Time’s up with soft approach

UNLICENSED factories located in unsuitable locations will have to relocate, despite a previous legalisation initiative by the Selangor government.

Selangor local government,public transport and new village development committee chairman Ng Sze Han said although the state introduced the factory legalisation initiative in 2019, businesses must still abide by current operational guidelines – including suitability of the location and type of business operation.

He said those who failed to do so – and thus remained as unlicensed factories – could face action including land seizure and demolition of structures.

Ng said that while this would be the worst case scenario, factory operators should still be wary as these measures could be taken anytime.

He noted that many were confused between unlicensed factories and illegal ones.


“It is not that these operators are carrying out illegal operations, but their factories and business premises do not have the necessary approvals.

“Most of them are operating on a temporary licence due to factors such as land status, zoning and planning permits.

“Illegal factories, on the other hand, refer to those that illegally occupy state or reserved land and can cause harm to people and the environment, ” he said.

He explained that many of the unlicensed factories had been operating for more than three decades, prior to the drafting of current by-laws and guidelines.

“In most cases, the factories were operating even before the local plans were created and fell outside of designated industrial zones once these plans were established.

“These businesses that are outside of industrial zones will have no choice but to relocate if the type of business is not suitable for their current locations, ” said Ng.

“This may include factories such as sawmills that are close to residential areas, or agricultural activities that can jeopardise water sources.”

He said that while the authorities understood that it would be challenging for owners to legalise their business premises, it was a necessary move.

“We need to ensure the state government does not lose out in revenue as many of these operators are paying lower fees in assessment and quit rent compared to those who are operating on legalised premises, ” he pointed out.

“Owners of factories who convert their land and get approval for their buildings can easily develop their business.

“It will also be easier for the authorities to supervise factories that pollute our waterways, ” he stressed.Legalisation programme

Between September 2019 and Dec 31,2020, Selangor held an initiative to legalise unlicensed factories.

The programme focused on factories that were already operating in industrial areas but failed to obtain the necessary approval and permits.

While the legalisation process had been ongoing prior to the scheme, applicants under this particular programme were able to enjoy several incentives and benefits.

These included quicker approval process, discounts on land premiums for land conversions and relaxed regulations for their premises.

The programme was only applicable to those who had failed to convert the existing agricultural or residential land to industrial status or had not sought approval for building permits.

“We made it easier for them to go through the process, but unfortunately the response was not good, ” said Ng.

It was reported in November last year that there were 5,589 unlicensed factories in Selangor, with the highest number in the jurisdiction of Shah Alam City Council (MBSA) which had 2,275 premises.

The next highest was 1,555 unlicensed factories in Klang municipality.

Ng said that 3,400 factories in Selangor were found to be operating on land that had not been converted from agricultural or residential to industrial.

Out of this number, only 363 had participated in the initiative and 194 of those applications were approved.

A further 144 are still being processed, while the remaining 25 applications were rejected.

Ng said factory owners whose applications were rejected would have to vacate and look for another suitable plot where they could operate.

He reiterated this was the last such amnesty that the state would give and there was no more extension on the legalisation programme.

“One of the challenges in getting operators to participate in the programme is that many do not want to pay industrial rates once the land status is changed.

“They had been enjoying lower tax rates and feel that the revised rates would be a burden, ” he said.

On illegal factories, Ng said enforcement measures were continuously taken by local authorities.

“There will be no compromise for those occupying state and reserved land, and with high risk of contaminating water sources, ” he said.

He also reiterated the government’s stance against plastic recycling factories that imported foreign plastic for processing purposes.

So far, some 200 of such centres in Selangor had been shut down.

However, Ng said there were about 100 factories that were allowed to do so in the state on a small scale.

“These centres are only allowed to process local plastics and must adhere to strict regulations by the Environment Department, ” he added.

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