RM3 billion lost to fraud

by Charles Ramendran; from the Sun2Surf 28 October 2008

KUALA LUMPUR (Oct 28, 2008): Police today said an estimated RM3 billion was lost in white collar crimes from 2006 to this month, a loss that reflects the size of the problem for businesses regardless of size. Deputy Inspector-General of Police Tan Sri Ismail Omar said Commercial Crimes Investigations Department (CCID) records showed the losses were sustained from cyber fraud, money laundering, criminal breach of trust, counterfeiting and other forms of cheating. He said according to a survey by an established accounting and auditing firm, about 48% of companies in Malaysia have experienced white collar crimes in the past two years. The same study showed fraud to be the most problematic issue for businesses regardless of size, location and industry. Speaking at the launch of the National Seminar on Forensics Accounting and Financial Criminology at the Securities Commission in Bukit Kiara, Ismail said corporate fraud increases the cost of doing business, puts a dent on consumer confidence and affects the profits of shareholders. He said in the long run, this can damage the soundness of the financial system and the economy. He said to safeguard legitimate businesses and consumers from fraud, financial institutions must develop a framework on its risks, conduct regular audits, issue regulatory guidelines and develop monitoring mechanisms. He said there should also be a suitable channel for informers or whistleblowers to come forward and corporations should share information of fradulent activities among themselves. Ismail said forensics accounting will eventually become the most powerful investigative tool in combating economic crimes. He said the CCID had formed its Forensic Accounting Division three years ago and it is headed by an assistant commissioner of police with a team of officers who have a strong background in the legal, financial and accounting fields. He said the police will work hand in hand with several other law enforcement agencies such as Bank Negara and the Anti Corruption Agency to contain economic crimes.

Spotlight: 10 things to do... ... if I were the Minister of Natural Resources and Environment

I AM a Malaysian who tries hard to protect the environment and I realise that I am not alone. Numerous individuals are working tirelessly in various capacities within the government, NGOs and private sector for the betterment of our environment. Despite our efforts, it is clear there are still many basic issues which need to be resolved to ensure that our environment is conserved. And this can only happen through intervention from the very top -- the Minister of Natural Resources and Environment. Since I am not the minister, I can only dream on. But if I were the minister, these are the 10 things that I will do ...

1- Revenue sharing between federal and state governments

I'll convince the Cabinet that revenue sharing between the federal and state governments must be restructured if the natural resources and the environment of the country are to be protected sustainably. The present scheme, where most of the revenue generated goes to the federal government, forces state governments to rely almost completely on exploiting natural resources (forest, minerals, land) to fill their coffers, and this probably represents the greatest threat to the environment. There is no incentive for state governments to protect their forests even for tourism, because tourism related receipts such as service and sales tax go to the federal government. State governments are at the mercy of the federal government for development grants and financial assistance.  I will formulate a scheme that will give the state governments a better slice of government revenue while giving them greater responsibility for caring for the environment. I will provide performance-linked incentives to the state governments to protect their forests, water catchments, and other natural resources. 

2- Environmental Quality Council

I will revamp and revitalise the Environmental Quality Council. The council, despite being in existence since the enactment of the Environmental Quality Act, 1974, has not made any impact on environmental protection and management. It has not, despite its mandate, played a lead role in the development and formulation of environmental policies and strategies. Forget the layman. Even people in the government do not know that such a council exists. I will ensure that the council does what it is required to do, namely to advise me. 

When I say advise, I expect advice at a policy and strategic level, advice on the direction to move forward, advice on how the Department of Environment is doing, and advice on where we are going wrong. A major priority is a total review of the National Environmental Policy. If this requires me to revamp the make-up and the powers of the council, including greater involvement of the states, I will do it.

3- A more visible minister

I will be more visible, more vocal and strive to be the face of the country's environmental management. This sector has a visibility problem. All the key government people keep a low profile. The public has no icon, no champion to look up to. Forget the notion of "we do our work quietly". If the public cannot see us, if the public does know not who I am, don't expect the public to think we are really working. If the public knows Karam Singh Walia better than they know me, we have a problem. The country needs an icon and I intend to be that.

4- Better support for NGOs

I will continue the practice of my predecessors in engaging the NGOs, and I will take this a step further by providing greater moral and financial support. I realise that many of the effective environmental programmes in this country, particularly those at the community level, have been implemented and funded by NGOs. There are several environmental NGOs doing excellent work in Malaysia and by working more closely with them, I believe the government's job would be much easier.I will ensure that my ministry appreciates and accepts their independent thinking and constructive criticism. This undoubtedly calls for open-mindedness among my officers and this is something that I will constantly insist upon. 

