FMM says no to abolishing HRDF

This follows the review of the governance framework by the Governance Oversight Committee

By LYDIA NATHAN / Pic By ISMAIL CHE RUS

The abolishment of the Human Resources Development Fund (HRDF) is not the right decision, as any issue of misappropriation of funds that might have happened in the past could be avoided with the implementation of better governance measures and practices.

Federation of Malaysian Manufacturers (FMM) president Datuk Soh Thian Lai (picture) said this conclusion was reached after the review of the governance framework by the independent Governance Oversight Committee, covering the functions of the HRDF board of directors and management.

He said the revelation of the misuse of funds for purchases without following the right procedure is indeed a serious matter and it should not have happened.

Human Resources Minister M Kulasegaran disclosed last year that a large sum of money from the fund had been misused by a number of people linked with the previous management. The funds were said to be used to purchase properties, salaries and bonuses for a few employees, totalling about RM140 million.

Soh said better controls and a more structured form of managing the fund could come into place with stricter governance measures.

“The overhaul of the governance structure and controls that have been recommended to be implemented would provide the foundation for the realignment of past wrongdoings and to position the organisation for the purpose it was set up for in meeting the human capital development and training needs of the industry,” he said.

He added that HRDF should focus on its efforts in spearheading human capital development of the labour force to ensure that the current and future workforce is prepared to meet the demands of today.

“It is important to harmonise efforts to upskill and reskill the existing workforce to meet the challenges of automation and digitalisation — in particular, the Technical and Vocational Education and Training skills.

“The need to facilitate the efficient utilisation of the HRDF levy — towards ensuring that the industry is able to adapt to the changes and challenges quickly, maintain their competitiveness and remain sustainable — is also vital,” Soh said.

Meanwhile, HRDF told The Malaysian Reserve that, from its inception in 1993 till December 2018, a total of RM7.8 billion in funds were collected, while RM6.38 billion had been disbursed.

Between January 2018 and December 2018, the levy was collected — amounting to RM428.59 million — and RM691.15 million was disbursed, with the remainder as government funding.

Currently, 26,281 employers and 2,290,647 employees contribute to the fund monthly as at December 2018.

HRDF said there were 10,968,556 large employers that underwent skills training alongside 3,840,794 employees from small and medium enterprises (SMEs) from 1993 till December 2018.

“In 2018 alone, we saw 503,523 large employers and 376,857 SMEs use the fund for training purposes. Our employer engagement sits at 64% of our registered employers,” it said.

Moving forward, HRDF said the 2019 action plans will include bringing the wrongdoers to book.

“HRDF will continue its internal investigations, which started in June 2018. (While) the fund has already filed reports to the police and the Malaysian Anti-Corruption Commission, it has also filed civil claims against trainees for submitting false particulars,” it said.

HRDF added that civil claims will soon be filed against errant training providers.

Another key target this year will be to train 1.2 million Malaysian employees, which the fund aims to achieve by working closely with — and understanding the training needs of — its registered employers through the HRDF Skills Framework that will be rolled out this year.

“The fund will focus on developing job-ready youths and graduates — especially from low-income families — by investing in selected Industrial Skills Training Institutes and courses, and serve as a bridge between the Human Resources Ministry and industry,” it said.

HRDF also said it will continue to ensure all eligible employers are registered by the end of 2019 and will take action against employers that do not comply as per the Pembangunan Sumber Manusia Bhd Act 2001.

“The fund shall also act against employers who fail to meet or under-report their levy commitment, and those who do not carry out training programmes as agreed. By the end of the year, the fund expects to expand the Act to cover all remaining industries,” it said.

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