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REHDA’s seminar to raise awareness on corruption risk management in the construction industry

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Kuala Lumpur, 21 September 2020 – REHDA Institute held a full-day awareness programme on Corruption Risk Management: Section 17A, MACC Act 2009 at the New World Petaling Jaya Hotel, with notable speakers including Teh Chau Chin and Datin Radhika Nandrajog from Malaysian Anti-Corruption Commission (MACC); and Tan Sri Haji Abu Kassim bin Mohamed, Director General, National Centre for Governance, Integrity and Anti-Corruption, Prime Minister’s Office.

Section 17A of the MACC Act 2009, which took effect on 1 June 2020, enables commercial organisations and associated persons to be subjected to legal proceedings should the person associated with the commercial organisation commit corruption offences.

“One key is to make the majority believe that anti-corruption practices will bring incentive and benefits. If they believe that this is the right thing, then they will start to monitor not only their practices but also others’, which in turn will assist the anti-corruption enforcement,” said Chau Chin.

According to Nandrajog, three key problems underlying corruptions are weak controls, weak enforcement and the ‘corruption culture’.

“Culture is prevalent because players in the industry may argue that if there is a giver, there is a taker. They may also believe that they cannot run businesses if they don’t pay; or compete with the competitors who pay, when they don’t. To tackle this, there has to be robust anti-corruption management put in place,” she shared.

She added that corruption may happen not only in tendering stage but also in all stages in a project cycle, even in the post-delivery and maintenance.

Tan Sri Haji Abu Kassim bin Mohamed maintained that prevention measures are paramount and could be put in place by identifying individuals engaging in suspected corruption practices.

“If we are going to catch the bad guy, we need evidence. By the time we need evidence, damage has already been done. Things do not happen overnight so there must be some indications of a corruption act. A robust risk management must be able to predict these indicators,” he said.

On a brighter side, Nandrajog mentioned that there are four major changes happening in the construction industry practices in Malaysia:

  • Leadership is now not all about business, but must include corruption risks;
  • More resources are allocated as the bigger the project scale, the more investment needed to oversee the delivery;
  • Stringent measures are in place to monitor industry players’ engagements with their partners through gifts and entertainment; and
  • There is now a requirement for anti-corruption commitment when signing an MoU.

According to Section 17A of the MACC Act 2009, where an offence is committed by a commercial organisation, the director, controller, officer, partner or any member in the management of the affairs will be deemed to have committed the offence, unless it can be proven that the offence is committed without the person’s consent and that due diligence to prevent the commission of the offence has been exercised.

The burden of proof then lies on the commercial organisation to prove that adequate procedures has been communicated, implemented and enforced effectively within the commercial organisation to prevent associated person(s) from committing an act of corruption.

Upon conviction under Section 17A of the MACC Act 2009, a commercial organisation may be liable to a fine of not less than 10 times the value of the gratification in question or RM1 million, whichever is higher, or an imprisonment for a term not exceeding 20 years, or both.

– Construction + Online