RE: SME Pledge.

YB DATO’ MUKHRIZ MAHATHIR

DEPUTY MINISTER OF INTERNATIONAL TRADE AND INDUSTRY

AT THE

LAUNCHING CEREMONY OF SME PLEDGE

23 DECEMBER 2011 (FRIDAY)

KL SENTRAL, KUALA LUMPUR

Assalamualaikum W.B.T and Salam 1Malaysia.

Yang Berbahagia Dato’ Seri Hj Abu Kassim Bin Mohamed,

Chief Commissioner of Malaysian Anti-Corruption Commission (MACC);

Yang Berbahagia Dato’ Sutinah Sutan,

Deputy Chief Commissioner of Prevention Section MACC;

Yang Berbahagia Dato’ Hafsah Hashim,

CEO of SME Corp. Malaysia;

Members of the Media;

Distinguished Guests.

1. First and foremost, please allow me to extend my appreciation to SME Corp. and the MACC for inviting me here today to be part of the launching of the SME Pledge.

Honourable Guests,

2. The business world today faces a grave concern focusing on corruption. The Small and Medium Enterprises (SMEs), including the micro enterprises face a serious challenge of fighting corruption in their cycle of growing and sustaining their business.

3. At the recent APEC Leaders’ Meeting in Honolulu, Hawaii, USA in November, the Leaders were unanimous in their opinion that transparency and good governance are key factors in ensuring long-term economic competitiveness leading to sustainable economic growth and prosperity. The Leaders were also supportive towards efforts to increase public trust by fighting corruption and by committing themselves to transparent and accountable governance.

4. Malaysia, in particular, came up with the Kuala Lumpur Principles (intended for the medical device sector) a business ethics guideline that will provide companies especially resource constrained SMEs without compliance personnel or adequate ethical procedures with greater clarity of what constitutes appropriate business interactions across the APEC region.

Honourable Guests,

5. This set of principles for the region’s medical devices industry is the first of its kind and will ultimately improve the quality of patient care, encourage innovation and promote the growth of SMEs that produce medical devices. However, it is our hope that the code of ethics for the medical devices sector will only be the beginning to many more guidelines that will cover all economic sectors in the country.

6. We acknowledge that corruption is a problem to be dealt with in our country. We also recognize the dangers that corruption poses to our economic growth and prosperity. It is for this reason that the KL Principles is adopted to promote anti-corruption practices in both the business dealings or corporate lifestyle of our SMEs. Surely, instances of corruption can be reduced if the Rakyat, public servants, business people and politicians perceive it as a ‘high-risk, low-reward’ activity. This education of society on the evils of corruption rests on the premise that a corrupt individual is likely to be caught and punished severely.

7. For your information, the Government has also undertaken other anti-corruption initiatives such as various internal auditing systems and the Malaysian Code of Corporate Governance to mention but a few. In this context, today’s SME Pledge, is just one of the very many initiatives taken to create awareness amongst our local SMEs and to make it known that the Government disapproves of unethical business transactions and neither do we condone corrupt practices.

8. Furthermore, I am told that the MACC has formed a dedicated division to further reduce the chances of corruption involving government departments, government-linked companies and enforcement agencies. Dubbed the Inspection and Consultation Unit- it is staffed with around 60 well-trained officers specialising in various fields that will identify and propose measures to fight corruption which is getting more complex in nature.

9. In addition, the Government has also formulated the Whistleblower Protection Act 2010 to encourage the disclosure of corrupt acts while protecting the informant’s identities. The Malaysian Judiciary has also set up special corruption High Courts as well as Session courts.

10. On the whole, the Government has implemented numerous other initiatives to stop corruption. Perhaps too many to list here.

8. Rest assured, that Malaysia will soldier on and fight corruption with our arsenal of dedicated agencies such as the MACC that we have armed with effective laws. Starting with and not exclusive to this SME Pledge, Malaysia will continue to work towards reducing corruption across all sectors of our economy.

9. In this regard, I have no hesitation to lend my support to and affirm this SME Pledge initiative. I thus call upon all SMEs to participate in this initiative to ensure transparent business relations for the sake of long-term economic competitiveness which could lead to overall sustainable economic growth and prosperity for the Rakyat.

Distinguished guests,

11. Let’s address the elephant in the room. I am aware that there is a general feeling that the big crooks escape prosecution while only the small fish fry. Let’s be candid about this subject. Although the MACC has good reason to dispute this perception based on case history and statistics-it remains that the Rakyat is unconvinced. To educate the public on the evils of corruption we must create the confidence in people that powerful politicians or individuals of influence are treated no less different from the ordinary citizen or that it is only the lower rank public servants or minor political figures that are prosecuted. This applies to big corporations who shouldn’t be given any special treatment in comparison to SMEs on this issue of corruption. Creating public confidence and trust with regards to anti-corruption initiatives is also a perception battle. Therefore, I urge the MACC to do more to discard this perception. Until the Rakyat is reasonably convinced can our efforts be of greater impact.

However, let us bear in mind that as more arrests or prosecutions are carried out by the MACC, the Rakyat’s negative perception on corruption in Malaysia may be reinforced. The point is that as more corrupt activities are uncovered it unfortunately adversely affects our perception of the prevalence of corruption in Malaysia instead of positively shaping our view of the MACC’s efforts in reducing corruption. Perhaps this contributes towards the drop by four places to 60th place Malaysia's ranking in the Corruption Perception Index by Transparency International. It is again unfortunate that when such an index findings is made public, the perception perpetuated by some unscrupulous parties is lay the blame solely on the Govt's shoulders when the CPI actually pertains to private sector indiscretions overseas. So, in this context let us be fair to those entrusted with this fight against graft.

Thank you