health care delivery.

II. Trade & investment environment

(a) Preferential treatment of domestic manufacturesIndustry remains concerned about provisions in Malaysia’s National Medicines Policy (MNMP), implementation of which is currently under discussion. The MNMP prioritizes the medium and long-term goals set by the Government for the pharmaceutical sector, which appear to favor generic and local manufacturers by promoting national self-reliance for drugs listed on the National Essential Drug List (NEDL). This preferential treatment discourages an open and competitive marketplace in Malaysia and limits the opportunity for innovative products to reach Malaysian patients. Industry is also concerned with indications that the Government of Malaysia may look to institute local manufacturing requirements.

III. Regulatory requirements for new and innovative products

Regulatory hurdles delay entry of innovative pharmaceutical products. The FTA may be helpful in calling for further harmonization to ensure regulatory frameworks that are consistent with international and EU standards, and efficient and transparent approval of pharmaceutical products (including a streamlining of regulatory processes domestically and across the region, e.g. clinical trial regulation, and labeling).

Efficient and expeditious regulatory processes for critical drugs

Early access to newly developed innovative medicines is critical to maintaining a world-class biotechnology research and health care delivery environment. An official accelerated regulatory process is required for innovative medicines that prevent or treat serious life-threatening diseases and fulfill unmet medical needs. This is to enable patients who need the medicines to have early access to the treatments.


Issues by Sector

Industry looks forward to working with the EU and Malaysian regulatory authorities through the FTA negotiations to implement clear, transparent processes that will help expedite registration of innovative medicines

Transparent science-based regulatory standards

Generic and innovative medicines each have their place in a country’s health care system. However, the safety, efficacy and quality of generics must be therapeutically equivalent to the original product. This will ensure that the patient’s health is not compromised at any time and will inspire patient confidence in their medicine, leading to improved compliance and health outcomes. While bioequivalence (BE) standards and requirements have been introduced, the number of compounds for which data is required continues to be small.

Industry applauds the Malaysian government for its plans to increase the number of BE test centers and looks forward to compulsory BE evaluation for all generics by 2012.

IV. Customs and tariffs

- Duty is exempted for chemicals and pharmaceuticals in Malaysia (EFPIA is further exploring if these are binding or merely applied standards)

- Customs procedures are adequate with no reported feedback from customer services. However, there are cases where some members have received a request about the Customs web site which has no translation into English, which does not allow any information for foreign traders nor predictability

- Malaysia should consider joining the Pharmaceutical Tariff Elimination Agreement- Rules of origin should be as simple as possible: For headings 3001 to 3004, we propose the following

rule: “Manufacture of materials from any heading”, considering that from both sides, these products already benefit from duty exemption, and that is the most convenient approach to deal with pharmaceutical sector characteristics. The proof of origin should be given by an exporter declaration on commercial documents (invoice, packing list, delivery note, transport documents) currently adopted for all EU FTA with commercial partners. The rules of origin used for the enforcement of this FTA would be the template for the extension to other ASEAN countries, as for pharmaceuticals the import duty is zero and likewise the EU should have access at import with zero duty

- Regarding enforcement in trade, especially origin, the verification of origin should always be performed by the national Customs authorities and the result of the investigation (whether preferential origin was declared rightfully by the exporter for the exported material) be communicated by the Customs authorities of the exporting country to the Customs authorities of the importing party. During the investigation of a preferential origin, extensive business information is shared (supplier networks, costs, synthesis, production steps, composition of medicine formulations, etc) with authorities. As such the access should be given to one’s own Customs authority. In this respect the quotation of the EU-Korea FTA is not helpful as the FTA has provided full access to data to the importing country’s customs.


Issues by Sector

V. FTA scope and enforcement

The EU-Malaysia FTA should include a definition of “pharmaceuticals”, applicable to the whole of the FTA, to include various categories of medicinal products of relevance to European Industry in line with the definition of Medicinal Products in the Community law. The definition of “pharmaceuticals” under the EU-Korea FTA is an appropriate model with this regard.

Provisions on the enforcement of the EU-Malaysia FTA should be consistent with other FTAs enforcement mechanisms (eg. EU-Korea FTA)

(a) Creation of Working Group on Pharmaceutical Products and Medical DevicesParties should be able to bring issues for discussion in the framework of a Working Group.

If the issue cannot be addressed in that context, there should be a possibility to launch a consultation procedure on an issue falling under the scope of the FTA. If the issue is not resolved through the consultations, it should be possible to take it before a dispute panel. If the dispute panel finds a Party has not complied with its commitments under the FTA, there should be scope for retaliation, including possible suspension of bilateral concessions under the FTA. Industry would also explore other enforcement mechanisms, such as a non-binding mediation mechanism, as for other EU FTAs.

5.5 Human Resources

The recovery of the general economy in 2010 has stimulated notable improvements in the labour market. This can be seen in the improvement in employment and compensation indicators such as the unemployment rate, employee turnover rate (including voluntary and involuntary separations), salary increase rate etc. as reported by the government and in major market remuneration and human resources surveys in Malaysia. Further positive forecasts have been made for some of these indicators and this augurs well for our country’s market recovery.

Despite these improvements, Malaysian employers are still beset with several perennial labour issues; some even further aggravated by the improving conditions. On one hand, these can be seen to be good problems to have; but on the other hand, these issues could have an impact on our country’s market competitiveness if they continue unchecked.

Issues

Insufficient supply of labour to meet the demands of companiesThis remains an issue faced by employers especially for jobs in the elementary level and unskilled labour category. The government’s initiative in reducing the number of foreign workers in the country has placed a challenging constraint on companies in fulfilling their manpower needs. In many sectors, particularly manufacturing, construction and restaurants, hiring foreign workers has been the solution to workforce stability. Despite their best efforts in offering more attractive compensation and benefits, Malaysian employers are finding it difficult to fill jobs occupied by foreign workers with local hires. Malaysian workers for these jobs are hard to find and even more difficult to keep. Poor work ethics of local workers is usually cited as one of the main reasons for Malaysian employers to turn to foreign labour.


Issues by Sector

Recommendations• Supportemployers’accesstoschool leaversby implementingasysteminwhichschool leavers(post-

PMR, SPM or STPM) who are unable to qualify for further education, register for employment with local Labour Offices, 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

• Continue to support apprenticeship schemes, vocational schools and technical training schemes foryouth. 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

• Increasethelabourforceparticipationrateofwomen,retireesandpart-timeworkersbyintroducingeasy-to-implement laws, such as minimum working hours and related benefits. A more regulated and employer-friendly system is likely to encourage employers to increase the hiring of these groups

Inability of labour to meet the requirements of employersThe common complaints of Malaysian employers in reference to workers have to do with work ethics, i.e. meeting basic employment terms and conditions and job-hopping. Employers are constantly faced with employees’ attendance, tardiness, as well as breach of employment contract issues. They present difficulties in resource planning on a daily basis for some companies and industries. This issue is particularly prevalent among local hires and needs to be curbed for our country’s workforce productivity to improve.

In terms of knowledge and skills, 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 fresh tertiary education graduates that enter the labour market each year, are still found wanting in certain areas. Poor verbal and written communication in the English language is the general complaint of employers, particularly the multi-national corporations. Those new to the labour market appear to be ill-equipped, mentally and physically in dealing with the reality of a competitive and aggressive working regime.

Salaries have been on the increase in recent years due to market forces but employers are questioning if the skills, knowledge, experience and work ethics of workers have increased in tandem. Due to the lack of talent and workers that meet their requirements, employers are offering increased compensation and benefits to attract new hires and this may further result in spiraling employee costs but questionable returns.

RecommendationsEUMCCI’s position is that while employers should continue to address labour issues with various human resource measures, it is more effective in the long term for these issues to be addressed before workers join the labour force. EUMCCI continues to lobby for the following to be implemented or intensified:-

• IncreasethequalityofEnglishlanguageteachinginourcountry’seducationsystem,focusingongrammarand 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 during job interviews

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


Issues by Sector

• Curbthejob-hoppingtrendandrampantbreachofcontractincidentsamongworkersbyintroducingalaw 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

• Lastbutnotleast,reviewtheeducationsystemtofocusmoreonexperientialandself-discoverylearningamong our school children and reduce instructional style learning at all levels of education. Include syllabuses 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 play should be included in the system to inculcate awareness and develop skills for the workplace even at a young age

In summary, the HR Committee of EUMCCI commits to focus on obtaining member companies’ views and support in addressing labour issues collectively with the relevant government authorities. Labour supply and productivity are our main concerns and our activities as well as our agenda this year will be directed towards these areas.

5.6 Information & Communication Technology

Introduction

As can be seen from the Malaysian government and regulator’s active role in developing National Key Economic Areas (NKEA) as well as areas such as Green ICT and various other ICT communities, the ICT industry has been recognised as a component player in supporting sustainable development. In addition to driving economic growth, broadband - in particular mobile communications access - will be key in solving the global challenges of our time, such as poverty, climate change, improving health, education and income generation possibilities. Broadband is also a prerequisite for a low carbon economy.

Malaysia’s ICT industry has been rapidly evolving since the ‘90’s and continues to do so. The most prominent and visible indicator of this, is the development of mobile communications in Malaysia. Based on a report released by the MCMC, the country’s regulator, mobile subscriber penetration has reached 110% of the country’s population.

The widespread availability of 3G/HSPA services, the popularity of social networking and the shrinking prices of iPhones, Blackberrys and other smartphones, has stimulated significant take-up of advanced mobile data services. Additionally the Government’s achievement of its target to see 50% of households possessing broadband has been reached with significant support from the number of mobile broadband subscriptions reported by operators.

Issues

With an increased number of broadband providers in Malaysia, there is now growing pressure to reduce tariffs resulting in declining Average Revenue per User (ARPU). Competition from WIMAX providers has seen a positive impact on the market place, although this has been limited so far due to the challenges of scale they face both locally and globally. Various state and local government implementation of wireless broadband community services is slow and largely not meeting users’ expectation.


Issues by Sector

The fixed network service has been very much at a standstill because of the declining market based on wireless substitution phenomenon. With the consumer hungry for reliable broadband offerings, the recent High Speed Broadband initiative launched by the Malaysian government and partly funded by TM will provide much needed direction to providing true broadband services. Much will be expected from TM in the provision of high quality services.

MCMC has highlighted 10 Entry Point Projects (EPPs) to catalyse the shift beyond infrastructure and enable critical sectors. These 10 EPPs adequately cover all segments of the ICT industry. However, without active contribution from the ICT community, it will be a great challenge to transform these EPPs from theoretical models to actual living and working models which contribute to MCMC’s Digital Lifestyle theme.

