Speech by Lim Guan Eng at the 4th Annual Corporate Governance Summit, Kuala Lumpur on Tuesday, 6^th March 2012: 

Political will, national commitment and even personal obligation rather than a single law will determine whether integrity in leadership centred on an ethically based society can be established 

It gives me pleasure to speak to you today at this 4th Annual Corporate Governance Summit organised here in Kuala Lumpur. I have been asked to speak on the issue of the Whistleblowers Protection Act 2010 (or “WPA”) which was passed by the federal Parliament and has been in force in Malaysia since December 2010.

Many of us here who are interested in corporate governance will have been captivated by the ongoing saga of alleged corruption and mismanagement in the RM250million National Feedlot Centre project. This is a corporate governance issue as well as a national governance issue. The question is will there be any action taken or will be it just be another case of of the RM2.52 billion losses incurred by MAS without anyone being punished and even those that caused losses such as Tan Sri Tajuddin Ramli being let off the hook.

Danaharta had agreed to settle with Tan Sri Tajudin on February 14 without enforcing a High Court decision on December 2009 in Danaharta’s favour ordering Tan Sri Tajudin to pay RM589.14 million to Danaharta, over a loan taken to purchase MAS. Where is the moral hazard?

I think I can summarise my view of the WPA by saying that is not so much a Whistleblowers Protection Act but rather a "Whispering to the Police Act". When one blows a whistle, everyone can hear. This Act is different. It only protects those who report to the police or other government enforcement agencies under conditions of secrecy. Under the WPA, a whistleblower is supposed to make a report to an enforcement agency such as the police. If the police don't take any action, that is tough. If the police decide that action should be taken, but the Attorney-General decides not to prosecute, that again is tough. All you have as a whistleblower is the right to be notified of the authorities' decision, and the right not to have any detrimental action taken against you.

Under the New South Wales Public Interest Disclosure Act, if no action is taken by the enforcement agencies, a whistleblower will be protected if he brings the matter to the attention of a Member of Parliament or the media. In the UK, once he has reported the wrongdoing, or if he reasonably fears retribution from his employer, there is no restriction at all on whom a whistleblower can notify as long as the disclosure in good faith and judged by an employment tribunal to have been reasonable in the circumstances.

However, in Malaysia, it is an offence punishable by a fine of up to RM50,000 and imprisonment of up to 10 years if a whistleblower or the person receiving or investigating the report discloses any information about the person accused of wrongdoing, or any other information disclosed by the whistleblower, to a third party.

Under the WPA, a whistleblower does not enjoy any protection if he decides to communicate his allegation of wrongdoing to a person other than a government enforcement agency. And under the Act, even if the report is made to a government enforcement agency, the protection can be revoked if the enforcement agency is of the opinion that the report "principally involves questioning the merits of government policy, including policy of a public body", or if the whistleblower commits an offence under the Act, such as disclosing the contents of his report to a third party.

I think we can all see that the WPA would have had absolutely no effect in the present cows and condos scandal, as it would not have protected any whistleblower who believed that the Malaysian public deserved to know about how a RM250 million soft loan given for the rearing of cattle was used to buy luxury condominiums in Bangsar and in Singapore. Without any media and public pressure, it is clear that no action would ever be taken and the allegations of wrongdoing in the NFC issue would simply have hushed up by the authorities.

But yet another issue that faces any whistleblower in this country is the fact that any information gained from government sources is routinely deemed to be an official secret, the disclosure of which is punishable under the Official Secrets Act 1972 by imprisonment of a minimum of one year and a maximum of seven years. This is not by any means a hypothetical risk. In 1979, my own father was convicted under the Official Secrets Act when he revealed the purchase price paid by the Government in a Swiss arms deal, though the minimum punishment of one year’s imprisonment was not yet then in place.

Such information should be made public. Whilst any person who has been unjustly defamed or maligned by malicious and false police reports should have the right to sue, the authorities should make available to the truthful whistleblower or the "lying" whistleblower as well as to the public all information obtained from such investigations. Even I was sued by the late Tan Sri Eric Chia when I exposed the RM 5 billion Perwaja scandal but I did not obtain the requisite information from the authorities.

The test should always be whether there is real public loss of funds. If there is then the protective safeguards should be in force. If none, then the whistleblower is merely whistling in the wind. More importantly, the MACC or any body authorised to conduct such investigations must be independent, possess powers to prosecute and free from any political oversight and accountable only to Parliament.

It is obvious to me, and I hope also to you, that the WPA will always be ineffective in fighting corruption and corporate wrongdoing involving the Government as long as the Official Secrets Act is not abolished and the culture of secrecy in Government is not replaced by a culture of transparency. Since 2008, both Selangor and Penang have enacted Freedom of Information Enactments that gives the rakyat the right to demand information from the Government instead of giving the Government the right to hide information from the rakyat.

In Penang, we have replaced direct negotiations with open tenders for all major government contracts, and introduced public asset declarations for all elected State Executive Councillors. The Penang state government does not expect any praise for our political commitment and personal obligation to promote integrity in leadership and transparency. However neither did we expect to be pilloried for politicising the public declaration of assets and even allowing Ministers to be endangered if they are compelled to follow suit.

Is our crime or public safety or the performance of Malaysian police so appalling that even Ministers are not safe if they publicly declare public assets? Or should I be walking around under police protection since I am endangered as I have declared my assets. This endangered argument is nothing more than a silly pretext by Ministers who want to hide their assets from public view. Those who hide their assets behind this "endangered" argument only arouse public suspicion that they have unexplained or unaccounted assets.

But to return to the Act that is the subject of this Session, I am afraid to have to conclude that the WPA unfortunately appears to be the product of the old mindset in this country that values secrecy above everything else. I believe that it is now high time for a culture of openness and transparency to become the norm in Malaysia, both in the corporate world and in the world of Government.

The lack of protective safeguards and proactive investigation in the WPA makes no difference for genuine whistleblowers. As long as there is no leadership by example and no moral outrage against those who refuse to comply with international norms of proper behaviour and trustworthy conduct of public assets, laws such as the WPA will only be an empty symbol of our fight against corruption.

Despite laws such as the WPA, Malaysia has suffered a precipitous decline in the rankings of Transparency International’s Corruption Perception Index from 56 in 2010 to 60 last year. For this reason it is political will, national commitment and even personal obligation rather than a single law such as the WPA will determine whether integrity in leadership centred on an ethically based society can be established. Thank you.

*Lim Guan Eng, DAP Secretary General & MP for Bagan