BUILDING A CORPORATE ETHICAL CULTURE
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 2
MALAYSIAN TRANSFORMATION PROGRAMMEANTI-CORRUPTION INITIATIVES
Introduction To Malaysian GTP and aspiration
Corruption Perception Indexes (CPI,GCB,BPI)
Corporate Integrity Pledge (CIP)
How and Why Corruption Perception Exist???
Integrity Pact (IP)
ETPETP
Malaysia’s 10th & 11th Plan Malaysia’s 10th & 11th Plan
To achieve the 2020 Vision, Malaysia introduced…
People First
Performance Now
2009 2010 2011Target 2015
2020 target
0% / Neutral
As percentage of GDP (rebased figures)* forecast**2015 Target as per 10th Malaysia Plan
6.6%5.6%
4.8%3%
4.5% 4%
2012*Target 2013
Gradual Reduction in Fiscal Deficit…
Under Act 637 of the Loan (Local) Act 1959, and Act 275 of the Government Investment Act 1983:
Combined loans raised domestically should not exceed a ceiling of 55% of the nation's GDP. Current figure:
53%
Act What it says
Note: 2012 MoF estimate
Malaysian National Debt is Governed by Law
&
To Become A High-Income Nation,
We Need:
We need “Drivers” to ensure focus on high-impact areas
FOCUS
NKEAs
We Need “Enablers” To Ensure
Competitiveness
COMPETITIVENESS
51 Strategic Reform Initiatives 12 National Key Economic Areas
SRI: Competition, Standards & Liberalisation
Competition Act Enforced on 1 January 2012
Remove Anti-Competitive Agreements
Remove Abuse Of A Dominant Position
X
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 7
People First Performance Now
1MALAYSIA
Fighting Corruption
Low Income Households
Reducing Crime
EducationRural Basic
Infrastructure
Urban Public Transport
1 2 3
4 5 6
The Government Transformation Programme (GTP) launched to support Malaysia’s transformation into developed & high-income nation
GRAND CORRUPTION
• Prevent the abuse of power and
public resources by politicians and
senior civil servants
*Enhance the delivery of justice
against corruption
GRAND CORRUPTION
• Prevent the abuse of power and
public resources by politicians and
senior civil servants
*Enhance the delivery of justice
against corruption
GOVERNMENT PROCUREMENT
• Reduce leakage in the funds allocated for
national development and
operations
* Ensure fairness in the award of
contracts
GOVERNMENT PROCUREMENT
• Reduce leakage in the funds allocated for
national development and
operations
* Ensure fairness in the award of
contracts
REGULATORY/ ENFORCEMENT
AGENCIES
• Regain public confidence in our
enforcement agencies
* Enhance competitiveness of
Malaysia as a place to do business
REGULATORY/ ENFORCEMENT
AGENCIES
• Regain public confidence in our
enforcement agencies
* Enhance competitiveness of
Malaysia as a place to do business
Sub NKRA
ASPIRATIONSReduce corruption through enforcement and compliance
Enhance transparency to improve our score in Corruption Perception Index (CPI)Improve public perception on the integrity of the government and civil service
CORRUPTION = POWER + DISCRETION – ACCOUNTABILITY – TRANSPARENCYCORRUPTION = POWER + DISCRETION – ACCOUNTABILITY – TRANSPARENCY
Integrity of Civil Service
Legal and regulatory framework
Detection, prosecution and punishment
• Strong commitment and message from our leaders -
‘Zero Tolerance’ for corruption
• No political interference in public administration and
perverting the course of justice
• Checks and balances to uphold independence of
judiciary, legal and law enforcement institutions
• Efficiency and effectiveness of law enforcement agencies
• Transparency and accountability in public
administrations, politics and the business sector
Political Will
Legal & Institutional
Reform
Effective Enforcement
Public Participation
Civil Service Reform
Freedom of Press
• Allow access to information to promote public scrutiny
• Increase awareness of the rights of the people
• Provide channel for people to voice out opinions
• Comprehensive and robust systems and processes to
ensure check and balance
• Institutionalize culture of excellence and integrity
• Strong voice from People to endorse leaders who drive
positive change
• Serve as watchdog to ensure governance
• Report corrupt practices, and assist investigations
Top Down Framework Bottom Up Framework
Base: All respondents (n=640).Q. Which one of these are you most concerned about?