There is mixed success in attracting multinationals to establish major global hubs under the auspice of the Multimedia Super Corridor (MSC) initiative. Local ICT R&D activities are still small and limited. The outbound portion of the business generated by the MSC status companies is comparatively low attributed to the small scale of international marketing and sales of relevant programs, abroad.

The often talked about rural development under the Universal Service Provision (USP) program has had limited impact on improving connectivity, quality of life and development of applications and usage in ICT in this sector. The initiative to use the fund to provide 1 million netbooks to stimulate broadband use has suffered from implementation challenges. The country would benefit from a review of the overall objectives and workings of the USP fund.

Within telecommunications, foreign participation in application service providers is limited to 49%. Foreign ownership in companies or joint ventures involved in network facility and service provision is limited to 30%. Application service provider licenses are also available for value added services but operators must still use channels or lines provided by licensed operators. Malaysia has not signed up to the UR Reference Paper on Telecommunications. Malaysia is currently losing ground in terms of competitive advantage towards most of its ASEAN partners due to lack of investment in modern technology in telecommunications, which in turns makes the country less attractive to run business in many sectors, manufacturing and services alike. Competition should be more open in the country to drag urgently needed FDI.

General technology training and education suffers from lack of funding and focused effort from the government. This is where international players such as members of EUMCCI can contribute significantly as there is a common vested interest to aid Malaysia’s aspiration of increasing its GDP and business contribution to 70% from its currently 45% as reported.

In the recent budget, new and heavy service taxes and changes in transfer pricing policy for multinationals might discourage further investment in the sector and slow ICT sector development.

Recommendations

Sharing of experiences – BroadbandGrowth in broadband usage and penetration provides good opportunities for sharing of experiences which will benefit the EU and Malaysia. These can cover issues such as: data traffic management, content hosting, smart networks, data centres, local content creation, application stores and IPTV. Rural broadband can be enhanced by driving true connectivity with the support of EU Telecommunication companies that have had significant experience with similar projects globally. Additionally, the USP funds should be utilised by an independent government body that is fully tasked to drive this initiative as opposed to asking MCMC, the regulator, to additionally take on this critical challenge


Issues by Sector

Sustainable developmentThe first such platform was in November 2010 when EUMCCI hosted a Green ICT event in Kuala Lumpur. Based on this experience, it would be of great benefit to establish a common platform for EU ICT leaders to share best practice from their experiences with the adoption of “green technology” on a consistent basis

Participation in MCMC’s NKEA contributionEU companies must take heed of MCMCs call for action to participate in the program to develop the 10 EPPs - MY Creative Content, 1MY Payment, Connecting 1MY, E-Learning, E-Healthcare, E-Government, Broadband for All, Extending Reach, Smart Network and Regional Network. Such programs have the full support from MCMC to upscale commercially

Foreign equityThe foreign equity cap for Individual Licenses is apparently being reviewed. Pressure should be applied to ensure that this becomes a reality, and thus improves the confidence of EU ICT companies to invest in Malaysia’s telecoms sector

Driving towards an innovation led economyThe Malaysian government should consider engaging EU-ICT companies as partners and stakeholders to change the population’s mind-set and culture into an innovation society. Co-op and collaboration from the industry perspective from elementary to higher education as well as industry attachment, scholarship and exchange program should be spearheaded by the ministries

Taxes and duties (stamp duties)• Thenewly introducedbudgetandthetaxesshouldbereviewedinconsultationwiththeprivatesector,

specifically with the EU-ICT companies in order to encourage further development and to improve attractiveness

• More incentives and support processes should be provided for the EU-ICT Small and Medium sizedEnterprises to set up shop in Malaysia

• Therationalesandthe implementationof thenewly introducedstampdutyshouldbedelayedandtheprivate sector should be given opportunities to provide feedback before implementation

Marketing and promoting Malaysia/MSCIn order to maximize the investment in marketing Malaysia’s MSC initiatives internationally, the Malaysian government should leverage the EU-ICT companies’ coverage and contact networks outside of Malaysia, in its promotion and marketing activities. The EU-ICT companies as well as the network of EU chambers can provide the needed conduits into various market places

Increase transparency and competitiveness in sourcing and partners• Malaysia,particularlythepublicsectorsandGLC’sshouldadoptamoreopenandtransparentpolicyin

major tenders. Instead of the traditional system hardware/software out-right purchases based on price only, Malaysia should look for strategic partnership with the EU-ICT companies that will result in a skills and knowledge transfer, that would ultimately benefit Malaysia in the long run

• Malaysia’s strategic partnership with the EU-ICT companies would be built on a long-term mutuallybeneficial basis


Issues by Sector

The need for local manufacturer of major ICT productsMalaysia has been successful in attracting ICT investors. However, most high-tech multinationals in ICT choose developed countries in Singapore, Korea and Taiwan to establish their high-tech products due to the availability of more skilled professionals and expertise in those countries. To acquire advanced ICT technologies that are important for developing high quality products and stay ahead in the ICT arena, Malaysia needs to prepare the relevant scientific and technical workforce through solid industrial-universities collaborations. Fiber optics is a major ICT product made of silica, a material available in abundance in Malaysia, but there are hardly any major Malaysian manufacturers of this basic resource. To always depend on others is to be conquered. Thus Malaysia needs to embark on developing its own major ICT products in order to have greater autonomy. If foreign countries can produce broadband fiber optics, why not Malaysia, especially as it is a highly marketable ICT product worth investing in through R&D commitment?

Tapping on the positive side of ICT• AnotherwayforMalaysiatoreapbenefitsfromthedevelopmentofthesectoristotakeadvantageofnew

ICT technologies to solve current problems and issues. Communication through the internet using services such as SKYPE and e-banking can result in time-saving and a reduction in travel; resulting in less fuel consumption, leading to more savings and higher productivity for certain kinds of jobs.

• More companies should efficiently implement on-line e-systems that can facilitate the success of theDigital Lifestyle Malaysia plan. Such systems must be well audited to ensure user friendliness and sufficient functionality.

• A lot of energy is wasted through unnecessary lighting. Smart sensors can be incorporated into ICTtechnology to establish automated lighting systems in buildings and public facilities

Development of Cyber securityRecent advances towards photonic technologies will enable sufficiently rapid switching and the possibility of rapid random number generators that can break security codes or passwords within minutes. Conventional cryptography may soon be subjected to fraud. Many security-based and monetary organizations are looking towards new technologies based on quantum informatics for fool-proof cryptography. It is important for Malaysia to closely follow the development of such technology to stay secure and ahead in the ICT arena

5.7 Logistics

Logistics is the backbone for cost effective and efficient international trade and therefore important for the competitive advantage of a country. Due to its strategic location in one of largest industrial regions of the world, along one of the busiest shipping routes (the Straits of Melaka), Malaysia has successfully developed its seaports and has become an important transhipment hub for Asia facilitated both through Port Klang and the Port of Tanjung Pelepas (PTP). Today KLIA and Senai Airport are Malaysia’s key air cargo airports, and these are expected to be further built into regional air cargo hubs over the coming years, supported by a further development of the five economic growth corridors: Iskandar Malaysia in Southern Johor (IRDA); Northern Corridor Economic Region (NCER); East Coast Economic Region (ECER); Sabah Development Corridor (SDC) and Sarawak Corridor of Renewable Energy (SCORE).

The World Bank developed the Logistics Performance Index, based on a worldwide survey of operators on the ground (global freight forwarders and express carriers), providing feedback on the logistics ‘friendliness’ of the countries in which they operate and those with which they trade. The 2010 Logistics Performance Index ranked Malaysia as 29th country worldwide for logistics efficiency, which scored much higher than neighboring countries such as Thailand (35), Philippines (44), India (47), Vietnam (53) and Indonesia (75). On the other hand, Singapore (2), Japan (7), Hong Kong (13), Taiwan (20), Korea (23) and China (27) achieved a higher score than Malaysia.


Issues by Sector

Under the Association of Southeast Asian Nations (ASEAN) a liberalization program of the logistics service sector has been agreed among the member countries. This program creates an ASEAN single market by 2015; strengthening ASEAN economic integration through liberalisation and facilitation measures in the area of logistics services and supporting the establishment and enhancing the competitiveness of an ASEAN production base through the creation of an integrated ASEAN logistics environment. The liberalisation of the various logistics services are forecast to be completed by 2013. The liberalization requires Malaysia to strengthen its logistics industry, the capabilities of the logistics players and the multi-modal transport infrastructure in order to attract FDI in logistics and trade to Malaysia in future.

Due to its excellent location, transportation infrastructure and availability of land, Malaysia would be the preferred location for an Asia Regional Distribution Centre allowing for value added logistics (VAL). Second, green logistics is an important strategy for global companies in creating sustainable supply chains and customer value. As one of ASEAN’s leading logistics hubs, Malaysia is expected to lead green logistics initiatives in ASEAN.

Issues

StatusValue added logistics such as repackaging are regarded as import-export and not recognised by Customs in the free zone. Basically for value-added, Customs are not involved as only the Zone Authority is involved. The document required will be the ZB2 for re-export from the Free Zone after the value-added repackaging. Additional cross border Customs process and procedures for transport via rail and road are complex.

What happens if the above are not addressed: under ASEAN, establishing an Asia Regional Distribution Centre located in Malaysia, will be a less attractive prospect when compared to the surrounding countries.

Internal issues:• Customs has a regulatory function and an important role in revenue collection rather than a trade

facilitating role.

External Pressure:• MalaysiawantstoattractFDIinlogistics• ReductionofValueAddingbyMalaysiaoverthepastyears• ItwantstoattracthalalregionaldistributioncentresinMalaysia’shalalhubprogramme• Liberalisationofthelogisticssectorby2013willopentheAsianmarketsforthelogisticsindustryandwill

attract Asia Regional Distribution Centres to the most favourable locations

RecommendationsTo create a competitive advantage for Malaysia as a strategic location for an Asia Regional Distribution Centre:• BenchmarkwithEuropeandistributionzoneshostingEuropean(Regional)DistributionCentres• Recognisevalue-addedlogisticsregulationsinafreezone• Efficientmovementofvehiclesinandoutfromthedistributioncentersaswellasattheborder• Knowledgeablecustomsofficerstomeetthedemandofbulkandloosecommodities• Post-declarationsandriskmanagementapproachbycustomsforsmootherclearanceprocess• Simplifytheprocesstoobtainvehiclespermitespeciallyforlogisticpurposes


Issues by Sector

• Standardize the process of classifications and clearance systems upgrade to enable historicalclassifications available from systems

• ReviewBumiputra-requirementsforthelogisticsindustryinMalaysia• Changethenon-preferentialCertificateofOriginfromalocalcontenttovalue-based,allowingtheuseof

made-in-Malaysia through re-packaging• Improvethesecurityofwarehousingandtransportationthroughlegislationandeffectivewifitechnology

monitoring of goods movement

Green Logistics

Green initatives become more and more important to importers from Asia. This means addressing environmental pollution, CO2 emission reduction, as well as the reduction of energy consumption and the use of renewable sources of energy (like waves, wind and sunshine). Various countries 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. Many countries 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. City logistics solutions are a combination of innovation in vehicles, like the use of small bicycle driven vehicles or inland shipping solutions, and through regulations, by restricting city areas for (big) trucks.

