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PERLIS

STATE RECOMMENDATION REPORT ON

GOOD REGULATORY PRACTICE (GRP)

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TABLE OF CONTENTS

CHAPTER 1 .......................................................................................................................................... 4

NATIONAL POLICY ON DEVELOPMENT AND IMPLEMENTATION OF REGULATION

(NPDIR) – PERLIS ..................................................................................................................... 4

1.1 INTRODUCTION. ..................................................................................................................... 4

1.2 GOOD REGULATORY PRACTICE (GRP) OVERVIEW. ...................................................... 7

1.2.1 REGULATORY IMPACT ANALYSIS (RIA). ................................................................. 9

1.2.2 REDUCING UNNECESSARY REGULATORY BURDENS ........................................ 14

1.3 MANDATE ............................................................................................................................... 17

1.4 SCOPE AND PURPOSE .......................................................................................................... 18

1.5 METHODOLOGY ................................................................................................................... 18

CHAPTER 2 ........................................................................................................................................ 19

PERLIS STATE GOVERNMENT.................................................................................................... 19

2.1 OVERVIEW OF PERLIS ......................................................................................................... 19

2.2 LOCAL AUTHORITY OF PERLIS ......................................................................................... 20

2.3 LAND AREA OF LOCAL AUTHORITIES. ........................................................................... 25

2.4 POPULATION BY LOCAL AUTHORITY. ........................................................................... 25

2.5 MEDIAN AVERAGE RESIDENT INCOME.......................................................................... 26

2.6 INCOME OF LOCAL AUTHORITIES. .................................................................................. 28

2.7 DOMINANT ECONOMIC ACTIVITIES AND INDUSTRIES. ............................................. 28

2.7 SCOPE OF REGULATORY MAPPING ................................................................................. 32

CHAPTER 3 ........................................................................................................................................ 36

ANALYSIS OF STATE GOVERNEMNT RULE MAKING PROCESS...................................... 36

3.1 PERLIS GRP IMPLEMENTATION PROGRESS ................................................................... 36

3.2 OVERVIEW OF RULE AND REGULATION MAKING PROCESS - MAJLIS

PERBANDARAN KANGAR (MPK). ................................................................................................. 36

3.3 RULE MAKING PROCESS OF KANGAR MUNICIPAL COUNCIL / MAJLIS

PERBANDARAN KANGAR (MPK). ................................................................................................. 37

3. 4 RULE MAKING REGULATION AND GOVERNANCE OF PERLIS LAND AND MINES

(PTG) DEPARTMENT. ....................................................................................................................... 40

3.5 GAP ANALYSIS MATRIX ..................................................................................................... 46

3.5.1 GAP ANALYSIS MATRIX OF KANGAR MUNICIPAL COUNCIL/MAJLIS

PERBANDARAN KANGAR (MPK). ............................................................................................. 47

3.5.2 EVALUATION OF EXISTING RULES AND REGULATION OF MPK...................... 54

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3.5.3 SWOT ANALYSIS MATRIX OF KANGAR MUNICIPAL COUNCIL/MAJLIS

PERBANDARAN KANGAR (MPK). ............................................................................................. 55

3.5.4 GAP ANALYSIS MATRIX OF PERLIS LAND AND MINES (PTG). ......................... 56

3.5.6 SWOT ANALYSIS MATRIX OF PERLIS LAND AND MINES (PTG). ..................... 64

CHAPTER 4 ........................................................................................................................................ 66

RECOMMENDATIONS AND CONCLUSION .............................................................................. 66

4.1 RECOMMENDATION FOR KANGAR MUNICIPAL COUNCIL (MPK). .......................... 66

4.2 RECOMMENDATION FOR PERLIS LAND AND MINES (PTG) PERLIS ......................... 67

4.3 CONCLUSION ......................................................................................................................... 68

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CHAPTER 1

NATIONAL POLICY ON DEVELOPMENT AND IMPLEMENTATION OF

REGULATION (NPDIR) – PERLIS

1.1 INTRODUCTION.

Throughout these demanding times, good regulations are needed for good governance. Good

regulations are also essential to the advancement of national initiatives and resources for

productive and sustainable economic growth. Which means, the legislation and the regulatory

process must cope with changing times and circumstances. Successful regulations

accomplished by a more rigorous review and stakeholder feedback process boost efficacy and

transparency, while promoting greater engagement, inclusiveness, and ownership of the

problem-solving process.

In 2013, the Government further strengthened and formalised the mandate of Malaysia

Productivity Corporation (MPC) for regulatory reform with the launching of the National

Policy for the Development and Implementation of Regulations (NPDIR). It is a policy that

embeds Good Regulatory Practice (GRP) in the formulation of new regulations or amendments

to regulations.

National Policy on Development and Implementation of Regulation (NPDIR) aims to promote

a good regulatory practice and impact analysis in developing new and amending regulations

among the state and local government. The NPDIR presents a holistic approach to the creation

of legislation while ensuring that the government's policy commitments and legal obligations

are fulfilled. The regulated mechanism also ensures predictability for regulatory-affected

residents, institutions, and businesses.

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The NPDIR expansion to states and local authorities took place in the year 2016. Initial

collaboration with state governments included workshops and seminars to raise awareness of

GRP and NPDIR, as well as to conduct baseline studies to better understand each state's

regulatory mechanism. At the state level, like those of the federal government, the rule-making

processes have evolved over time without well-documented guidelines. This has reflected in

the rule-making procedures having holes and contradictions.

The aim is to provide greater continuity, accountability, and openness to the rule-making

process at all levels of government by extending the application of GRP to state governments

and local authorities. A strategic plan was outlined to direct the implementation of GRP at the

level of state and local authorities, focusing on five (5) main elements: strengthening the GRP

structure, launching state GRP policies and pilot projects, developing GRP structures,

monitoring the implementation of GRP, and maintaining a strong culture of GRP.

The NPDIR promotes the concept of Good Regulatory Practice (GRP) with the goal of

achieving better regulation through an improved sound analysis, informed decision-making,

transparency, and accountability. The NPDIR is pertinent to all federal government agencies,

including ministries, departments, statutory bodies, and regulatory commissions. The NPDIR,

in which the extension of policy to the States was strengthened by the 11th Malaysia Plan, is

encouraged to be implemented by State Governments and Local Authorities.

MPC shall initiate a review of the National Policy on the Development and Implementation of

Regulations after 5 years or earlier if the need arises. The review of the Policy will be

undertaken with active participation of stakeholders. The review will take into account

successes achieved, constraints encountered in implementation over the 5 year period, the

changes in national priorities in international business environment and the impact of other

national policies that have direct relationship with this policy.

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The implementation of NPDIR will be oversee by National Development Planning Committee

(NDPC) Overseeing the implementation of this policy, assessing its effectiveness, and

recommending improvements, also examining Regulatory Impact Statements (RIS) for

adequacy and making appropriate recommendations. Other bodies that will work hand in hand

with NDPC are:

1) Malaysia Productivity Corporation (MPC).

• Responsible to NDPC to implement its functions on this policy. In performing

this function, MPC shall assist in the coordination for implementing the policy.

• MPC shall perform these duties by developing guidelines and programmes for

the implementation of NPDIR, ensuring that capacity building programmes for

regulators are available

• Assisting NDPC in assessing RIS, providing guidance and assistance to

regulators in RIA and preparation of RIS

• Conducting periodic reviews of progress made and submitting reports to NDPC

and promoting transparency of RIS.

2) National Institute of Public Administration (INTAN).

• INTAN is the agency responsible for providing training on RIA.

3) Regulators.

Regulators comprising of government agencies such as Ministries, departments,

statutory bodies and regulatory commissions that are responsible for developing,

maintaining and enforcing regulatory programs, are to observe this policy and meet the

Regulatory Process Management Requirements.

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4) Stakeholders.

This policy is also dependent on the input of stakeholders such as business community,

employees, interest groups, professional organisations and individuals into the design

and review of regulations.

5) Attorney General’s Chambers (AGC).

AGC is responsible for offering legal advice to the cabinet or any minister. The

Chambers may provide legal opinions on regulatory solutions, drafting of regulations,

harmonisation of regulatory requirements, provisions on compliance and enforcement

as well as compliance with obligations of international treaties and relevant agreements.

Reflecting the need to strengthen the regulatory process, the Government introduced the new

strategy to change the governance of the government, which to include Regulatory Impact

Analysis (RIA). This framework is introduced to ensure that the regulations are successfully

addressing the required public policy goals, serving the country in a fair and equitable manner,

and enforced in a transparent manner. It is the government's aim to ensure that cumbersome

regulations that impose unnecessary burdens on society and industry, discourage competition

and innovation, or alienate stakeholders are reduced or avoided.

