a) works, the both companies must able to comply

a)    
Health, Safety and Environment Risk

There
is limited information related to health, safety and environment issue in 2016
annual report for both companies. Safety risks not only come from the
construction site or near the construction area, but also from the quality of
the building structure itself or the construction materials used in the
construction works. If the structure of the building is not reasonable, there
may be a tendency to collapse, and the safety of the builder or the consumer
who buys the building may be at risk and polluting the environment. Sometimes
due to the working environment, employee health or employee attitude and other
reasons, resulting in the risk of accidents in the construction area. And also,
lack of proper precautions and serious mistakes in the operation can also lead
to employee safety risks. In addition, the company does not attach importance
to staff welfare, health and safety culture in the organization to develop, and
always cause safety and health issues. Next, construction companies are lack of
consideration in maintaining a good landscape after completion of the
construction works which may lead to environment risk.

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b)     Compliance
Risk

In
the 2016 annual report, both companies does not disclose the information
related to compliance issue. Compliance risks may come from unfavorable,
unenforceable, defective or unintended contracts, litigation or even claims. In
addition, new developments in laws and regulations or non-compliance with
applicable laws and regulations may also trigger the compliance
risk to happen in construction companies. As qualifies contractor of civil
engineering and structural construction works, the both companies must able to
comply with rule and regulation that established by Construction Industry
Development Board (CIDB). The following rules and regulation that the must be
comply with:

 

 

I.          Federal
Roads Act 1959

Bills declaring federal roads,
bridges, ferries and other modes of transport. The law applies to the whole of
Malaysia. The Minister may, in consultation with the government of the country
concerned, declare in any country any road, bridge, ferry or other means of
communication as a federation.

 

II.         The
Registration of Engineers Act 1967

The provisions of the registration
of engineers and wholly-owned enterprises, Partnerships and corporate bodies to
provide professional engineering services and related purposes

 

III.       The Housing Development (Control and Licensing) Act 1966

Provide for the control and
licensing of the housing development business in Peninsular Malaysia, protect
the interests of buyers and matters related thereto.

 

Other
than that, the whole process of construction work should follow the procedure
and requirement which set by regulatory agencies and associations like The
Board of Engineers Malaysia (BEM), The Board of Architects, Construction
Industry Development Board (CIDB) and other regulatory bodies until the
completion of the construction work. If the company fail to do so, they will be
suffer huge losses. The companies must also be responsible for any safety and
quality issues before and after the building or infrastructure is open to the
public. In addition, the cost of compliance has cost companies too much in
order to get construction projects.

 

 

 

c)     Business
probity risk

There
is no relevant information on business probity issue disclose in the 2016 annual
report for both company. The risk is related to the governance and ethics of
the organization. This may be due to the unethical behavior that is cultivated
throughout the organization and the unhealthy organizational culture. This risk
may be due to the company’s procurement of construction materials with poor
quality in the course of project construction, in order to reduce costs and use
substandard materials to construct projects or cut corners. Not only that, it
possible that the company bribed law enforcement officials in order to get a
construction project or streamline the application process. And also, the
senior management may leak the company’s private information to other
competitor for their own interest as well as promote corruption culture among
the organization. Those unhealthy organization culture and unethical behavior always
leads to poor performance of the company and there is a risk that company will
be closed down if company still not aware that issue.