Currently in Malaysia, the logistics industry has a limited awareness of green warehouse and green transportation solutions. Secondly, there are no environmental friendly city logistics schemes for Malaysia’s busiest cities, which are still being polluted by trucks.

If the above is not addressed, Malaysia will receive a lower rating on sustainability and green supply chains in comparison to neighbouring countries such as Singapore and Thailand.

Issues

• Fragmentation of responsibility of logistics and city logistics over various government department andlocal government agencies

• NolocalplayersarechampioninggreenlogisticsinMalaysia

Additional factors• Liberalisationofthelogisticssectorby2013whichwillopentheASEANmarketsforthelogisticsindustry,

where one of the criteria for foreign investment will be the existence of and support for, green logistics• SingaporeandThailandhavemadestrongcommitmentstoagreenlogisticsprogram• Existanceof internationalGreen/ECOstandardssuchasUSGBCLEED2009 (forgreenbuildings)and

ISO 14001• Postalandcourier services–Malaysiahasnocommitmentsonpostalandcourier servicesunder the

Uruguay Round and makes no new offer. EUMCCI would like to see an offer in this area along the lines of the EC request, and at least in the courier services. Foreign Express Courier providers should be allowed to distribute in the domestic market. Currently, POS Malaysia has a monopoly in the market and foreign providers are only allowed to operate through collaboration.


Issues by Sector

Recommendations• PilotagreencitylogisticsinitiativeinKualaLumpur• Introducespecialsubsidiesforgreenwarehousebuildings• PromoteFDIintoMalaysiaforagreenAsiaRegionalDistributionCentre(Matrade)• CreateawarenessamongthelogisticsindustrythroughorganisationslikeMITRANSontheimportanceof

green logistics

5.8 Oil & Gas

Oil

Malaysia held proven oil reserves of 4 billion barrels as of January 2010. Nearly all of Malaysia’s oil comes from offshore fields. The continental shelf is divided into 3 producing basins: the Malay basin in the west and the Sarawak and Sabah basins in the east. Most of the country’s oil reserves are located in the Malay basin and tend to be of high quality. Malaysia’s benchmark crude oil, Tapis Blend, is very light and sweet with an API gravity of 44° and sulfur content of 0.08 percent by weight.

Sector OrganizationMalaysia’s national oil and gas company, Petroliam Nasional Berhad (Petronas), holds exclusive ownership rights to all oil and gas exploration and production projects in Malaysia. Petronas is responsible for all licensing procedures and is subject to only the Prime Minister, who controls appointments to the company board. The company holds stakes in the majority of oil and gas blocks in Malaysia. It is the single largest contributor of Malaysian government revenues, almost half in 2009, by way of dividends and taxes. Since its incorporation, Petronas has grown to be an integrated international oil and gas company with business interests in 31 countries. It was ranked by Fortune as the 80th largest corporation in the world in 2009 and the 13th most profitable. All foreign and private companies must operate through production sharing contracts (PSCs) with Petronas. ExxonMobil is the largest foreign oil company by production volume and other major foreign oil producers operating in Malaysia via PSCs include Shell, Murphy Oil, and Talisman Energy.

Energy policy in Malaysia is made and overseen by the Economic Planning Unit (EPU) and the Implementation and Coordination Unit (ICU), which report directly to the Prime Minister. Malaysia’s oil and gas policy has historically focused on maintaining the reserve base to ensure long term supply security while providing affordable fuel supplies to its population. In July 2010, the government introduced subsidy reductions for gasoline, diesel, and liquid petroleum gas (LPG) with the aim of gradually rationalizing the fuel subsidy system to reduce expenditures. Further cuts in fuel subsidies are expected.

Exploration and ProductionTotal oil production in 2009 was 693,000 barrels per day (bbl/d), of which 83 percent was crude oil. More than half of total Malaysian oil production currently comes from the Tapis field in the offshore Malay basin. Malaysian oil production has been gradually decreasing since reaching a peak of 862,000 bbl/d in 2004 due to its maturing offshore reservoirs. Malaysia consumes the majority of its production and domestic consumption has been rising as production has been falling. Exports in 2009 were 157,000 bbl/d. However, the government is focused on opening up new investment opportunities by enhancing output from existing fields and developing new fields in deepwater areas offshore Sarawak and Sabah.

Exxon-Mobil’s enhanced oil recovery project at the Tapis field, which lies 118 miles off Terengganu in 210 feet of water, will start up in 2013, with an estimated gross investment of more than $1 billion. Tapis is one of 7 mature fields offshore peninsular Malaysia that ExxonMobil and Petronas have agreed to develop as part of a


Issues by Sector

25-year production-sharing contract that was finalized in June 2009. Under the agreement, which includes provisions for the deployment of enhanced oil recovery and further drilling to boost output, work will be carried out on all 7 fields, including Seligi, Guntong, Tapis, Semangkok, Irong Barat, Tebu, and Palas.

The Commercial Arrangement Area (CAA) in the Malay Basin, which Malaysia shares with Vietnam, also contributes to the country’s oil production. Talisman Energy (Canada) holds operating interests in the Northern and Southern oil fields in the CAA. While the Southern Fields are still under exploration, the Northern Fields development reportedly began producing at 25,000 bbl/d in August 2009, reportedly rising to 50,000 bbl/d in early 2010. Talisman holds a 41.4 percent interest, Petronas holds a 46 percent interest and PetroVietnam has 12.5 percent. Talisman is continuing to explore and develop fields in the area.

The dispute that lasted over 20 years between Malaysia and Brunei over land and sea boundaries was ended when the two countries signed a boundary agreement in April 2009. Blocks L and M were ceded to Brunei while Limbang, a popular tourist site on the Sarawak-Brunei border, was ceded to Malaysia. In September 2010, Petronas and the Brunei government reportedly agreed to jointly develop the 2 blocks offshore Borneo Island, signing a 40-year production sharing agreement for newly named Block CA1; an agreement on Block CA2 is expected.

Deepwater oil production projects under development are all offshore Sabah:The Kikeh oil field is currently Malaysia’s only producing deepwater oil field. It is offshore Sabah in 4,400 feet of water and was discovered and is operated by Murphy Oil in partnership with Petronas. It came onstream in 2007 at an initial rate of 20,000 bbl/d; estimated production in 2010 is 68,000 bbl/d of oil and 62 mcf/d of gas. Murphy Oil is carrying out more developmental drilling in order to boost output to 120,000 bbl/d in the near term. The nearby Kakap and Siakap fields, discovered in mid-2009 in the same block, will be tied into Kikeh in 2011 and 2013, respectively, to maintain steady production through 2015.

The Gumusat/Kakap project, offshore Sabah in 3,900 feet of water, will include the region’s first deepwater floatingproductionsystemfrom19subseawells.Gumusat/Kakapisexpectedtobeonstreamin2012withproduction of 150,000 bbl/d, using reinjected associated gas to maintain pressure. Shareholders are Shell, the operator, at 33 percent, ConocoPhillips at 33 percent, Petronas at 20 percent, and Murphy Oil at 14 percent. The system will be connected via pipelines to the new Sabah Oil and Gas Terminal being built in Kimanis, which is also expected to be completed by 2012.

Development is also underway at the Kebabangan Northern Hub development project (KBB), to be brought online together with Gumusat/Kakap and Malikai between 2012 and 2014. KBB, about 87 miles northeast of Kimanis, will be the hub for the development of deepwater oil and gas assets offshore Sabah. The KBB platform will be located in 460 feet of water and has a design capacity of 825 Mmcf/d of gas and 22,000 bbl/d of condensate. It consists of 4 contiguous fields being developed by the Kebabangan Petroleum Operating Company (KPOC), consisting of Petronas at 40 percent, ConocoPhillips at 30 percent, and Shell, the operator, at 30 percent.

The Malikai oil and gas field is located nearby and will be tied into the KBB via liquids and dry gas pipelines shortly after first gas comes from KBB. It will supply the Sabah Oil and Gas Terminal. The field was discovered in 2004 at 1,854 feet and field development began in 2009. Malakai is expected to come online by 2013 with production of up to 150,000 bbl/d. Shell is the operator at the Malikai oil field with 35 percent interest, in partnership with ConocoPhillips at 35 percent and Petronas with 30 percent.

Oil PipelinesMalaysia’s main oil pipelines connect oil fields offshore Peninsular Malaysia to onshore storage and terminal facilities. From the Tapis oil field runs the 124-mile Tapis pipeline, which terminates at the Kerteh plant in Terengganu, as does the 145-mile Jerneh condensate pipeline. The oil pipeline network connecting oil fields


Issues by Sector

offshore Sabah with the coast is currently expanding following the launch of development projects including the Kebabangan cluster, the Malikai, Gemusat/Kekap, and Kikeh oil fields. The majority of pipelines are operated by Petronas, although ExxonMobil also operates a number of pipelines connected with its significant upstream holdings located offshore Peninsular Malaysia.

An international oil products pipeline runs from the Dumai oil refinery in Indonesia to the Melaka oil refinery in Melaka City, Malaysia. An interconnecting pipeline then runs from this refinery via Port Dickenson to the Klang Valley airport and to the Klang oil distribution centre.

Downstream ActivitiesAccording to OGJ, Malaysia had approxiamately 515,000 bbl/d of refining capacity at six facilities as of January 2010. Petronas operates 3 refineries (259,000 bbl/d total capacity), while Shell operates 2 (170,000 bbl/d total capacity), and ExxonMobil operates one (86,000 bbl/d). Malaysia invested heavily in refining activities over the last two decades and is now able to meet most of the country’s demand for petroleum products domestically, after relying on the refining industry in Singapore for many years.

Petronas’ refinery in Melaka is a joint venture with ConocoPhillips, which owns a 47 percent interest. The refinery produces a full range of refined petroleum products. An expansion project at Melaka was being completed in 2010 to increase crude oil, conversion and treating unit capacities.

The Sabah Oil and Gas Terminal is under construction in Kimanis by Samsung Engineering, and is expected to be completed by the end of 2013. It will receive crude from offshore fields, process and distribute the products via a planned 310-mile onshore pipeline linking Sabah with Bintulu, Sarawak. The terminal will have a processing capacity of 300,000 bbl/d of crude and condensate, and 1.25 million cubic feet per day (Mmcf/d) of natural gas.