Source: Frost & Sullivan, 2012
Rakyat perceived Grand Corruption, Government Procurement andEnforcement Agency as their Key Concerns
Grand Corruption,
35%
Government Procurement,
17%
Political Financing,
17%
Corruption in enforcement
agencies,
17%
Corruption in regulatory agencies, 6%
Corruption in the Judiciary system, 8%
2010
131%131%
2011
Results have been encouraging!
109%109%
2012
121%121%Overall composite scoring
Reducing Crime
Anti-Corruption
Rural Basic Infrastructure
Urban Public Transport
Low Income Household
Education
Cost of Living
CorruptionCorruption
Figures: 2010, 2011, 2012,2013
Whistleblower
Protection
Corruption Offender
Database
Integrity Pacts
Corruption Courts
Government
Contracts Corporate Integrity
Pledge
6,688government
contracts published online
14 corruption courts
Reduces
600Backlog cases
Whistleblower Protection
11,665reports received,
191Awarded protection
142,268 Integrity Pacts have been signed
1,172corruptionoffenders Publishedin MACC website
441 Companies Signed CIP
Building Blocks showing encouraging results
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 13
MALAYSIAN TRANSFORMATION PROGRAMMEANTI-CORRUPTION INITIATIVES
Introduction To Malaysian GTP and aspiration
Corruption Perception Indexes (CPI,GCB,BPI)
Corporate Integrity Pledge (CIP)
How and Why Corruption Perception Exist???
Integrity Pact (IP)
CORRUPTION PERCEPTIONINDEX (CPI)
What is the Corruption Perceptions Index (CPI)?
The CPI ranks countries/territories based on how corrupt their
public sector is perceived to be. It is a composite index, a
combination of polls, drawing on corruption-related data
collected by a variety of reputable institutions. The CPI reflects
the views of observers from around the world, including
experts living and working in the countries/territories
evaluated.
Transparency International Malaysia
Is the country/territory with the lowest score the world’s most corrupt nation?
No. The CPI is mostly an assessment of perception of administrative and political corruption. It is not a verdict on the levels of corruption
of entire nations or societies or of their policies and activities. Citizens of those countries/territories that score at the lower end of the CPI have shown the same concern about and condemnation of corruption as the public in countries that perform strongly. Further, the country/territory with the lowest score is the one where public sector corruption is perceived to be most prevalent among those
included in the list. There are more than 200 sovereign nations in the world, and the 2011 CPI ranks 183 of them. The CPI provides no information about countries/territories that are not included.
Transparency International Malaysia
1 - 56th place/178 countries
Score – 4.4
Constituent Survey - 9
1 - 56th place/178 countries
Score – 4.4
Constituent Survey - 9
2011 - 60th place/ 183 countries
Score – 4.3
Constituent Survey - 12
2011 - 60th place/ 183 countries
Score – 4.3
Constituent Survey - 12
CorruptionCorruptionImproved Transparency International Results
49*
* Score under new methodology is 50/100
Malaysia’s CPI Ranking:
2013: 532012: 542011: 60
2013
50
GLOBAL CORRUPTIONBAROMETER (GCB)
Personal experiences of bribery • The survey asked people if they had come into contact with 1 of 9 identified
services in Malaysia.
• For each of these services they were then asked if they had paid a bribe, identify the services where people were most likely to pay a bribe and the % of people paying a bribe for each service is given as a proportion of people who had accessed that service.
• Those people that did not come into contact with each service were excluded from the analysis.