5- National Transportation Policy

I will cajole, and if necessary threaten, my colleague, the Minster of Transport, that the National Transportation Policy should be jointly formulated by three ministries -- my ministry, Transport Ministry and Ministry of Energy, Water and Telecommunications. Transportation has such great impact on the environment and energy use that it cannot be left just to one ministry to decide. I do not want the Transport Ministry to just invite one of my officers to sit in some committee. We want to be in the joint driving seat. Transportation impacts the environment in so many ways -- emissions, land use, noise, societal, and through energy use. Sustainable transport is fundamental to ensuring environmental quality and reducing demand for energy.

6- National Biological Diversity Policy

I will reformulate the National Biological Diversity Policy. The present policy is outdated, so obscure that almost no one outside my ministry knows it, sets no targets, provides some vague directions and was formulated without serious stakeholder engagement. I will ensure the new National Biodiversity Strategy and Action Plan that my ministry formulates will holistically address all the requirements of the Convention on Biological Diversity (CBD). This is the leading global agreement on how countries should manage their biological resources. We will set realistic targets, develop a holistic biodiversity planning framework, with action plans, budget and timeframe that will help us achieve our targets. I will ensure that Malaysia become the poster-boy or girl of CBD. I am aware that biological diversity is our national heritage and it is our duty to protect it.

7- Environmental impacts of the Malaysia Development Plans

I will examine the environmental impacts of the Ninth Malaysia Plan and all other subsequent national plans. For far too long, the country has focused on the "small picture" such as examining the environmental impacts of projects only and discharges from factories. It is time that we started looking at how our major policies, programmes and plans are affecting the environment. For example, we can't blame a farmer for opening farm land in Cameron Highlands -- our National Agriculture Policy encourages temperate agriculture. We can't blame TNB for building coal-fired power plants -- our Energy Policy explicitly calls for the use of coal.My ministry will study the environmental impacts of the major initiatives under the 9MP so that we can advise the Cabinet appropriately when the 10th Malaysia Plan is drafted in two years' time. I will also push for the adoption of a policy that requires all ministries to be responsible for environmental management within their areas of jurisdiction.

8- Biofuel

I will convince my colleagues in the energy and plantation sectors to review the national strategy on biofuel. 

Although the original intentions were noble, viz to produce more environment-friendly fuel and to rely less on fossil fuels, there is now an increasing body of scientific knowledge that there are unintended adverse consequences. Demand for palm oil and other biofuels is now threatening forest land and many important wildlife species, as well as pushing food prices up to the point where they threaten the welfare of millions of people, especially in the Third World. The benefits of reduced greenhouse gas emission from biofuels are now offset by increased carbon release from deforestation. Given the volume of scientific and economic analysis that is emerging, it is just a matter of time before many developed countries change their biofuel policies, almost certainly reducing demand for palm-oil based biofuels. We need to rethink our strategy now.

9- Water resource management

Too many ministries and agencies are involved in the management of our water resources -- KTAK, NRE, SPAN, JPS, MOA, DOE, PUAS, LUAS, various state agencies and local councils, etc. If you look at our rivers, you will know instantly that we have not got it right. Overlapping and conflicting jurisdictions, gaps, responsibilities without authority, lack of human capacity and the vagaries of the state-federal scope of jurisdiction add to the problem. I will push for a re-examination of these shortcomings, streamline the roles and responsibilities of the various agencies, and push for greater responsibility of state governments in water resource management. I will also give emphasis to the many grey areas such as catchment management and protection, sullage discharges, riparian reserves, quality of surface runoff, and protection of river aquatic life.

10- Environmental awareness and education 

I will ask the prime minister to insist that all ministries, departments and various statutory and non-statutory agencies, as well as all Members of Parliament, are aware of environmental policies that have been adopted in the country. I will work with the Education Minister to infuse greater environmental understanding into the school curriculum.  While there is some ongoing effort in this respect, this is not enough. We need to nurture teachers who are "environmentally-sensitive" -- hence the need to expand environmental education in teachers' training. In short, we need an environmental education policy, and then we need to consistently implement that policy. There are so many things to do and so little time or resources. To ensure follow through, I will establish a Performance Monitoring Unit that reports directly to me, with a brief to monitor performance, identify where actions are slow or neglected and where laws and rules are not being enforced. We cannot live without our environment to support us and it deserves better treatment than we are currently giving it. We have a big job to do and the sooner we put more resources and effort into it, the better for all our futures.

• This article was prepared bythe Policy Reserach Unit of ERE Consulting Group

for sharing purposes; Copied from NST Online; 25 October 2008