Using Negotiation to Steer Urban Growth: Lessons Learned from Malaysia Dr Noor Rosly Hanif, Dr Wan Nor Azriyati

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Using Negotiation to Steer Urban Growth Lessons
Learned from MalaysiaDr Noor Rosly Hanif, Dr Wan
Nor Azriyati Ibrahim AhmadCentre of Study for
Urban Regional Real Estate (SURE) Faculty of
Build EnvironmentUniversity of Malaya, Malaysia
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Malaysia Attained independence from the
colonial British in 1957
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We are multi-ethnic society, total population of
24 million people
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Majority is Malay who is the son of soil
followed by Chinese and Indians
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Governance Structure

• A Federated State consists of 13 states and 3
  Federal Territories (Putrajaya, Kuala Lumpur and
  Labuan).
• Agong (a King) is the Titular Head of the
  Malaysia (every 5 years), 9 Sultans and 4
  Governors.
• 3 tiers government system, Central Government,
  State and Local Government

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Land Ownership System

• Being a British Colony, adapted a hybrid land
  ownership system.
• The land ownership torrens sistem from Australia
  (ownership title perpetuity or leasehold)
• Land matters is under the state jurisdiction
  mixed from India and Canada
• The land acquisition from India
• Planning system from United Kingdom

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Having established a brief background of
Malaysia, we now move to the purpose of this paper

• Aims of this paper-
• to establish that negotiations is embedded within
  the cultural characteristics and governance of
  Malaysia.
• to demonstrate that negotiation facilitates an
  acceleration of planning approval.
• to consider the extent to which negotiation plays
  a significant role in steering urban growth.

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What is negotiation?

• Negotiation is a means of getting things
  accomplished when different groups or
  organisations need to consider each others
  viewpoints to get things done (Strauss, 1978).
• Negotiation as a discussion between two or more
  parties with the apparent aim of resolving a
  divergence of interest and thus escaping social
  conflict (Pruitt et al, 1997).
• Negotiation as an act whereby two or more parties
  with different interests come together to discuss
  a common matter until they manage to find an
  acceptable solution.

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What is negotiation? (influence on culture in
negotiation)

• Social-psychology researchers assert that
  peoples cultural background has an influence on
  peoples negotiation behaviour.
• Hofstede (1991) postulated that culture develops
  from an individuals repeated exposure to certain
  customs, practices and behaviours which lead to
  the internationalisation of certain attitudes and
  values.
• Hofstede (1980 25) also argued that culture is
  the collective programming of the mind that
  distinguishes the members of one group or
  category of people from another.

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What is negotiation? (influence on culture in
negotiation)

• Han and Lim (2002) in their study on influence of
  culture argued that the interdependence between
  nations, markets, enterprises and people has
  strongly emphasised the visibility of national
  cultures. In comparing Eastern culture with
  Western culture, they further argued that Eastern
  culture features low individualism, high
  uncertainty avoidance and high power distance.
  People in this region strive for group interest.

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What is negotiation? (influence on culture in
negotiation)

• On the other hand, Han and Lim (2002) claimed
  that Western culture is characterised by high
  individualism, low uncertainty avoidance and low
  power distance. People in this region are noted
  as striving for self-actualisation rather than
  for group interest.

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Negotiation in the land development process

• Several authors claimed that negotiation
  conflicts in land development arise to resolve
  the conflict of rights as well as interest
  (Carnevale, 1995 Radhakrishnan, 1994 Kennedy et
  al, 1989).
• Kennedy et al (1989) postulated that conflicts
  could be of two key kinds in negotiation context
  conflicts of interest and conflicts of right.

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Negotiation in the land development process (cont)

• Carnevale (1995) claimed that ownership of
  property is often the basis for negotiation. Land
  owners were granted the rights to use and to
  develop their land and therefore the initial
  negotiation held with local authorities is to
  obtain these rights. However, for the
  developments to take place, it requires resources
  and incurred cost. Hence, it involves investment
  and risk factors. This has resulted in the land
  owners to protect their investment and thus, lead
  to negotiation with local authorities to secure
  their interest.

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Why do developers need to negotiate with the
planning authority?

• Developers and land owners are interested in
  utilising their resources in such a way as to
  increase the monetary interest in the development
  potential.
• However, in order to engage with the development
  activity formal planning permission is required.
• Thus, the action for each party is one that leads
  to gain of control over the resources that
  interest them by offering the resources which
  each has to the other side.

