Government or Public Procurement is one area in the Government that is most vulnerable to corruption and other illegal activities.
Despite existing procurement procedures, numerous projects were awarded through direct negotiations and selective tenders in the past, partly due to political interference. This has led to allegations of corruption, lact of transparency and accountability, delays, inflated cost, inefficient resources management as well as adversely affecting public trust and perception towards government integrity and accountabiliity. Every year, the Auditor’s Generla Report exposes millions in wastage but no action has been taken to the contractors.
The Malaysian government spends over RM100 billion a year on government procurement through various projects. According to the National Anti-Corruption Plan, between 2013-2018, 42.8% of the total complaints received by the Malaysian Anti-Corruption Commission were complaints against the government sector.
The National Anti-Corruption Plan 2019-2023 (NACP) is an anti-corruption policy that aims to resove these issues out of many, through various broad-based anti-corruption initiatives right from the highest to the lowest level. This integrated anti-corruption plan, is the first of its kind to be formulated in the country, reflects the people’s expectations for a greater corrupt-free nation that promotes transparency and accountability.
As one of the leading civil society organisations working on combatting corruption, C4 Center aims to ensure that the new government duly implements these key initiatives.
In collaboration with Institut Integriti Malaysia (IIM), we successfully organised a forum entitled
Perolehan Bebas Rasuah, Aspirasi Kita (Procurement, Corruption Free is the Way to Be) on 27 September 2019, 8.00am – 12.00 noon at the Auditorium INTEGRITI, Malaysian Institute of Integrity.
- Keynote address by: Tan Sri Abu Kassim Mohamed, Director General of the National Center for Governance, Integroty and Anti-Corruption (GIACC)
- Moderated by Sri Murniati, Fellow from the Institute for Democracy and Economic Affairs (IDEAS)
- Datuk Zulkipli Abdullah, Deputy Auditor General (Governance), National Audit Department
- Ir Kamaluddin Abdul Rashid, Deputy Director (Specialist sector), Malaysia Public Works Department, Ministry of Works
- Amir Mahmod Abdullah, Program Director, Procurement and Supply Chain Department, Tenaga Nasional Berhad (TNB)
- Deputy Commissioner Mohd Hafaz Nazar, Director, Policy, Planning and Research Department, Malaysia Anti-Corruption Commission (MACC)
This event was conducted in Malay.
The theme of the forum was Corruption Free is the Way to Be. This event was a huge success. We targeted about 100 participants from all across the ministries, government agencies and GLCs but more than 200 participants registered and attended. This shows that the government agencies are serious about this topic and sent more than one of their representatives who are directly involved with procurement in their agencies. From the registration sheet, mostly who attended were from the procurement, internal audit and integrity department, from the Head of Departments to executive level.
We collaborated with the Malaysian Institute of Integrity (INTEGRITI) because they are appointed as one of the lead agency assigned by the government to educate and advocate the reform initiatives listed in the NACP. We also wanted to target a larger number of audience and invite major key players in the procurement scenario in the country to address the current issues and how it could be fix.
The main objective of this forum were met, which was to provide a platform for government officials to be more engaged in issues related to the fight against corruption in government procurement, and to encourage active participant of relevant government officials, contractors and project consultants in efforts to raise awareness, encourage integrity, and ensure accountability and transparency.
The Director of GIACC, Tan Sri Kassim Mohamed applaud C4 in initiating this event to gather civil servants in a forum to create awareness and identifying loopholes in the current procurement system and how badly it needs an overhaul. He also gave a Keynote speech that day.
The event started off with a welcoming speech by the acting CEO of INTEGRITI, Pn Nor’afiza Saim. She calls for the civil servants to understand the causes, effects and steps of anti-corruption measures in public procurement.
Tan Sri Abu Kassim, explained what the NACP is and how it is actually a manifestation of the new government who promised to clean up Malaysia from corruption. It is part of a political reform where it focuses on the transparency of politicians, to avoid conflict of interest. He also mentioned that a law is being drafted that will make selling off a project as a criminal offense. He also took the opportunity to announce a new provision of the law which is the Section 17A of the MACC Act 2009 that has commercial offenses against all businesses. This section provides for an offense if a person affiliated with the commercial organization illegally gives, agrees to give, promise or offer to any person any feed either for the benefit of the person or for the benefit of another person.
The Deputy Auditor General shared some abandoned and failed projects without proper monitoring. He shared some examples of audit issues at the planning stage, design stage and procurement stage. The consequences of awarding a contract to unqualified contractors. Improper payment, where work is not perfect but is confirmed to be completed and full payment is made.
The Deputy Director General, Ministry of Works spoke on Causes: Attraction, Opportunity, and High Tolerance of Corruption. How all of these causes related to demand and surplus. The lowest tender does not mean profit to the government. There are also ways to counter the normal practice of these cartels of contractors. One of them is to not publish the cost estimation of a project, it is only done after the tender is closed based on the market price statistics. And also there must be some sort of regulation into checking the authenticity of contractor’s financial statement.
Amir Mahmod Abdullah the Program Director, Procurement and Supply Chain Department (TNB) shared some of the procurement policies practiced in Tenaga Nasional Berhad. He also recommended to have strong policies to build strong shared value: policies must be supported by systems, structures and activities.
Final speaker, Deputy Commissioner Hafas Nazar from MACC explained some of the unknown offences of corruption which includes tender withdrawal, submitting false documents to deceive the person of interest. Giving help to siblings or someone who are closely related. He also shared some of the common issues in public procurement like acquisition at unreasonable prices, where market research is not properly done. Supplies that do not meet specifications. Improper payment. Receiving gifts, sponsorships and entertainment from contractors and Letter of Support from a Minister.
Participants from the audience also showed how impactful the forum was. We had 6 comments and questions from the floor. They shared and asked about contract termination, how effective e-procurement is and about registration of unqualified contractors, ways to check bank statements and other documents. A Swiss national commented that in Switzerland, people have a certain integrity level, even if they could and there’s opportunity, they will not tolerate corruption. It is something the Swiss have pride over and have worked it to success.
C4’s ED Cynthia Gabriel gave a closing speech, wrapping up all that were discussed. She reminded everyone again that public procurement sector are the most sector prone to corruption. Corruption shouldn’t be called a culture and we all play a role in combatting them. She recommends that more cooperation with NGOs like C4, MACC and specific body like the Department of Works plays an important role to ensure a clean and successful procurement.