Forestry and Environmental Perspectives in Light of Liberalization of Services Industry

The paper was presented by Datuk Dr Abdul Rahim Nik, Deputy Secretary General (Environmental Management), Forestry Development Division, Ministry of Natural Resources & Environment Malaysia, at the seminar On Liberalization of Forestry and Environmental Services in Malaysia, organized by the Institute of Foresters Malaysia (IRIM) and MSPC at the Forestry headquarters in Kuala Lumpur on 12 March 2013.

  

Introduction 

YAB Prime Minister at the Second Stimulus Package presentation (2009) 

• announced that Government will take steps to liberalize the services sector.
• to enhance the level of competitiveness of the services sector in the country.

Liberalization of the services sector: 

-open to the foreign companies to offer their service with less restriction imposed by the government 
-the business is allowed to have 100% of foreign equity

Four modes of supply: 
        (i)    Cross-border trade

  (ii)   Consumption abroad

  (iii)  Commercial presence

  (iv)  Movement of natural persons

Rational for Liberalization

• Attract foreign direct investments (FDI)
• Enhancing the competitiveness of services industry
• Creating a conducive business environment
• Create higher income employment opportunities
• Enhance cooperation esp in terms of capacity building and transfer of knowledge/ technology/ expertise into the services sector.

Current Policies Governing Forestry and Environment in Malaysia

National Forestry Policy 1978:- 
Objectives:

• to conserve and manage the nation’s forest based on the principles of sustainable management.
• To protect the environment as well as to conserve biological diversity, genetic resources, and to enhance research and education.

-Was revised in 1992.

Current initiative - in the process of amending, taking into consideration current concerns such as climate change, forest plantation, enforcement etc.

National Policy on the Environment:- 
Objectives :

•    A clean, safe, healthy and productive environment for present and future generations

•    Conservation of the country’s unique and diverse cultural and natural heritage with effective participation by all sectors of society 

•    Sustainable lifestyles and patterns of consumption and production

National Policy on Climate Change:

Policy Statement:

• Ensure climate-resilient development to fulfill national aspirations for sustainability.

Objectives:

• Mainstreaming climate change through wise management of resources and enhanced environmental conservation resulting in strengthened economic competitiveness and improved quality of life;

FORESTRY & ENVIRONMENTAL PERSPECTIVES IN LIBERALIZATION

Service Sectors Liberalized:

15 broad sectors and over 40 sub sectors have been liberalized. 15 broad sectors include:

•      Computer and related services

•      Health and social services

•      Business services

•      Sporting and other recreational services

•      Supporting and auxiliary transport services

•      Rental/leasing services

•      Transport

•      Tourism

•      Telecommunication services

•      Healthcare

•      Professional services

•      Environmental services

•      Distributive trade

•      Education

•      Courier services

Promoted Activities

Environmental Management:

• Energy conservation/efficiency
• Energy generation, using renewable energy sources
• Storage, treatment and disposal of hazardous waste
• Recycling of agricultural waste and agricultural by-products

Environmental Services Sector:

• 4 sub sectors:

Sub-sector

i.   Waste Water Management

ii.   Cleaning Services of Exhaust Gases

iii.  Noise Abatement Services

iv.  Nature and Landscape Protection Services

Matter

i.    Covering removal and treatment of industrial effluents

ii.   Covering services provided at industrial premises to remove air pollutants including monitoring of mobile emissions and implementation of control systems or reduction programmes

iii.   Covering only monitoring programmes, and installation of noise reduction and screens in residential, commercial and industrial premises

iv.  Covering contaminated soil clean-up and remediation

Services related to forestry have not been liberalized by Malaysia for the following reasons:

• natural resources are a sovereign right that must be safeguarded
• national security and ILCs issues
• natural resources and forest products should be used wisely for domestic benefit
• harvesting operations are under the jurisdiction of the state.
• liberalization has implications for SFM and conservation efforts
• forest rehabilitation activities are carried out solely by the government

Possible Linkages to Forestry Sector:

Services related to the forestry sector:

• Harvesting operations
• Forest certification
• Forest monitoring and surveillance
• Forest products development

Key Principles in Negotiating on Environment Related Provisions:

Malaysia will follow the below principles which will drive negotiation on environment provisions:

• Trade should not be linked or in any way conditional on environmental performance.
• Ensure the sovereign right of the nation is protected in which the Government (Federal and State level) are able to regulate our own laws, rules, regulations and policies.

• Ensure the objective of Sustainable Development is reflected in all the international trade agreements in line with our commitments in all International Treaties.
• Careful in ensuring trade agreements won’t supersede any International Treaties that we are party to.
• Committed to ensuring that the environment standards should not be used for trade protectionist purposes.

ISSUES REGARDING ENVIRONMENTAL GOODS AND SERVICES (EGS)

•    No agreed definition or classification for EGS.

•    Varied definitions of EG - range from goods used for managing waste and pollution to innovations for large-scale production of renewable energy. Some prefers “environmentally preferable products” i.e products that cause significantly less environmental harm than alternative products used for the same purpose.

WTO Negotiations:

Pursuant to paragraph 31(iii) of the WTO’s 2001 Doha Ministerial Declaration, negotiations on the liberalization of environmental goods & services continues to be essentially at a standstill.

• Developed countries: prefer to see a much more liberalized regime for environmental services.
• Developing countries: prefer to be more cautious due to concerns about being able to retain regulatory policy space with respect to environmental services.

Developing countries concerns:

• List-based approach preferred by developed countries –

*Export benefits from tariff liberalization in the listed goods accrue mainly to developed countries

• Product characteristics – developing countries opposed to the use of production or process methods (PPMs)

CONCLUDING REMARKS

• Liberalization of services can be done by a country on its own volition, where it can control the type, the limit and the pace of liberalization.

* forestry – status quo, has policies in placed

* environmental services - done through case by case basis

• Interaction between economic activity and environment are increasingly recognised locally and internationally. A balance based on national priority and circumstances is crucial while acting responsibly on environment matters.  
•  
• “Malaysia must be a nation that is fully developed along all the dimensions: economically, politically, socially, spiritually, psychologically and culturally. We must be fully developed in terms of national unity and social cohesion, in terms of our economy, in terms of social justice, political stability, system of government, quality of life, social and spiritual values, national pride and confidence.” - Tun Dr Mahathir Mohamad