Conditions for a licence must be clear and concise

IMAGINE that you are going into business for the first time. You are setting up a shop and have learnt that no premises can be used for trade, business or industry without a licence from the relevant local authority.

You find out what exactly is needed to get this business licence and applied for one.

Then you are told that the licence comes with several conditions. Failure to adhere to any of these conditions can result in the local authority cancelling your permit. That sounds reasonable enough, you think.

That is until you discover that one of the conditions is that you must have good behaviour and morality, which happens to be the fifth principle of the Rukunegara.

You now have second thoughts about investing in a shop at the chosen location.

What if your business or you (as the licence holder) were somehow deemed to have behaved badly and your licence was withdrawn? That would be hugely disruptive and you might lose a lot of money.

You consider yourself a decent and courteous person, and it is unlikely that you would violate the good-behaviour-and-morality condition. And yet, you know that in business, you must consider all known risks.

But how do you deal with a probability this vague and potentially arbitrary?

An easy solution is to revise your plans and switch to another place where the local authority does not impose licence conditions that explicitly insist on a specific way of conducting oneself.

The above is a make-believe scenario but it parallels what may happen in Pahang following the state government’s decision to attach a new condition to business licences and permits to curb contempt against the Rulers.

In his winding-up speech at the state assembly in Kuantan on Friday, Mentri Besar Datuk Seri Wan Rosdy Wan Ismail said local authorities, departments and agencies that issue permits and licences in the state must stipulate a condition of respect and loyalty at all times to the Sultan of Pahang and the Yang di-Pertuan Agong.

“This decision is effective immediately. Any violation will result in the permit or business licence being revoked,” he added.

There is no doubt that the royal institution has an important role in Malaysia. After all, the second principle of the Rukunegara is loyalty to King and country.

Nevertheless, Pahang’s additional licence condition is curious for a few reasons.

Any condition attached to a business licence ought to be closely linked to the business activity and should promote the licensing objectives.

Does this apply to the new condition? What are the state’s licensing objectives?

In the United Kingdom, for example, the Licensing Act regulates the sale and supply of alcohol, and the provision of entertainment and late-night refreshment.

The UK government is clear about the licensing objectives: the prevention of crime and disorder; public safety, the prevention of public nuisance; and the protection of children from harm.

Malaysia has the Sedition Act, which covers acts or words that have the tendency “to bring into hatred or contempt or to excite disaffection against any Ruler”.

There are other questions that surely must be in the minds of businessmen who operate in Pahang or who are thinking of doing so.

Our Local Government Act allows a local authority to subject its licences to conditions and restrictions as it “may think fit” and these licences can be revoked “at any time without assigning any reason therefore”.

The local authority can also refuse to grant or renew a licence.

These are broad, discretionary powers under the law but they must be exercised with fairness, consistency and much thought. New rules can be ineffective and even damaging if they are loose, fuzzy and superfluous.