‘Corporate liability’ law will hold firms accountable for corrupt staff
Author: Sophie-Marie Odum | Date: 12 Oct 2016
Malaysian business will be given a year to adjust their procedures and put preventative measures in place
Firms could soon be held accountable for the corrupt acts of their employees under new corporate liability laws proposed by the Malaysian government.
Corporations will be liable for bribes paid by their employees when any person associated with a company pays a bribe to obtain or retain business.
The law, which will be added to the Malaysian Anti-Corruption Commission (MACC) Act 2009, is expected to come into force in 2018. It has been introduced since Malaysia became a signatory to the Trans Pacific Partnership Agreement, which aims to deepen economic ties between 12 nations and create a new single market similar to the EU.
Datuk Mohamed Yusoff Akope, director of the MACC inspection and consultancy division, said businesses would have a full defence if they could prove that adequate procedures were in place to prevent employees from committing corruption.
He said: “If companies do not have such policies, they can be held responsible for their staff’s action. That is why we are encouraging companies to have integrity laws in place within the organisation.”
Minister in the Prime Minister’s Department, Senator Datuk Paul Low Seng Kuan, said: “I definitely want to see this implemented. After we implement it, we need a one-year grace period for companies to adjust their procedures and put in place anti-corruption measures. Even though we may have it this October, we can only implement it properly by January 2018.”
Low is urging all Malaysian businesses to sign a Corporate Liability Pledge, which affirms their commitment to promote integrity, transparency and good corporate governance, enhance their internal systems to support prevention of corruption, abide by anti-corruption laws and fight corrupt practices by reporting cases to the authorities.
“The new provision will help businesses build their compliance capabilities, not only in Malaysia, but in other countries as well,” he said.
“For business purposes, it is a benefit for them because building up anti-bribery procedures takes time and cannot happen overnight. This could be the catalyst for helping build that capacity,” he added.
More than 800 companies signed the Corporate Liability Pledge at a recent conference. Low hopes 3,000 to 4,000 more will sign up over the next three years.