Set up independent oversight mechanism for government-linked companies

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The GLC Reform Group, along with the following non-governmental organisations, and individuals are deeply concerned with recent developments regarding the appointment of various politicians to lead government-linked companies and statutory bodies.

The emergence of Covid-19 and the ensuing movement control order have posed economic and public health challenges on a scale unseen by this country in recent history. During this time, millions in Malaysia have been unable to go to work to earn a livelihood. Even post-movement control order, many businesses will face grave challenges due to the long hiatus and the new normal of social distancing that will have to be imposed in a post-Covid-19 world.

Government intervention and assistance in these circumstances will be inevitable to ensure that lives and livelihoods are protected and to deal with the economic fallout. We have already seen the government announce large stimulus packages to assist businesses and individuals.

In this climate, the role of the thousands of government-linked companies under the various ministries and state governments is more crucial than ever to ensure that government aid and stimulus are properly targeted and utilised. These companies include large government-linked investment companies such as Khazanah Nasional, PNB, Tabung Haji and Lembaga Tabung Angkatan Tentera (LTAT), and other government-linked companies and statutory bodies such as Maybank, Tenaga, Sime Darby, Petronas, Pharmaniaga, the Federal Land Development Authority (Felda) and Mara.

Together, these enterprises control and administer billions of ringgit and affect the livelihoods of thousands of employees. It is more important than ever that these assets and resources are not misused and diverted for political gain in bad faith or for improper purposes.

The GLC Reform Group has consistently called for an independent and transparent appointments mechanism for the leadership of government-linked companies to replace the current system where the ruling government can exercise its power arbitrarily to appoint and dismiss heads of these companies.

We have also called for these bodies to be brought under independent scrutiny, whether through a separate commission or through Parliament. Prof Terence Gomez has emphasised the importance in identifying how many government-linked companies exist, for there to be proper accountability and transparency.

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Unfortunately, other than the setting up of a parliamentary Select Committee on Major Political Appointments, these structural reforms were not implemented by the Pakatan Harapan government. Now, under the Perikatan Nasional government, we have seen a slew of dismissals of government-linked companies heads appointed by the previous government, and appointments of politicians in their place.

There has not even been an attempt to disguise the fact that these appointments are based on political affiliation. Minister in the Prime Minister’s Department and Pas secretary-general Takiyuddin Hassan openly said that all government members of Parliament will be given the responsibility to manage government-linked companies. He further added that all of them are qualified because “they are MPs.”

Takiyuddin’s statement is worrying as it displays the arbitrary nature of the appointment process for heads of government-linked companies and statutory bodies. It indicates that political affiliation may become the sole criteria in these appointments. It is well-established that appointing politically-linked individuals to head such entities creates room for cronyism, patronage, abuse of power and corruption.

Government-linked companies play a crucial part in our economy, especially so in these difficult times. Leadership of government-linked companies cannot be utilised as a political reward or as tools to foster loyalty towards the ruling party.

In the best of times, such practices would hamper the alleviation of poverty and the equitable allocation of resources. In the worst of times, it would spell economic disaster for our nation and an increase in poverty.

Recommendations

Political appointments are just one of the larger structural issues that plague the management and performance of our government-linked companies.

Government-linked companies operations are largely opaque and lack institutional checks and balances. As stated above, we are not even able to ascertain exactly how many government-linked companies exist.

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As the government holds these entities in the public’s trust, it is important that that there is proper accountability and transparency in the running of these entities. To restore the public’s confidence in our government-linked companies, we urge the government to immediately do the following:

Cease the appointment of politicians to positions in government-linked companies and statutory bodies at the federal and state levels until there can be public confidence that appointments are made transparently and post-holders can be held accountable

Work with stakeholders (the opposition, civil society organisations, experts and business leaders) to introduce a set of objective criteria to appoint leaders in government-linked companies and statutory bodies

In the longer term, the government must commit to the following:

  • Introduce legislation regarding the management, governance and performance of government-linked companies. Such legislation should provide for a central registry and access by the public to information on government-linked companies and their activities
  • Institute an independent and transparent appointments mechanism within ministries and state governments for the appointment of heads of government-linked companies
  • Form a parliamentary select committee on government-linked companies, headed by a member of the Opposition, whose duties include:
    • Scrutinising the annual reports and financial reports of government-linked companies
    • Evaluating candidates for top positions in government-linked companies
    • Summoning heads of government-linked companies to answer questions that relate to the public interest

Parliament must sit

Furthermore, we are extremely concerned that the prime minister decided to postpone Parliament to 18 May and more recently, to convene Parliament to sit for only one day.

This decision undermines Parliament, an important institution that must play its role in keeping the executive’s decisions in check, and in this case, to ensure that decisions regarding government-linked companies are made in the public interest.

