1.0 Introduction

1.1 Background of Royal Malaysian Customs Department

Royal Malaysian Customs Department is the government agency under Ministries of

Finance which is responsible for administrating the nation’s indirect tax policy. In other

words, Royal Malaysian Customs administers seven main and thirty-nine subsidiary

laws. Their core business is to collect indirect tax such as import and export duty, excise

duty, sales tax and service tax . Customs Department also have responsibility to

facilitate industries development and safeguard nation’s security by preventing

smuggling activities. It can be done through the implementation of Free Industrial Zone,

exemption from sales tax to industries and many others. Below are the vision,mission

and service ethics of Royal Malaysian Customs Department.

Vision - To be world class customs administration in 2015.

Mission - Collecting customs duties and taxes, providing facilitation to trade and

industrial sectors and ensuring compliance to legislations in protecting national

economic, social and security interests.

Service ethics – Trustworthy Services, Sincere and Dedicated (Amanah

Berkhidmat , Ikhlas, Dedikasi)

(Latarbelakang JKDM, retrieved from http:www.customs.gov.my)

As the main revenue collector, the Customs Department not only must continue to

contribute but it also has to increase revenue collection annually. These are done with a

delicate balancing act so as not to jeopardize the performance of the industrial sector. In

fact, the department has to ensure that whilst it’s control on the related industries is

minimal but effective, it is also there to lend a helping hand and push and prod the

industries to develop and prosper. At the same time, preventive activities especially in

stopping the entry of negative elements that can threaten the country’s security or those

that brought moral decay, must be executed continuously. However the main roles of

Customs Department still in revenue collection.

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1.2 Quality Practices In An Organization

Quality Practices in an organization should be look from wide aspect. It comes from

Total Quality Management(TQM). Quality practices in public sector, manufacturing, non-

profit organizations or private sector are different due to the difference in a way of doing

business, regulation, products,organization objectives and stakeholder.However their

goals should be same; to produce goods or services which is comply to relevant

regulation or procedure and the product could meet or exceed customer

expectation.Quality practices in public services get more attention under administration

of Chief Secretary of State, Tan Sri Sidek Hassan. Government has introduce many

policies under his leadership to enhance quality practices and service delivery in public

sector.

2.0 Finding

2.1 Interview Questions and Answers.

1. What is Royal Customs main roles?

Royal Customs Department main roles is revenue collection, facilitate industries

development and safeguard nation’s security by preventing smuggling activities

at Malaysian border.In term of revenue collection Customs Department

responsible to collect indirect taxes such as import and export duty, sales tax,

excise duty and service tax . Facilitation to industries been given through

exemption of tax, transit facilities and etc. Meanwhile protect nation security been

done through prevent illegal consignment such as drug, weapon and malicious

documents from entering Malaysia.

2. Which regard to quality achievement, are there any reward been given to the

department?

Royal Customs Selangor have been awarded ISO 9001:2001 and upgraded to

the latest version ISO 9001:2008 in Clearance of Import and Export. We also

have won Quality Productivity Improvement Team ( KMK) in both segment;

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technical and management, during KMK Convention competition for public

sector in 2009 for Selangor state.

3. Can you briefly explain on the ISO 9001:2008 which have been awarded to

Selangor Royal Customs?

This award is recognization to Customs standard practice quality which provide

fast clearance of cargo/shipment at the same time protect nation’s security from

any illegal importation.This also means that services provided by Royal

Malaysian Customs at Selangor in Clearance of Import and Export had achieved

the quality standard and comply SIRIM requirement on all aspect that have been

laid out.

4. Customer is the main focus in quality setting especially external customer. Can

you tell me, Royal Customs Department strategies to achieve customer

satisfaction?

Answer: Customer satisfaction always become our priorities especially external

customer. They are contributor to Royal Customs Selangor revenue collection.

