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“CONSUMER MANAGEMENT – CONSUMER
ASSOCIATION PERSPECTIVE OF MALAYSIA WATER
INDUSTRY”
By
Chan Ngai Weng, PhD
Professor, Universiti Sains Malaysia
President, Water Watch Penang (WWP)
www.usm.my www.waterwatchpenang.org
Email: nwchan@usm.my
•INTRODUCTION
•PERCEPTION OF MALAYSIAN WATER INDUSTRY
ISSUES BY CONSUMER ASSOCIATIONS IN
MALAYSIA
•CONSUMERS’ ASSOCIATIONS’ EXPECTATIONS OF
MALAYSIAN WATER INDUSTRY
•CONSUMERS’ ASSOCIATIONS’ MAIN CONCERNS
OF MALAYSIAN WATER INDUSTRY
•CONCLUSIONS
AGENDA
•BLUE GOLD - The Water Industry sees water as “Blue Gold”
•PRIVATISATION - Extremely Lucrative & is promoted globally
•WATER GIANTS -Some of the world’s biggest multi-nationals
are water companies
•WATER WARS – The “Water Giants” have water businesses
in many developing countries, but have faced fierce
resistance from consumers/consumer associations/NGOs
INTRODUCTION
•Consumer Associations in Malaysia are
highly professional nowadays.
•They don’t see The Malaysia Water
Industry (e.g. Water Companies) treating
water as “Blue Gold” & exploiting it as a
Commodity for profiteering.
•But they are aware that MNCs have
exploited water in other countries & are
strongly against such developments.
•Consumer Associations firmly believe
that consumers must pay for piped
water, but not to the extent that
consumers are short-changed or the
poor are denied access.
PERCEPTION OF CONSUMER ASSOCIATIONS – on
“Water as Blue Gold”
Consumer Associations in Malaysia are
NOT against Privatisation of the water
industry in Malaysia. They are all for
privatisation that is:
• “Professionally Executed”
• “Based on Open Tender”
• “Transparent”
• “Accountable” &
• “Improves Services & Quality”
PERCEPTION OF CONSUMER ASSOCIATIONS –
On Privatisation The Cochabamba
protests of 2000, also
known as the
"Cochabamba Water
Wars",
Jakarta 2010
France: 1999-The city of
Grenoble took back its
water utility when it
discovered that Suez was
overcharging customers.
•Consumer Associations are formed to protect
consumers’ interest.
•Consumer Associations want to know WHO the
Malaysian Water Industry is protecting? - Consumers or
Water Service Providers/Water Companies?
PERCEPTION OF CONSUMER ASSOCIATIONS – on
Protection of Consumers’ Interest
Consumers Association
of Kapar Selangor
(CAKS)
Muslim consumer association of
Malaysia
•Consumer Associations obviously fight for the
lowest price for consumers.
•Consumer Associations obviously want Water
tariffs to be subsidised.
•Bankruptcy - But Consumer Associations are also
aware that if prices are suppressed so low that
Service Providers go bankrupt, then consumers
would also suffer!
•Generally, Consumer Associations are happy with
Reasonable Tariffs – no problem with Cost
Recovery.
•Consumer Associations will support Consumer
Goods Subsidy Removal if Subsidies given to
“Suppliers” are also removed.
PERCEPTION OF CONSUMER ASSOCIATIONS – on
Water Subsidy * Consumer
Associations
are aware
that RM
millions of
subsidies are
given to
Independent
Power
Producers
(IPP),
Private Water
Companies ,
Highway
Concessionar
ies, etc.
How do Consumer Associations Perceive:
(i) Federal Take Over of State Water Industry
(ii) Water Tariffs
(iii) Water Conservation
(iv) NRW
(v) Service Efficiency & Quality
(vi) Other Water-Related Issues
PERCEPTION OF CONSUMER ASSOCIATIONS – on
Other Aspects of the Malaysian Water Industry
On Federal Take Over of State Water Industry
PERCEPTION OF CONSUMER ASSOCIATIONS – on
Other Aspects of the Malaysian Water Industry
Consumer associations do
not really care who takes
over the water industry, as
long as water is supplied to
consumers (professionally,
of good quality, reasonable
tariff & accountably).
Consumer Associations all over the
world are DEAD AGAINST “Rise in
Tariffs” by the water industry, but NOT
in Malaysia.