• The results by service were then aggregated such that a bribe payers was considered someone who had paid for any one or more of the services in the last 12 months.
• Only 1.2% of people have paid a bribe to one of 9 service providers in Malaysia.
BRIBE PAYERS INDEX (BPI)
However, only 2 questions on corruption was taken into CPI survey which dragged us down with the percentage of 2.7%.
Transparency International Malaysia
Source: Global Corruption Barometer 2010. Percentages are weighted. Figures are calculated for respondents who paid a bribe to the service providers. Groups were defined using cluster analysis.
Countries Rank
Netherlands 1
Belgium 3
Japan 4
Australia 6
Canada 6
Singapore 8
United Kingdom 10
France 11
South Korea 13
Malaysia 15
Hong Kong 15
Taiwan 19
Saudi Arabia 22
Argentina 23
Indonesia 25
Mexico 26
China 27
Russia 28
Malaysia is ranked 15th out of 28 countries with a score of 7.6 out of 10 sharing with Hong Kong, Italy and South Africa.
Survey is about Malaysian traders who paid bribe when doing business abroad.
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 23
MALAYSIAN TRANSFORMATION PROGRAMMEANTI-CORRUPTION INITIATIVES
Introduction To Malaysian GTP and aspiration
Corruption Perception Indexes (CPI,GCB,BPI)
Corporate Integrity Pledge (CIP)
How and Why Corruption Perception Exist???
Integrity Pact (IP)
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 24
LACK OF TRANSPARENCY
INCONSISTENT ACTION
BAD OR DELAYED DELIVERY SYSTEM
NOT RESPONSIVE TO COMPLAINTS
LIVING BEYOND MEANS
WHY CORRUPTION PERCEPTION EXIST?
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 25
1. Receiving and giving gratification as reward or inducement for favors.
2. Using documents which contain false material particulars for certain pecuniary advantage.
3. Using office or position for personal interest.
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 26
To become A Developed Country
with High Income Nation,
We need to MANAGE
the CORRUPTION PERCEPTION.
HOW???
Encourage Transparency And
Good Governance
Inculcate Good Values
Within The Organisation
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 29
MALAYSIAN TRANSFORMATION PROGRAMMEANTI-CORRUPTION INITIATIVES
Introduction To Malaysian GTP and aspiration
Corruption Perception Indexes (CPI,GCB,BPI)
Corporate Integrity Pledge (CIP)
How and Why Corruption Perception Exist???
Integrity Pact (IP)
Corporate Integrity Pledge: proposed tools
1i
ii
• unilaterally entered into• pledge to uphold Anti-
Corruption Principles
• To be endorsed by members of Roundtable
• Made available on websites of Bursa and IIM
• bilateral, between parties committing to each other to uphold the Principles
• Target contracts relating to national development etc. – e.g. under Economic Transformation Programme
Appendix I - Integrity pledge
Appendix II - Integrity agreements
Anti-Corruption Business Principles
CORPORATE INTEGRITY PLEDGE (CIP)
31
“a voluntary unilateral declaration –a written commitment by a company that it will
not commit corrupt acts, will work toward creating a business environment that is free from
corruption and will uphold the anti-corruption principles in the conduct of its business and its interactions with its business partners and the
government”
“a voluntary unilateral declaration –a written commitment by a company that it will
not commit corrupt acts, will work toward creating a business environment that is free from
corruption and will uphold the anti-corruption principles in the conduct of its business and its interactions with its business partners and the
government”
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 32
Initiative overviewInitiative overviewTHE CORE PRINCIPLES OF CORPORATE INTEGRITY PLEDGE (C.I.P.)
