WTO government procurement rules and the local dynamics of procurement policies: A Malaysian case study

European Journal of International Law

Volumn 17, Issue 1, 2006, Pages 151-185

  McCrudden, Christopher ^a   Gross, Stuart G ^b,c  

^a UNIVERSITY OF OXFORD   (United Kingdom)

^b Shearman and Sterling LLP   (United States)

^c UNIVERSITY OF MICHIGAN LAW SCHOOL   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 33645907885     PISSN: 09385428     EISSN: 14643596     Source Type: Journal    
DOI: 10.1093/ejil/chi162     Document Type: Article

References (265)

1. For consideration of these issues, see, generally, Kingsbury, Krisch and Stewart, 'The Emergence of Global Administrative Law', 68 Law & Contemporary Problems (2005) 15.
2. See S. Arrowsmith, Government Procurement in the WTO (2003)
3. P. Trepte, Regulating Procurement: Understanding the Ends and Means of Public Procurment Regulation (2004),
4. and A. Reich, International Public Procurement Law: The Evolution of International Regimes on Public Purchasing (1999).
5. See, e.g., World Bank, Guidelines Procurement under IBRD Loans and IDA Credits: May 2004 (2004);
6. European Bank for Reconstruction and Development, Procurement Policies and Rules (Aug. 2000).
7. WTO, Technical Note on the Accession Process - Note by the Secretariat, WT/ACC/10 of 21 Dec. 2001.
8. WTO, Working Party on GATS Rules - Overview of Government Procurement-Related Provisions in Economic Integration Agreements-Note by the Secretariat, S/WPGR/W/44 of 24 June 2003.
9. A somewhat similar debate was more important at the domestic level in the past than now, particularly in the context of discussions about the relationship between administrative law and the welfare state.
10. Parties to the Agreement are: Canada, European Communities (including its 25 Member States: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, Netherlands, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, and United Kingdom), Hong Kong China, Iceland, Israel, Japan, Korea, Liechtenstein, Netherlands with respect to Aruba, Norway, Singapore, Switzerland, and United States. Negotiating accession are: Albania, Bulgaria, Georgia, Jordan, Kyrgyz Republic, Moldova, Oman, Panama, Chinese Taipei (information available at http://www.wto.org/english/tratop_e/gproc_e/memobs_e.htm) (last visited 29 Sept. 2005).
11. Final Act and Related Documents, United Nations Conference on Trade and Employment, Havana, Cuba, 21 Nov. 1947-24 Mar. 1948, UN Doc. ICITO/1/4 (1948).
12. Provisions of the General Agreement on Tariffs and Trade (GATT 1947), which required 'national treatment', explicitly did not apply to 'procurement by governmental agencies of products purchased for governmental purposes'; instead, a much weaker 'fair and equitable treatment' commitment was made applicable: General Agreement on Tariffs and Trade 1947, 30 Oct. 1947, 61 Stat. A-11, TIAS 1700, 55 UNTS 194 (1994), Art. XVII(2). Although Art. III(4), concerning national treatment on internal taxation and regulation, would otherwise have covered procurement, Art. III(8)(a) stated: 'The provisions of this Article shall not apply to laws, regulations or requirements governing the procurement by governmental agencies of products purchased for governmental purposes and not with a view to commercial resale or with a view to use in the production of goods for commercial sale'. Art. III(8)(b) provided further: 'The provisions of this Article shall not prevent the payment of subsidies exclusively to domestic-producers, including payments to domestic producers derived from the proceeds of internal taxes or charges applied consistently with the provisions of this Article, and subsidies effected through government purchases of domestic products'. The argument that procurement was included to some extent, however, derives from the provisions of Art. XVII, concerning state trading. Para. 1 provides that state trading shall be carried out on the basis of the General Agreement. Para. 2 states that, with respect to imports involving government procurement, 'each contracting party shall afford to the trade of the other contracting parties fair and equitable treatment'. In so far as procurement was included in this minimal way in the GATT, the general exceptions provided in Art. XX and the national security provisions in Art. XXI were applicable.
13. Christopher McCrudden is grateful to Gherado Bonini of the Historical Archives of the European Communities in Florence and Mary-Ann Grosset, Head of OECD Records Management and Archives Service in Paris, for their help in gaining access to the OEEC and OECD records of these discussions.
14. See Jones, 'The GATT-MTN System and the European Community as International Frameworks for the Regulation of Economic Activity: The Removal of Barriers to Trade in Government Procurement', 8 Maryland J Int'l L & Trade (1984) 53
15. Bourgeois, 'The Tokyo Round Agreements on Technical Barriers and on Government Procurement in International and EEC Perspective', 19 CML Rev (1982) 5.
16. Pomeranz, 'Toward a New International Order in Government Procurement', 11 Law & Pol'y Int'l Bus. (1979) 1263.
17. Agreement on Government Procurement, done 11 Apr. 1979, Art. II, GATT Doc. MTN/NTM/W/211/Rev. 2, reprinted in 18 ILM (1979) 1052 (hereafter '1979 Agreement'), Art. II.
18. Ibid., Art. I.
19. At that time, around US$190,000.
20. For background on GPA 1979 see Goldstein, 'Doing Business Under the Agreement on Government Procurement: The Telecommunications Business - a Case in Point', 55 St John's L Rev (1980) 63
21. Peterson, 'The Trade Agreements Act of 1979: The Agreement on Government Procurement', 14 Geo Wash J Int'l L & Econ (1980) 321
22. De Mestral, 'The Impact of the GATT Agreement on Government Procurement in Canada', in J. Quinn and P. Slayton (eds), Non-Tariff Barriers After the Tokyo Round (1982), 171
23. Horsch, 'Eliminating Nontariff Barriers to International Trade: The MTN Agreement on Government Procurement', 12 NYU J Int'l L & Pol (1979) 315.