They can comply to Customs requirement but in return they asked for fast

services.Any delay in Customs process could add cost to them. Golden Client is

one of our effort to recognize compliance customer. Through this system

importer and forwarding agent will get a lot of benefit in term of Customs

clearance. They can make an early declaration of import and export eventhough

the vessel has not arrive yet at the port. Their cargo also will get through without

underwent customs examination process like usual. In counter services and

complaint management, we will investigate any complaint if they have evidence

that our officer misuse their power , lack of commitment or make wrong decision.

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5. What Royal Customs Department have done to improve quality performance of

their staffs?

At Selangor we have more than 1200 staffs from different rank and all of them

play different roles. Human Resource Management have great responsibility to

plan roaster of staffs according to their background qualification and knowledge

they have.This could improve productivity.All of Customs personnel at Selangor

also will be given training at least seven days a year. This is in line with training

policy in public sector. Head of Units or branch also will do regular spot check to

ensure that customs officer doing their job in quality manner. Every units or

branch also have to create a team quality. These team will responsible to identify

which work activity at their unit whereas they could make an improvement in term

of work procedure, innovation or other else.

6. The roles of ICT are very significant nowadays. How Royal Customs Department

utilize this?

We cannot deny the significance of ICT nowadays. Since our stakeholder were

importer, trading,industries player and also free zone authority,the use of ICT to

integrate all the customs activities are essential. Customs Information System, e-

licence and e-procurement among the online transaction that Customs have

used. These system are not only speed up customs process, it’s also enhance

customer satisfaction by reduce their cost.Royal Customs website also have

been upgraded and updated with latest procedure and news about customs.

Public can surf to this website to get latest information about import/export,

taxable item, customs law and many more information that are very useful to

public and relevant parties.

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7. Integrity is a big issue in any enforcement body including Customs Department

which could affect performance and quality services of Royal Customs

Department. What do you think Royal Customs Department should do to

overcome this issue?

We all know that integrity is a big issue in public sector. Institute Integrity of

Malaysia (IIM) in their letter have mentioned on that issue. Government agency

such as police,customs, immigration and JPJ among the government agency

who are exposed to this problem. They deal directly with the public and to avoid

stiff penalty people could offer bribe to enforcement officer. At Royal Customs

Selangor, we have close relationship with Anti Corruption Agency or known

know as SPRM.Certain procedure which could contribute to corruption have

been improved. We also make job rotation every two year. Every customs officer

cannot work more than two years in one place. We also give emphasize to

inculcate Islamic value towards our personnel.Those who bring money more than

certain amount to office, must declare their money. All this could reduce or

prevent corruption to take place.

8. In your opinion, which aspect of quality Royal Customs should emphasize most?

As a second main contributor to federal government revenue, we should focus

more to improve on our strength in revenue collection.Some of the tactics use by

importer to avoid pay the right amount of duty is by wrongly declare or fraud.

Therefore we must intensify our ‘Risk Assesment’ to detect this problem. The use

of scanner machine at port also have contribute to increase of revenue collection

which show the degree of compliance toward customs law are not fully abide by

our stakeholder. We should address this problem by giving them more

information and awareness about their roles and the importance to comply the

customs procedure.We also should focus more in giving proper training to all

personnel, especially on their daily work activities and encourage innovation

which could contribute to positive outcome to department.

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9. What are the barriers to achieve TQM in Royal Customs Department?

In our department, when we talk about Total Quality Management ,our focus will

be on customer satisfaction, continuous improvement and the involvement of all

staffs. Our stakeholder and customer comes from various background.Some of

them are voluntarily ready to comply customs laws and procedure but some of

them are not. Simply said nobody like to pay correct amount of tax. If possible we

would like to avoid pay tax. That is our problem or barrier. We always enhance

our procedure by simplify it without compromising quality but we still cannot

satisfy them. Secondly, some of our staffs especially at supporting level are

prejudice with whatever policy create by high level of management. They like to

be a passenger. Do not give hundred percent commitment. This could affect

quality performance to department.