1.2 GOOD REGULATORY PRACTICE (GRP) OVERVIEW.

Regulations are essential for the proper functioning of society and the economy. The challenge

for the Government is to deliver effective and efficient regulations; effective in tackling an

identified problem and efficient in terms of optimising the benefits to the community, taking

into account the costs. Determining whether regulations meet the dual goals of effectiveness

and efficiency requires a structured approach to policy formulation that systematically analyses

costs and profit.

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Good regulatory practices are basically derived from the ‘regulatory governance’ which is

referred to as the systematic implementation of government-wide policies, to promote a

regulatory system that is effective, efficient, transparent, and accessible. According to Within

the concept of regulatory governance, there are four elements of should be mutually

interactively reinforce towards achieving a well-functioning regulatory governance, which are:

1) Regulatory policy: an overall policy declaration on how the government will use its

regulatory powers. Modern policies include declarations on regulatory standards and

regulatory procedures.

2) Regulatory institutions: administrative and political bodies by which regulations are

created, enforced, and adjudicated.

3) Regulatory quality tools and processes: the administrative and political procedures by

which regulations are created, adopted, enforced, monitored and reviewed. Such

techniques include the use of regulatory impact analysis (RIA), consultation processes,

and benchmarking and evaluation tools such as the Standard Cost Model and the

Guillotine Reviews.

4) Regulatory policy instruments and outputs: the legal instruments by which regulatory

policy objectives are accomplished. They are part of the portfolio of existing regulations

and the flow of new regulations introduced each year and can include regulatory as well

as alternative non-regulatory policy instruments used to achieve regulatory policy

objectives. Policy mechanisms are the outputs of programmes, institutions, and

procedures.

The regulatory governance agenda encompasses a variety of goals important to economic,

social, and environmental development. Achieving a regulatory system that is as efficient as

possible over time and within the constraints of other social values requires actions on many

different levels. The main challenge is one of institutions and incentives. Good regulatory

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governance rests on a system of institutions, driven by supporting incentives, that set

transparent goals for regulation; apply, advocate, and monitor regulatory quality; and

implement a host of better regulation tools. These tools could include RIA, public consultation,

measures to regularly update existing regulation, alternatives to regulation, and measures to

promote regulatory transparency, access, and user friendliness.

Relatively, the first step in the policy formulation process should be the identification of the

issue to be solved and the relevant policy goal. A range of alternatives (including no action or

a status quo option) for achieving the objective should be discussed and an analysis of the

possible economic, social, and environmental impacts should be carried out. Effective

consultation ensures that both the regulator and the parties involved have a clear understanding

of the issue, of the alternative options for resolving the problem, of the appropriate

administrative and regulatory processes to be adopted, and of the subsequent benefits, as well

as the costs and risks, of the proposed regulation.

The Regulatory Process Management Specifications of the Government include a structured

approach to ensuring high quality regulation in compliance with the National Development and

Implementation of Regulation Policy (NPDIR). Therefore, in normalizing the good regulatory

practice (GRP), Regulatory Impact Analysis (RIA), public consultation and reducing

unnecessary regulation burden (RURB) are those mechanisms highlighted in the NPDIR for

regulating and improving the new and existing regulations.

1.2.1 REGULATORY IMPACT ANALYSIS (RIA).

Regulatory Impact Analysis (RIA) is a process of systematically identifying and assessing the

expected effects of regulatory proposal, using a consistent analytical method such as cost-

benefit analysis. It is a comparative process which is based on determining the underlying

regulatory objectives sought and identifying all the policy interventions that are capable of

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achieving them. These “feasible alternatives” are assessed using the same method to inform

decision makers about the effectiveness and efficiency of different options and enable the most

effective and efficient options to be systematically chosen.

RIA assist in ensuring that regulations are as efficient and effective as possible. Effectives

regulations are regulations that achieve the policy objective for which they were made.

Efficient regulations achieve these objectives at the lowest total cost to all members of society.

Efficiency and effectiveness are important because there are limits to the amount and types of

regulations that are able to be absorbed within economies and enforced effectively by

governments. Regulations have costs as well as benefits, and inappropriate regulations can

stifle economic growth by putting obstacles in the way of doing business and by creating

perceptions of a negative environment. Making and enforcing regulations also places large

demands of government administrations. It is important therefore that regulations are well

designed.

The NPDIR provides a consistent approach to making regulations while ensuring that the

policy commitments and legal obligations of the Government are met. The structured process

also ensures predictability for citizens, institutions, and businesses affected by regulation. The

Government’s RIA requirements are intended to achieve better regulation by supporting:

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Figure 1

RIA Purpose.

Regulators who are proposing new regulations or regulatory changes must undertake the regulatory

impact analysis (RIA) involving the following components:

1) Problem Identification.

Regulators must establish clear objectives, evidence that a problem has arisen and

government intervention is required. When any risks are involved, regulators must

ensure that risks are of sufficient significance to justify intervention. This process is

TRANSPARENCY.

The information on which government’s regulatory decisions

are based should be publicly available

INFORMED DECISION MAKING.

Decision makers, faced with a range of options for achieving the

Government’s objectives, must understand the implications and be informed about the likely impact of

the available options before deciding.

SOUND ANALYSIS.

The case for acting in response to a perceived problem, including

addressing the fundamental question of whether regulatory action is

required, needs to be demonstrated. The analysis should also outline the desired objective of the response, a

range of alternative options to achieve the objective, and an

assessment of the impact of each option, and should include effective

consultation

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applicable to regulations and other legally binding instruments which are issued by

regulators.

2) Objectives.

The desired objectives of the proposal or the problem that is being addressed must be

identified, described, analysed and documented clearly and concisely. Interested parties

must be consulted on alternative ways to achieve the objectives or solve the problem.

3) Instrument Option.

A range of options (regulatory and non-regulatory) that may constitute feasible means

for achieving the desired 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

4) 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. It must be demonstrated that the benefits are

greater than their costs. When regulations address health, social, economic or

environmental risks, it must be demonstrated that regulatory effort is directed where it

will do the best. Information obligations should be limited to what is necessary and

impose the least possible cost on affected parties. The impact of additional regulatory

burden on small businesses must be considered, and the least burdensome but effective

alternative for their circumstances should be chosen.

5) Consultation

Regulators proposing new regulations or changes must carry out timely and thorough

consultations with affected parties. The consultation effort should be proportionate to

the impact of the proposed regulation. Notice of proposed regulations and amendments

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must be given so that there is time to make changes and to take comments from affected

parties into account. Regulators must clearly set out the processes they use to allow

affected parties to express their opinions and provide input. In particular, regulators

must be able to identify and contact stakeholders, including, where appropriate,

representatives from public interest, employees and consumer groups.

Consultations should begin as early as possible in order to get stakeholder’s input on

the identification of the problem, as well as on proposed solutions. Other regulators

having an interest in the matter must be consulted. Regulators must determine what, if

any, related regulations already exist, and which other departments and agencies are

involved. New regulations must be coordinated with existing ones to avoid duplication

and to take advantage of possible efficiencies.

6) Conclusion and Recommendation

RIS should include a statement identifying the preferred option based on the impact

analysis.

7) Implementation.

The implementation strategy and a review of the preferred option must be described

comprehensively in RIS. The plans, procedures and resources that will be used for

compliance and enforcement should be described. Obligations arising from treaties and

international agreements must be complied with.

8) 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. MPC will consult the regulator on the publication.

The implementation of RIA’s components should be undertaken during the design or review

of a particular regulation. In determining whether the RIA process is required for a particular

regulation, MPC should be consulted by the regulatory agencies. Generally, RIA will be

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required for regulatory proposals or amendments which will have a significant impact on

businesses and consumers.

Besides, it is also recommended, in addition to stakeholder meetings, public consultations

should be held in situations or instances where the rules and regulations will have an effect on

the public. The MPC further assisted in aiding and guiding on the method of performing the

consultation for a minimum recommended duration of twelve (12) weeks. Besides, MPC

further stressed that all undertakings should take these public consultations seriously. The

consultation process should be carried out in a transparent, substantive, and balanced manner

that takes serious account of the input received from the consultation process by the regulatory

agency. The circumstance must be avoided by the regulatory authorities conducting the

consultation process, where the consultation is merely carried out for 'box-ticking' purposes

where its decisions and course of action relating to the subject matter have already been

predetermined.

Furthermore, regulators are responsible to notify MPC on proposals to introduce or amend

regulations. MPC will assess whether the regulator is required to submit RIS (Regulatory

Impact Statement (RIS) for the proposed regulation. If RIS is required, it needs to be submitted

to NDPC which will examine RIS for compliance with the regulatory process management

requirements. This process is defined as RIS process. Guidance for implementing the

regulatory process management requirements and preparation of RIS is provided in Best

Practice Regulation Handbook issued by MPC.