24. The Agreement was amended in 1987, but only relatively minor changes were made to its text.
25. Agreement on Government Procurement, contained in Proposal for a Council Decision Concerning the Conclusion of the Results of the Uruguay Round of Multilateral Trade Negotiations (1986-1994), COM(94)143 final/2, Brussels, 25 Apr. 1994. The full Agreement, including the Annexes, is contained in Agreement Establishing the World Trade Organization: Plurilateral Trade Agreements: Agreement on Government Procurement, Cm 2575 (1994). For discussion of the background to the Agreement, see Barshevsky, Sutton, and Swindler, 'Developments in EC Procurement Under the 1992 Program', 4 Brigham Young U L Rev (1990) 1269, at 1326-1336.
26. Messerlin, 'Agreement on Public Procurement' in OECD, The New World Trading System: Readings (1995), at 65
27. B. M. Hoekman and P. C. Mavroidis (eds), Law and Policy in Public Purchasing: The WTO Agreement on Government Procurement (1997), in addition to the literature cited below.
28. See the useful article by Low, Mattoo, and Subramanian, 'Government Procurement in Services', 20 World Competition (1996) 5, at 6.
29. The GPA 1994 threshold is 130,000 SDR (1 SDR = $US 1.45 (2005)) for procurements of goods and services (except construction services) by central government entities. Thresholds for purchases by sub-central entities vary by country (usually around 200,000 SDR), as do purchases by government-related enterprises (usually around 400,000 SDR). In general, the threshold is 5,000,000 SDR for procurement of construction services by all of these entities: Agreement on Government Procurement, 15 Apr. 1994, WTO Agreement, Annex WTO Agreement (hereinafter GPA 1994), App. 1.
30. Ibid., Art. III.
31. Ibid., Art. III(2)(a).
32. Ibid., Art. III(2)(b).
33. Ibid., Art. VIII (b).
34. Ibid., Art. IX(9)(b).
35. Ibid., Art. XIII(2)(h).
36. Ibid., Art. XIII(2)(j).
37. Ibid., Art. XIII(4)(a).
38. Ibid., Art. XIII(4)(b).
39. Ibid., Art. XIII(4).
40. Ibid., Art. XIII(4)(d).
41. Ibid., Art. XVI(1). According to a footnote to this Art., included in the text of the Agreement, offsets are regarded as 'measures used to encourage local development or improve the balance-of-payments accounts by means of domestic content, licensing of technology, investment requirements, counter-trade or similar requirements'.
42. Ibid., Art. XXIII(2).
43. The United States had earlier taken a reservation stating that Agreement obligations would not apply to set-asides on behalf of small and minority businesses under the North American Free Trade Agreement (NAFTA), ch. 10, Annex 1001.2b, General Notes, Schedule of the United States, Note 1.
44. GPA 1994, supra note 20, United States Annex to App. 1, General Notes, Note 1.
45. Industry Canada, Industry and the Uruguay Round, Volume 1 - Results of the Negotiations (1995).
46. Ibid.
47. GPA 1994, supra note 20, Canadian Annex to App. 1, General Notes, Note 1(d).
48. Ibid., Korean Annex to App. 1, Annex 1, Note 3
49. Annex 2, Note 3
50. Annex 3, Note 2.
51. Ibid., United States, Annex 2.
52. Ibid., United States Annexes to App. 1, General Note 1.
53. They were notified by the European Community to the WTO in a communication dated 22 Dec. 1995 (WTO, Interim Committee on Government Procurement, Modifications to Appendix I of the European Communities and the United States, GPA/IC/10 of 16 Jan. 1996, at 8).
54. Davies, 'Remedies for Enforcing the WTO Agreement on Government Procurement from the Perspective of the European Community: A Critical View', 20 World Competition (1996-1997) 113
55. Hoekmann and Mavroidis, 'The WTO's Agreement on Government Procurement: Expanding Disciplines, Declining Membership?' 4 Public Procurement L Rev (1995) 63.
56. GPA 1994, supra note 20, Art. XXII(1).
57. Ibid., Art. XX.
58. Ibid., Art. XX(6).
59. Messerlin, 'Agreement on Public Procurement', in OECD, The New World Trading System: Readings (1995), at 65.
60. For a detailed discussion of EU implementation of the 1994 GPA, see Didier, 'The Uruguay Round Government Procurement Agreement: Implementation in the European Union', in B. Hoekman and P. Mavroidis (eds), Law and Policy in Public Purchasing (1997), ch. 7.
61. 'International Benchmarks and Standards for Public Procurement Systems', paper presented to the OECD/DAC World Bank Round Table, Strengthening Procurement Capacities in Developing Countries, Paris, 22-23 Jan. 2003, paras 2-3.
62. Ibid., para 2.
63. Ibid., para 3.
64. The report further stated: '[e]fforts have been underway since the 1980's in many countries worldwide to develop well functioning public procurement systems in order to increase the effective use of public funds to achieve a range of governmental and developmental objectives. New instruments were created to facilitate the development of public procurement systems, including a model law on procurement produced by the UN Commission on International Trade Law (UNCITRAL). The World Bank, other multilateral development banks, international organizations, and increasingly bi-lateral donors have supported the development of public procurement systems in the countries they support through loans, grants and technical assistance': Ibid. para 2.
65. Ibid.
66. See also Hernandez, 'Harminization [sic] of Procurement Policies and Practices of Public International Financial Institutions: Report on the Progress of Work by Heads of Procurement, November 2002', presentation made at the High Level Forum on Harmonization, Rome, 24-25 Feb. 2003.
67. See S. Arrowsmith, J. Linarelli, and D. Wallace, Jr., Regulating Public Procurement: National and International Perspectives (2000), at 15 ff.
68. On corruption in government procurement, see Hellman, et al., 'Measuring Governance Corruption, and State Capture: How Firms and Bureaucrats Shape the Business Environment in Transition Economies', EBRD and the World Bank: Policy Research Working Paper 2312, available at http://www.worldbank.org/wbi/governance/pdf/measure.pdf
69. Boehm and Polanco, 'Corruption and Privatisation of Infrastructure in Developing Countries', Transparency International: Integrity Pact And Public Procurement Programme, IP & PC Working Paper 1, Nov. 2003, available at http://www.transparency.org/integrity_pact/resources/ working_papers/dnld/wk1_boehm_polanco.pdf.
