LETTER | Set up an independent oversight mechanism for GLCs

LETTER | The GLC Reform Group, along with the following NGOs and individuals are deeply concerned with recent developments regarding the appointment of various politicians to lead government-linked companies (GLCs) and statutory bodies.

The emergence of Covid-19 and the ensuing movement control order (MCO) have posed economic and public health challenges of 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 MCO, 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 GLCs 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 GLCs include large government investment-linked companies such as Khazanah Nasional, PNB, Tabung Haji and Lembaga Tabung Angkatan Tentera (LTAT), and also 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 GLCs to replace the current system where the ruling government can exercise its power arbitrarily to appoint and dismiss heads of GLCs.

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

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 GLC 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 (MPs) will be given the responsibility to manage GLCs. 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 GLCs 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.

GLCs play a crucial part in our economy, especially so in these difficult times. Leadership of GLCs cannot be utilised as political reward or 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 GLCs. GLC operations are largely opaque and lack institutional checks and balances.

As stated above, we are not even able to ascertain exactly how many GLCs exist. 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 GLCs, we urge the government to immediately do the following:

a) Cease the appointment of politicians to positions in GLCs 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; and

b) Work with stakeholders (the opposition, civil society organisations, experts, business leaders) to introduce a set of objective criteria to appoint leaders in GLCs and statutory bodies.

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

a) Introduce legislation regarding the management, governance and performance of GLCs. Such legislation should provide for a central registry, access by the public to information on GLCs and their activities;

b) Institute an independent and transparent appointments mechanism within ministries and state governments for the appointment of heads of GLCs;

c) Form a Parliamentary Select Committee on GLCs, headed by a member of the ppposition, whose duties include:

i) Scrutinising the annual reports and financial reports of GLCs;

ii) Evaluating candidates for top positions in GLCs; and

iii) Summoning heads of GLCs to answer questions that relate to public interest.

Parliament must sit

Furthermore, we are extremely concerned that the prime ,inister decided to postpone Parliament to May 18 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 GLCs are made in the public’s interest.

We therefore call on the government to convene Parliament immediately so that, at the very least, appointments to GLCs can be scrutinised through the Parliamentary Select Committee on Major Public Appointments. 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 undermines democracy.

Written by the GLC Reform Group consisting of:

1. IDEAS, Aira Azhari ( Institute for Democracy and Economic Affairs

2. C4, Cynthia Gabriel, Sheefa Ahmad (Center to Combat Corruption & Cronyism)

3. PROHAM, Ivy Josiah (The Society for the Promotion of Human Rights)

4. Ding Jo-Ann

5. Lydia Chai

6. Prof Terence Gomez

7. Lim Wei Jiet

8. Jaswinder Singh Ahluwalia

9. Mohd Sheriff bin Mohd Kassim

Endorsements

17 individuals

1. Ambiga Sreenevasan

2. Andrew Khoo

3. Chin Su Yee

4. Chong Yee Shan

5. Eugene Yapp

6. Fadiah Nadwa Fikri

7. Jac sm Kee

8. Johan Saravanamuttu

9. Kanda Kumar

10. Lim Teck Ghee

11. Mansoor Saat

12. Dr Mohd Faizal Musa

13. Mary Shanthi Dairiam

14. Noor Farida Ariffin

15. Roger Chan

16. Sha Kok Tein

17. Wong Chin Huat

18. Zaharom Nain

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. JOAS (Jaringan Orang Asal SeMalaysia)

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. MTUC 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. SUARAM (Suara Rakyat Malaysia)

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)