Natural Gas

Malaysia was the world’s tenth largest holder of natural gas reserves in 2010 and the second largest exporter of liquefied natural gas after Qatar in 2009.

According to the Oil and Gas Journal, Malaysia held 83 trillion cubic feet (Tcf) of proven natural gas reserves as of January 2010. Most of the country’s natural gas reserves are in its eastern areas, predominantly offshore Sarawak.

Source: Oil and Gas Journal

Top 5 Asia-Pacific Proven Natural Gas Reserve Holders, 2010

Trillion Cubic Feet

Australia

India

0 20 40 60 80 100 120

Malaysia

Indonesia

China


Issues by Sector

Sector OrganizationAs in the oil sector, Malaysia’s state-owned Petronas dominates the natural gas sector. The company has a monopoly on all upstream natural gas developments, and also plays a leading role in downstream activities and the LNG trade. Most natural gas production comes from production sharing agreements operated by foreign companies in conjunction with Petronas.

Exploration and ProductionNatural gas production has been rising steadily, reaching 2.1 Tcf in 2009, while domestic natural gas consumption has also increased steadily, reaching 1.0 Tcf in 2009. There are several important ongoing projects that are expanding natural gas production in Malaysia over the near term. Exploration and development activities in Malaysia continue to focus on offshore Sarawak and Sabah.

Malaysia-Thailand Joint Development AreaOne of the most active areas for natural gas exploration and production is the Malaysia-Thailand Joint Development Area (JDA), located in the lower part of the Gulf of Thailand. The JDA reportedly holds 9.5 Tcf of proved plus probable natural gas reserves. The area is divided into three blocks, Block A-18, Block B-17, and Block C-19, and is administered by the Malaysia- Thailand Joint Authority (MTJA), with each country owning 50 percent of the JDA’s hydrocarbon resources. The Carigali-Triton Operating Company (CTOC), a joint venture between Petronas Carigali and Hess, operates Block A-18, while Blocks B-17 and C-19 are operated by the Carigali-PTTEP Operating Company (CPOC), a joint venture of each country’s national oil company. Block B18 phase 1 came online in 2005, and in September 2009, production was reported to have reached 1 Bcf/d. Block B17 came online in 2009. In October 2010, B17 gas shipments reportedly reached 335 Mmcf/d, with half going to Thailand and half to Malaysia.

New Sarawak Natural Gas ProjectsMurphy Oil announced in September 2009 the start up of several smaller new gas fields located in Blocks SK309 and SK311. The first phase of this project, located 137 miles offshore Sarawak, is to produce gas from the Golok, Golok Barat, Serampeng, and Merapuh gas fields, which are being developed in a cluster and will supply the Bintulu LNG Terminal. It was reported in fourth quarter 2010 that gross production had reached 250 Mmcf/d and is expected to remain at that level for 5 years. Murphy Oil holds an 85 percent interest and Petronas holds 15 percent. Murphy Oil projects that Phase 2 could produce 350 Mmcf/d for another 10-year period when additional fields in SK311 are brought online.

The Kumang Cluster in Block SK306, Central Luconia province, a major gas field offshore Sarawak, is being developed by Petronas. Phase 1 is expected to provide 500 Mmcf/d and 22,000 bbl/d of condensate to the Bintulu Terminal when it goes online at the end of 2010. Three new gas fields in Block SK 308, 124 miles offshore Sarawak, are being jointly developed by Shell and Petronas. They are projected to produce first gas of 90 Mmcf/d in 2012.


Issues by Sector

Source: EIA

PipelinesMalaysia has one of the most extensive natural gas pipeline networks in Asia. The Peninsular Gas Utilization (PGU) project, completed in 1998, expanded the natural gas transmission infrastructure on Peninsular Malaysia. The PGU system spans more than 880 miles and has the capacity to transport 2 billion cubic feet per day (Bcf/d) of natural gas.

A number of pipelines link Sarawak’s offshore gas fields to the Bintulu facility. Petronas is building the 310-mile Sabah-Sarawak Gas Pipeline between Kimanis, Sabah and Bintulu, Sarawak to transport gas from Sabah’s offshore fields, such as Kota Kinabalu, to Bintulu for liquefaction and export. Some of the gas will be used for downstream projects in Sabah. This pipeline is expected to be completed by March 2011.

The Association of South East Asian Nations (ASEAN) is promoting the development of a trans-ASEAN gas pipeline system (TACP) aimed at linking 80 percent of ASEAN’s major gas production and consumption centres. Because of Malaysia’s extensive natural gas infrastructure and its location, the country is a natural candidate to serve as a hub in the ongoing TACP project.

The first pipeline connected Malaysia with Singapore and was commissioned in 1991. This has been followed by gas pipeline links between West Natuna, Indonesia and Duyong, Malaysia, commissioned in 2002, and the Trans-Thailand-Malaysia gas pipeline, commissioned in 2005, which allows Malaysia to pipe natural gas from the Malaysia-Thailand JDA to its domestic pipeline system. Other links are under development.

ExportsMalaysia was the second largest exporter of LNG in the world after Qatar in 2009, exporting over 1 Tcf of LNG, which accounted for 12 percent of total world LNG exports. Japan, South Korea and Taiwan were the 3 primary purchasers. LNG is primarily transported by Malaysia International Shipping Corporation (MISC), whichownsandoperates27LNGtankers,thesinglelargestLNGtankerfleetintheworldbyvolumeofLNGcarried. MISC is 62-percent owned by Petronas.

Malaysian Natural Gas Production and Consumption,1990-2009

1990

0

500

1000

1500

2000

2500

1992 1994 1996 1998 2000Year

Production

Consumption

Net Exports

2002 2004 2006 2008

Bill

ion

Cub

ic F

eet


Issues by Sector

The Bintulu LNG complex on Sarawak is the main hub for Malaysia’s natural gas industry. Petronas owns majority interests in Malaysia’s 3 LNG processing plants, all located at Bintulu, which are supplied by the offshore natural gas fields at Sarawak. The Bintulu facility is the largest LNG complex in the world, with 8 production trains and a total liquefaction capacity of 1.1 Tcf per year. A further increment through debottlenecking is expected by end-2010, raising overall capacity by 0.6 Tcf per year. Japanese financing has been critical to the development of Malaysia’s LNG facilities.

Construction began on the Sabah Oil and Gas Terminal (SOGT) in February 2007 and it is expected to be completed by 2012. It will have handling capacity of 300,000 barrels of crude and 1 billion cubic feet of natural gas per day and will primarily serve Malaysia’s export markets. The Sabah-Sarawak Gas Pipeline project is part of this development.

Issues

Access to the marketTo access PETRONAS business it is imperative that the company is registered in Malaysia and get the relevant licenses for its business, services and/or products.

The procedure is accessible on the website of Petronas but all documents are only available in Malay. Additionally the list of licenses do not cover the full scope of products/services, and some shall fall under more general licenses.

To obtain licences:The company must be a Bumiputera company:

Definition of Bumiputera CompanyA Bumiputera company must fulfil the following criteria:

i. Established under the Companies Act, 1965ii. Paid-up capital of at least RM25,000iii. Shareholders are 51% Bumiputeraiv. Board of Directors are at least 51% Bumiputerav. Managerial and Professional Staff are at least 51% Bumiputeravi. Supporting Staff are at least 51% Bumiputera

iLINTAS – Petronas Integrated Licensing Information and Tendering Administration SystemPetronas has successfully implemented its iLINTAS (Integrated Licensing Information and Tendering Administration System). It is a very comprehensive system containing information of all vendors & companies under the Petronas Licensing department. The procurement department or similar will be the official channel to get the list of approved vendor from Petronas. The iLINTAS information is highly confidential. Even though it is new there are a lot of positive outcomes from the system itself.1. Owning a Petronas License will not be the ultimate reason for vendor/company getting invited for all

tenders.2. To ensure your company is always included in iLINTAS database you must always comply with all

Petronas requirements. (Validation of Petronas license, submission of audited account, no complaints from sub-vendor on work quality or payment etc.)

3. Indirectly, it encourages all vendors especially local business to engage in proper business practices4. It also indirectly improves vendor work quality, since part of the requirement is to have a ‘good track

record’ if you want to remain within the system.


Issues by Sector

The information is not accessible to Non-Petronas License entities. It is worth monitoring the necessary requirements to ensure your company is always inside the iLINTAS. Business opportunities are easily lost if you are not within the system.

RecommendationThe Government should simplify the business licensing application and approval process and Petronas should provide an English language version of the licensing process application description. This is the first step in the understanding of the process for a foreign company, and accordingly the need for FDI in Malaysia, so having access to procedures that foreigners can understand is an immediate encouragement to apply. ILINTAS remains an improvement but it is questionable whether the system can ensure that Vendors are under the programme without a constant process of checking in place.

Companies can understand the fundamentals of the process and its relevance according to the country constraints and regulation. However the competitiveness and the technological need in the O&G industry shouldtriggermoreflexibilityandopennessonthisprocess.Greaterclaritywillincreasebothunderstandingof the Malaysian market and the perception of potential opportunity in Malaysia for SMEs from EU, so increasing foreign direct investment. This will allow foreign direct investment linked to SMEs from EU to increase.

5.9 Wines and Spirits

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 recommendations have been developed with the following objectives in mind:• IncreaseoverallGovernmentrevenuebyimprovingtaxcomplianceandreducingnon-taxpaidactivitiesof

counterfeit and contraband. Actual government revenue from excise tax in 2008 and 2009 was RM18.6 million and RM18.7 million, respectively. Industry intelligence suggest that the collection of Government revenue from excise should actually be about RM200 million per year

• Improveconsumersafetybybringingmorevolumesintolegallyregulatedandmonitoredchannels• CompliancewithWTOrecommendationsontaxation(andinlinewithWHOandOECDbestpractices)• ReinforcingMalaysia’simageasaleadingemergingeconomy• FacilitatingnegotiationsofaMalaysia-EUFTA• Removemarketdistortionsandencouragingfairtrade• RespectfuloftheMuslimcommunityaswellasthepluralityoftheMalaysiansociety• ConsistentwithresponsibledrinkingandMalaysia’spublichealthgoals.


