Unlocking potential for penal tourism

Malaysia can attract white-collar criminals seeking to do community service

WHEN he sentenced Rajat Gupta, the former McKinsey & Co boss, on Wednesday to two years in prison for insider trading-related offences, Judge Jed S. Rakoff of the Federal District Court in Manhattan spurned the chance to be the midwife at the birth of penal tourism.



We've heard of ecotourism, medical tourism, religious tourism, sports tourism, agritourism, education tourism and even sex tourism. So why not a type of tourism that caters for people convicted of crimes, offering these people a chance to atone for their wrongdoings through community service away from home?

Gupta's lawyers suggested precisely this in a sentencing memorandum submitted on Oct 17. In requesting that the court impose a sentence of probation with the condition that Gupta perform “a rigorous full-time programme of community service”, the lawyers proposed two options.

The first is that he's assigned full-time for a few years to Covenant House, which provides emergency shelter and other services for homeless, runaway and at-risk youth.

The idea is that he will be based in New York to work directly with the children at Covenant House's facility in Manhattan, and to help Covenant House come up with strategic initiatives for expansion and improvement. There's no tourism element here because New York is one of several places where Gupta maintains a residence.

The second option, in the words of the lawyers, is “less orthodox but innovative”.

No kidding. The plan is for Gupta to go to Rwanda to contribute towards improving the delivery of health care (focusing on HIV/AIDS and malaria) and agricultural development.

The Rwandan government has agreed that if the judge accepted the proposal, Gupta would be under its direction and supervision, along with Care USA, a humanitarian and development organisation. He would live and work with government officials in the African nation's rural districts.

In the sentencing memorandum, Gupta's lawyers explained: “We recognise this is an unusual community service proposal, but one that could potentially provide great benefits to large numbers of Rwandans desperately in need of help, and which Mr Gupta is uniquely situated to perform.

“Moreover, it would require Mr Gupta to confront significant hardships and would thus constitute punishment commensurate with the seriousness of the offence, as Gupta would be thousands of miles from his family and friends, and would be living in basic accommodations in rural areas of the country.”

However, Rakoff rejected both proposals, labelling them as “Peace Corps for insider traders”. He instead stuck to the conventional, sending Gupta to jail, slapping him with a US$5mil fine and ordering him to be placed under a year of supervised release after the prison term ends.

But the idea of penal tourism is now out there. There's rich potential in welcoming white-collar criminals who are made to do community service in faraway places.

Besides the direct impact of their work, these wealthy law-breakers will draw the international spotlight, thus raising the profile of the host countries. The criminals are likely to function as magnets that attract family members, friends and associates to come over. All this attention can translate into cash inflows for penal tourism destinations.

Malaysia should seize this opportunity to claim the first-mover advantage in penal tourism. As outlined by Gupta's lawyers, the key is to have plenty of community service projects that involve “significant hardships” so that the criminals (or penal tourists, to use the politically correct term) are indeed doing work that can be widely accepted as punishment that fits the crimes.

Here are some projects that can be used to promote Malaysia as a hotspot for penal tourism:

Stick no bills: The problem with the Ah Longs is not only their frighteningly high interest rates and intimidating debt collection tactics. Their annoying advertising strategy is to plaster signs, walls, lamp posts, phone booths and other surfaces with stickers bearing their contact numbers. Penal tourists can pay their debt to society by painstakingly removing these stickers and doing restoration work if there's damage.

Setting the record straight: When somebody attempts to break a trivial record or establish a new one for example, the longest popiah, largest group of people doing Gangnam Style moves, most Facebook “likes” in 24 hours penal tourists will be present to verify the feat.

Gaydar duty: Penal tourists will be tasked with compiling statistics on the lesbian, gay, bisexual and transgender (LGBT) community. They will rely on a leaflet recently issued by the Yayasan Guru Malaysia Bhd and Putrajaya Consultative Council of Parent-Teacher Associations to spot those with LGBT tendencies.

Pointing in the right direction: Armed with laser pointers, penal tourists will be stationed at concerts, plays and cinemas to shame the inconsiderate people who use mobile phones, or who talk too much and loudly.

