Perak State Recommendation Report on Good Regulatory Practice (Grp)

PERAK STATE RECOMMENDATION REPORT ON GOOD REGULATORY PRACTICE (GRP)

Table of Contents

Contents Page Table of Contents ii

CHAPTER 1 INTRODUCTION 1 1.1 Background, mandate and methodology for 1 the study 1.2 Objective and Scope 2 1.3 What is GRP – NPDIR 2

CHAPTER 2 ABOUT THE STATE GOVERNMENT 6 2.1 State characteristics 6 2.1.1 Brief History of Perak State 8 2.1.2 No. of State Governments and Local 10 Authorities 2.1.3 Population by Local Authorities 13 2.1.4 Land area of Local Authorities 14 2.1.5 Population density 14 2.1.6 Median average resident income 14 2.2 Income of local authority from rates, 15 licenses etc. 2.3 Dominant economic activities and 16 industries 2.4 Regulatory Responsibilities (state list and 17 concurrent list)

CHAPTER 3 ANALYSIS OF STATE GOVERNMENT RULE 18 MAKING PROCESS 3.1 Existing regulation and governance 18 rulemaking (include institutions) Rule making process of Perak Local Authorities

3.1.1 Mechanism of Rule Making Process (Current 23 Procedures) 3.1.2 Evaluation of the Existing Mechanism of Rule 29 Making Process (gap analysis but benchmarking against what) 3.2 Rulemaking Regulation and Governance 32 of Perak Land and Mines (PTG) 3.3 Gap analysis matrix – to compare between 36 existing state rule-making process with NPDIR

CHAPTER 4 RECOMMENDATIONS & CONCLUSIONS 38 4.1 Recommendations to Improve the Rule 38 Making Process (recommendations) 4.1.1 Recommendation PBN & PBT 38 4.2 Conclusion 42

iii

CHAPTER 1

INTRODUCTION

1.1 Background, mandate and methodology for the study

The Government’s regulatory reform initiative took a significant step forward in 2013 with the introduction of the policy and guidelines for implementing good regulatory practice. The circular on the National Policy on the Development and Implementation of Regulations (NPDIR) was issued by the Chief Secretary to the Government of Malaysia on 15 July 2013 which requires all federal ministries and agencies to undertake good regulatory practice (GRP) and regulatory impact analysis (RIA) in developing new and amended regulations. This policy seeks to ensure that regulations are developed according to international best practice in regulatory management.

In the Eleventh Malaysia Plan (2016-2020), Malaysia Productivity Corporation (MPC) has been mandated to expand the adoption of the National policy on Development and Implementation of Regulations (NDPIR) to states and local governments. This initiative is to accelerate a comprehensive and inclusive regulatory reform in Malaysia to ensure new and existing regulations, as well as their administration and enforcement, are aligned with GRP.

For the purpose of this report, the methodology consists of three main phases:

Phase 1: • Desk research – collecting data and information. • Data collected from several related website such as Department of Statistic, State Economic Planning Unit,

State Agencies, local Authorities and few other related websites. • Data and information also collected via phone call and email. Phase 2: • Analysis of data, review and confirmation of data and information. Phase 3: • Recommendations for improvement and report writing

1.2 Objective and Scope

Generally, the objective and scope of this report is to develop a recommendation report to implement GRP for the state of Perak and Local Authorities. The specific objective and scope are: a. To analyze practices existing regulation and governance rulemaking (include institutions) b. To find the gap analysis between existing state rule-making process with NPDIR c. To provide recommendation on how to improve the rule making process to ensure that it is align with NPDIR.

1.3 What is GRP – NPDIR

The National Policy on the Development and Implementation of Regulations (NPDIR) has been developed to support the modernisation of the regulatory regime. There is increasing recognition that over-regulation, poorly designed regulations or in some cases under-regulation leads to regulatory failures which undermines the intentions of good policies. Global competition, social, economic and technological changes requires the government to consider the inter-related impacts of regulatory regimes, to ensure that regulatory structures and processes continue to be relevant, robust, transparent, accountable and forward-looking.

The goal of good regulatory policy is to achieve coherence, effectiveness, efficiency and accountability in the rule-making and implementation process. This modernization is also an essential part of realizing several of the policy objectives of the NEM that include: • Removal of barriers and reduce cost of doing business; • Improvement in decision making for policy implementation; and • Improvement in economic efficiency through enabling fair competition.

The Special Task Force to Facilitate Business (PEMUDAH) was established by the government to ensure that Malaysia remains an attractive and competitive investment location. PEMUDAH has been addressing service delivery issues that relate directly to investment and starting a business. It has recognized that changes in rules and legislation are also required. NPDIR policy complements PEMUDAH’s efforts and will ensure that any new regulation does not result in disincentives to business, investment and trade.

NPDIR guides the development of good regulations, which is essential in achieving the NEM policy objectives. It sets out core principles that regulatory authorities should adhere to in regulating and outlines a number of steps that will be taken to put the principles into practice. It will also seek to reduce, if not eliminate, cumbersome and inappropriate bureaucratic procedures that affect the cost of investing and the potential returns on investment.

The objective of the policy is to ensure that Malaysia’s regulatory regime effectively supports the country’s aspirations to be a high-income and progressive nation whose economy is competitive, subscribes to sustainable development and inclusive growth. The policy is implemented to promote a regulatory process that is effective, efficient and accountable as well as to achieve greater coherence among the policy objectives of government. This policy applies to all federal government ministries, departments, statutory bodies and regulatory commissions. It is also applicable for voluntary

3 adoption by state government and local authorities. Regulators proposing new regulations or regulatory changes must undertake the regulatory impact analysis (RIA) involving the following components:

• Problem Identification Regulators must establish clear objectives, evidence that a problem has arisen and government intervention is required. Regulators must ensure that risks are of sufficient significance to justify intervention.