10.How quality is measured in the most of the activities especially on clearance of

importation of goods?

Normally customer satisfaction is the best method to measured quality

achievement on what are we doing. As enforcement department our delivery

services must follow procedure and according to law. This is another way to

measure quality. In clearance of import, we measure the quality based on

correct valuation of goods made by assessment officer and how long it takes

times from registration to container release. It should not take more than three

days for overall process. In the early year, everybody will prepared their annually

work target (SKT). This SKT will be evaluate in middle of the year and at the end

year to measure their performance whether it’s reach or exceed what have been

targeted. For high level management, they have Key Performance Indicator (KPI)

whereas they should achieved.

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11.One of the important aspect to uphold quality culture in an organization is

through implementation of recognition and reward system. What Royal Customs

have done on this aspect?

We realize that our staffs is the most important assets in our department. We

always recognize and appreciate good performance that have been show by our

personnel. Beside annual reward service, those who shown extraordinary

performance will get more an opportunity for promotion and training

development. We also organize quality competition between unit and branch.

This could inculcate and uphold quality environment in Selangor Royal Customs

Department.

(Interviewed , Tuan Wan Abdul Jamal bin Wan Salam, Head of HRM, JKDM

Selangor on 24 February 2010)

2.2 Analysis of Finding

From the interview session, I found that quality practices in Royal Customs Department

are quite advance especially on their main roles-revenue collection. The implementation

of online transaction for declaration of import and export and payment of duty through

electronic fund transfer (EFT) had speed up the importation and exportation process.

The use of online transaction likes Customs Information System (SMK) contribute to

customer and stakeholder satisfaction. They also emphasized on human resources

training and development with the establishment of Customs Academy at Malacca. This

academy focus to enhance skill of their staffs in various field including revenue

collection activities and enforcement activities. The use of latest technology at Port such

as scanner machine had increased the revenue collection. This machine able to detect

whether forwarding agent had declared correctly and paid the right amount of duty

involved.

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Royal Malaysian Customs Department at Selangor have been awarded ISO 9001: 2001

on Clearance of Import and Export and then upgraded by latest version ISO 9001:2008.

They also have won Quality Productivity Improvement Team (KMK) at Selangor

Convention for public sector. This achievement shown that the management are very

serious about quality practices in Custom’s organization. Customer is the main focus in

quality setting and Customs Department realize the importance to satisfy his customer.

They are contributor to Customs Department revenue collection as well as Malaysian

government revenue.

Human resources is the main asset for all organization including Customs.At Selangor,

there are 1200 staffs from different rank and all of them have their own roles which are

very much important for organization competitiveness.Every unit and branch have their

own quality team. This team are responsible to identify which work activity they could

enhance or make improvement. Customer needs change very fastly nowadays. To

ensure that Customs do not left behind, they have taken proactive action in quality

aspect and quality delivery services in the department.

3.0 SWOT Analysis

SWOT analysis is the analysis of Strength, Weaknesses, Opportunities and Threat of

organization and for this research purposes, we will do SWOT analysis on Royal

Malaysian Customs Department for state of Selangor.

Firstly is the Strength. What is Customs Department strength? As the enforcement body

and revenue collector, Customs have been provide and protected by various law

including Customs Act 1967, Sales Tax Act, Service Tax Act and etc. Therefore it is

important for custom’s personnel to know better their work activities and whether what

they done comply to the requirement of particular law. Customs Department through

their academy center at Melaka responsible to give training about customs procedure,

import and export, risk assessment and many more field in Custom’s. Through this

academy, customs staff can get well trained from experience lecturer or tutor. When

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they came back to station, they can apply the knowledge gained in workplace and

make an improvement whereas necessary.

The use of technology such as online transaction, scanner machine and many more

technical gadget to detect smuggling activities and false declaration were not only

essential, it is also very effective and efficient. For example, the use of scanner machine

at port and airport contribute to increased of case caught by customs such as illegal

importation of drugs, beer, cigarette and high risk item like tiles, cloth and handphone.

Some of the items that have been mentioned is not only subjected to high import duty

but it’s also could jeopardize country security.

The recruitment of senior officer of customs lately gave more emphasize on graduate

who have accountancy and law background. This move could benefit Customs

Department in term of related knowledge with their work requirement. Those who work

in narcotic unit also are quite advance to detect suspicious consignment with the

assistance of dogs unit and special detector machine.

The weaknesses factor on the other side can affect the organization performance. In

Customs, some of the older staff do not show commitment to enhance their skills and

quality delivery. They feel complacent and don’t want to learn computer or new

technology.To make it worse, some of them were senior officer of customs who

supposedly show the good example to their subordinates.

Training and development programme are very important to cope up with the changes

in technology and with diversity within the organization.Eventhough every training

session have it’s objective, however the evaluation on the training sometimes are not

accurately evaluated. Training participant give feedback not based on training content

or what outcome they got from the training.They only focus on facilitation provided such

as good meals, conducive environment and lecturer personality rather than

comprehensive valuation which is essential to determine whether the training had

achieved objective targeted and apply what they have learned in workplace. As a result

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the training that they attended could not change their performance and waste of

organization effort and money invest for training.

There are a lot of opportunities for Selangor Royal Customs Department to make an

improvement of their services and their main core business. One of the factor is

recruitment of new staff especially for senior officer ranks. They emphasize on those

who have background in accountancy and law qualification . Royal Customs also now

prepared very intensively to implement new regime of taxation called Goods and

Service Tax or GST. GST will replace Sales Tax and Service Tax.The implementation

of GST will contribute more revenue to Customs Department and government. It also

could solved the problem of smuggling activities and hidden economy which contribute

to loss of revenue to government.GST expected will be implemented in 2011. However

in the latest news, government have decide to postponed the implementation of GST

until public understand and get correct information about this tax regime.

Beside revenue collection, another customs main roles is to facilitate the industrial

development. This could be done through trade agreement with another countries such

as Free Trade Asean and World Trade Organization agreement. These agreement will

simplify the movement of goods to Malaysia and Malaysia could expected more Foreign

Direct Investment (FDI) to come in.

Last factor in SWOT analysis is a Threat. Importer and trading companies nowadays

are more advance in information and communication technology. Fraud cases and

smuggling modus operandis have change from physical movement to fraud on

document. This is huge challenge for Customs Department. They should enhance their

skill and ability in auditing area and computer forensic to detect the illegal use of double

invoicing, port documents fraud and country of origin whereas the goods have been

imported from. The issues of integrity among custom’s personnel also frequently raise

attention from public and governments.This problem must be handle carefully and

proactively to ensure that it will not jeopardize Royal Malaysian Custom Department

image and integrity.

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4.0 Suggestion and Recommendation

There are three principle of Total Quality; customer and stakeholder focus,participation

and teamwork and a process focus supported by continuous improvement and

learning(Evans/Lindsay,2008,The Management and Control of Quality,South Western

Cengage Learning, page 19).All level of management and employees must fully

understand these principle, their roles and organization objectives in order to enhance

quality practices in an organization.

Working environment nowadays also have change drastically. Public sector roles also

subject to change.The problem is, the culture of resistance to change in Customs

Department were not being handle by human resource management carefully.

Sometime no action have been taken to those who are resist change without any

concrete reason. Resistance of change can be overcome through face to face

communication and empowerment. The empowerment culture in Royal Malaysian

Customs Department at Selangor could be increased if top management ready to

change their perception toward ability of their subordinate in decision making.

Empowerment could be done through involvement and employee participation.Before

empowerment took place, top and middle management should communicate with their

subordinate thoroughly.Empowerment could lead to positive environment in the

workplace and satisfy customer with fast delivery services.Organizations who are able

to create the environment for employee empowerment, not only motivated employees,

they also could increased productivities in organizations.