The scoop on food: Penal tourists will be put in charge of crowd control and apportioning of food at government open houses during festivals, AGMs of listed companies and popular hotel buffets. Their job is to ensure there's queuing and that there's no wastage of food. Now that's true hardship.

Garbage or generosity?: There's often a lot of unusable stuff among items given away to welfare homes and charitable organisations. The penal tourists can be deployed to sift through the piles of things.

Smoking wardens: This is strictly for penal tourists who relish a tough challenge with a dash of danger. They will patrol smoke-free zones to tick off smokers who insist on having a puff. The tourists will be required to sign indemnity forms before starting work.

Compelling courtesy: Instead of air marshals, we have bus and train marshals. The penal tourists will ride buses and trains to zero in on passengers who refuse to give up seats for the elderly and the disabled, pregnant women, and mothers with young children. Boarding passengers who don't wait for others to disembark will be targeted as well.

To delete or not to delete: Online political forums can get wild and woolly if they aren't moderated vigilantly. Penal tourists will be entrusted with the gruelling job of monitoring forums to ensure there's no flaming and spamming, use of inappropriate language, and seditious or defamatory content. If that sounds punishing, Malaysia is on track to becoming a top penal tourism destination.

By The Star Executive editor Errol Oh is happy to be just a plain tourist.

Related articles:
Ex-Goldman director, Wall Street Titan Gupta gets 2-year jail sentence 
Ex-McKinsey CEO’s case highlights swapping of secrets in corporate world
 

Legal profession unattractive in Malaysia?

Malaysia is not a hub for legal services in the region. The best minds are more interested in practising in other jurisdictions where the work and pay is better.

IT’S a funny world we live in. Today’s unalterable truth may be tomorrow’s shibboleth.

For the legal profession in Malaysia, the seemingly unalterable truth is – do not join the profession unless you are prepared to face the harshness of the working conditions.

However, if you persevere, the returns can be very rewarding and fulfilling.

The National Young Lawyers Committee (NYLC) conducted a survey on the working conditions of young lawyers in late 2011, and the results which were recently released can be found at www.malaysianbar.org.my.

It indicates that there is or will be a mass exodus of young lawyers from the legal profession because of the lack of work-life balance, low pay and bad working conditions.

The survey shows that the average starting pay is RM3,000-RM3,500 in the Klang Valley and RM2,000-RM2,500 outside of the Klang Valley – just enough to support the cost of living.

The average working hours are between 51 hours to more than 60 hours a week. Almost all young lawyers work weekends.

This means that, in the Klang Valley, based on the average monthly pay of RM3,250 (RM39,000 per annum, excluding bonuses) and average working hours of 55 hours a week (2,860 hours over 52 weeks), over a year, first-year lawyers are only paid RM13.64 per hour. It is much lower for pupils.

Outside of the Klang Valley, based on the average monthly pay of RM2,250 (RM27,000 per annum, excluding bonuses) and the same average working hours, over a year, first-year lawyers are only paid RM9.44 per hour.

Some recommendations were made by the NYLC to increase the starting pay and improve working conditions.

Some quarters cynically cried out that young lawyers are making demands despite being of low quality.

They say that young lawyers should not demand higher pay unless they have proven themselves.

Pause for a moment and consider what the survey results really mean. Firstly, it means that the profession, as a whole, is not attractive.

Students, when choosing a degree, will second-think pursuing law. Law students may choose not to practise upon completing their law degree.

Some will be driven by passion, but not everyone has enough passion to endure the initial hardship.

The best minds may instead be more interested in other professions. Why isn’t the profession able to retain these talents?

Generally, Malaysia is not a hub for legal services in the region. The best minds are more interested in practising in other jurisdictions where the work and pay is better.

The profession must improve and be the main legal services hub in the region. But the paradox is, to do so, higher salary and better working conditions are also required to attract and retain the best talents.

Secondly, not having an attractive entry point does not augur well for diversity in the legal profession.

The legal profession should be diverse because lawyers are guardians of rights and liberties of people of all gender, races, backgrounds or classes.

The current starting salary and working conditions, by chance or design, targets only a single demographic – fresh graduates, middle or upper middle class, living with their family, and having little family or financial commitments.