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Why do developers need to negotiate with the
planning authority? (cont)

• Many writers mentioned that developers and land
  owners are only attracted in carrying-out
  developments that will generate income and profit
  to them (Harvey, 1982 Harvey 1985 Ward, 1994
  Millington, 2000).
• They control the inputs for the factors of
  production such as land, finance, labour, and
  ideas and power (Healey, 1991).
• On the other hand, local authorities are vested
  with power to facilitate development through the
  issuance of planning permission.

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The case study Malaysia

• Negotiations have been embedded with the culture
  of the country.
• Negotiation practices have been workable far back
  from the beginning of the British involvement in
  Penang, during the setting-up of the new
  independence government of Malaya (Malaysia) and
  even until now.
• Negotiations between the elite communal groups to
  achieve political stability of the country are
  the main key success of this nation.

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The case study Malaysia

• Government policies were formulated based on the
  outcomes of these negotiations to achieve certain
  goals mainly related to economic and social need
  as well as to maintain political mileage.
• The negotiation approach has been widely practice
  and encouraged in almost all aspect of the
  countrys day to day endurance.

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The case study Malaysia

• It is interesting to note that in the context of
  Malaysia, the government plays a pivotal role in
  land development activities.
• Its involvement starts from the initial planning
  stage at the national level up to the
  implementation of the policy at the micro level.
• Experience contributes toward the nature and form
  of government plans and actions.

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The case study Malaysia

• developers are recognised as governments
  partners in ensuring that the land developments
  schemes could materialise in each of the local
  authorities area (Iskandar, 2002 Gomez, 2003).
• Another positive aspect of the Malaysian
  government approach is the adoption of
  collaborative governance as the exercise of
  political, economic and administrative authority
  in the management of its affair at all levels.

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The case study Malaysia

• The practice of collaborative governance as
  shown in politics, such as the formation of
  Barisan Nasional (National Front), a coalition of
  political parties representing each ethnic in the
  country, while in economy the establishment of
  MTEN consisting of influence groups, giving
  suggestions to the government to overcome
  economic turmoil faced by the nations.

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Instrumental Case Study

• The case study further draw on the information
  collected through questionnaire-based interviews
  with the Planning Directors of the local
  authorities in Malaysia.
• The questionnaire-based interviews were a mix of
  structured and semi-structured type. In the
  former, interviewees were asked questions to
  which multiple choices answers were appropriate.
  In the semi-structured questions, the
  interviewees were asked a number of open-ended
  and perception based questions.
• The aim is to obtain additional information
  which relates to personal opinion and
  professional reasoning.

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Instrumental Case Study (Negotiation in the
Planning Application Process)
Stages of Planning Process Percent Valid Percent Cumulative Percent
Pre Application Yes No 57.1 42.9 57.1 42.9 57.1
Before TPC Meeting Yes No 57.1 42.9 57.1 42.9 57.1
After TPC Meeting Yes No 28.6 71.4 28.6 71.4 28.6
Others Yes No 14.3 85.7 14.3 85.7 14.3
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Instrumental Case Study (Negotiation Issues)
Level Stage Percentage of Negotiation took place Negotiation Issues
I Pre Application 57.1 Planning Standards and regulations
II Preparation of Planning Paper Before TPC 57.1 Planning Standards and regulations Infrastructure Provisions and technical requirements.
III After Decision made by TPC 28.6 All above Economic, social political Obligation and contributions Cross Subsidies contras Others
IV Appeal 100 All of the above
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Instrumental Case Study (Outcomes)

• Negotiations with the planning authority at both
  level I and level II were considered to be
  successful. To a great extent, it demonstrated
  that negotiation has facilitated an acceleration
  of planning approval at the TPC meeting.
• Majority of the planning application cases were
  approved by the TPC with minor changes.
• Negotiations and appeals after TPC decision only
  involved a relatively small number of unique
  cases only.
• Negotiations at level III is very small as most
  of the dispute between developers and planning
  authorities could be disentangled before the TPC
  meeting.

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Conclusion

• The empirical case study produced evidences that
  negotiations are held to be an acceptable
  practice that forms an essential part of the
  planning process in Malaysia, and thus, in
  steering urban growth.
• Negotiations occur early at the pre-application
  stage and continue throughout the planning
  process.
• The study has proven that negotiation has been
  embedded in the planning process. Thus,
  negotiations have been recognised as one of the
  significant activity in the land development
  processes in Malaysia.

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Thank You
E-mail nroslyhanif_at_um.edu.my