1.

0 Introduction
Regulation is administrative legislation that constitutes or constrains rights and allocates
responsibilities. Regulation is defined as the result of pressure-group action and results in law
and policies to support business and to protect consumers, workers and the environment.
(Salvatore, 1993). Regulations are issued by various federal government departments and
agencies to carry out the intent of legislation enacted by Congress. Administrative agencies, often
called "the bureaucracy," perform a number of different government functions, including rule
making. The rules issued by these agencies are called regulations and are designed to guide the
activity of those regulated by the agency and also the activity of the agency's employees.
Regulations also function to ensure uniform application of the law. n a system of private property
rights and competitive markets, prices regulate the behavior of consumers and producers so as to
allocate resource to their highest-valued use. The price system works within a framework of
institutions. A market economy evolves institution, rules, and economic agents.
The textbook justification for government intervention is the correction of an apparent
market failure. t is now widely recognized that market failure, such as pollution, results from
incompletely specified property rights. n the case of air pollution, for example, individuals do not
have an enforceable and tradable right in air quality. Merely postulating weak or absent property
rights, however, begs the question. That procedure falls under Hayek's dictum that "before we
can explain why people commit mistakes, we must first explain why they should ever be right.
Government regulation alters the allocation of resources and, indeed, is designed to accomplish
just that reallocation. Along with attenuating property rights, government regulation can also
undermine the complex system of market-based institutions, rules, and standards that enhance
and strengthen property rights. That system, or institutional framework, is as an integral part of a
market economy as is the price mechanism.
Williamson (1975) contends that market imperfections are caused by human and
environmental factors. Human factors likely to lead to market inefficiencies include bounded
rationality and opportunism. Of course, even such people of goodwill differ as to appropriate
objectives for government actions. Many, if not most, economists argue that the chief objective of
government regulation should be economic efficiency (Schmalensee 1979; Kahn 1970, 1975);
that is, the correction of market inefficiencies. (Feldstein 1972) argued that regulation should be
used to redistribute income. Many believe that trying to use regulation to redistribute income is
difficult, and possibly counterproductive. (Kahn 1975).
According to Clair Wilcox (1966), the proper and improper application of regulation may
be seen in the starkly contrasting results of regulation's impact on price that empiricists have
uncovered.
Many forms of government regulation exist in a capitalistic market economy, where
economic activity is organized around the decisions of those who own capital and who act
through decentralized markets. There are three main areas of governmental market regulation ---
regulation of competition, regulation of industries, and social regulation. Because economic
affairs are regulated primarily by the forces of competition, knowledge of competition helps to
reveal when it is not working well and, thus, when to seek other forms of market regulation.
These other forms included regulation of competition through antitrust law, which supports
competition, and industry regulation, which may modify or even replace competition. A third form,
called social regulation, cuts across many industries to affect what a firm can release from its
smokestacks, how it is governed, how it organizes its workplace, and even how it designs its
products.

.0 ReguIation of Competition
Regulation of competition is out of great expansion in economic activity that followed the
U.S. Civil War there emerged large combinations of firms within many industries, combinations
that were called "trusts, after the voting trusts that appeared in the 1880s. Trusts allowed
effective boardroom voting control of groups of firms in the same industry. Reports about ruthless
abuse of the growing market power of trust were legend. Yet the trusts could not be controlled by
common law, because their actions were not unambiguous offenses. The three major statutes
governing antitrust policy are the Sherman Act, passed in 1890; the Clayton Act, passed in 1914;
and the Federal Trade Commission Act, also passed in 1914. The Sherman Antitrust Act
declared illegal "every contract, combination or conspiracy in restraint of trade or commerce"
between states or foreign countries. The Sherman Antitrust Act prohibits monopolies and restraint
of trade. For example, several suppliers of widgets get together and agree they will all sell
widgets for $1.00 to stores, and no less. This hurts competition. This Act prohibits a conspiracy by
two or more persons to unreasonably restrain trade (i.e., to unreasonably limit competition an
unlawful monopoly or an attempt to monopolize an industry and price fixing. Price fixing between
competitors is prohibited. This is called horizontal price fixing Vertical price fixing is also
prohibited. This is when a manufacturer and an independent retailer agree on a resale price of a
product. Sherman Act doesn't regulate how big a company may get unless company continues to
buy up other companies in such a way as to substantially lessen competition and tend to create a
monopoly. The breakup of AT&T is an example of breaking up a monopoly in order to create
more competition. The Clayton Antitrust Act of 1914, amended by the Robinson-Patman Act of
1936, prohibits discrimination among customers through pricing and disallows mergers,
acquisitions or takeovers of one firm by another if the effect will "substantially lessen competition."