We therefore call on the government to convene Parliament immediately so that, at the very least, appointments to government-linked companies can be scrutinised through the parliamentary Select Committee on Major Public Appointments.

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A dormant Parliament not only casts doubt over the legitimacy of the current government, it also gives rise to the executive making unilateral decisions that do not stand up to scrutiny and undermine democracy.

Written by the GLC Reform Group consisting of:

  • Institute for Democracy and Economic Affairs (Ideas), Aira Azhari
  • Centre to Combat Corruption & Cronyism (C4), Cynthia Gabriel, Sheefa Ahmad
  • Society for the Promotion of Human Rights (Proham), Ivy Josiah
  • Ding Jo-Ann
  • Lydia Chai
  • Prof Terence Gomez
  • Lim Wei Jiet
  • Jaswinder Singh Ahluwalia
  • Tan Sri Mohd Sheriff bin Mohd Kassim

Endorsements by 18 individuals

  • Datuk Ambiga Sreenevasan
  • Andrew Khoo
  • Chin Su Yee
  • Chong Yee Shan
  • Eugene Yapp
  • Fadiah Nadwa Fikri
  • Jac sm Kee
  • Johan Saravanamuttu
  • Kanda Kumar
  • Lim Teck Ghee
  • Mansoor Saat
  • Dr Mohd Faizal Musa
  • Mary Shanthi Dairiam
  • Datuk Noor Farida Ariffin
  • Roger Chan
  • Sha Kok Tein
  • Wong Chin Huat
  • Zaharom Nain

And 47 NGOs

  1. Agora Society Malaysia
  2. Aliran
  3. All Women Action Society (Awam)
  4. Angkatan Belia Islam Malaysia (Abim)
  5. Association of Women Lawyers (AWL)
  6. Bersih 2.0
  7. Beyond Borders Malaysia
  8. Centre for Independent Journalism (CIJ)
  9. Childline Foundation
  10. Community Action Network (CAN)
  11. Empower Malaysia
  12. Engage
  13. Foreign Spouses Support Group (FSSG)
  14. G25
  15. Gabungan Bertindak Malaysia (GBM)
  16. Gerak (Pergerakan Tenaga Akademik Malaysia)
  17. JKOASM
  18. Jaringan Orang Asal SeMalaysia (JOAS)
  19. Justice for Sisters
  20. KLSCAH Women Division
  21. Kryss Network
  22. Lawyer Kamek for Change (LK4C)
  23. LLG Cultural Development Centre (LLG)
  24. Local Unionists Network (LUN) Malaysia
  25. Monsoons Malaysia
  26. Malaysian Trades Union Congress Sarawak
  27. Muslim Finance Professionals
  28. MyPJ – Persatuan Peduduk Petaling Jaya
  29. North-South Initiative
  30. Our Journey
  31. Penang Forum
  32. Persatuan Pemangkin Daya Masyarakat
  33. Persatuan Sahabat Wanita Selangor (PSWS)
  34. Pertubuhan Ikram Malaysia
  35. Pertubuhan Rangkaian Pembangunan Kesinambungan Malaysia (Susden Malaysia)
  36. Projek Wawasan Rakyat (POWR)
  37. Pusat Komas
  38. Sarawak Bank Employees Union
  39. Save Rivers
  40. Sisters in Islam
  41. Suara Rakyat Malaysia (Suaram)
  42. Tenaganita
  43. Teoh Beng Hock Trust for Democracy
  44. Toy Libraries Malaysia
  45. Women Development Organisation Malaysia
  46. Women’s Aid Organisation (WAO)
  47. Women’s Centre for Change (WCC)

Source: Malay Mail

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Gursharan Singh
Gursharan Singh
18 May 2020 10.52am

Call made to ‘Set up independent oversight mechanism for government-linked companies’

Currently there are several oversight organizations including
# SECURITIES COMMISSION
# AUDIT OVERSEAS BOARD
# INDEPENDENT AUDITORS
# COMPANIES COMMISSION

Others indirectly involved may include
# ENFORCEMENT AGENCY INTEGRITY COMMISSION

NEED IS FOR THEM TO FUNCTION AS INTENDED AND BE EFFECTIVE ESPECIALLY WHEN GLCs CONTRAVENE IN ANY LAWS OR MAY BE SUSPECTED TO BE INVOLVED IN
MISMANAGEMENT-FRAUD-CORRUPTION-COLLUSION-CRONYISM-EMBEZZELMENT-BRIBERY-KICK BACKS-NEPOTISM-MONEY LAUNDERING AND PUNISHMENTS ARE DETERRENT ON THOSE RESPOBSIBLE FOR THE DECISIONS AND PROMPT [as justice delayed is justice denied].
HOW WILL ANOTHER INDEPENDENT OVERSIGHT AGENCY ASSIST?