Corporate crime without economic sabotage: Why Malaysia is now ready for DPA
By Mohamad Fuad Rozali and Nurhidayah Abdullah
His Majesty the Yang di-Pertuan Agong, in a royal address (titah) during the opening of Parliament in January 2026, highlighted the urgent need for efficient case resolutions to avoid the judicial stagnation caused by protracted trials. This royal directive reinforces the 3 June 2025 decision by the Special Cabinet Committee on National Governance (JKKTN) to introduce the Deferred Prosecution Agreement (DPA) into the Malaysian legal framework.
A DPA is a legally binding agreement between prosecutors and a company accused of wrongdoing where, instead prosecutor taking a company to court immediately for a crime for example corruption, money laundering, tax evasion; they strike a deal where the government “pauses” the charges and in exchange the company overhauls its behaviour. The objective is not to grant immunity but to provide an efficient alternative solution despite paying massive fines and did not repair the damaged impact on the case. For example the prosecutors may mandate the implementation of robust compliance programmes and require the company to cooperate fully with ongoing investigations.
At the international level, DPAs are already well-established in developed countries such as the United Kingdom (UK), the United States (US), France, Canada, and Singapore, proving particularly effective for large corporations and cross-border crimes. The 2020 Airbus case remains a global benchmark for the efficacy of these agreements; it involved a massive corruption probe where the company was accused of using bribes to secure aircraft contracts worldwide. It successfully securing settlements totalling €3.6 billion across multiple jurisdictions, this was achieved by getting all the involved countries to agree on the same set of facts and evidence at once, allowing them to settle the case immediately instead of spending decades in expensive and repetitive court battles across different nations. To date, this case remains the highest DPA settlement ever recorded globally.
In Malaysia, a compelling case for the DPA framework can be seen in the October 2025 incident involving an illegal e-waste factory in Gurun, Kedah. The facility violated Sections 18 and 34B of the Environmental Quality Act 1974 by unauthorized storage and disposal of scheduled waste, a practice that releases toxic fumes and causes severe soil and water contamination. Research indicates that such exposure leads to respiratory disorders, infertility, and cancer. Under a DPA, the offending company could be legally compelled to repair environmental damage and compensate the affected community, ensuring a restorative outcome that standard litigation might fail to achieve.
In 2018, Malaysia introduced Section 17A to the Malaysian Anti-Corruption Commission Act regarding corporate liability, aligning with Article 26 of the UN Convention Against Corruption (UNCAC) and modelled after the UK Bribery Act 2010. However, Malaysia’s current framework lacks the alternative resolution mechanism found in the UK’s Crime and Courts Act 2013 which is the DPA.
In France, the DPA framework is known as the Convention Judiciaire d’Intérêt Public (CJIP). While originally introduced under the Sapin II Law of 2016 for financial crimes, its scope was expanded in December 2020 to include offenses under the French Environmental Code. A landmark application of this expansion occurred in December 2021 with the company SYMPAE, which was investigated for discharging harmful substances into groundwater. Under the settlement, SYMPAE was mandated to pay a fine and, more importantly, execute a three-year ecological restoration plan designed to repair the local ecosystem and ensure the long-term health of the affected stream.
Thus, this case highlights the DPA’s ability to punish corporate misconduct while actively repairing societal harm, a dual outcome that benefits the nation at large. The core philosophy is to hold corporations strictly accountable without triggering economic sabotage through mass unemployment. The DPA ensures that the entity is penalized for its crimes while preserving the livelihoods of innocent employees. This strategic approach prevents the collateral damage of a total corporate collapse, which would otherwise devastate families and destabilize the local economy.
Although, critics fear DPAs might allow corporations to “buy their way out,” the UK model offers a solution through a two-step judicial process involving private preliminary and public open hearings. Courts only approve agreements found to be fair, reasonable, and proportionate together with the requirement that all settlements between the prosecutor and company to be published publicly to ensure transparency. It is vital for Malaysia to adopt this transparency mechanism by implementing a mandatory judicial process. Requiring a judge to validate every agreement serves as a critical safeguard, ensuring that no corporation is able to simply ‘buy its way out’ of criminal accountability.
Additionally, DPAs encourage whistleblowing, as employees can report misconduct without the immediate fear that their bread and butter will vanish if the company is liquidated. Ultimately, the DPA aligns with the Madani Economy Framework’s emphasis on good governance and inclusive prosperity. It fosters a transparent, resilient economy and complements the “Keep Malaysia Clean” initiative by nurturing an integrity-driven society.
Mohamad Fuad bin Rozali is a Doctor of Philosophy (PhD) candidate at the Faculty of Law, Universiti Malaya and Associate Professor Dr. Nurhidayah Abdullah is a Lecturer at the same faculty and they may be reached at abd_hidayah@um.edu.my