1.2.2 REDUCING UNNECESSARY REGULATORY BURDENS

Reducing Unnecessary Regulatory Burdens (RURB) program, a part of Modernising Business

Regulation agenda, focuses on improving the quality of existing business regulations and its

administration (by way of ex-post review). RURB helps the regulated businesses to identify

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regulatory burdens and provide options and recommendations and present them to regulators

in a credible way. Through RURB, redundant and unnecessarily burdensome and outdated

regulations will be removed or modified; this will contribute to a more competitive private

sector by lowering the cost of doing business. The economic and social costs of burdensome

legislation are high, involving substantial government resources and significant burden to the

business and wider community. Thus, it is pertinent to review regulations to ensure regulations

remain up to date, cost justified and effective, does not impede efficiency, productivity and

innovation as well as deliver the intended policy objectives.

Figure 2

RURB Value Proposition

REGULATED BUSINESS INSIGHT

Identify regulatory burdens.

• Ways to reduce

regulatory burdens.

ROLES OF MPC

• Identify least burdensome tools for

achieving regulatory ends without

slowing economic growth, innovation,

competitiveness, and job creation.

• Present recommendations.

• Provide a forum and a process for

identifying regulatory burdens and

finding answers.

• Review ‘’regulations and regulatory’’

REGULATORS INSIGHT

Regulatory objectives.

• How to protect public

health, welfare, safety,

environment, etc.

using regulation.

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The potential for unnecessary regulatory burdens arises from several sources which can be

outlined as follow.

1) Problem with regulations themselves.

• Unclear or questionable objectives

• Conflicting objectives

• Overly complex regulation

• Excessively prescriptive regulation

• Redundant regulation

• Regulatory creep

2) Poor enforcement and administration

• Excessive reporting or recording requirements

• Inadequate resourcing of regulators (including inexperience or lack of expertise)

• Overzealous regulation

3) Unnecessary duplication and inconsistency.

• Duplication of regulation

• Inconsistency of regulation

• Variation in definitions and reporting requirement

Six (6) core principles for assessing regulations and its administration:

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Figure 3

Six (6) core principles for assessing regulations and its administration:

1.3 MANDATE

Relatively Prof. Dr. Haim Hilman Bin Abdullah from Universiti Utara Malaysia (UUM) has

been appointed in leading the reviewing process of Perlis regulatory framework, related to the

rule making processes of Perlis Land and Minerals Department, and Local Authorities (Pihak

Berkuasa Tempatan) (PBT).

6 CORE PRINCIPLES IN ASSESSSING

REGULATION & ITS ADMINISTRATION

Principle 1: Have a proportionate and targeted response to the risk being

addressed.

Principle 2: Minimise adverse side-effects to only those necessary to achieve

regulatory objectives at least cost.

Principle 3: To have a responsive approach to

incentivise compliance with regulation.

Principle 4: Ensure all written regulations are

consistent and that regulators interpret and apply them consistently. Avoid duplication and

overlap of regulations and regulators.

Principle 5: Adopt transparency criteria, so

interested parties are regularly consulted, itis clear to businesses what

their legal obligations are, and that all regulations are easily accessed by everyone

Principle 6: Accountability so that businesses can seek explanations of decisions

made by regulators, as well as an avenue for appeal and through probity provisions

in order to reduce corruption

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1.4 SCOPE AND PURPOSE

The purpose of this study is to capture and understand the current functioning of the State

Government. Specifically, assessing the processes involved in formulating, reviewing, and

amending rules and regulations made under the principal Acts/Enactments by Perlis Land and

Minerals Department, and Local Authorities (Pihak Berkuasa Tempatan) (PBT). This report

would generally identify gaps in the regulatory system of the State and, where appropriate,

include recommendations on areas that might need improvement in ensuring that the State

adopts good regulatory practices initiated by the MPC.

1.5 METHODOLOGY

Towards a better comprehension of the State government operation flow, first, the general and

relevant information on the state characteristic have been gathered in order to obtain the related

data, such as the number of local authorities, land area and population.

Due the outbreak of Covid-19 and the needs to adhere to the health precautions by the Ministry

of Health (MOH), most of the information were collected and extracted from the online reports,

websites, and relevant publications. Besides, face to face interviews were not conducted as

those communications done by emails. Additionally, questionnaires have been distributed to

Kangar Municipal Council (MPK) and Perlis Land and Minerals Department (PTG) as to gain

insights on the information needed related to rules making process and governance.

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CHAPTER 2

PERLIS STATE GOVERNMENT

2.1 OVERVIEW OF PERLIS

Perlis, also known as Perlis Indera Kayangan, is the smallest state in Malaysia. It resides on

the northern part of the western coast of the Peninsula of Malaysia and has the provinces of

Satun and Songkhla on the northern border of Thailand. It is bordered to the south by the state

of Kedah.

Relatively, Perlis State Legislative Assembly (Dewan Undangan Negeri Perlis) is the state

legislature of Perlis. It is a unicameral institution, consisting of a total of 15 lawmakers

representing single-member constituencies throughout the state. Members of the state

legislature are called state assemblymen. The Assembly convenes at the Perlis State Assembly

Complex in the state capital, Kangar. It has 15 seats, making it the smallest state assembly in

Malaysia. The state of Perlis is governed by three ( 3 ) major branches, which are executive,

legislative and judicial (Syariah).

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Diagram 1: State of Perlis Organizational Structure

Sources: https://www.perlis.gov.my/index.php/kerajaan-negeri/info-

2.2 LOCAL AUTHORITY OF PERLIS

Local Government Act 1976 (Act 171) defined “local authority” (PBT) as City Council,

Municipal Council or District Council (link:

http://jkt.kpkt.gov.my/index.php/ms/SUK%26PBT/PBT/TakrifanPBT). The following

characteristics have been outlined in distinguishing the categories of local authority (as

provided in official Jabatan Kerajaan Tempatan (JKT) website (link:

D.Y.M.M Tuanku Raja

Perlis

Legislative

State Legislative Assembly

Executive

Executive Council

State Secretary

State Government Department

State Statutory

Bodies

Local Authorities

Kangar Municipal

Council (MPK)

Judiciary

Syariah

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http://jkt.kpkt.gov.my/index.php/ms/SUK%26PBT/PBT/KategoriPBT). The Table 1 below

will further distinguish the characteristics of 3 types of Council in Malaysia.

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Table 1

Characteristic of Council in Malaysia

CHARACTERISTICS

CITY COUNCIL MUNICIPAL COUNCIL DISTRICT COUNCIL

▪ The central administrative area of a state

should be covered by the local authority.

▪ Population of not less than 500,000.

▪ Income from sustainable financial

services (fiscally sustainable) with an

annual revenue of not less than RM100

million able to balance out expenditure.

▪ Capable of providing high-level services,

including revenue collection activities,

approval of development growth,

enforcement, and other functions of local

authorities, as well as having a strong

organisational structure and competent

personnel who are capable of performing

their duties effectively and efficiently.

▪ Urban development that emphasises

sustainable development and focuses on

efforts to resolve municipal issues such as

squatters, illegal factory operations,

security, low-income housing group, and

▪ Main city or administrative centre of a state

or district.

▪ The population is not less than 150,000

people.

▪ Income from sustainable financial resources

with an annual revenue of not less than RM20

million and be able to provide services at a

reasonable and comfortable level in

accordance with the quality of life of a

municipality.

▪ Holding main industrial, business, tourism,

and housing activities or in the plans that

potentially contributing to the increase in

taxable holdings as well as the generation of

employment opportunities in various sectors.

▪ Ability to provide space and opportunities for

traders while encouraging the growth of

investment, business, and commercial

activities.

▪ In the areas other than major

cities.

▪ Population is less than 150,000.

▪ Total annual revenue is less than

RM20 million.

▪ The needs of the population are

more focused on infrastructure

facilities and public utilities than

on municipal services.

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CHARACTERISTICS

CITY COUNCIL MUNICIPAL COUNCIL DISTRICT COUNCIL

environmental protection. Indicators as

underlined by Malaysia Urban Indicator

Network (MURNInet) System is also

considered.

▪ The creation of an urban image or identity

that is appropriate to the role of the city

and of a national culture that symbolises

history and heritage. Areas and buildings

which have historical, cultural, and

architectural values, need to be preserved.

▪ Holding the industrial centres, financial

institutions, providing business and trade

facilities to attract investors. This

includes, the hotel facilities which built to

promote tourism and business activities.

