While the finance ministry has put on hold plans to enforce a controversial 51% Bumiputera equity rule for freight forwarders with customs brokerage licences until December next year, there are no such equity requirements for foreign IILS providers.
IILS is a status the Malaysian Investment Development Authority (Mida) grants to logistic companies that provide integrated door-to-door logistics services as a single entity on a regional or global scale.
“The logic in this is wrong. The rule should apply to everybody and should not be discriminatory,” said Ramon Navaratnam.
“This will send the wrong message to the non-Malays – that the government has a preference for foreigners as opposed to the local people.
“This would not be accepted anywhere in the world,” added the former transport ministry secretary-general.
The matter has also caught the attention of former transport minister Loke Siew Fook, who on Tuesday questioned why foreign-owned IILS do not have requirements for Bumiputera equity.
The Seremban MP also said the policy was unfair to non-Bumiputera-owned firms and made them less competitive.
“Where is the Keluarga Malaysia (Malaysian Family) concept here?” Loke asked when debating the 12th Malaysia Plan (12MP) at the Dewan Rakyat.
“I know there is an agenda to strengthen Bumiputera equity, but this is not the right way and this policy must be further reviewed.”
However, an industry insider looked at the issue through a different lens.
Former customs official Gary Foong has more than a decade of experience building procurement control departments and handling supply chains and export shipments at a Japanese multinational company (MNC).
He explained that while Malaysians may think the lack of a Bumiputera equity rule for foreign IILS firms was “unfair” and gave the impression that the government is supporting overseas businesses as opposed to local businesses, many foreign companies stress confidentiality as a prerequisite in setting up shop in Malaysia.
“When they run the supply chain themselves, there will be no leaked information regarding price, vendors, suppliers and things like that,” Foong said.
“Foreign investors are not stupid. They have studied Malaysia, they know what the country has to offer.
“If they cannot bring their business to Malaysia, they will go to Thailand or Indonesia. In this perspective, there are reasons for such companies to be given these exemptions.”