A prospective entrant who has dependants would find it hard to pursue a career in law given the low average starting pay, the long hours and the non-existing weekends.

To quote Lord Falconer: “If you don’t catch people when they’re 15 or 16, when it comes to choosing judges 30 or 40 years later, you won’t have the diversity you need to ensure that judges reflect society”.

Thirdly, with the starting salary and working conditions of the legal profession failing to attract and retain talents and not encouraging diversity, legal access would be significantly affected. Legal access also means having access to a lawyer of your choice.

The survey shows that 28.17% of the respondents in the Klang Valley and 15.29% of the respondents outside of Klang Valley are leaving the profession in the next five years and a further 38.73% of the respondents in the Klang Valley and 48.24% of the respondents outside of Klang Valley are uncertain of their future in the legal profession.

These staggering numbers show that lawyers do not want to be lawyers anymore.

Society will be affected because the choice of lawyers would be limited. There will not be a greater pool of talent to choose from for clients or when it comes to the appointment of judges.

The quality will have to be compromised with whatever the supply is. In the long run, it will be detrimental to the legal system in Malaysia.

The results and the recommendations by the NYLC are not unjustified.

It would be convenient to blame the law schools for failing to produce competent graduates. But employers must look at themselves and ask if they have been contributing to this problem.

The unalterable truth of today must be questioned. For employers who are truly concerned about attracting and retaining the best talents, the survey results and recommendations should be taken seriously.

For those who choose to ignore the survey results and recommendations, do so at your own peril.

PUTIK LADA 

By NEW SIN YEW
newsdesk@thestar.com.my

 > The writer is a young lawyer. Putik Lada, or pepper buds in Malay, captures the spirit and intention of this column – a platform for young lawyers to articulate their views and aspirations about the law, justice and a civil society. For more information about the young lawyers, visit www.malaysianbar.org.my.

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Jul 30, 2012

World Bank: Singapore, Hong Kong and New Zealand still ‘easiest’, most business-friendly, Malaysia ranked 12th

Singapore, Hong Kong and New Zealand continue to be the easiest countries in the world to do business in, while local entrepreneurs in developing nations are finding it easier to do business than at any time in the last 10 years, according to the World Bank and IFC's latest Doing Business report. 

The improvement in the ease with which people are saying they are able to do business in the world’s developing countries highlights “the significant progress that has been made in improving business regulatory practices across the globe”, according to a summary of the 282-page report’s findings.

The study looks at 185 countries, and examines such indicators as how long it takes to start a business, and how difficult and time consuming it is to submit tax returns, export or import goods, obtain credit and register a property.

Year's 'most improved'

Topping the list of economies that registered the biggest improvements in the ease of doing business over the past year were Poland, Sri Lanka, Ukraine, Uzbekistan, Burundi, Costa Rica, Mongolia, Greece, Serbia, and Kazakhstan.

Australia moved up to 10th place from 15th, Malaysia to 12th from 18th, and Taiwan to 16th from 25th. (See chart, below.)

Also moving up were the UAE (to 26th from 33rd), Italy (to 73rd from 87th), and the Russian Federation (112th from 120th).

Decliners incuded Saudi Arabia (22nd from 12th), Israel (38th from 34th), Argentina (124th from 113th) and Kenya (121st from 109th).

The report, Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises, is the tenth in the World Bank/IFC’s Doing Business series.

Since the reports were first published, they have recorded “nearly 2,000 regulatory reforms implemented by 180 economies”, a summary of the findings notes, adding that such reforms have resulted in such improvements as a 20-day decline in the average time it takes to start a business since 2005 – to just 30 days, from 50.

And in low-income economies,  “the average [time required] has been reduced by half”.

All of the five countries at the bottom of this year's ranking are in Africa. In descending order, they are the Democratic Republic of the Congo, Eritrea, Republic of the Congo, Chad, and the Central African Republic. Mauritius, in 19th place, emerges as Africa's most competitive economy, while South Africa, in 39th place, was down four places from last year's report.

