Beginning in early 2020 Malaysia has experienced an extraordinary period of political instability that has tested many constitutional norms to the limit and perhaps beyond the limit. Aspects of this instability have been discussed by us in this blog previously.
On this occasion we are pleased to report more positive developments that point towards a period of relative stability, and moreover indicate the likelihood of important reforms centring on parliamentary institutions. This change in fortunes is due to the signing on 13 September 2021 of a Memorandum of Understanding (‘MOU’) between the federal government and the Pakatan Harapan (PH) opposition coalition.
In this report we describe first the background to the MOU, and then the content and significance of the MOU itself in its general and specific provisions. The interest of this in terms of constitutional law generally is wider than Malaysia, given that we confront, as we argue here, political constitutionalism in the form of ‘constitutional soft law’. Our conclusion is that this form of soft law – in this case embodied in the MOU – has potential benefits as a method of stabilising a country that has become politically unstable. To be sure, the MOU at this point appears to promise a good deal, but it guarantees nothing. The MOU lacks binding legal force, and it does not guarantee the survival of the current administration. However, given the timing and context in which it was adopted (specifically, in an environment of political uncertainty, threats of shifting political alliances, and public fatigue with self-serving political battles), it could prove to be significant in offering Malaysia a much needed “political reset”.
On 20 August 2021, there appeared to be a resolution of the agonising uncertainty surrounding the Perikatan Nasional (PN) government of Muhyiddin Yasin, which took office on 1 March 2020 in highly controversial circumstances following the defection of political factions that had been part of the previous PH coalition that took power on 10 May 2018. The Muhyiddin government had never been subjected to a positive or negative confidence vote in Parliament, despite persistent doubts as to whether it enjoyed the confidence of a majority of MPs. This led to other difficulties and evasions such as the refusal by the Yang di-Pertuan Agong (King) to proclaim an emergency on government advice in October 2020, and then his agreement to an emergency in January 2021, which in turn prevented Parliament from meeting before August 2021. All through this period the government enjoyed thin political and even constitutional legitimacy, was referred to routinely as a ‘back-door’ government that had never been elected, and had at best a very slender majority, if indeed it had one at all, given its extreme reluctance to allow any confidence vote.
There was also a palpable sense, mounting during 2021, and echoed on occasion by the King, that the public was tired of the factional politicking leading to instability, which it viewed as occurring at the expense of administrative attention to the pressing needs to deal with the pandemic and the severe economic problems resulting from it. Covid cases spiked between April 2021 and August 2021 in spite of an extensive vaccination roll-out, which appeared to be the Muhyiddin government’s only achievement in office. The parliamentary numbers game continued as the Muhyiddin government tottered and then finally fell in mid-August 2021. As seems to have become usual, and in the absence of any possibility of an election given the severity of the Covid-19 pandemic, the King – as he did in February 2020 – assessed parliamentary support of various candidates by interviewing all the MPs, reaching the conclusion that a majority supported Datuk Seri Ismail Sabri Yaakob, who had been home affairs minister in the Muhyiddin government.
Accordingly, the latter was appointed Prime Minister with a demonstrable majority of six. Unlike his predecessor, the new PM gained most of his support from his own party, UMNO, which had been the main party in the PN government, as it had in previous governments, other than the PH government, since independence in 1957. The King had repeatedly stressed the need for politicians to come together and address the country’s needs, and in the dying days of his government, Muhyiddin had attempted to persuade the opposition to support the continuation of his premiership on the basis that reforms would be carried out in return for a confidence and supply agreement (‘CSA’). This proposal, however, was rejected by the opposition coalition. Ismail Sabri’s appointment then appeared to put an end to such possibility, and yet, immediately on taking office, he too proposed a CSA with the opposition. This was rejected, but it led to a negotiation process to explore other possible arrangements.
The Drafting of the MOU
The process of drafting the MOU was undertaken by second echelon leaders on both sides, mainly ones who were legally qualified, over a period of 18 days before it was signed on 13 September. There was no precedent for this exercise. The drafters went through ten stages of drafting, in which both sides gradually dropped demands and modified their stance. For example, 28 reforms originally demanded by the opposition parties were reduced to 19. The original version presented by the government was seen by the opposition as too vague in its wording, using phrases like ‘will use its best endeavours’; during the process the wording became more precise and more legalistic. The drafting was done in English, the resulting MOU being then translated by an opposition lawyer into Malay, and then published. One concern of the opposition was that the MOU and its entire implementation process should be completely transparent.
The outcome of this process surprised many, including those who were engaged in the negotiations; a last-minute U-turn by the government after its Attorney General appeared to pour cold water on the MOU, created a unique opportunity to reach agreement. It was described not as a CSA, nor as providing for a unity government, but as a ‘stability and reform’ agreement. The distinction is important, as the opposition had already roundly rejected a CSA, and the MOU makes it clear that the opposition will continue to perform its function as a democratic opposition. Thus, for example, although it indicates the opposition will not vote the budget down, it also provides that agreement is to be reached on the budget before it is presented to parliament. A CSA involves merely keeping the government in office and the ability of government to continue in operation with a parliamentary-approved budget, and carries no other implications policy-wise. This MOU, on the contrary, embodies substantive agreement on important constitutional reform initiatives, as we shall see.
Substantive Contents: General Issues
The MOU comprises a general part and an Appendix containing the specific reform provisions. The latter are outlined in the next section. In general, the contents are organized around six main themes: (1) Empowerment of the Covid-19 plan; (2) Administrative transformation; (3) Parliamentary reforms; (4) Judicial independence; (5) The 1963 Malaysia Agreement; and (6) The Formation of steering committees.