These laws are applicable to acts which affect interstate commerce, which has a very broad
interpretation. The Antitrust Division of the U.S. Department of Justice is responsible for enforcing
antitrust laws for the federal government, but private lawsuits may also be brought to curb
antitrust activities. Most if not all states have comparable statutes prohibiting monopolistic
conduct, price fixing agreements, and other acts in restraint of trade having strictly local impact.
The Clayton Act prohibits a corporation from acquiring an interest in the stock or assets of
another corporation if doing so substantially lessens competition or may create a monopoly. A
Federal Court may enter a divestiture order making the guilty party give up the property it
acquired.
Antitrust law is an added constraint on firm behavior. t does not pursue firms that run the
trucks of competitors off the road, as ordinary criminal law serves that purpose, but antitrust law
guides and restrains firms in their competition. When it is effective, it limits practices that firms
may be tempted to use, such as fixing prices among themselves, restraining trading opportunities,
or obtaining and exercising monopoly advantage. Antitrust policy generally regulates competition
and preserves its role in guiding economic decisions so they serve the general welfare. Under the
common law, price-fixing among firms, though not illegal, was unenforceable: a court would not
enforce a contract in which one firms agreed with a competitor to fix prices. Similarly, agreements
not to compete that accompanied the sale of a business or an employment relationship were also
unenforceable if they were judged "unreasonable. Agreements among workers to either fix
wages or strike were often held to violate the law. Practices by which firms attempted to exclude
competitors (for example, predatory pricing) were not considered to violate the law unless
accompanied by additional illegal actions such as fraud (Posner and Easterbrook 1980, 18).
Merges between firms in the same market for example are prohibited by the Clayton Act (Celler-
Ketanver Act of 1950) if their effect maybe substantially to lesson competition. The courts when
judging whether a given case produces this effect, examine the number of firms in the market.
The trend in numbers over time and the market shares of the merging firms, all of which obviously
relate to two attributes of market structure, namely, the number and size distribution of firms.
Antitrust laws have a simple goal: to promote efficiency. That is, they should prevent practices or
amalgamations of firms that would harm society through the exercise of market power. For
example, some may argue that the antitrust laws are designed to help small firms that compete
with large firms, whether or not this promotes efficiency.

The decision to implement of any public policy requires political support in democratic
and non-democratic societies. Such decisions may or may not be supported by theoretical or
empirical arguments on the desirability of such a policy. Of course, society is probably better off if
public policy decisions are justified by theoretical and empirical support. n the case of
competition policy, its pioneering implementation in the United States was clearly an outcome
business lobbying (Hylton, 2003). n other countries such as Japan and Germany competition
policies were transplanted by occupying forces for political reasons (i.e. to demilitarize and
democratize dismantle these nations). (Haley, 2001). While the early implementation of
competition policies may be chiefly outcomes of political lobbying, it can be argued that the later
implementation of competition policy may depend mostly on empirical evidence collected in
developed countries (UNCTAD 1997).
.0 ReguIation of Industries
Regulation of industries refers to government regulation of an entire industry. The most
common industry regulation has been in airline, railroad, trucking, banking, and television
broadcasting. The objective of industry regulation is for a regulatory agency to keep a close eye
on an industry's prices and product to ensure that they don't start a monopoly and take advantage
of consumers. Unfortunately more than a few of the regulatory agencies have been prone to work
too closely with those they regulate, in large part because regulators move freely between
industry and agency. The agency often ends up working for the industry and running what is
effectively a legal monopoly that raises prices, prevents competition, and gouges consumers.