To promote principles of transparency, integrity and corporate governance
To include anti-corruption elements to strengthen its internal procedures
To adhere to the anti-corruption laws
To eradicate all forms of corruption
To support anti-corruption initiatives by the MACC and the Government
1
5
4
3
2
Corporate Integrity Pledge: proposed governance mechanism
Principles published on Bursa/ SC / CCM/ IIM website
Companies that sign on listed on Bursa website
Agreements signed and accounted for under GTP/ ETP and published on PEMANDU website
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 34
34
1. Committed in promoting values of integrity, transparency and good governance2. Strengthening internal systems that support corruption prevention3. Compliance of the laws, policies and procedures 4. Zero tolerance on corrupt practice5. Support MACC anti-corruption initiatives.
ANTI-CORRUPTION PRINCIPLES FOR CORPORATIONS
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 35
ENTERPRISE POLICIES AND GUIDELINES ON :
• GIFT RECEIVING
• POLITICAL CONTRIBUTIONS
• CHARITABLE CONTRIBUTIONS/ SPONSORSHIP
• FACILITATION PAYMENTS
• GIFTS/HOSPITALITY AND EXPENSES
• CONFLICTS OF INTEREST
• REFERAL POLICY CORPORATE SOCIAL RESPONSIBILITY (CSR)
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 36
RAISING CONCERNS AND SEEKING GUIDANCE
• Provide secure and available channels through which employees and others able to raise concerns and whistle-blow (without retribution)
(i.e establish an integrity unit)
• Provide guidance in respect of the interpretation of the Principles/ Code
Code of Ethics and Code of Conduct
is a must
71 companies had signed CIP • Among those are:
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 39
SIGNEES OF C.I.P. UPLOADED IN CISM PORTAL
NO
1
2
3
4
5
6
COMPANIES/BODIES SIGNEES
MULTI NATIONAL COMPANIES (MNCs)
GOVERNMENT LINK COMPANIES (GLCs)
PRIVATE LINK COMPANIES (PLCs)
SMALL MEDIUM ENTERPRISES (SME)/INDUSTIRES
NON GOVERNMENT ORGANISATION & OTHERS
GOVERNMENT BODIES
TOTAL
35
47
19
59
4
15
179
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 40
MALAYSIAN TRANSFORMATION PROGRAMMEANTI-CORRUPTION INITIATIVES
Introduction To Malaysian GTP and aspiration
Corruption Perception Indexes (CPI,GCB,BPI)
Corporate Integrity Pledge (CIP)
How and Why Corruption Perception Exist???
Integrity Pact (IP)
Ministry of Finance issued Integrity Pact directive on 1st April 2010; guidelines on 16 December 2010
• Official invitation to participate in tender/quotations
• Declaration of abstention from bribery – by all parties, at all stages of contracting (including registering as a supplier/ firms)
• Formulation of Code of Conduct
• Contractual provision to abstain from bribery
1
2
3
4
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 42
WHAT IS AN INTEGRITY PACT (IP)?
42
“an agreement between the government, or a government department (the authority, the
project owner) and all bidders for a public sector contract”
“an agreement between the government, or a government department (the authority, the
project owner) and all bidders for a public sector contract”
- An IP is both a document (a legal contract) and a process- An IP is an activity of the CIP- Use in public procurement/contracting- To ensure clean bidding, a level playing field
It contains rights and obligations that all parties will not engage in, pay, offer, demand or accept bribes while carrying out the contract
• A pact between a government office inviting public tenders for any type of contracts related to goods and services and the bidders for the contract
• Undertaking by the principal that its officials will not demand or accept any bribes, gifts etc ., with appropriate disciplinary or criminal sanctions in case of violation
• Statement by each bidder that it has not paid, and will not pay, any bribes in order to obtain or retain the contract
• Each bidder to disclose all payments made in connection with the contract to anybody (including agents and other middlemen as well as family members etc.)
