The 'primitive' way of conducting business through donations and sponsorships should be eradicated, an advertising industry group said in reaction to recent graft allegations involving the issuance of outdoor billboard licences by the Petaling Jaya municipal council.

In a press statement yesterday, the Outdoor Advertising Association of Malaysia (OAAM) said the recent revelation that part Australian-owned advertising company Kurnia Outdoor had donated RM3 million in exchange for rights to 30 billboards, is unhealthy, unfair and prevents other companies from doing business.

"The association welcomes the participation of foreigners in this industry in the hope that it creates more competition in the market," it said.

"However, we would like to stress that they should abide by the professional code of practice and not indulge in questionable acts."

According to OAAM, MPPJ in October 2002 had issued termination letters to all owners of billboards, effective 2003. Association members were asked to begin donating RM10,000 per billboard per year to the MPPJ Sports and Culture Club - which has apparently been granted exclusive rights to manage all billboards under the council's jurisdiction

However, earlier news reports have quoted MPPJ sports club assistant director Redzuan Sintol denying that the donations were forced down any of the companies' throats.

Bending the rules

The association also added that the 'privatisation' of billboards by local councils - including Subang Jaya, Melaka and Kota Bharu - is an "unhealthy trend" whereby one single company is awarded exclusive rights to advertising concessions just because they manage to entice authorities to "bend the rules".

In 2001, the Melaka Municipal Council had informed advertisers that exclusive rights had been awarded to Kubang Media, including billboards situated on or within private property, said the OAAM.

The loss suffered by companies who had their advertising structures demolished in failure to come to terms with Kubang Media, it added, amounted to millions of ringgit.

It said that in 1998, with the award of exclusive rights to Nilam Simfoni for ad space along the Federal Highway and other JKR roads, companies with existing billboards were forced to either sell their structures, share their income with the concessionaire, or have their billboards demolished.

The OAAM pointed out that the exclusive owner of billboard licences in Kota Bharu, Abroad Multi-Network, has even attempted to claim the licensing rights to advertisement on private buildings.

"In the opinion of the OAAM, this practice of preventing competitors from doing business through privatisation, or awarding exclusivity to one single company ... is unhealthy and unfair.

"Most of the time, the companies awarded the privatisation rights are newly incorporated companies with small staff and low paid-up capital...their survival can only come at the expense of others," it said.

"Our intention is not to challenge the government, local councils or authorities ... however we have a responsibility towards our members and the industry at large to promote a business environment which is transparent and fair to all legitimate operators." it added.