Sectoral regulation in the pre-privatization period involved mostly economic regulation and this
was purely a matter "self-regulation by the government. With privatization, new regulatory
institutions and mechanisms have been established to regulate privatized entities. n the absence
of a national competition policy or law, a sectoral approach to competition regulation was adopted.
This approach to competition regulation has thus far been limited and ineffective.
n the United States many of these services are provided exclusively by privately owned
firms that public agencies regulate. The firms are often called public utilities, another name (like
antitrust) that goes back to the nineteenth century, and they are seen as providing goods and
services in which the general public has a great interest. The public regulatory agencies that
oversee them are commonly operated at the state level, as a Public Service Commission, State
Corporation Commission, or similarly titled agency, although federal agencies also play important
roles. The vast majority of electricity, natural gas, television, and local telephone service, and
large amounts of water, public transportation, and other services have at some time been
provided by such privately owned and governmentally regulated public utilities. Services may also
provided by public enterprises, which are publicly owned and operated. Public enterprises are
especially common in water and public transportation services, and they are more widely uses as
an organizational form in many countries. The largest public enterprise in the United States is the
U.S. Postal Service.
Rate-of-return regulation set prices for regulated industries that would cover costs,
including profit at a reasonable rate of return on the firm's assets. That set a limit on profit, which
almost eliminated the role of the residual claimant and left little incentive for the firm to keep its
costs low or innovate. As it functioned, rate-of-return regulation also produced bias in the firm's
input decision, tempting the firms use more capital than was efficient, relative to other inputs,
because profit was allowed only on capital assets. New regulatory arrangements are being
devised that offer better incentives-more cost control, better input choices, better pricing, more
innovation-than rate-of-return regulation. Many countries are participating in the search for better
regulatory institutions, and when arrangements adopted in one country prove effective they are
often used by other countries.

.1 Communication and MuItimedia

n November 1998 the Malaysian Government restructured the Ministry of Energy,
Telecommunications, and Post (METP) into the Ministry of Energy, Communications and
Multimedia (MECM). A major reason for this restructuring exercise was to bring the regulatory
structure in line with technological developments, in particular, the convergence in
communications and multimedia industries. (The Ministry defines convergence as "the
progressive integration of the value chains of traditional communications and content industries
within a single value chain based on the use of distributed digital technology.
http://www.ktkm.gov.my). Concurrent with this restructuring exercise, a new regulatory authority
for the sector, the Malaysian Communications and Multimedia Commission (CMC), was formed.
The Commission comprise of five members. Even though only a single member of the
Commission is a government representative, all five are appointed by the Minister of Energy,
Communications and Multimedia. n April 1999, the CMC assumed the regulatory mandate for the
sector with the passage of the both the Communications and Multimedia Act 1998(CMA 1998)
and the Malaysian Communications and Multimedia Commission Act 1998(CMCA 1998). The
former spells out the regulatory institutions and structure for the industry whilst the latter details
the function, powers and operational aspects of the CMC. The CMA 1998 is a comprehensive
piece of regulatory legislation. ts enactment streamlines the regulatory structure by consolidating
the many legal statutes (Telecommunications Act, Broadcasting Act) and regulatory authorities
(METP, JTM, Ministry of nformation) for telecommunications and broadcasting by putting them
under a single umbrella regulatory framework. Under the present regulatory framework, the
Minister of Energy, Communications and Multimedia is the most influential. The Minister makes
all key decisions pertaining to regulatory policies. The CMC provides policy recommendations to
the Minister and is responsible for the enforcement of regulatory policies and legislation (the CMA
1998). n the case of the issuance of licenses, the Commission administers the application and
renewal process, makes recommendations but the final decision is up to the Minister. There is a
greater role for public participation in the present regulatory framework. The CMA 1998 provides
for the conduct of public inquiries by the CMC on regulatory matters. The CMC has used this
avenue to solicit opinions from operators during the process of drafting regulatory policies (e.g.
Access List Determination). The CMA 1998 also allows for the setup of an Appeal Tribunal to
review CMC decisions and direction when the need to do so arises. Another avenue for public
participation is the establishment of industry forums that act as a consultative body to the CMC in
important issues such as access code, consumer code, content code and technical code. Thus
far, two industry forums have been established namely the Consumer Forum and the Content
Forum. Even though the CMC takes directives from and makes recommendations to the Minister
of Energy, Communications and Multimedia it is an organization outside the Ministry. Unlike its
predecessor, JTM, this setup provides the CMC with greater flexibility with regards to regulatory
initiatives. This is crucial as it embarks on new functions such as monitoring competition.
