UNIVERSITI TEKNOLOGI MARA KAMPUS KOTA KINABALU

SARJANA MUDA SAINS PENTADBIRAN (KEPUJIAN) Fakulti Sains Pentadbiran dan Pengajian Polisi AM228 (e-PJJ) Courses ADS 452 ETHICS IN ADMINISTRATION GROUP SAMA1A Prepared by Eddy Irwansyah Bin Dahlan 860311-12-5389 2011-608-726

Lecturer IntanSyahriza Azizan Date 01 JUN 2013

National Feedlot Corporation Sdn Bhd Question 1 Describe the background of the issue? All nine charges related to the National Feedlot Centre project (NPP) are thrown many parties including the opposition missed the Executive Chairman of National Feedlot Corporation Sdn Bhd (NFC), Datuk Seri Dr Mohamad Salleh Ismail, yesterday. In a brief press conference followed nearly two hours in the NFC farm here, Dr Mohamad Salleh, said the charges one by one especially made by the Strategic Director People's Justice Party (PKR), Rafizis Ramli. All charges including associate Minister of Women, Family and Community Development Minister Datuk Seri Shahrizat Abdul Jalil, read NFC lawyer Datuk Seri Muhammad Shafee Abdullah and answered Mohamad Salleh. The first charge - Prime Minister Datuk Seri Najib Razak and Deputy Prime Minister Tan Sri Muhyiddin Yassin, was charged with not telling the truth when you said just raise funds NFC RM181 million. Commenting on this, Mohamad Salleh said the disbursement of funds has two stages and both leaders said the fact that the NFC just got a RM181 million in 2009. He said RM250 million is included in the Special Loan Account (SLA), but the balance of the production process requires verification and certification of funds from a number of parties before the NFC acquire the entire loan. Second charge - the price of a cow NFC RM4, 481, compared to cattle sold in this country between RM2, 500 to RM2, 700. He said the allegations following the failure to understand the principles of account management that combines capital and operating costs (OPEX) in the price of a cow. This resulted in travel expenses and utilities are included in the price of livestock."Following the account management, more cows sold, the lower the price. This resulted in the early stages of a cattle prices NFC is expensive, "he said.

A third charge - Restaurant chain Meatworks receive discounts RM2.9 million from RFC (Realfood Company Sdn Bhd), a company marketing the NFC. She said, completely unrelated discount for joint Meatworks 70 other buyers also receive the same discount from the RFC and the actual amount of RM2.9 million RFC discounts and promotions to all registered buyers. Fourth accusation - NFC posted a loss of RM7 million to RM11 million in 2009 and will face the problem caused the government to write off the loan. Responding to the allegation, Mohamad Salleh said the view was immature conclusions because the agreement did not specify the loan repayment schedule and the company is still in a period that allows a refund within a certain lead the NFC does not violate the loan agreement. "Business is growing and this NFC allows a cattle prices down and increase profitability. Expected the company to be profitable in 2015 or 2016. Therefore, the accused failed NFC is unfair at this stage, "he said. Fifth counts - Rafizis claims NFC funds channeled from the National Meat and Livestocks Corporation Sdn Bhd (NMLC) and RFC. He said, NMLC created to allow the importation of cattle, slaughter and processing separated from distribution and retail functions managed RFC. "No funds into the pockets of individuals, especially directly linked to Shahrizat. Alleged irregularities and leakages occur is defamatory because all investments made on behalf of the NFC and NMLC, "he said. Sixth accusation - the purchase of two condominium units in Bangsar One Menerung cost RM13.8 million, RM9.8 million but allegations that distortion for the purposes that have nothing to do with the cattle industry. He said the condominium purchases made by the Board as there are unused funds for the abattoir project delayed due to factors not fault the NFC. "Actually placing the funds in a fixed deposit is less controversial, but do not give proper results to the company through a fund of that.