PERCEPTION OF CONSUMER ASSOCIATIONS –
On Water Tariff The Cochabamba
protests of 2000, also
known as the
"Cochabamba Water
Wars",
Jakarta 2010
France: 1999-The city of Grenoble took
back its water utility when it discovered
that Suez was overcharging customers.
India
(ii) On Water Tariffs
PERCEPTION OF CONSUMER ASSOCIATIONS – on
Other Aspects of the Malaysian Water Industry 83,233% Profit for a Glass of water? We call on the
Ministry of Domestic Trade, Cooperatives and
Consumerism to immediately enforce the Price
Control and Anti Profiteering Act 2011 on shops,
restaurants and coffee shops who are charging
consumers up to RM1.50 for a glass of water.
[SYABAS charge RM2.00 for 1,000 litres of water in
Selangor = a glass of water (300ml) = RM0.0006 sen.
Hence, shops earn a profit of 83,233% for each
glass of water sold. This is really daylight robbery!!
Letter to Editor, 9 Feb 2012
What disturbs you the most about local
manufacturers?
Manufacturers are in the business of
making profits. We are not anti-business
but we are against bad business practices,
i.e. businesses which cheat and exploit
consumers, sell or make unsafe products,
or displace local communities or pollute our
environment.
When their guiding principle is to make as
much profit as possible, there needs to be
stringent controls and enforcement against
unfair trade or contracts and business
malpractices.
The problem is not whether the
manufacturers are local or foreign. The
problem is the lack of adequate laws and
enforcement to protect consumers
12
Source:
13
14
On Water Conservation
PERCEPTION OF CONSUMER ASSOCIATIONS – on
Other Aspects of the Malaysian Water Industry
What are CAP’s biggest successes in protecting consumers?
* It was CAP’s pressure and work on environmental issues that was instrumental in
the formation of the Department of Environment in 1975
* The Penang Hill project which was cancelled in 1991 following the rejection of its
Environmental Impact Assessment by the Department of Environment was another
success which helped protect the watershed areas of Penang.
* But we consider raising awareness among Malaysians on both consumer,
environmental and developmental issues to be our biggest achievement. Malaysians
who are aware of their rights and problems will go a long way in helping to create a
healthy, just and green Malaysia.
Save water — and money
Our growing population, agricultural needs, inefficient appliances and sometimes inconsiderate
consumer behaviour put pressure on our water supplies. Here are some tips on how you can
conserve water — and save money. These days most water authorities urge people to reduce
their water use, and supply brochures and pamphlets with savings tips. For them, conserving
water means less need to spend money on new dams — instead, they can spend it on improving
existing infrastructure. For you, conserving water is likely to mean saving money — the more you
use, the more you pay. In addition, if you're also saving hot water (for example, in the shower),
you'll reduce your energy bill.
Water conservation initiative in Penang
The Consumers’ Association of Penang (CAP) lauds the Penang Water Supply
Corporation Sdn Bhd’s (PBAPP) Aquasave programme to promote water
conservation in the state. This water conservation effort has been long due.
PBAPP has stated that Penangites are high water users, consuming 286 litres of
water per person daily, compared with the national recommendation of 220 litres
and United Nations’ recommendation of 165 litres. This is very high indeed.
We concur with the water saving and conservation measures proposed by Prof
Chan Ngai Weng, President of Water Watch Penang. Besides this, water demand
management should be adopted in every aspect of the planning, management and
maintenance by PBAPP……On the whole, the way Penangites and non-domestic
users are currently using water is not sustainable. We need to change our water
consumption behaviour to protect our precious water resources for the future.
Press Statement - 13 August 2010
16
On Non-Revenue Water (NRW)
• Malaysia Water Industry Guide 2010 gave an average NRW
at 36.63% = 1.8 billion m3 of water lost = Loss of RM1.64
billion!
• The Main Reason why Consumer Associations are
reluctant to “Blindly” allow water suppliers to raise tariffs
is the fact that water suppliers have failed to reduce NRW
• Consumers should not be liable to pay for NRW. They
should only pay for the actual cost of production minus
NRW!
