A leading international transparency watchdog has ranked Malaysia as having high corruption risk in its defence spending and operations, placing it the same league with countries such as Bangladesh, Pakistan, China, Russia, Kazakhstan and Jordan.

NONE According to the Government Defence Anti-Corruption Index , the world's first global analysis of corruption risk in defence establishments worldwide, which was released by Transparency International UK today, Malaysia scored D- in the band range of A to F.

The index, produced after a two-year study with country research done between July 2011 and November 2012, examined the corruption risks of 82 countries that generally have strong government institutions and rule of law.

Australia and Germany topped the ranking with band A, while Asian countries that scored the highest are South Korea, Taiwan (both band B) and Japan (band C).

Among Asean countries, Singapore and Thailand outperformed Malaysia, both scoring D+, while Indonesia and Philippines fell behind Malaysia in band E.

Each government was assessed using a questionnaire of 77 questions in five main areas of possible defence corruption risks - political, financial, personnel, operations and procurement risks.

Malaysia scored the lowest in financial risks and operations risks, with 25 percent and 10 percent out of 100 percent respectively.

“Political corruption vulnerability is high, as there is no defence and security committee and parliament’s role in the sector is limited to approving a general, aggregated budget.

“While there is no defence-specific anti-corruption policy in place, general anti-corruption institutions (i.e. the Enforcement Agency Integrity Commission and the Institute of Integrity Malaysia) exist although they are not sector-specific and there is a lack of clarity regarding their impact,” reads the country report on Malaysia.

Transparency hindered by OSA

The report noted that the transparency of defence acquisition planning, as well as of defense audit and security expenditures are weak, and they are further restricted by the Official Secrets Act (OSA).

In relation to financial defence corruption risks, the report pointed out that the percentage of the budget allocated to secret items is unknown and they are not believed to be audited.

“Off-budget spending is legally permitted and overseen by a division within the Finance Ministry; however there is no official information regarding the extent of their use.

“Moreover, the OSA enables discretionary information classification.”

military tentera askar soldier malaysia 260307 mobile artillery It further explained that Malaysia performed abysmally in regards to corruption risks in operations as there is a lack of anti-corruption military doctrine, training, and monitoring.

“There is no information to indicate that corruption risks in contracting on operations are guarded against through guidelines or training.”

The report also found that despite regulations in general procurement legislation, the procurement cycle is not disclosed and parliamentary scrutiny is lacking and defence purchases are only made public retrospectively.

M’sian gov’t: There is no element of corruption

“Although suppliers are required to sign integrity pacts, there is no evidence that having compliance programmes in place is a prerequisite.

“Regarding levels of competition, there is no official estimate of the level of single-sourcing and it is difficult to ascertain the same.

“With regard, to offset contracts, while some monitoring takes place by the Defence Industry Division, they are lacking in transparency and in clarity over due diligence requirements.”

The country report was accompanied with a government's response document to the assessment.

According to the document, when asked whether the public trust the country’s institution of defence and security to tackle the issues of bribery and corruption in their establishments, the Malaysian government defended itself by specifically mentioning its “procurement of submarine” and even cited the opposition.

“With reference to the comments made by the independent assessor in the country assessment report, the ministry would like to stress that there is no element of corruption in the country defence procurement process.

“As for the reference made to the procurement of submarine, the opposition party has recently mentioned that there is no evidence of misconduct in such procurement.”

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