Travel Reference
In-Depth Information
and policy considerations
A.A. Hasan & N.C. Abdullah
Faculty of Law, Universiti Teknologi MARA, Shah Alam, Malaysia
ABSTRACT: Tourism Industry Compensation Fund (TICF) is a new ministerial agenda for the protec-
tion of package tour purchased by travelers. This paper endeavors to encourage further discussion and
aims to assist the policy drafter in attending at some conceptual implementation concerns of TICF. By
applying qualitative and comparative research method, the paper examines the regulatory framework
establishing TICF and make comparative assessment with equivalence model adopted by selected foreign
jurisdictions. The paper concludes that the operating mechanism of TICF needs to align with the princi-
ples of fairness and equity to secure the mutual interest of travelers and travel agencies in Malaysia.
Keywords
:
compensation fund, insurance, package tour, tourism industry
1 INTRODUCTION
the Tourism Industry Act 1992 and its accompa-
nying regulations. Actions taken against travel
agencies include revocation of business licenses
and issuance of compounds in respect of fraud,
operating business without license, operating busi-
ness outside the permitted scope of the license,
non-compliance with the terms and conditions of
tour brochures, and engagement of unlicensed tour
guide in package tour (Tourism Licensing Divi-
sion, Ministry of Tourism and Culture Malaysia,
2012). In response to travelers' complaints against
unethical misconduct of some travel agencies in the
industry, the Malaysian Ministry of Tourism and
Culture (MOTAC) has recently proposed the Tour-
ism Industry Compensation Fund (TICF) TICF
with the ultimate aim to protect customers who
purchase package tour from travel agencies licensed
by the Ministry (Tourism Licensing Division, Min-
istry of Tourism and Culture Malaysia, 2012).
According to the proposal, TICF is modeled
from the legal framework currently adopted by the
United Kingdom and Queensland, Australia. No
justification, however, was given in support of such
preferences. Hence, in order to get a broader per-
spective on the subject matter, comparative study
with other selected jurisdictions is made. Essen-
tially, any merit derived from the comparative
jurisdictional assessment needs to be molded with
the local trading atmosphere. The implementation
of the TICF has been agreed by the Drafting Divi-
sion of Attorney General Chamber and Ministry
of Finance (Tourism Licensing Division, Minis-
try of Tourism and Culture Malaysia, 2012). The
proposal for the introduction of TICF is available
Tourism industry is an important foreign exchange
earner under the National Key Economic Areas
(NKEA). In temporal parallel to the National
Transformation Programme, TICF is viewed as an
innovative approach to consumer grievance man-
agement through regulative means. The present
paper analyses the practical feasibility of TICF
as the effective way to promote a positive balance
between consumers' rights and sustainable tour
and travel industry. Since TICF is still at the con-
sultation stage, the questions and issues raised in
this paper may appear to be speculative in nature.
However, the issues raised are grounded on some
analysis on the present state of the industry, exist-
ing regulatory framework currently in force as well
as comparative study with the existing features of
equivalence model in other countries.
2
THE GENESIS OF TICF
For many years, there are many complaints against
travel and tour agencies. The complaints centered
on travel agencies' failure to perform tour packages
as contracted, failure to adhere the tour itinerary,
last-minute cancellation and failure to account
money in respect of tour cancellation by the com-
pany, and improper performance of service quality
(Tourism Licensing Division, Ministry of Tourism
and Culture Malaysia, 2012). In furtherance of
the complaints lodged, several travel agencies were
found to have committed various offences against
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