Ministry of Domestic Trade and Consumer Affairs Memorandum for Annual Private Sector Consultation 2006

REHDA would like to raise the following issues and propose the following recommendations:-

1. Encourage International Retailers/Franchises to Set Up Shops in Malaysia
   Retail shopping is one of the contributing factors to the country's growth. Incentivising quality international retailers/franchise holders to operate in Malaysia will not only bring new investment and expertise into the country but will also create new demand for retail space and housing accommodation.
   
   
   1. Issues
      
      We refer to the "Guidelines on Foreign Participation in Distributive Trade" which took effect from 1 December 2004 in particular provisions on incorporation of local companies and equity structure requirements which in our opinion :
      • hamper the expansion of businesses involved in imported merchandise and services ;
      • hinder on-going efforts to revive the shelved projects for the commercial property industry ; and
      • are contrary to our country's aspirations to be an international shopping destination.
        
        
   2. Recommendations
      We urge the Government :-
      • to provide green lane approvals for such international retailers/ franchise holders ;
      • to embark on an aggressive promotional campaign to grow Malaysia as a food, shopping and retail haven ;
      • not to impose deterrent requirements such as minimum local and Bumiputera equity conditions for foreign direct investments.

   Imposition of such requirements makes it unattractive and cumbersome for compliance - driving away foreign direct investment and nullifying the government's other efforts to promote shopping tourism in Malaysia.

2. Owners and Landlords should not be held liable for Tenants' copyright infringement acts
   
   
   1. Issues
      
      REHDA wishes to reiterate the joint stance adopted in the Joint Memorandum dated 8 May 2006 submitted by ACCCIM, PPKM and FIABCI to the Minister that whilst full support should be given to the government's efforts in fighting copyright infringement and/or piracy, the Ministry's proposal to make property owners and landlords liable for copyright infringement by tenants and operators is not appropriate.
      
      Our reasons for objections are as follows :-
      
      
      1. Owners / Landlords cannot be held liable
         • Owners / landlord may not retain all lots in the shopping centres but sell the lots by strata title to individual investors or purchasers.
         • Although owners/landlords would have a right to terminate the tenancy of tenants who carry out illegal activities at rented premises, owners/ landlords do not have the expertise to detect or proof the infringement / illegality. It should be job of the expert enforcers,
         • Even if the owner/landlord successfully proves the wrong-doing or illegal activity of the defaulting tenant, the court process involved to evict the tenant is time consuming and tedious, during which time the defaulting tenant may continue its illegal activities at the premises.
         • All retailers operating businesses are required to have the necessary and requisite licenses, approvals and permits from relevant authorities prior to commencement of their businesses. As landlords/owners would have taken all the necessary precautions to ensure legality of the business and operations of the tenants, it should be the responsibility of the authorities to take action by withdrawing or revoking the licenses of retailers who are found to be carrying out illegal businesses such as selling pirated goods.
           
           
      2. Moral Obligation, not Legal
         It can only be the moral obligation of owners and landlords to inform the relevant authorities in the event business operations are alleged to be illegal and this should not be converted to a legal obligation.
      3. Consequences of such amendments
         The undesirable consequence in the event such amendments are passed include :-
         • Owners / landlords will effectively become the 'police' of copyrights instead of the copyright bodies themselves
         • It will effectively not only damper but put a stop to foreign investment for the purchase of commercial properties in our country
         • In order to ascertain the legality of tenants' business operations, owners/landlords will need to constantly check on the latter's credit and/or criminal history to which the former has no legal access
         • It will be vastly impractical for building owners/landlords to monitor their tenants especially when these premises are not located only in shopping centres but at shophouses etc. in geographically diverse areas
         • there will be vast ramifications in overall legislation which have to be addressed simultaneously
         • the biggest owners and landlords of commercial property in terms of number of buildings i.e. the government themselves, would be within the ambit of any such provisions.
           
           
   2. Recommendations
      • Firstly, as there is existing legislation in place to enforce copyrights, the logical step would be to take action against manufacturers who produce such illegal merchandise. This would eliminate any illegality at source.
      • Secondly, it would be both more productive and effective for legislation to be effected against the very consumers who propagate copyright infringements by creating a demand for such merchandise. Whilst unpopular, this is the practice in some European countries which do not have such widespread infringements.
      • the principle of drawing up laws and legislations are to be punitive against those who flout them or commit the offense, not against those who do not and are not even empowered to do so.