Kuala Lumpur, 10 August 2022 – IDEAS commends the Public Accounts Committee (PAC) of Parliament for the release of the report on the procurement of the Littoral Combat Ship (LCS) for the Royal Malaysian Navy (RMN) and calls on the government to implement the PAC recommendations. The PAC recommended seven steps including for the MACC to take action on the findings from the PAC Report, Forensic Audit Report and the Special Committee on Governance Investigation, Government Procurement and Finance (JKSTUPKK) report and for the Ministry of Defense (MINDEF) to submit progress reports to the PAC every three months until the project is completed. Additionally, the PAC recommends for the JKSTUPKK report to be declassified. The JKSTUPKK  was established in 2018 under the Pakatan Harapan government to investigate governance, procurement and finance in all ministries and was headed by former Auditor General, Tan Sri Ambrin bin Buang. 

“The PAC has carried out its parliamentary role in providing check and balance to the Executive arm of government. The government now has to implement these recommendations swiftly if they respect and take the institution of Parliament seriously. Instead of more commissions of inquiry and more investigative committees, action can already be taken urgently based on the PAC report by law enforcement agencies, such as the MACC. Malaysians want  to see those who are responsible for wastage and corruption of public money are made accountable. By implementing the recommendations, the government shows the public that they take this matter seriously. Among the recommendations, we emphasise that the Special Committee (JKSTUPKK) report must be declassified. We also urge the government to update the public on the implementation of these recommendations and call for the PAC to examine all the JKSTUPKK reports”, Dr Tricia Yeoh, CEO of IDEAS, commented. 

Additionally, IDEAS calls the government to take a serious step in reforming public procurement, including by  introducing  the Government Procurement Act (GPA) that was promised as part of the National Anti-Corruption Plan (NACP). “The LCS case marks yet another grievous example of poor compliance and governance in public procurement in Malaysia and the abuse of direct negotiation method. We need to stem the prevalence of operational mismanagement, uncontrolled project variations, the lack of timeliness of payment schedules and general lack of enforced oversight in our procurement system. The current direct negotiation rules, as our policy paper suggests, have some weaknesses.  The GPA, especially if it is modelled after the international procurement legislation such as the UNCITRAL Model Law on Public Procurement, will provide a better accountability mechanisms for direct negotiation and public procurement in general,” Sri Murniati Yusuf, IDEAS Deputy Research Director and author of IDEAS Policy Paper titled “Improving Direct Negotiation rules in Malaysia: Learning from current practices and international laws”, said. 

“The GPA will also help improve transparency in defence procurement. Malaysia is ranked in Band D in the Government Defence Integrity (GDI) Index 2020, indicating a high risk of corruption in defence procurement. The LCS scandal should be a wake-up call for us to take a more serious effort to reform our procurement system,” Dr Yeoh concluded.

— END —

IDEAS Policy Paper No 68, “Improving Direct Negotiation rules in Malaysia: Learning from current practices and international laws” can be downloaded here.

Download Media Statement PDF File Here

For enquiries, please contact:
AAlissa Rode, Manager, Public Finance Unit
T: +603 2070 8881/8882 | E: alissa@ideas.org.my

Louis Denis, Manager, External Relations
T: +603 2070 8881/8882 | E: louis@ideas.org.my