Fighting private sector corruption

  • Letters
  • Tuesday, 04 Aug 2020

AS the world waits in hope for a vaccine for Covid-19, a vaccine for a scourge that is equally harmful to society, corruption, already exists. That vaccine is prevention.

Borrowing a phrase common in Covid-19 parlance, i.e. social distancing, we should introduce “corruption distancing” to effectively prevent corruption.

Today, corruption involves both the public and private sectors, making it a highly complex problem. It is likened to a contagious disease that will eventually wreak havoc on our economy and institutions.

For every crooked politician or bureaucrat, there would be a businessman willing to grease their palm. Such activities would erode integrity, reduce citizens’ trust in the powers that be, corrode the rule of law and eventually undermine democracy.

The Malaysian Anti-Corruption Commission (MACC) has consistently warned that the level of corruption in Malaysia’s commercial and business sector is alarming.

Data between 2019 and June 2020 show that 390 individuals were arrested, which represented 26.1% of the total arrests on record. In the last five years, MACC has arrested more than 800 individuals in cases involving commercial organisations.

The illicit assets seized were worth billions of ringgit.

MACC has urged the private sector not to offer bribes and to take a more proactive role to combat corruption. But the truth of the matter is, if there are no givers, there will be no takers. The real culprits are the givers who bribe and offer attractive rewards to corrupt public officials to win contracts or gain an unfair advantage over their competitors.

A key legislative change in the fight against corruption in the private sector is the enforcement of Section 17A of the MACC Act 2009, which imposes criminal liability on commercial organisations for failure to prevent corruption.

Section 17A (1) states that a commercial organisation commits an offence if “a person associated with the commercial organisation corruptly gives, agrees to give, promises or offers to any person any gratification whether for the benefit of that person or another person with intent to a) obtain or retain business for the commercial organisation; or b) to obtain or retain an advantage in the conduct of business for the commercial organisation.”

The onus has shifted to the directors, partners and management of the organisations or companies, who have to prove in their defence that they had put in place adequate procedures to prevent their associates from committing corrupt practices.

The MACC foresees more reports on corruption in commercial organisations falling under this section.

Local and foreign industries and trade organisations/associations in Malaysia must collectively support MACC’s efforts to curb corruption by practising good governance.

The Association of Certified Fraud Examiner (ACFE), in its Report to Nations 2020, stated that any corporates that did not practise a culture of anti-corruption and integrity could suffer losses of up to 5% of their profits.

It is therefore advisable for companies to hold talks on how to prevent bribery and corruption. By doing so, they may be able to save between 2% and 3% of their profits.



Malaysia Association of Certified Fraud Examiners

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