BIPC objects the expansion of HRDF Act 2001 to cover construction industry

Kuala Lumpur, 20 April 2021 – The Building Industry Presidents’ Council (BIPC) strongly objects the new ruling on the expansion of the Human Resources Development Fund (HRDF) Act 2001 (Act 612), which included the construction industry with effect from 1 March 2021.

BIPC maintains that the building and construction industry has always been under the governance of CIDB. CIDB has been undertaking the role of training and development of construction personnel and workers through levy collection from contractors in line with the amended CIDB Act 520. Contractors are required to undergo and attend skill accreditation courses and trainings organised by CIDB, and to collect the Continuous Contractor Development (CCD) programme points before they can renew their licences with CIDB.

For the professional services involved in the construction industry, each is regulated by the respective Professional Board formed under their respective Act. Architects, engineers, quantity surveyors, town planners and land surveyors are regulated under their respective professional boards, which require them and their firms to pay their annual renewal of registration fees and are also subjected to compulsory learning and training under the Continuing Professional Development (CPD) programme as approved by the respective boards.

BIPC claims that it would not be necessary for the construction companies and the construction professionals’ firms to be registered and be further charged with the HRDF levy for the human resource development and training. The HRDF levy will be redundant on top of the fee the industry is already paying to CIDB. Professionals and firms have been exempted from registration with HRDF all these years and this arrangement has been proven to work well.

BIPC wishes to highlight that the construction industry is strongly linked to 180 other industries and businesses related to property development. The sector also employs about 1.4 million workers and a paying salary of about RM40 billion yearly. Presently, the businesses in building and construction industry have been severely affected by the COVID-19 pandemic where huge expenses have been utilised for the purpose of COVID-19 screening of workers and staff. At the same time, companies are struggling to restructure workers accommodation to comply with the amended Act 446 under the Emergency Ordinance.

Furthermore, there are many other legal liabilities being brought upon the industry that is already facing many legal risks and compliance, not to mention additional financial stress on cash flow. The cost of doing business and regulatory burden will also increase due to the said implementation. Many contractors and professional service providers are already facing significant challenges to just survive.

– Construction+ Online

Source: PAM