PUTRAJAYA: To ensure that commercial organisations conduct their businesses with integrity, and to promote good governance among companies, a new provision in law on corporate liability has been enforced in Malaysia.Under the new provision – Section 17A of the Malaysian Anti-Corruption Commission (MACC) Act 2009 (Amendment 2018) – a commercial organisation can be prosecuted if an individual from the company gives or agrees to give, promises or offers any form of bribe to any persons to benefit its business.

If convicted, the penalty is a fine of 10 times the value of the bribe or RM1mil, whichever is higher, or a jail term of up to 20 years, or both, under Section 17A (2) of the same Act.

Stay out of trouble

While companies may find the new normal a challenge for business, the MACC has warned them not to resort to corrupt acts to boost their bottom line.

“We want a clean business environment. We want to have corruption-free companies and promote healthy competition among the businesses, ” MACC Deputy Chief Commissioner (Prevention) Datuk Shamshun Baharin Mohd Jamil told a press conference at the MACC headquarters here.

“We do not want commercial organisations to offer bribes to anybody for a tender.”

Shamshun Baharin said that companies struggling in the post-movement control order period may be tempted to indulge in corrupt practices out of desperation.

He noted that there is a tendency for the commercial sector to be involved in corruption as at stake are tenders for projects and contracts worth millions of ringgit.The new provision in law is a testament of intolerance of business corruption as the Government is out to elevate investors’ confidence, he said.

Higher penalty

Previously, MACC prosecuted agents who receive bribes on behalf of a company under Section 17(a) of the same Act, which carries a penalty of jail up to 20 years and a fine of five times the value of the bribe or RM10,000, whichever is higher.

On June 1,2020, Section 17A of the MACC Act was enforced following the expiry of a two-year grace period for businesses to implement anti-bribery measures within their organisations.

Parliament passed the amendments to the Act on April 5,2018, and it was gazetted on May 4 the same year.

Section 17A was modelled after Section 7 of the UK Bribery Act 2010 and Foreign Corrupt Practices Act 1977.

The new provision was enacted to also fulfil the obligation and international responsibility under Article 26 of the UN Convention Against Corruption – to establish the “liability of legal persons” for participation in the offences, which includes the top management such as the chief executive officer and board of directors.

Under the new provision, a commercial organisation means:

> A company incorporated under the Companies Act 2016 and conducts a business in Malaysia or elsewhere.

> A company wherever incorporated and conducts a business or part of a business in Malaysia.

> A business partnership in Malaysia or elsewhere.

The new provision has extra-territorial jurisdiction over Malaysian incorporated companies and partnerships committing corrupt practices outside of the country.

It defines a person associated with a commercial organisation as a director, controller, officer, partner, those involved in the management of its affairs, and those who perform services for or on behalf of the organisation.

In defence

The commercial organisations can defend themselves by showing they have implemented adequate procedures to prevent corruption in their operations or business activities.

The person such as director, controller, officer or partner is deemed to have committed the offence unless he or she proves that the alleged bribery was committed without his/her consent or connivance, and that he/she has taken care to prevent the commission of the offence.

Control measures

Adequate procedures to prevent corruption within a company can follow guidelines issued by the Prime Minister’s Department in December 2018, pursuant to Section 17A (5) of the MACC Act.

The guidelines are based on the five principles of TRUST:

> Top level management’s commitment

> Risk assessment

> Undertake appropriate controls and contingency measures

> Systematic review, monitoring and enforcement of the anti-corruption programme

> Training and communication relevant to its anti-corruption management system.

Shamshun said that companies which require assistance with initiating anti-bribery measures can approach the MACC. Other than the MACC, the Malaysian Institute of Integrity and the National Centre for Governance, Integrity and Anti-Corruption can also advise on adequate measures.

“We are ever ready to assist commercial organisations with adequate procedures. We can go to their premises to give a briefing.”

Whistleblower protection

Besides commercial organisations, the public sector is also considered high-risk for corruption, said Shamshun.

Last year, the MACC opened 1,039 investigation papers and arrested 1,101 people for corruption – of which 525 (47.7%) were civil servants.

Shamshun gave the assurance that those who supply MACC with information on corrupt activities would be protected.

“If the person wants to be a whistleblower, he or she cannot expose the information to the media or a third party as this will cause the whistleblower to lose the immunity provided by us, ” he said.

This article was first published here.

Photo by ???????? Claudio Schwarz | @purzlbaum on Unsplash.