70. Arrowsmith et al., supra note 53, at 29.
71. This figure was reached by adding the total federal government expenditure for supplies and services to the development expenditure of local governments, state governments, statutory bodies, and 'nonfinancial public enterprises' (the government's term for government-owned companies not involved in banking or other financial business): Finance Ministry, Economic Report 2003/2004, Annex, Tables 2.2, 4.4, 4.6, 4.10, 4.11, 4.12 4.13, available at http://www.treasury.gov.my/er2004/er-04.htm (last visited 21 Dec. 2003). For an analogously based analysis of Malaysian government procurement expenditure see Report by the Secretariat, Trade Policy Review-Malaysia WT/TPR/S/92, Table 111-4 (5 Nov. 2001) (hereinafter Malaysia TPR (2001)). As this figure does not include the non-development-related procurement of supplies and services by non-federal governmental bodies, it can be assumed that the total true figure including these elements would be significantly higher.
72. See Surat Pekeliling Perbendaharaan Bil. 7 Thn. 2002 (Treas. Circ. Let. No. 7/2002), Penggunaan Bahan/Barangan/Perkhidmatan Tempatan Dalam Perolehan Kerajaan (Use of Domestic Materials/Goods/Services in Government Procurement), §2 (5 June 2002); Surat Pekeliling Perbendaharaan Bil. 4 Thn. 1995 (Treas. Circ. Let. No. 4/1995), Dasar dan Keutamaan Kepada Syarikat Bumiputera Dalam Perolehan Kerajaan (Policy and Preferences for Bumiputera Firms in the Context of Government Procurement) (12 Apr. 1995); Surat Pekeliling Perbendaharaan Bil. 2 Thn. 1995 (Treas. Circ. Let. No. 2/1995), Tatacara Penydiaan, Peniliaan dan Penerimaan Tender (Tender Preparation, Evaluation and Acceptance), §4.1.3 (10 Apr. 1995). According to the Mid-Term Review of the Eighth Malaysia Plan 2001-2005, preferences for Bumiputera, already large, would be scrapped in favour of a set-aside of 60% of government procurement spending for Bumiputera providers. Midterm Review of the Eighth Malaysia Plan §3.53 (30 Oct. 2003).
73. See Surat Pekeliling Perbendaharaan Bil. 4 Thn. 1995 (Treas. Circ. Let. No. 4/1995) Dasar dan Keutamaan Kepada Syarikat Bumiputera Dalam Perolehan Kerajaan (Policy and Preferences for Bumiputera Firms in the Context of Government Procurement), §§ 5.1-5.5, 6-7 (12 Apr. 1995; see also Midterm Review of the Eighth Malaysia Plan, supra note 57. § 1.57 (30 Oct. 2003); Third Malaysia Plan 1976-1980, §§ 599-600 (5 July 1976).
74. Surat Pekeliling Perbendaharaan Bil. 7 Thn. 2002 (Treas. Circ. Let. No. 7/2002), Penggunaan Bahan/Barangan/Perkhidmatan Tempatan Dalam Perolehan Kerajaan (Use of Domestic Materials/Goods/Services in Government Procurement), §2 (5 June 2002); Surat Pekeliling Perbendaharaan Bil. 2 Thn. 1995 (Treas. Circ. Let. No. 2/1995), Tatacara Penydiaan, Peniliaan dan Penerimaan Tender (Tender Preparation, Evaluation and Acceptance), §4.1.1. (10 Apr. 1995); see also, e.g., Mid-Term Review of the Eighth Malaysia Plan, 2001-2005, supra note 57, foreword, §§ 1.33, 1.67, 5.76, 8.09 (30 Oct. 2003).
75. A. Chua, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability (2003), at 6.
76. Ibid.
77. Ibid., at 6-7.
78. Ibid., at 10.
79. On the background, see Tun Haji Mohd. Salleh Bin Abas, 'Traditional Elements of the Malaysian Constitution' in F.A. Trindada and H.P. Lee (eds), The Constitution of Malaysia: Further Perspectives and Developments (1986), at 10-11
80. D. Nesiah, Discrimination With Reason?: The Policy of Reservations in the United States, India and Malaysia (1999), at 74-88.
81. Colonial Office, Report of the Federation of Malaya Constitutional Commission 1957, Colonial No. 330 (1957).
82. Ibid., para. 163.
83. Ibid., paras 163-168.
84. Constitution of Malaysia, Art. 153(1).
85. Ibid., Art. 153(2).
86. See, generally, L. A. Sheridan and H.E. Groves, The Constitution of Malaysia (1979), at 382-386.
87. Phillips, 'Positive Discrimination in Malaysia: A Cautionary Tale for the United Kingdom' in B. Hepple and E. M. Szyszczak, Discrimination: the Limits of Law (1992), at 349.
88. J. van der Westhuizen, Adapting to Globalization: Malaysia, South Africa, and the Challenges of Ethnic Redistribution with Growth (2002), at 19.
89. Ibid., at 27.
90. Nesiah, supra note 64, at 90.
91. Stafford, 'Malaysia's New Economic Policy and the Global Economy: The Evolution of Ethnic Accommodation', 10 Pacific Review (1997) 556.
92. M. bin Mohamad, The Way Forward (1998).
93. Ibid.
94. E. T. Gomez, Political Business: Corporate Involvement of Malaysian Political Parties (1994), at 1-2.
95. In 1969, 65% of Bumiputera still lived in poverty, though they represented 62% of the population: Ganguly, 'Ethnic Policies and Political Quiescence in Malaysia and Singapore', in M.E. Brown and S. Ganguly (eds), Government Policies and Ethnic Relations in Asia and the Pacific (1997), at 234 (citing 1995 Malaysian Government Census figures). They owned only 2.3% of the nation's commercial equity: Second Outline Perspective Plan 1991-2000, Tables 2-1, 2-6 (17 June 1991).
96. The situation of the Chinese, though better, was not great; 26% of Chinese also lived in poverty: Ganguly, this note, at 234 (citing 1995 Malaysian Government Census figures).
97. However, their per capita and absolute share of the nation's commercial equity was quite a bit better, representing just 27% of the population: ibid. They held 22.8% of its commercial equity: Second Malaysia Plan, 1971-1975, Table 3-1 (25 June 1971).
