By Jason Loh
THE recent news in early April this year regarding the existence of a cartel/syndicate that had been monopolising government procurement contracts is yet again a grim reminder of how deeply-rooted the culture of corruption is in our society.
According to the Malaysian Anti-Corruption Commission (MACC), the cartel had been active since 2014 and was awarded 345 tenders worth RM3.8 bil with a focus on maintenance and development projects – until the cessation of its operations with the arrest of the individuals concerned, that is.
Even the now retired Inspector General of Police (IGP) who stepped down on May 3, Tan Sri Abdul Hamid Baldor, has even admitted to the existence of a cartel or clique within the PDRM (Royal Malaysian Police Force), i.e., right within the very heart of the institution that’s supposed to the nemesis and antithesis of criminality, what more.
Hopefully, with Datuk Seri Panglima Acryl Sani at the helm as the successor and with officers such as Johor Chief Commissioner Datuk Ayob Khan Mydin Pitchay “by his side”, so to speak, the PDRM on the whole would be able to start off with a clean slate, as it were, and be that fighting force against criminal cartels and syndicates of whatever shape and stripe.
And of course, we’ve been living with the existence of well-established cartels thriving on borderline, semi-legal activities like market monopoly and manipulation. When “big business” controls the market in terms of wholesale supply, then profiteering that’s unrelated to the dynamics of supply and demand as such is to be expected.
Enforcement teams from KPDNHEP, however, are springing into action to ensure price reversion and stability on the back of the implementation of the 2021 Aidilfitri Festive Season Maximum Price Control Scheme (SHMMP) throughout the country beginning from April 21. No efforts will be spared in prosecuting errant and non-compliant suppliers and traders.
Notwithstanding, there’s much the Government has to do to fight back the criminal cartels and syndicates.
Firstly, there’s no doubt that there needs to be a major-cleaning up of the PDRM. The fight back against the cartel culture should begin within the law enforcer itself, by a combination of external and internal reforms.
Externally, there needs to be a dedicated taskforce or specialised unit physically positioned within PDRM to monitor and gather intelligence on the activities of the rank-and-file, including the IGP.
It’ll work and loosely coordinate with the Enforcement Agency Integrity Commission (EAIC) and what should be an “Internal Affairs Division” of the PDRM as proposed by then Home Minister Datuk Seri Zahid Hamidi.
This taskforce or unit, unlike the Internal Affairs Division, will only report directly to either the Home Minister or Prime Minister and accountable to the relevant parliamentary select committee (PSC). Its report shall be presented and tabled in Parliament annually.
In addition, there also needs to be a specialised court set up to try the misconduct and wrongdoing of police officers – that’s parallel to the existence of court martials for the military.
This is to ensure respect for the institution of the PDRM and afford the defendants some semblance of honour and dignity. Composition of the tribunal would be a mixture of civilian and retired police officers and could either be sui generis (i.e., in a class of its own) or part of the judicial system.
Secondly, with regards to the Government procurement system, there needs to be a complete overhaul of the tender process.
Here as is in other areas, the use of artificial intelligence (AI) – progressing from machine learning (i.e., algorithm of detection) to deep learning (i.e., algorithm of prediction) – is critically important to ensure detection and identification of potential fraud.
Predictive analysis entails the AI to be endowed with knowledge of a large number of complex permutations from different weightages of different types of data such as the rate of successful bids, the number of companies that participated in the auction and the bid prices.
AI could also be used for tracking the flow of funds (which entails the cooperation of banks). In this, the Malaysia Competition Commission (MyCC) under KPDNHEP as the body par excellence charged with quasi-judicial body powers to investigate and prosecute at the same time in spearheading the effort against bid-rigging and other anti-competitive activities should also play a central role in training, advocacy and execution by the use of digital technology.
Finally, among others, under the Leniency Programme provided for by Section 41 the Competition Act (2010) whereby cartel members are encouraged to come forward in exchange for lenient or total immunity from the penalties, the following should be considered as per “The Use of Leniency Programme in Detecting Cartels in Malaysia” (2019) published in Sciendo (Academic Journal of Interdisciplinary Studies):
- MyCC should clearly and systematically stipulate the levels of fine reduction in exchange for assistance provided by cartel whistleblowers who don’t qualify for 100% waiver;
- MyCC to provide a wider scope for immunity eligibility so that the ringleader/head honcho will also be eligible for 100% fine waiver provided that he didn’t force others to participate in the cartel, or MyCC has not been able to find enough evidence of infringement; and
- MyCC shall, strictly and without equivocation, have zero tolerance in accepting undertaking (i.e., some form of understanding – oral or written) involving cartel cases in reference to Section 43 of the Competition Act (2010).
In conclusion, purging our society of the cartel culture is indeed a long-term and indefatigable effort. It not only requires an all-of-government and whole-of-society approach, but precisely a change of culture that starts from within the individual, to quote Datuk Hussamuddin Yaacub, founder of the Rasuah Busters movement. – May 3, 2021
Jason Loh Seong Wei is Head of Social, Law & Human Rights at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.