The focus is given to the rapid growth of

the services sector and the development of

value-added and knowledge-based urban

economic activities.

▪ Comprehensive educational hub with

universities, schools, colleges, museums,

and public libraries.

▪ Satisfactory infrastructure facilities that

connected to an efficient highway system.

Possessing a sustainable urban planning

concept that is able to provide a safe and

comfortable environment to live. Sustainable

urban indicators as emphasized in the

Malaysia Urban Indicator Network

(MURNInet) System will also be considered.

▪ Organizing programs that can encourage

local residents to develop their communities

through efficient urban governance such as

the implementation of the Local Agenda 21

Program (LA 21) or the involvement of the

resident committee.

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CHARACTERISTICS

CITY COUNCIL MUNICIPAL COUNCIL DISTRICT COUNCIL

▪ Centre for cultural events, sports, and

leisure activities, as well as national and

international conventions.

▪ Possessing complete infrastructure

facilities, sufficient public amenities,

including user-friendly public parks,

particularly for people with disabilities

(OKU). These include public transport

facilities, an effective traffic control

system, a road network, and ICT services.

▪ Certain recognition has been achieved,

either at the national or international level,

in certain fields in line with the status as a

city.

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Based on the outlined characteristics, as the population of Perlis is estimated at 250 000, there

is only one (1) Municipal Council, which addressed as Kangar Municipal Council (MPK) and

the regulation reporting responsibility will be channelled to Local Government Division

(Bahagian Kerajaan Tempatan (BKT) of State Secretary (SUK). The process of monitoring and

authorization the rules and regulations made by the PBTs in Perlis is under the responsibility

of BKT and State Legal Advisor.

2.3 LAND AREA OF LOCAL AUTHORITIES.

As depicted in Table 1, Kangar Municipal Council (MPK) governs the whole state of Perlis,

occupying roughly a total land area of 816 km2, as at 2017

(https://www.dosm.gov.my/v1/index.php?r=column/cone&menu_id=UDZaUXd2N2k2L2or

K2FpdDJ1UjVtZz09).

2.4 POPULATION BY LOCAL AUTHORITY.

According to the report of Population Distribution by Local Authority and Mukims (2010), the

total population of Perlis is 225, 590. Further population distribution based on local authorities

and mukims of Perlis as in Table 2.

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Table 2

Population Based on Local Authority of Perlis

LOCAL AUTHORITIES/ADMINISTRATIVE AREAS TOTAL POPULATION

Majlis Perbandaran Kangar (MPK)

Kaki Bukit 663

Kangar 10024

Kangar (Arau) 1530

Kuala Perlis 686

Padang Besar 729

Pauh 1546

Simpang Empat 2379

Remainder of M.P 208033

TOTAL 225590

Sources: Population Distribution by Local Authority and Mukims (2010).

The above table represents the population and the data were reported based on the last census

publication in 2010 as in the year of 2020, census publication still not been released by the

Department of Statistics Malaysia (DOSM). From 225 590 total population, 111 176 (49.3%)

are male and 114 414 (50.7%) are female.

As for current year 2020, the estimated total population of Perlis is 254,800 and population

density for the current year of 2020 is 311 per km2 with 65.5% are the urban citizen

(https://statsgeo.mycensus.gov.my/geostats/mapv2.php#). The population of male expected to

increase to 49.7% and female expected to decrease to 50.3%.

2.5 MEDIAN AVERAGE RESIDENT INCOME.

Looking at the Perlisian household source of income, income from paid employment is the

main source of income, contribute to 56.1% of the total household income, followed by income

from self-employment (22.8%) and income from current transfers received by 13.3%.

Meanwhile, income from property & investment contributes 7.8 percent of household income

in Perlis (Perlis Socio Economic Report, 2019).

27

Median income refers to the median value when income is compiled ascending from the lowest

value to the highest value. Based on the Perlis Socio Economic Report (DOSM, 2019), the

median income for Perlisian in general is RM 4,594. The strata further divided into two (2),

urban and rural group. For the urban group, the strata median income is at RM 4,706, where

the rural strata median income is at RM 4,251. The median income of Perlisian can be

specifically divided into three (3) groups which are B40, M40 and T20, which as follows.

Table 3

Median Average

INCOME GROUP

POPULATION

(%)

MEDIAN INCOME (%)

CAGR

2016

2019

B40

(Less than RM 3870)

19.1% 2572 2665 1.2

M40

(RM 3870 – RM 7279)

40.5% 4571 5377 4.1

T20

(RM 7930 and above)

40.4% 9017 9782 2.7

According to the Perlis Socio Economic Report (DOSM, 2019), there is an increase in the

percentage of median income level for B40, M40 and T20 respectively, compared to the year

of 2016. From the Table 3 above, it is reported that the compounded annual growth rate

(CAGR) is the highest in the group M40, compared to the other income groups.

28

2.6 INCOME OF LOCAL AUTHORITIES.

Relatively, as reported in the latest available report by the National Audit Department for the

year of 2018, Kangar Municipal Council/Majlis Perbandaran Kangar (MPK) has recorded the

income of RM 27.5 million, compared to RM26.4 million in 2017. Part of the income of MPK

derived from assessment tax collection from the residents. Assessment tax is an annual tax

levied on property holding under the local authority administration area in accordance with the

Act Local Government 1976 and became a major contributor to the revenue of local authorities

of Perlis. Assessment tax is levied on holdings such as residences, shops, business buildings,

non-government offices, factories, hotels and lots more. Until the end of 2018, the Municipal

Council Kangar has collected assessment tax amounting to RM14.9 million (2017: RM15.1

million), depreciated by 1.7 per cent over the previous year.

2.7 DOMINANT ECONOMIC ACTIVITIES AND INDUSTRIES.

According to Perlis Socio Economic Report (2019), Perlis economic growth increased to 4.6

percent in 2019 from 3.3% in 2018. In 2019 as well, Perlis recorded an increase of Gross

Domestic Products (GDP) to RM6.2 billion compared to RM5.9 billion in 2018. The Perlis

state economy remains dominated by the sector Services (66.2%) and the Agriculture sector

(21.7%). Both sectors accounted for 87.9 percent of the overall GDP of Perlis. Manufacturing

sector contributed 7.6 percent, while 2.7 percent contributed by the Construction sector. As

much 0.6 percent was contributed by the sector Mining and quarrying.

The services sector recorded a positive growth by 5.0 percent in 2019 compared to 4.2 percent

in 2018 (Perlis Socio Economic Report, 2019). This sector also recorded an increase in its value

added in 2019 by RM4.1 billion (Perlis Socio Economic Report, 2019). Besides, the Perlis

service sector is driven by the sub-sector, utilities, wholesale, and retail trade. Achievements

in the wholesale and retail trade sub-sector is expected to remain strong in lieu of the

29

completion of mega projects like the Industrial Area of Lembah Chuping, new developments

in Padang Besar Mixed Development, Redevelopment of Padang Besar Market, and K-PARC

Shopping Mall (Perlis Socio Economic Report, 2019).

Subsequently, the agriculture sector recorded a growth of 5.9 percent in 2019 compared to

the year of 2018 (Perlis Socio Economic Report, 2019). This sector recorded an increase in its

value for 2019 by RM1.3 billion (Perlis Socio Economic Report, 2019. This significant

increase was driven by the positive growth of marine fisheries and specifically increased on

sea fish landings. As to increase the valued added of Perlis agriculture sector, the state

government had introduced high-impact projects such as dairy projects, ruminant livestock

projects and pineapple planting projects, which is in line with the implementation of the

National Agro Food Policy 2011-2020.

Meanwhile, the manufacturing sector has recorded a moderate growth of 1.0 percent (2018:

1.5%). This is influenced by the modest growth of the non-metallic mineral products sub-

sector, base metals, and designed metal products it is expected to grow further as a result of

Ammunition Compact Factory in Pauh Putra Technology Park (Perlis Socio Economic Report,

2019).

Meanwhile, the construction sector also showed a slow trend in growth with 13.2 percent in

2019 compared to 21.5 percent in the previous year with value added of RM0.2 billion (2018:

RM0.1 billion) (Perlis Socio Economic Report, 2019). The slow growth in this sector is

affected by depreciation growth for the non-building sub-sector residence and special

carpentry.

Lastly, the mining and quarrying sector have recorded the growth of 4.9 percent in 2019

(2018: 6.8%) with additional value added of RM34.4 million (Perlis Socio Economic Report,

30

2019). This performance is influenced by quarrying activity of limestone and granite. The main

economic sectors which contributed to the increase in Perlis GDP illustrated as below:

Source: Perlis State Government Financial Statements (2019).