Besides, as a statutory body with its own funds, the CMC also has greater flexibility in staff
recruitment. n particular, since its establishment, it has adopted a "greenfield approach to staff
recruitment i.e. hiring people from the private sector, the industry and other regulatory bodies.
Telecommunication industry in Malaysia, the CMA 1998 has substantially clarified and
deepened the regulatory framework for the communications and multimedia sector. Under the Act,
regulatory activities are classified into four key areas: economic regulation, consumer protection,
technical regulation and social regulation. The objective of economic regulation is to ensure that
the communications and multimedia industry is efficient. This is to be achieved through the
implementation and enforcement of three types of regulatory policies licensing, competition
policy and service access. The licensing structure underwent significant changes under the CMA
1998. Previously, licenses were issued for specific technologies and services such as
telecommunication license, broadcasting (TV or radio) license, cellular license, SP license and
VAN license. Under the CMA 1998, licenses were issued for four major categories of activities,
namely content application services, application services, network services, and network facilities.
This new licensing structure takes cognizance of the potential for vertical separation, allowing
competition at different levels along the upstream-downstream continuum of the industry (akin to

enhancing horizontal competition). The activities-based licensing is also expected to facilitate the
introduction of convergent services. Prior to the CMA 1998, previous telecommunications
legislation (Telecommunications Act 1950) did not have any provisions on anti-competitive
conduct. Recognizing the importance of market competition in the achievement of efficiency and
in the absence of a national competition law, the CMA 1998 took the bold step of addressing this
issue by incorporating in the Act prohibitions of anti-competitive practices. Since its enactment,
the CMC has published a series of guidelines on relevant concepts such as "substantial lessening
of competition (CMC, 2000a) and "dominant position (CMC, 2000b). t has also published
guidelines on the procedures and processes for assessing and remedying anti-competitive
conduct (CMC, 2000c). Access to essential facilities such as the fixed network is an important
pre-condition in ensuring level-playing field competition in the telecommunications market. To this
end, the CMA 1998 provides for the determination of an access list. The determination of the
access list was completed and came into effect in April 2001. Having settled the issue of access
list, the CMC is currently looking into the issue of access codes and pricing. Consumer protection
is undertaken to ensure that consumers' needs in terms of access, affordability, and service
quality are met. To meet these objectives, the CMA 1998 provides for the implementation of
regulatory policies and if necessary, institutions to deal with key issues such as service quality,
required applications services, consumer disputes, rate regulation and universal service provision.
The two areas that have received the most attention from public are rate regulation and universal
service provision. The CMA 1998 has provisions for market-based rate setting (i.e. cost-oriented
and no cross subsidies) but ironically it also provides for the Minister to intervene on this matter.
The latter tends to dominate the former - thus tariff re-balancing requires Ministerial approval.
Equal Access by way of call-by-call which enables subscribers to choose their long-distance
(STD) or international (DD) carrier via dialing of a 3-digit selection code was implemented in
January 1999. An important aspect of the implementation of the Equal Access is the ruling that
operators are not allowed to offer rate discounts that exceed TMB's published rates by more than
20 per cent. This ruling was implemented to allow for a smooth transition to cost-based pricing
and avoid a price war (which was considered undesirable for the long-term viability of the
industry). An even more ambitious version of Equal Access, by way of pre-selection which
allows subscribers to permanently pre-select the long distance or international carrier without
dialing a selection code has been deferred. The CMA 1998 provides for the establishment of a
Universal Service Fund (USF) to improve network facilities and services in underserved areas
and for underserved groups within the community. Prior to 1999, TMB was the only network
operator required to fulfill universal services obligations (USO). n the mean time (for 1999 and
2000), other network operators were required to contribute to the provision of universal services
in proportion to their revenues and weighted by services (CMC, 2001a). The USO regime in
Malaysia is currently undergoing transition to a full USF-based system. Prior to the CMA 1998,
provisions on service quality and consumers' needs were subsumed under very brief objective
statements (e.g. ". the Director General shall have regard to (a) efficiency and economy; (b)
satisfying all reasonable demands for telecommunication services ., Section 3B, (2) of the
Telecommunications Act 1950). The CMA 1998 makes explicit provisions for the formation of a
Consumer Forum (established in February 2001) to deal with matters pertaining to consumer
protection. Technical regulation is important to ensure technical inter-operability of networks,
efficient allocation of resources and the safety, security and integrity of network services and
applications services (Syed, 1999). The key areas under technical regulation are spectrum
assignment, numbering and electronic addressing, and technical standards. The CMC can issue
spectrum assignments to operators but only after the Minister has determined the frequency
bands for it. Social regulation is meant to ensure that content applications and services reflect
national cultural aspirations. This area of regulation is targeted at offensive content. There is no
mention of Ministerial intervention in this matter but the Minister's control over licenses certainly
provides a strong case for some form of moral suasion. The CMA 1998 also has provisions for
the promotion of public education.