PactPact
Elements of IP
Code of conductCode of conduct
SanctionsSanctions
Independent monitoring
system
Independent monitoring
system
Source: Transparency International
Description
• Bidders are also advised to have a company Code of Conduct (clearly rejecting the use of bribes and other unethical behaviour) and a compliance programme for the implementation of a Code of Conduct throughout the company
• A pre-announced set of sanctions for any violation by a bidder which may include:
– Denial / loss of contract, forfeiture of the bid security and performance bond, liability for damages to the principal and the competing bidders, debarment of the violator by the principal for an appropriate period of time
• The use of arbitration as a conflict resolution mechanism and the instance to impose sanctions
• Use of an independent monitoring body which can be performed by any structure with independence, accountability and credibility
Solutions
IMPLEMENTATION OF INTEGRITY PACT ON MEGA PROJECT
Element of IP Current Status
Legal undertakings etc.
Covered by MoF directive/ directives on Government contracting
Monitoring of bidding process and execution
MACC and Auditor General’s Department are among the body monitoring the implementation.
Arbitration No provision currently; to consider
• The MRT SBK Line project was proposed for full-scale showcasing of Integrity Pact2
NEXT ACTIONS:
1. To include arbitration clause in the next project.
2. To implement IP
on privatisation
project as well.
Role to Play by Employer :
>Reduce Bureaucracy/Red Tape >Simplify Processes >Encourage Reporting on Corrupt Practices or Abuse of Power >Protect Whistle Blower >Know your employee (Be busy body) and take care of their welfare.
Direct interaction between two parties who Direct interaction between two parties who holds a position and involves discretionary holds a position and involves discretionary
power gives opportunity for corruption. power gives opportunity for corruption. Automation is the best solution to reduce Automation is the best solution to reduce
discretion.discretion.246 CCTV installed at 17 entry points involving 12 states
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 47
CHALLENGES
1. PUBLIC APATHY AND EMPATHY - LACK SUPPORT
2. PERCEPTION ISSUES
3. DIFFERENCES IN:- CULTURE & TRADITION – eg. gift giving during festive seasons
- VALUES of the gifts – nominal, modest, non-commercial- LEGAL PRACTICES – anti-corruption
laws, facilitation payments
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 48
'NO GIFT POLICY' BY PETRONAS
BEST PRACTICES
‘WHISTLE BLOWING POLICY’ BY PKNS
WHISTLEBLOWER PROTECTION ACT 2010
IMPACT:
Whistleblowers will be encouraged to report and will receive:
• Protection of confidential information
• Immunity from civil/ criminal suits
• Protection against detrimental action
Dec 15, 2010 – Act came into force
• Smile• Say ‘Thank you’• Respect Others
• Tolerate• UPHOLD INTEGRITY
Putrajaya at night
CONTACT USMalaysian Anti-Corruption CommissionBlock D6, Complex D, Federal Government Administrative CentreP.O Box 600062007 Putrajaya, Malaysia
Tel : 03 8886 7000 Fax : 03 8888 9562 Email : [email protected] SMS : 019-6000696
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 52
The Essential Elements :-
52
- A pact (contract) between the project owner and the main contractor;- An Undertaking by the principal – written declaration that its officials will not demand or accept any bribes;- A statement by each bidder that he has not paid, and will not pay any bribes in order to obtain or retain contract;- An undertaking by each bidder to disclose all payments made in connection with the contract including to third parties (agents/middlemen0 as well as family members;- The explicit acceptance by each bidder that the no-bribery commitment and the disclosure obligation, as well as the corresponding sanction, remain in force for the bidder until the contract has been fully executed;
TRACKER
Unit of measure
1 Footnote
SOURCE: Source 53
53
- Bidders must have company’s Code of Conduct/Ethics (clearly rejecting the use of bribes and other unethical behavior) and a compliance programe- The use of arbitration as a conflict resolution mechanism and the instance to impose sanctions;- A pre-announced set of sanctions for any violation by a bidder of its commitments or undertakings, including * denial or lost of contract, * forfeiture of the bid security and the performance bond; * liability for damages and performance bond. * debarment of the violator by the principle for an appropriate period of time.- An independent monitoring system, which can be performed with active civil society participation or any other structure with independence, accountability and credibility.
The Essential Elements :-