66.2%0.6%

21.7%

2.7%

7.6%

MAIN SECTORS OF PERLIS GDP

Services Mining and Quarrying Agriculture Construction Manufacturing

31

Source: Perlis State Government Financial Statements (2019).

Referring to Perlis Socioeconomic Report (2019), the wholesale and retail trade industry,

motor vehicle repair activity and motorcycles activity recorded the largest number of labour

force in Perlis, which is 17,800 (16.4%), followed by the accommodation industry and food

and beverage service activities in 15,900 labour force (14.7%). Education industry, public

administration and defence industries, and compulsory social security services respectively

recorded 12,100 (11.2 %) and 11,800 (10.9%) number of labour force respectively. These four

industries are the main activity that is the focus of 53.1% of employees in Perlis.

0.2

0.2

0.2

0.3

0.4

0.4

0.5

1.0

1.3

1.5

3.7

5.1

7.2

8.8

9

11.1

11.8

12.1

15.9

17.8

0 5 10 15 20

Real estate activities

Information and communication

Electricity, gas, steam and air conditioning…

Mining and quarrying

Household activities as an employer

Arts, entertainment and recreation

Water supply; sewerage, waste management…

Professional, scientific and technical activities

Other service activities

Financial and insurance / takaful activities

Transportation and storage

Humanitarian health activities and social work

Administrative activities and support services

Construction

Agriculture, forestry and fisheries

Manufacturing

Public administration and defense; social…

Education

Accommodation and food and beverage…

Wholesale and retail trade; motor vehicle repair

MAIN ECONOMIC ACTIVIES IN PERLIS (2019)

No. of Labor Force '000

32

2.7 SCOPE OF REGULATORY MAPPING

Upon the constitutional monarchy, Malaysia has a parliamentary democracy. There are three

levels of government in Malaysia: federal, state and local. The federal and state governments

are elected, but officials are appointed by the local government. There are a range of legislative

and regulatory instruments levied on businesses by all three forms of government. The

allocation of the legislative power between the federal and state governments is set out in the

Ninth Schedule of the Federal Constitution and is set out in the Federal List, the State List and

the Concurrent List.

The mapping of legislation in this research report is limited to the main legislation and

subsidiary legislation. The main legislation is the law (Enactment) made by the legislature of

the State other than Sarawak, as specified in Section 3 of the Interpretation Act 1948 & 1967

(Act 388). Relatively, for subsidiary legislation, the term can be found in Section 3 of the

Interpretation Act 1948 & 1967 (Act 388) where Section 3 specifies that subsidiary legislation

consists of regulations, by-laws, guidelines, orders, notices, declarations, ordinances or other

instruments passed by the main legislature or by any authorities based on that principal

legislature.

Additionally, the interpretation of subsidiary legislation can also be found in the 2013 Best

Practices Handbook released under the National Policy on the Development and Regulations.

In that document, the rules shall contain steps that are commonly applicable in different forms,

which are enforced by the Ministry, Department or Organization, where the enforcement is

mandatory. These include alternative measures referred to as regulations, rules, by-laws, and

orders which relatable with the definitions provided under Section 3 of Interpretation Act 1948

& 1967 (Act 388).

33

The key subjects of the Federal List are foreign relations, defence, national security, civil and

criminal law, citizenship, finance, trade and shipping, communications, health and labour law.

The State List covers issues such as land, agriculture, forestry, local government, riverine

fishing, Muslim rule, etc. The Concurrent List, under the jurisdiction of both the federal and

state governments, includes social welfare, scholarships, wildlife conservation and town and

country planning. If there is some inconsistency between federal and state law, the federal law

takes precedence over the state law.

The construct regulatory framework in Malaysia establishes the role of the local authority as

the sole planning authority. The Local Authorities all over Malaysia, except for Sabah and

Sarawak, including Kangar Municipal Council (MPK) is under Town and Country Planning

Act 1976 (Act 172). Malaysia's building regulatory system requires agencies and local

authorities carry out building inspections and to grant permits and clearances to signify

compliance with the Agency Regulations and the Building Code, respectively.

For Perlis, the departments that subject to both State List and Concurrent List are:

1) Office of the Menteri Besar

2) Office of the State Executive Councillors

3) Office of the State Secretary

• State Economic Planning Unit

• Administration and Services Division

• State Legislative Assembly Division

• Housing and Local Government Unit

• Human Resources Management Division

• Management Services Division

• District Administration Unit

• State Sports Council

34

• Internal Audit Unit

• Corporate Management Division

• Information Technology Management Division

• Quality and Human Capital Development Unit

• Protocol Unit

4) Office of the State Legal Advisor

5) Office of the State Treasury

6) Department of Mufti

7) Kangar High Court

8) Department of Syariah Judiciary

9) State Syariah Court

10) Department of Works

11) Department of Lands and Mines

12) Department of Irrigation and Drainage

13) Department of Islamic Affairs

14) Office of the Private Secretary to the Raja of Perlis

15) Department of Veterinary Services

16) Department of Agriculture

17) Department of Forestry

18) Department of Social Welfare

19) Department of Town and Country Planning

For statutory bodies, those which subjected to both state and concurrent list are:

1) Perlis State Economic Development Corporation

2) Perlis State Public Library Corporation

3) Rumah Seri Kenangan Kangar

35

4) Perlis State Islamic Foundation

5) Perlis Islamic Religious and Malay Customs Council

36

CHAPTER 3

ANALYSIS OF STATE GOVERNEMNT RULE MAKING PROCESS

3.1 PERLIS GRP IMPLEMENTATION PROGRESS

The expansion of GRP to the state and local government levels is imperative for the governance

reform efforts to be effective. A road map has been outlined to guide the implementation of

GRP at the state and local authority levels. It focusses on 5 key aspects:

1. Strengthening GRP foundation.

2. Launching the state GRP policy and pilot projects.

3. Enhancing GRP systems.

4. Monitoring of GRP Implementation.

5. Ensuring a strong GRP culture.

As for Perlis, the implementation schedule of GRP has started from 2019 (Report on

Modernisation, 2018) which currently Perlis have started the mobilizing business licensing

(MBL) and in the progress of mapping regulation.

3.2 OVERVIEW OF RULE AND REGULATION MAKING PROCESS - MAJLIS

PERBANDARAN KANGAR (MPK).

The regulation, implementation, or amendment of the new and existing rules for Local

Authorities (PBTs) will be monitored by the State Legal Advisor. As for Kangar Municipal

Council / Majlis Perbandaran Kangar (MPK), MPK will work closely with the Local

Government Division (Bahagian Kerajaan Tempatan (BKT). On occasion, the amendments or

drafting new rules and regulations are implemented by referring to what have been done by

other PBTs of other states, where the information and data collected will be compared to other

PBT. Then, the review and the feedback will be acquired from the State agency.

37

All the procedures in regulating new rules and regulations will be ensured to follow the State

guidelines. Thus, this will assist in the regulation/rule’s implementation process, as it will be

implemented within a short time of period and reducing the misuse of administrative

procedures. The reporting or any matters arise regarding the rules and regulation of MPK will

be addressed and tabled to BKT. All the policies, rules, and regulations disseminated by BKT to

MPK; besides that, BKT will provide the mandate as they are MPK’s representative to the State.

Relatively, the process of reviewing all the rules and regulations that will be implemented by the MPK

will be conducted by BKT. Internal discussion involving every department will be tabled to the Council

after the review has been completed by the State Legal advisor and BKT.

3.3 RULE MAKING PROCESS OF KANGAR MUNICIPAL COUNCIL / MAJLIS

PERBANDARAN KANGAR (MPK).

The rule making process by the Local Authorities (MPK) is further illustrated in Diagram 2,

accordance with the flow provided by Kangar Municipal Council/ Majlis Perbandaran Kangar

(MPK).

38

Diagram 2: Flow Chart to Enact, Amend And / Or Repeal By-Laws, Orders and Methods

Used by Kangar Municipal Council (MPK).

RESPONSIBILITY

WORKFLOW

Terima arahan daripada

YDP/SU

Kumpulkan maklumat

Buat perbandingan atau

rujukan

Sediakan surat panggilan

Sediakan draf gubalan atau

pindaan

Adakan pembentangan

Buat pindaan mengikut

keputusan semasa

pembentangan

Sediakan surat mohon ulasan

YB PUUN

Pastikan surat dan draf

gubalan dihantar kepada YB

PUUN

Rekod kertas pandangan

Buat pembetulan jika ada

Sediakan Kertas Kerja utk

Mesy. J/kuasa Tetap

PUU

PPUU

PPUU

PPUU/PTPO

PPUU/PTPO

PUU/PPUU

PPUU/PTPO

PPUU

PN

PTPO/PN

PPUU

PPUU

Lulus

Buat

pindaan

Tidak Ya

39

RESPONSIBILITY

WORKFLOW

Bentang Kertas Kerja dalam

MMP

Sediakan Kertas Kerja untuk

pewartaan

Sedia memo utk MMK

Sediakan surat kepada SDUN

utk pewartaan

Dapatkan salinan warta

daripada Setiausaha Dewan

Undangan Negeri.