. Energy Sector
The statement on the competition regulation function of the Energy Commission in the
Energy Commission Act 2001 is fairly general "to promote and safeguard competition and fair and
efficient market conduct, or in the absence of a competitive market, to prevent the misuse of
monopoly power or market power in respect of the generation, production, transmission,
distribution and supply of electricity and the supply of gas though pipelines (ECA 2001, p.14). At
present, competition regulation in the energy sector has not advanced beyond the above broad
legal provision. The Energy Commission itself can be considered to be in formative stages. t has
not issued any guidelines on competition regulation in the sector. There seems to be a lack of
urgency to implement competition regulation in this sector. This is partly because only the power
generation segment has been liberalized and this segment is primarily regulated by the ministry
via contracts (between the incumbent distributor and independent power producers) and via
control over tariffs.
.0 SociaI ReguIation
Social regulation refers generally to societal and political mechanisms or processes that
regulate individual and group behavior, leading to conformity and compliance to the rules of a
given society, state or social group. According to Lester B. Lave (1981), direct regulation of
economic activity may take the form of controls over prices and earnings to prevent price
discrimination and monopolistic profit (economic regulation), or controls over products,
contaminants, pollutants, and working conditions to protect health, safety, and the environment
(social regulation). Both forms of public control have drawn increasing criticism on the grounds
that they are wasteful, too costly, and do not achieve the desired objectives. Much of this criticism
has come from neoclassical economists who support their condemnation of regulation by
contrasting the actual, often flawed, performance of regulatory agencies and regulated sectors
with the assumed high level of efficiency associated with the competition market paradigm. When
the question of market failure is raised, the market solution (deregulation) is justified by
emphasizing the minimal, indirect involvement needed to internalize third-party costs by imposing
some form of tax or effluent charge. When the question of market power raised, the argument is
made that imperfect markets are less burdensome than imperfect regulation. The alternative to
regulation becomes the establishment or restoration of the market as the arbiter of all values and
costs. Lester B. Lave's analysis of social regulation takes a different approach. Lave proceeds on
the assumption that some form of direct intervention will be necessary and that pressing need is
to reform the regulatory process. The result is a comprehensive is a survey of many of the
difficulties encountered in implementing the consumer protection and environmental legislation of
the 1960s, and an attendant set of recommendations for reform.
The main areas of social regulation all involve some problem in how markets function.
Environmental pollution, for example, is a classic example of an externality. An externality is an
effect that spills over from a decision and affects a party who did not participate in the decision.
nformation is another source of concern. Safety of consumer products, or workplaces, may be
improved if information about dangers, good practices, or good product and equipment design
can be widely disseminated. Much is known about imperfect information and the problems it
creates in markets, and this knowledge can be helpful in dealing with workplace health and safety
regulation and with consumer product regulation. Social problems can arise in markets precisely
because high-powered incentives motivate private corporations so well. f no restriction limits their
release of pollutants into air, for example, polluting is the low-cost way of operating that improves
profit. Profit-seeking competitors may be forced to pollute, because the firm that incurs greater
cost to reduce its pollution will be handicapped by those greater costs when it tries to sell its
product. f workers and consumers are poorly informed, they may suffer in unsafe workplaces or
consume unsafe products. When information is poor, a firm that is able to skimp on safety for its
workers or its consumers may be more likely to survive. Social regulation attempts to limit these
potentially perverse effects of strong incentives.

