The fourth National Congress on Integrity was held at the University College Sedaya International Campus on last Saturday.
It reflected on the issue: Federal Accountability, Local Governance . The implicit question was whose responsibility was local governance?
Notice, we did not say \”local government but rather governance\”. Around 100 people attended; the smallest ever. Rather discouraging. Furthermore, as one attendee questioned, why there where were not many the Malay-Muslims to discuss such an issue which affects all Malaysians.
Nevertheless, the lack of numbers was made up by the quality of participants. The media was there too and especially TV3 covered the event. Both keynote speakers took the bull by the horns in addressing the core issues:
The explicit and implicit answers give were. The ultimate responsibility for good governance lies not with the federal government per se (who makes the laws and sets up the executive system of local governance and finances them) but rather with those with \”fiduciary responsibility\” for the authority and power to make the specific decisions.
That was Saturday. The next day\’s headlines of the New Straits Times carried the words: \” Astonishing, Ridiculous, But it\’s true! \”
The lead story carried some stark but true facts about Class F contractors and clearly defined why they were only of \”class F.\” They \”sell their contracts\” for the 10 percent or 30 percent of the value of the contract and enjoy life, while the sub-contractors struggle to meet the technical standards and requirements and thereby \”bribe their way into approvals.\”
Is this new news? For those of us who are 50 years and older, and maybe wiser, we know that the days of the Ali Baba contractors were there right from the early 1970\’s.
Embedded in culture
In fact, I distinctively remember an incident wherein \”our Reluctant Politician\” once remarked to the Director General of the Public Works Department at the National Operations Room, when questioned about the percentage of \”bumiputea contractors, (he said, and I quote), \”while that is an important issue, please still ensure that some real work gets done!\”
I was then a 22 year old junior officer in the last row of the second prime minister\’s Rural Economic Development (RED Book) system\’s monitoring and implementation follow-up meeting.
The NST headlines issue and the 4th NCOI central theme overlapped in our core concern about the problem of Federal Accountability and Local Governance.
Local governance does not mean only \”the administration of local authorities\” but includes all forms of local governance of federal funds which are allocated and used or abused.
In fact, a good friend of the family was telling me that \”such abuse of fiduciary responsibility\” happens even in the sports association that he helps administer in an honorary capacity.
Therefore, this issue of poor Class F contractors and the related issue of the \”sale of contracts\” for pecuniary gain of some sort is never a new issue for the Merdeka Malaysians i.e. those born after before independence in 1957.
We were trained in awareness of the nature of fiduciary responsibility and were equally cultured to take on such assignments seriously. But, the real questionis: why does this abuse of public and federal funds continue to date, after 50 years of us managing of our own economy?
Is it a lack of the right culture and values within our society; Islam Hadhari aside? Is it that the British colonial service never left such a solid heritage of rules and regulations? Or is that our political culture \”expedient wealth creation\” is so corrupt that it cannot distinguish between right and wrong political intent, anymore?
Bribery and corruption are an embedded part of our culture and values today; and therefore we need to be proud of it! Really? Or, is it merely that our greed and self-interest has no public or private limits; in short we have become modernists like all the rest of them who make \”I-Me-Myself,\” what I call the unholy trinity, the prima donna of life?
How else can you rationalize the case for a councilor who is supposed to \”make the rules but breaks them\” to build a RM6 million palatial home, for his family; and justifies it also \”as a worship place for the community?\”
And the state government \”hears no evil, sees no evil and speaks no evil\” but would rather collude in silence and \”take the trip to Abilene,\” as Professor Jerry Harvey would put it.
Contractor wibawah
Another actual example from my experience will shed a little more light on real and genuine class F contractors.
When I came back in early 1980 from the US after a master\’s course, I was assigned a government quarters next to the Parliament, which I applied to be repainted!
The selected Class F contractor came and presented himself to me. I soon realized that he had clue zero about how to really paint a whole house. But, he also admitted that this was his first big contract.
Sympathizing and empathizing with him, rather than get angry with uninformed incompetence, I decided to be extra gracious to him and in fact collaborated with him to help him get the house painted.
In fact, the greatest challenge was getting the wooden louvers of the house painted; which involved about 30 percent of the wooden surface of the large government quarters. He had no clue where or how to start to get it done.
I went to a Chinese hardware shop with him and found a special thong sponge brush specially designed for such a painting job. He got the job done after a month of painting by himself, and I can only pray that that contractor is today a Class A contractor because he had the right attitude and determination of the business opportunity given by the government to Class F contractors.
On my part, I was especially sympathetic because of the Bumiputra Commercial and Industrial Community (the BCIC Report) paper that was in fact crafted within the ICDAU or the Implementation and Coordination, Development Administration Unit of the Prime Minister\’s Department where I worked in the early 1970s.
But today 35 years later my question to all those federally responsible for Class F contractors is: \”so, how has this policy and programme created the so-called contractor wibawah?\”
If not, why not and who should be held responsible for with fiduciary responsibility for all these failures?
Can my two university-mates and economics colleagues, Izzuddin Dali and Nor Mohamed Yackob please answer the query of the other two of your UM classmates of the same vintage?
