The Cabinet’s Special Committee on National Governance (JKKTN) announced on 14 September 2023 that it had decided at a meeting to enact a Government Procurement Bill to “strengthen governance on the government’s procurement through laws aimed at increasing accountability of those involved in government procurement,” amongst other reforms. JKKTN’s statement on the matter also mentioned that the principle of transparency should be taken into account in the upcoming Government Procurement Bill through the creation of a complaints and objection mechanism in line with international standards.
The Center to Combat Corruption and Cronyism (C4 Center) welcomes these announcements as a positive and progressive step forward in reforming Malaysia’s procurement process. C4 Center has long advocated for procurement reform and also subsequently supported the enactment of a Government Procurement Act in order to regulate the procurement process, recognising it as extremely vulnerable to corruption, especially in the Malaysian context. C4 Center formed part of the committee consulted in the initial drafting of the National Anti-Corruption Plan 2019-2023 (NACP) and also has provided input to the drafting of the new National Anti-Corruption Strategy (NACS). Regrettably, over the past four years, every administration has fallen short in implementing procurement legislation, even though it constitutes a vital component of the NACP’s strategic objectives.
On Monday, 18 September 2023, C4 Center held a forum called “Crafting the Future of Malaysia’s Public Procurement” in collaboration with the United Nations Office on Drugs and Crime (UNODC) – the forum was attended by academics, civil society, members of the public sector, and subject matter experts both domestic and international, where C4’s Draft Policy Paper on the Government Procurement Act was presented. The paper formed the basis for subsequent discussions surrounding urgent reforms that need to be made in the field of public procurement and the related challenges to be overcome in doing so.
In the draft policy paper, C4 Center identified five key issues that must be addressed in the Act or any upcoming future procurement reforms. These include the wide powers ministers have over financial operations and the procurement process; ensuring compliance of the civil service to procurement procedures; the accessibility and transparency of procurement-related information; the need to enact an adequate complaints and review mechanism for addressing flawed procurements; and lastly, defence procurements and the need to adopt adequate transparency measures to prevent the abuse of “national security” exemptions in procurement.
The issues listed above remain contentious within public discourses, but it is vital that the government prioritise these areas in drafting the Government Procurement Bill as the weaknesses in these areas hold open the avenue for bad practices to take place. These issues reflect a need to strengthen transparency and accountability in governance – the operations of public procurement need to be made open and accessible for public scrutiny, with individuals responsible for subverting the procurement process held responsible. The decentralisation of unfettered power from politicians in deciding on procurement matters must also be accounted for.
The forum was not the only platform at which stakeholders were engaged on the subject of public procurement – C4 Center had also previously conducted a consultation session with members of the private sector including both SMEs and MNCs on how Malaysia’s public procurement system should be improved. The feedback from this session was also incorporated into the draft policy paper.
The measures for doing so are already prescribed in international legal instruments of which Malaysia is a signatory, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which compels the enactment of a complaint and review mechanism. The model for such a mechanism is also available for study and adaptation into the local context via the application of the United Nations Commission on Trade Law (UNCITRAL) Model Law on Public Procurement.
Hence, C4 Center reiterates its long-standing willingness to engage in further discussions with all stakeholders on the policy positions that need to be taken in order to move procurement reform forward. Particularly, we hope to be able to meet with the Prime Minister to present our full research and recommendations as a reference for a robust and effective Procurement Bill.
Additionally, since the tabling of the Government Procurement Act was announced to be tabled by the end of 2023, we urge the government to release the Bill for public scrutiny ahead of time in the interests of upholding transparency and public participation in governance. The government has stated that the legislation of the Act was to curb corruption and wastage in the procurement process – it is important that the preamble and provisions to the Act should reflect this intention. The participation of the private sector and civil society in assessing that the draft Bill fulfils its stated purpose is vital to the success of this law.
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Center to Combat Corruption & Cronyism (C4 Center)
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