KUALA LUMPUR – Industry representatives across various sectors have opposed a proposal for a moratorium on the Human Resource Development Corporation’s (HRD Corp) collection of levies from employers, despite criminal investigations into the embattled government-linked entity.
Malaysian Employers’ Federation Datuk Syed Hussain Syed Husman said probes by the Malaysian Anti-Corruption Commission (MACC) into the corporation should be viewed as a “separate matter” from levy contributions.
“MEF is in support of the levy contributions continuing, (as) we need the levy to provide skills and management training to our talent,” he said when contacted by Scoop.
“The probe (by the anti-graft agency) is a separate matter that must address any shortcomings within HRD Corp, which has undertaken numerous beneficial initiatives for the Malaysian public.
“Like all things in life, there must be continuous improvement to manage the funds more efficiently and increase focus on talent-building in the nation,” he added.
He also called for structural changes to HRD Corp, such as amending the Pembangunan Sumber Manusia Bhd (PSMB) Act 2001, which oversees the corporation’s collection of human resources development levies.
Similarly, Labour Solidarity and Learning Resources Association secretary-general Gopal Kishnam Nadesan said the coalition endorsed by 58 trade unions from various sectors and workers organisations calls for intensified scrutiny of HRD Corp’s training programmes funded by the levies.
“We do not agree with giving any kind of moratorium to any employers, but we’re insisting that the investment panel must be very vigilant when approving any programme,” he told Scoop.
In backing its call for the continuation of levy contributions, the Federation of Malaysian Manufacturers asserted that a halt to the collection would be a “drastic measure with significant implications”.
This, its president Tan Sri Soh Thian Lai said in a statement today, is because ongoing and planned training programmes could be disrupted, thus adversely affecting employees and employers who rely on the funds for skills development.
“(A moratorium on levy contributions) could be counterproductive, especially during a time when continuous training is crucial for economic development.
“The training of employees does not only benefit individual career development, but also plays a pivotal role in driving economic growth, innovation, and competitiveness in Malaysia,” he added.
Soh also said that Human Resources Minister Steven Sim has ensured HRD Corp begins taking steps towards overhauling its financial management, including the separation of accounts to ensure levies collected from employers are used solely for training.
Additionally, he proposed a thorough review of the PSMB Act, including the possible removal of the corporation’s investment portfolio and allowing the board of directors to have a say in the chief executive officer’s appointment.
However, on July 5, the Malaysian Medical Association said that private general practitioners are “feeling cheated” after learning that HRD Corp “mismanaged” the levies collected from businesses.
The nation’s top graft busters’ investigation into HRD Corp follows the release of reports by Parliament’s Public Accounts Committee (PAC) and the National Audit Department detailing discrepancies in the corporation’s operations and management.
PAC’s three-volume report stated that HRD Corp had undertaken various high-risk investments using levy funds while its management practiced poor governance and suspicious procurement methods for real estate, leading to the corporation suffering losses.
HRD Corp used a total of RM3.77 billion in levies collected from employers for training development programmes to make investments worth RM3.84 billion at market value as of March this year, the bipartisan committee found.
The corporation’s investment panel also did not report its investment activities to the board due to its management’s justification that the chairman of the investment panel is the chairman of the board.
Meanwhile, the Auditor-General’s Report 2024/2 revealed that HRD Corp is owed RM205.42 million in mandatory levies by a total of 21,058 employers.
The audit report also said there had been a trend of outstanding levies rising year-on-year, from RM72.47 million in 2020 to RM96 million in 2021, RM141.77 million in 2022 and RM183.87 million last year.
The report also recommended the Human Resources Ministry take appropriate action against HRD Corp’s management by referring them to enforcement agencies.
The actions and decisions by HRD Corp’s management, the audit report said, did not comply with procedures and failed to protect interests necessary to achieve the corporation’s objectives.
MACC has since said its probe into HRD Corp is focused on elements of alleged corruption, power abuse and fund misappropriation.
The Human Resources Ministry is also set to appoint an independent auditor to conduct a third-party audit of HRD Corp’s operations from 2019 to 2023, while a special task force chaired by ministry secretary-general Datuk Seri Khairul Dzaimee Duad has also been formed. – July 11, 2024