• Objectives Objectives of the proposal or the problem must be identified, described, analysed and documented clearly and concisely.

• Instrument Options The objectives must be analysed to ensure the most effective and efficient option is chosen. It must be demonstrated that new regulations will help solve the problem.

• Assessment of Impact An assessment of the impact (costs, benefits and where relevant, levels of risk) of a range of feasible options for consumers, business, government and the community must be carried out to assess potential effects.

• Consultation Regulators proposing new regulations or changes must carry out timely and thorough consultations with affected parties.

• Conclusion and RIS should include a statement identifying the Recommendation preferred option based on the impact analysis.

• Implementation The implementation strategy and a review of the preferred option must be described comprehensively in RIS.

• Publication of RIS RIS is to be published on the regulator’s and MPC website as soon as practicable from the date of official announcement of the decision.

In order to standardize the way that polices, laws and regulations are developed and improve overall regulatory quality, regulatory impact statements and public consultations were introduced. Under National Policy on the Development and Implementation of Regulations (NPDIR), all Federal Government regulators must undertake Regulatory Impact Assessment (RIA) and present the Regulatory Impact Statement (RIS) in the creation of all new regulations or review of regulations that relate to, or impact business, investments and trade, upon assessment by MPC. The process is also applicable for voluntary adoption by state governments and local authorities. RIA will be applied in all ministries and agencies. The tool is to enable governments to make sound analysis, evidence-based decision making and ensure transparency in all new and amended regulations.

CHAPTER 2

ABOUT THE STATE GOVERNMENT

2.1 State characteristics

Perak is a peaceful and beautiful state, and full of opportunities. Bordered by a number of other states, Perak offers various privileges in aspects of economy, tourism, infrastructure and others. Perak or also known as Perak Darul Ridzuan is the second largest state in Peninsular Malaysia (after Pahang), with an area of 21,000 square km. It is one of the states that form the Federation of Malaya.

Hulu Perak District with size, position and features itself is a special territory that the volume of population growth will be the smallest population between regions.

Northern Region (Mature and Long Dissolved District as well Kerian region) as a growth region that driven by the ‘Greater Kamunting’ Growth Area is projected to be the focus of 23 percent of total population of Perak by 2040.

Kinta Valley Metropolitan Region (Wilayah Metropolitan Lembah Kinta- WMLK) consisting of from Kinta District; Kampar; Kuala Kangsar; Perak Middle; and Manjung as the focus areas residents of Perak State in line with its position as the Core Region or ‘Core Region’ of Perak. Kinta District will continue to function as a Core Center to WMLK by volume the population reaches over 1 million people.

Southern Region or known as Bernam Valley (Muallim District, Batang Padang, Bagan Datuk and Hilir Perak) merged is projected to represent 15.0 percent of the total population of the state.

Figure 1: Districts of Perak

2.1.1 Brief History of Perak State

There have been many opinions as to how Perak got its name. Some people say that the name is taken in conjunction with the Bendahara Tun Perak from Melaka while some others say that it is taken from the “flash caused by a fish in the water” which shone like silver. Hence, the origin of the name illustrates the rich treasures available in its soil.

Perak has been around since the pre-historic era. Kota Tampan in Lenggong is the only source of evidence of its existence since the Paleolithic Age in Tanah Melayu. Starting from 400,000 to 8,000 years B.C, Perak has gone through a series of evolutions. The finding of tools made from stone and a human fossil known as the “Perak Man” are evidences of the stone age existence in Perak.

The historical realm of Perak advanced a step forward with the emergence of such local governments as Manjung in the Dinding district and Beruas (which comes into existence after the extinction of Manjung). So are a few other governments in Central and Ulu Perak such as Tun Saban and Raja Roman. Simultaneously, Islam has started to set foot firmly in Perak.

The real point of history for Perak starts with the installation of Sultan Muzaffar Syah I from the descendent of Sultan Mahmud Syah in Melaka in 1528. Although the Perak sultanate has emerged as a strong entity, other local governments at that time remained as strong. The administration method chosen was a descendent from the feudal system of the democratic Melaka.

Perak is generally more well-known following the discovery of tin in Larut in 1848 by Cik Long Jaafar. With the discovery, Perak rapidly developed, and more mines are opened. Besides tin, rubber also plays an important role in Perak and has been planted during the reign of 34 Sultans. Due to these developments, a multi-racial community has been formed in Perak, comprising especially the Chinese who had flocked to the mines to work.

The English, who had always had an interest in Perak, finally had the opportunity to intervene via the Pangkor Agreement 1874 after a riot broke in Larut. With this intervention, the English Resident administration system has been installed and J.W.W Birch became its first Resident.

Initially, the resident system is expected to produce a positive implication, however, due to of its deviating implementations coupled by the locals’ attitude that refused to be colonized, a confrontation has taken place led by Datuk Maharaja Lela. As a result, J.W.W Birch was killed in 1875.

The Resident System, however, continued to be practiced until the arrival of the Japanese in Malaya in the year 1941. Perak has suffered tremendously during the Japanese occupation until 1945.

The English colonialization does not end even after the Japanese surrendered and prolonged until 1948. Violence, everywhere in Perak, was mainly caused by the Communist Party of Malaya.

After the Japanese occupation in Tanah Melayu, the position of the Malay States became very unstable. This is made worse by the emergence of nationalism among the people to demand independence. The English tried their best to stay in power by introducing a few administration systems such as the Malayan Union in 1946.

Both commoners and state officials toiled hard to fight off the English system until the English finally declared independence on Tanah Melayu in 1957. The independence of Tanah Melayu means the freedom of the confederated states, and Perak is one of the states. Rapid development in all sectors continued to grow until today after 34 generations of Sultans have ruled the state. The mausoleum of the bravery and national heroes of Perak has been restored and preserved.