PERCEPTION OF CONSUMER ASSOCIATIONS – on
Other Aspects of the Malaysian Water Industry
18
Source:
•MONITOR YOUR CALLS
•MONITOR YOUR RESPOND TIME
•MONITOR TIME TAKEN TO SOLVE A PROBLEM
•COMPUTERISE YOUR MONITORING SYSTEM
•REWARD PEOPLE (NON-MONETARY) WHO REPORT
PROBLEMS (LEAKAGE, THEFTS, POLLUTION, ETC).
2010 = 36.63 %
2010 in Malaysia:
Water Production = 13,500 MLD
NRW = 36.63 % = 4,945MLD = 1,804,943MLY
86 Teluk Bahang
Dams (Size 21,000
Million Litres)
Based on Average Price of Water of 70 sen/m3
Loss = RM3.46 Million Per Day
= RM1.26 Billion Per Year
20
Recently Consumer Associations have
highlighted the Seriousness of NRW & Informed
Water Authorities on the Need to be Responsible
in Reducing NRW
Recent reports show that the
three migrated states of Negeri
Sembilan have reduced NRW
from 49.2% at the end of 2009 to
43.4% in 2010, Melaka from
29.7% to 26% and Johor from
31.9% to 29.9% (Source:Kettha).
No, it
is only
30 %
It is
50+ %
WATER QUALITY SUPPLIED IS NOT UP TO STANDARD
CONSUMER ASSOCIATIONS’ PERSPECTIVE OF MALAYSIAN WATER SERVICE PROVIDERS
•Consumer Associations expect good water quality
•In general, Consumer Associations view piped water
quality as poor. Hence, there is a lack of confidence
in water quality. Hence the Proliferation of “Water
Filters”
•In recent years, Consumer Associations view piped
water quality deteriorating (due to increased
complaints of sediments, rusty pipes, colour, odour,
etc)
•Consumer Associations are generally unhappy
about poor water quality
•Hence, consumer Associations are reluctant to
support tariff increase.
Thursday October 22, 2009 (The Star) Water quality in Kelantan not up to standard The quality of water supply in Kelantan does not meet the standard set by the Health Ministry, said the Auditor-General’s Report.
22
•
Nik Aziz (picture) cited a letter dated October 30 sent by the National Water Services
Commission (SPAN) to the office of state water supplier Air Kelantan Sdn Bhd
(AKSB), informing them that Kelantan had been listed together as having a “less than
satisfactory” water quality (The Malaysian Insider, 21 Nov 2011).
The listing was based on a report prepared by the Ministry of Health from January till
July/August this year. “The states which showed a less than satisfactory performance
was Kelantan, Pahang , Labuan, Perak and Perlis.
“Based on the report, e-coli levels in treated water provided by AKSB was 0.88 per
cent, lower compared to Pahang (1.12 per cent), Perak (0.90 per cent), Perlis (1.21
per cent) and Labuan (1.01 per cent),” Nik Aziz said.
23
PERCEPTION OF CONSUMER ASSOCIATIONS – on
Other Aspects of the Malaysian Water Industry
On Groundwater
Protection of Water Resources •CAs is feels that protection of water resources is the joint responsibility of government & water service provider (WSP)
•Even if WSPs have no jurisdiction/TOR to protect water resources, they should do it Voluntarily(Part of CSR)
•WSPs should buy up land in water catchments that are privately owned
•Government owned catchment land should be gazetted as water catchments (for protection)
•Consumers will not accept WSP’s excuse of “non-responsibility” when a catchment is destroyed.
They see water catchments & water supply as ONE.
PERCEPTION OF CONSUMER ASSOCIATIONS – on
Other Aspects of the Malaysian Water Industry
High Degree of Professionalism from WSPs
CONSUMERS’ EXPECTATIONS OF MALAYSIAN WATER INDUSTRY
•Highest degree of professionalism
•"The best in the business” everyone says good things about
•A high standard of service, ethics and success
•Professional/Corporate Image/Reputation backed by practice
•Domestic & international business relationships
•Great understanding of effective communication styles
•“Friendly & Professional Customer Service” - attentive,
understanding, caring, non-offensive and courteous staff
(“Customer is always right)
•Command consumer confidence - Be able to deliver.
