The provision with a capital alphabet and a capital-sized liability
TRIVIA time: Why is Section 17A of the Malaysian Anti-corruption Commission Act 2009 (MACC Act) one with a capital A?
Not because the original writer had inadvertently left his caps lock button on while drafting it, but because there is already a Section 17(a) in the act.
When we engaged with the authorities some time ago on this matter, the officer in charge emphasised that there was already a Section 17(a), which pertains to an offence by an individual in the receiving of a bribe, and this Section 17A needs to be referred to correctly.
So, Section Seventeen Capital A, then. This fearsome – on paper, for now – amendment to the MACC Act, via the MACC (Amendment) Act 2018, introduced into Malaysia the hitherto alien concept of “corporate liability”.
The act of giving a bribe in this country has always been associated with an individual, and rarely would a corporation or organisation feel the pain from the individual being found guilty, beyond the inevitable but often transient reputational damage – one tends to quickly forget.
Relaxed perception
In the nine months since the law came into effect on June 1, 2020, as internal audit practitioners we continue to see a somewhat relaxed perception in Corporate Malaysia towards the impact and implication of Section 17A.
It is often a challenge to convince organisations to take the necessary first steps towards developing and aligning their anti-bribery and corruption (ABC) policies and procedures with the Guidelines on Adequate Procedures document (Guidelines), which were issued by the Prime Minister’s Office as a direct response to Section 17A, providing valuable handles on how to put in place an adequate ABC programme.
Faced with resource constraints, companies tend to lower the priority of assessing their ABC programme, preferring to focus on auditing their core business processes areas.
In terms of training, badly designed or delivered programmes result in only partial awareness of the message the organisation must convey.
An ABC programme could be weak from both a process design perspective (for example, the whistle-blowing channel is non-existent) and from an execution perspective (for example, the person who picks up the whistle-blowing hotline does not speak the language of the caller).
The reporting season for a vast majority of listed issuers on Bursa Malaysia Securities Bhd has already begun, by virtue of their financial year end of Dec 31.
The Listing Requirements of Bursa Malaysia was amended on June 1, 2020 to require listed issuers to address corruption risk as part of its annual risk assessment process (Paragraph 15.29 of the Listing Requirements).
This paragraph also requires listed issuers to put in place policies and procedures as described by the Guidelines.
What the listed issuer has done in respect of the aforementioned would need to be addressed via its annual report.
Directors of listed issuers may find themselves in a quandary should they remain unaware of these requirements and the time comes for such disclosures to be made in the annual report.
This may lead to awkward and uncomfortable questions during a listed issuer’s general meeting.
We expect that a commercial organisation should have done, among others, the following even before Section 17A came into effect:
> Educate everyone, beginning with the board of directors;
> Identify the gaps within the context of the Guidelines;
> Develop necessary processes to close the gaps; and
> Lay a long-term foundation through education.
Training, training, training – when you tell someone something often enough, it becomes an institutional knowledge.
Real possibility
Section 17A has made it a real possibility that commercial organisations would suffer the ignominy of being prosecuted for acts committed by the individual.
Directors and managers of that organisation are deemed to be liable for the same offence.
The stick can be best described as huge, amounting to a minimum fine of Rm1mil or ten times the sum of gratification, whichever is higher, or jail time of up to 20 years, or both.
The sword of Damocles swings overhead, but fortunately Section 17A also provides a way for commercial organisations to defend themselves in event of a prosecution by way of adopting the Guidelines.
The Guidelines describe what organisations should focus on, such as addressing culture and governance, undertaking periodic risk assessment, providing regular training and performing on-going reviews.
The road to having in place an adequate ABC programme is windy and challenging, but everything that produces fruitful results require effort and sacrifice.
“The road to having in place an adequate ABC programme is windy and challenging, but everything that produces fruitful results require effort and sacrifice.”
Collective effort
The ABC programme of a commercial organisation should not be seen in isolation, acting only as a shield from prosecution; rather, it should be regarded as a collective effort to level the competitive playing field in this country and ultimately enhance, in the eyes of her citizens and of the wider world, the perception of Malaysia’s integrity.