2.1.2 No. of State Governments and Local Authorities

There are twenty-five (25) state governments/agencies and fifteen (15) local authorities in Perak.

List of State Departments / Agencies

1. Pejabat DYMM Paduka Seri Sultan Perak Darul Ridzuan 2. Perak State Secretary Office (Pejabat Setiausaha Kerajaan Negeri Perak) 3. Perak State Legal Advisor Office (Pejabat Penasihat Undang- Undang Negeri Perak) 4. Perak State Finance Office (Pejabat Kewangan Negeri Perak) 5. Director of Land and Mines Office (Pejabat Pengarah Tanah dan Galian Negeri Perak) (PTG) 6. Perak Islamic Religious and Malay Customs Council (Majlis Agama Islam dan ’Adat Melayu Perak) (MAIPk) 7. Perak Islamic Religious Department (Jabatan Agama Islam Perak) (JAIPk) 8. Perak Syariah Judiciary Department (Jabatan Kehakiman Syariah Negeri Perak) (JKSPk) 9. Perak Syariah Prosecution Department (Jabatan Pendakwaan Syariah Negeri Perak) (JPSPk) 10. Perak Public Service Commission (Suruhanjaya Perkhidmatan Awam Negeri Perak) (SPA) 11. Perak Forestry Department (Jabatan Perhutanan Negeri Perak) 12. Perak Veterinary Services Department (Jabatan Perkhidmatan Veterinar Negeri Perak) 13. Perak State Fisheries Department (Jabatan Perikanan Negeri Perak) 14. PLANMalaysia@Perak (Jabatan Perancangan Bandar dan Desa Negeri Perak) 15. Perak State Development Corporation (Perbadanan Kemajuan Negeri Perak) (PKNP)

16. Perak Water Board (Lembaga Air Perak) (LAP) 17. Perak State Agricultural Development Corporation (Perbadanan Pembangunan Pertanian Negeri Perak) (SADC) 18. MB Incorporated (MB INC) 19. State Secretary Incorporated (Perbadanan Setiausaha Kerajaan Negeri Perak) (SSI) 20. Perak Islamic Economic Development Corporation (Perbadanan Kemajuan Ekonomi Islam Negeri Perak) (PKEINP) 21. Perak State Parks Corporation (Perbadanan Taman Negeri Perak) 22. Perak Public Library Corporation (Perbadanan Perpustakaan Awam Negeri Perak) 23. Perak Foundation (Yayasan Perak) 24. Perak Housing And Real Property Board (Lembaga Perumahan dan Hartanah Perak) (LPHP) 25. Perak State Museum Board (Lembaga Muzium Negeri Perak)

Local Authorities

1. Ipoh City Council (Majlis Bandaraya Ipoh) 2. Manjung Municipal Council (Majlis Perbandaran Manjung) 3. Kuala Kangsar Municipal Council (Majlis Perbandaran Kuala Kangsar) 4. Taiping Municipal Council (Majlis Perbandaran Taiping) 5. Teluk Intan Municipal Council (Majlis Perbandaran Teluk Intan) 6. Kampar District Council (Majlis Daerah Kampar) 7. Gerik District Council (Majlis Daerah Gerik) 8. Kerian District Council (Majlis Daerah Kerian) 9. Batu Gajah District Council (Majlis Daerah Batu Gajah) 10. Lenggong District Council (Majlis Daerah Lenggong) 11. Pengkalan Hulu District Council (Majlis Daerah Pengkalan Hulu) 12. Perak Tengah District Council (Majlis Daerah Perak Tengah) 13. Selama District Council (Majlis Daerah Selama)

14. Tanjong Malim District Council (Majlis Daerah Tanjong Malim) 15. Tapah District Council (Majlis Daerah Tapah)

2.1.3 Population by local authorities

As of 2019, the state's population was estimated 2,508,800 (Department of Statistics, Malaysia, 2020). Based on the population, they were consisted of Bumiputera (1,433,200), Chinese (692,200), Indians (275,700), Others (10,000) and Non-Malaysian Citizens (97,700).

Table 1: Population of Perak by Districts/Local Authorities (Year 2016p)

Population Number Districts (‘000) 1 Batang Padang dan Muallim 126.2 2 Manjung 250.2 3 Kinta 817.3 4 Kerian 192.7 5 Kuala Kangsar 171.6 6 Larut, Matang and Selama 356.2 7 Hilir Perak dan Bagan Datuk 225.2 8 Hulu Perak 100.5 9 Perak Tengah 109.8 10 Kampar 106.1 Jumlah 2,455.8 Source: Basic Data Negeri Perak Darul Ridzuan 2016 P – Preliminary

2.1.4 Land area of local authorities

Table 2: Land Area by Local Authorities of Perak (Year 2016).

Number Districts Area (km2) 1 Batang Padang 1,794.177 2 Manjung 1,080.000 3 Kinta 1,305.000 4 Kerian 905.200 5 Kuala Kangsar 2,561.000 6 Larut, Matang and Selama 2,095.310 7 Hilir Perak 792.073 8 Hulu Perak 6,611.000 9 Perak Tengah 1,295.000 10 Kampar 669.800 11 Muallim 934.347 12 Bagan Datuk 949.699 Jumlah 20,992.606 Source: Basic Data Negeri Perak Darul Ridzuan 2016

2.1.5 Population density

Population Density (persons/sq.km):118.66 (2017)

2.1.6 Median and average resident income

In 2019, average income in Malaysia was RM7,910 while Malaysia’s median recorded at RM5,873. Based on Table 3, the highest Average Monthly Gross Household Income 2019 by district were Manjung (RM6,137) and Kinta (RM6,120). While the lowest were Hulu Perak (RM4,554) and Hilir Perak (RM4,783).

