Recently, the Yang di-Pertuan Agong Sultan Abdullah Sultan Ahmad Shah urged the Government to remain committed to the implementation of the National Anti-Corruption Plan. His Majesty's aspiration is for everyone to champion the conviction in order for the country's development not to be eroded by corruption, misappropriation and abuse of power. As large amounts of public funds are being channelled into the administration and investment of Government Interest Companies, it is imminent that the Government reaffirms its commitment in combatting corruption through the introduction of various initiatives to encourage good governance and ethics. In this article, our Partner Mohamad Izahar Mohamad Izham and Senior Associate Liya Saffura Ab Rashid of the Corporate & Government Advisory Practice of Zaid Ibrahim and Co. (a member of ZICO Law) provide an informative look into the efforts supported by the National Anti-Corruption Plan within the public sector, with a focus on the establishment and operation of Integrity and Governance Units in Government Interest Companies.
Malaysia's anti-corruption policies are laid out in various legal and policy documents which include provisions under penal, civil, and administrative laws that safeguard integrity, transparency, and uphold accountability in the public sector. Despite so, the Malaysia Anti-Corruption Commission ("MACC"), as the regulator of the anticorruption regulatory framework has received an alarming number of complaints on corruption within the public sector relating to among others procurement processes in contracts awarded through direct negotiations or allegations of graft cases in Government officers to name a few. In undertaking its role as the lead agency monitoring corruption, there are four divisions that serve as the 'heartbeat' of MACC i.e. the Investigation Division, Intelligence Division, Legal and Prosecution Division, and Records Management and Information Division. These divisions undertake a range of portfolios relating to anti-corruption which includes investigating, gathering information, providing forensic assistance, processing and managing information as well as managing case trials on complaints received by the MACC. However, an effective regulatory framework should be supplemented with preventive measures to ease the supervisory burden of the MACC in overseeing the implementation of anti-corruption laws. To this effect, the Service Circular No.6/2013 requires all Federal Ministries, Departments, and Government Agencies to set up internal Integrity Units that are tasked with six core functions coordinated through the Prime Minister's administrative orders. As a result of the effectiveness of the Integrity Units, the Government of Malaysia has since expanded this initiative in reaffirming its commitment to promoting good governance and ethics in combating corruption within the public sector.
PRIME MINISTER'S DIRECTIVE SERIES 1 NO.1 YEAR 2018
During the Invest Malaysia Kuala Lumpur (IMKL) 2017 conference, the Government announced the need to establish Integrity and Governance Units in Government Interest Companies in order to facilitate the strengthening of internal controls to prevent malpractice, corruption, and abuse of power. This was followed by the Prime Minister's Directive Series 1 No. 1 Year 2018 dated 5 October 20181 ("Directive") which mandates MACC, in particular, the Agency Integrity Management Division or "Bahagian Pengurusan Integriti Agensi" ("BPIA") of MACC to monitor the implementation of this new policy. The Directive has the effect of extending the Integrity Units policy to include all Government-linked companies, companies owned by Ministries and Government agencies including by State Governments (collectively referred to as "Government Interest Companies" or "GIC"). Fundamentally, the Directive requires all GICs to set up an Integrity and Governance Unit or "IGU" within the organisations to promote good governance.
The then MACC Chief Commissioner had been quoted during a press conference on 6 August 20192 highlighting that the number of GICs flagged as "high-risk" is a matter of concern in which MACC has been encouraging GICs to comply with the various guiding documents. One such document issued by MACC in support of the Directive would be the Guideline for the Management of Integrity & Governance Unit (2019) ("Guideline"). The requirements under this Guideline are outlined in detail under the Strategic Plan of Integrity and Governance Unit (2019 - 2021) ("IGU Strategic Plan") which provides the overview of the mechanism in setting up and running the IGU within organisations.3
On a national level, the National Anti-Corruption Plan 2019 - 2023 ("NACP") supports the IGU Strategic Plan by having an institutional anti-corruption approach which underlies the spirit of Article 5 of the United Nations Convention against Corruption (UNCAC). The NACP was developed in accordance to the "National Anti-Corruption Strategies: A Practical Guide for Development and Implementation" by the United Nations Office on Drugs and Crime (UNODC).4 Under the NACP, the priority areas relevant to the implementation of IGUs are public sector administration and corporate governance which guided the development of the core functions under the Guideline.
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1. Arahan YAB Perdana Menteri No. 1 Tahun 2018 Siri 1 No. 1 Tahun 2018 "Penubuhan Unit Integriti dan Governans Syarikat Berkaitan Kerajaan (GLC), Syarikat-Syarikat Yang Dimiliki Oleh Kementerian dan Agensi Kerajaan Termasuk di Bawah Kerajaan Negeri"
2. MACC chief calls on private companies to have own integrity officers as watchdogs, https://www.thestartv.com/v/macc-chief-calls-on-private-companies-to-haveown-integrity-officers-as-watchdogs
3. Strategic Plan of Integrity and Governance Unit (2019-2021), https://www.sprm.gov.my/images/Arahan_Pekeliling/Strategic_Plan_of_IGU.pdf
4. National Anti-Corruption Plan (2019-2023), https://www.pmo.gov.my/wp-content/uploads/2019/07/National-Anti-Corruption-Plan-2019-2023_.pdf
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