The promises made by the opposition are specific to the government of Ismail Sabri, so that any change of leadership would dissolve the agreement. A monitoring committee is provided for, with the job of meeting every two weeks during this period to ensure that it is being implemented.
The new PN government was able to secure agreement that there would be no motion of no confidence in the government, and the opposition was able to secure agreement that there would be no dissolution of parliament before 31 July 2022. The latter, arguably, would buy the opposition some time to put together a decent-strength coalition to contest the next elections and form a stable government. Presently, the constantly shifting political alliances and political horse-trading mean that no single party has an upper hand, be it now or even, we may imagine, in the next general election. With the MOU, both sides can take credit for creating the governmental stability that is needed to deal with the pandemic and economic recovery measures. It is also apparent that neither side would be confident in going to the electorate at any early juncture. The date of 31 July 2022 was chosen on the basis that the vaccination process would lead within this time-frame to the possibility of holding an election, and that reforms embodied in the MOU would take around nine months to bring to fruition, given the norms for legislative process. Thus, the MOU will terminate on 31 July 2022 unless renewed by agreement, and it is stated that time is always of the essence, given the nine-month window for implementation. It is also provided that the agreement can be terminated by either side if not observed by the other.
Substantive Contents: Specific Reform Issues
Parliamentary reforms indicated in the MOU are extensive but have been long discussed. In the cases of parliamentary services and select committees, reforms were already in train under the previous Speaker during the PH government, 2018-20.
- Parliamentary services: the Parliamentary Services Act, repealed in 2002, is to be reintroduced; this will enhance the independence of Parliament via its ability to make its own staff appointments and enjoy a guaranteed budget.
- A Parliamentary Commission Act is to be passed.
- Select Committees are to be introduced based on ministerial portfolios; there are to be 15 of these with specified powers and terms of reference. These are to have proportionate membership according to the parties’ numbers of seats in parliament, with half of them (chosen by the monitoring committee) chaired by the opposition.
- Sexist, racist, and anti-religionist statements in Parliament are to be banned.
- The Prime Minister is to be limited to a single term of ten years in office, equivalent to two normal parliamentary terms.
- Constituency Development Fund allocations are to be granted equally to each MP, irrespective of party.
- The Leader of the Opposition as a PM-in-waiting is to be entitled to the same government intelligence information as the PM.
- A constitutional amendment in 2020 to reduce the voting age from 21 to 18 is to be implemented via the Election Commission. Foot-dragging on this issue by the PN government had become an issue. From the opposition’s perspective such reform is likely to be to their advantage and needs to be implemented before the next election.
- Structural reform involving the central bank, Bank Negara, is to be undertaken immediately, providing for its independence.
- Judicial independence of the government of the day is to be strictly observed. This is clearly important, given upcoming trials and appeals concerning current leaders who have been charged with numerous counts of corruption.
- Very importantly from an East Malaysian perspective, the MOU indicates attention must be given to the demands from Sabah and Sarawak parties for full implementation of the Malaysia Agreement 1963, so that powers and status granted thereby are fully recognised. A constitutional amendment bill on this is before Parliament.
- Finally, this section of the MOU contains specific points regarding the pandemic recovery; and a covid recovery committee is to be established, comprising 50% experts from the private sector, 25% government-side, and 25% opposition-side membership.
Although the MOU, having been drafted by lawyers, appears highly legalistic in its terms, it seems doubtful whether it could be legally enforced in the event of a breach. It is unlikely in our view that a Malaysian court would see the MOU as anything other than a purely political matter, to be enforced by political means. Yet there is every reason to suppose that this MOU is in essence a dramatic and much needed reset button being pressed for the renewal of Malaysian parliamentary and constitutional governance. It will now be extremely difficult, given the state of public opinion, for either side to treat it lightly. It is of course only for a limited period, but it affords a precedent for the future and demonstrates that, contrary to recent experience, the Malaysian political class can come together on the basis of an agreed and principled way of implementing democratic constitutionalism. Indeed, it may well be that the bar with regard to governance expectations has now been firmly raised and that other reforms will follow in the wake of this development.
Suggested citation: Andrew Harding and Dian AH Shah, Governance by Memorandum: Constitutional Soft Law in Malaysia, Int’l J. Const. L. Blog, Nov. 13, 2021, at http://www.iconnectblog.com/2021/11/governance-by-memorandum-constitutional-soft-law-in-malaysia.
 Dian AH Shah & Andrew Harding, Constitutional Quantum Mechanics and a Change in Government in Malaysia, Int’l J. Const. L. Blog, Apr. 8, 2020, at: http://www.iconnectblog.com/2020/04/constitutional-quantum-mechanics-and-a-change-in-government-in-malaysia/; Andrew Harding, Acting (or Not Acting) on (Lawful or Unlawful) Advice in Malaysia: From Windsor to Kuantan and Back Again, Int’l J. Const. L. Blog, Nov. 20, 2020, at: http://www.iconnectblog.com/2020/11/acting-or-not-acting-on-lawful-or-unlawful-advice-in-malaysia-from-windsor-to-kuantan-and-back-again/.
 Shah and Harding, Ibid.
 Even by-elections have been seen to cause a spike in covid cases.
 Tun Mahathir Mohamad was PM 1981-2003 and 2018-2020.