Competence •A WSP’s success depends on (i) the perceived value of its
services and (ii) its overall competency (competency of the
organization, of its staff, its equipment and infrastructure)
•Incompetent WSPs must be severely dealt with, either by
sacking/replacing them or punishing them with severe fines
•Customer satisfaction surveys indicates that the majority are
dissatisfied with incompetent WSPs but are happy with
competent WSPs (even when water tariffs are higher)
•Ideally, government/customers should evaluate the
performance & competency levels of WSPs on a yearly basis
•Consumers expect the highest level of competency, whether
it be the WSP itself or their staff
•Staff with a “Critical” no. of complaints should be sacked.
CORPORATE SOCIAL RESPONSIBILITY (CSR) - Support & Collaborate with NGOs
• Smart-Partnerships
• Funding & Other Support
• Consultancy/Sub-contracts
• Public Awareness & Education
• Public Relations & Image
• Public Surveys/Opinion Polls
• Social, Environment, Education, Entertainment etc
WORLD WATER DAY
CSR is about how companies manage the business
processes to produce an overall positive impact on society,
while at the same time minimizing the negative impacts, as
shown in the Figure below:
CSR INVOLVES SMART-PARTNERSHIPS WITH NGOs
•PUBLIC AWARENESS & EDUCATION
•PROMOTION OF DEMAND MANAGEMENT & RECYCLING
•“SMART-PARTNERSHIP” WITH GOVERNMENT
•“WATER AUDITS FOR BUSINESSES, FACTORIES & HOTELS
•CONSULTANTS IN EIA
•CONSULTANTS IN FIXING WATER TARIFFS
•LINKAGE BETWEEN GOVERNMENT-INDUSTRY-RAKYAT
Minggu Alam Sekitar
2010 (DOE & WWP)
Accountability
•WSPs, like elected governments, must be held accountable
for all their actions & mistakes
•When a water project fails and the public is affected, then
those responsible for it must be held accountable
•WSPs must be held accountable for all aspects relating to
water management under their jurisdiction
•Accountability is needed to protect the public interest and
promote government and corporate accountability
•When a WSP is Accountable, its image will be greatly
enhanced & public confidence boosted
•An accountable WSP is more likely to get public support in
the event of asking for price increase, new projects, etc .
Stay Within Core Function
•WSPs are expected to be responsible for what they have
been set up to do (Do NOT branch out for whatever reasons!)
•WSPs are expected to manage water resources from
impoundment to treatment, distribution & services, but
responsibility does not end here
•WSPs are also responsible for protection of water resources
•Responsible WSPs are expected to use holistic management
•Responsible WSPs are expected to make profits but not to
the extent of “Profiteering”!
+
CONSUMERS EXPECT NRW TO BE REDUCED
Osaka = 5 %
Shanghai = 20 %
Bangkok = 37 %
Kuala Lumpur = 43 %
Jakarta = 50 %
Delhi = 53 %
Manila = 60 %
(Source: ADB)
ADB Report in 2007 -
Cambodia’s Phnom Penh Water
Authority has managed to reduce
NRW from 90 % in 1993 to 8 %
in 2007, & 5.85 % in 2010 &
provides continuous drinking
water supply (Drinkable from
Tap).
PUT YOUR OWN
HOUSE IN ORDER!
MALAYSIAN AVERAGE OF 36.63% IS
NOT ACCEPTABLE!
Responsibility = Compensation
•COMPENSATION-WSPs expected to compensate
consumers for losses, accidents, inconvenience,
medical costs, etc. related to water supply
•Some form of compensation should be paid out
when customers suffer due to a WSP’s mistake
•Compensation does not necessarily = $
•Currently, WSPs do not pay compensation, but
people caught stealing water, polluting water or not
paying their water bills, they are punished
•If a WSP compensates its clients, the consumers
feel BETTER! They know their WSP CARES!
Fair Tariff/Price
CONSUMERS’ EXPECTATIONS OF WATER MANAGEMENT ORGANISATIONS
Surprise! Surprise! Consumer Associations & Consumers in
Malaysia are not overly concerned about Water
Tariffs/Price
What does this tell you?
MALAYSIAN WATER TARIFFS ARE VERY LOW
WHAT DOES THIS
MEAN?
THIS MEANS THERE IS
TREMENDOUS
POTENTIALS FOR
INCREASING TARIFFS
& MAKING MORE
PROFITS!
TARIFFS MUST BE
AFFORDABLE & FAIR. WATER
SERVICE PROVIDERS MUST
NOT BE SEEN AS
“PROFITEERING”, “GREEDY”
OR “UNSCRUPULOUS”!
