Better mechanisms needed to discourage corruption, say SME groups

 

A recent study has found that nearly two-thirds of SMEs fear losing their business if they refuse corrupt practices. (Bernama pic)

PETALING JAYA: Groups representing small and medium enterprises (SMEs) have called for improved reporting mechanisms to combat bribery and corruption, following a recent study reporting that nearly two-thirds (63%) of SMEs fear losing business if they refuse corrupt practices.

SME Association of Malaysia secretary-general Chin Chee Seong said the government should create and promote a dedicated hotline through the Malaysian Anti-Corruption Commission (MACC) to receive anonymous reports, and consider a secure online portal for whistleblowers.

“Many SMEs are still confused as to what constitutes bribery, as it is often unclear whether actions like buying a big dinner or offering small gifts to customers cross the line into bribery,” he said.

Chin also urged the government to launch more public awareness campaigns through various media platforms to promote ethical business practices, and offer free or subsidised legal consultations for SMEs on anti-corruption matters.

Chin Chee Seong.

He said while anti-bribery laws currently exist, such as Section 17A of the MACC Act 2009, which increases corporate accountability and drives anti-corruption measures, many SMEs still struggle with implementation because of limited resources.

He proposed the formation of subsidised workshops for SMEs by collaborating with NGOs and leveraging MACC’s training programmes.

Chin also said that financial incentives and support, such as grants or tax breaks, should be provided to SMEs demonstrating strong anti-corruption practices through certifications or audits.

He said a national certification programme in collaboration with NGOs could be introduced to recognise and reward SMEs with strong anti-corruption measures.

“The government should promote a culture of integrity to encourage Malaysian companies and government agencies to require anti-corruption compliance from their suppliers,” he said.

The survey, conducted by the Association of Chartered Certified Accountants, showed a strong understanding of the benefits of standing up to bribery and corruption, with 68% of respondents saying a robust anti-bribery policy increases customer confidence in their business.

Meanwhile, 83% of the respondents said such a policy would increase their chances of getting lucrative contracts with big businesses and public sector bodies.

Small and Medium Enterprises Association president William Ng said many businesses still believe corruption is common, especially in government-linked companies (GLCs) and agencies.

William Ng.

“This fear goes beyond the client-supplier relationship, to regulatory and compliance agencies as well.

“Many SMEs end up using runners or agents to get jobs or to apply for licences, perhaps because of the perception that it is difficult and that some ‘duit kopi’ (‘coffee money’) may be involved,” he said.

He proposed that GLCs and government agencies publish tenders, procurement requests for quotations, and details of awardees on their websites.

“(Changing perceptions) will take time as more SMEs win orders or find it easy to register or apply for licences and permits online,” he said.

Ng said a publicly accessible email for potential whistleblowers should also be established to report any solicitation of kickbacks directly to the board or its independent directors, with copies forwarded to an external body such as MACC.

“This will not only reduce the likelihood of corruption, but also build confidence among SMEs that they need not entertain or succumb to such practices, and allow genuine and hardworking SMEs to report black sheep among the SMEs and agencies,” he said. - FMT