Parliament has passed the corporate liability amendment to the anti-corruption legislation, the Malaysian Anti-Corruption Commission Act (2009), which will have a significant impact on private sector anti-corruption.
The main thrust of this amendment is to introduce a new far-reaching corporate liability provision into the MACC Act.
A two-year transition period has been given to allow corporations and businesses to adapt to this change in the way they operate and do business arising from the provision in this amendment Act.
The amendment aligns the MACC Act with international standards set by other similar legislation, such as the American Foreign Corrupt Practices Act 1977, and the United Kingdom’s Bribery Act 2010. These two Acts have been described as the toughest anti-corruption legislation in the world. In the new amendment, there are key changes and steps that companies and their directors and officers have to be aware of.
Currently, under the present Act, when an employee is arrested for corruption or bribery, he or she will face the consequences and can be charged individually. The company that the guilty employee works for or represents is not held liable for the employee’s corrupt act as, strictly speaking, the company being an artificial legal person did not have the “criminal mind” to authorise such unlawful acts.
When the corporate liability provision becomes a reality, employers in the private sector would be made liable not for the crime but rather for the failure to implement “adequate procedures” to prevent such corrupt acts from happening. This means companies now need to initiate anti-corruption programmes to prevent, mitigate and eventually eradicate corrupt practices. Otherwise they run the risk of being charged by the MACC under the corporate liability provision.