Consider This: Government Procurement Act (Part 2) — Preventing Cronyism, or Legalising It? - Video Dailymotion

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Parliament has passed the Government Procurement Act — a law that Putrajaya insists will bring transparency and reform and is key to preventing another scandal on the scale of 1MDB. However, critics warn of loopholes in the law that could invite abuse. On this episode of #ConsiderThis Melisa Idris speaks with Sri Murniati Yusuf, specialist in Public Financial Management, Procurement, and Governance of State-Owned Enterprises. She is currently a Senior Fellow at the think tank, IDEAS Malaysia.

Transcript

00:00Hi, welcome back to Consider This. I'm Melissa Idris. Let's continue our discussion about the

00:15newly passed Government Procurement Act, which the government insists will bring transparency

00:21and reform to the procurement process, the public procurement process. However, skeptics fear that

00:29the law doesn't go far enough. Joining me on the show to help us think this through is Sri Munyati

00:36Yousaf, who is a senior fellow at the think tank Ideas Malaysia, where she is a specialist in public

00:42financial management, procurement, and the governance of state-owned enterprises. Unni Munyati,

00:49welcome to the show. It's good to have you back. I'm curious to know, given your extensive background

00:54research on public procurement, what is your overall assessment of the Government Procurement Act

01:01as it was passed in Dewan Rakyat and Dewanegara? Well, I didn't follow the Dewanegara debate

01:09in detail, and the answer isn't out yet. So I understand the bill went through without amendment

01:16in both houses. So the concern raised by many of us when it was stable in Dewan Rakyat several weeks

01:23ago is still very much valid. So I think I share concerns. The main concerns, I think this is an op-ed

01:33that I wrote with Dr. Rahana. The act is designed with the wrong center of gravity. It puts heavy

01:41emphasis on and almost dangerous on enforcement, while leaving the root causes of procurement

01:48and weaknesses largely untouched, in my opinion. And one of the things I think maybe other organization

01:54highlight is the extraordinary powers under the act given to authorize officers from the Treasury

02:01to seize and search without warrants. I mean, yes, we know that compliance has been a problem.

02:12violations of the rules have been problematic. And that causes many wastage and, you know, in our spending.

02:21But I think that's not the answer to it. Having a very broad power like that, and it's given to Treasury,

02:28I think we put the responsibility in the wrong hands.

02:31All right. Oni, if I may cite that op-ed you referenced just now, the op-ed that you co-wrote.

02:38You, when you talk about the wrong center of gravity, you said that the law was built on this problematic

02:47assumption that it was about compliance. In fact, you said, you alluded to the fact that there are so many

02:54circulars. Now, this is part of the conversations that we've been having on Consider This as well.

02:59Talk to me a little bit about why you think that this is the wrong center of gravity,

03:04and what the assumption or what the foundations of the bill should have been.

03:11I think what emerged from our consultation before is we have extensive circulars.

03:18Can you imagine when you read this book, 600 to 800 pages of circulars?

03:21And I think I understand that they don't want to repeat this so long circulars as low.

03:30However, there are certain things that could be elevated.

03:34For example, the principles, transparency, what else, competition.

03:42These are very important principles that should not be left out.

03:47And I think that Dr. Rohana's point is right now, value for money.

03:51If you see the law, the core principle is not stated at all, which is, for me, is something that we miss.

04:00And then transparency is in every law, procurement law, transparency is very important.

04:09So, mandating it in the law that you should disclose, and these are the things that need to be disclosed is very important.

04:17Right now, we don't say that at all.

04:19It's just, okay, publish, but, you know, the requirements or the print,

04:25the, what needs to be published, left out in the circulars.

04:30So, those are the missing points.

04:32Another thing was the procurement methods, which is right now, yes, we state that it should be competitive,

04:41I think, in one of the section, but it's not enough because the remaining of the procurement methods

04:47are left to the ministers to decide, which is now actually in many circulars.

04:52In other jurisdictions, these are put in the laws precisely because we want to have consistency.

05:01That when you choose to move from open tender to other method of procurement,

05:07there are reasons, and the reasons are being decided by laws instead of administrative circulars,

05:14which is actually internal.

05:18So, yeah, these are about, actually, circulars meant for internal purposes.

05:22Yeah, that's right.

05:23So, these are the things that I think right now, missing the point.

05:29Yeah.

05:30Moriati, you on previous shows have highlighted the discretionary,

05:36the concentration of discretionary power in the hands of ministers,

05:39so, and political influence in the procurement process.

05:43I'm wondering how we should think about the role of the Treasury, the role of the Ministry of Finance now,

05:50because one of the justifications for this procurement bill in its current iteration

05:56was the fact that it would minimize interference or discretionary power

06:01in the hands of ministers in public procurement.

06:05Does it truly address that concern?

06:10It's actually, I feel the bill is a little bit fake in this matter.

06:18So, one, Section 38 said, you know, say, prohibit interference in procurement process.

06:24No person shall directly or indirectly intervene.

06:30Intervene meaning that it's not only the result, but also to change the procurement process.

06:35Say, suddenly, from open tender, you intervene, you want to change it to direct negotiation.