Table 3: Middle and Average Monthly Gross Household Income by Administrative District, Perak, 2019.

Number Districts Median (RM) Average (RM) 1 Batang Padang 4,067 5,637 2 Manjung 4,636 6,137 3 Kinta 4,556 6,120 4 Kerian 4,512 5,532 5 Kuala Kangsar 3,875 5,156 6 Larut, Matang and Selama 4,345 5,364 7 Hilir Perak 3,484 4,783 8 Hulu Perak 3,532 4,554 9 Perak Tengah 4,097 5,390 10 Kampar 3,821 4,845 11 Muallim 3,915 5,488 12 Bagan Datuk 4,503 5,705 Source: Department of statistics Malaysia Newsletter (retrieved on 31 October 2020)

2.2 Income of local authority from rates, licenses etc

The income of Perak largely contributed by tax revenue, followed by non-tax revenue and non-revenue receipt (Table 4).

Table 4: Statement of Consolidated Revenue Account as at 31st December 2014-2016

Item 2014 2015 2016 Revenue Tax Revenue 395,406,455.83 400,006,195.76 452,392,006.27 Non-Tax Revenue 298,071,257.53 309,404,987.11 357,264,392.31 Non-Revenue Receipt 234,349,152.74 247,521,333.19 201,844,430.17 Total Receipt 927,826,866.10 956,932,516.06 1,011,500,828.75 Source: State of Perak Financial Office

2.3 Dominant economic activities and industries

Table 5 showed the types of economic activities state of Perak contributed to the Gross Domestic Product (GDP) for the year 2017 till 2019. Services sector was dominantly contributed to the GDP of Perak. Services sector mainly consist of utility, transport and storage, information, wholesale and retail trade, and F&B.

Table 5: Gross Domestic Product (GDP) and types of economic activities state of Perak, by year.

Number Economic Activities 2017 2018 2019 (RM mil) (RM mil) (RM mil) 1 Agriculture 10,942 10,994 11,308 2 Mining and quarrying 438 446 468 3 Manufacturing 12,691 13,222 13,678 4 Construction 2113 2338 2488 5 Service 43,028 45,873 47,938 6 Import duty 124 106 31 Source: Department of statistics Malaysia

Under the Perak Industrial Development Masterplan, there were 12 areas identified: a. Iron and steel related industries. b. Natural iron ore c. Oil and gas-related engineering and maritime engineering. d. Mechanical molding e. Transportation equipment and parts f. Electrical and electronic industry g. Manufacturing related services and supporting industries. h. Renewable energy related industries. i. Medical and research equipment. j. Education. k. Halal certified industries.

l. Petrochemical industry and distribution centres.

2.4 Regulatory responsibilities (state list and concurrent list)

Federal list Concurrent list State list

• External affairs • State government • Social welfare • Defense of the • Islamic law • Town & country Federation • Malay custom planning, except in the • Internal security • Islam federal capital • Civil law, criminal law & • Local government • Drainage and irrigation administration of justice • Land • Scholarships • Official secrets • Riverine fisheries • Public health, sanitation • Citizenship • Forestry & prevention of • Machinery of • Roads & bridges diseases government • Public nuisances • Culture and sports • Finance & taxation • Agriculture, housing • Preservation of heritage • Trade, commerce & • Malay reservations industry • State work & water • Shipping, navigation & fisheries • Communication & transport • Federal works and power • Labor & professions • Social security • Education, medicine & health • Welfare of the aborigines • Tourism

Source: Article 74 and Ninth Schedule of the Federal Constitution

There are four (4) regulation and governance rule making (include institutions) bodies involve in regulatory responsibilities in Perak:

a. Perak State Secretary Office b. Legal Advisor Office c. State Authorities d. Local Authorities

CHAPTER 3

ANALYSIS OF STATE GOVERNMENT RULE MAKING PROCESS

3.1 Existing regulation and governance rulemaking (include institutions)

This report is part of the National Policy on the Development and Implementation of Regulations (NPDIR) in relation to the National Policy on Good Regulatory Practice, which aims to modernize the existing regulatory system as well as the proper implementation of the GRP by the Perak state and local governments. To ensure adherence to the NPDIR, the ability of regulatory coordinators in local authorities and agencies will be enhanced. The NPDIR provides a policy framework for the adoption of GRP in the policy and regulatory processes. Successful regulations accomplished by a more rigorous review and stakeholder feedback that boost efficacy and transparency, while promoting greater engagement, inclusiveness and ownership of the problem- solving process.

The Constitutions of each of the states in Malaysia consist of: a. Federal Acts of Parliament b. State Acts (called Enactments and Ordinances) c. Subsidiary (delegated / subordinate) Legislation, including Royal Proclamations, Orders, Rules, Regulations and By-laws.

The distribution of law-making authority between the Federal and State Governments is contained in the Ninth Schedule of the Federal Constitution and is set out in a Federal List (List I), State List (List II) and a Concurrent List (List III). The main subject areas of the Federal List (for which only the Federal

18 government can make laws) are external affairs, defense, internal security, civil and criminal law, citizenship, finance, commerce and shipping industry, communications, education, health, labor, censorship, tourism and all matters relating to the Federal Territories. The State List (matters on which only the States can legislate) includes Islamic law, land, agriculture and forestry, and local government. The Concurrent List, under authority of both the Federal and State Governments, includes social welfare, public health, protection of wildlife, heritage, housing, culture, sports, and town and country planning.