Issues by Sector

Issues

Current Tariffs and Duty Structure and Market DistortionsCurrently, 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:

(5.9-1)

(5.9-2)

Product

Spirits

Classification

Brandy and whisky

Rum, gin and vodka

Liqueurs and cordials

57˚ abv

Other

Other

Samsu (incl. Benedictine DOM)

Arrack

Bitters

Other 0.5˚ <abv<1.14˚

Other

58 per litre

55 per litre

93.5 per LPA

64.5 per LPA

26.5 per LPA

20 per litre

30 per litre

3 per litre

64.5 per LPA

Import Duty

Product

Wine

Classification

Wine

Sparkling wine

Other wine

Other Fermented

Cider/perry

Rice wine

Mead

Fruit juice wines

23 per litre

7 per litre

7 per litre

25.5 per LPA

23 per litre

108.5 per LPA

Import Duty


Issues by Sector

The current excise structure has:• 13differentratesforwinesandspirits• AcombinationofAd-Valorem,unitaryandspecifictaxes• Thismakesitoneofthemostadministrativelycomplexregimeintheworld• Thebulkofthevolume(over80%)fallsinonecategoryforwinesandspirits,makingtheexcisesystem

unnecessarily complicated

(5.9-3)

(5.9-4)

The complex excise structure and the resulting high tax burdens encourages the 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 by selling low priced alcohol to consumers. The high taxation is also encouraging the production of counterfeited goods. A recent survey suggests a 20% counterfeit rate in Malaysia, one of the highest in Asia.

A key principle in tax policy is equity. Similar products should be subject to similar taxation burdens. However, the rates vary greatly between similar and competing products. This also encourages consumption of poor quality spirits, such as cheap compounded hard liquor.


Issues by Sector

The current system is poor for the government because it is:• Inefficient-Government’srevenuelossandincreaseinnon-taxpaidactivities• InconsistentwithWTOobligations-unequaltreatmentamongcompetingproducts• InconsistentwithresponsibledrinkingandMalaysia’spublichealthgoals• Unnecessarilycomplex-forbothCustomsandbusiness

Poor for consumers because it:• Creates risks for consumers - high incentives for smuggling put large volumes outside the normal

regulatory testing and monitoring system• Forcesconsumersincludingtouristsbeinglessabletoaffordthequalityofbeveragestheywouldnormally

enjoy in other markets

Recommendations• GradualeliminationofimporttariffsonallwinesandspiritsinthecontextoftheMalaysia-EUFTA• The elimination of import tariffs would significantly reduce total burden of taxation on legally imported

goods - reduce incentive for smuggling which will contribute to increasing government revenue• TheconcessionwouldnotbecostlytoMalaysiabecause:

• Minimal fiscal impact: import tariffs revenue for 2008 and 2009 were RM15.2 million and RM16.2million, respectively

• Aholisticreformoftheexcisetaxsystemthroughsimplificationandharmonizationofcurrentsystemby:• Transformingthecomplexformula(advalorem+specific/unitary)intoauniquespecificrateofRM110

per LPA (litre of per alcohol)• Thisratehasbeencalculatedtoensureoverallexcisetaxneutrality and will in fact increase the actual

excise rate per litre on a majority of wines and spirits categories• Immediateremovaloftaxstampsforallalcoholicbeverages• Industryandgovernmentshareacommongoalinminimisingcounterfeitandcontraband• UnfortunatelyTaxStampsarenotaneffectivesolutioninpreventingsalesofcontrabandandcounterfeit

alcohol as the incentive is high for illegal operators to circumvent the system • Thetaxstampsarenegativeforthegovernmentandbusinessesasthesystemis:

• Ineffectiveatensuringcomplianceandpaymentoftaxes• CostlyandInefficienttorun• Ineffectdiscriminatory,penalizinglegalbusinesses

• Theremovalofthetaxstampwillbeapositivereformtoincreaseadministrativesimplicityforindustryandfor the government

• Industry is willing to work with the government to use alternative systems to monitor the market and reduce counterfeit and contraband

• For example cooperation on anti-counterfeit technologies, enforcement and prosecution and theimplementation of traceability systems


Issues by Sector

Issues

IP Rights, GI Protection and Traceability information

Recommendations:• StrongenforcementofIPRagainstcounterfeitedbrandedproducts• FullprotectionofitsprincipallytradedgeographicalindicationsinMalaysia(asisbeinggrantedbyother

Asian countries - e.g. recognition recently granted for Scotch whisky in Vietnam, Thailand and China)• Institute legal protection for producers’ voluntary traceability information (i.e. lot codes on products) –

including specific sanctions in place for third parties who remove or tamper with such information. Such systems form part of producers consumer safety systems to enable product recalls, monitoring etc.

The recommendations would:• Improve the ease of doing business through simplifying and harmonising the current complex and

burdensome tax system for wines and spirits. It would also help reduce administrative burden and improve government efficiency. The basis of taxation on alcohol content is an easily determined objective criteria

• Ensureexcisetaxneutralperlitreofalcohol• Increasegovernmentrevenueonwinesandspirits fromaboutRM38millionperyear (RM16millionon

import, RM19 million on excise, RM3 million on sales tax) to about RM230 million (RM200 million on excise and RM30 million on sales tax)

• Ensurestableandconsistentrevenuesovertimeasalcoholiccontentisfarlessvolatilethanvalue• Reducethenon-taxactivitiesofcontrabandandcounterfeit• Ensurethattaxonproductswithsimilaralcoholcontentwouldbethesameandthuscomplywiththe

WTO principle of non-discrimination between local and imported products• BeconsistentwithrecommendationofWHOtointroducespecifictaxesasawayofdecreasingharmful

misuse of alcohol thus addressing health policy goals• Facilitatenegotiationsunder theMalaysia-EUFTA.Marketaccess forwinesandspirits isan important

issue for many key EU Member States• Ensurepositivespillovereffectsforthetourism,retailandrestaurantsectors• Providegreatercertainty,transparencytogovernment,industryandconsumersandfacilitatebusinesses



Appendix

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Appendix

Table A1.The Global Competitiveness Index 2010-2011 rankings and 2009-2010 comparisons© 2010 World Economic Forum

Country/EconomyGCI 2010-2011 GCI 2010-2011 rank

among 2009 countriesGCI 2009-2010 rank*

Rank Score

Switzerland 1 5.63 1 1Sweden 2 5.56 2 4Singapore 3 5.48 3 3United States 4 5.43 4 2Germany 5 5.39 5 7Japan 6 5.37 6 8Finland 7 5.37 7 6Netherlands 8 5.33 8 10Denmark 9 5.32 9 5Canada 10 5.3 10 9Hong Kong SAR 11 5.3 11 11United Kingdom 12 5.25 12 13Taiwan, China 13 5.21 13 12Norway 14 5.14 14 14France 15 5.13 15 16Australia 16 5.11 16 15Qatar 17 5.1 17 22Austria 18 5.09 18 17Belgium 19 5.07 19 18Luxembourg 20 5.05 20 21Saudi Arabia 21 4.95 21 28Korea, Rep 22 4.93 22 19New Zealand 23 4.92 23 20Israel 24 4.91 24 27United Arab Emirates 25 4.89 25 23Malaysia 26 4.88 26 24China 27 4.84 27 29Brunei Darussalam 28 4.75 28 32Ireland 29 4.74 29 25Chile 30 4.69 30 30Iceland 31 4.68 31 26Tunisia 32 4.65 32 40Estonia 33 4.61 33 35Oman 34 4.61 34 41Kuwait 35 4.59 35 39Czech Republic 36 4.57 36 31Bahrain 37 4.54 37 38Thailand 38 4.51 38 36Poland 39 4.51 39 46Cyprus 40 4.5 40 34Puerto Rico 41 4.49 41 42Spain 42 4.49 42 33Barbados 43 4.45 43 44Indonesia 44 4.43 44 54Slovenia 45 4.42 45 37Portugal 46 4.38 46 43Lithuania 47 4.38 47 53Italy 48 4.37 48 48Montenegro 49 4.36 49 62Malta 50 4.34 50 52India 51 4.33 51 49Hungary 52 4.33 52 58Panama 53 4.33 53 59South Africa 54 4.32 54 45Mauritius 55 4.32 55 57Costa Rica 56 4.31 56 55Azerbaijan 57 4.29 57 51Brazil 58 4.28 58 56Vietnam 59 4.27 59 75Slovak Republic 60 4.25 60 47Turkey 61 4.25 61 61Sri Lanka 62 4.25 62 79Russian Fedration 63 4.24 63 63Uruguay 64 4.23 64 65Jordan 65 4.21 65 50Mexico 66 4.19 66 60Romania 67 4.16 67 64Colombia 68 4.14 68 69Iran, Islamic Rep. 69 4.14 n/a n/a

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Appendix

Country/EconomyGCI 2010-2011 GCI 2010-2011 rank

among 2009 countriesGCI 2009-2010 rank*

Rank Score

Latvia 70 4.14 69 68Bulgaria 71 4.13 70 76Kazakhstan 72 4.12 71 67Peru 73 4.11 72 78Namibia 74 4.09 73 74Morocco 75 4.08 74 73Botswana 76 4.05 75 66Croatia 77 4.04 76 72Guatemala 78 4.04 77 80Macedonia, FYR 79 4.02 78 84Rwanda 80 4 n/a n/aEgypt 81 4 79 70El Salvador 82 3.99 80 77Greece 83 3.99 81 71Trinidad and Tobago 84 3.97 82 86Philippines 85 3.96 83 87Algeria 86 3.96 84 83Argentina 87 3.95 85 85Albania 88 3.94 86 96Ukraine 89 3.9 87 82Gambia, The 90 3.9 88 81Honduras 91 3.89 89 89Lebanon 92 3.89 n/a n/aGeorgia 93 3.86 90 90Moldova 94 3.86 n/a n/aJamaica 95 3.85 91 91Serbia 96 3.84 92 93Syria 97 3.79 93 94Armenia 98 3.76 94 97Mongolia 99 3.75 95 117Libya 100 3.74 96 88Dominican Republic 101 3.72 97 95Bosnia and Herzegovina 102 3.7 98 109Benin 103 3.69 99 103Senegal 104 3.67 100 92Ecuador 105 3.65 101 105Kenya 106 3.65 102 98Bangladesh 107 3.64 103 106Bolivia 108 3.64 104 120Cambodia 109 3.63 105 110Guyana 110 3.62 106 104Cameroon 111 3.58 107 111Nicaragua 112 3.57 108 115Tanzania 113 3.56 109 100Ghana 114 3.56 110 114Zambia 115 3.55 111 112Tajikistan 116 3.53 112 122Cape Verde 117 3.51 n/a n/aUganda 118 3.51 113 108Ethiopia 119 3.51 114 118Paraguay 120 3.49 115 124Kyrgyz Republic 121 3.49 116 123Venezuela 122 3.48 117 113Pakistan 123 3.48 118 101Madagascar 124 3.46 119 121Malawi 125 3.45 120 119Swaziland 126 3.4 n/a n/aNigeria 127 3.38 121 99Lesotho 128 3.36 122 107Côte d’Ivoire 129 3.35 123 116Nepal 130 3.34 124 125Mozambique 131 3.32 125 129Mali 132 3.28 126 130Timor-Leste 133 3.23 127 126Burkina Faso 134 3.2 128 128Mauritania 135 3.14 129 127Zimbabwe 136 3.03 130 132Burundi 137 2.96 131 133Angola 138 2.93 n/a n/aChad 139 2.73 132 131

*The 2009-2010 rank shown is the one published last year out of 133 countries. One country that was included last year, Suriname, has been excluded this year for lack of Survey data. Suriname’s rank of 102 from last year is therefore not shown in the table.

