RM1.8 Billion Fertiliser Contracts: Ask How Suppliers Were Selected And Who Picked Them

The controversy over delayed fertiliser distribution to padi farmers in Kedah should not be viewed merely as a logistics failure or immediately labelled as corruption, but should trigger scrutiny of how suppliers were selected and monitored in the first place, former Malaysian Anti-Corruption Commission (MACC) deputy chief commissioner Datuk Mohamad Fauzi Husin said.

His comments come after Prime Minister Datuk Seri Anwar Ibrahim called on MACC to act against suppliers responsible for delays in distributing fertiliser to farmers and to come down hard if investigations uncover elements of corruption or bribery.

Fauzi, who is president of Pertubuhan Integriti dan Antirasuah Malaysia (INTRAS), said the central question should be whether fertiliser paid for using public funds actually reached farmers when it was needed.

He pointed to complaints from farmers in PIDA 15, Kubang Pasu, who reportedly held a peaceful gathering on Aug 14 calling for additional fertiliser to be distributed urgently. Some crops were already between 70 and 80 days old although the additional fertiliser was supposed to have been received before the padi reached 45 days, according to the commentary.

Scrutinise How Suppliers Were Chosen

Fauzi said that when deliveries are delayed, attention tends to focus on problems at the end of the supply chain, such as logistics, shortages and distribution.

However, he argued that authorities should examine an earlier and more fundamental question: how was the supplier selected?

This should include determining whether suppliers had sufficient financial resources, experience, warehouses, logistics networks and the ability to deliver large quantities on schedule. Authorities should also examine suppliers’ track records and beneficial ownership, possible conflicts of interest and the due diligence undertaken before contracts were awarded.

“If the supplier fails to deliver, the supplier must indeed be held accountable. But if an incapable supplier was selected from the beginning, then the question changes. Who selected them?” Fauzi said in the commentary.

He said there was an important distinction between the failure of an individual supplier and a systemic failure in the process used to select that supplier. Where there are elements of abuse of power or corruption, the authorities should investigate.

Previous RM1.8 Billion Fertiliser Probe Raises Questions

Fauzi also drew attention to MACC’s 2024 investigation into allegations of a cartel involving padi fertiliser procurement and distribution contracts estimated to be worth RM1.8 billion.

As part of that investigation, a contract worth about RM60 million for the supply of 15,000 tonnes of fertiliser had attracted MACC’s attention.

Citing reports at the time, Fauzi said the company awarded the contract was reported to have been inactive in Malaysia for eight years, while the contract was reportedly awarded through direct negotiation on the grounds of an emergency purchase.

Subsequent reports alleged that the contract was made without price comparisons or going through the board and was approved in about six days. Fauzi stressed, however, that an investigation is not a conviction and those investigated should not be presumed guilty.

He argued that emergency procurement should not be treated as a reason to abandon due diligence.

“If the process needs to be accelerated, the checks can be accelerated, but they should not be eliminated,” he said, adding that authorities should still establish a supplier’s ownership, capacity, track record, pricing and potential conflicts of interest.

Farmers Should Not Become Government’s ‘Last Auditor’

Fauzi said simply being a registered company does not demonstrate that a supplier has the operational capacity to fulfil a large fertiliser contract.

Large-scale fertiliser supply requires reliable sources, quality controls, storage, transportation and distribution capabilities, with timely delivery particularly critical because delays can directly affect crop yields.

He said it was troubling when farmers themselves became the first to flag that fertiliser was late, had not arrived or was of questionable quality.

“Farmers should be the beneficiaries, not the government’s last auditors,” he said.

Fauzi also called for complaints over fertiliser quality to be dealt with through testing rather than rhetoric. Samples should be sent to laboratories and checked against contractual specifications, with the results disclosed to farmers.

If the fertiliser meets specifications, this should be explained, while action should be taken if it fails the required standards.

‘Follow The Money And Follow The Supplier’

Fauzi said integrity in public procurement goes beyond whether someone accepts a bribe. It also encompasses fair supplier selection, proper due diligence, avoiding conflicts of interest, ensuring reasonable pricing and specifications, monitoring performance and taking action when contracts are not fulfilled.

He proposed extending the anti-corruption principle of “follow the money” to “follow the supplier”, including examining who received contracts, beneficial ownership, contract values, how suppliers were selected, who approved the awards and whether there were links with decision-makers.

INTRAS called for transparency rather than premature accusations, saying any investigation should be independent and comprehensive where sufficient grounds exist.

Fauzi said the Kedah fertiliser issue should therefore prompt a review of the entire chain — from allocations and contracts to suppliers, product quality, delivery, distribution and ultimately the farmers.

“If the problem is management, fix it. If it is negligence, take disciplinary action. If the supplier fails, demand accountability. If there is a conflict of interest, disclose it. If there is corruption, investigate and prosecute in court,” he said.

He warned that delays ultimately carry consequences beyond procurement administration, as lost time could translate into lost yields, affecting both farmers’ household incomes and the country’s food security.

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