98. That said, in reality it was foreign interests rather than the Chinese that dominated Malaysia's economy; it was the foreign interests who owned 63.3 % of Malaysia's commercial equity: Second Outline Perspective Plan 1991-2000, Table 2-1 (17 June 1991) and, with the exception of those parts controlled by the Chinese, continued to 'control large-scale commercial agriculture and all forms of non-agricultural enterprises' as they had during colonial times: Ganguly, this note, at 261.
99. A. Harding, Law, Government and the Constitution in Malaysia (1996), at 230.
100. See Second Malaysia Plan 1971-1975, foreword, §§ 20, 26, 26, 27, 126, 135, 147, 149, 155(1) 155 (iv); 25 (25 June 1971)
101. E. T. Gomez and K.S. Jomo, Malaysia's Political Economy (1999), at 29-32.
102. See Sedition Act 1948 (Act 15, amended 1969), §3(1)(a), (f) (amended 1969). For a general discussion of the various laws enacted by the government in this period to pacify the country and the important role they have played in defending subsequent regimes from political attack, see W. Case, Politics in Southeas Asia: Democracy or Less (2002), at 108-111.
103. Hickling, 'An Overview of Constitutional Changes in Malaysia: 1957-1977', in Tun Mohamed Suffian, H.P. Lee, and F.A. Trindade (eds), The Constitution of Malaysia: Its Development: 1957-1977 (1978), at 23.
104. Harding, supra note 80, at 231-232
105. see also Othman et al., 'Social Change and National Integration' in J. Yahaya et al. (eds), Sustaining Growth, Enhancing Distribution: The NEP and NDP Revisited (Proceedings of CEDER Conference) (2003), at 141, 145 ('The logic of the exercise is simple enough: If the questioning of these "sensitive issues" had led or paved the way to serious social discord, its prohibition could help ensure, if not guarantee, societal harmony.').
106. Nesiah, supra note 64, at 231.
107. See Second Malaysia Plan 1971-1975, foreword (25 June 1971)
108. Othman et al., supra note 84, at 141, 145
109. Gomez, supra note 78, at 3.
110. Second Malaysia Plan 1971-1975, §135 (25 June 1971).
111. See Gomez and Jomo, supra note 81, at 29-32.
112. Third Malaysian Plan 1976-1980 (1976), supra note 58, para. 567.
113. See also I. Emsley, The Malaysian Experience of Affirmative Action: Lessons for South Africa (1996), at 49.
114. Ibid., at 81.
115. See Second Malaysia Plan 1971-1976, §3 (25 June 1971).
116. Ibid.
117. This is essentially Stafford's argument: See supra note 75.
118. Ibid., at 559.
119. Second Outline Perspective Plan, 1991-2000 (1991), 4.
120. Sixth Malaysia Plan, 1991-1995, §1.99; see also §1.30 (10 July 1991).
121. Second Outline Perspective Plan, 1991-2000 (1991), para. 4.51.
122. Ibid., para. 4.53.
123. Gomez, 'Capital Development in Malaysia' in Yahaya et al., supra note 84, 71, 81.
124. Ibid.
125. Stafford, supra note 75, at 573.
126. See Surat Pekeliling Perbendaharaan Bil. 4 Thn. 1995 (Treas. Circ. Let. No. 4/1995), Dasar dan Keutamaan Kepada Syarikat Bumiputera Dalam Perolehan Keralaan (Policy and Preferences for Bumiputera Firms in the Context of Government Procurement) (12 Apr. 1995); Surat Pekeliling Perbendaharaan Bil. 2 Thn. 1995 (Treas. Circ. Let. No. 2/1995), Tatacara Penydiaan, Peniliaan dan Penerimaan Tender (Tender Preparation, Evaluation and Acceptance), §4.1.3 (10 Apr. 1995).
127. Arahan Perbendaharaan (Treas. Instr.), §§ 166 ff (1997); Surat Pekeliling Perbendaharaan Bil. 7 Thn. 2002 (Treas. Circ. Let. No. 7/ 2002), Penggunaan Bahan/Barangan/Perkhidmatan Tempatan Dalam Perolehan Kerajaan (Use of Domestic Materials/Goods/Services in Government Procurement) (5 June 2002); Surat Pekeliling Perbendaharaan Bil. 4 Thn. 1995 (Treas. Circ. Let. No. 4/1995), Dasar dan Keutamaan Kepada Syarikat Bumiputera Dalam Perolehan Kerajaan (Policy and Preferences for Bumiputera Firms in the Context of Government Procurement) (12 Apr. 1995); Surat Pekeliling Perbendaharaan Bil. 2 Thn. 1995 (Treas. Circ. Let. No. 2/1995), Tatacara Penydiaan, Peniliaan dan Penerimaan Tender (Tender Preparation, Evaluation and Acceptance) (10 Apr. 1995). In addition to these provisions, government procurement is also regulated by the very brief Government Contracts Act of 1949 (Act 67, amended 1973), which grants to Ministers the authority to contract directly or by delegation on behalf of the Federal Government (in §2), and to Chief Ministers of States the authority to contract directly, or by delegating, on behalf of their respective states.
128. See Surat Pekeliling Perbendaharaan Bil. 4 Thn. 1995 (Treas. Circ. Let. No. 4/1995), §§ 5-6. In addition to establishing/reaffirming these preferences, TCL No. 4/1995 eliminates preferences for providers from other ASEAN nations that had been in effect since 1984: Ibid., §10.1 (v) (cancelling Surat Pekeliling Perbendaharaan Bil. 7 Thn. 1984 (Treas. Circ. Let. No. 7/1984), Peraturan-Peraturan Untuk Melaksanakan Artikal 7, Perjanjian Istimewa Perdagangan Di Kalangan Negara-Negara ASEAN: Indonesia, Filipina, Singapura, Thailand, Brunei dan Malaysia (Special Trading Provisions for ASEAN Nations: Indonesia, Philippines, Singapore, Thailand, Brunei and Malaysia), §3 (19 Dec. 1984)). While there does not appear to be any official document confirming that this is the case, additional evidence suggests that Art. 7 of the 1977 ASEAN Preferential Trading Arrangements (PTA) is no longer in force.
