KUALA LUMPUR — Malaysia's parliament on Thursday (Aug 28) passed a law to better regulate government procurement processes, as rights groups and some opposition lawmakers raised concerns over potential loopholes and a lack of independent oversight.

The Southeast Asian country has been seeking to strengthen fiscal management and avoid the massive financial losses linked to corruption cases like the multibillion-dollar 1MDB scandal.

It has also long struggled to contain leakage and misappropriation from graft involving public officials, particularly through the awarding of government contracts through negotiations rather than open tenders.

The Government Procurement Bill is aimed at ending such practices, providing a framework for all government agencies and local authorities that utilise public funds.

It will also introduce penalties for wrongful practices like rent-seeking, sub-contracting, and interfering in procurement processes.

"This bill places the obligations and powers in government procurement matters according to uniform standards and procedures, thus reducing the room for different interpretations, non-compliance, or abuse of power," Finance Minister Amir Hamzah Azizan said while wrapping up a debate about the bill on Thursday.

The law will next be sent to the Senate, or upper house, for approval before being gazetted.

The CSO Platform for Reform, a coalition of over 70 civil society organisations, voiced worries over some of the provisions of the bill, saying they would give ministers too much control over procurement decisions and allow them to exempt entire programmes from the new rules.

The concerns were echoed by some opposition lawmakers.

Amir Hamzah defended the bill, saying that the law limited the finance minister's powers rather than expanding them.

The ministry would also look to update existing regulations to further limit ministerial powers to declare exemptions from procurement rules, he said.