.1 Industry PaIm OiI

ndustry palm oil is referring to social regulation. The palm oil in Malaysia is over a
century old. ntroduced as an ornamental in 1871, the oil palm was commercially exploited as an
oil crop only from 1911 when the first oil palm estate was established. Much has been written
about the crop, its products and commercial trade (Yusof Basiron 09 , 2000). Atmospheric
emission introduced to the environment from fuel combustion, incineration and industrial emission
sources are causing increasing concern to air pollution researchers. The emissions are not only
posing threat human and animals but they may also affect the metrological and geophysical set
up such as the scattering of solar radiation back in to the space and reducing visibility. Therefore,
atmospheric emission from a stationary source like palm oil mill operation plant is not an
exception in this regard. The palm oil industry in Malaysia is a success story. Today it is labeled
as the 'sunshine' industry having moved from a activity involving only 46 mills producing 430,000
tonnes of Crude Palm Oil and no refining capacity in 1970 (N.M. Sulaiman, and A.F. Shafii 1987),
to the world largest producer and exporter involving 263 mills and 57 operating refineries
producing 14 million tonnes in 1987. Hourly, the industry processes 8260 tonnes of Fresh Fruit
Bunches (FFB) harvested from 1.7 million hectares oil palm estates (Palm Oil Registration and
Legislation Authority, Annual Report, 1987). However, due to high solid by-product present, the
industry is continually faced with a massive solid waste disposal problem. On average, 43 tonnes
EFB, fiber and shell are produced per 100 tonnes Fresh Fruit Bunches (FFB) processed and the
total estimated solid wastes amounted to 8.1 million tonnes in 1985 (A.F. Shafii, and Govalupillay).
n order to overcome the problem, the technology of utilizing the EFB and fibers as the fuel to
incinerators and boilers was adopted (N.M. Sulaiman, and A.F. Shafii 1987). Such processes of
course have their associated duty of atmospheric emission and it is the objective to discuss in the
context of milling air pollution control practice in compliance with the Environmental Quality
(Clean Air) Regulation introduced in 1978.
According to Environmental Quality Act (Malaysia), under the enabling legislation
provided by the 1974 Environmental Quality Act, the Malaysian Government has issued the
Environmental Quality (Clean Air) Regulations, which came in to force on 1
st
October 1978, and
which limit air emission from stationary fuel burning sources. For the palm oil industry, the
principle concern of the regulations is toward the control of the smoke and solid particulates
emission from the burning wastes. Under Regulation 14 and 15 of Environmental Quality (clean
Air) Regulation, the existing and new facilities burning solid fuel will not be permitted to emit
smoke darker than shade No. 2 on the Ringlemann Chart. Exceeding the permitted dark smoke
limit shall b allowed under Regulation 16 only to the extent that the period for such emissions
being no more than 15 minutes in any period of 24 hours. Meanwhile, under Regulation 21 and
25 the maximum permitted level of solid particulates concentrations in gas emitted will be 0.5
gm/Nm
3
before 1/10/1978 and a limit of 0.4 gm/Nm for plant erected after the date.
