Corporate Festive Gifts: A Gesture or Bribe?

Exchanging gifts, especially during the festive season, is a way to show appreciation, which is part of our Malaysian culture. But could showing that appreciation to third-party vendors be seen as a bribe?

It’s easy to see how extravagant gifts, like a Rolex watch or a luxurious hamper, could be perceived as bribes. But what about simpler items like mandarin oranges, ketupats or murukkus? Although these might seem low in value, they can still be perceived as bribes. MACC director Datuk Mohd Fauzi Mohamad informed during a press conference, Gerakan Memerangi Rasuah 2018, that giving a gift, whether it is angpows, oranges or hampers, with the hopes of getting something in return is a form of crime. In fact, civil servants are expressly prohibited from accepting gifts during festive seasons in any form, such as hampers, mandarin oranges, angpow packets, and other gifts from any person associated with their official duties (Service Circular No. 3 of 1998).

Following the press conference, public expressed their opinions that focusing on small gifts, such as food, in exchange for large projects is illogical and urged the MACC to focus on bigger issues. Is this focus truly an exaggeration? Certainly not!

While it may seem insignificant, when such gifts are normalised, they can create a culture of expectation where more substantial favours are sought later. In Transparency International’s Corruption Perceptions Index 2023, Malaysia ranked 57th out of 180 countries, which signals the urgent need to effectively combat corruption. Every measure, whether small or large, must be taken consistently and diligently. By addressing all gifts, no matter how small, the management of the company is setting a zero-tolerance standard. Solving bigger issues begins with attention to smaller practices.

Companies should have in place a ‘no gift’ policy or have clear guidelines on acceptable gift practices, including maximum value limits. Additionally, implementing a declaration process for employees to report received gifts ensures transparency and accountability.

Having clear guidelines was a major plus point for the company in defending an employee’s unfair dismissal claim, Roshidah Daud v USG Boral Sdn Bhd [2023] 3 ILR 517. The employee was dismissed when she was to have been taking bribes for many years, but she claimed them to be angpows. The company’s anti-bribery policy which requires employees to undergo training and declare all received gifts, played a critical role in the Court’s ruling. The Court decided the employee’s action to be inconsistent with the Company’s Anti-Bribery and Corruption Policy as well as the company's HR policy, “The claimant at all times knew the policies of the company and that her misconduct was contrary to the said policies, which she consciously concealed the arrangements she had with the company's transporters. It has been admitted by the claimant during cross-examination that it was done outside the knowledge of the company”. The Anti-Bribery and Corruption policy reinforced the Company’s position and the Court dismissed the employee’s case.

The anti-bribery policy does not only protect the company from unfair dismissal claims as above but also acts as a defence if the company is prosecuted under section 17A of the MACC Act. If the company is found guilty of the charge under section 17A, the Top Management and partners are liable to pay a fine of 10 times the value of the bribe or RM1mil, whichever is higher, or a jail term of up to 20 years or both. The company will be liable to a fine calculated on the same basis. 

Thus, a clear, well-defined anti-bribery policy ought not to be taken lightly. Instead of a generic policy, companies should develop policies tailored to their specific business nature and ensure they are well-communicated to employees and third-party vendors. Policies must be comprehensive, and employees should receive thorough training. Small investments in clarity and training can offer significant protection, and strengthen compliance.

7 November 2024

WRITTEN BY LEENALOCHANA

Find Leenalochana at: www.linkedin.com/in/leena39/

Sources:

1.    https://www.transparency.org/en/cpi/2023/index/mys

2.    https://www.sprm.gov.my/index.php?articleid=522&language=en&page_id=75

3.    https://www.thestar.com.my/news/nation/2022/05/31/when-a-favour-may-be-a-bribe

4.    https://says.com/my/news/sprm-says-giving-mandarin-orange-could-be-a-form-of-bribery