RWC Community Series: MACC Act 2009, Section 17A & ISO 37001 ABMS

Kuala Lumpur – Richard Wee Chambers (RWC) in collaboration with Brickfields Asia College (BAC) hosted a webinar titled “The Community Series: MACC Act, Section 17A & ISO 37001 ABMS” on Friday, 22nd May 2020, attended by over 100 participants.

Moderated by senior legal practitioner and founder of RWC, Mr Richard Wee, the session featured a dialogue session with guest speaker, Dr. KM Loi, an industry expert with over 20 years of experience in anti-corruption advocacy work including the development of the ISO 37001 ABMS standards in Malaysia.

Mr. Richard Wee introduced the topic by highlighting the recent announcement made by the Malaysian government – “On 21 May 2020, the Prime Minister’s office issued a statement that section 17A of the MACC Act 2009 (as amended by the Malaysian Anti-Corruption Commission (Amendment) Act 2018) regarding corporate liability will come into effect on 1 June 2020”.

Dr. KM Loi covered several key areas on the topic, i.e. (1) Definition of bribery; (2) Different forms of corruption; (3) Scope of liability and defence under s 17A; and (4) T.R.U.S.T Principles (Ministerial Guidelines for Adequate Procedures).

“According to Transparency International, bribery means the offering, promising, giving, accepting, or soliciting of an advantage as inducement for an action which illegal, unethical or a breach of trust. Inducements can take the form of money, gifts, loans, fees, rewards or other advantages (taxes, services, donations, favours, etc)”, said Dr. KM Loi.

He then proceeded to examine the scope of liability under s 17A -“section 17A (1) introduces another category of a corruption offence by a commercial organization, if a person associated with it corruptly gives, offers or promises any gratification to any person with an intent to obtain or retain business or a business advantage for the said commercial organization; and the penalty is stipulated in s 17A (2).”

“It is important to note that a company includes partnerships and even subsidiaries based in Malaysia (see s. 17A (8)) and those who are liable include the board of directors and officers in the top level of management (see s. 17A (3))”, he stressed.

Companies facing a prosecution under s 17A need to show that they have adopted and implemented “adequate procedures” in line with ministerial guidelines (i.e. “T.R.U.S.T principles”) to prevent bribery from taking place (as stipulated by s. 17A(4), (5)).

Dr. KM Loi summarized the adequate procedures under the T.R.U.S.T principles as follows:

1. Top Level Commitment (T)

– The organization practices highest level of integrity and ethics; compliance with the applicable anti-corruption laws and regulations while managing potential risks and ensuring stakeholders that it is operating in accordance with all policies and regulatory requirements.

2. Risk Assessment (R)

– Periodical risk assessments (guidelines suggest once in 3 years or when necessary) were conducted to identify, analyze, assess and prioritize risks of corruption.

– Findings from such assessments should be used to develop and implement appropriate processes, systems and controls to mitigate corruption risks.

3. Undertake control measures (U)

– Appropriate control and contingency measures (such as due diligence/policies and procedures/documentation, etc.) ought to be in place to address corruption risks identified.

4. Systemic review, monitoring and enforcement (S)

The organization’s anti-corruption programme must be regularly reviewed and assessed to improve the effectiveness of existing anti-corruption measures.

5. Training and communication (T)

Training and communications (both internal and external stakeholders) relevant to its anti-corruption management system should be developed and disseminated.

– In this regard, it is advisable to adopt the ISO 37001:2016 ABMS which provides the proper assurance that the organization has adopted, implemented, reviewed and improved on its ABMS.

To wrap-up the session, both guest speaker and moderator reminded viewers that “although adopting the ISO 37001 standards is a significant way of creating a defence, it is not an absolute defence if the officers of the company don’t do anything to mitigate corruption risks”.