The laws made by Parliament are called 'Statutes' or 'Acts'. A law begins with a Bill (a proposed or draft Act). A Bill could come from a Ministry or from a member of Parliament (MP) or Senator (which is called 'sponsoring' a Bill). That Bill then needs to be introduced in Parliament (which is called 'tabling a Bill'). A Bill can first be tabled either before the Dewan Rakyat or Dewan Negara. After the Bill is tabled in one House, it must be tabled in the other House. Bills that deal mainly with money (for example taxes and using money from the Consolidated Fund) must be tabled by a Cabinet Minister and must first be tabled in the Dewan Rakyat. These Bills are called 'Money Bills'.

Under the Standing Orders, a Bill goes through three readings in each House. For example, if a Bill is first tabled in the Dewan Rakyat, the process are:

•The Minister or •The Dewan •The Minister or MP MP proposing Rakyat proposing the Bill the Bill discusses and submits the Bill to introduces it. In debates the Bill. a vote. If more practice, there is This is when than half of the

no actual other MPs can MPs who are

Reading 2 Reading 3 Reading Reading 1 Reading present and voting reading of the seek (or two–thirds of Bill, and it is explanations on the total number of assumed that the Bill, propose MPs in certain everyone has amendments to cases) approve the read the Bill. the Bill or Bill, the Bill is oppose the Bill. 'passed'. The Bill is then sent to the Dewan Negara where three readings also take place.

If the Bill passes, it will be presented to the Yang di–Pertuan Agong for approval, which must be given within 30 days. The king’s approval is called the royal assent. If the King does not assent within 30 days, the Bill automatically becomes an Act.

Laws that passed will be published in the Official Government Gazette. Federal Laws cannot come into force until they are published in the Gazette (Article 66(5) of the Federal Constitution). Gazetted laws are given a PU number (PU = Acts and Ordinances; PU(A) = Subordinate legislation: Royal Proclamations, Orders, Rules, Regulations and By-laws; and PU(B) = all other subordinate legislation). The Federal Gazette also contains all Bills. The Gazette is available in English on the e-Federal Gazette Official Portal. Laws can be searched by date of publication, PU number, title, and Act.

Source: Southeast Asian Legal Research Guide. Retrieved from https://unimelb.libguides.com/c.php?g=402982&p=2744220

Malaysia practices the mixed legal system which includes the Common Law, Islamic law and Customary Law. The Malaysian Legal System is based on English common law. The sources of Malaysian law mean the legal rules that make the laws in Malaysia, which can be classified into written and unwritten law.

Laws in Malaysia Details Written Law Written law is the most important source of law. It refers to the laws contained in the Federal and State Constitutions and in a code or a statute. The written laws are much influenced by English laws as the Malaysian legal system retains many characteristics of the English legal system. The Written law includes the Federal Constitution, State Constitutions, Legislation and Subsidiary legislation. Malaysia is a Federation of thirteen States with a written constitution, the Federal Constitution, which is the supreme law of the country. The Constitution can only be changed by a

two-thirds majority of the total number of members of the legislature. The Federal Constitution comprises many Articles concerning the religion of the federation, citizenship, supreme law of the Federation and many other related subjects. Besides the Federal Constitution, there is a state constitution where each state has their own constitution regulating the government of that state. Legislation Legislation refers to the law enacted by a body constituted for this purpose. The Parliament and State Legislatures are not supreme and so they have to enact laws subject to the provisions set out in the Federal and State Constitution. Parliament is competent to enact laws on matters enumerated in List I of the Ninth Schedule while the State can enact laws on matters enumerated in List II. List III are within the concurrent competence of both authorities. Subsidiary Legislations are made by the people or bodies who are authorized by the legislatures. Subsidiary Legislation is mainly legislated by Ministers and local authorities. It made in contravention of either a parent Act or the Constitution is void except in a proclamation of emergency under Article 150 of the Federal Constitution. Unwritten Law / Common Unwritten law is simply that portion of Malaysian law Law which is not being enacted by Parliament or the State Assemblies and which is not found in the written Federal and State Constitutions. This category of law comes from cases decided by the Courts and the local customs, which is otherwise known as common law. The unwritten law mainly comprised of the English law, judicial decisions and custom law.

English Law English Law can be divided into two which are the English Commercial Law and English Land Law. In section 5(1) of the Civil Law Act 1956 provides that The English Commercial Law is applicable in Peninsular Malaysia except Penang and Malacca as it stood on 7 April 1956 in the absence of local legislation. On the other hand, Section 5(2) of the same act, applies in Penang, Malacca, Sabah and Sarawak as the law administered in these states will be the same as law administered in England, in the like case at corresponding period. As for the English Land Law, none of the English Land Law concerning the tenure, conveyance, assurance of or succession to any immovable property or any estate, right or interest therein applies in Malaysia. In Malaysia, National Land Code is the law that governs the land matters. Muslim Law Muslim law is also a major source of Malaysian law which is enacted under the Federal Constitution. It is only applicable to Muslims and is administered by a separate court system, the Syariah Courts. Muslim law applies to Muslims only and does not apply to non-muslim.

3.1.1 Mechanism of Rule Making Process (Current Procedures)

Below is the legal development process at the Perak state level. This legal development process is the same for new legislation, amendments to existing legislation or additions to existing legislation.