06:39That's also intervention, and that's what we are seeing happening.

06:42So, that is now being considered as an offense.

06:46In fact, you are liable to five years imprisonment, which is good.

06:50On the other hand, the bill gives the power to minister to not be bound by the decision of procurement board.

06:59If the board cannot decide, the decision can be made by the minister.

07:06So, this, in the past, is not being seen as something that you should do,

07:13but now it's legalized by the law.

07:15So, when I wrote the paper on direct negotiation, we are seeing that this act in which the minister

07:25ignored the recommendation procurement board, exactly what leads to some problems in the project.

07:35So, now we have it as something that legalized by the act.

07:39So, one of the other justifications was that this is how the government will prevent future scandals,

07:54future, you know, scandals on the size and the scale of 1MDB.

07:59Do you think that's true, that this act tackles those specific governance failures

08:03that had enabled past cases like that?

08:06Look, if we see cases before, I think many of us would feel a lot of, you know, doubt on that statement.

08:18But, look, I believe that this is made of, you know, out of good intention.

08:24So, let's see whether this actually works.

08:27But in the past, as I said, cases where projects are being delayed,

08:31you change so many contractors, this is some of it is because the minister did not bound by the decision by procurement board.

08:41So, and then some minister just decide without consulting the procuring authority.

08:46So, these are the cases in which we saw before.

08:50But let's see, hopefully, yeah, things are different with the new act or maybe minister will be more careful in using this

09:00that is now being legalized in the act.

09:03So, let's see.

09:05Well, you've been studying this for a long time, Moni.

09:08Do you think the understanding is there amongst us Malaysians?

09:13Do we understand why it is that we should care about procurement law?

09:19It sounds like a dry topic, but could the government have communicated how it affects our daily lives,

09:27our tax money going forward?

09:29Do you think we have an understanding, a public understanding about it?

09:34I agree with you.

09:36This is a very dry topic.

09:38But look, schools, hospitals, most of the public facilities are built because we have procurement process.

09:48So, if we have our procurement process sound, you know, free of corruption, accountable,

09:57and this could be one of it to facilitate this is through having a good procurement law,

10:03then we should care about it because most of the services that we acquire,

10:09remember the cases of, you know, during COVID, the ventilator and all these things,

10:15these are procurement activities.

10:18And if we have a better rules on this in which abuse of power interventions being minimized,

10:25then hopefully in the long run, you know, wastages, corruption related to procurement will be minimized.

10:33And we get a better service, you know, for our daily lives, right?

10:39From mental health services to education services.

10:42Absolutely.

10:42So, you said that we'll have to kind of wait and see to see how this law is being implemented.

10:49What are you, as a researcher specializing in procurement and public finance management,

10:55what are you going to be watching?

10:57What are you going to be vigilant about?

10:59I think there are quite, I mean, many things that needs to be established, right?

11:06I mean, say, for example, the tribunal.

11:09I would love to see whether this is really something that our contractors

11:12or people who are watching procurement actually use it to, yeah,

11:17one of the purpose of tribunals is to ensure that procurement process are being followed

11:22and then contractors who are not happy with the process, they can submit complaints,

11:28see whether, you know, whether this is actually being used.

11:31And who are the members, right?

11:34We would love to see that.

11:35And then we have the new thing called Registers Office.

11:40I know that right now MOF has already has some registration office for contractors,

11:45but right now it's being elevated as an institution in the act.

11:48So I want to see how that happen.

11:50And of course, the one that I mentioned before,

11:53oh, actually, Treasury is really going to be a sort of police in the procurement process, right?

12:00Not only how they are going to do it, but how much resources are they going to put in this?

12:07I mean, I would imagine that if I'm now like a staff at the Treasury,

12:12suddenly you have a power to actually seize and warrant, to search and seize, sorry, to search and seize.

12:20So all these things have institutional implications,

12:23and I think I would love to see how this act will be implemented.

12:30Yeah.

12:31Just one more thing, I think one equally important thing that we need to see is the parliamentary oversight.

12:36I think I always talk about this simply because in the last one,

12:40one of the things that was actually missed on this point is the scrutiny by the parliamentary select committee,

12:47which actually now, according to the standing order,

12:50actually they're supposed to do it before it goes to the committee level and being passed.

12:56But they didn't do it.

12:57So since they missed that opportunity, maybe they would be more vigilant during the implementation period,

13:03so they will be able to review and see whether, you know, there are unintended consequences

13:09and maybe, maybe recommending refinements, if gaps and things, you know,

13:15we see some gaps in the implementation.

13:17Right.

13:18I think those are my hopes.

13:20Let's remain optimistic.

13:22I think this thing will really, you know, have a good impact on our procurement process.

13:29The eternal optimist, Uni.

13:31Thank you so much for being on the show with me today.

13:33Sri Mulyati Yusuf from ThinkTech Ideas Malaysia.

13:36Wrapping up this episode of Consider This.

13:38I'm Melissa Idris signing off for the evening.

13:41Thank you so much for watching.

13:42Good night.

Consider This: Government Procurement Act (Part 2) — Preventing Cronyism, or Legalising It?

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