IRDA in pitch fees dispute with Malaysian 4As

IRDA, the brand custodian of Iskandar Malaysia, a special economic zone in the Southern Malaysian peninsula, has challenged its obligation to pay a fee on the grounds that it is a government body.

Government departments are usually exempt from paying pitch fees because their advertising serves a social purpose. However, 4As president Datuk Vincent Lee (pictured) argues that this doesn't apply to IRDA.

He said: "IRDA generates hundreds of millions of dollars. It is not a socially-driven organisation. Its advertising doesn't - for example - communicate the dangers of smoking to young Malaysians." He added that IRDA has not responded to his requests that IRDA pay a pitch fee.

Nasser Bin Ismail, IRDA's VP of strategic communications, responded: "At no point in time have the 4As asked for a pitch fee with respect to our current RFP exercise. As far as we are concerned there is no issue of pitch fee and we have clarified this with the 4As."

He argues that a clause in the 4As Mandatory Pitch Fee By-Laws states that government ministry campaigns that are aimed at altering people's behaviour or perceptions shall be exempted from the fee. Being a Malaysian federal government agency - which is non-profit-making - exempts IRDA from the pitch fee, he says.

IRDA publicised its request for proposal in three national newspapers on 15 and 16 July. The deadline for submissions is 1 August.

So far, 14 agencies have responded to IRDA's RFP. A shortlist of the best three proposals will be invited to present in a final round of pitching.

IRDA is a separate entity to Iskandar Investment, Iskandar Malaysia's investment arm, which awarded its RM45 million (US$13.8 million) creative account to Y&R and PR business to Ogilvy PR earlier this year.