Edarkan salinan UUK,

Perintah atau Kaedah kepada

Simpan warta UUK, Perintah

atau Kaedah dalam fail

pindaan Unit Undang-

Undang.

PUU

PPUU

PPUU

PUU/PTPO

PTPO

PPUU

PTPO

PTPO/PN

Lulus

Buat

pindaan

Tidak Ya

Lulus

Buat

pindaan

Tidak Ya

40

3. 4 RULE MAKING REGULATION AND GOVERNANCE OF PERLIS LAND

AND MINES (PTG) DEPARTMENT.

OVERVIEW OF PERLIS LAND AND MINES (PTG) DEPARTMENT.

Perlis Land and Mines Department (Pejabat Tanah dan Galian (PTG) is one of the State

Government Department. To strengthen the function of PTG, there are eight (8) divisions have

been established, which are as follows (https://ptg.ptgps.gov.my/unit.php).

1) Management Services Division

2) Data and Revenue Division

3) Enforcement Division

4) Development Division

5) Government Project Division

6) Registration Division

7) Disposal/Technical Division

8) Legal Division

Accordingly, the functions of Perlis Land and Mines Department are to manage and administer

all land affairs of the State of Perlis based on the provisions of the laws and policies of the State

Government, which are Federal Constitution, National Land Code 1965, State Land

Regulations 1987, The Malay Reservation Enactment Perlis 1353, Land Acquisition Act 1960,

Minerals Act 2002 Perlis State, Strata Titles Act 1985. Besides, PTG needs to adhere to the

decisions made by the State Executive Council meetings and other regulations adopted from

time to time. Furthermore, PTG entitles to provide views and recommendations related to land

management and new policies to the State Government; and keep all land records and data for

the entire state of Perlis.

41

PTG also carry a significant role in enhancing the socio-economic development of through land

disposal actions, land type change process, land acquisition and other services in line with

government policies. PTG also striving in developing an efficient and effective system for land

title registration, land administration matters and all types of land records in accordance with

the requirements of laws and regulations as to maximize the collection of state revenue while

finding and adding other sources of revenue from land and mineral resources.

Development Unit of Perlis Land and Mines Department responsible in managing the

application is accessible from the link: https://ptg.ptgps.gov.my/serPembangunan.php.

• Subdivision Land Division (Section 142, National Land Code).

• Application of Land Subdivision (Section 137, National Land Code).

• Application of Land’s Amalgamation (Section 148, National Land Code).

• Simultaneous Application for Subdivision and Variation of Condition Restrictions and

Categories (Section 124 (1) (a) and (c), National Land Code).

• Retrieval Application Alienated Land (Section 204B, National Land Code).

Likewise, any other applications related to land matters also need to be referred to the Perlis

Land and Mines Department through the required forms. The reason for choosing the rule

making process and governance of PTG Perlis is due to the fact that one of the most significant

and biggest contributors towards the State income. Table 4 further illustrates the fraction of

income which have been contributed by the matter controlled by PTG Perlis as of 2019.

42

Table 4.

Key Contributors of Perlis State Government for the Year 2018.

NO. DETAILS

INCOME

(MILLION (RM)

1 Federal Government Grants 80.68

2 Current Land Tax 14.57

3 Premium Land 3.66

4 Limestone Permit 2.73

5 Premium Change of Land Conditions 2.20

TOTAL 103.84

Source: State Government Financial Statements 2019

The main contributors to the Perlis state government's revenue for 2018 consist of Federal

Government Grants, Current Land Tax, Land Premium, Limestone Permit and Land Condition

Change Premium. All these revenues contributed RM103.84 million or 81.1% of the total

revenue in 2018.

3.4 RULE MAKING PROCESS AND GOVERNANCE OF PERLIS LAND AND

MINES (PTG) DEPARTMENT.

Matters related to the rules and regulations of PTG are monitored through the consultation with

the Perlis State Legal Advisor. For any rules or regulation which involved in the state

development matter, PTG will work closely with Perlis State Economic Planning Division

(BPEN). BPEN will play its role in providing insights on the issues or proposal regarding the

43

rules and regulation. Other stakeholders such as Local Authorities (MPK) and other

government agencies also participate in this process (Kangar Municipal Council, 2020).

In the process of drafting the rules and regulation by the PTG, BPEN does not involve. The

mandate for PTGs to implement certain rules and regulations will be issued by Department of Director

General of Lands & Mines Federal. JKTPG and Malaysia Action Council/ Majlis Tindakan Negara

(MTN) through the minutes meeting (Kangar Municipal Council, 2020).

The circular by JKTPG, MTN minutes of meeting by PTG will be prepared as the informed letter

(Kertas Makluman) for the approval and adoption process. Relatively, for the review process, the rules

and regulations by the PTG always being reviewed and if there is any amendment to be made, the

minutes for Executive Council/ Majlis Mesyuarat Kerajaan Negeri (MMKN) will be taken by

considering the advanced draft by other states in Malaysia. The approval from other state agencies is

needed before the draft for amendment will be prepared (Kangar Municipal Council, 2020).

Additionally, PTG is also allowed to initiate their own rules and regulations or review process.

However, it needs to get the approval from the other State Agencies and MMKN before any draft could

be prepared. Currently, there is also quite several rules and regulations are being reviewed. Additionally,

the review needed is reflected from the current political and economic condition (Kangar Municipal

Council, 2020). The rule making process by Perlis Land and Mines (PTG) Department is further

illustrated in Diagram 3, accordance with the flow provided by Perlis Land and Mines (PTG).

44

Diagram 3: Process Flow on PTG Perlis Development of Regulations

Circular from Department of Director General of Lands & Mines Federal. (JKTPG), Minutes of meetings by Malaysia Action Council (MTN0 & Minutes of Meetings of PTG Perlis

The Informed Paperwork/Kertas makluman by PBN and Executive Council (MMKN) for approval and adoption ant state level.

Preparation MMKN paperwork for PBN approval

Written views by State agencies, State Finance Officer (Pegawai Kewangan Neeri (PKN) & State legal Adviosr

PBN/MMKN approved rules and regulatiions

45

Diagram 4: Process Flow on PTG Rules and Regulation Implementation.

The draft retrievd from lawnet & the hardcopy will be otained from the Library at the State Legal office

Notes : Considering the regulation/ ammendment which have been done by other state.

The draft will be prepared based on current format provided by the Attorney General Chambers and State Legal Advisor.

Draft will be submit to State Legal Advisor for approval

Approved draft will be submit to Assemblymen Office to be gazetted in the state government gazette

The draft was published in a series of state government gazettes

46

3.5 GAP ANALYSIS MATRIX

Towards achieving the objectives of the National Policy on The Development and

Implementation of Regulations (NPDIR), which aims to ensure that Malaysia’s regulatory

regime effectively supports the country’s aspirations to be a high-income and progressive

nation, to promote a regulatory process that is effective, efficient and accountable, and to

achieve greater coherence among the policy objectives of government, there should an aligned

practices and implementation by the State government, especially in relation to rules and

regulation practices require comprehensive analysis.

Reflecting to the purpose of the research, the gap analysis matrix is conducted in identifying

the gaps in rule and regulation practices and process which can be highlighted and discussed

in detail. For Perlis, the gap matrix analysis conducted for Kangar Municipal Council (MPK)

and Perlis Land and Mines Department (PTG). The following subsection further elaborates the

identified gaps, which is generated from the comparison made between the existing rule

making process by MPK and PTG via NPDIR approach. The highlight of the comparison will

be based on the Regulatory Impact Analysis (RIA) and how the rule making process of MPK

and PTG meets the 7 elements of RIA.

47

3.5.1 GAP ANALYSIS MATRIX OF KANGAR MUNICIPAL COUNCIL/MAJLIS PERBANDARAN KANGAR (MPK).

NO.

ELEMENTS OF

RIA

JUSTIFICATION

DISCUSSIONS

1. Problem Identification Regulators must establish clear objectives, evidence

that a problem has arisen, and government intervention

is required.

When any risks are involved, regulators must ensure

that risks are of sufficient significance to justify

intervention.

This process is applicable to regulations and other

legally binding instruments which are issued by

regulators.