129. Surat Pekeliling Perbendaharaan Bil. 4 Thn. 1995 (Treas. Circ. Let. No. 4/1995), §5.6.
130. Ibid., §§ 5-6.
131. Ibid., §§ 5.2.1, 5.3.3.
132. Ibid., _§st 5, 7, 8; see also Midterm Review of the Eighth Malaysia Plan, supra note 57, §1.57 (30 Oct. 2003); Third Malaysia Plan 1976-1980, supra note 58, §§ 599-600 (5 July 1976).
133. Surat Pekeliling Perbendaharaan Bil. 4 Thn. 1995 (Treas. Circ. Let. No. 4/1995), §§ 2, 5-7; Sixth Malaysia Plan 1991-1995, §§ 1.99, 1.109 (10 July 1991).
134. See Third Perspective Plan, 2001-2010, foreword (3 Apr. 2001); Second Outline Perspective Plan, 1991-2000, foreword (17 June 1991); Second Malaysia Plan 1971-1975, foreword (25 June 1971).
135. See Surat Pekeliling Perbendaharaan Bil. 4 Thn. 1995 (Treas. Circ. Let. No. 4/1995), §§ 2.1.1.2-2.1.1.6; Second Malaysia Plan 1971-1975, §§ 122-124 (25 June 1971).
136. See Second Malaysia Plan 1971-1975, foreword (25 June 1971); Midterm Review of the Eighth Malaysia Plan, supra note 57, §1.57 (30 Oct. 2003).
137. See Surat Pekeliling Perbendaharaan Bil. 7 Thn. 2002 (Treas. Circ. Let. No. 7/2002), §2; Surat Pekeliling Perbendaharaan Bil. 2 Thn. 1995 (Treas. Circ. Let. No. 2/1995), §4.
138. See Surat Pekeliling Perbendaharaan Bil. 11 Thn. 1965 (Treas. Circ. Let. No. 11/1965), Preference in the Purchase of Domestically Made Articles (14 Aug. 1965) (referencing a General Circular Memorandum No. 5 of 1963); Arahan Perbendaharaan (Treas. Instr.), §169.2 (1997).
139. See Second Malaysia Plan 1971-1976, foreword (25 June 1971).
140. Ibid., §3.
141. Ibid., (emphasis added); see also §§ 20, 140 ('The strategy is founded on the philosophy of active participation not on disruptive redistribution.').
142. Ibid., §3 (emphasis added).
143. Datuk Seri Dr. Mahathir Bin Mohamad (then Prime Minister of Malaysia): The 2004 Budget Speech, ¶99 (12 Sept. 2003 at Dewan Rakyat (the House of Representatives)) (official translation).
144. Thomas Sowell also criticizes these policies as not achieving a reduction in income differences between the races, but that does not appear to have been their purpose: T. Sowell, Preferential Policies: An International Perspective (1990), at 45-49.
145. Emsley, supra note 89, at 65.
146. BERNAMA (Malaysian National News Agency), 'Award of Government Contracts Based on Contractors' Capability', Malaysia General News, 5 Dec. 2000.
147. Ibid.
148. Arnold, 'Scandal Lets Malaysia Prove Its Mettle', The New York Times, 16 Oct. 2002, W 1, col. 4.
149. Ibid., at 65.
150. BERNAMA, supra note 122.
151. BERNAMA (Malaysian National News Agency), 'M'sians Urged Not to Recoil into Own Racial Cocoons', Malaysia General News, 18 May 2001.
152. BERNAMA (Malaysian National News Agency), 'Dr Mahathir Tells Bumi Entrepreneurs to Stop Depending on Govt', Malaysia General News, 6 Aug. 2002.
153. Stafford, supra note 75, at 572.
154. Ibid., at 573.
155. BERNAMA (Malaysian National News Agency), 'Contract Value of All Class Bumi Contractors Increased', Malaysia General News, 20 Sept. 2002.
156. See Financial Procedures Act 1957 (Act 61, amended 1972), §4.
157. The minor exception is the monitoring role of procurement boards, which play a role in some types of procurement but which are themselves significantly controlled by the Finance Ministry. See Arahan Perbendaharaan (Treas. Instr.) No. 191 (1997).
158. See Financial Procedures Act 1957 (Act 61, amended 1972), §4. M.P. Jain calls the Malaysian judiciary's role in determining whether administrative agencies have overstepped their rule authority under laws such as the Financial Procedures Act 'almost symbolic': Jain, 'Administrative Law in Malaysia' in M.B. Hooker (ed.), Malaysian Legal Essays (1986), at 213, 214, 222-223; see also Interpretation Act, 1948 (Act 81, amended 1967), §§ 20, 25
159. M. P. Jain, Administrative Law of Malaysia and Singapore (1997), at 91, 105-106.
160. Sedition Act 1948 (Act 15) §§ 3(1)(a), 3(1)(f) (amended 1969).
161. See Jain, supra note 134, at 568-569
162. Lim Kit Sang v United Engineers of Malaysia [1988] 1 SCR at 22
163. [1988] 2 MJL 25.
164. The authors are not aware of any case in which a provider has challenged his status in Malaysian courts. Some cases, which deal with other status-type administrative decisions, appear to indicate that such a claim could be entertained by the courts. See, e.g., Ketua Pengarah Kastam v Ho Kwan Seng [1977] 2 MJL 152
165. Metal Industry Employees v Registrar of Trade Unions [1992] 1 MLJ 46
166. Keith Sellar v Lee Kwang [1980] 2 MJL 191
167. Au Kong Weng v Bar Committee Pahang [1980] 2 MJL 89
168. DK Gudgeon v Professional Engineers Board [1980] 2 MJL 181
169. Tann Boo Chee, David v Medical Council of Singapore [1980] 2 MJL 116
170. Tan Choon Chye v Singapore Society of Accountants [1980] 1 MLJ 258
171. Lim Ko v Board of Architects [1966] 2 MLJ 80.
172. However, in order for a provider to prevail it would be likely to have to show that it had a legitimate expectation of the status which it was denied: Jain, supra note 134, at 273-274
173. which might be difficult, given the 'private law' perspective from which government contracting decisions are viewed by Malaysia's courts: Ibid., at 568-569.
