Friday, May 31, 2013

Media Statement: Stop Being 'BN Apologist'

Minister in Prime Minister’s Department Datuk Paul Low should perhaps do his homework first before attempting to “justify” Malaysia’s poor rankings in the Revenue Governance Index Report

Paul Low should read the Revenue Watch Institute (RWI) 2013 report first before defending the Barisan Nasional government of their inability in resource governance, which is clearly shown by the Malaysia’s poor ranking in the report’s Resource Governance Index (RGI).

In responding to the poor ranking, Paul Low was reported saying that it is because the disclosure of overseas agreements make up a "big item" in the index and Petronas has to respect the host government’s requests for non-disclosure while doing operation overseas. This excuse given is contrary to that stated in the RGI report.

Firstly, I would like to remind Paul Low that Petronas is not the only state oil company (SOC) that has operations overseas. Petrobras, which is the state oil company for Brazil, has operations in 24 countries, similar to the number of countries Petronas is operating, which is 22 countries. Brazil too is a developing country. However, our performance in resource governance as reported by RWI is very different - Brazil stands tall at 5th with overall RGI score of 80/100 while Malaysia at 34th at a dismal 46/100. Hence it is clear that overseas agreements does not at all impede resource governance and transparency.

Secondly and more importantly, the disclosure of overseas agreement is not a ‘big item’ in the index. The index assesses the quality of four key governance components: i. Institutional and Legal Setting, ii. Reporting Practices, iii. Safeguards and Quality Controls and iv. Enabling Environment. There are indicators under each component.

The indicators that we scored zero, i.e. the causes of the poor ranking, are freedom of information law, EITI (Extractive Industries Transparency Initiative) participation, 4 subnational transfer related indicators, contracts, subsidies, operating company names, fund rules, government disclosure of conflicts of interest, SOC disclosure of conflicts of interest, checks on fund spending, fund disclosure of conflicts of interest.

Most of the above are related to disclosure of operation and business activities within Malaysia and none of them is related to overseas agreement disclosure. Perhaps the new Transparency Minister could advise us on how the “overseas agreement” factor is actually a “big item” as to why Malaysia fared badly in the RGI?

We do not expect Datuk Paul Low to be responsible for the past mistakes done by the BN Government. We do expect him to give solutions for greater transparency for the future. However, he appeared to have assimilated into the past BN culture of denial syndrome – that is to “deny first” and face the consequences later.

We call upon Datuk Paul Low not to become an apologist for the BN administration.  He should study the RGI report in detail, review all criticisms and propose all necessary transparency reforms needed for the Petronas Development Act to make Malaysia a shining example of good governance in the world.