>> MIM Speaks
PERILS OF IGNORING CORRUPTION
APRIL 12, 1998 -
THE STAR
WHEN the 1996 Corruption Perception Index (CPI) was released,
ranking Malaysia 26th from the countries surveyed, I was asked
by the press about the perceived levels of corruption in the
countries surveyed.
I said, among other things: "Such perceptions of corruption
may not always be a fair reflection on the state of affairs in
the countries surveyed, but they are reality. We may not like
other people's perceptions. But the world goes on the basis of
perceptions
... they tell us something about
ourselves. If this is how the world perceives us, obviously
this is not good for us. What should we do to improve other
people's perceptions of us?"
The 1997 CPI came out last July. It appeared at a most
significant time in the development of our national integrity
system, a period characterised by vigorous and highly visible
efforts on the part of the government to ensure that
corruption did not become a way of life.
Both at home and abroad, these various anti-corruption measure
end initiatives were a clear signal that we were reacting
positively to the perceived level of corruption in our country
by pushing corruption out into the public domain.
We replaced the Prevention of Corruption Act 1961, the
Anti-Corruption Prevention Act 1982 and the Emergency
(Essential Powers) Ordinance No.22 1970 with new legal
provisions giving the ACA more muscle and teeth. All in all,
here is cause for cautious optimism.
At the present moment, our economic is in a shambles not
thought possible a few months ago. Something has, quite
clearly, gone horribly wrong and the economic miracle which we
claimed was brought about by our adherence to the much-vaunted
Asian values was nothing more than a bag stuffed full of
speculative funds looking for temporary haven.
No one was interested in the real reason why our country was
targeted when our economic fundamentals were supposed to be so
strong.
Rightly or wrongly, both foreign and local investors thought
we in Asean and, in particular, Thailand, Indonesia, Korea,
the Philippines and Malaysia, were becoming risky places in
which to park their money.
Who can blame them when they discovered, for example, that
major financial and economic decisions were invariably made
under a cloak of secrecy, negotiated rather than open tenders
were the preferred option end privatisation projects handed on
a platter without competitive bidding, and banklending
policies and procedures bent under political pressure.
Our leaders blithely ignored the absolute need for
transparency and accountability in carrying out their work. As
a consequence, we now pay a heavy price overall human terms.
We have seen from all this that perceptions do matter. As we
have to learn to live with them, it is important that we take
steps to ensure observance of "best practices" not just in the
public sector but also, and just as importantly, the corporate
sector.
The private sector and what can
Much has been written about what governments can do to fight
corruption and I shall not go over the same ground. I wish to
look at ways in which the private sector can help control
corruption in business transactions.
The private sector can no longer hide behind their ledgers.
they have a duty to make contributions to methods of fighting
corruption in business as part of both national and
international initiatives
In many countries, including our own, some companies take the
e view that corruption is an inevitable part of conducting
business.
To ask them to desist from employing corrupt means to secure a
contract or an order when the field is crawling with
unscrupulous competitors is expecting rather a lot.
They often argue that they have a responsibility to their
shareholders and employees to run a profitable business and if
bribery is a price to pay, so be it.
Nothing can be simpler than that argument, or is it?
However, consider the following reasons and we shall at once
realise that we ignore business integrity,
Morality and ethics at our peril:
1. Bribery changes the dynamics of competition. In place of
quality, price and delivery, the willingness to offer
"competitive bribes" assumes paramount importance.
2. Product design/innovation suffers when bribery is used to
dump inferior goods and services. Short term gain.
3. Public disclosure of wrongdoing can ruin a company's
reputation and damage business.
4. The fight against corruption goes beyond profit and loss
calculations; if corruption is tolerated in our national life,
and particularly in business transactions, market economies
and democratic institution will be seriously threatened.
As the President of the Federation of German Industry said
recently: "The private sector has an immense interest in
solving this problem, because corruption not only increases
the costs and hinders competitiveness of companies, but
corruption can undermine our market economy system and finally
even our society."
The stakes are frighteningly high. car we remain mere
bystanders?
I have tried to show you why the need for national integrity
has taken on a global journey of sorts in order to show you
what concerned groups as well as ordinary individual citizens
can do to increase the levels of awareness about the insidious
nature of corruption and to contain its spread.
To convert the concept or idea of integrity into a personal
living experience requires more than just political will, it
requires deep personal conviction in the virtues of being part
of an ethical system that is transparent, open, accountable
and just.
It requires the participation of every citizen, organisation,
structure and network. In other words, the sum total of
organisations and networks both within and outside the formal
apparatus.
Actions that can be taken at the national and local levels
The 8th International Anti-Corruption Conference held in Lima,
Peru, Sept 7-11,1997, declared as follows in relation to
measures that a country needs to address urgently:
* All governments should operate in a transparent and
accountable manner at all levels, with the public having
access to information to the maximum extent possible.
The role of civil society is most crucial at the national and
local levels, where participation should be fostered by
providing open access to decision makers and the holding of
public hearings on matters of importance.
* Civil society, too, must put its own house in order, with
NGOs reforming themselves to ensure that, as organs of civil
society, they practise the same standards of transparency and
accountability that they expect from their governments. It
must also be vigilant in defence of those who are persecuted
for opposing corruption.
* All governments must assure the independence, integrity and
depoliticisation of the judicial system as the cornerstone of
the rule of law on which the effectiveness of all efforts to
combat corruption depends.
* Government, in conjunction with civil society and the
private sector, should periodically review the accountability
features of all relevant organs of the state and
constitutional office holders, and at the local level, to
ensure that these form the bulwark against corruption.
Conflict of interest rules must receive special attention.
Particular attention should be given to the strengthening of
financial management systems and to rendering budget processes
transparent.
* Countries should improve the effectiveness of their laws
dealing with corruption to the maximum extent possible
consistent with their constitutions and international human
rights norms including:
* abolishing any requirement to prove that an official who
received an illegal gift actually gave favours in return;
* providing a system for the declaration of assets by persons
holding public positions of trust (and their families) and
placing on them the obligation to justify increases out of
line with legitimate sources of income.
* introducing periodic or random monitoring of the assets and
lifestyles of significant decision makers in the public sector
(and their families and associates) where appropriate by an
independent agency.
This list has, of necessity, been greatly reduced for the
purpose of this discussion. There are, however two other
points to be made which I believe are highly relevant. They
are:
1. As reform efforts will be in vain unless the culture of
corruption is reversed, governments, schools and religious
institutions should launch education initiatives designed to
raise awareness in the young of the incalculable harm done by
corruption and of the personal risks they run if they are
involved in this.
2. Codes of Conduct should be introduced in many spheres of
life (including the cabinet parliament, the judiciary and
throughout government ministries) as well as local councils.
I need hardly mention the obvious need for a code of ethics or
conduct for companies and professional bodies in the fight for
integrity.
A code of conduct or an integrity pact is an important
starting point for self-regulation and discipline, without
which no real progress can be made.
I conclude with a quotation from Dr Jon Quah, who in
Bureaucratic Corruption in the Asean countries: A comparative
analysis of their anti-corruption strategies, wrote: "The acid
test of a government's sincerity in wiping out bureaucratic
corruption hinges not only on the formulation of
anti-corruption measures. Rather its credibility lies in the
actual implementation of such measures and their effects on
the behaviour of civil servants and society at large."
Tunku Abdul Aziz is a member of The Board, Transparency
International and pro tem president of the Malaysian Society
for Transparency and Integrity.
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