Sunday, June 9, 2013

Paul Low slammed for defending Malaysia’s ranking drop

Dr Dzulkifly’s criticism on Low comes as the anti-graft minister continues to take a battering over his softened stand in fighting corruption after being made a member of the Najib Cabinet.

PAS has criticised Datuk Paul Low for defending Putrajaya’s poor scores and low ranking in the 2013 Revenue Governance Index (RGI), calling the minister ignorant and suggested that he was being apologetic for dismissing the rating inaccurate.

Low had said last week that Malaysia’s weak result was because the disclosures of overseas agreements makes up a “big item” in the index, pointing out state oil firm Petronas must respect the host government’s requests for non-disclosure while carrying out its operation abroad.

“In the context of RGI, the ratings made on Petronas were made based on its role in Malaysia. Only some were made based on its external roles,” PAS chief researcher Dr Dzulkefly Ahmad told a press conference held at the party’s headquarters here.

The PAS leader’s criticism on Low comes as the anti-graft minister continues to take a battering over his softened stand in fighting corruption after being made a member of the Najib Cabinet.

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Just last week the DAP made a similar allegations against the former Transparency International-Malaysia president, saying that instead of being an apologist to the Barisan Nasional government, the minister should instead 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 global example.

Among Southeast Asia’s main oil and gas producers, Malaysia was ranked 34th in the latest global index that measures the quality of governance in oil, gas and mining sectors of 58 countries, tailing neighbours Indonesia, the Philippines and even poverty-plagued Timor-Leste.

The index grades each country on four areas: institutional and legal setting; reporting practices; safeguards and quality controls; and enabling environment with the latter looking at how the government manages income from the country’s natural resources based on state-owned companies, natural resource funds and subnational revenue transfers.

The RGI then splits the ranking into one of four bands — satisfactory, partial, weak or failing.

Malaysia scored 46 composite points out of 100, on par with west African countries such as Gabon, Guinea and Sierra Leone and just ahead of China, which scored 43 points and ranked 36th out of the 58 countries.

Dzulkefly said the only way to address what he termed as “opaque” management of the country’s oil revenue was for the National Audit Department conduct an audit on Petronas and supported by an independent technical team.

“The full report of this audit must then be tabled for debate in Parliament,” he said.

Dzulkefly had previously alleged that Malaysia’s drop in RGI ranking should be blamed on alleged widespread cronyism practised in an industry monopolised by a state oil firm that is solely controlled by the prime minister, who helms a government known to favour the allocation of lucrative contracts to companies closely linked to the ruling elites.

The opposition economist pointed to how oil contracts have been distributed only among “crony” companies like SapuraKecana, Dialog, Petra and Scomi, outfits said to be allegedly close to figures in Petronas’ top management.

And recently, the state oil firm was also seen allocating its marginal field exploration jobs (also known as Risk Service Contracts) to these companies, Dzulkefly added.

“All of them are known to be close to Petronas’ top management and this has prevented growth of local contractors, be it Bumiputra or non-Bumiputra.

“And although the first round of RSC contracts were given out through open tender, the criteria to set the winners remain shrouded in secrecy,” he said.

Dzulkefly’s allegations have echoes of the accusations made by the Malay Economic Action Council who claimed Petronas was sidelining Malay companies by favouring a certain pool of contractors seen close to the government.

It further reminded Petronas that it was established to help nurture the growth of local players but the company has failed to do so since management was taken over by Datuk Shamsul Azhar Abbas whom the group had called for his resignation.

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