THE RULE OF LAW AND ECONOMIC COMPETITIVENESS
The Right Honourable Dato’ Sri Mohd Najib bin Tun Abdul Razak,
Prime Minister of Malaysia
Yang Amat Arif Tun Arifin bin Zakaria,
Chief Justice Of The Federal Court Malaysia
Yang Berhormat Senator Tan Sri Abu Zahar bin Dato’ Nika Ujang,
President of the Senate
Yang Amat Arif Tan Sri Dato' Seri Md Raus Bin Sharif
President of The Court of Appeal Malaysia
Yang Amat Arif Tan Sri Dato' Seri Zulkefli bin Ahmad Makinudin
Chief Judge of Malaya
Yang Berbahagia Tun Dato’ Seri Zaki Bin Tun Azmi
Former Chief Justice Of The Federal Court
Encik Khairil Azmi bin Mohd Hasbie,
President of the Advocates Association of Sarawak
Dr Shin Young–Moo,
President of the Korean Bar Association
Judges of the Federal Court, Court of Appeal and High Court
Members of the Bar and
Ladies and Gentlemen.
The Malaysian Bar is indeed delighted that the Honourable Prime Minister has agreed to open our inaugural International Malaysia Law Conference.
Prime Minister, I have no doubt that you feel very much at home and comfortable in the presence of hundreds of lawyers, most of whom are quarrelsome and opinionated (some of them even more so than me), since you come from a family of lawyers.
2. The Rule of Law
On 31 August 1957, our first Prime Minister Tunku Abdul Rahman set our nascent nation on the path to “be for ever a sovereign democratic and independent State founded upon the principle of liberty and justice and ever seeking the welfare and happiness of its people”.
In order for the principles of “liberty” and “justice” to take root and flourish, they need to be firmly founded on the rule of law.
The rule of law is often defined as the government of law and not men1. It encompasses a number of principles, among the more important of which are the protection, promotion and fulfillment of:
(i) freedoms, rights and liberties;
(ii) equal access to justice; and
(iii) the right to a fair and impartial hearing.
The phrase “government of law” is a misnomer for it does not acknowledge that it is men and women who as legislators create laws, men and women who as judges interpret those laws (and sometimes make their own law), and men and women who as lawyers frame the disputes and advocate the arguments which the judges rely on to write their judgments.2
How then do we ensure that these three groups of individuals legislate, adjudicate and advocate in a manner which upholds the rule of law?
The answer is complex, but one essential factor is to ensure that the institutions they work in are strengthened in terms of independence, integrity, selection, training, and financial security, and have access to the best available advice.
a. Present Advances in the Rule of Law
Whilst substantial progress has been made in Malaysia in economic achievements and law reform, much still remains to be done. On this occasion, I want to focus on what is positive, and make some suggestions on the way forward. There are two significant advances this year which have strengthened the rule of law in Malaysia.
(i) Repeal of Internal Security Act 1960 (“ISA”) and Other Laws
The first advancement began a year ago when the Honourable Prime Minister announced during the eve of Malaysia Day speech on 15 September 2011, his vision of creating “a Malaysia that practices a functional and inclusive democracy where public peace and prosperity is preserved in accordance with the supremacy of the Constitution, rule of law and respect for basic human rights and individual rights."
In that same speech a pledge was made to repeal the Internal Security Act 1960, Banishment Act 1959, Restricted Residence Act 1933, and three proclamations of Emergency. This pledge has been fulfilled. This is a bold move to ensure that a suspect must either go on to be charged and subsequently tried in a court of law3, or released, and to rid our statute books of oppressive laws which restrict our freedoms, rights and liberties.
The Bar urges the Honourable Prime Minister not to waver in the path of law reform towards an inclusive and functional democracy, notwithstanding the wailing of voices in the wilderness for the restoration of the Internal Security Act.
The Bar hopes that law reform will not stop there.
(ii) Establishment of Law Reform Commission and Sentencing Council
The law–making process in Malaysia will be significantly improved with a permanent and independent law reform commission, accountable to Parliament and the public, with adequate funding, tasked to undertake research and advise Parliament on law reform. This body must engage in inclusive, open, and transparent consultation. Commissioners should be drawn from judges, lawyers (both private and government), academics and members of civil society, in order to provide the necessary depth of knowledge and experience. The law reform commission can and should obtain assistance from I–CeLLS, the International Centre for Law and Legal Studies, which is undertaking excellent research at the moment.
Whilst the Attorney General Chambers and the Bar Council are engaged in regular and frank discussions, this is no substitute for a wider consultation and detailed deliberation by a law reform commission.
The recent outrage in reaction to the perceived lenient sentence of binding over for the conviction of a national bowler who was 19 years old at the time of the offence of statutory rape, and when the girl was 13 years old, and the cry for mandatory sentencing, represents the challenge that the judiciary faces when it comes to the issue of sentencing. All too often commentators are too quick to generalise and to criticise sentences without having a full appreciation of the facts of individual cases. The reaction highlights the need to promote greater understanding of the basis for sentencing, and guidelines for those who have to pass sentence, whilst being sensitive to the human rights of victims.
The Bar welcomes the announcement by the Honourable Minister Dato’ Seri Mohamed Nazri bin Tan Sri Abdul Aziz that the Government will consider establishing a sentencing council. Such a body will promote consistency in and raise awareness of sentencing by issuing guidelines (and not legislation) to assist judges in deciding on the appropriate sentence to reflect the seriousness of the crime committed. The sentencing guidelines for individual offences should set out sentence ranges reflecting different levels of seriousness and within each range, a starting point for the sentence. It is not a substitute or replacement for judicial discretion in sentencing. The composition of the sentencing council should be similar to that of the law reform commission.
(iii) National Legal Aid Foundation (“NLAF”) and Access to Justice
The second advancement has been to ensure that individuals who are arrested, detained, charged or prosecuted are represented by lawyers, thus upholding access to justice and assisting the courts in determining the outcome of the case.
Prime Minister, I will always remember the meeting which my predecessor, Ragunath Kesavan, and I had with you on 7 January 2010 where we raised the plight of the unrepresented 75% of individuals who appear at the trial stage in the Magistrates' Court. Far from being indifferent, you immediately empathised and knew that the solution would have to be a government–funded legal aid scheme where lawyers are paid to represent the accused4 and where the accused need not pay any fee, subject only to a means test for criminal trial representation.
Hence the National Legal Aid Foundation (Yayasan Bantuan Guaman Kebangsaan, "YBGK") was launched in February 2011 and it commenced operations on 2 April 2012. The three Bars of the Peninsula, Sabah and Sarawak now have a trained pool of 777 lawyers volunteering in the scheme and to date a total number of 8500 Malaysians receive legal representation. NLAF complements the existing legal aid scheme of the Bar which provides free legal representation for those who cannot afford to pay a lawyer.
It would be remiss of me not to acknowledge the dedication and diligence of the Honourable Attorney General whose pivotal push in, and leadership of, the NLAF led to its commencement and smooth operations.
However, the number of lawyers who volunteer for NLAF can and should increase, and one of the incentives would be to improve the present nominal sum paid to them to at least match that of an equivalent jurisdiction such as Taiwan, noting also that the fees payable in the United Kingdom and Australia are many times higher than in Malaysia.
Prime Minister, the Bar hopes there is still room for expenditure on this item in the imminent Budget.
a. Independence of, and Advancements in, the Judiciary, and Further Reform
The right to a fair and impartial hearing would not be fully realised without the hearing taking place before a competent and independent judge who enjoys security of tenure and financial independence, working in a supportive environment, and able to dispose of cases in an expeditious manner.
The Judicial Appointments Commission has improved the selection process through its recommendation to the Prime Minister in the appointment of competent and independent judges5. The Malaysian Judiciary itself has improved its efficiency by leaps and bounds in the last five years through the leadership of Tun Dato’ Seri Zaki bin Tun Azmi, the former Chief Justice, and Tun Arifin bin Zakaria, the present Chief Justice. The advancements in efficiency and clearance of backlog of cases is well documented in a World Bank Report and has been held up as a model for other nations6.
The independence of the Judiciary can be further strengthened in two ways.
Firstly, the deliberations of the Judicial Appointments Commission can be made more open and transparent. The public needs to be able to see how candidates for the Judiciary are evaluated and assessed, both for appointment and promotion, so as to have greater trust and confidence in the Judiciary.
Secondly, there should be an increase in remuneration and benefits for magistrates, Sessions Court judges, judicial officers and judges, commensurate with the importance of judicial responsibilities and comparable (or at least close to) the benefits of private practice. This will provide financial independence and attract talent to the Bench, thus alleviating the perpetual problem of the President of the Bar having to persuade top advocates to leave behind their financially rewarding practice and active social life at the long bar and enter a world of solitude on the Bench.
The salary scheme for the judicial officers should be different and separate from that which applies to the civil service.
I can do no better in my advocacy for better judicial compensation than to borrow the words of the United States Chief Justice John Roberts:
Our judiciary will not properly serve its constitutional role if it is restricted to (1) persons so wealthy that they can afford to be indifferent to the level of judicial compensation, or (2) people for whom the judicial salary represents a pay increase7.
Apart from judicial compensation, better funding should be provided to the Judicial Academy which is responsible for the training of judges. More resources should be directed to ensure that judges are kept up to date with the latest developments in the judicial world, to appreciate the latest legal trends, and to learn from legal luminaries.
b. The Role of the Bar
The Bar’s role in upholding the rule of law is not limited only to legal representation but also to commenting publicly on matters and issues related to the law. We lend our voice to the vulnerable, the weak and the marginalised. Clashes and competing interests will always exist, and there can be no advancement without criticisms. It would not be wrong to say that the public expects the Bar to advise the public on what the law is, what the law should be and what the law must not be.
The Malaysian Bar shares the aspiration towards an inclusive and functional democracy and will fulfill its role and responsibility towards achieving this. An inclusive and functional democracy includes a dynamic and vibrant civil society.
3. Global Competitiveness and the Rule of Law
It is a common misconception that the rule of law has no role to play in economic competitiveness. Its importance is underscored by the fact that key rankings such as World Economic Forum’s Global Competitiveness Report 2011–2012 and World Bank’s Doing Business Report 2012 have, as key indicators, independence of the judiciary, efficiency in dispute resolution and strength of investor protection. Businesses need both economic and legal certainty and predictability.
a. Malaysia as a Regional Dispute Resolution Centre
The courts are not the only forum for dispute resolution: arbitration is equally important in commercial disputes, especially those involving cross–border transactions and foreign investments.
Prime Minister, in the same meeting two years ago, along with your decision to establish NLAF, the Government agreed to appoint a reputable and competent arbitrator to be the Director of the Kuala Lumpur Regional Centre for Arbitration (“KLRCA”). Since his appointment in March 2010, Datuk Sundra Rajoo has set about with great zeal to improve the efficiency of the KLRCA. He has also widely promoted the KLRCA as an appointing authority and Malaysia as a seat for arbitration, both in Malaysia and abroad. KLRCA recently launched the first set of arbitration rules in the world to cater for “disputes by arbitration which arise from commercial transactions that may contain Shariah elements or premised on Shariah principles”8.
The Bar is fully supportive of KLRCA, and its members are strenuously promoting the use of KLRCA as the appointing authority and Malaysia as seat for arbitration in commercial contracts. More than that, we have also conducted roadshows together with KLRCA, the Judiciary and the former Chief Justice, in promoting Malaysia as a dispute resolution centre in places such as China, South Korea and India.
What makes Malaysia attractive as a dispute resolution centre is its lower cost structure, available pool of competent and skilled lawyers and a pro–arbitration Judiciary. We hope all these efforts will result in higher caseloads in Malaysia, in particular international arbitrations.
b. Malaysian Bar’s Role in Global Competitiveness
(i) Liberalisation of the Legal Profession
Prime Minister, you announced in your policy speech on 22 April 2009 that as part of the measures to develop Malaysia as an international Islamic financial hub, the legal profession will be liberalised to allow up to five top international law firms with expertise in international Islamic finance to practise in Malaysia. The Bar has embraced this brave new world and even expanded further with two additional modes for entry of foreign lawyers, namely international partnership and recruitment by local law firms.
When these foreign lawyers practise in Malaysia, the Malaysian Bar as regulator must ensure that these foreign lawyers who invest resources here do not face unfair and illegal competition by others who do not play by the same rules.
(ii) Expanding and Exporting Legal Services
Malaysia has produced some outstanding and excellent lawyers, some of whom are now practicing abroad in major financial centres in New York, London, Hong Kong and Singapore. A few of these lawyers are here today amongst the speakers in the conference.
The local lawyers count amongst their ranks two giant advocates, in stature if not in physique, who are recognised both here and abroad as leaders in international arbitration, one of whom will soon helm the Chartered Institute of Arbitrators, the leading association for arbitrators.
In order for the Bar to ensure a regular and increasing supply of competent lawyers, it is implementing a Common Bar Course as a single entry point into the profession and a mandatory continuing professional development programme for practising lawyers.
Our standards must improve because we are competing not locally but now globally. Whilst the Bar acknowledges its responsibility for ensuring the quality of legal practitioners, it can only work with the raw material which comes out of our local education system as a whole. Hence, our schools must significantly improve their standards with greater emphasis in communication skills, especially English, the international language of business.
The Malaysian Bar strongly encourages its Members to expand abroad and would like to see more law firms following the footsteps of the local pioneer firm that has an ASEAN footprint. Towards this end, the Bar urges the Government to consider fiscal incentives for the services sector in the form of income and service tax exemptions, double tax deductions, and financial grants for those lawyers undertaking legal services with cross–border dimensions.
Prime Minister, the Government’s investment in human capital and institutions – the Judiciary, the Bar, a law reform commission, and a sentencing council – will constitute a major contribution in our quest for “liberty” and “justice”, and towards fulfilling Malaysia’s aspiration of achieving developed nation status by 2020.
The welfare and happiness of the Malaysian people are in no small way promoted and protected by the strengthening of justice and the rule of law in our country. The Malaysian Bar stands committed to this, and we will continue to work with all who share this value.
In closing, I would like to express my deepest thanks to the Chairperson of the IMLC 2012 Organising Committee, Raphael Tay, and his team, for their courage to dream dreams and imagine the unimaginable. Their sterling efforts and untiring work have brought about this conference, which we know will be a stunning success.
Lim Chee Wee
26 Sept 2012
1 The word “men” includes women and is used for ease of reference only.
2 Please see this reference here.
3 The only remaining legislation with preventive detention without trial is Dangerous Drugs (Special Preventive Measures) Act 1985.
4 Presently, the money paid is nominal.
5 JAC was established on 2 February 2009 with the coming into effect of the Judicial Appointments Act 2009 [Act 695].
6 World Bank Report dated August 2011 entitled Malaysia – Court Backlog and Delay Reduction Program.
7 2006 Year–End Report on the Federal Judiciary.
8 Please see here.