Simplifying Rules and Regulations Malaysia’s Experience Session 6 Simplifying Rules and Regulations Malaysia’s Experience Mohd Alamin Rehan, Senior Consultant, MPC Presentation for the 2nd Asian Public Governance Forum on Public Innovation, Hanoi, Vietnam 9 – 10 September 2015

Contents Malaysia Regulatory Reform Journey Regulatory policy and governance framework Reducing Unnecessary Regulatory Burdens on Business (RURB) as a tool for simplifying regulations RURB Focus Areas Case Study: RURB Logistics and Construction Achievement

Malaysia Regulatory Reform Journey To expand GRP at State and Local Governments Improve Business Ecosystem Reduce Red Tape To get out Middle Income Trap Establised PEMUDAH Setting up Regulatory Review Department Introduce GRP Expand GRP to State and LGs Monitor & implement DB reforms till present Issued NPDIR Circular Conducted RURB To develop state & LG GRP Policy Liberalisation of Services Sectors 2006-2010 2011 - 2015 2016 - 2020 Public-Private Collaboration High Income Nation Conducive Business Environment Integrated and Comprehensive Governance Reform 9th Malaysia Plan New Economic Model (GTP & ETP) 10th Malaysia Plan 11th Malaysia Plan

9th Malaysia Plan 2006-1010 – Reviewing Regulations 26.32 Statutes and regulations will be reviewed to further simplify and eliminate cumbersome regulations and procedures. More self-regulation approaches will be considered to ensure faster approvals for business permits and licences while promoting greater transparency. Efforts will also be undertaken to empower professional bodies to monitor and certify compliance with administrative and statutory provisions. (Chapter 26-2)

10th Malaysia Plan 2011-1015 – Modernising Business Regulations MPC to spearhead a comprehensive review of business regulations and improve processes and procedures to increase productivity and competitiveness of major economic sectors (Chapter 3; pages 73-74) MPC will provide support to NKEAs by reviewing and recommending changes to existing regulations and policy with a view to remove unnecessary rules and compliance costs and improve the speed and ease of delivery (Executive Summary; page 25)

11th Malaysia Plan 2016-2020 – Accelerating Regulatory Reforms 1.24. Regulation reforms will be accelerated to ensure new and existing regulations as well as their administration and enforcement are aligned with good regulatory practices. This will be done by expanding the adoption of the National Policy on Development and Implementation of Regulations (NPDIR), and conducting regular regulatory review for ministries and agencies. In addition, a “cost-in, cost-out” evaluation will be applied on all new business regulations to reduce regulatory burden. Under this evaluation, the direct cost of each new regulation on the private sector will be determined and the introduction of the new regulation will need to be accompanied by the abolishment of outdated or unnecessary business regulations to ensure that the total regulatory cost to business does not increase. (Strategy Paper 1)

Regulatory policy and governance framework Open Government Transparency Accountability Coherence Core Policies Regulatory Process Management Requirements Integrated RIA Reducing Unnecessary Regulatory Burdens (RURB) Public Consultation procedures Performance Evaluation Systems, Processes & Tools Oversight Body Regulatory Agencies Regulatory Coordinators RIA Assessors RIA Trainers Actors, Institutions & Capacity Economy Society Environment

Important documents to review regulation Reference should be made to the government circular on National Policy on the Development and Implementation of Regulations issued by the Chief Secretary to the Government of Malaysia on 15 July 2013 (Pekeliling Am Bilangan 1 Tahun 2013) Guideline on Public Consultation Procedures National Policy on the Development and Implementation of Regulations Provides a systematic guideline based on best practices adopted from other countries Best Practice Regulation Handbook Tool to facilitate the implementation of Best Practice Regulation system and provides detailed guidance for the implementation Quick Reference Best Practice Regulation Handbook Summarised version of Best Practice Regulation Establish guiding principles and requirements for carrying out an adequate public consultation exercise

RURB as a tool for simplifying regulations RURB helps regulated businesses identify regulatory burdens, suggest solutions and then present them to regulators in a credible way. RURB covers written regulation and its administration. Regulated BUSINESSES insights 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 RURBS and finding answers review “regulation and regulators” Regulators Insights regulatory objectives how to protect public health, welfare, safety, environment, etc using regulation

5 13 14 RURB Focus Areas 1 Construction Trade Logistics Environmental Services Employment

75% RURB Logistics Reduce Processing time RURB on Business: Commercial Vehicle Licensing : Remove Unnecessary Processes and Documentations Compliance cost savings : RM61million Reduce 75% Processing time BEFORE AFTER Time Saving Procedure Before : 4 months 8 After < 1 month 5

RURB Dealing with Construction Permits (DCP) KL Trax Strengthen OSC & Introduce risk based system Streamline OSC to World Bank research Rank/189 Introduce OSC EASE OF DOING BUSINESS REPORT

DCP team : government and business smart partnership KWP KKR PEMUDAH

Achievements Systematic review of all business licences, legislations and regulation; Elimination of archaic licences and laws; Implementation of the proposals to either eliminate or consolidate the licences; As of April 2014, 735 business licenses were re-engineered or simplified and composited into 454 business licenses. This involved cost savings of RM729 million; At state level, 2,546 licenses were reviewed with cost savings of RM1.7 billion; and Second review of Acts/Regulations/Licenses extended to State Level

Like to Know More? Visit MPC Website: www.mpc.gov.my 14/4/2018 Visit MPC Website: www.mpc.gov.my Visit RIS Portal: ris.mpc.gov.my E-mail: regulatoryreview@mpc.gov.my