3.1.1.1 Establishment of Enactment Law

Start

Prepare proposal / draft of rules / regulation by the related agency / department

Presentation proposal / draft of rules / regulation by the related agency / department Not approve

Check on proposal / draft of rules/ regulation &

reviews by Legal Advisor

Approve

Presentation of the proposal / draf of rules /

regulation to MMKN

Check, reviews and finalize the proposal / draft by Legal Advisor

Draft approval at State Legal Advisor

Publish the RUU at least 14 days before DUN convene

Present RUU for DUN approval

Approval and sign RUU by PNMB

Approval and sign by KDYMM Sultan

Gazette the new enactment / UUK

End

3.1.1.2 Establishment of Perak PBN Law, Rules and Regulations

Start

Prepare proposal / draft of

rules / regulation by the related agency / department

Presentation proposal / draft of rules / regulation by the related agency / department

Not approve

Check on proposal / draft of rules/ regulation & reviews by Legal Advisor

Approve

Presentation of the proposal / draf of rules / regulation to MMKN

Check, reviews and finalize the proposal / draft by Legal Advisor

Submit the draft to PBN for SU MMK signature

State Legal Advisor receive a copy of the signed draft by SU MMK

Publication

End 26

3.1.1.3 Establishment of Perak PBN Law, Syariah Rules

Start

Prepare proposal / draft of rules / regulation by the related agency / department

Presentation proposal / draft of rules / regulation by the related agency / department

Not approve

Check on proposal / draft of rules/ regulation & reviews by Legal Advisor

Approve

Presentation of the proposal / draf of rules / regulation at the Technical Committee Level

Check, reviews and finalize the proposal / draft by Legal Advisor

Submit the draft to PBN for signature of Timbalan Yang Dipertua

State Legal Advisor receive a copy of the signed draft by

Timbalan Yang Dipertua

Publication

End 27

3.1.1.4 Establishment of Subsidiary Legislation at PBT (By-Laws, Orders and Rules)

Start

Prepare proposal at PBT

Presentation of proposal at BKT

Not approve

Check on proposal & reviews by JKT

Approve

Review and approval by MMKN

Publish by BKT

Office of Legal Advisor for publication

End

3.1.2 Evaluation of the Existing Mechanism of Rule Making Process (gap analysis but benchmarking against what)

3.1.2.1 State Good Regulatory Policy (GRP)

Good Regulatory Practices (GRP) were introduced in the Tenth Malaysia Plan (10MP). This practice has been practiced by all ministries and agencies at the federal level. To increase the effectiveness of implementation, this practice is also extended to the State Government and Local Government as proposed in the Eleventh Malaysia Plan (11MP). This practice is expanded to reduce the unnecessary regulatory burden in all relevant aspects so that the state economy becomes more competitive and able to create more employment opportunities. It is seen to be able to stimulate investment as well as facilitate business and trade processes.

In an effort to further strengthen Regulatory Good Practices (GRP) in all Perak state government agencies, the Malaysian Productivity Corporation (MPC) in collaboration with the Perak State Legal Advisory Office has carried out the Existing Regulation Transformation Project (PTPS) through repeal (Guillotine) / Deregulation).

3.1.2.2 Initiative Implementation

3.1.2.2.1 JKKMAR (Jawatankuasa Khas Kabinet Mengenai Anti-Rasuah)

The implementation of government consolidation movement, integrity and anti- corruption in government administration management system at the National level involves the establishment of a special cabinet committee, namely the Jawatankukasa Khas Kabinet Mengenai Anti- Rasuah) (JKKMAR).

Roles and responsibility of JKKMAR are:

1. Determine policies related to strengthening governance, integrity and anti-corruption in the Government administrative management system. 2. To plan, monitor and evaluate the implementation efficiency and policy effectiveness regulations and service delivery systems that have an impact on strengthening the governance, integrity and anti-corruption of the Government administrative management system; 3. To consider and approve the implementation of initiatives on governance, integrity and anti-corruption in Government administration; and 4. Consider the recommendations submitted by members of JKKMAR and JAR at the National Level to strengthen the governance, integrity and anti-corruption of the Government administrative management system

JKKMAR agrees with the recommendation of the Malaysian Productivity Corporation (MPC) that all ministries / agencies responsible for issuing permits and licenses publish the License Application Guidelines which will be displayed online for public information. This aims to create a more transparent mechanism in the process of permit and license management, increase integrity and prevent corruption.

3.1.2.2.2 MyMudah

The government is committed in minimizing the economic impact of the spread of COVID-19 pandemic. Unnecessary regulatory burdens are among the main barriers impeding businesses recovery and growth from the crisis repercussions. In the Economic Action Council (EAC) Meeting 16/2020, dated 20 July 2020, chaired by YAB Prime Minister, Tan Sri Muhyiddin Yassin, EAC and Malaysia Productivity Corporation (MPC) have been tasked to lead the programme of MalaysiaMudah (#MyMudah) which is to remove unnecessary regulatory burdens to support economic growth. The purpose of #MyMudah is

30 simple yet crucial; to identify, review and remove business regulations that no longer make sense.

Since the launch of #MyMudah on July 20, 2020 by the Malaysia Productivity Corporation (MPC), an agency under MITI, 300 issues had been highlighted by businesses through the Unified Public Consultation (UPC) portal. Of the total, 58 percent were about services, 22 percent about government policies, nine percent on construction, seven percent on agriculture, three percent on manufacturing and three percent on mining and quarrying.

Solving the regulatory burdens

The government’s #MyMudah programme is expected to help businesses by addressing unnecessary and burdensome regulations that are impeding their recovery and growth in the current challenging economic climate due to the Covid-19 health crisis.

The truth: unnecessary regulations get in the way of work that matters. Especially as businesses resume operations post MCO, these are among the main barriers that slow down recovery and growth. Thus, MPC conducts a public consultation for businesses and interested parties to work with the government to reduce regulatory burdens while protecting public interest through submitting their regulatory concerns. This includes looking at temporarily or permanently abolishing, modifying, waiving or exempting regulations that are unnecessarily burdensome to businesses, as well as reducing the number of procedures and processing time to facilitate ease of doing business.

Less paperwork, more work done

Today, businesses in Malaysia are estimated to spend RM40 billion for regulatory compliance cost. After its implementation, #MyMudah is expected to reduce it by 25%, generating around RM10 billion in savings for businesses, following the reduction in regulatory burden and compliance costs. Even better

31 news, this would mean more productive hours and a step forward in stimulating the Malaysian economy.

