Real Estate and Housing Developers Association (Rehda) national treasurer Datuk Muztaza Mohamad (right) presenting a souvenir to Abu Kassim.

PETALING JAYA: The Malaysian property development and construction industry is a multifaceted, multi-billion-ringgit industry that has its own upside and challenges.

One of the key-long standing challenges faced by the industry is the absence of speed of approval at many stages of property development. Lengthy process is the norm, delays are expected, made worse by endless appeal processes at each stage of application.

“Such situations breed corrupt practices as developers struggle to get approvals faster as any delay may lead to financial and time loss,” said Rehda Institute chairman Datuk Jeffrey Ng.

“Having said that, we should not succumb to the temptation of corrupt practices and as an industry, must at all times uphold zero tolerance to corruption in property development,” he said during the Corruption Risk Management: Section 17A, MACC Act 2009 awareness programme.

The event is part of Rehda’s Members Outreach Programme. Tan Sri Abu Kassim Mohamed, director-general of National Centre for Governance, Integrity and Anti-Corruption, Prime Minister’s Office Malaysia shared his knowledge, experience and wisdom at the event.

Two other speakers Teh Chau Chin and Datin Radhika Nandrajog, former consultants for the Malaysian Anti-Corruption Commission Inspection and Advisory Division, also presented their papers.

Rehda together with other key industry players have signed a Memorandum of Cooperation on Nov 13, 2014 which pledged to ensure that the nation’s construction industry is free from corruption and operates with good governance and high integrity both locally and abroad.

Section 17A of the MACC Act enforced on 1 June 2020, stipulates a corporate liability principle, where an organisation can be considered guilty if any of its employees and/or associates commit corruption for the benefit of the organisation.

“The burden of proof falls onto the organisation and it is, therefore, crucial to ensure that adequate procedures and due diligence are in place to prevent such offence.

“The responsibility placed on top of corporate organisations and their ability to eliminate corruption in this country will be tested from time to time.

“I strongly believe that it is crucial for every property developer in this room and our fellow Rehda members to digest this new provision with utmost caution and to start taking the necessary precautionary measures by implementing key longstanding risk management for their respective organisations and take strict actions in combatting corruption in this country,” said Ng.

From an operation’s viewpoint, Ng believes that most companies have a compliance program in place which entails frequent communication to staff and stakeholders and continuous training to its employees, business partners, contractors and other stakeholders on the implementation of adequate procedures and the grave consequences of non-compliance.

“Management staff are expected to understand and comply with various policies in relation to gifts, entertainment, donations, sponsorships and undertake to exercise them in their daily duties and responsibilities when liaising with all stakeholders, internally and externally.

“The challenge faced by most companies, I believe, is a re-education of communication and business practices to employees, business partners, vendors, even senior management and the directors themselves. In fact, an effective compliance program should result in a change in the company culture,” he said.

The new culture must be set by example from the top, he pointed out.

As part of the training programs, there should be regular reinforcements and reminders on anti-bribery and corruption to all employees, business partners and stakeholders alike. Disciplinary and punitive actions have to be followed through by senior management to reflect the seriousness of these consequences to anyone dealing with the company.

As a reminder, breach of Section 17A Corporate Liability provision will result in a fine of not less than 10 times the value of gratification or RM1mil whichever is higher or imprisonment not exceeding 20 years or both.

“On our part, Rehda Institute, together with Rehda Malaysia and all fellow Rehda members would like to pledge our full support and join forces to ensure the industry’s understanding and compliance on the subject matter through various programmes and sessions.

“We also urge the Malaysian Government to play a more efficient role in eliminating the industry’s and the authorities’ exposure to corrupt practices by taking the necessary reviews on some of the property development approval processes,” he added.

These processes include self-regulation by the relevant professionals like architects, planners and engineers, transformation of Malaysia’s property development approval system to a digital platform that will eliminate face-to-face interactions and the speed of approval.

“We believe if these measures are in place, corruption in the industry will reduce significantly as we are tackling the issue at source and not merely looking at protecting ourselves against corrupt practices by staff members, directors or associates of our organisations,” said Ng.