By UK Menon

21 January 2025

 

A Radical Approach to a persistent crisis

We are at a critical juncture in our battle against corruption. Despite the escalating number of corruption scandals and our high ranking on international corruption indices, our collective response has softened. The seriousness with which we once treated this vile conduct has waned, and our resolve to prosecute and hold accountable the corrupt among us has weakened, often compromised by political expediency.

Alarmingly, public sentiment, led by the actions of our leaders, now seems to favour leniency—clamouring for the release of individuals convicted in some of the most egregious corruption cases in our nation’s history. We are at a dangerous juncture, one that forebodes the normalisation of corruption, leading to a culture where power trumps accountability and the rule of law.

Corruption is not a victimless crime. Its consequences ripple through every facet of society. Resources intended for public welfare are siphoned off, stunting development and perpetuating inequality and poverty.

This crisis is not merely about the acts of corruption of a small class of individuals. It represents a deeper malaise, one that debilitates national development, erodes trust in institutions, and infringes on the fundamental rights of the people.

Our current strategies are failing

We need new perspectives and innovative regulatory models to address what has become a cancer within the nation.

A controversial but potentially transformative idea needs study

One controversial yet potentially transformative idea warrants exploration: decriminalising corruption and placing it under a broader regulatory framework that will go beyond the cat-and-mouse processes of the criminal system and expose where, why, and who perpetuates the process and to what extent.

Why Decriminalise Corruption?

Decriminalising corruption may seem counterintuitive, even dangerous. But the idea presented in this paper is not about excusing or legitimising corruption; it is about addressing it more effectively. Decriminalising corruption will dismantle the secrecy surrounding corrupt transactions, fostering greater societal awareness and accountability.

The criminal justice system often struggles to handle corruption cases.

Political interference, protracted trials, and the difficulty of meeting the high burden of expert proof frequently lead to charges being discontinued midway through a trial.

Legalisation supported by accounting practices

By bringing bribes into formal accounting practices, we could have measurable insight into the true cost of corruption. Legalisation supported by accounting practices would require full disclosure of these payments, revealing the main recipients and beneficiaries.

Tax deductible

Additionally, if such payments were made tax-deductible, the resultant loss of revenue could also be quantified. This transparency would enable us to better understand the economic impact of corruption, rather than allowing it to remain a shadowy, invisible drain on public resources.

Shift focus from punishment to prevention, disclosure and deterrence

The regulatory model proposed shifts the focus from punishment to prevention and systemic reform. The proposed model can create a culture of deterrence by addressing the root causes of corruption and creating disincentives, such as stringent financial penalties and disqualification from public office and ownership and leadership positions in the private sector.

The model prioritises swift resolution, transparency, accountability, and self-reporting over punitive justice.

The Alternative Model – Adequate Procedures to Combat Corruption

The proposed alternative model builds upon section 17A of the Malaysian Anti-Corruption Commission Act (MACC), which imposes corporate liability on businesses and their controllers for the corrupt actions of associates acting for the business organisations.

Under this provision, a business organisation can mount a full defence if it demonstrates that it has implemented ‘adequate procedures’ to prevent corrupt practices. These procedures, outlined in guidelines issued by the Prime Minister’s Department, have set a foundation for combating corruption within the private sector.

Under the proposed model, the five core principles of ‘adequate procedures’ (T.R.U.S.T.) will now serve as the foundation for public sector compliance:

• Top-Level Commitment: Senior government officials must actively promote a culture of integrity and lead by example.
• Risk Assessment: Regular evaluations of corruption risks in public procurement, licensing, and resource allocation.
• Undertake Control Measures: Establish procedures to prevent corruption, including robust whistleblowing channels and financial controls.
• Systematic Review, Monitoring, and Enforcement: Conduct regular audits and reviews to assess compliance and effectiveness.
• Training and Communication: Train public servants on anti-corruption laws and ensure policies are well-communicated.

Extend Adequate Procedures to Politicians and Political Parties

Corruption in political offices, involving both individuals and political parties, has become a pervasive issue undermining trust in governance and democracy. Elected officials, entrusted with upholding the public good, are too often implicated in corruption cases, diverting resources for personal or political gain.

A parallel system, which has ‘formalised’ corruption, thrives

Anti-corruption laws have proven ineffective in eradicating corruption.

Instead, they have given rise to a ‘parallel’ system—what can be described as a ‘second system’ of government—composed of politicians and individuals, often the same people entrusted with governance, who systematically divert public resources and opportunities for their own benefit.

An example: the stickers for lorries

The recently reported case of bribes paid by lorry owners issued with stickers to bypass police checks highlights two stark realities of this second system. First, it operates with a level of formality and organisation rivalling that of legitimate governance.

Parallel system ‘monetises’ breach of corruption law

Second, it monetises the enforcement of regulatory laws, turning mechanisms meant to protect public welfare into tools for personal profit.

To combat this, the alternative model proposes mandating political offices to implement adequate anti-corruption procedures currently applied to businesses under section 17A of the Malaysian Anti-Corruption Commission (MACC) Act. Extending this obligation to political entities will ensure that they demonstrate the same level of accountability and transparency expected of private organisations.

Establishment of a New Anti-Corruption Commission

A specialised Anti-Corruption Commission will be created to oversee the implementation of adequate procedures across businesses and government entities.

Functions of the Commission:

• Monitoring: Conduct regular audits and inspections of anti-corruption measures in both public and private sectors.
• Reporting: Publish periodic reports on compliance and corruption trends to maintain transparency.
• Receiving Complaints: Operate an independent platform for individuals, businesses, and government officials to report corruption.
• Public Engagement: Engage civil society to build trust and encourage accountability.

The Commission will operate independently of the executive branch to ensure impartiality and effectiveness.

Decriminalisation does not legitimise corruption

Corruption payments will be decriminalised, allowing them to be officially recorded and accounted for.

Decriminalisation does not legitimise corruption, but provides a mechanism to bring corrupt practices into the open. This will allow regulators and law enforcement to monitor, analyse, and address corruption more effectively.

Implementation:

How should the proposed system be implemented?

• The proposed Anti-Corruption Commission will play a central role in the regulation and prevention of corruption.
• Receiving and monitoring the implementation of adequate procedures in the government, businesses, and political parties.
• Receiving and analysing periodic reports on defined activities, such as new appointments to the board, the background of directors and senior officials, and corruption risk assessment reports.
• Details of corruption payments paid or received by the entities.
• Failure to report such payments will result in the withdrawal or suspension of government approvals and licences.

Conclusion

The alternative model proposes a bold and comprehensive approach to combating corruption in Malaysia by expanding the principles of section 17A to the government sector, establishing a new Anti-Corruption Commission, and decriminalising corruption payments.

These measures ensure a proactive, transparent, and inclusive strategy to tackle corruption, aligning public and private sector efforts while addressing systemic issues that have long hindered Malaysia’s governance and development.

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