Azmin is wrong, Trans-Pacific pact will affect Bumiputeras, says MP
Klang MP Charles Santiago says certain provisions in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership will subvert Bumiputera policies and privileges. (AFP pic)
PETALING JAYA: A number of chapters in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will undermine the rights of Bumiputeras despite repeated insistence from international trade and industry minister Mohamed Azmin Ali that they will not, according to Klang MP Charles Santiago.
He told FMT that provisions in these chapters would subvert Bumiputera policies and privileges, including in the areas of investment, government procurement and state-owned enterprises.
The CPTPP pact involves Malaysia, Brunei, Vietnam, Singapore, Australia, New Zealand, Japan, Canada, Mexico, Chile and Peru. Malaysia is one of four countries that have yet to ratify it.
Azmin has been steadfast in saying that the agreement will not affect Bumiputera privileges.
PETALING JAYA: A number of chapters in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will undermine the rights of Bumiputeras despite repeated insistence from international trade and industry minister Mohamed Azmin Ali that they will not, according to Klang MP Charles Santiago.
He told FMT that provisions in these chapters would subvert Bumiputera policies and privileges, including in the areas of investment, government procurement and state-owned enterprises.
The CPTPP pact involves Malaysia, Brunei, Vietnam, Singapore, Australia, New Zealand, Japan, Canada, Mexico, Chile and Peru. Malaysia is one of four countries that have yet to ratify it.
Azmin has been steadfast in saying that the agreement will not affect Bumiputera privileges.
Charles Santiago.
Santiago acknowledged that the agreement contained non-conforming measures allowing Malaysia to maintain or adopt policies, but he said these applied only to certain sectors.
“An example is New Zealand’s exception for its indigenous people, which exempts its preferences for the Maoris from the entire CPTPP,” he said. “But Malaysia does not have an equivalent exception to the entire CPTPP for Bumiputera policies and privileges.”
On the clause that states Malaysia reserves the right to adopt or maintain measures that assist Bumiputeras, which Azmin recently touted as proof of the agreement’s allowances, Santiago argued that this portion applied only to licences issued in certain sectors.
“It is not a general exception to help Bumiputeras. It does not allow Malaysia to require 30% Bumiputera equity.
“Since the investment chapter of the CPTPP liberalises all sectors except those listed, 30% Bumiputera equity requirements are only allowed in sectors which specify this in Malaysia’s Annexes I or II, like hypermarkets, superstores and convenience stores,” he said.
Furthermore, he said, Malaysia would not be able to require foreign companies to appoint Bumiputeras in senior positions or as board members as this would violate the agreement.
On the subject of government procurement, Santiago said Malaysia would not be able to direct government procurement of goods and services to Bumiputera firms in most cases.
“Malaysia does have some exceptions, including the right to direct up to 30% of the total value of construction contracts above the agreed-upon threshold to Bumiputeras, but currently, Malaysia can choose to direct 100% of its construction contracts to Bumiputeras. The CPTPP reduces this to 30%.
“Also, this exception is only for construction contracts. This is not an exception to all procurement, like ministries purchasing goods like paper or cars, or services such as phone services.”
He said large GLCs would also be affected since those with annual revenues in excess of RM1.17 billion would have to liberalise their procurement of most goods and services and issuance of contracts.
There are some exceptions, but even these were limited.
“Annex IV allows state-owned enterprises to preferentially direct up to 40% of their purchasing budget to enterprises owned by Bumiputeras, Sabahans, Sarawakians and SMEs.
“However, if you take a company like Tenaga Nasional Berhad, which in 2019 allocated 68% of its procurement to Bumiputeras, this would have to be cut to 40%. That would mean no additional preferences could be given to Sabah, Sarawak or SMEs without cutting it further,” he said.
The remaining 60% would have to be liberalised and Bumiputera companies would then have to compete on price and quality for the remaining percentage of funds, he added.
Santiago acknowledged that the agreement contained non-conforming measures allowing Malaysia to maintain or adopt policies, but he said these applied only to certain sectors.
“An example is New Zealand’s exception for its indigenous people, which exempts its preferences for the Maoris from the entire CPTPP,” he said. “But Malaysia does not have an equivalent exception to the entire CPTPP for Bumiputera policies and privileges.”
On the clause that states Malaysia reserves the right to adopt or maintain measures that assist Bumiputeras, which Azmin recently touted as proof of the agreement’s allowances, Santiago argued that this portion applied only to licences issued in certain sectors.
“It is not a general exception to help Bumiputeras. It does not allow Malaysia to require 30% Bumiputera equity.
“Since the investment chapter of the CPTPP liberalises all sectors except those listed, 30% Bumiputera equity requirements are only allowed in sectors which specify this in Malaysia’s Annexes I or II, like hypermarkets, superstores and convenience stores,” he said.
Furthermore, he said, Malaysia would not be able to require foreign companies to appoint Bumiputeras in senior positions or as board members as this would violate the agreement.
On the subject of government procurement, Santiago said Malaysia would not be able to direct government procurement of goods and services to Bumiputera firms in most cases.
“Malaysia does have some exceptions, including the right to direct up to 30% of the total value of construction contracts above the agreed-upon threshold to Bumiputeras, but currently, Malaysia can choose to direct 100% of its construction contracts to Bumiputeras. The CPTPP reduces this to 30%.
“Also, this exception is only for construction contracts. This is not an exception to all procurement, like ministries purchasing goods like paper or cars, or services such as phone services.”
He said large GLCs would also be affected since those with annual revenues in excess of RM1.17 billion would have to liberalise their procurement of most goods and services and issuance of contracts.
There are some exceptions, but even these were limited.
“Annex IV allows state-owned enterprises to preferentially direct up to 40% of their purchasing budget to enterprises owned by Bumiputeras, Sabahans, Sarawakians and SMEs.
“However, if you take a company like Tenaga Nasional Berhad, which in 2019 allocated 68% of its procurement to Bumiputeras, this would have to be cut to 40%. That would mean no additional preferences could be given to Sabah, Sarawak or SMEs without cutting it further,” he said.
The remaining 60% would have to be liberalised and Bumiputera companies would then have to compete on price and quality for the remaining percentage of funds, he added.
Ain't now the time for these tongkat addicts to face up to the reality?
ReplyDeleteOoop… those rent-seeking ketuanan elite - my bad!
Over 6 decades, BN and its allies have become experts at massively stretching any leeway statement covering licences into permanent and all-encompassing Special Rights for Bumis.
ReplyDeleteThey already did that with Article 153 in the Malaysian Constitution.
TPP is a minor easy stretch.