Malaysia Country Profile

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Business Corruption in Malaysia

Malaysia FlagThe level of corruption in Malaysia is considered relatively low in the region of South East Asia, and corruption is punished under existing laws such as the Malaysian Anti-Corruption Commission Act. The Malaysian Anti-Corruption Commission (MACC) was established to provide for offences and penalties for private and public sector corruption. However, the overall effectiveness of the Commission is hampered by the lack of capacity and technical skills in some areas. The government of Malaysia recognises corruption as an important problem in the country and has taken steps to address the problem through, for example, the introduction of the Corporate Integrity Pledge in 2011 and the Whistleblower Protection Act in 2010. 

Government procurement is an area subject to corruption, and closed-door negotiations are allowed for public procurement in cases where it is possible to help local companies obtain a foothold in the economy through the acquisition of a tender. Government favouritism towards Bumiputera (ethnic Malays and other Malaysian indigenous peoples) companies for small public contracts continues to exist. Moreover, the policies of awarding huge infrastructure projects to selected Bumiputera companies without open tender and of giving special licences to the same group has encouraged corruption between public officials and domestic and foreign companies. In order to reduce corrupt practices and enhance transparency in the procurement process, MyProcurement, a new government tender portal, was launched in April 2010.