My question then to the Minister of Finance: Where should the fiduciary responsibility lie for the governance and policy jurisdiction?
A more complete and solid answer to the issues raised by the Deputy Internal Auditor\’s article and report must be given to explain the current policy and this failed agenda?
I also remember that when I first joined MITI in the early 1990s, Minister Rafidah Aziz closed down the Bumiputera Participation Unit or BPU within her ministry because, according to her logic, the job of bumiputera participation belongs to all ministries.
I agree, but surely the implementation, review and evaluation of such a programme is equally the responsibility of the government and namely, the Ministry of Finance, as the custodian of public assets and opportunities created by the financial procedures act.
Umno\’s little emperors
If such a policy and programme is not adequately designed, evaluated, and governed, then we run into problems like the one highlighted by the NST wherein \”Umnoputeras\” get their contracts which are then they are resold for a song!
Why else would the Prime Minister announce the RM600 million expenditure for, what used to be called Christmas shopping, or end of year crash purchases at the pre-counsel meeting of the Umno General Assembly, where all the Umno little emperors who are the current power elite (like the Klang Councilor) who make up the 3000 plus key \”power rangers\” within Umno?
These funds allocation were a Tun Razak innovation to cater for small projects and works expenditure via the ICU in the Prime Minister\’s Department.
The monies are usually dispersed via the ICU and through the federal establishment of the state development officers; all of whom are federal officers seconded to the state but operating directly as federal officers.
Such offices are also present in Sabah and Sarawak as the federal secretaries. They are meant for small projects and minor works but how can the Umno division head in the district be held responsible and accountable for propose use of such federal funds?
The money is for all Malaysians!
To my mind and heart, one of the greatest problems of the NEP implementation today is the lack of a structured framework for evaluation of its success or failure related to the real policy intent.
To my rational mind, I am inclined to agree with the Dr Lim Teck Ghee\’s analysis of the problem of the NEP. The fact maybe that today, more than 45 percent of the value of projects and services daily contracted out from the government goes to companies registered with the MoF.
I would like to know who is counting all this, even as we talk? These companies have to have at least 50 percent bumiputera partners. Most are not even genuine partners but rather sleeping partners, and therefore only interested in the 10 percent kick-back from the award of the contract (excluding the costs incurred for the securing or under the counter payments for the contract).
Is it then any wonder that the non-genuine Bumiputera contractors are only two ringgit registered companies but are still able to get contracts in unrelated fields of experience when they know nothing about that industry and can only sell the contract after the fact!
Shahrir-Cyrus solution
The above problem was discussed, dialogued and debated at the 4th NCOI as a local governance issue as well. The keynote speakers in fact offered some credible solutions and I would like to describe them for the benefit of those who could not attend the congress.
Shahrir Abdul Samad, the chairman of the Public Accounts Committee, said that they have heard and are aware about all these problems of poor public services delivery because of corruption and abuse of power.
He said that the PAC has therefore agreed to study the Financial Procedures Act and see if the rules and regulations proscribed in the Act have been violated in the award of such contracts without a tender being called.
Dr Tan Kee Kwong, another PAC member commented that there is no such thing as a negotiated tender, technically and legally.
There is either a negotiated contract as in the case of the purchase of specialized equipment or there is either an open or closed/restricted tender.
Dr Cyrus Das, a leading constitutional lawyer and former Bar Council chairperson identified two critical principles for public accountability worth being educated about: they are the rule of law or the principal of legality and the trust concept where the fiduciary responsibility is given by trust to the agents as executors of the law.
According to Das, unless these two principles are adhered to very closely by all executors they can go very wrong in the exercise of the fiduciary responsibility.
Shahrir repeated his now famous statement that \”all power of governance resides in parliament\” as the supreme authority between general elections.
The cabinet is only a parliament-agreed executive authority for the government. The power to make, change, review and exert laws remains with the parliament. The parliament is the seat of all power between elections.
That power is expressed be the federal constitution as the supreme law of this land. Based on the federal constitution all other laws and made and adjudicated. Therefore all decision-making power must have a legal basis for it foundation and formation.
All such laws also define the four corners of the law, according to Das. Therefore the person who adorns this power at any level is the fiduciary responsible for the use and abuse of the authority and power so given by the laws of this land.
Any abuse of such power and authority can bne reviewed by the Public Accounts Committee of the parliament.
The next conference
Shahrir educated some of us privately that when he first started the PAC, he had to get all parliamentarians to discard their party allegiance and mentality to stand as a legal and public authority to audit the federal funds for good governance.
The PAC today is willing and able under the leadership of Shahrir to review any aspect of federal funds allocation, use and abuse, as they are the ultimate custodians of the fiduciary responsibility for all publicly generated federal funds, approved by parliament.
Therefore the buck of federal accountability stops there based on the ultimate fiduciary responsibility for good governance resident in both the federal constitution and related laws, and the parliament as the source of all such power to make laws.
The 5th NCOI will be on the theme of Integration with Integrity and will be held at the UCSI on Sept 14 and 15, 2007.
Hope many Bangsa Malaysians will plan to attend on the occasion of the 50th Anniversary of our independence and 44th Anniversary of our Malaysia Day!
