TEEAM’s Stand on the Issue of EE Sector Negotiations

TEEAM’s Stand on the Issue of EE Sector Negotiations

Backdrop

  • Modern manufacturing of EE products, especially those that come under the definition of ICI, or Control & Protection Schemes for electrical power systems, or Electrical & Instrumentation (and control) of the various process – industries; consumer products, and others – is very much design driven, with value adding by an integration of parts and sub-systems.
  • Based on the concept of “economy of scale”, the manufacturer of the final finished product, will attempt to obtain its intermediate components or parts by the least cost out-sourcing method; and only when necessary will the manufacturer make the critical parts in-house. It is with the in-house expertise in the design and the final integration of parts and sub-systems which gives the final value of the product / system which will either meet international standards, or conthrm to pedbnnance-based vendor (sell)- declared standards.
  • Products and/or systems have to be type-tested to the requirements oC either: international standards, or: performance-based standards, betbre they go to market. All IllaIllItimurers or vendors will find their products competitive, if there was in place the concept of
    1. One standard,
    2. One (set of) tests(s), and
    3. One approval

which will then enable their products, not only to enter the domestic market, but also be exported all over the world without the expensive and duplicative retesting and fresh approval!

  • Because hi-tech products and/or systems have rather short obsolescent life, no publicly developed standards, more so, international standards (that take a minimum period of 36 months to develop – very often 4 to 5 years!), can keep up with the technology and innovativeness of the products/ systems. Therefore, the “latest” standards, usually performance-based, are vendor-self-declared standards; with the under-pinning of a very comprehensive Consumer-protection Act that has to be in place.
  •  Besides one standard and one test; for the “one approval” to work, there shall be an alignment or harmonisation of regulatory regimes among trading partners.
  • Malaysia prides itself as a leading trading nation, and a role-model for other developing countries.
  • Malaysia is a significant exporting country of EE products, and has since migrated to the hi-tech EE sector for which we are still able to attract FDI’s.
  • Malaysia is known for our MSC policy and has marketed aggressively the benefits of investing in it. For a start, we do not censor the internet.
  • Amongst the 11 priority sectors for ASEAN Economic Integration, i.e. AEI leading to the ASEAN Economic Community, i.e. AEC, Electronic Sector is one of them; and at the ASEAN Coordinating Committee on Standards & Quality, i.e. ACCSQ of AFTA, Electronic is a part of the Electrical & Electronic Mutual Recognisation Agreement. i.e. EEMRA which has been operationalised since 2002.
  • An ongoing exercise by the operative committee of the EEMRA, viz. the Electrical & Electronic Joint Sectoral Committee, i.e. EEJSC is the harmonisation of the regulatory regime (among the 10 ASEAN nations) for the EE sector along a modified EU model; which recognises the vendor self-declared performance-base standards.
  • Malaysia has signed on the EEMRA tinder the ambit of APEC.
  • Malaysia is a leading negotiation party to the other FTA’s/ CEPs with ASEAN Dialogue Partners, etc.

TEEAM’s Stand:

Based on the backdrop above. TEEAM calls on MITI and other related Malaysian Agencies and Regulator(s) to appreciate the tbllowing:

(a)            CLC – purchasers of domestic EE products/systems are, in fact, making Malaysian manufacturers/vendors uncompetitive. Their requirements are generally beyond the requirements of international standards. An example is the TNB’s “Sijil Gunapakai” – which, besides a periodic renewal; costing quite a sum for each product; there are other tests and inspections which have economic and financial impact. There is a very high cost involved in TNB’s conformity assessment procedures.

(b)                      Having spent substantial amount of money and effort to have the EE products tested, for example, to TNB’s preferential requirements, additional costs will still be needed, should such so-called (TNB) approved products are exported, say, to Indonesia or other ASEAN countries, because of duplicative re-testing and unnecessary duplicative assessment procedures.

(c)             Besides the above, for Malaysian EE product (or EE system) manufacturers to remain competitive, their out-sourced intermediate products and parts, especially when imported, should not attract unnecessary import duties and taxes.

(d)                      Therefore, TEEAM supports the concept of:

–        One standard as established by SIRIM / DSM but to international standards;

–        One (set) tests conducted by certified and accredited labs;

–        One approval by the relevant Regulator;

that will not only permit the entry into the domestic market, but also to other markets that Malaysia has entered into trade-pacts with; either on a multi­lateral basis, or bilateral basis.

(e) TEEAM also hopes that there be effort to realign, or better still, harmonise the regulatoral regime of the EE products – the scope of coverage should be extended beyond the regulated (controlled) 31 (range of) products.

(f) TEEAM also understands that the convergence of technologies and the innovate design of system will result in a mis-match of regular standards developed by the traditional method (as by IEC or SIRIM/ DSM), and the performance-based vendor-self-declared standards. This will be recognised when Malaysia, as a key member of AFTA’s EEJSC, adopts the regulatory regime being harmonised, based on the modified EU model. Concurrently with this, the Ministry of Domestic Trade and Consumers’ Affairs will lime to work out amendments to their current act on the protection of consumers; especially to address the essential requirements dealing with the environment and the safety to properties, plants, animals and humans.

On balance, and in conclusion, we believe there is merit for Malaysia to be involved (hopefully by the industry) in the negotiations for the EE Sector; especially with the goal of achieving “1 -1 SDoc” Policy – i.e. One Standard. One Test to Supplier’s Declaration of Conformity.