As for MPK Perlis, in identifying the problems

related to the rules and regulations, the data gathering

and reviewing process which consumes a long period

of time always made the intervention action outdated

and ineffective.

The drafting process at MPK is mostly based by

referring to the draft prepared by the other PBT from

other states. This process seems to be irrelevant for

the “first time” regulation process as the impact is not

going to be the same for all states, all are depending

48

NO.

ELEMENTS OF

RIA

JUSTIFICATION

DISCUSSIONS

on the economic, political and other matters. It is

comprehensive to refer to other PBTs’ draft, but

MPK should already come out with their own draft

guidelines as to avoid any misunderstanding in

regulating any rules or regulation.

2. Objectives Desired objectives of the proposal or the problem that

is being addressed must be identified, described,

analysed and documented clearly and concisely.

MPK Perlis identified, and drafted the objectives

related to rules and regulation by referring to other

PBTs. This process is not comprehensive enough as

MPK does not try to comprehend the root of the

problems which probably or initially faced by the

state agencies.

49

NO.

ELEMENTS OF

RIA

JUSTIFICATION

DISCUSSIONS

The feedbacks and reviews from the agencies are

crucial in ensuring that measures taken upon the rules

and regulations act for the benefit of the stakeholders

and society.

3. Instrument/Alternative

Option

A range of options (regulatory and non-regulatory) that

may constitute feasible means for achieving the desired

objectives must be analysed to ensure the most

effective and efficient option is chosen.

Referring to process provided by MPK, it is not clear

whether MPK has a range of options/alternatives

which serves as the most efficient measures.

MPK measures are based on other PBTs practices

and this approach is not feasible enough in giving the

best options as the identified problems might be

differ from another state.

4. Assessment of Impact Costs, benefits and where relevant, levels of risk of a

range of feasible options for consumers, business,

Process of regulation and amendment by MPK

initially involved the data reviewing and collection

50

NO.

ELEMENTS OF

RIA

JUSTIFICATION

DISCUSSIONS

government, and the community must be carried out to

assess potential effects.

process. But the process on how the review of

existing regulation or regulating new regulation are

not being done extensively upon the other

stakeholders since MPK mostly refer to other PBTs’

actions.

Assessment of Impact is not being conducted

aggressively in looking at the pros and cons of such

decisions. The analysis should be done extensively at

the state level, local authority and how the decision

on the rule and regulation affect the current and

future economic situation. This should be

highlighted as the income of MPK for the 2019 has

shown a decreased as compared to 2018. The report

51

NO.

ELEMENTS OF

RIA

JUSTIFICATION

DISCUSSIONS

indicated it was due to weak enforcement of MPK on

the assessment of tax collection.

5. Consultation Regulators proposing new regulations or changes must

carry out timely and thorough consultations with

affected parties

Upon the rule and regulation and amendment, MPK

is monitored by the State Legal Advisor and Local

Government Division (BKT).

The internal discussion has taken place, however,

the consultation not being conducted rigorously by

the state agencies on how such decision will affect

them, and the feedbacks are crucial in ensuring that

MPK comes out with the decision that act for the

benefit of all.

52

NO.

ELEMENTS OF

RIA

JUSTIFICATION

DISCUSSIONS

6. Conclusion and

Recommendation

RIS (Regulatory Impact Statement) should include a

statement identifying the preferred option based on the

impact analysis.

MPK still lack of awareness regarding the NPDIR

policies.

RIS is involving the problem identification stage and

impact analysis specifically not being conducted

extensively by MPK where this process should be

implemented at each level before any rules will be

regulated or amend.

7. Implementation

The plans, procedures and resources that will be used

for compliance and enforcement should be described in

RIS.

MPK implementation of rules and regulation based

on RIA still weak. Even though the process being

reviewed by the State Legal Advisor, the initial

process before the approval has not been enforced

systematically. The guidelines provided by the State

53

NO.

ELEMENTS OF

RIA

JUSTIFICATION

DISCUSSIONS

should not be the only sources for the enforcement

and compliance.

The following SWOT Analysis clearly indicates the present situation faced by the MPK.

54

3.5.2 EVALUATION OF EXISTING RULES AND REGULATION OF MPK.

In evaluating the existing rules and regulation of majlis Perbandaran Kangar, the evaluation

also based on the SWOT analysis prepared by the officers from MPK. As for the review

process, all regulations are having been reviewed and approved by the State Legal Advisor and

Bahagian Kerajaan Tempatam (BKT). However, even though there is only 1 PBT in Perlis,

each of the review process will take a long period of time as the respective departments need

to gather the related information which will be used in the reviewing process.

Particularly at the initial information gathering process, MPK is having the issues with the

respective departments and stakeholders in giving their feedback towards on the review

matters. Thus, this will delay and make the process lengthier than supposed. The weakness that

can be highlighted is in the review process, the decision my MPK will be based on the decision

made by the other PBTs, where it is preferable the decision should be made on the feedbacks

by the state agency and other stakeholders.

MPK have been provided by the State guidelines which would help in implementing the rules

and regulation in a short period of time and will be able to reduce the misuse of administration

procedures.

55

3.5.3 SWOT ANALYSIS MATRIX OF KANGAR MUNICIPAL

COUNCIL/MAJLIS PERBANDARAN KANGAR (MPK).

STRENGHS WEAKNESSES

1. All rules and regulations have been

reviewed and approved by the State

Legal Advisor and Bahagian

Kerajaan Tempatan.

2. Strong legal unit.

3. MPK Strategic Plan.

4. Teamwork and leadership.

5. The only PBT for Perlis.

1. Long period of time taken by the respective

department to review and gather data and

information.

2. PBT will make amendments and drafting

based on referring other PBT.

3. Lack of NPDIR & RIA knowledge.

4. Time consuming on data & information

collection process.

5. Weak asset liquidity.

OPPORTUNITIES THREATS

1. The State provides clear

requirements and guidelines.

2. IR4.0 and advancement of IoT.

3. State Development Plan.

4. Urbanization.

5. NPDIR & RIA support by MPC.

1. Commitment from respective stakeholders in

terms of giving feedback.

2. Bargaining power of NGO & local

community.

3. Political interference.

4. Threats of neighbouring state’s PBT.

5. Incorporating premise owner - assessment tax

backlog.

A lot can be done as to improve the overall performance of MPK as to emerge as one of the

most outstanding state agencies in Perlis and in the country. Specifically, MPK must utilize its

strengths as to exploit opportunities and at the same time reduce the threats. It should strive to

overcome weaknesses as to exploit opportunities and reduce threats. Such actions must be

supported by clear objectives and sound state.

56

3.5.4 GAP ANALYSIS MATRIX OF PERLIS LAND AND MINES (PTG).

NO.

ELEMENTS OF

RIA

JUSTIFICATIONS

DISCUSSIONS

1. Problem Identification Regulators must establish clear objectives, evidence

that a problem has arisen, and government intervention

is required.

When any risks are involved, regulators must ensure

that risks are of sufficient significance to justify

intervention.

This process is applicable to regulations and other

legally binding instruments which are issued by

regulators.

In gathering the information on the addressed

problems, PTG obtained the data by considering the

action taken by other PBT related to the similar or

almost similar rules and regulation.

If the rules and regulations or amendments involve

the state development aspect, BPEN will also

participate in the decision-making process and the

State Legal Advisor will further monitor such

processes.

57

NO.

ELEMENTS OF

RIA

JUSTIFICATIONS

DISCUSSIONS

Additionally, the decision to change the policy also

being made drastically, thus this will give the

opportunity for the process to be more complicated

and unclear problem identification. Hence, the

objectives will be misleading.

However, the participation should not only by

BPEN, but other state agencies should also be

incorporated as PTG scope is wide and land matters

affect mostly on the assessment tax collection of

2019. Thus, MPK should be involved as the

enforcement of the tax collection involving land

matters also part of local authorities’ responsibilities.

58

NO.

ELEMENTS OF

RIA

JUSTIFICATIONS

DISCUSSIONS

Additionally, the proposal of changes in rules also

been made by other unknown parties, including the

assignment of duties.

2. Objectives Desired objectives of the proposal or the problem that

is being addressed must be identified, described,

analysed and documented clearly and concisely.

The objectives of the proposal by PTG have been

drafted by the current format in line with the

requirements by the AGC. However, as the process

of drafting is crucial and involving analytical skills,

PTG currently facing the shortage of staff in drafting,

and unfortunately, only 1 personnel from Putrajaya

is responsible for this. At the state level, there is a

skilled staff on drafting matters.

59

NO.

ELEMENTS OF

RIA

JUSTIFICATIONS

DISCUSSIONS

The drafting process interrupted by the task overlap

among the officers. When the workflow,

responsibilities of each staff not being clearly

outlined, this will lead to confusion.