Officials in such countries might take some comfort in some data included in the report that shows how countries compare in certain areas of business activity, for it reveals that even some of the countries considered the "easiest" to do business in have weaknesses. Although Hong Kong ranks second-easiest overall, for example, it is the 60th easiest country in which to register a property; while the United Kingdom, in seventh place, is the 62nd easiest in which to obtain electricity, behind such countries as Estonia, Chile, Bahrain, Thailand, Malaysia and Brazil.

To view the report, click here.

Ease of doing business rankings 2013
Country	Rank	2012 rank
Singapore	1	1
Hong Kong	2	2
New Zealand	3	3
United States	4	4
Denmark	5	5
Norway	6	6
United Kingdom	7	7
Korea, Rep.	8	8
Georgia	9	16
Australia	10	15
Finland	11	11
Malaysia	12	18
Sweden	13	14
Iceland	14	9
Ireland	15	10
Taiwan	16	25
Canada	17	13
Thailand	18	17
Mauritius	19	23
Germany	20	19

                  World Bank/IFC
Sources: International Adviser

Asian tour golf stars return to Malaysia CIMB Classic

PETALING JAYA: The talented trio of Kevin Na, Charlie Wi and Noh Seung-yul are taking trips down memory lane when they compete in the US$6.1mil CIMB Classic at the Mines Resort and Golf Club during 25-28 October, 2012
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Malaysia has been a happy hunting ground for the trio, who have all won tournaments here when they featured on the Asian Tour previously before moving on to the PGA Tour.

The 40-year-old Wi claimed the first of his seven Asian Tour titles at the 1997 Kuala Lumpur Open before establishing himself as one of Asia’s top golfers with six more victories, including the 2006 Malaysian Open.

Na, a Korean-American, enjoyed his career breakthrough by winning his maiden professional title at the 2002 Volvo Masters of Asia in Malaysia while the gifted Seung-yul has since emerged as one of the Asian Tour’s greatest talents in recent times.

Seung-yul has been touted as a potential top-10 player in the world and is currently training under swing guru Sean Foley, who is also the coach of 14-time Major champion Tiger Woods.

Former world No. 1 Woods will headline the CIMB Classic along with title holder Bo Van Pelt and inaugural champion Ben Crane.

The slender Seung-yul produced an impressive rookie season on the PGA Tour this year, notching three top-10s and 13 top-25s. He has also made 17 consecutive cuts on the PGA Tour dating back to April.

Seung-yul, who started hitting golf balls on the beach near his home when he was seven, said competing on the Asian Tour laid the foundation for his rapid rise in the game.

Sanctioned by the PGA Tour, Asian Tour and Professional Golf Association of Malaysia, the CIMB Classic will see a top class field of 48 players competing for the US$1.3mil winning purse.

The tournament will feature 30 players from the PGA Tour and the top 10 available players from the Asian Tour’s Order of Merit. Eight sponsors’ exemptions will make up the rest of the field, with two places reserved for Malaysian professionals. - The Star

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Taman Manggis land issue in Penang, a ‘Robin Hood story' or soap opera?

The twists and turns in the Taman Manggis land issue in Penang is starting to resemble a soap opera but it has also raised the question of whether the legal procedures are observed in the sale of state land.

THE showdown over a plot of land known as Taman Manggis or “mangosteen garden” in the heart of George Town is about to erupt in another slanging match on Nov 3.

Dubbed by some as the “Robin Hood story”, the Taman Manggis land has become one of the most controversial issues in Penang.

It has also become a rather entertaining saga of gamesmanship between Chief Minister Lim Guan Eng and his political secretary Ng Wei Aik on one side and the state Barisan Nasional Youth on the other.

The 0.4ha of land had been designated for affordable housing but before the project could take place, Barisan was toppled.

Lim’s administration has since reportedly sold the land for RM11mil to a Kuala Lumpur company that is planning to build a health tourism facility that includes a private dental hospital and hotel on the site.

That was how the Robin Hood thing came about, but with a twist where Barisan is accusing the Pakatan Rakyat government of being a distorted version of Robin Hood by taking land meant for the poor to give to the rich.

When Barisan accused the state government of selling the land at below market rate, Lim challenged it to buy the land for RM22.4mil. Lim probably thought Barisan would not take up the dare. After all, RM22.4mil is not small change.

But Barisan agreed and announced that it had set up a special purpose company to buy and develop affordable homes on the land.

