Continuous revision and improvement of anti-corruption laws in Malaysia

KUALA LUMPUR: As part of on-going efforts and measures to combat corruption, it’s vital that anti-corruption laws are constantly updated, improved and reformed – over time. This is to ensure that anti-corruption laws keep up with newer developments that may render these to be left behind and incapable of being implemented effectively as before. A good example is Section 17A that was inserted into the Malaysian Anti-Corruption Commission (MACC) Act (2009) in relation to corporate liability – which actually incentivises companies (in a negative way, i.e., by way of the use of the “stick”) to install and put in place adequate procedures and safeguards to prevent the emergence and development of corrupt practices.

In addition, there’s also a need to amend legal provisions to ensure that the scope be widened further to account for pre-existing gaps such as institutional limitations. For example, Section 8(1) of the Whistleblowers Act (2010) should be amended to do away with the narrow constraints imposed or placed upon the whistleblower’s reporting capacity.

Currently, two institutions and stakeholders play a prominent role in providing policy guidance and ideas, namely the Integrity Institute Malaysia (IIM) and the National Centre for Governance, Integrity and Anti-Corruption (GIACC). The IIM and GIACC should be empowered further so as to:

• continue to monitor the situation of corruption and associated practices in the context of Malaysia in particular (and worldwide in general);

• issue advice and guidelines to the MACC; and

• meet up with the government to ensure that the anti-corruption drive and momentum are maintained. This could be done by ensuring high-level meetings involving the Prime Minister is done on a regular basis which should also include representations from the Malaysian chapter of Transparency International (TI), the anti-corruption watchdog. Both the IIM and GIACC are to provide policy reviews and feedback on existing anti-corruption laws as well as propose amendments and reforms so as to keep up with developments.

Furthermore, continuously updating the law whereby the basic and fundamental anti-corruption principles (both moral and legal) are preserved intact whilst the approach and implementation might differ according to context-specific developments require us to learn from the experience of other countries too.

This is important and while there can’t be a “cut and paste” approach in terms of specifics since the context might vary, there’d be much to borrow. For instance, the idea of introducing “astronomical” salaries for the Prime Minister and Ministers as done in Singapore wouldn’t be suitable and justifiable in Malaysia (or in most parts of the world for that matter). But we can still emulate the practice of digitalising all government procurement.

Or as in Hong Kong, all civil servants have to report the source of every cent they earned. And this information is constantly published by the mass media and the Independent Commission Against Corruption (ICAC) would monitor the correspondence of their expenses and income.

Reforming the MACC Act to enhance its provisions should also include a mandatory or obligatory investigation to be launched by the MACC upon receiving a complaint by a member of the public. At the same time, another provision should be added to ensure that this procedure isn’t abused. This means that a member of the public who lodges a false or malicious complaint without basis (bad faith) is liable to be prosecuted in court. One of the ways to safeguard the integrity of the reporting system which allows for mandatory or obligatory investigation upon receipt of a complaint is to ensure that the complainant appear in person. Then the person’s NRIC and other details can be checked and verified, and this also allows for an interview to take place for further probing and/or examination of any evidence provided by the complainant.

It’s high time that our anti-corruption laws, particularly in respect of the MACC Act (2009), be further improved to strengthen the hand of the MACC and promote an anti-corruption culture in the country.

The issue of political funding, while not as high-profiled as other corruption-related issues, is critical if an anti-corruption culture is to take root in our society. In fact, the issue of political funding strikes at the heart of what it means to be a democratic society. The question is, “Who is beholden to whom” at the end of the day? Or “whose interests it is that the politicians serve?”

As it is, political funding can be and is often abused by interested parties and stakeholders to the detriment of society, especially those who are disenfranchised socio-economically, economically, politically, etc., or the marginalised. For example, financial contributions made to a ruling party for the purpose of awarding contract for the construction of a dam that would destroy the environment and displace the natives highlights the need for reforming political funding laws.

In Malaysia, as former Chairman of the Election Commission (EC) Azhar Harun who’s now the Speaker of the Dewan Rakyat put it, there are basically two risks of unrestricted lobbying and funding:

1. One was corruption, and

2. The second, more insidious risk was that policies will be promulgated at the behest of the funder without much concern of the impact on the general public.

Towards that end, the Elections Act (1958) should be amended to require political parties and candidates to disclose their donors as well as limit campaign contributions. The mandatory requirement for auditing campaign contributions should also be included. This would then be supplemented and complemented by public funding as in the case in other countries. Currently, the Act only limits campaign spending – which is an anomaly. The National Anti-Corruption Plan (NACP) 2019-2023 calls for the Election Commission to review the amount of allowable election expenses and to clearly define what constitutes as “election expenses”.

The Election Offences Act 1954, especially Part III (Corrupt Practices), should be strengthened when it comes to inducement to vote or “vote-buying” (re Section 9 & 10). The terms of penalty under Section 11 should be enhanced. This is so that the maximum jail sentence of two years and fine of RM5000 are extended longer and higher, respectively. At the same time, a case could be also be made for the introduction of an Act (similar to that in the UK where it’s in the form of the Representation of the People’s Act) – whereby a statutory duty is imposed on every wakil rakyat (MP & Adun) to publicly disclose, highlight and update records of donations (that’s RM10,000 and above) from corporations and business/corporate figures on his/her website. The Act will also require MPs to make an annual report to the EC on the donations received from corporations – stating reasons for the donations.

The GIACC is currently pushing for a rule that requires disclosure of the source of political funding above RM10,000. To complement and supplement this policy proposal, layers of corporate veils deployed to mask the identity of the funder – as a common tactic – should be countered with the mandatory requirement for the disclosure of beneficial ownership analogous to proxy share ownership holding in trust for the real owner. In the same vein, such proposed measures would strengthen and enhance the existing Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act/AMLA (2001) and Banking & Financial Institution Act/BAFIA (1989).

Not least, we should be seriously studying the political funding models in other countries. In Germany, the government provides funds for political parties during elections. Germany’s Political Parties Act (1967) stipulates that the State will fund the parties to partly finance their general activities, and the criteria for the distribution of public funds would be the parties’ performance in the European Parliament, Bundestag (federal parliament) and Landtag (state parliament).

Public funding of elections would reduce political parties’ dependency on corporate donations, thus preventing corporations from influencing policy-making decisions. This system also ensures that the elected government and representatives work for the public interest, thus upholding democracy. However, a political funding system which is completely tax-payer dependent might be unsuitable and not feasible. The right approach is to find or strike the right balance – with the ultimate purpose of eradicating corrupt practices.

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Jason Loh Seong Wei is head of Social, Law & Human Rights at EMIR Research, an independent think tank focussed on strategic policy recommendations based on rigorous research.

** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.