Denmark (Copenhagen) – US$8.92/m3
France (Paris) – US$4.11/m3
Sweden (Oslo) – US$3.90/m3
Germany (Frankfurt)– US$3.27/m3
Desalinated Water - US$1.76 – US$2.06/m3
Japan (Tokyo) – US$1.44/m3
USA (New York) - US$1.30/m3
Indonesia (Jakarta) - US$0.77/m3
Singapore - US$0.62/m3
Australia (PAWA) – $0.60/m3
China (Beijing) – US$0.41/m3
Thailand (Pattaya)- US$0.2143/m3
Cambodia (Phnom Penh) - US$0.20/m3 Malaysia - US$0.0947/m3
MALAYSIA’S LOW TARIFFS JUSTIFY COST-
RECOVERY & TARIFF RISE
Source: http://www.ib-net.org/en/tariffs_map.php 12/3/11
•POOR QUALITY OF WATER SERVICE
•UNPROFESSIONAL PRIVATISATION & PRIVATISED
WATER COMPANIES HOLDING GOVERNMENT AT
RANSOM
•WATER SERVICES FALL INTO THE WRONG HANDS
WITH GOVERNMENT & CIVIL SOCIETY LOSING
CONTROL
•TOO MUCH POLITICKING IN THE WATER
INDUSTRY!
•CONSUMERS BEING TAKEN FOR A RIDE!
CONSUMER ASSOCIATIONS’ MAIN CONCERNS ON
MALAYSIAN WATER INDUSTRY
THE MOST DREADED CONCERN OF MALAYSIAN
CONSUMER ASSOCIATIONS & CONSUMERS!
CONCLUSION • CONSUMER ASSOCIATIONS ARE HIGHLY
PROFESSIONAL WITH HIGHLY QUALIFIED,
INFORMED & CAPABLE STAFF – MWI MUST
WORK WITH CAs
• CONSUMER ASSOCIATIONS [& CONSUMERS]
HAVE RIGHTS & THEY WILL FIGHT FOR IT!
• CONSUMER ASSOCIATIONS EXPECTATION OF
MWI IS VERY HIGH – THEY EXPECT THE BEST
PRODUCT & WILL GO TO GREAT LENGTHS TO
PROTECT CONSUMERS!
• CONSUMER ASSOCIATIONS ARE WILLING TO
SUPPORT HIGHER TARIFFS & “PAY FOR GOOD
PRODUCT & EFFICIENT SERVICE” BUT
AGAINST “PROFITEERING & CORRUPTION”
• CONSUMER ASSOCIATIONS ARE NOT
AGAINST PRIVATISATION & WILL SUPPORT IF
IT IS PROFESSIONAL, TRANSPARENT,
ACCOUNTABLE & PRO-CONSUMERS
CONCLUSION • CONSUMER ASSOCIATIONS EXPECT NRW TO
BE REDUCED TO ACCEPTABLE LEVELS
(PENANG’S NRW IS THE BENCHMARK)
• CONSUMER ASSOCIATIONS ARE ALL FOR
“WATER CONSERVATION” & DEAD AGAINST
“WATER WASTAGE”
• CONSUMER ASSOCIATIONS SUPPORT
GAZETTEMENT OF WATER CATCHMENTS &
FOREST PROTECTION
• CONSUMER ASSOCIATIONS SUPPORT GREEN
& BLUE TECHNOLOGY
• CONSUMER ASSOCIATIONS ARE DEAD
AGAINST “CONSUMERISM” (I.E. OVER-
CONSUMPTION) & CAMPAIGN FOR
“RESPONSIBLE & HEALTHY CONSUMPTION”
41
Word of Caution
The Malaysian Water Industry
(Government Ministries, SPAN,
Government Agencies, Water
Companies, Other Water Service
Providers, NGOs & Civil Society
[Local Communities] need to work
closely/consult with Consumer
Associations towards Long-Term
Sustainability of Water Resources.
42
THANK YOU
HELP CREATE
A “WATER
SAVING
SOCIETY” IN
MALAYSIA
Chan Ngai Weng, PhD Professor, Universiti Sains Malaysia
President, Water Watch Penang (WWP) www.usm.my
www.waterwatchpenang.org Email: nwchan@usm.my
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