WHAT CONSTITUTES A FAVOUR?
Although the corporate sector may view this as a favor to a recipient, the Malaysian Anti-Corruption Commission (MACC) has clarified that facilitation, payment, gifts, entertainment, bribes, Charitable contributions and sponsorship are considered corrupt business practices.
“Favor is a very difficult question to define, and it is up to each individual. There is a lot of subjective judgement,” says Malaysia-China Chamber of Commerce (MCCC) President Datuk Tan Yew Sing.
Referring to Section 17A of the Malaysian Anti-Corruption Commission (Amendment) Act 2018, he said: “Section 17A is a good starting point as it states that corruption does not only involve money but also favors. (But) how to define favor?
Under Section 17A, a business organization can be sued if an individual in the business gives or agrees to give, promises or offers any form of bribe to any person for the benefit of their business.
The provision of this law has extraterritorial jurisdiction. This means that Malaysian incorporated companies and partnerships that engage in corrupt practices outside the country are equally liable.
If convicted, the penalty is a fine of 10 times the value of the bribe or RM1mil, whichever is greater, or a prison term of up to 20 years, or both.
Also, everyone in the company needs to be careful because you can’t give the excuse that the act was done by staff and management has no idea, Tan says.
“Job, power and authority can be delegated to your staff, but responsibility cannot be delegated in the sense of ‘I don’t know, and that’s none of my business,'” he says, adding that from his interaction with foreign partners in joint ventures, they know they too are liable to prosecution.
The director, controller, officer or partner of the company is deemed to have committed an act of corruption unless it can be proven that the alleged offense was committed without his consent or connivance, and he exercised due diligence to prevent it.
A company that allegedly bribed to obtain business became the first business entity to be charged in Shah Alam Sessions Court in March last year under Section 17A of the Act.
In Transparency International’s Corruption Perceptions Index 2021 report, Malaysia fell five places to 62nd out of 180 countries.
“In 2020, Malaysia was ranked 57th out of 180 countries, with 51 points out of 100. We should be able to come out of this stronger,” says Tan.
Tan urges MACC to strictly enforce the law and support MACC in implementing anti-corruption measures and practices.
“Let the whole world know that we mean business. Corruption is the mother of all evil. We want to create a culture without grafting. We must lead by example and set a good example for the next generation for a reputable Malaysia,” he says.
Tan, Founder and Chairman of INTI Education Holdings Sdn Bhd, says corruption could lead to income inequality, affect resource distribution and impact innovative ideas, business growth and the integrity of the country.
“Once corruption sets in, you have to have wealth and connections. There will be all kinds of promises because corruption comes in many forms, and it is no longer competitive, because it will depend on what you can offer and who you are,” he says.
The government is committed to rooting out corruption through the implementation of section 17A(5). This provision is inspired by section 7 of the UK Bribery Act 2010 and the Foreign Corrupt Practices Act 1977.
In December 2018, the Prime Minister’s Department issued a set of guidelines on proper procedures under MACC Section 17A(5). These guidelines are based on the five principles of TRUST:
> Senior management’s commitment to maintaining integrity and ethics.
> Risk assessment.
> Undertake appropriate controls and emergency measures.
> Systematic review, monitoring and enforcement of the anti-corruption program.
> Training and communication relevant to its anti-corruption management system.
The provision is not only intended to act as a punitive law, but to help organizations implement proper procedures to prevent corruption.
On June 1, 2020, Section 17A of the MACC Act came into effect after the expiry of the two-year grace period granted to companies to implement anti-corruption measures.
Parliament adopted the amendments to the law on April 5, 2018, and the law was published on May 4 of the same year.
Tan says that among the MCCC’s 1,800 members are SMEs and some of them have implemented their own anti-corruption measures, such as setting a limit on the value of gifts they accept.
The MCCC will work closely with the MACC to further educate its members on the law, he said.
“There are a lot of SMEs that still don’t understand the rules. They find it difficult to distinguish what is corruption and what is not.
Tan says he is committed to working with MACC and the Ministry of Education to promote anti-corruption awareness activities among students, undergraduates and cultural associations.
“We have to put our hope on the younger generation. Together with the students, we must argue that corruption is not acceptable. If there are no moral values in business relationships, anything can happen.