Caught on one foot, the state government was forced to respond and Ng issued an offer letter to Barisan. And that was when the soap opera began.

The Barisan side led by its State Barisan Youth chief Oh Tong Keong proceeded to pay 1% earnest money as is called for in such transactions.

The next step, as anyone would know, is for the lawyers from both sides to draw up a sales and purchase (S&P) agreement.

Once that is signed, the buyer would pay the balance of the requisite 10% and depending on the terms and condition, the full amount is usually paid within three months or more.

This is to enable the buyer to raise funds or secure a loan from the bank.

However, following the 1% payment, Lim demanded that the Barisan pay up the rest of the amount within a month.

The outlandish demand saw a few jaws drop on the Barisan side. First, it is not possible for Barisan to cough up that kind of money in so short a time.

Another was the audacity of the demand.

“There is no S&P agreement in sight and the seller is demanding the full amount. Do they understand the laws of transaction? Without an S&P agreement, no one would want to pay RM22.4mil,” said architect Khoo Boo Soon.

Khoo, who was the former building director of the Penang Island Municipal Council (MPPP), is quite appalled at the frivolous way that state property is being treated.

He is incredulous that state land is being sold based on an offer letter by a political secretary on the instruction of the Chief Minister.

“I have been a government servant for more than 17 years. As far as I know, land transactions have to be discussed and decided by the state exco, the state legal adviser has to be consulted, the state secretary has to be involved. It cannot be a one-man decision, both parties need to sign an S&P agreement,” said Khoo.

The Barisan side was more direct. “This is government land, it belongs to the people. The land does not belong to the Chief Minister’s grandfather. We are not buying a bicycle or a car, this is about public land costing millions of ringgit,” said Oh.

The Barisan side had on Oct 3 written to the state government requesting for an S&P agreement before they proceed to pay up the rest of the money.

On Oct 8, the state secretary wrote back asking them to refer to the offer letter and to pay up within a month.

To compound this half-past-six state of affairs, rumours abound that the land has actually been sold to the Kuala Lumpur company.

No one can tell for sure because the state government has been tight-lipped about the issue.

Requests for information on the actual status of the land has run up against a stone wall.

On top of all that, the house that Lim is renting in Penang reportedly belongs to the wife of the major stakeholder of the Kuala Lumpur company.

The lady is also the cousin of state exco member Phee Boon Poh. The implication of all this is unclear but it does add spice to the story.

Many people following this soap opera are quite confused but that is what makes soap operas so addictive – there are lots of twists and turns.

The more discerning think Lim has no intention of selling the land to Barisan, hence the conditions and obstacles put in the way.

Some suspect the delay tactics are aimed at making Barisan give up.

But it would be a blow to Lim’s administration if the Barisan people actually purchased it and proceeded to build low-cost housing.

Lim would lose face, particularly given that his administration has failed to build any affordable housing since coming into power.

To make matters worse, this is happening amid an inflated property market on the island and where house prices have soared beyond the reach of 80% of wage earners.

Lim should be transparent about the issue. If the land has been sold, he should admit it.

If it is still in the state’s hands, then he should do the decent thing and use it for its original purpose.

Instead he is angry at being criticised and is punishing those who want to build affordable homes by doubling the price of the land.

A Penang lawyer said he is not surprised about the “Robin Hood issue”.

“What shocks me is the silence on the part of the Penang NGOs. They used to be so vocal on issues affecting public interest,” said the lawyer.

In the meantime, the countdown to Nov 3 has begun.

ANALYSIS BY JOCELINE TAN The Star/Asia News Network

P/S:  Landlady of CM’s residence is not wife of company stakeholder

Regarding the Taman Manggis land, the Star and State exco member Phee Boon Poh clarified yesterday that the woman in question is his cousin, she is not married nor is she the wife of the company stakeholder.

“My cousin and the stakeholder are just business partners,” he said.

The Taman Manggis land which had been designated for low-cost housing by the former Barisan Nasional government, became an issue when the Lim administration decided to sell it to a Kuala Lumpur company to develop a health tourism facility that includes a private dental hospital, hotel and multi-storey car park.

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Land sold for a song? Aug 11, 2012