Another aspect that Customs Department should focus is on quality measurement.

They must measure customer satisfaction toward custom’s services. This could

discover customer perception whether it’s meet or exceed customer

expectation.Customer feedback form should be provide at all service counter .Let

customer evaluate our service. These feedback should be compile,study and analyze

regularly. Any idea to enhance counter service should be taken seriously by top

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management. As a public sector agency, they also should follow the ‘Wrong Door

Policy’ which have been introduced by Chief Secretary of State (KSN) Tan Sri Mohd.

Sidek Hassan.

Training and development programs are also important to cope up with the changes in

technology and with diversity within the organization.Today because of number of

changes in technological fields, these programs are increasingly emphasizing on

converting the organization to learning organizations and human performance

management.The important stages in training is to identify the need of training and

development.To be world class customs administration in 2015, they should know their

main roles and how to facilitate industrial sector. Knowledge worker is the very

important assets for any organizations and this should become a target from training

and development programme.

The departments should establish an effective complaints management system for the

good of organization,customers and employees. All complaints must be investigated

fairly,without side to any party.Although the importance of customers need to be

preserved there are some complaints or ‘letter flying’ with intent to throw a party.For

complaints which have justification,appropriate action should be taken and the

complainant being informed about corrective actions that have been or being taken by

the department.

Study of customer needs and their expectation toward quality of delivery services in

Customs Department should be implemented. These study or survey should focus on

activities such as sales and service tax, import and export and also in human resource

management. The strength of enforcement unit should also be enhanced to detect and

combat the smuggling activities which in an increasingly worrying. This can be done

through smartpartnership and cooperation with relevant authority inside and outside the

country. They also should develop a database which consist informations and trends

related to smuggling.

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Integrity of customs officer should be monitored continuously. Therefore, more religious

activities are needed to increased the awareness of the terrible acts of corruption and

abuse of power. Cooperation with the Anti-Corruption Commission (SPRM) can be done

by placing their officers at a strategic and critical places such as at port and free zone

area.

Last but not least, top management should emphasize more on quality process and

quality programme.They are not only involved in policy making regarding quality, they

also must involve directly and make it as continuous effort to enhance quality practices

in an organization.These could be done with recognition to those who have contribute in

quality development, allocate sufficient resources including time,idea and finance and

inculcate quality culture in all department activities and programme. To achieve total

quality, its need a long-term effort , participation, teamwork and commitment from all

level of staffs.

5.0 Conclusion

Quality practices in the Royal Malaysian Customs Department at the level of good.

However , in line with economic growth and public awareness, the demand to quality

services, new approach,strategic management and customer satisfaction also

increased. As the main contributor to government revenue,Customs Department need

to develop human capital and enhance the use of modern information and

communication technology in implementing the tasks. Level of public service delivery in

Malaysia often seem low,especially in the aspect of quality practices and total quality

management. It is appropriate concern by all parties to make the quality as a cultural

practice in the Royal Malaysian Customs Department.

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6.0 References :

Evans, J.R. and Lindsay W. M. (2008), The Management and Control of Quality: Eighth

Edition. Canada: South-Western.

Tuan Wan Jamal bin Wan Salam (Formal Interview with Head of Human Resource

Management,JKDM Selangor February 24, 2010).

JKDM (2010), Latarbelakang, Retrieved July 4, 2010, from

http:www.customs.gov.my.

JKDM (2009), KPI Pengukur Prestasi, Buletin JKDM Selangor.

Pelaksanaan Sistem Star Rating Kastam Diraja Malaysia,2009,Buletin Cawangan

Komunikasi Awam,Ibu Pejabat JKDM, Putrajaya.

Sepakat,Mei-Ogos 2009,Buletin Kastam,Percetakan Nasional (M) Berhad.

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