174. See also ibid., at 606-610 (for a discussion of some of the obstacles to gathering evidence that a challenger to a decision by an administrative agency might have); 655-657 (for a discussion of the discretion courts have to hear or refuse to hear challenges of administrative agency decisions).
175. Sudha CKG Pillay, 'The Changing Faces of Administrative Law in Malaysia', 1 Malayan LJ (1999) pp. cxl, cxli;
176. See also Jain, supra note 134, at 255.
177. The dangers posed for judges who take on the executive were powerfully demonstrated in 1988, when a High Court ruling, which nullified for registration irregularities UMNO party elections that had narrowly left Mahathir in power, precipitated the removal of, first, the Lord President of the Supreme Court (principally for criticizing moves by Mahathir to consolidate the executive's power against the judiciary), and then five other Supreme Court judges, who rose to the Lord President's defence. See Gomez, supra note 78, at 62-63
178. Marks, 'Judicial Independence', 68 Austl LJ (1994) 173, at 177-179 (stating inter alia that these events 'resulted in a judiciary stripped of whatever independence it formerly had');
179. Case, supra note 82, at 116-117.
180. See Jain, supra note 134, at 568-569.
181. For the details, see Arrowsmith, 'Reviewing the GPA: The Role and Development of the Plurilateral Agreement After Doha', 5 J Int'l Econ L (2002) 761, at 768.
182. Ibid., at 769.
183. Australian Department of Foreign Affairs and Trade, WTO Agreement on Government Procurement: Review of Membership Implications (1997).
184. WTO Trade Policy Review: Malaysia, WT/TPR/S/31, 3 Nov. 1997, para. 122.
185. Interestingly in this regard Malaysia has consistently included exceptions to its various preferences programmes for procurement paid for by international development organizations, such as the IMF and World Bank. See, e.g., Surat Pekeliling Perbendaharaan Bil. 7 Thn. 1974 (Treas. Circ. Let. No. 7/1974), Keutamaan Kepada Bumiputra Dalam Perolehan Barang-Barang, Perkhidmatan Dan Kerja-Kerja (Preferences for Bumiputera in the Procurement of Goods Services and Works), §11 (1 June 1974). Current regulations simply require any such procurement to be done in accordance with requirements established by the funding organization: Surat Pekeliling Perbendaharaan Bil. 2 Thn. 1995 (Treas. Circ. Let. No. 2/1995), Tatacara Penydiaan, Peniliaan dan Penerimaan Tender (Tender Preparation, Evaluation and Acceptance), §§ 2.2.3, 4.3 ff, 8.4 (10 Apr. 1995).
186. Singapore Ministerial Declaration (Adopted 13 Dec. 1996), WT/Min(96)/ DEC, ¶21(18 Dec. 1996); see also Abbott, 'Rule-Making in the WTO: Lessons form the Case of Bribery and Corruption', 4 J Int'l Econ L (2001) 275, at 287.
187. WTO, Ministerial Declaration, Ministerial Conference Fourth Session, 14 Nov. 2001 (WT/MIN(01)DEC/W/1), para. 26.
188. Doha Declaration, para. 26.
189. See Note by the Secretariat, Work of the Working Group on the Matters Related to the Items I-V of the List of Issues Raised and Points Made, WT/WGTGP/W/32 (23 May 2002); Note by the Secretariat, Work of the Working Group on the Matters Related to the Items VI-XII of the List of Issues Raised and Points Made, WT/WGTGP/W/33 (3 Oct. 2002); see also Abbott, supra note 146, at 289 (noting the passively named 'List of the Issues Raised and Points Made').
190. See Elements for an Agreement on Transparency in Government Procurement, Communication from the European Communities, WT/WGTGP/W/26 (5 Nov. 1999) (hereinafter EU Draft Agreement); Communication from Hungary, Korea, Singapore, and the United States, Preparations for the 1999 Ministerial Conference, The WTO's Contribution to Transparency in Government Procurement, WT/GC/W/384, WT/WGTGP/W/27, Annex, Draft Text for an Agreement on Transparency in Government Procurement Articles X, XII (9 Nov. 1999) (hereinafter US Draft Agreement).
191. Ibid., Art. X(2)-(3); EU Draft Agreement, supra note 150, Art. 8(1)-(2).
192. Ibid.
193. See US Draft Agreement, supra note 150, Arts VIII(2.2)-VIII(3), IX(1); EU Draft Agreement, supra note 150, Arts 7(2), 8(3).
194. See US Draft Agreement, supra note 150, Art. VIII(2); EU Draft Agreement, supra note 150, Art. 7(2).
195. US Draft Agreement, supra note 150, Art. IX(1); EU Draft Agreement, supra note 150, Art. 8(3).
196. US Draft Agreement, supra note 150, Art. IX(1).
197. EU Draft Agreement, supra note 150, Art. 8(3).
198. World Trade Organization, WT/WGTGP/W/41, 17 June 2003, Working Group on Transparency in Government Procurement, Positive Effects of Transparency in Government Procurement and its Implementation: Communication from the European Communities.
199. See, e.g., ibid., ¶10 ('It is not the case, as it is often claimed, that new multilateral TGP rules will open DC procuring markets to suppliers from developed countries.') (17 June 2003); Communication from the United States, Proposal for a Work Plan to Build on the Progress of the Working Group, ibid., ¶9 ('The Doha Ministerial Declaration has narrowed scope by limiting its parameters to "transparency aspects, and explicitly providing that an agreement will neither restrict domestic preferences nor require market access commitments".') (30 Sept. 2002)
200. Doha Declaration, supra note 148, ¶26.
201. See, e.g., Note by the Secretariat, Report of the Meeting of 6 Oct. 1999, WT/WGTGP/M/9, ¶11 (9 Nov. 1999) (relating suspicions voiced by Malaysia's representative on behalf of itself and other developing country members that in the view of developed country members 'an agreement on transparency in government was merely a building block towards the establishment of a multilateral framework for government procurement')
202. cf Abbott, supra note 146, at 290 (stating on the basis of interviews with trade officials from the US and EU that '[t]he whole aim of the [TGP] exercise from the US and EU perspectives, was to multilateralize the GPA').