Source: The World Economic Forum


Appendix

Year Export ValueRM

(million)

Export Growth

Rate(%)

Import Value RM (million)

Import Growth

Rate(%)

Total Trade Value

RM (million)

Total Trade Growth

Rate(%)

Trade Balance

ValueRM (million)

1990 79,646.37 0 79,118.57 0 158,764.94 0 527.80

1991 94,496.63 18.65 100,831.06 27.44 195,327.70 23.03 -6,334.43

1992 103,656.70 9.69 101,440.47 0.60 205,097.18 5.00 2,216.23

1993 121,237.48 16.96 117,404.73 15.74 238,642.21 16.36 3,832.75

1994 153,921.22 26.96 155,920.97 32.81 309,842.19 29.84 -1,999.76

1995 184,986.48 20.18 194,344.49 24.64 379,330.97 22.43 -9,358.00

1996 197,026.10 6.51 197,279.75 1.51 394,305.86 3.95 -253.65

1997 220,890.44 12.11 220,935.47 11.99 441,825.91 12.05 -45.03

1998 286,563.12 29.73 228,124.47 3.25 514,687.59 16.49 58,438.64

1999 321,559.54 12.21 248,476.82 8.92 570,036.36 10.75 73,082.71

2000 373,270.32 16.08 311,458.87 25.35 684,729.18 20.12 61,811.45

2001 334,283.81 -10.44 280,229.09 -10.03 614,512.91 -10.25 -10.25

2002 357,430.02 6.92 303,090.47 8.16 660,520.48 7.49 54,339.55

2003 397,884.39 11.32 316,537.85 4.44 714,422.24 8.16 81,346.54

2004 481,252.99 20.95 399,632.17 26.25 26.25 880,885.16 23.30 81,620.82

2005 533,787.81 10.92 434,009.91 8.60 967,797.72 9.87 99,777.90

2006 588,965.49 10.34 480,772.54 10.77 1,069,738.03 10.53 108,192.95

2007 605,153.24 2.75 504,813.80 5.00 1,109,967.03 3.76 100,339.44

2008 663,493.99 9.64 521610.82 3.327369 1185104.81 6.77 141883.17

2009 498,622.34 -24.85 392365.12 -24.78 890987.46 -24.82 106257.22

2010 644,764.00 16.50 528,706.00 21.60 1,173,470.00 18.70 116,058.00

Source: Ministry of International Trade and Industry, Ministry of Finance, Malaysia

Table A2.Malaysia's Total Trade 1990 - 2010


Appendix

Year Export ValueRM

(million)

Export Growth

Rate(%)

Import Value RM (million)

Import Growth

Rate(%)

Total Trade Value

RM (million)

Total Trade Growth

Rate(%)

Trade Balance

ValueRM (million)

1990 12,318.94 0 12,682.83 0 25,001.77 0 -363.89

1991 14,447.85 17.28 15,554.01 22.64 30,001.85 20.00 -1,106.16

1992 15,919.57 10.19 13,973.52 -10.16 29,893.09 -0.36 1,946.05

1993 18,127.81 13.87 15,120.70 8.21 33,248.51 11.22 3,007.12

1994 22,238.75 22.68 23,287.18 54.01 45,525.92 36.93 -1,048.43

1995 26,646.25 19.82 30,274.42 30.00 56,920.67 25.03 -3,628.17

1996 27,440.67 2.98 28,936.07 -4.42 56,376.74 -0.96 -1,495.40

1997 32,360.80 17.93 31,869.55 10.14 64,230.34 13.93 491.25

1998 47,551.67 46.94 27,623.99 -13.32 75,175.66 17.04 19,927.68

1999 51,555.27 8.42 29,553.82 6.99 81,109.09 7.89 22,001.45

2000 52,219.58 1.29 34,284.18 16.01 86,503.77 6.65 17,935.40

2001 47,348.33 -9.33 36,518.62 6.52 83,866.96 -3.05 10,829.71

2002 45,427.20 -4.06 35,280.48 -3.39 80,707.68 -3.77 10,146.72

2003 50,085.37 10.25 37,761.62 7.03 87,846.99 8.85 12,323.75

2004 60,676.54 21.15 47,892.98 26.83 108,569.52 23.59 12,783.56

2005 62,829.95 3.55 50,585.50 5.62 113,415.46 4.46 12,244.45

2006 75,148.92 19.61 54,757.18 8.25 129,906.09 14.54 20,391.74

2007 77,823.64 3.56 59,941.48 9.47 137,765.12 6.05 17,882.16

2008 74,886.17 -3.77 61,692.83 2.91 136,559.00 -0.88 13,173.34

2009 53,854.53 -28.08 45,968.72 -25.49 99,823.25 -26.90 7,885.80

2010 68,693.00 27.55 54,159.00 17.81 122,852.00 23.07 14,534.00


Table A3.Malaysia’s Trade with European Union 1990 - 2010


Appendix

Table A4.Malaysia's Exports by Sector 2009 - 2010

Description2009 2010

ValueRM (Million)

Share(%)

Change(%)

ValueRM (Million)

Share(%)

Change(%)

MANUFACTURED GOODS 411405 74.4 -11.3 460957.1 72.1 12Electrical & Electronic Products 227778.3 41.2 -10.9 249797.2 39.1 9.7

Chemicals & Chemical Products 32981.4 6 -18.2 40821.2 6.4 23.8

Machinery, Appliances & Parts 19118.3 3.5 -10.5 21454.1 3.4 12.2

Manufactures Of Metal 14532 2.6 -25.3 18382 2.9 26.5

Optical & Scientific Equipment 13094.7 2.4 -12.9 18331.9 2.9 40

Rubber Products 12478.8 2.3 -2.6 16026 2.5 28.4

Wood Products 14152 2.6 -14.7 14834.6 2.3 4.8

Processed Food 10739 1.9 -11.6 11997.5 1.9 11.7

Transport Equipment 10352.7 1.9 12.8 9494.3 1.5 -8.3

Manufactures Of Plastics 8260.7 1.5 -11.6 9418 1.5 14

Textiles & Clothings 8933.7 1.6 -14.9 9325.6 1.5 4.4

Iron & Steel Products 8814.8 1.6 -15.8 8452.7 1.3 -4.1

Jewellery 5550.3 1 3.8 6478.8 1 16.7

Non-metallic Mineral Products 5245.4 0.9 -1.1 4987.8 0.8 -4.9

Petroleum Products 2786.9 0.5 -28 3360.9 0.5 20.6

Paper & Pulp Products 2821.1 0.5 -1.5 3125.4 0.5 10.8

Beverages & Tobacco 2423.4 0.4 0.6 2754.8 0.4 13.7

Other Manufactures 11341.1 2 1.3 11914.2 1.9 5.1

AGRICULTURAL GOODS 55459.2 10 -22.6 71803.8 11.2 29.5Palm Oil 38475.5 7 -22.6 48422.5 7.6 25.9

Crude Rubber 4459.8 0.8 -45 9210.5 1.4 106.5

Saw Logs & Sawn Timber 5140.7 0.9 -12.6 5387 0.8 4.8

Other Vegetable Oil 2086.3 0.4 -23.7 2511 0.4 20.4

Seafood, Fresh, Chilled Or Frozen 1686.9 0.3 -14.6 1996.8 0.3 18.4

Live Animals & Meat 604.2 0.1 -4.8 647.5 0.1 7.2

Vegetables, Roots, Tubers 430.5 0.1 -7.8 461.1 0.1 7.1

Hides, Skins And Furskins, Raw 21.4 0 -21.1 26.1 0 21.8

Cereal 7.8 0 1.6 13.9 0 78.2

Other Agricultures 2546.3 0.5 20.2 3127.3 0.5 22.8

MINING GOODS 81503 14.7 -32.8 101904.1 15.9 25Lng 31195 5.6 -24.8 38099.1 6 22.1

Crude Petroleum 25572.3 4.6 -41.8 31026.1 4.9 21.3

Refined Petroleum Products 22059.6 4 -31.5 28711.4 4.5 30.2

Tin 1226.3 0.2 -38 2304.8 0.4 87.9

Crude Fertilizers & Crude Minerals 911.5 0.2 12 907.3 0.1 -0.5

Metalliferous Ores And Metal Scrap 502.4 0.1 -39.2 779.5 0.1 55.1

Other Mining 35.7 0 -23 76 0 112.8

OTHERS 4928.5 0.9 -22.2 4763.2 0.7 -3.4



Appendix


Table A5.Malaysia’s Imports by Sector 2009 - 2010

Description2009 2010

ValueRM (Million)

Share(%)

Change(%)

ValueRM (Million)

Share(%)

Change(%)

