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Malaysia – Climate Change Bill: What You Have To Know In 2 Minutes.

What is happening now: The Ministry of Natural Resources and Environmental Sustainability (NRES) is currently seeking feedback on the proposed Climate Change Bill/Rang Undang-Undang Perubahan Iklim Negara (RUUPIN), as outlined in the consultation paper issued on October 4th. Access the consultation paper here: https://t.ly/1UsCl. 

Objective: The RUUPIN aims to establish a comprehensive legal framework for climate change in Malaysia. It will facilitate the transition to a low-carbon economy, strengthen climate resilience, establish a regulatory entity, institutionalise climate change governance, enable compliance mechanisms, and promote emission reduction. 

Overview of the RUUPIN: 

Part 1: Definitions 

  • Provide clear definitions for greenhouse gases and related terms. 
  • Ensure consistency with existing regulations. 

Part 2: Setting of National Targets and Monitoring 

  • Set national emissions reduction targets aligned with Nationally Determined Contribution (NDC) and Long-Term Low Emissions Development Strategies (LT-LEDS). 
  • Monitor implementation of targets to ensure they are met. 

Part 3: Establishment of Regulatory Entity 

  • Establish a regulatory entity to administer the Climate Change Act. 
  • Focus on implementation, enforcement, and stakeholder coordination. 
  • Key functions include emission reduction mechanisms, data management, market-based initiatives, and climate promotion. 

Part 4: Development of National Integrated Climate Data Repository (NICDR) 

  • Establish a centralized system for climate data collection and reporting. 
  • Store, analyse, and track climate data. 
  • Mandate data submission from various sectors and states. 

Part 5: Regulations of Carbon Trading Mechanism 

  • Regulate carbon trading mechanisms, including international transfers and domestic emissions trading. 
  • Establish a domestic emissions trading scheme with emission thresholds. 
  • Develop criteria for participation in the Domestic Emissions Trading Scheme (ETS). 

Establishing a National Registry for Climate Change 

  • Establish a robust NRCC to facilitate participation in the global carbon market.  
  • Prioritise development of Measurement, Reporting, Verification (MRV) and Monitoring & Evaluation (M&E) systems to enhance transparency, efficiency, and trust.  
  • Enable collaboration and potential linking with other market mechanisms.  
  • Track and record issuance, trading, and retirement of carbon credits. 

Part 6: National Climate Fund 

  • Establish a fund to address the funding gap for climate change initiatives. 
  • Source funds from various sources, including government budgets, fees, and international financing. 
  • Use funds to support climate change actions, research, education, and awareness programs. 
  • Contribute data to the Biennial Transparency Report. 

Part 7: Reporting 

  • Fulfill reporting obligations under the UNFCCC and Paris Agreement. 
  • Establish reporting deadlines, methodologies, and standards. 
  • Focus on GHG emissions, climate impacts, mitigation, and adaptation efforts. 

Part 8: Compliance and Enforcement 

  • Implement a compliance mechanism to ensure adherence to RUUPIN’s objectives. 
  • Focus on mandatory reporting, emissions trading scheme requirements, and other regulations. 
  • Enforce compliance through incentives and penalties. 

Part 9: General Provisions 

  • Provide legal protection to enforcement units. 
  • Require Public Prosecutor’s approval for legal proceedings. 
  • Enforce punitive measures against individuals and entities committing offenses. 
  • Define the scope of liabilities for individuals, employees, and corporate entities. 
  • Empower the minister to make regulations regarding penalties and other measures. 

What will happen next: The Ministry is seeking feedback from stakeholders to refine the RUUPIN. All comments will be considered and the legislative details may be amended. Further engagements and a regulatory impact assessment will be conducted before the draft RUUPIN is submitted to the Attorney General’s Chambers and then to Parliament. 

WRITTEN BY

For further information, please contact:

Norhisham Abd Bahrin – Azmi & Associates,
norhisham@azmilaw.com

Norhisham Abd Bahrin – Azmi & Associates

Norhisham Abd Bahrin - Azmi & Associates. Norhisham, a seasoned Corporate and M&A Partner with 23 years of experience, specializing in investments and corporate governance. An active speaker and coach, he's advised major deals and trained board members across industries.

Norhisham brings 23 years of corporate legal experience with him.

He is currently a Corporate and Mergers & Acquisitions Partner at Azmi & Associates, a legal firm with more than 80 lawyers in Kuala Lumpur. His practice focuses on investments, corporate and commercial transactions, private equity & venture capital, corporate governance and compliance.

He has strong business acumen having advised major corporate transactions for listed companies and GLCs across a number of industries including automotive, palm oil plantation and real estate.  

Norhisham also maintains a robust corporate governance practice and is a regular speaker in the market.  He has conducted more than 85 public and in-house programs in the last 5 years for many entities including the Securities Industry Development Corporation (SIDC), Malaysian Institute of Accountants (MIA), Malaysian Insurance Institute (MII), and the Malaysian Directors Academy (now known as the Institute of Corporate Directors Malaysia). He also coaches board members of public listed companies and GLCs on corporate governance issues. 

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