"The condominiums are discounted 20 percent with a rental guarantee of RM30, 000 a month, which is credited in the NFC. Suppose include RM13.8 million in fixed deposit at a rate of 2.75 percent will give a return of RM379, 500. "Rent was a return of RM360, 000 a year. Because the property was purchased 20 per cent lower than the market value if the property is assumed to be resold at market price, then there will be an additional RM2.76 million a year rental co RM360, 000, "he said. This means that the total profit was RM3.12 million, which is 22.6 percent higher than one year fixed deposit rate of 2.75 percent. He said the property was in the name of the company and will not have an advantage or wealth to private individuals. Seventh allegations - allegations the NFC get soft loans and land while thousands of experienced breeders are eligible for the grants. Mohamad Salleh said NFC actually not grant a loan with a loan must be repaid as any other commercial loans. Besides, he said, NFC has a social responsibility to create farm contract farming industry in this country that are not necessarily profitable. Eight counts - travel expenses of RM827, 579 while only 1,618 cattle slaughtered in 2009. Therefore, the cost of travel for each cattle was RM511 or 11 percent of the cattle price of RM4, 481. He said, so far the only spending about 0.3 percent of RM250 million, which is a small amount compared to the value of the project. In the early stages of the NFC, the management company must go to Australia to see a consultant and also buy cattle. Such expenditure was expected and included in the budget, "he said.

Question 2 Identify ethical issues involved in the given example. Tan Sri Muhyiddin Yassin last night asking National Feedlot Corporation Sdn Bhd (NFC) give an explanation since some issuesNational Center Fidlot related projects (PFN) various parties that received criticism, especially Dissidents. (Daily News - 16/11/2011) (RM250 million loan easy) diversion to the original purpose loans and not reach the target that involve misuse of money this case very clearly a breach of ethics in organizations.

This is the same question many Malaysians are now asking about the RM250 million National Feedlot Centre (NFC) scandal, especially after the shocking claim by the UMNO Youth leader Khairy Jamaluddin that the purchase of an RM10 million condominium from funds meant for cattle production was a strategic move, so that the money would not lie idle. The Prime Minister, Datuk Seri Najib Razak or his Deputy Prime Minister, Tan Sri Muhyiddin Yassin, who was Agriculture Minister when the NFC project was first mooted and approved, should answer this question in the minds of most Malaysians: Shouldnt someone go to jail? If the cast of personalities involved in the NFC scandal had all involved Pakatan Rakyat leaders and their family members, and not the incumbent Minister for Women, Family and Community Development, Datuk Seri Shahrizat Abdul Jalil and her family members, there is no doubt that the Malaysian Anti-Corruption Commission (MACC) would have swooped in on the case from Day One, the MACC investigators now crawling all over the cases and all the protagonists already subject to intense and sustained grilling alaTeoh Beng Hock. But this is not the case as there is total inaction, indifference and disinterest on the part on the MACC with regard to the RM250 million NFC scandal, despite the shocking revelations of a clear misappropriation of public funds in the case of RM10 million from the funds to promote cattle production to purchase a condominium for private benefit and

the RM800,000 to pay for the expensive overseas trip of the Minister and her family members on company funds. Shahrizats self-defence that her family does not deserve the allegations as they work very hard has only opened up a Pandoras Box. t is time that her husband Mohamad Salleh Ismail, her children Wan Shahimur Izran, Wan Shahimur Izmir and Wan Izzana Fatimah, break their silence. They should appear in the public to explain the numerous queries, contradictions and inconsistencies which had surfaced since the strictures of the Auditor-Generals Report 2010 about the NFC especially as the explanations and justifications made on their behalf such as by the UMNO Youth Leader Khairy Jamaluddin have only dragged the Shahrizat family and the NFC scandal deeper into the mud. This situation showed that there is a breach of ethic in NFC administration.

Question 3

Choose any ONE ethical theory that you have learnt, analyze the issue from the perspective of chosen theory In this issue of National Feedlot Corporation. The ethical theories ythat can be used to describe this situation is about Ethical Egoism -- Moral agents have an obligation to do what is in their own self-interests. Self-interest is NOT the same as "If it feels good, do it." For example, it may be convenient to fling a bag of trash out of the car window, but in the long term you could have contaminated drinking water and food sources, so it is not in your self interest. It may feel good to have unprotected sex, but the consequences of VD or pregnancy make it not in your best interest. Moral agent is simply one who is capable of telling right from wrong. So, ethical egoism does NOT mean everyone does what is in their own self interest.

Ethical egoism contrasts with ethical altruism, which holds that moral agents have an obligation to help others. Egoism and altruism both contrast with ethical utilitarianism, which holds that a moral agent should treat one's self (also known as the subject) with no higher regard than one has for others (as egoism does, by elevating self-interests and "the self" to a status not granted to others), but that one also should not (as altruism does) sacrifice one's own interests to help others' interests, so long as one's own interests (i.e. one's own desires or well-being) are substantially equivalent to the others' interests and well-being. Egoism, utilitarianism, and altruism are all forms of consequentialism, but egoism and altruism contrast with utilitarianism, in that egoism and altruism are both agent-focused forms of consequentialism (i.e. subject-focused or subjective), but utilitarianism is called agent-neutral (i.e. objective and impartial) as it does not treat the subject's (i.e. the self's, i.e. the moral "agent's") own interests as being more or less important than the interests, disires, or well-being of others. Although the utilitarian concept of enlightened self-interest could be considered an agent-focused form of the philosophy. Ethical egoism does not, however, require moral agents to harm the interests and well-being of others when making moral deliberation; e.g. what is in an agent's selfinterest may be incidentally detrimental, beneficial, or neutral in its effect on others. Individualism allows for others' interest and well-being to be disregarded or not, as long

as what is chosen is efficacious in satisfying the self-interest of the agent. Nor does ethical egoism necessarily entail that, in pursuing self-interest, one ought always to do what one wants to do; e.g. in the long term, the fulfillment of short-term desires may prove detrimental to the self. Fleeting pleasure, then, takes a back seat to protracted eudaimonia. In the words of James Rachels, "Ethical egoism [...] endorses selfishness, but it doesn't endorse foolishness. Ethical egoism is often used as the philosophical basis for support of right-libertarianism and individualist anarchism. These are political positions based partly on a belief that individuals should not coercively prevent others from exercising freedom of action

Question 4 Explain varoius strategies can be adapted as to encourage more ethical practices thus avoiding malpractices in the given example.

1. Anticipating specific threats to ethics standards and integrity in the public sector: attention needs to be paid to systemic threats that could weaken adherence to core public sector ethics values, and commitment to good governance, and to preparing the necessary political and management ; IMPLEMENTING EFFECTIVE ETHICS STANDARDS IN GOVERNMENT AND THE CIVIL SERVICE 2. Strengthening the ethical competence of civil servants, and strengthening mechanisms to support professional ethics: new techniques need to be undertaken to institutionalise ethically Competent decisionmaking, disinterested advice to Government, and, ultimately, an ethical culture which supports professional responsibility, self-discipline, and support for the rule of law ; 3. Developing administrative practices and processes which promote ethical values and integrity: new and proposed proethics laws require effective implementation through, for example, effective performance management techniques which support the entrenchment of the ethical values set out in Civil Service (and parastatal) Codes of Ethics.

Specific strategies which

should be considered include:

effective laws which require civil servants to give reasons for their official decisions, (for example: a Freedom of Information law);

management approaches which encourage all public officials and civil servants to deal positively with corruption and unethical practice when hey encounter it.

whistleblower protection law to protect appropriate 'public interest disclosures' of wrongdoing by officials;

ethics audits to identify risks to the integrity of the most important processes (for example financial management, tendering, recruitmen

and promotion, dismissal and discipline); new Human Resource Management strategies (which link, for example, ethical performance with entry and advancement, and ethical under-performance with disciplinary processes), merit based promotion and recruitment, antidiscrimination protections; training and development in the content and rationale of Ethics Codes, the application of ethical management principles, the proper use of official power, and the requirements of professional responsibility, and effective external and internal complaint and redress procedures.

