Under this law, those who set up such a factory illegally will face a maximum RM50,000 fine or five years’ jail or both.
Those who help or abet someone in setting up these illegal factories would also be fined RM25,000 or jailed a maximum of two years, or both.
Penang is an important furniture-making state, coming in third after Selangor and Johor.
The Wood-based Industries (Amendment) Enactment 2018 bill was proposed by state executive councillor Phee Boon Poh (DAP-Sungai Puyu).
He said the new bill will also help protect the environment in the long run and impose heavy sentences on those who set up such factories illegally.
Phee said currently, there are 97 licensed factories while 185 more in the state are in the process of being legalised.
“For far too long, the fines imposed have been too low and this has encouraged many to act in impunity, setting up illegal factories wherever they liked.
“The amendment will deter those who are planning to start a factory illegally,” he said.
Phee said the amendment also gives power to the state to issue compound fines for minor offences and ask for higher deposits to license a wood-based factory.
At the debate stage of the bill, Gooi Hsiao Leung (PKR-Bukit Tengah) said a task force to improve the state’s wood-based industry should be formed to ensure compliance.
He said this would further improve Penang’s position as one of the top three furniture makers in the country.
Gooi said the country recorded RM53 billion in exports of wood-based products annually and Penang’s share was 20%.
“We are one of the top 10 countries exporting furniture in the world.
“In Malaysia, Penang comes in at number three after Muar and Sungai Buloh, at number one position.
“With Penang’s products contributing 20% to the furniture exports valued at RM10 billion yearly, we must capitalise on this,” he said.
Gooi said the wood-based industry was going through a lot of issues nationally, with a shortage of raw materials and skilled workers.
“The Taiwanese learnt a lot from us in the wood-based business. They are now doing better than us, in terms of technology and production.”
Satees Muniandy (DAP-Bagan Dalam) said the new amendment to the law would help modernise the wood-based industry in the state.
Khaliq Mehtab Mohd Ishaq (PPBM-Bertam) said minor infractions under the law should not be prosecuted, as it would be a waste of the courts’ time.
The assembly adjourned sine die and is expected to sit again in November.