Local councils outsourcing statutory functions

Two local councils in Johor have been delegating their functions to a private company, which a lawyer says is illegal

PETALING JAYA: Can a local council delegate its duties to a private entity? Two local councils in Johor seem to have been doing this for years.

The Johor Bahru Tengah Municipal Council (MPJBT) and the Kulai Town Council (MPKU) have been outsourcing its statutory functions to Southern Ads Sdn Bhd, a private company.

“Southern Ads does the licensing for banners and buntings. We only approve licensing for business premises and signboards,” said an official from the MPKU’s licensing department.

The official, who claimed anonymity, said that the local council has been delegating tasks to the private company for a long time, but could not confirm when this practice started.

An official from MPJBT’s licensing department also said this has been going on for some years. “For bunting and banner licenses, please refer to Southern Ads,” said the official.

When contacted, a staff from Southern Ads, who did not want to named, said that they have been issuing bunting and banner licenses on behalf of both local councils since 2004.

“We’re the concessionaire for MPJBT and MPKU,” said the staff, who could not say if it was legal for them to be taking over the councils’ statutory functions.

”I don’t know. I just work here,” was her quick response.

It’s illegal, says lawyer

However, lawyer Derek Fernandez said it was illegal for local councils to delegate jobs to a private entity under the Local Government Act 1976.

“Parliament has given power or discretion to a particular body or person, then that power or discretion must be exercised by that body or person.

“Any attempt to delegate such power to a third party or any other outside body is illegal and ultra vires,” said Derek who is also a councillor with the Petaling Jaya City Council (MBPJ).

He cited the Subang Jaya Town Council (MPSJ) when it tried to privatise health department approvals for restaurants to a third party during the previous state administration.

“After much objection from several parties, we found that it was illegal for them to do so,” he said. If such practises are allowed, it should also be legal to privatise the entire local council.

“We can start privatising the state and federal government. No need to call for elections… we can privatise government powers to third parties for a 100-year contract,” he said.

FMT’s calls to MPJBT and MPKU presidents Md Fuzi Ahmad Shamimi and Md Rofiki Shamsuddin for clarification were unsuccessful.