15th March 2018 – Transparency International Malaysia (TI-M) has launched its very first Business Integrity Country Agenda (BICA) assessment report. Aimed at enhancing national level business integrity, the BICA assessment report is a baseline assessment of public, private and civil society sector efforts to promote business integrity in business practices.
The report seeks to further understand the factors and actions that can increase business integrity in Malaysia, in order to facilitate public, private, and civil society efforts to diminish corruption.
15 thematic areas were assessed for the purpose of the report. Each area was given a score between 0 to 100. A full score of 100 indicates that all requirements under the United Nations Convention Against Corruption (UNCAC) were met.
Malaysia scored 0 (the lowest) in the area of ‘Prohibiting Undue Influence’ – which covers laws and enforcement on Political contributions, lobbying and other conflict of interest.
Laws on prohibiting bribery of public officials, commercial bribery, laundering of proceeds of crime and collusion received a full score of 100. Although the scores indicate that there are comprehensive laws to address these areas, the enforcement of these laws scored 50.
The overall findings of the BICA indicate that reform is needed in many key areas in order to raise the level of integrity among businesses and improve the overall context in which businesses operate.
Expediting the inclusion of corporate liability provisions in the MACC Act 2009 and addressing the weaknesses in the Whistleblower Protection Act 2010 are among the key concerns that need to be addressed by the Government.
PUBLIC SECTOR RECOMMENDATIONS
- Parliament should expedite passing amendments to the MACC Act 2009 to incorporate corporate liability clauses into the MACC Act.
- Section 36 of the MACC Act 2009 should be amended to compel an individual suspected of possessing unusual wealth and/or living beyond his/her means to declare and explain their finances or assets without the MACC having to initiate a formal investigation.
- The Whistleblower Protection Act 2010 should be strengthened to offer complete protection to whistleblowers; while organizations should ensure that their whistleblowing policies are consistent with the Act and that safe, confidential channels are to be provided.
- Political funding/contributions should be regulated by appropriate legislation.
- Public officials and members of the government administration should make a public declaration of assets.
- Official Secrets Act 1972 should be amended to limit its scope while legislation on access to public interest information should be enacted at the Federal level.
Regulators having oversight over companies need to encourage businesses to adopt and practice policies and systems that mitigate corruption risks. Also, the regulators to foster a culture of “clean business” based on self-driven efforts taken by all corporations, including SMEs and Non-PLCs.
It is noted that Malaysians generally have a very complacent attitude towards implementing the right business practices. If a certain practice for good business governance and management is not made mandatory by the law and authorities, Malaysian companies do not usually adopt the suggested practices. It is only when the practice is made compulsory by laws and regulations, companies will feel compelled to comply. Malaysian businesses need to move beyond compliance to sustain themselves and attract investors.
|PRIVATE SECTOR RECCOMENDATIONS
- Politicians should not be appointed to the Boards of State Owned Enterprises (SOEs) and Public Interest Entities (PIEs); independent directors should be appointed and allowed to exercise their independent functions.
- Bursa should make it mandatory for PLCs to implement and report anti-corruption initiatives.
- Anti-corruption training should be mandatory for all public officials and boards of companies.
Media and CSOs also need to play an active role of monitoring and engaging with the private business sector.
- Printing Presses and Publication Act 1984 and Malaysia Communications and Multimedia Commission Act 1998 should be reformed in order to create conditions for the development of an independent and free press and media.
Following the release of the BICA report, TI-M hopes to collaborate with relevant enforcement agencies, regulators, business associations and other stakeholders to see how these recommendations can be implemented.
The full report of the assessment will be available on TI-M’s website in the beginning of April 2018. You may also place your request for hard-copies via email to: