LETTER | As the former corporate communications director of the Human Resources Development Fund (now HRD Corp), my experience during my four-year tenure from 2015 to 2019 allowed me to observe the challenges faced by the organisation.
It appears that these issues have worsened in recent times.
Now, with Steven Sim at the helm of the Human Resources Ministry, it is crucial to address these deep-rooted problems and implement sustainable changes, particularly by enhancing the Human Resources Development Act 2001 and limiting ministerial power.
The perfect storm
At the heart of the HRD Corp controversy lies a toxic mix of mismanagement, political patronage, and legislative shortcomings.
Recent investigations by the Public Accounts Committee (PAC) and the auditor-general have uncovered significant governance issues at the corporation:
Questionable financial practices, including suspicious training programme disbursements and property purchases without proper board approval.
Lack of oversight in investment activities, resulting in substantial unrealised losses.
Non-compliance with regulatory requirements and internal procedures.
Misalignment between HRD Corp’s activities and its core mandate of human resource development.
These findings have prompted calls for increased scrutiny, with the ministry submitting reports to the MACC for further investigation.
However, the issues within HRD Corp run far deeper.
An internal power struggle has laid bare the complex and flawed governance structures, exposing the corporation’s vulnerability to political manoeuvring.
Legislative shortcoming
At the crux of these governance failures lies the Human Resources Development Act 2001, which governs the corporation.
The act grants the minister sweeping powers over HRD Corp’s operations, effectively creating a system ripe for political interference and abuse.
If future administrations were to operate less ethically, Malaysia’s talent landscape stands to pay a steep price.
The result could be a culture of impunity that erodes the very foundations of this crucial institution, undermining efforts to develop and enhance the nation's human capital.
Charting course for change
It’s important to note that in 2018, former human resources minister M Kulasegaran took a significant step towards transparency and accountability.
He commissioned the 2018 PricewaterhouseCoopers Governance Oversight Committee (GOC) report, a historic first for a government agency.
An independent five-member committee, led by former international trade and industry secretary-general Rebecca Sta Maria was tasked with reviewing all aspects of the fund’s board governance framework.
The GOC’s findings were presented to stakeholders during a town hall with employers’ associations and registered employers on Nov 10, 2018, and were published on the then-HRDF website.
However, it’s worth stating that the report has subsequently been taken out of public view after Kulasegaran’s tenure.
Key legislative enhancements
Based on the GOC report, the following enhancements to the act were recommended:
Reducing the size of the board of directors: To improve decision-making efficiency and accountability.
Defining the chief executive’s role and responsibilities: Ensuring clear accountability and governance.
Balancing decision-making powers between the minister, board, and management: To prevent excessive ministerial interference.
Aligning financial provisions with current practices: Including the treatment of the consolidated fund and recognition of interest income.
Enforcing statutory declarations for board members: To prevent conflicts of interest and ensure transparency.
Segregating financial statements between the fund and corporation: Ensuring both accounts are audited separately for better financial transparency.
Accountability
It is essential to understand why the crucial recommendations from the GOC report, which were made public on the corporation’s website in 2019, have not been addressed by successive ministers.
This raises important questions about whether the successive ministers - V Sivakumar, M Saravanan, and Sim - were adequately informed about the report or if the recommendations, particularly those concerning the limitation of ministerial powers, were overlooked.
Addressing these questions is vital for ensuring a commitment to genuine reform and accountability.
Learning from the best
In stark contrast to the murky waters of HRD Corp stands Singapore’s SkillsFuture initiative.
Renowned for its transparency, merit-based appointments, and unwavering focus on lifelong learning, SkillsFuture offers a compelling blueprint for reform.
By adopting best practices from this successful model, HRD Corp can pivot from a political playground to a genuine engine of skills development and public service.
The road ahead
As Malaysia stands at this critical juncture, the urgency for reform cannot be overstated.
I urge Prime Minister Anwar Anwar and Sim to act swiftly and decisively:
Initiate a comprehensive review of the Human Resources Development Act 2001, focusing on the GOC report’s recommendations, in addition to the PAC report.
Draft amendments to the Act that incorporate these key enhancements.
Engage with stakeholders, including industry representatives and legal experts, to refine the proposed amendments.
Present the amended act to Parliament for debate and approval.
The HRD Corp controversy is more than just another case of public fund mismanagement. It’s a wake-up call for Malaysia's entire public sector.
By addressing these systemic issues head-on through reviewing the act, Sim has the opportunity to not only salvage HRD Corp but also set a new standard for governance and accountability across all public institutions.
The time for half-measures and political posturing is over. Malaysia’s future workforce and economic competitiveness hang in the balance.
It’s time for bold, decisive action by our reformist-driven government to overhaul HRD Corp and restore public trust in the institutions that serve the Malaysian people.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.