203. For opposition to the Transparency Agreement from a developing country perspective, see Khor, 'WTO "Singapore Issues": What's at Stake and Why it Matters', in TWN Briefings for Cancun, No. 3, available at www.twnside.org.sg.
204. See also United Nations Development Programme et al., Making Global Trade Work for People (2003), ch 15, noting the extent to which a new agreement on transparency in procurement may reduce domestic policy space for linkages and give rise to extra implementation costs for developing countries.
205. For Malaysian opposition to the Transparency Agreement, see Rafidah Aziz, Minister of International Trade and Industry, Malaysia, 'Doha Development Agenda - The Way Forward', in The Federal Trust, Where Next for the WTO? After Cancun: Views, Ideas and Proposals by Trade Ministers (2003), at 31.
206. See, e.g., Note by Secretariat, Report of the Meeting of 18 June 2003, WT/WGTGP/M/18, ¶12 (relating comments by the Malaysian representative. 'In addition there were two elements that his delegation - together with those of other developing countries - had repeatedly emphasized, namely domestic review procedures as well as linkage to the WTO's DSU. In his view, these elements were not concerned with transparency and should never be a part of an agreement on transparency in government procurement') (7 July 2003); Report of the Meeting of 7 Feb. 2003, Working Group on Transparency, WT/WGTGP/M/17, ¶22 (15 Apr. 2003); Working Group on Transparency, WT/WGTGP/M/15, ¶¶ 13 (relating to the statement by the Malaysian representative, 'Developing countries ha[ve] difficulties with essentially two elements, namely domestic review procedures and the application of WTO dispute settlement procedures') 47, 78, 83 (9 Jan. 2003); Report of the Meeting of 25 Sept. 2000, Working Group on Transparency, WT/WGTGP/M/11, ¶ 31, 33 (19 Dec. 2000); Report of the Meeting of 7 June 2000, Working Group on Transparency, WT/WGTGP/M/10, ¶16 (1 Aug. 2000).
207. See, e.g., WT/WGTGP/M/17, supra note 163, at ¶23.
208. See, e.g., ibid., at ¶16.
209. See, e.g., ibid., at ¶36 (relating comments by the Brazilian representative: 'his authorities experience has been that suppliers who lost a procurement would use each and every possible recourse, administratively and judicially, to delay the procurement, perhaps even feel that if they could protract the whole bidding process long enough the whole bidding process could be declared null and void and they could get a second chance').
210. Ibid.
211. Courts of Judicature Act 1964 (Act 91); see also supra notes 133-140, and accompanying text.
212. Ostry, 'The World Trading System: In Dire Need of Reform', 109 Temple Int'l & Comp LJ (2003) 109-111.
213. Finger and Schuller, 'Implementation of Uruguay Commitments: The Development Challenge', in The World Bank Research Department, Policy Research Working Paper (1999).
214. In a statement posted on the Malaysian Ministry of International Trade and Industry (MITI) website soon after the collapse of the Cancun Ministerial Conference, MITI Minister, YB Dato'Seri Rafidah Aziz made this explicit: 'The Developing countries do not want a repeat of earlier experiences where they had signed on to agreements such as Trade-related Investment Measures (TRIMS) and Trade-related Aspects of Intellectual Property Rights (TRIPS) which are seen as to be imbalanced as they restrict their ability to pursue development objectives. The price for developing countries to pay would be too high': Cancun WTO Ministerial Conference: The Malaysian Perspective, available at http:// www.miti.gov.my/wto-cancun.html (last accessed 12 Jan. 2004).
215. See Surat Pekeliling Perbendaharaan Bil. 2 Thn. 1995 [Treas. Circ. Let. No. 2/1995] §13.2.3.
216. See Arahan Perbendaharaan (Treas. Instr.), Nos. 170.3, 198.1(b), 198.3 (1997).
217. See Official Secrets Act 1972 (Act 88), §§ 2(1) (defining 'official secrets' to include inter alia 'Cabinet documents, records of decisions and deliberations including those of Cabinet committees' and 'any other official document, information and materials as may be classified as "Top Secret", "Secret", "Confidential" or "Restricted" as the case may be, by a Minister ... or such public officer appointed under section 2B'), 8 (making unauthorized distribution (even inadvertent) or knowing receipt of designated documents punishable by a prison sentence of 1 to 7 years) (26 Sept. 1972). See also Jain, supra note 134, at 611-619 (discussing inter alia, Lim Kit Siang v Public Prosecutor [1979] 2 MJL 37 (upholding designation of purely administrative material, '[b]roadly speaking, it may be said that secret official information within the meaning of section 8 of the Act is really the government information the confidentiality and secrecy of which depends upon the manner in which the government treats the information.')
218. Datuk Haji Dzulkifli v Public Prosecutor [1981] 1 MJL 112, 113 ('[A] document does not lose its status as a secret document merely because.... [it] happens to contain information which is already known to the public.')). According to K.S. Jomo, in operation this has meant that ' [a]lmost everything has become confidential.
219. As far as the government is concerned when in doubt, chop it as secret', quoted in Reyes, 'The War Against Cronies', 26 No. 43 Asiaweek, 3 Nov. 2000, 1.
220. Not surprisingly, this type of effect is among those which the US has cited in favour of concluding a strong TGP agreement. See United States Trade Representative, Annual Report on Discrimination in Foreign Government Procurement (30 Apr. 1996) (hereinafter USTR Annual Report (1996)), §III.