We encourage business leaders to accord Section 17A the weight it deserves.
It is appropriate to equate it with the concept of a sleeping time bomb – it might not hurt anyone yet, but once it goes off the impact could be severe.
The first prosecution, whether successful or not, would almost certainly cause a mad scramble to get one’s house in order.
It took less than five years for the first successful prosecution under Section 7 of the UK Bribery Act (with Section 7 being the UK version of Section 17A).
Investigations with regards to this particular case, involving a publicly listed entity called Sweett Group plc, commenced in 2014, just three years after the coming into force of Section 7.
Going by this example, should we expect to see some action by the authorities, by 2023? The clock is indeed ticking.
BANGI: The Malaysian Palm Oil Board (MPOB) has come up with a three-wheeled utility farm vehicle equipped with a hybrid power electric sprayer system to assist planters with their maintenance work and transportation of palm fruits in the estates.
In a statement, MPOB said a group of its researchers led by Dr Mohd Azwan Mohd Bakri invented the utility vehicle that is built with a single chassis.
It is lightweight and suitable for various activities in the plantations including spraying pesticides using an electric pump as well as field applications by simply changing the rear platform.
This simple innovation is expected to help increase the productivity of workers and smallholders involved in the local oil palm industry.
According to Azwan, MPOB and Fulle Technik Sdn Bhd have signed an agreement for the transfer of the technology for the utility vehicle.
Fulle Technik has embarked on an innovation effort to turn the results of this study into commercial products.
Azwan said: “This technological innovation is expected to be available in the local market in the near future.
“This simple utility vehicle produced at an affordable price can be used in various plantation and agricultural activities.
“The function of the three-wheeled utility vehicle is similar to other motor vehicles in the market and powered by diesel or petrol engines.”
Additional power for farm equipment such as electric sprayers is generated from hybrid power systems; solar and engine chargers.
This hybrid power system is controlled by user-defined electronic equipment via a switch placed in front of the cabin.
This machine is developed through engineering research methods where the specifications are studied to ensure it is suitable for the targeted markets.
“Therefore, the production costs can be reduced,” explained Azwan.
Research for the innovation started in 2016 and then introduced in 2019.
The preliminary studies were funded by MPOB while the pre-commercialisation efforts were funded by the Entrepreneur Development and Cooperatives Ministry, the Malaysian Technology Development Corp and other government agencies.
Fulle Technik was appointed as the prototype developer while FGV Sdn Bhd was one of the plantation companies involved in the initial prototype testing.
This innovation differs from the threewheeled utility machinery currently in the market built for rugged plantation activities such as the transportation of fresh fruit bunches up to one tonne.
“This innovation invented by MPOB is expected to provide more benefits to smallholders, sustainable oil palm growers cooperatives as well as oil palm plantation companies.”
MPOB said the selling price, which is below RM15,000 based on the type of accessories requested, is the lowest in the local market for agricultural and plantation utility machinery.
The additions such as hybrid generator power for plantation equipment could decrease the use of oil or fossil energy and also reduce environmental pollution in agricultural activities, added Azwan.
SINGAPORE: The Singapore Exchange (SGX) issued a list of queries to developer Emerging Towns & Cities (ETC) over its project in Myanmar after a rights group critisised the company for doing business with the military.
ETC is among companies being called out by activists over ties to the Myamar military, which seized power from the elected government in a Feb 1 coup, sparking widespread protests in the country and international condemnation.
Singapore is the biggest source of foreign investment into Myanmar, according to the governments of both countries.
Singapore-headquartered payments firm Coda told Reuters on Friday it had deactivated military-linked telecom operator Mytel from its portfolio of payment channels. This means that Mytel customers cannot make purchases using Coda’s services.
ETC is developing a commercial and residential project in Myanmar called Golden City, which is being built on land leased from the Myanmar army.
The development has a total tenure of 70 years, including extensions, after which the entire project transfers to the lessor – the army’s office of the quartermaster general, according to ETC’S annual report. — Reuters