Legal mechanisms in place in S’wak Sovereign Fund bill to prevent abuse, says Kota Sentosa rep

Yap delivering his debate on the Sarawak Sovereign Wealth Fund at the State Legislative Assembly (DUN) sitting today (Nov 22, 2022). Screenshot taken from a Sarawak Public Communications Unit (Ukas) Facebook Live video.

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By Lian Cheng

KUCHING, Nov 22: The Sarawak Sovereign Wealth Future Fund Bill has legal mechanisms in place to prevent weak compliance cultures and insufficiently designed but maintained compliance controls.  

This is the view of Kota Sentosa assemblyman Wilfred Yap (GPS-SUPP) who believed that the drafters of the bill must have learnt from the various root causes allowing the IMDB scandal to happen.

“Suffice to say that no laws can be perfect but that the Sarawak government have through this law put in place the legal regulatory and compliance mechanism in the management of the Sarawak Sovereign Wealth Future Fund,” said Yap while debating on the Bill at Sarawak Legislative Assembly (DUN) at New DUN Complex here today.

His reading of the Bill showed that the Sarawak government has adopted the Santiago principles for good governance.  

The good practices of the Santiago principles will promote more transparency with a clear and stable legal framework with no discrimination and a reciprocity in the application of investment policies of the fund, he said.

“One of the most important objectives of the Santiago principles is on the independence of sovereign wealth funds from political power and put in place appropriate mechanism of internal controls, risk management and accountability,” said Yap.

His reading of the Bill showed that it is equipped with a system that allows for identification, evaluation and management of risk of their activities.  

The system he said, will ensure that any investment will not exceed the risk tolerance defined in the investment mandate or policy comprising reliable mechanisms of transmission of information which must be regularly submitted to an independent internal audit and scrutiny.

He pointed out that Bill also places high emphasis on transparency which will have a big impact on the general governance of the fund which in turn improves operation and investment practices.

“All investments come with risks even if it is managed by a full team of highly qualified and experienced professionals. 

“As such the investments mandate set by the Sarawak government must be reviewed regularly and must respond to changing needs of Sarawak that are not directly satisfied by the market,” said Yap. — DayakDaily