Hornbill Unleashed

September 20, 2013

‘Very high graft risk ranking must trigger alarm’

Filed under: Politics — Hornbill Unleashed @ 12:00 AM
Tags: , , ,

Josie Fernandez

Malaysians should be very concerned as Malaysia is placed in the “very high” risk category for corruption in the Transparency International (TI) Defence and Security Programme Survey that was released on Tuesday.

Malaysia shares its high corruption risk category with 21 countries, including Bangladesh, China, Pakistan, Singapore, Turkey and Zimbabwe. This study, a spin-off from the Government Defence Anti-Corruption Index, released earlier this year, focuses on parliamentary oversight of defence procurements.

Alarm bells should be ringing as high corruption risks in the defence sector and increasing crime rates affect personal safety and the economy as well, for businesses avoid corrupt economies. Public trust in the police and the armed forces is also reduced and results in a waste of public resources.

Corruption risks in defence and security exist in several areas, including the political field, personnel, finance, operations and procurement.

NONEThe biggest area for corruption is in government procurement, where the big money is. Malaysia has, over the years, taken some measures to improve governance and transparency in procurement.

In 2006, the then prime minister Abdullah Ahmad Badawi launched the Red Book to improve the procurement process of government-linked companies (GLCs) and he said the top 15 GLCs could then potentially save RM15 billion if they adopted best practices.

In the absence of any published impact analysis of the Red Book, it is difficult to ascertain if the Red Book reduced corruption risks in GLCs.

The highest corruption risk in defence processes is in the procurement cycle. These include privileged defence relations, defence budgets, use of the Official Secrets Act (OSA), no open tenders, which sometimes comprise single sourcing, incorrect technical specifications, and so on.

For example, the contractor may tell the purchaser to write the tender specifications in such a way that it gets the contract. Single sourcing is another risk, where competitive bids are not sought.

Competition is a proven way of improving transparency and driving down corruption. However, The Malaysian Competition Act 2010 only came into force on Jan 1, 2012.

According to studies by Transparency International UK (TI-UK) Defence and Security Programme, “military-owned businesses are either directly or indirectly inherently risky ventures for any country because of the potential consequences.

“Business engagements are detrimental to the professionalism of the armed forces. One of the most harmful consequences of such practices is that the element of profit-making breeds corruption within the military”.

In Indonesia for example, the military businesses include forestry, cooperatives and foundations. The Indonesian government has been trying to reform army-owned businesses through legislation, but with limited success.

Political will and Parliament

Corruption ion the defence sector is very easy and so is a target for politicians for political financing, re-election budgets and rewards for favours. The lack of political will to reform political financing in this country, for example, indicates that reforms to reduce corruption risks in the defence sector may face greater challenges.

Members of Parliament can help to create political will for tackling corruption in military spending. For example, about 40 Malaysian MPs in 2012 signed a declaration in support of an Arms Trade Treaty.

These MPs should now work towards a Freedom of Information Act (FOI) that can help stem risks of corruption at the source.

Putting requirements through an FOI for transparency of the defence budget and freedom of information into law will enable Malaysians to understand and question government actions.

The OSA should also be reviewed as government agencies use the OSA to stop disclosure of all kinds of information, from levels of air pollution to actual cases of child abuse in the country.

The OSA has been the biggest hurdle to obtaining information on the actual expenditure on defence budgets.

The absence of an FOI is a red flag for defence corruption risks. The FOI may prevent the shadows of secrecy from darkening the areas in which corruption may breed in the defence sector.

Lobby Obama during KL visit

The US Defence Secretary Chuck Hagel has paid visits to Indonesia, Malaysia and the Philippines as a preparation for President Barack Obama’s visit to Indonesia and Malaysia in October.

NONEA senior US defence officer also reiterated the US commitmentto “working with Southeast Asian nations to grow defence capabilities and deepen military-to-military cooperation.”

The US, the largest arms exporter, has elaborate defence contractor programmes to minimise waste and fraud in contracting and introduced a new legislation in its Federal Acquisition Regulation in 2010. All government contractors receiving awards in excess of US$5 million must have a code of business conduct and a compliance programme.

The US FOI requires federal agencies to provide access to records when requested by a citizen in writing. Malaysian civil society groups should include the FOI in their efforts to lobby President Obama’s support for various concerns to be raised with Prime Minister Najib Abdul Razak in their meetings.

At the Asean level

One of the seven Asean roles is to “promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries of the region and adherence to the principles of the United Nations Charter”.

The Asean Plan of Action to Combat Transnational Crime was adopted by the second Asean Ministerial Meeting on Transnational Crime in June 1999.

This politically binding instrument builds on earlier Asean declarations that emphasise on the role of arms smuggling in transnational criminal activities and the need for comprehensive action and regional cooperation against this.

The government needs to provide both the media and Malaysians information on the progress achieved in this plan of action to reduce cross boundary crime, given the link between defence corruption and organised crime.

Malaysia has yet to ratify the United Nations Arms Trade Treaty that was adopted in April 2013. To date, only about 60 countries have established some kind of national legislation on arms brokering.

As Scott Stedjan of Oxfam’s Control Arms Campaign put it, “How can we have strict national and international laws that regulate the trade of bananas and mobile phones, but allow traders of weapons and ammunitions to go unchecked?”

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2 Comments »

  1. Malaysia is terminally ill if the graft ranking is any indication.

    Comment by Mata Kuching — September 20, 2013 @ 6:11 PM | Reply

  2. Why worry – Everything is perception lah…… Msia to some is the most unblemished and uncorrupted country.

    Comment by timchoo — September 20, 2013 @ 9:36 AM | Reply


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