221. See Case, supra note 82, at 99 ('Politics in Malaysia can be conceptualized in terms of a steep pyramid ... [a]t is apex looms a national leader ... tightly concentrating power in his prime ministerial office, then dispensing benefits to elites in patrimonialist ways'), 111-114
222. Gomez, supra note 78, at 6-26, 35, 60-61
223. D. Horowitz, Ethnic Groups in Conflict (1985), at 666-669
224. Gomez, supra note 99, at 77-80.
225. Ibid.
226. see also, e.g., Khalid and Rasip, 'Corruption and the Malaysian Situation', in Aliran (ed.), Corruption (1981), at 74, 76-82
227. 'Leaders Support PM's Stand on Government Contracts', New Straits Times, 4 Apr. 2002, at 2
228. 'Con-fusing', Malay Times, 30 Mar. 2002, at 3
229. Zain, 'Reform: Questioning our Feudal Loyalty; Malaysians are New People', 26 No. 43 Asiaweek, 3 Nov. 2000, at 1
230. Reyes, supra note 174, at 1
231. 'No Corruption in Pularek Project, Says Agency', New Straits Times, 5 July 2000, at 1
232. 'Shahrir to be UMNO "Postman"', New Straits Times, 22 May 2000, at 2
233. 'Government Agencies Rapped for not Doing Enough for the Poor', New Straits Times, 14 May 2000, at 14
234. Jaysankaran, 'Revenge Attack', Far E Econ Rev, 30 Mar. 2000, at 25
235. Jaysankaran, 'Regional Briefing', Far E Econ Rev, 30 Mar. 2000, at 16
236. 'Malacca Takes Action Against Civil Servants', New Straits Times, 26 Mar. 2000, at 4
237. 'Bank Submits List of Errant Staff', New Straits Times, 22 Mar. 2000 at 4
238. 'Preparations to be Made for Sanggang By-Election', New Straits Times, 7 Mar. 2000, at 2
239. 'UMNO Divisions Must Nominate all Posts', New Straits Times, 7 Mar. 2000, at 18
240. 'Malacca Takes Steps to be Fair to Supporters', New Straits Times, 6 Mar. 2000 at 4
241. 'Unity Versus Choice as UMNO Polls, New Straits Times, 9 Jan. 2000, at 13
242. 'Caterers Fear Losing Contracts', New Straits Times, 28 Feb. 2000, at 10
243. Funston, 'Malaysia's Tenth Elections: Status Quo, Reformasi, or Islamization?', 22(1) Contemp Southeast Asia 23, 32.
244. See US Draft Agreement, supra note 150, Arts V(2), VIII(1), IX(1); EU Draft Agreement, supra note 150, Arts 5(4), 7(1), 8(3); Gomez, supra note 99, at 78-80.
245. US Draft Agreement, supra note 150, Arts IV, V(2), VIII(1), IX(1); EU Draft Agreement, supra note 150, Arts 5(4), 7(1), 8(3); 'Leaders Support PM's Stand on Government Contracts', supra note 183, at 2 ('If Umno does not want division heads to expect government awards, then the party should perhaps increase the allocation given to each division to carry out activities', quoting Marang UMNO deputy head Datuk Dr Bdul Latiff Awang).
246. US Draft Agreement, supra note 150, Arts VII(2), X; EU Draft Agreement, supra note 150, Arts 7(1), 8; Jaysankaran, 'Revenge Attack', supra note 177, at 25 (describing actions of the Chief Minister of the state of Malacca, who sought to punish those who had voted for the opposition Islamic party in 2000 by issuing an order to the various governmental entities located in his state, placing 'private clinics, architects, a property valuer and several providers on a blacklist where they [were] excluded from government contracts'
247. See also Jaysankaran, 'Regional Briefing', supra note 177, at 16 (reporting that 20 contractors and professionals were banned as part of the action);
248. 'Malacca Takes Steps to be Fair to Supporters', supra note 177, at 4 (quoting the Malaccan Minister as saying, 'It is only right that we replace [those who voted for other parties] with supporters who "swim and sink" with the government';
249. 'Bank Submits List of Errant Staff', supra note 177, at 4 (detailing actions by Bank Islam against errant employees and contractors done to appease state and get funds back, and actions taken in compliance by federal government-owned companies such as Petronas and Telekom to blacklist any doctors or lawyers who sided with opposition candidates).
250. Jain, supra note 134, at 214.
251. See, e.g., WT/WGTGP/M/15, supra note 163, ¶¶ 13 (relating statement by Malaysian representative, 'Developing countries ha[ve] difficulties with essentially two elements, namely domestic review procedures and the application of WTO dispute settlement procedures. Although the details of some other elements might also cause some difficulties, by and large, they were acceptable'), 42 (relating comments by the Singapore representative: 'a bid challenge mechanism was an integral part of national procurement systems.');
252. WT/WGTGP/M/17, supra note 163, ¶65 (relating comments by the US representative: 'Without a link to the DSU, an agreement could not be effective').
253. Prime Minister of Malaysia, Mahatir Bin Mohamad, supra note 119.
254. See supra note 119.
255. See ibid.
256. Joint Communication for Bangladesh (on behalf of the LDC Group), Botswana, China, Egypt, India, Indonesia, Kenya, Malaysia, Nigeria, Philippines, Tanzania, Uganda, Venezuela, Zambia and Zimbabwe, Singapore Issues: The Way Forward, WT/GC/W/522, ¶6 (12 Dec. 2003).
257. Abbott, supra note 146, at 287.
258. See ibid.
259. 'Round-the-Clock Meeting Produces Historic Breakthrough', WTO News - 2004 News items, available at http://www.wto.org/english/news_e/news04_e/ dda_package_sum_31july04_e.htm (last visited 15 Aug. 2004).
260. See Decision Adopted by the General Council on 1 Aug. 2004, Doha Work Programme, WT/L/579, ¶1(a)-(b) (2 Aug. 2004).
261. Ibid., ¶1(g) (Relationship between Trade and Investment, Interaction between Trade and Competition Policy and Transparency in Government Procurement: The Council agrees that these issues, mentioned in the Doha Ministerial Declaration in paragraphs 20-22, 23-25 and 26 respectively, will not form part of the Work Programme set out in that Declaration and therefore no work towards negotiations on any of these issues will take place within the WTO during the Doha Round') (emphasis added).
262. See Jayasuriya, 'Governance, Post-Washington Consensus and the New Anti-Politics', in T. Lindsey and H. Dick (eds), Corruption in Asia: Rethinking the Governance Paradigm (2002), at 24, 31.
263. Westhuizen, supra note 72, at 91.
264. See Jaysankaran, 'The New Way: Thinking Small', Far E Econ Rev, 6 Nov. 2003, 14.
265. Since taking office Badawi has publicly made cleaning up governmental corruption, particularly in the area of government procurement, a focus of his administration: Jaysankaran, 'Tycoons in Trouble', Far E Econ Rev, 15 Jan. 2004, 50.