Powering the #MyMudah initiative, company and business owners who are burdened with unnecessary regulations can forward the issues they face through the Unified Public Consultation (UPC) Portal. They can share feedback https://upc.mpc.gov.my.

MPC has also implemented various activities to engage with businesses in Malaysia. A total of 41 Business Virtual Round Table discussions and online meetings have been conducted to identify the regulatory issues faced by Malaysian business community. Additionally, 47 companies have participated in the one-on-one Business Regulation Virtual Advisory Clinics.

3.2 Rulemaking Regulation and Governance of Perak Land and Mines (PTG)

Land and Mines Department (PTG – Pejabat Tanah & Galian) of Perak is one the State Authority (PBN). The objectives of the PTG Perak are: 1. Empowering knowledge and human resource skills towards work culture and high-performance governance. 2. Management strengthening and land administration for state development. 3. Strengthening security system to ensure integrity in land administration. 4. Enhancing strategic collaboration to increase efficiency and effectiveness of delivery system service.

The PTG offices are located at all district of Perak with the functions of: 1. The role played by this office, in keeping with its position as a department that manages and administers the land. 2. The following are the main functions of the Perak State Land and Mine Office:

a. Submit land applications for the consideration of the Perak State Land Committee in accordance with the provisions of the law. b. Determining land management throughout the State of Perak is implemented in accordance with the laws and policies set by the Government. c. Determining the land revenue is collected in an effective and systematic way. d. Determines the land to be used according to the rules and laws of the land to produce optimum benefits for the people and the government.

In details, the functions of PTG Perak including: 1. In compliance with legal requirements, inform state authorities on all aspects of land administration. 2. Assist state authorities with the determination of state land and mineral policies in accordance with government policy criteria. 3. Guide, organize and track the activities of land offices in the state in such a way that the tasks are done in compliance with the laws laid down. 4. In order to assess the yield of land and minerals, an appropriate and satisfactory method is used to obtain revenues from the state government. 5. Determine and preserve updated title documents and land relations records as well as property legal possession. 6. Introduce land affairs and human resource development changes and enhancements through the use of ICT facilities. 7. Provide the government and the people with the best and effective services in land-related matters.

Therefore, the Perak Land and Mines Department's duties are to administer and manage all land affairs of the State of Perak, based on the state government's provisions, laws and policies. Furthermore, PTG is entitled to provide opinions and recommendations on land management and new policies to the State Government and to maintain all land records and data for the entire state of Perak.

PTG also seeks to create an efficient and effective system for the registration of land titles, land administration matters and other types of registration of land, in accordance with the requirements of the laws and regulations. This aims to increasing the collection of state revenue.

Rule Making Process and Governance of Perak Land and Mines (PTG)

3.3 Gap analysis matrix – to compare between existing state rulemaking process with NPDIR

Federal adoption of NPDIR has focused primarily on raising awareness among regulators of the benefits of GRP and promoting their adoption by providing guidance, capacity building, and coordination.

This approach was adopted because when the Regulatory Framework was developed, there was limited power, expertise, and awareness of GRP. While this was a positive approach for the first few years, outcomes have proved to be mixed, with a handful of regulators freely adopting GRP. While others are either unaware of it or unable to enforce what they consider to be voluntary and an additional burden. A more consistent observation of GRP can be ensured by adding more binding GRP criteria. Therefore, by creating formal and legally binding criteria, the inconsistent implementation and acceptance of the GRP in the state of Perak can be improved.

Regulators may also partly attribute non-compliance with GRP specifications to a lack of expertise and ability. They lack knowledge of RIA and other GRP instruments. It is understood that RIA and GRP are still seen by some regulators as an extra burden or procedural conditions that are not compulsory. In order to comply with GRP, lessons from the current rule-making process showed that compliance problems relate to the issues such as lack of knowledge and support, low commitment to capability and resources, and a minimal out-reach and training program for regulators.

Evaluation of the Existing Mechanism of Rule Making Process

There are few problems that have been identified in evaluating of the existing mechanism of rule making process in Perak. The problems are: a. Lack of standardization of by-laws in each PBT in Perak. This can be seen from the graph. b. Obsolete by-laws with no fixed review period.

c. No public consultation before enactment or amendment of law by state and local authority.

Statistik Perundangan Negeri Perak

Majlis Daerah Tapah Majlis Daerah Tanjong Malim

Majlis Daerah Selama

Majlis Daerah Perak Tengah

Majlis Daerah Pengkalan Hulu

Majlis Daerah Lenggong

Majlis Daerah Batu Gajah

Majlis Daerah Kerian

Majlis Daerah Gerik

Majlis Daerah Kampar

Majlis Perbandaran Teluk Intan Perintah

Majlis Perbandaran Taiping Kaedah Majlis Perbandaran Kuala Kangsar Peraturan Majlis Perbandaran Manjung UUK Majlis Bandaraya Ipoh Enakmen 0 5 10 15 20 25 30

CHAPTER 4

RECOMMENDATIONS & CONCLUSIONS

4.1 Recommendations to Improve the Rule Making Process (recommendations)

As refer to the previous section, there is a need to find ways to improve the rule making process. Among the recommendations are: a. Develop high potential of leadership and GRP committee at State Level. They are responsible to encourage and motivate others in doing their job, and at the same time they act as management representative to walk the talk. b. In order to ensure that legislation serves the public interest and is aware of the legitimate interests of those involved in and impacted by regulation, adherence to the principles of open government, including accountability and involvement in the regulatory process. This involves providing the public with effective (including online) opportunities to contribute to the process of preparing draft regulatory proposals and to the quality of the research supporting them. c. Develop Quality Regulatory Management System for Perak by adopted National Policy on the Development and Implementation of Regulations (“NDPIR”), GRP and RIA in the state .