3. Instrument/Alternative

Option

A range of options (regulatory and non-regulatory) that

may constitute feasible means for achieving the desired

objectives must be analysed to ensure the most

effective and efficient option is chosen.

The feasibility analysis of available alternatives has

not been done extensively. The shortage of staff will

lead to a bigger problem the smoothness of process

must be interrupted as there is no time investment for

such analysis.

4. Assessment of 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.

Assessment of Impact also very weak in rules and

regulation process of PTG. The pros and cons of such

alternatives could not be analysed properly due to

60

NO.

ELEMENTS OF

RIA

JUSTIFICATIONS

DISCUSSIONS

staff shortage, unclear direction of the relevant

officers.

The internal discussion only being done with BPEN

on the development aspect, not widely discuss on

broader spectrum. As decision being influenced by

other PBT, this approach could not be generalized

that it will benefit the whole stakeholders, as each

state might face different problem which require

different mechanisms.

5. Consultation Regulators proposing new regulations or changes must

carry out timely and thorough consultations with

affected parties.

The changes of policy of PTG always being made

drastically. Even the consultation process took place,

61

NO.

ELEMENTS OF

RIA

JUSTIFICATIONS

DISCUSSIONS

as the process it too much drastic, the appropriate

measure will be overlooked.

6. Conclusion and

Recommendation

RIS (Regulatory Impact Statement) should include a

statement identifying the preferred option based on the

impact analysis.

RIS is still weak for PTG, started from the problem

identification stage, defining the objective,

assessment of impact and consultation. Even PTG

has multitasking officers, this could not be a

guarantee that the whole process will be effective and

efficient.

7. Implementation

The plans, procedures and resources that will be used

for compliance and enforcement should be described in

RIS.

PTG enforcement is limited to less effective legal

provisions, for example, requiring TPR approval on

compound issues.

62

NO.

ELEMENTS OF

RIA

JUSTIFICATIONS

DISCUSSIONS

When the enforcement is limited to less effective

legal provision, the impact assessment could not be

competed effectively.

The following SWOT Analysis clearly indicates the current situation faced by the PTG.

63

3.5.5 EVALUATION ON EXISTING RULE AND REGULATION OF PTG PERLIS.

The existing rules and regulations of PTG Perlis will be review depends on the issues that arise.

Such rules and regulations that arise, if they involve the development aspect of the state, the

opinion from State Economy Planning Unit (BPEN) will be asked, together with other agencies

and other stakeholders such as MPK.

The current issue faced by PTG is the drastic changes in the policy in such a way affecting the

enforcement of the rules and regulation. It is also being addressed that enforcement is limited

to less effective legal provisions, for example, requiring TPR approval on compound issues.

Besides, the current enforcement of rules and regulation of PTG need to be integrated with the

state government enforcement unit which is highly skilled and complete in all aspects including

weapons as to assist in enforcement duties.

Additionally, in the review process, drafting procedures is very crucial as to highlight the issues

and need of such review. However, PTG Perlis is lacking in terms of the skilled workforce who

is in charge in the drafting process. Staffs also constantly changing all all are working with

insufficient manpower. This problem will affect the whole reviewing process as all steps will

require longer period of time.

64

3.5.6 SWOT ANALYSIS MATRIX OF PERLIS LAND AND MINES (PTG).

STRENGHTS WEAKNESSES

1) Officers / staff who understands the

aspirations of the people below.

2) Multitasking staff.

3) Excellent cooperation with other

state departments.

4) Always assisted by AGC / PUUN

room. No bureaucracy.

5) System -Lawnet.

1) Staff who is constantly changing &

insufficient.

2) Very drastic policy changes.

3) Lack of drafting skills at the state level

because there is no such exposure except

only one officer from Putrajaya.

4) Enforcement is limited to less effective

legal provisions, for example, requiring

TPR approval on compound issues, etc.

5) Need to integrate state government

enforcement unit that is highly skilled and

complete in all aspects including weapons

as to assist in enforcement duties.

OOPORTUNITIES THREATS

1) State government support.

2) Development of IR4.0 & IoT.

3) Small state - easy to make an

engagement.

4) Cooperation with NGOs.

5) Many strategic areas and high

potential for development.

1) Pressure from politicians.

2) The people's negative perception of the

state government.

3) Competitors from neighbouring Kedah

and Thailand.

4) Changes in rules by other unknown

parties, including assignment of duties.

5) The existence of outdated regulations

does not take into account the socio-

economic and geographical geography of

the state.

A lot need to be done as to improve the overall performance of PTG before it can emerge as a

leading state agency in Perlis and in the country. Specifically, PTG must utilize its strengths as

to exploit opportunities and at the same time reduce threats. It should also strive to overcome

65

weaknesses as to exploit opportunities while working to reduce threats. Such actions must be

supported by clear objectives and sound strategies.

66

CHAPTER 4

RECOMMENDATIONS AND CONCLUSION

4.1 RECOMMENDATION FOR KANGAR MUNICIPAL COUNCIL (MPK).

1) Strategic collaboration with MPC

It is crucial for MPK to establish strategic collaboration with MPC especially with NPDIR and

RIA. To have knowledge of both is a must as it will enable MPK to develop better rules and

regulation. Apart from that, strategic engagement with respective stakeholders need to be

established as it will enable the agency to develop better or sounds rule and regulation.

2) Prepare the State Draft Guideline

In regulating the rules and regulation, MPK relies on the other PBTs in looking the best

approach that has been taken up for similar situations. It is wise to refer other PBTs’ draft, but

MPK should already come out with their own draft guidelines as to avoid any misunderstanding

in regulating any rules or regulation. Additionally, being independent is important as to avoid

heavily influenced by the other PBT approach especially in the decision-making process. It is

crucial for the state in dealing with different economic condition and stakeholders.

3) Extensive Discussion and Consultation with State Agency

In coming out with alternatives for such decision regarding the rule and regulation, MPK

should address the issues in depth with the State agencies, taking into account how such rule

and regulation need to be improved and how the action taken will help the agencies to cater the

current and future problems. MPK should rigorously obtain the feedback from the state

agencies prior and after the implementation process.

67

4) Extensive Investigation Rules and Regulation Impact Analysis.

The impact analysis of the alternative’s assessment should be conducted in detail, by looking

at how such regulation (new/amend) will affect the whole stakeholders, specifically the citizens

and state agencies. The assessment process should look into the pros and cons from different

parties’ perception.

5) Effective Segregation of Duties

The process of obtaining the data and information should be segregated to more number of

officers as this will help to fasten the process, so that the corrective measure can be taken in a

short period of time. This will lead to better cost and revenue management, especially in the

context of the state revenue collection.

4.2 RECOMMENDATION FOR PERLIS LAND AND MINES (PTG) PERLIS

1) Strategic collaboration with MPC

It is crucial for PTG to establish strategic collaboration with MPC especially with NPDIR and

RIA. To have knowledge of both is a must as it will enable PTG to develop better rules and

regulation. Apart from that, strategic engagement with respective stakeholders need to be

established as it will enable the agency to develop better or sounds rule and regulation.

2) Skilled Worker on Drafting Competency at State Level

PTG Perlis should address this issue to the higher management as they need the skilled

employees in drafting the proposal. This process is crucial in defining the problems and clearly

outlines the objective by the PTG in regulating or amending the rules or regulation. The

workforce should be effectively managed as currently they are always being transferred and

68

changed without clear reasons. This will interrupt the whole process of establishing PTG as an

efficient agency.

3) Extensive Investigation Rules and Regulation Impact Analysis.

The impact analysis conducted by PTG requires further improvement. Comprehensive

assessment should be conducted in detail. This will enable PTG to develop better rules and

regulations. No doubt, to engage affected stakeholders like the public at large and state agencies

is a must. The assessment process should look into the pros and cons from different parties’

perception.

4) Effective Period in Introducing/Proposing Policy Changes

The policy changes should not be made drastically, this will lead to confusion, misleading

purpose, and objective, thus failure in such regulations. Proper assessment analysis should be

conducted before such decision can be made.

4.3 CONCLUSION

Effective collaboration and cooperation between the State Secretary, the individual body, and

the MPC is crucial for the GRP criteria to be properly adopted by all the various bodies within

the State. Thus, would help to raise awareness of GRP specifications, instruments, and

measures.

In addition, the cooperation will also assist in establishing a sound GRP system to be complied

by the various bodies' law and regulation makers. This structure should serve as a reference by

the various bodies when introducing new rules or regulations. The implementation of the GRP

would assist the State in building an effective and efficient system of regulatory management.