MANUFACTURED GOODS 358953.4 82.6 -14.2 430491.4 81.3 19.9Electrical & Electronic Products 159767.4 36.8 -15.7 189114.9 35.7 18.4Chemicals & Chemical Products 36941.9 8.5 -14.6 45322.3 8.6 22.7Machinery, Appliances & Parts 38272.7 8.8 -10.8 43986.7 8.3 14.9Manufactures Of Metal 21714.1 5 -20.7 29046.1 5.5 33.8Transport Equipment 24331.4 5.6 11.6 28499.4 5.4 17.1Iron & Steel Products 17859.9 4.1 -37.7 21311.9 4 19.3Optical & Scientific Equipment 13920 3.2 -12.6 17215.2 3.3 23.7Processed Food 8969.9 2.1 0.4 10779.2 2 20.2Paper & Pulp Products 5547.7 1.3 -10.3 6673.5 1.3 20.3Manufactures Of Plastics 5008 1.2 -9.3 5861.7 1.1 17Textiles & Clothings 4461.1 1 -18.4 5156.9 1 15.6Non-metallic Mineral Products 3957.7 0.9 5.9 4761.3 0.9 20.3Rubber Products 3273.5 0.8 -9.1 4370.2 0.8 33.5Jewellery 1222.3 0.3 88.2 3310.9 0.6 170.9Petroleum Products 1672 0.4 -22 2308.7 0.4 38.1Beverages & Tobacco 1370.9 0.3 -6.6 1592.6 0.3 16.2Wood Products 1143.5 0.3 -12.3 1390.6 0.3 21.6Other Manufactures 9519.4 2.2 -0.2 9789.5 1.8 2.8AGRICULTURAL GOODS 27855.3 6.4 -3.3 33291.3 6.3 19.5Crude Rubber 4458.6 1 27.6 5776.4 1.1 29.6Palm Oil 3710.5 0.9 6.3 5714 1.1 54Cereal 5160.3 1.2 -20.8 5153.9 1 -0.1Vegetables, Roots, Tubers 1796.2 0.4 30.3 2222.3 0.4 23.7Seafood, Fresh, Chilled Or Frozen 1846.6 0.4 24.6 1998.8 0.4 8.2Live Animals & Meat 1678.4 0.4 9.2 1966.1 0.4 17.1Other Vegetable Oil 1139.7 0.3 -24.6 1389.1 0.3 21.9Saw Logs & Sawn Timber 534.6 0.1 -37.1 599.7 0.1 12.2Hides, Skins And Furskins, Raw 34.9 0 12.7 45.8 0 31Other Agricultures 7495.5 1.7 -12.1 8425.2 1.6 12.4MINING GOODS 37595.4 8.6 -36.4 55182.2 10.4 46.8Refined Petroleum Products 15295 3.5 -40.9 26768.2 5.1 75Crude Petroleum 14881.8 3.4 -36.3 18273 3.5 22.8Metalliferous Ores And Metal Scrap 1959.8 0.5 -21.5 2821.6 0.5 44Crude Fertilizers & Crude Minerals 891.4 0.2 -37.3 1171.1 0.2 31.4Tin 728 0.2 27.3 807.4 0.2 10.9Lng 1.1 0 289.8 0 0 -97.1Other Mining 3838.3 0.9 -28.9 5340.8 1 39.1OTHERS 10265.7 2.4 -25.2 10229.7 1.9 -0.4Total Imports 434670 100 -16.4 529195 100 21.7


Appendix

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

Product Sectors2008 2009 2010 2010 (Jan) 2011 (Jan)

Value RM (Million)

Share%

Value RM (Million)

Share%

Change%

Value RM (Million)

Share%

Change%

Value RM (Million)

Value Share%

Change%

TOTAL EXPORTS 74805 100 59968 100 -19.8 68693 100 14.5 5612 5851.4 100 4.3MANUFACTURED GOODS 63170 84.4 52302 87.2 -17.2 58319 84.9 11.5 4924.8 4533.6 77.5 -7.9Electrical & Electronic Products

38810.8 51.9 33116.5 55.2 -14.7 35773.3 52.1 8 3182.9 2551.4 43.6 -19.8

Manufactures Of Metal 1478.2 2 1302.1 2.2 -11.9 1709.9 2.5 31.3 141.6 254 4.3 79.4

Chemicals & Chemical Products

3805.4 5.1 2532.5 4.2 -33.5 3557.8 5.2 40.5 224.7 246.6 4.2 9.7

Optical & Scientific Equipment

2342.3 3.1 2132.9 3.6 -8.9 2617.5 3.8 22.7 179 246 4.2 37.4

Rubber Products 2887.1 3.9 2520.2 4.2 -12.7 3144.6 4.6 24.8 234.7 244.6 4.2 4.2

Machinery, Appliances & Parts

2858 3.8 1953.2 3.3 -31.7 2486.4 3.6 27.3 193.2 220.7 3.8 14.2

Wood Products 2241.2 3 1829.6 3.1 -18.4 1785.2 2.6 -2.4 184.7 136.2 2.3 -26.3

Transport Equipment 1521.8 2 1366.2 2.3 -10.2 1435.5 2.1 5.1 109.1 116.5 2 6.9

Textiles & Clothings 1451.1 1.9 1151.8 1.9 -20.6 1251.3 1.8 8.6 98.5 113.3 1.9 15

Manufactures Of Plastics 1541 2.1 1238.7 2.1 -19.6 1272.8 1.9 2.8 115.8 99.9 1.7 -13.8

Processed Food 1102.4 1.5 669.5 1.1 -39.3 708.2 1 5.8 54.9 52.4 0.9 -4.6

Petroleum Products 210.6 0.3 101.5 0.2 -51.8 202.2 0.3 99.3 17.6 28.3 0.5 61.2

Iron & Steel Products 521 0.7 123.5 0.2 -76.3 198.3 0.3 60.7 22.4 21.5 0.4 -3.6

Non-metallic Mineral Products

208 0.3 163.9 0.3 -21.2 172.9 0.3 5.5 11.9 20.1 0.3 68.3

Paper & Pulp Products 163.7 0.2 158.4 0.3 -3.3 154.2 0.2 -2.7 11.8 10.4 0.2 -11.7

Jewellery 46.2 0.1 33.4 0.1 -27.6 27.4 0 -18 7.9 1.8 0 -77

Beverages & Tobacco 38.5 0.1 15.9 0 -58.6 37.6 0.1 135.8 1 1.4 0 49.2

Other Manufactures 1942.3 2.6 1892.2 3.2 -2.6 1784 2.6 -5.7 133.1 168.6 2.9 26.6AGRICULTURAL GOODS 9825.1 13.1 6485.9 10.8 -34 9177.9 13.4 41.5 653.6 1208.9 20.7 85Palm Oil 5515.3 7.4 4236.5 7.1 -23.2 5254.7 7.6 24 396.8 748.5 12.8 88.6

Crude Rubber 2637.7 3.5 1182.8 2 -55.2 2788.2 4.1 135.7 155.3 380.9 6.5 145.3

Saw Logs & Sawn Timber 1164.6 1.6 836.9 1.4 -28.1 854.1 1.2 2.1 82.3 65.1 1.1 -20.9

Other Vegetable Oil 129 0.2 71.9 0.1 -44.3 82 0.1 14 6.9 3.3 0.1 -52.2

Seafood, Fresh, Chilled Or Frozen

254 0.3 39.9 0.1 -84.3 64.2 0.1 61 4.5 2.2 0 -50.2

Hides, Skins And Furskins, Raw

0.6 0 0.9 0 54.2 3 0 239.9 0 0.5 0 581.9

Vegetables, Roots, Tubers 6.8 0 7.3 0 7.4 6.9 0 -6.3 0.5 0.2 0 -65.1

Cereal 0 0 0 0 23.6 0 0 -8.4 0 0 0 ∞

Live Animals & Meat 0.9 0 1.3 0 54.4 1.7 0 31.4 0 0 0 -100

Other Agricultures 116.3 0.2 108.5 0.2 -6.7 123.2 0.2 13.6 7.1 8.2 0.1 16MINING GOODS 1426.2 1.9 885.7 1.5 -37.9 924.4 1.3 4.4 18.3 80.8 1.4 342.6Refined Petroleum Products

758 1 709.9 1.2 -6.3 551.6 0.8 -22.3 5.7 46.1 0.8 713.7

Tin 237.7 0.3 86.4 0.1 -63.6 289.8 0.4 235.2 12 34.7 0.6 190

Metalliferous Ores And Metal Scrap

429.2 0.6 87.9 0.1 -79.5 81.4 0.1 -7.3 0 0 0 ∞

Crude Fertilizers & Crude Minerals

1.3 0 1.4 0 11.8 1.3 0 -11.8 0.3 0 0 -95.1

Other Mining 0 0 0 0 ∞ 0.3 0 ∞ 0.3 0 0 -100



Appendix

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


Product Sectors2008 2009 2010 2010 (Jan) 2011 (Jan)

Value RM (Million)

Share%

Value RM (Million)

Share%

Change%

Value RM (Million)

Share%

Change%

Value RM (Million)

Value Share%

Change%

TOTAL IMPORTS 61611.4 100 50760.8 100 -17.6 54159.1 100 6.7 4100.7 4424.1 100 7.9MANUFACTURED GOODS 60240.4 97.8 49463.3 97.4 -17.9 52842.7 97.6 6.8 3975.1 4310.6 97.4 8.4Electrical & Electronic Products

23846.8 38.7 17617 34.7 -26.1 19782.3 36.5 12.3 1745.4 1689.4 38.2 -3.2

Machinery, Appliances & Parts

8944 14.5 8611.7 17 -3.7 8244.5 15.2 -4.3 583.7 710.1 16.1 21.7

Chemicals & Chemical Products

6544.1 10.6 6525.5 12.9 -0.3 6916.5 12.8 6 511.1 600.2 13.6 17.4

Transport Equipment 5836.9 9.5 5294.9 10.4 -9.3 5751.3 10.6 8.6 279.3 369.7 8.4 32.4Manufactures Of Metal 2134.1 3.5 1536.8 3 -28 1992.3 3.7 29.6 123.5 190.6 4.3 54.3Optical & Scientific Equipment

3095.2 5 1787.2 3.5 -42.3 2181.2 4 22 140.3 159.9 3.6 14

Iron & Steel Products 3741.3 6.1 2337.3 4.6 -37.5 1696.6 3.1 -27.4 89.6 111.7 2.5 24.7Processed Food 1052.9 1.7 1112.6 2.2 5.7 1422.4 2.6 27.8 113.4 100.5 2.3 -11.3Paper & Pulp Products 1153.3 1.9 995 2 -13.7 1202.5 2.2 20.9 97.4 75.2 1.7 -22.8Beverages & Tobacco 575.2 0.9 617.9 1.2 7.4 736.6 1.4 19.2 70.9 61.6 1.4 -13Manufactures Of Plastics 433.5 0.7 395.7 0.8 -8.7 496 0.9 25.4 33.2 51.4 1.2 54.5Non-metallic Mineral Products

474.4 0.8 460.2 0.9 -3 489.2 0.9 6.3 49.1 35.1 0.8 -28.6

Rubber Products 444.4 0.7 443 0.9 -0.3 403.9 0.7 -8.8 26 30.1 0.7 15.4Textiles & Clothings 379.4 0.6 280.1 0.6 -26.2 297.5 0.5 6.2 21.3 25.3 0.6 18.9Wood Products 238.6 0.4 74.3 0.1 -68.9 97.6 0.2 31.4 5.7 7.5 0.2 32.3Jewellery 44.4 0.1 31.2 0.1 -29.7 34.2 0.1 9.5 2.2 3.9 0.1 80Petroleum Products 34.7 0.1 113.3 0.2 226.8 149.1 0.3 31.6 1.8 2.2 0.1 25.5Other Manufactures 1267.4 2.1 1229.7 2.4 -3 948.9 1.8 -22.8 81.3 86.2 1.9 6AGRICULTURAL GOODS 389.2 0.6 403 0.8 3.5 509.3 0.9 26.4 39.2 50 1.1 27.5Live Animals & Meat 114.2 0.2 83 0.2 -27.3 115.5 0.2 39.2 6 14.5 0.3 142.7Vegetables, Roots, Tubers 63.3 0.1 82.7 0.2 30.7 91.4 0.2 10.5 15.4 8.9 0.2 -42.1Hides, Skins And Furskins, Raw