Question 5 Identify some good principles from Islamic percective that can be applied to improve the situation. Freedom of Enterprise Islam gives complete freedom to economic enterprise. Each individual in an Islamic

society enjoys complete freedom in the earning of his livelihood. He can start, manage and organize any kid of business enterprise within the limits set by the Islamic Shariah. However, freedom does not and must not operate without a sense of responsibility. An individual is free to pursue his economic activities provided he respects the code of conduct prescribed for the profession, which broadly means choosing things lawful and shunning matters unlawful. The dictates of the Holy Quran and the teachings of the Prophet (sws) serve to set a scale in everybodys mind to distinguish between the lawful and the unlawful means of earning, and to prohibit or disapprove of all things that are either morally wrong or socially unacceptable. Islam, as a matter of principle, prohibits all activities which may cause harm either to the traders or the consumers in the market. It encourages the prevalence of free market where everyone earns his sustenance without government intervention. However, it puts certain restraints in order to eliminate the incidence of injustice and check malpractices and unlawful operations. In all other respects market in Islam is free from any state intervention. However, if the people fail to take guidance from the Holy Quran in matters relating to business transactions, an Islamic state will strive to organize the market transactions on sound Islamic principles. Freedom of enterprise in an Islamic market will, therefore, be regulated by the (i) dictates of the Holy Quran and the teachings of the Prophet Muhammad (sws) and (ii) the directives of the temporal authority. During the early centuries of Islam, this function was mainly performed by the institution of Muhasbah (headed by a Muhtasib or market inspector). The institution of Muhasbah was an important institution whose functions were broad-based and multifarious, chief among them being keeping a watch on the harmful practices prevalent in the market and the society and checking the incidence of injustice and malpractices in the market. Truthfulness in Business Transactions Islam encourages truthfulness in business transactions and raises the status of a truthful merchant so much so that he will be at par with the holy warriors and martyrs, in the Hereafter. The Prophet (sws) is reported to have said: The truthful merchant [is rewarded by being ranked] on the Day of Resurrection with prophets, veracious souls, martyrs and pious people. (Tirmidhi, No: 1130)

The seller and the buyer have the right to keep or return the goods as long as they have not parted or till they part; and if both the parties spoke the truth and described the defects and qualities [of the goods], then they would be blessed in their transaction, and if they told lies or hid something, then the blessings of their transaction would be lost. (Bukhari, No: 1937) Ttradition implies that Allah blesses business dealings if both the buyer and the seller are true to each other. Telling lies and hiding facts will result in the loss of divine blessing. A tradition reads. The Holy Prophet said: Traders are wicked people. The Companions asked: O Messenger, has Allah not permitted business? The Messenger replied: Of course He has declared trading lawful. But they (i.e. the traders) will swear by Allah and do evil, they will not speak but tell lies. (Ahmad, No: 14982)

Honouring and fulfilling Business Obligations Islam attaches great importance to the fulfilment of contract and promises. Islamic teachings require a Muslim trader to keep up his trusts, promises and contracts. The basic principles of truth, honesty, integrity and trust are involved in all business dealings. The Holy Quran emphasizes the moral obligation to fulfil ones contracts and undertakings. A verse states thus: O you who believe! Fulfil [your] obligations. (5:1) A tradition of the Prophet (sws) states thus: The Muslims are bound by their stipulations. (Abu Daud, No: 3120) In order to safeguard the interest of both the buyer and the seller it is desirable, according

to the Islamic teachings, to clearly define all the necessary details concerning the business deal. Each business contract should clearly specify the quality, the quantity and the price of the commodity in question. Thus, in a business contract the offer and acceptance should be made between the parties concerned on a commodity which is with the buyer and, which he is able to deliver. Any commodity which is non-existent or not deliverable is not allowed to be transacted. A contract must be explicit with regard to the rights and obligations of the parties concerned so that it does not lead to disputes and disagreements between them.

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4. Hashim Musa. Falsafah, logic, Teori Nilai Dan Etika Melayu: Suatu Pengenalan, Petaling Jaya, Akademi pengajian Melayu Universiti Malaya. 5. Abdul Rahman Md. Aroff.1999. Pendidikan Moral: Teori Etika dan Amlaan Serdang, Penerbit Universiti Putra Malaysia Moral.

6. Hill, W.H. 1999. Ethics or Moral Philosophy. New Delhi. Anmol Publications . 7. Jones, R. N. Practical Counselling and Helping Skills: Helping Clients to Help . 2nd edition. London, Holt, Rinehart and Windston Ltd.