THE Malaysian Anti-Corruption Commission (MACC) made its biggest cash seizure ever following the arrest ot'two senior Sabah Water Department officials recently. At last count, more than KM 100 mil was seized from their homes and bank accounts, along with jewellery (RM3.64 mil), 91 designer handbags(RM500,000), nine luxury cars (RM2.74 mil) and 127 land titles.
Before this case, Bank Rakyat's chairman was charged with abetting the bank's managing director in criminal breach of trust (CBT) of almost RM15 mil. Under section 409 of the Penal Code, it relates to CBT by a public servant or agent, which is punishable with a jail term of at least two years or up to 20 years and with whipping, and shall also be liable to a fine.
MACC's Investigation Division director Datuk Azam Baki said the commision took the issue of corruption seriously, especially within government agencies and would use everthing within its authority to take action against those involved in corrupt practices. The MACC is shown to be trying its best to clean up the corruption in the government and government-linked companies (GLCs).
It is high time that punishment for cases involving white-collar crime, including corruption, be reviewed to provide for a heavier sentence because existing penalties have no effect on offenders. The fines ranging between RM50,000 and RM100,000 are no longer relevant since the culprits could earn millions of ringgit through corruption and abuse of power.
Of course, there is avenue in the law to also deny the offenders the fruits of their crime but this is sometimes difficult to prove. If need be, there should be mandatory whipping together with imprisonment. The impact of such crime results in not only loss of the country's treasures, but can also destroy the enviroment and endanger lives.
White-collar crime is more brutal than violent crime. The actions of on or a few corrupt pulic officials and corrupt businessman can affect the lvielihood of thousands, even millions, of people. The punishment must be a deterrent so that offenders will not repeat the act.
The implementation of harsher punishments would most likely reduce corrupt activies. Survey indicate that both the public and offenders consider prison to be the most severe of effective punishment for criminals, including white-collar ones. In China, white-collar criminals can be given the death penalty. Stiffer penalties can thus also serve as a deterrent.
The MACC Act 2009 came into effect on Jan 1, 2009 and officially established MACC as an independent, transparent and professional bost to effectively and efficiently manage th nation's anti-corruption efforts. But in fact, it appears that MACC is not a fully or really reports to the prime minister. Furthermore, the Act also reduced the penalty for offenders compared to the previous legislation. The general penalty for any corruption related offences in the Malaysian Anti-Corruption Commision Act 2009 is (i) imprisonment for a term not exceeding 20 years; and (ii) a fine of not less than five times the sum or value of the gratification or RM10,000, whichever is higher.
In comparison, the previous Anti-Corruption Act(ACA) 1997 provides fir (i) imprisonment for a term of not less than 14 days and not more than 20 years; and (ii) a fine of not less than five times the sum or value of the gratification or RM10,000, whichever is higher.
Less severe penalty instead
The ACA actually carries a more severe penalty with mandatory jail sentence of not less than 14 days and not exceeding 20 years and fines amounting to five times the bribe amount or RM10,000 (whichever is higher) if found gulty. By right the penalty in the MACC Act should be more severe.
It should be noted that CBT under section 409 of the Penal Code carries a mandatory jail term of between two and 20 years, together with mandatory whipping AND a fine, upon conviction. The penalty for the offence of cheating under Section 420 of the Penal Code is Imprisonment for less than a year(mandatory) and not more than 10 years and with whipping, and a fine.
The government should seriously consider increasing the penalties immediately by amending the relevant laws and institute other amendments or new laws as needed. It should at least insert section 16 of the ACA to replace the penalty in the MACC Act. By reinforcing this clause, anyone found guilty will face a prison sentence of no fewer than 14 days to a maximum of 20 years.
There are indications of some pending proposed amendments to the MACC Act. One is to include corporate liability offences to punish companies engaged in corrupt practice.
The US Foreign Corrupt Practices Act and the UK Anti-Bribery Act have extra-territorial jurisdiction and hold corporations liable for corrupt acts of their employees and that of their subsidiaries. Malaysia is behind on this and following in these footsteps will be a move in the right direction. Once such amendments are made, companies can be held responsible if their employees commit bribery, unless they can prove that they had taken measures to prevent it. Under the MACC Act, only individuals such as employees are liable for bribery offences under the ACt.
According to KPMG's 2013 Fraud, Bribery and Corruption Survey, 90% of respondents stated that bribery and corruption is the major problem for businesses in Malaysia. The PwC's Global Economic Crime Survey 2016 found that bribery and corruption increased from 19% in 2014 to 30% this year.
Based on the above findings, corporate liability needs to be introduced so that companies can be held responsible for offences committed by their employees and be prompted to ensure their business entities are transparent and corruption free.
Such an amendment would also strongly encourage companies to immediately revise their standard operation procedures, ensure employees and agents are trained n ethics and integrity, and promote good governance or risk being fined by the authorities.
We have a long way to go in our journey to purge corruption, but carry on we must.
This article first appeared in Focus Malaysia, on October 22, 2016.