0.4 0 7.7 0 1957.9 25.8 0 236.6 1 4.6 0.1 344.2

Other Vegetable Oil 34.9 0.1 29.7 0.1 -15 48.5 0.1 63.6 4 4.1 0.1 3Saw Logs & Sawn Timber 25.5 0 34.1 0.1 33.4 41.7 0.1 22.4 3.2 2.9 0.1 -8.6Seafood, Fresh, Chilled Or Frozen

17.2 0 22.5 0 30.5 30.3 0.1 34.6 2.8 2.6 0.1 -7.8

Cereal 8.7 0 12.3 0 40.4 11.8 0 -3.8 0.3 0.9 0 245.5Crude Rubber 0.2 0 0.3 0 6 0.7 0 167.8 0 0.3 0 ∞Palm Oil 0 0 0 0 ∞ 0 0 3002.2 0 0 0 ∞Other Agricultures 124.8 0.2 130.9 0.3 4.9 143.8 0.3 9.8 6.6 11.1 0.3 69.7MINING GOODS 283 0.5 361.5 0.7 27.7 288.6 0.5 -20.2 19.2 18.7 0.4 -2.3Crude Fertilizers & Crude Minerals

149.5 0.2 114.1 0.2 -23.7 150.7 0.3 32.1 9.8 8.9 0.2 -9.3

Refined Petroleum Products

92.5 0.2 83.8 0.2 -9.3 72.9 0.1 -13 6.7 6.1 0.1 -9.5

Metalliferous Ores And Metal Scrap

25.2 0 28.2 0.1 12 39.2 0.1 38.8 2 2.7 0.1 34.6

Tin 0.3 0 2.3 0 740.9 7.9 0 245.1 0 0 0 ∞Lng 0 0 0 0 ∞ 0 0 106.6 0 0 0 ∞Crude Petroleum 0 0 126.3 0.2 155512.4 0 0 -100 0 0 0 ∞Other Mining 15.6 0 6.8 0 -56.3 17.9 0 163.3 0.6 1 0 63.7


Appendix

Table A8.Malaysia-EU Trade Figures by Member StateYear 2009

Country Exports ValueRM

(Million)

Export Share(%)

Imports ValueRM

(Million)

Import Share(%)

Total Trade ValueRM

(Million)

Total Trade Share(%)

Bal of Trade ValueRM

(Million)

Austria 247 0.41 1,233 2.43 1,480 1.34 -986

Belgium 1,607 2.68 1,563 3.08 3,170 2.86 44

Bulgaria 98 0.16 47 0.09 145 0.13 51

Cyprus 59 0.10 18 0.04 77 0.07 41

Czech Republic 623 1.04 186 0.37 809 0.73 437

Denmark 567 0.95 525 1.03 1,092 0.99 42

Estonia 56 0.09 17 0.03 73 0.07 39

Finland 1,571 2.62 593 1.17 2,164 1.95 978

France 5,450 9.09 7,059 13.91 12,509 11.30 -1,609

Germany, Federal Republic of

14,830 24.73 18,417 36.28 33,247 30.03 -3,587

Greece 450 0.75 42 0.08 492 0.44 408

Hungary 636 1.06 183 0.36 819 0.74 453

Ireland 915 1.53 3,454 6.80 4,369 3.95 -2,539

Italy 2,821 4.70 4,408 8.68 7,229 6.53 -1,587

Latvia 91 0.15 7 0.01 98 0.09 84

Lithuania 42 0.07 65 0.13 107 0.10 -23

Luxembourg 65 0.11 23 0.05 88 0.08 42

Malta 92 0.15 225 0.44 317 0.29 -133

Netherlands 18,421 30.72 3,520 6.93 21,941 19.82 14,901

Poland 808 1.35 208 0.41 1,016 0.92 600

Portugal 413 0.69 73 0.14 486 0.44 340

Romania 176 0.29 44 0.09 220 0.20 132

Slovak Republic 402 0.67 59 0.12 461 0.42 343

Slovenia 55 0.09 38 0.07 93 0.08 17

Spain 1,572 2.62 868 1.71 2,440 2.20 704

Sweden 820 1.37 1,845 3.63 2,665 2.41 -1,025

United Kingdom 7,082 11.81 5,999 11.82 13,081 11.81 1,083

EU Total 59,968 100.00 50,761 100.00 110,729 100.00 9,207


Appendix

Country Exports ValueRM

(Million)

Export Share(%)

Imports ValueRM

(Million)

Import Share(%)

Total Trade ValueRM

(Million)

Total Trade Share(%)

Bal of Trade ValueRM

(Million)

Austria 264 0.38 1,477 2.73 1,741 1.42 -1,213

Belgium 1,905 2.77 2,006 3.70 3,911 3.18 -101

Bulgaria 163 0.24 37 0.07 200 0.16 126

Cyprus 136 0.20 20 0.04 156 0.13 116

Czech Republic 834 1.21 265 0.49 1,099 0.89 569

Denmark 742 1.08 525 0.97 1,267 1.03 217

Estonia 89 0.13 9 0.02 98 0.08 80

Finland 1,840 2.68 716 1.32 2,556 2.08 1,124

France 7,110 10.35 6,258 11.55 13,368 10.88 852

Germany, Federal Republic of

17,347 25.25 21,342 39.41 38,689 31.49 -3,995

Greece 342 0.50 55 0.10 397 0.32 287

Hungary 637 0.93 375 0.69 1,012 0.82 262

Ireland 626 0.91 3,533 6.52 4,159 3.39 -2,907

Italy 3,449 5.02 4,548 8.40 7,997 6.51 -1,099

Latvia 109 0.16 17 0.03 126 0.10 92

Lithuania 58 0.08 53 0.10 111 0.09 5

Luxembourg 186 0.27 41 0.08 227 0.18 145

Malta 93 0.14 40 0.07 133 0.11 53

Netherlands 20,219 29.43 3,398 6.27 23,617 19.22 16,821

Poland 1,026 1.49 301 0.56 1,327 1.08 725

Portugal 522 0.76 48 0.09 570 0.46 474

Romania 246 0.36 76 0.14 322 0.26 170

Slovak Republic 290 0.42 56 0.10 346 0.28 234

Slovenia 109 0.16 46 0.08 155 0.13 63

Spain 1,924 2.80 1,034 1.91 2,958 2.41 890

Sweden 1,231 1.79 2,046 3.78 3,277 2.67 -815

United Kingdom 7,198 10.48 5,836 10.78 13,034 10.61 1,362

EU Total 68,693 100 54,159 100.00 122,852 100 14,534

Source: Department of Statistics Malaysia

Table A9.Malaysia-EU Trade Figures by Member StateYear 2010


Appendix

Project partners Enhancing the EU-Malaysia Dialogue and Business Cooperation in services sector

The Services sector has been identified by the Malaysian government as the engine of growth for future. The foreign direct investment is very low and there is scope for dialogue and business cooperation between European Union and Malaysia. EUMCCI together with its partners applied through call for proposal for a project funding under EU Outreach & Visibility Programme. The focus sectors in this project are Logistics, Environmental Technologies, Financial Services and ICT

The project is co-funded by 80% by the European Commission, with a total budget of €715,741 over a period of 3 years.

ActivitiesMeetings, dialogues with key stakeholders, technical seminars, panel discussions.• Industry focused: Logistics, Financial Services, ICT, Environmental

Technologies• Function-focused: benefits of liberalisation, EU standards and best

practises, market access and focus areas• B2Bmeetingsfocusingonservicessector

Publications• Draftingofissuesintopositionpaperstobelaunchedatannualconference• Publicationofreports/surveys/brochuresonspecificsectorstheprojectis

focusing

Aims1. Good relations and ongoing dialogues with various stakeholders2. Enhanced access for European companies to Malaysia through more

open sectors3. Enhanced access for Malaysian companies to Europe by adopting

European standards4. Overall EU visibility and awareness of main policies and trade issues

raised5. Trade and investment relations between Malaysia and EU enhanced and

increased

EU-Malaysia Chamber ofCommerce and Industry

(263470-U)


Appendix

Join as our Member!

Acting as a facilitator between the European and Malaysian business communities as well as relevant government ministries, official representations and other Chambers in Asia, EUMCCI’s main objectives are:

• TocontributetotradeandinvestmentflowsbetweentheEuropeanUnionandMalaysiaandfosterbusinesscooperation between these countries and Malaysia

• Toraiseissueswiththeauthoritiesandcontributetopolicyconsultations• Tocollectanddisseminatekeymarketstatisticsandotherinformationontradeandindustrytoitsmembers• Topromoteuniformityandclarityofrulesandpracticesconcerningcommerce,industryandtradeandact

on particular issues that affect the European and Malaysian business and industrial relations• ToincreaseandsustainmemberinterestsintradeandindustryandassistcompaniesinEuropeandMalaysia

to establish long-term commercial links and partnerships• Toprovidea forumfor thediscussionandexchangeof ideasoncommerce, industryand tradebetween

Malaysian and EU member countries• ToexchangeopinionsandviewswithotherChambersofCommerceandsimilarassociationsinMalaysia,the

Asian region, and the Member States of the EU

The above objectives are realized through the many activities of the Chamber be it through participation in the 13 EUMCCI Industry Sector Committees and Working Groups or submission of your company’s issues to Memorandums of Ministerial Dialogues. Our members have access to a wide network of more than 1200 corporations in Malaysia, and be part of the ever growing European Business Organisation (EBO) networks worldwide. The monthly VIP Luncheons provide an excellent platform for high level exchange of views and opinions with the relevant agencies.

Please visit our website www.eumcci.com for all the latest Chamber news, events and membership form.

The benefits:• MembershiptoIndustryCommittees• FreesubscriptiontoBi-Weeklye-Bulletin• FreebannerintheBi-Weeklye-Bulletin• FreecopiesofEUMCCIReview• NewMemberlistinginEUMCCIReview• ListinginMemberDirectory• FreecopyofMemberDirectory• FreecopyofEUMCCITradeIssues&RecommendationsBook• FreecopyofEUMCCICSRBook• ActiveLinktoOwnWebsiteinWebsiteListing• ExclusiveinvitationsandMember’sPrivilegedPricingforEUMCCIcorporateevents• EligibilityforAwardsattheAnnualGalaDinner• InclusioninEBOnetworksworldwide

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