4.1.1 Recommendation PBN & PBT

4.1.1.1 Lembaga Muzium

Fees and charges to museum visitors are under the approval of the Majlis Mesyuarat Kerajaan (MMK). However, these rate of fees and charges was not

38 gazetted. Therefore, there are needs to validate and gazette the fees and charges in the rules.

There are various private small museums that exist but are not subject to any rules and regulations of the Lembaga Muzium. It is recommended that those small museums need to register and get permission to operate from the Lembaga Museum. It is also suggested for them to pay the levy to Lembaga Muzium. Therefore, all those small museums will be monitoring under Lembaga Museum.

4.1.1.2 Perbadanan Taman Negeri Perak (PTNP)

2 main issues that should be discussed under Perbadanan Taman Negeri Perak (PTNP): no authority for compounding, and lack of human resources.

A compound cannot be imposed for minor offenses as there is no source of legal authority is provided under the enactment. It is proposed that the enactment to be amended, and the source of compounding power be assigned to PTNP.

Section 29 of the Enakmen Taman Negeri provides penalties of a fine not exceeding RM5000 or imprisonment not exceeding 6 months, or both for offenses under the enactment. PTNP proposes to amend the enactment to increase the rate of fines and imprisonment.

Meanwhile, Section 30 of the Enakmen Perbadanan Negeri Perak empowers directors or any authorized officer of the corporation or police officer not below the rank of inspector to arrest, seize, demolish or remove any person, vehicle or building that offense with enactment. However, PTNP has a constraint of manpower. No officer specifically appointed to carry out enforcement functions due to policy and administrative issues.

As there are addition to other parks, for instance archaelogical parks and nature tourism park, the enacment review is required to get more insights in terms of administrative and financial management. Thus, PTNP able to focus on each function that state parks perform as well as strengthen the power of PTNP especially in terms of enforcement and management. It is recommended that those parks need to register with the PTNP. It is also suggested for the operator to pay the levy to PTNP. Therefore, all those parks will be monitoring under PTNP, and more infrastructure can be built for visitor convenience.

4.1.1.3 Jabatan Perkhidmatan Veterinar Negeri Perak

As refer to Enakmen Perladangan Unggas 2005 dan Peraturan-Peraturan Pengawalan Perladangan Unggas (Lesen) 2010, there are few issues to be discussed.

Application for Kebenaran Merancang (KM) poultry farms is expensive for small entrepreneurs. If it can be reviewed to lower the rate so that the price for potential entrepreneurs can be reduced. For now, relatively high rates are imposed on prospective entrepreneurs to apply for KM. It is proposed that the legislation should improve the KM approval process and lower the rate of development charges to reduce the burden on operators.

Terms and condition for KM approval are also proposed to be simplified. The process of changing land conditions and express condition (syarat nyata) is too specific. If possible, there is no need to specifically change the express conditions if changes happen in the future. Example: state livestock as an express condition without specify the type of livestock.

It is also proposed to provide a long-term rent scheme for farmers operating on government land. This will generate revenue for the State Government. For example, there are duck farms that are cultivated on government land. However, the land is taken and given to others who do not cultivate it. This contributes to inefficient use of resources.

4.1.1.4 Pejabat Setiausaha Kerajaan Negeri Perak

Boarding House Enactmen (1927) is found as irrelevant to the current development of homestays and hotels. It is proposed to abolish the enactment and be replaced with a more relevant local authority law (PBT).

Kaedah-kaedah Caj Air Perak (2010) is also found as irrelevant and it is proposed to be abolished and be replaced with Rang Undang-undang Sumber Air Perak 2019.

4.1.1.5 Local Authorities (PBT)

UUK Kedai Gunting Rambut dan Pendandan Rambut is seen as inefficient and not customer friendly. Therefore, UUK Kedai Gunting Rambut dan Pendandan Rambut was abolished in MB Ipoh and replaced with UUK Pusat Kecantikan dan Penjagaan Kesihatan. Kerian District Council also practice the UUK. However, there are some District Councils that still use UUK Kedai Gunting Rambut dan Pendandan Rambut (other District Councils such as Batu Gajah, Kuala Kangsar, Taiping, Perak Tengah, and Kampar). It is therefore proposed to retract it and replace with UUK Pusat Kecantikan dan Penjagaan Kesihatan.

UUK Perpustakaan Tun Razak Ipoh 1976 include fees and charge for membership. The membership fee was too low (RM10 per person for a lifetime). This is irrelevant as compared to infrastructure and services provided at the library.

License Fees for Markets (Kerian District Council) By-Laws 1984 (UUK Bayaran Lesen Untuk Pasar-Pasar (Majlis Daerah Kerian) 1984) is too old and the fees are irrelevant with current situation. Thus, the UUK is required to be reviewed, specifically for fees rate.

Undang-Undang Kecil Penjaja (MBI)(Pindaan) 1997 is under review for all local authorities in Perak. This is due to the fees that is irrelevant with current

41 situation. It is proposed to be abolished and replace with UUK Penjaja dan Gerai. This new UUK will also replace Undang-Undang Kecil Pasar Malam (MPI) 1973, and Undang-Undang Kecil Pasar Malam/Sehari (Majlis Daerah Kerian) 1987.

4.2 Conclusion

The potential for productivity growth to generate higher incomes for Malaysians makes it a natural and important consideration for decision makers. Thus, the ongoing need to drive productivity remains at the forefront of government policy. Regulation is the heart of a modern economy that are well- functioned. Most of the regulations can contribute to the high potential to impact on the productivity, either through the incentives which they provide to businesses to change operating and investment decisions, or more directly through the impact of compliance costs. It is unimaginable for a modern economy functioning without a regulation. However, bad regulations can cause frustration and unintended consequences, or simply add red tape that is unsuitable to the economy.