The Employees Provident Fund Act should be amended to spell out clearly a mechanism to ensure the accountability, transparency and scrutiny of the EPF and the EPF Board by the EPF contributors


Media Statement
by Lim Kit Siang 
 

(Petaling Jaya, Monday): The May Day Labour Symposium organised by the DAP Labour Bureau, attended by trade unionists and Malaysians concerned about the rights of the workers, yesterday passed a resolution asking the DAP to launch a nation-wide campaign to demand accountability, transparency and scrutiny of the Employees Provident Fund (EPF) and EPF Board members to ensure that there is no imprudent, injudicious or illegal investment of the RM130 billion EPF monies, that EPF monies are not used to bail-out troubled companies and to take all necessary action, including if necessary, legal action with the one-ringgit one-contributor support of the nine million EPF contributors to protect the long-term interests of the provident fund.

DAP will consider how to implement this resolution and will be convening a meeting of EPF contributors in Kuala Lumpur in a month’s time, tentatively on 7th June, to discuss a joint action by EPF contributors to demand accountability and transparency of the EPF and the EPF Board to the nine million EPF contributors.

There is a serious crisis of confidence in the EPF to the extent that contributors worry whether their provident fund would be safe by the time of their retirement - something which has never happened before.

This is because of the refusal of the EPF and the EPF Board to be accountable and transparent and to subject the EPF affairs to the scrutiny of EPF contributors, especially as the EPF seems to be involved in several dubious bail-out projects of troubled companies when its first and last agenda should be to promote the best interests of the EPF contributors.

The declaration of the lowest EPF dividend of 6.7 per cent in 21 years, even lower than in the recession in the 1980s when the national economic growth plunged to a negative -1 per cent growth has deepened the contributors’ crisis of confidence in the EPF.

During the recession in the 1980s, the EPF was raided to fund certain dubious transactions resulting in the EPF-Makuwasa scandal, causing huge losses to the EPF.

The EPF-Makuwasa scandal came about because the government wanted to recoup the RM600 million losses suffered in a misguided attempt to corner the London tin-market through the Maminco operations in the early eighties, which backfired instead.

With this record of the EPF funds being used as a ready cash-rich source to bail-out troubled companies during an economic crisis, the EPF contributors must exercise the highest vigilance to prevent a recurrence of the use of EPF funds in the current economic crisis to bailout troubled companies with special connections to the political establishment. It has been rightly pointed out that troubled companies with special political connections do not want the IMF (International Monetary Fund) as they want the EPF, but the nine million EPF contributors must ensure that their funds are not used for any such bailouts whatsoever.

At present there is a serious lacuna in the EPF act, which does not provide for the accountability, transparency and scrutiny of the EPF affairs by the EPF contributors. The EPF Act 1991 should be amended to spell out clearly a mechanism to ensure the accountability, transparency and scrutiny of the EPF and the EPF Board by the EPF contributors.

(4/5/98)


*Lim Kit Siang - Malaysian Parliamentary Opposition Leader, Democratic Action Party Secretary-General & Member of Parliament for Tanjong