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SMI (Small and Medium Industry) has a crucial role in the economic growth of any nation. Because of the lack of resources and misconception, most SMI neglect the need to implement safety and health measures except for the very minimum dictated by the law. From the Malaysian experience, to improve OSH (Occupational and Safety Health) in the SMI need a multi-prong approach.

This is where the large companies or the MNC (Multi National Company) where the SMI have business with can play an important role in dictating the SMI to implement OSH measures in their organization.

The SMI are a crucial component of the country’s economic development. The record showed that in 2001, they comprised nearly 90% of private business establishments, employing nearly 30% of the Malaysia employees in the private sector and contributing approximately 19% of Malaysia’s manufacturing output.

The breakdown of SMI by sectors showed that 20% of the them are in food, beverage & tobacco sector; 18% are in the fabricated metal products, machinery and equipment; 17% in the wood and wood products; 12% in the textile, wearing apparel & leather; 11% in the coal, rubber and plastic products; 8% in the paper & paper products, printing & publishing; 6% in the non metallic, mineral product; 4% in the basic metal industry; and 3% are in the other manufacturing industries.

One of the early methods of reaching to the SMI was to carry out one-day seminar at different places where there were concentration of SMI with the objective of creating awareness on safety and health.

These seminars however were poorly attended by them even though much coaxing and persuasion has been carried out. Most of them gave reasons that they could not spare the time and hinted that the seminar would serve no benefit to them.

One of the initiatives carried out by the Ministry of International Trade and Industries (MITI) through its agency the Small and Medium Sized Development Cooperation (SMIDEC) is providing Industrial Technical Assistance Fund (ITAF) for financing of purchase of machinery, technical and productivity training and quality certification.

In 2000, the National Council for Occupational Safety and Health (NCOSH) has initiated a pilot study of OSH-MS among the Proton vendors of which the majority of them are small and medium sized industries.

The study showed that by using the OSH-MS checklist adopted from ILO OSH 2001, there were significant differences between Proton’s vendors and the benchmarked companies that consisted of gold and silver safety award winners organized by Malaysia Society of Occupational Safety and Health (MSOSH).

This study also highlighted that the Proton vendors OSH management are geared towards legislative compliance and lack of management review and continuous improvement, which are very prominent in the benchmarked companies.

The Proton vendors are enlightened SMI in safety and health compared with the others because Proton had insisted that they must establish and implement minimum requirements on safety and health in order for them to do business with Proton.

In fact this is a crucial point to note because persuasion often failed in most cases would be successful in getting the SMI to implement safety and health measures.

Another point to note here is the role of large companies to dictate or pre-qualify their vendors before they are accepted to do business with them.

The SMI in most developing countries shared many similarities in terms of the characteristics of the organization and the shortcomings that are inherent in them.

In the area of occupational safety and health, because of the inherent weaknesses and the inadequacies, safety and health are often viewed as counter-productive to the operation and are never treated as a crucial part of the overall management of the organization.

As such workers working in the premises of the SMI are more prone to be involved with workplace accidents and illnesses compared to those working in the premises of larger sized industries.

Accidents and illnesses are wastages to the nation causing economic losses as well as human suffering which cannot possibly be quantified.

A simple calculation to show the economic impact to the nation using 2000 statistics showed that the direct cost of accident amount to about 0.3% of the Malaysian gross domestic product (GDP). Taking into consideration the indirect cost that may range from 4 to 6 times the direct cost, the more likely cost would be between 1.5 and 2.1 percent of the GDP.

There are times when persuasion worked but the success rate is very low. Even enforcement of the law would only be effective when the enforcement officers are at the workplace; after they leave the workplace things are back to ‘normal’.

However, out of all the initiatives that have been implemented, the one that affected their earnings has shown encouraging results to drive them to improve safety and health in their organization.


(this article written for 1BINA.my)