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Go-ahead for corporate liability law

FMM In The News: THE STAR, KUALA LUMPUR, FRIDAY, May 22, 2020 - 

KUALA LUMPUR: Manufacturers and civil society organisations have welcomed the government’s decision to go ahead with enforcing the corporate liability law come June 1.

Despite some pushback by businesses, the Prime Minister’s Office (PMO) announced that the government would go ahead with the provision in Section 17A of the Malaysian Anti-Corruption Commission (MACC) Act 2009.

This will make a commercial organisation liable if any of its employees or allies are found to be involved in corrupt practices that benefit the organisation.

Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai (pic) said it welcomed the June 1 implementation.

“The government should not delay the implementation. Corruption is very bad as it creates inequality among equals.

“Those who are corrupt get better chances of getting business opportunities and this deprives those who adhere to the law,” he said.

On companies saying they needed more time, Soh said they had been informed two years ago and the MACC had carried out a lot of roadshows and awareness campaigns.

“All they have to do is comply and come up with a standard operating procedure according to Section 17A,” he said, adding that the MACC had already given guidelines.

“We cannot leave it to only the government to push for a clean, no-corruption environment. The private sector too needs to play a role,” he said.

In a statement yesterday, the PMO said the government was committed to fighting corruption, improving integrity and implementing good governance – regardless whether the efforts would be given priority at government departments, the private sector and civil societies.

“After considering the current situation and the views of all parties, the government has decided that the implementation of the corporate liability law on June 1, 2020 will be maintained,” it said.

Among others, the provision will encourage commercial organisations to take the necessary measures to ensure the business they carry out does not get involved in any corrupt activities.

Section 17A of the MACC Act was first gazetted on May 4, 2018.

However, there have been calls recently for the enforcement of the new provision to be postponed for a year in view of the Covid-19 pandemic, which has caused business interruptions to many firms.

Following that, MACC chief commissioner Datuk Seri Azam Baki said the government would study feedback from companies that said they were not ready.

The Malaysian Employers Federation still maintains this is not a suitable time as employers, badly hit by Covid-19, are currently saddled with sustainability issues.

Its executive director Datuk Shamsuddin Bardan said it was also unfair to companies as they were “deemed” liable when their employees were involved in corrupt practices.

“Instead of the prosecution proving the case against the company, which is the normal procedure in criminal charges, now the burden is shifted to employers to actually prove that they are not guilty,” he said.

Shamsuddin said under Section 17A of the MACC Act, it is the statutory duty of the government to draw up a guideline on how a company can rebut the “deeming” provision and prove that it is not complicit.

But he expressed concern that even if an employer adopted the guidelines, it did not mean that it would not be guilty.

“You still have to prove that you are not guilty. What is the point of adopting the guideline when the duty is still on you to prove that you are not guilty?” he said, adding that it should be reviewed.

Shamsuddin said the two years given since the provision was gazetted were not enough as companies had to adapt to political changes in the country as well as the Covid-19 pandemic.

Shamsuddin also said that Section 17A should not target only the private sector but also the public sector if the government wanted to eradicate corruption.

Meanwhile, Centre to Combat Corruption and Cronyism (C4) executive director Cynthia Gabriel lauded the government’s decision.

“It’s a very important step in the right direction to curb corruption and bribery in the private sector.

“The provision is also important in governing areas relating to public-private partnership and procurement,” she said.

She urged the MACC to engage C4 as partner to provide the necessary support and training to prepare all companies.

Asked about employers unhappy that they are required to prove that they are not guilty, Gabriel said they would need to establish important compliance practices, including good whistleblower policies.


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