Though, utilization of fiber and shell as the fuel in the boiler and the smoldering of EFB in
incinerators for potash production are indeed necessary and commendable. Unfortunately, the
absence of proper control measures have resulted in excessive smoke and particles emissions
and consequential public out-cry. Presently, on average, every palm oil mil in the country are
equipped with two boilers and one incinerator. Hence, up to 1987, the total number of boilers and
one incinerators installed in the country are 526 and 263 respectively. Thus, the emission from
palm oil mill will certainly create a great burden to the local atmosphere if it is not properly
controlled. n order to obtain an approximate atmospheric emission level contributed by the palm
oil mill, surveillance was carried out by the Department of Environment, Malaysia (DOE) and
Malaysia Oil Palm Growers Council (MOPGC). Result of the surveillance that was carried out on
several boilers and incinerators of different size, type, and age in the country are discussed in the
following (M.L. Tan 1985). Based on the assessment by regular inspection of the smoke plumes,
the intensity of the dark smoke emitted from the boilers appeared to be exceeded the smoke
emission limit required by the Clean Air Regulation. However, the smoke intensity emitted from
the incinerator still remained below No.2 on the Ringelmann Chart at all times, thus complying
regulations. Meanwhile, results of the test carried out on the particulate concentration emitted

from the boiler and incinerators showed that majority are not complying with the regulation. The
emission of dark smoke and to a certain extent, the carryover of soot and partially carbonized
fibrous particulates from the palm oil mill boilers, are a result of incomplete combustion of the fuel
and the readily volatilized tarry product formed. The incomplete combustion probably results from
the furnace combustion and boiler design problem which include lack of steady state condition
caused by fluctuating steam load particularly manual operate fuel feed system, insufficient
primary and secondary air feed, and too short residence time caused by high suction of induced
draught fan (K.Y. Boon, and A.F. Shafii 1987). The same underlying reasons are undoubtedly the
cause of some of the particulates carry-over in incinerators. However, it is possible to create
condition of light smoke from the incinerator because the high moisture level of the fuel being
incinerated (ERL, and Bumi Watson (M) Sdn 1974).
By current practices of controlling emission, dark smoke only occurs in emission from
boiler plant. n order to meet dark smoke regulation, it will be necessary for the industry to look in
to the most cost effective means of establishing the optimum steady state combustion condition in
the furnace. Presently, in some mills, compliance may be achieved with little or no equipment
expenditure, though some increased operating cost associated with improved boiler operation,
and maintenance will be necessary. However, in some boiler, certain amount of capital
expenditure on control equipment and re-engineering of the boiler design will be required if
permitted smoke limits are to be met. mprovement on the combustion condition on the boiler in
order to reduce dark smoke emission will also cut back the amount of total particulates emitted
without addition further control equipment. But, currently, as regulation required all the boiler plant
in the country which is installed after July, 1978 are equipped with mechanical dust arrestment
equipment or plant to ensure the emission standards are consistently met (M.L. Tan 1985).
Presently, in the palm oil mill, due to the relatively low ash content of the fuels, the cyclone
method will be sufficient for compliance with the Clean Air Regulation Limit of 0.4 gm/Nm
3
of
particulate loading for chimney emission provided the boiler and incinerator has been operated
according to design (K.Y. Boon, and A.F. Shafii 1987). However, in some older boilers, the twin
peripheral cyclone was found not to be effective. n this particular case, the use of bag filter plant
has been proven to be most efficient to control the emission to the prescribed limits (M.L. Tan
1985). Surveillance carried out by DOE show that the installation of proven dust arrestment plant
or equipment has been able to reduce the emission level down to range of 0.05 to 0.39 gm/Nm
3

(M.L. Tan 1985). Meanwhile, currently, the most serious problem facing the palm oil industry is
incinerator emission failure in meeting the prescribed limit required by the regulation. Although, it
should be possible to achieve significant reduction in particulate emissions by more careful of
combustion but it is unlikely the step will be sufficient to ensure standards are consistently met.
Beside, the addition of dust arrestment plant will be impossible because of the rudimentary open
grate design of the incinerators. n other words, if particulate level still cannot be brought down to
acceptable level, then new properly designed incinerator has to be considered. Clearly, the
adoption of such a course of action would represent an enormous financial burden to mill
operators (A.F. Shafii, and Govalupillay 1987). Even though, it is difficult to meet particulate
emission of 0.4 gm/Nm
3
but due to its significant economic value through fertilizer savings, the
General Guidelines has not stopped any construction and operation of incinerations except when
the mill is very close to inhabited areas.
.0 ConcIusion
Malaysia does not have a national competition law. Competition is regulated at the sector
level in the country. Two economic sectors have legal provisions for competition law but these
have been relatively ineffectively enforced. The benefits of Malaysia's industrial policy as well as
the policy reforms in regulation and trade have been compromised by the lack of a formal
institution to address competition related issues. Hence, the future priority and direction of
regulatory reform is obvious the country needs to implement a competition law and build the
related institutions and capacities.