Amendments to Co-op Societies Act contrary to
constitution
A legal action had been filed at the
High Court in Kuala Lumpur to challenge several of the provisions in the
Malaysian Co-operative Commission Act 2007 and the Co-operative Societies
(Amendment) Act 2007) which came into force on Jan 1, 2008.
It is vehemently considered that it
is unreasonable for its capital, which has been built over the years for the
benefit of its members as a result of good management, to now be taken away and
used by the government without adequate compensation. The requirement for an
outside authority approving the members of the board is also an unreasonable
restriction on the rights of the members to manage the co-operatives
democratically.
The movement had perforce to look
for justice in the Halls of Justice because leading co-operators feel aggrieved
by several of the provisions which unreasonably restrict the fundamental
liberty of members of co-operatives to associate under Article 10 of the
federal constitution.
- The fundamental liberty of co-operatives to be deprived
of its property for the use of the government without adequate
compensation in accordance with Article 13 of the federal constitution.
- The fundamental liberty of the officers of
co-operatives to be subjected to arbitrary arrest under Article 5 of the
federal constitution.
The legal action filed for and
behalf of the co-operative movement as a whole seeks declarations that:
- Section 43 (1) of the Malaysian Cooperative Societies
Commission Act 2007 requiring all cooperative societies to deposit their
funds not immediately needed for operations or investments into the
Cooperative Deposit Account and Section 42(2) of the Act requiring
cooperative societies to pay a percentage of its share capital,
subscription capital and assets to the Central Liquidity Fund without
providing for adequate compensation for the compulsory acquisition for use
of the funds is inconsistent with Article 13 (2) of the federal
constitution and is therefore invalid pursuant to Article 4 (1) of the
federal constitution.
- Section 42 (1) of the Malaysian Co-operative Societies
Commission Act 2007 enables the Malaysian Co-operative Societies
Commission to compel any cooperative society by order in writing to contribute
to the Central Liquidity Fund established under Section 42 of the Act and
money howsoever raised or received by the federation and ought to be paid
pursuant to Article 97 of the federal constitution to the Federal
Consolidated Fund from which withdrawals are permitted in the manner
stated in Article 104 of the federal constitution and Section 42 (1) of
the Act is therefore invalid under Article 4 (1) of the federal
constitution for being inconsistent with the federal constitution.
- Section 54 of the Malaysian Co-operative Societies
Commission Act 2007 which stipulates that every offence punishable under
the Act, the Co-operative Societies Act 1993 or any other written law
enforced by the Malaysian Co-operative Societies Commission shall be a
seizable offence and that a police officer not below the rank of inspector
or an Investigating Officer may arrest on reasonable suspicion without
being required to state the reasons for the arrest is inconsistent with
Article 5 (1) and (3) of the federal constitution which provides that no
person shall be deprived of his life or personal liberty save in
accordance with the law and further requires that the person arrested
shall be informed as soon as may be of the grounds of his arrest and be
allowed to consult and be defended by a legal practitioner of his choice
and the said Section 54 of the Act is therefore invalid under Article 4
(1) of the federal constitution.
- Section 43 (2) of the Co-operative Societies Act 1993
(as amended by the Co-operative Societies Amendment Act 2007) requires
that a co-operative society shall, prior to the appointment or
re-appointment as a member of the board of a co-operative society, seek
verification from the Malaysian Co-operative Societies Commission on
whether such person satisfies the fit and person criteria as , seek
verification from the Malaysian Co-operative Society be specified by the
Malaysian Co-operatives Societies Commission is inconsistent with the
citizens' fundamental right of freedom of association guaranteed by Article
10 (1) of the federal constitution and not excepted by Article 10 (2), 10
(3) or 10 (4) of the federal constitution.
Safeguarding interests of members
This legal action has been initiated
to safeguard the interests of its members and their savings.
On Friday, March 19, 2010, Justice
Lau Bee Lian dismissed the originating summons filed on Jan 2, 2008. the
solicitors for the co-operatives filed an appeal in the Court of Appeal on
March 25, 2010 on the matter and also wrote to the learned judge’s secretary for
the notes of proceedings and the judge’s grounds of judgment.
The President of the Court of Appeal
gave leave of appeal to file the appeal records within three weeks of receiving
the notes of proceedings from the High Court.
The society’s solicitors had
appealed to the High Court for the notes of proceedings and the grounds of
judgment and had been advised by the secretary to the learned judge that the
notes and grounds of judgment would be given “when they are finalised”.
The co-operatives were distressed
over this gross delay denying justice and millions of members of co-operative
societies in Malaysia were awaiting a review “by all and any means” of the
Co-operative Act based on the points raised in the Courts.
Meantime, the Co-operative Societies
Commission of Malaysia is continuing issuing guidelines which are said to be
mandatory at this stage based on the provisions of the Revised Act which the
co-operatives are completely against. The co-operatives consider these
guidelines to be ultra vires and a contempt of court.
Members of co-operative societies
wishing to stand for election as directors must now obtain the written
permission of the commission after going through a gamut of procedures.
Reserves which had in past years
been created for future shortfall in dividends on share capital cannot now be
used to pay the current year’s dividends without the prior written approval of
the commission.
The very principles of the
co-operative movement, as enshrined in the principles promulgated by the Rochdale
Pioneers nearly a hundred and fifty years ago in Manchester, United Kingdom and
the principles which have been adopted universally by the International
Co-operative Alliance which is composed of more than 100,000,000 individual
members from all over the world is now being sullied and brutalised in Malaysia
with currents bordering on ‘political’ bureaucracy.
Finally, the High Court released a
fair copy of the judgment and the solicitors had filed their documentation to
the Court of Appeal. The matter had come up on four (4) different occasions and
is still in limbo, with continued adjournment.
The delay in the courts denying
justice to more than 9,000,000 members of co-operatives in Malaysia strikes at
the very heart of democracy and human rights and there is a foreboding that the
cooperative movement will be fully politicised and the funds of the
co-operatives put to abuse by vested political masters and their cronies. Many
members of co-operatives have resigned from their societies out of disgust.
The people’s movement of 90 years is
in limbo.
The movement is now working out
strategies to use its power through the membership to stake this matter up
through the ‘ballot box’ at the forthcoming general election because no other
language seems persuasive to the politicians or the Courts of Judicature.
THURAISINGHAM SHAN is a co-operative
and management consultant.
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