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Malaysia's new national security law gives Najib, army, police new powers, amid 1MDB probe

Malaysian Prime Minister Najib Razak extended his policing powers with a tough new security law that took effect Monday, spurring concerns over civil liberties.

The law, which Najib said was needed to combat terrorism, was pushed through on the final day of the parliamentary session in December, creating a National Security Council with broad powers to create "security areas" where police can conduct searches without warrants and impose curfews. It also eliminated the need to conduct public inquests into shootings by police in the security zones and gave the new security council the ability to declare emergency rule.

The security council, which will include the prime minister and be majority controlled by members of his political party, won't be required to provide explanations or justifications for its decisions.

That represented a major expansion of powers for Najib, who has been embroiled in a scandal over funds allegedly funneled away from Malaysian state wealth investment fund 1MDB.

Ei Sun Oh, who was political secretary to the Malaysian prime minister's office from 2009-2011, during Najib's tenure, told CNBC in an email interview that it wasn't clear how far the government's new discretionary powers could be pushed.

"Under the current oppressive political climate, there is legitimate fear that the law may be abused to stifle dissents, such as expressed in peaceful street protests which should have been a fundamental right to assemble," said Oh, who is currently an adjunct senior fellow at the S. Rajaratnam School of International Studies in Singapore.

Others were more specifically concerned about the fresh powers that the law gave to Najib, who has been prime minister since 2009.

"A lot of people in Malaysia don't trust Najib. It gives him too much power," noted James Chin, director of the Asia Institute at the University of Tasmania. "This gives the prime minister the powers of the king. Previously only the king had [this] authority."

Not only does the law not allow for judicial review of the security council's rulings, politicians on the council would be selected solely from the country's ruling party and would outnumber administrators such as police chiefs, Chin noted.

"There's no way anyone can overrule the prime minister. Effectively, he will get what he wants," Chin said. "It sends a strong signal to the population of Malaysia and also the opposition that he's all-powerful."

Chin noted that the law didn't define what constituted a national security threat, which could enable the prime minister to use small incidents to impose emergency rule. Chin was particularly concerned about whether areas currently under opposition party rule, such as Penang, might be targeted.

Oh said, meanwhile, that not only was it unclear whether a security zone could be declared retroactively to avoid an inquest into a police shooting, it also wasn't clear whether a retroactive declaration could be challenged in court.

Chin cited an additional concern: "The act gives the military a civilian role ... The army can come in to take over the role of the police."

In a statement last week, Najib's office said critics had "fear-mongered for political reasons" and "deliberately misinterpreted" the law.

The Prime Minister's office said the country's terrorist threat was "real and growing."

In mid-July, Malaysia detained more than 200 people, 27 of them foreigners, as part of investigations into ties to terror groups, Singapore media reported. In late June, there was a grenade attack at a bar, injuring eight, which Malaysian authorities tied to terror group Islamic State, according to reports.

Malaysian police subsequently arrested 14 people under suspicion for ties to Islamic State, and seized an explosive device, reportedly amid a plot for a bomb attack on top police officials, media reports said.

Malaysia has also long suffered incursions by Philippine terror group Abu Sayyaf into the Sabah region, with attacks generally including kidnaping for ransom. Because of that modus operandi, Abu Sayyaf has often been referred to as bandits, but the group has recently been in focus amid reported attempts to formalize some sort of pro-Islamic State coalition in Southeast Asia.

"My government will never apologize for placing the safety and security of the Malaysian people first," the statement from Najib's office said on Friday. "These laws were necessary, and other countries have since followed our lead."

The statement didn't disclose which other countries had followed Malaysia's lead.

Analysts did note concerns over terrorism in the country.

"Terrorism risks in Malaysia, particularly in the capital Kuala Lumpur, have clearly risen in the past year," with arrests including some members of security forces and civil servants, noted Harrison Cheng, senior analyst for global risk analysis at consultancy Control Risks.

"While counter-terrorism laws and capabilities remain fairly robust, authorities are also concerned about the possibility of lone-wolf attacks,which are far harder to foil. This plausibly has also given impetus for stronger enforcement powers to mitigate the windows of opportunity for such attacks to occur," he said via email.

But Cheng added that concerns Najib would use the law to silence dissenters were also "credible," noting that it applied not only to security threats, but also to "loosely defined" threats to the economy and, according to the law's section 18, "any other interest of Malaysia."

Najib had already stepped up use of the existing Sedition Act, with arrests and investigations up as much as five-fold in 2015 from 2014, Cheng noted.

Public outcry over the law was likely to be muted.

Oh, the former political secretary to the prime minister's office, noted that the public was "weary" of violent thugs and soon would be tired of terrorist threats as well.

"The public has no problem if the new security law were to be applied solely to deal with the kinds of calamity that the government described when seeking to pass the law, namely terrorist attacks or mass disturbances, such as armed attacks," he said.

Protesters demanding Prime Minister Najib Razak's resignation during an August rally in Kuala Lumpur.
Getty Images
Protesters demanding Prime Minister Najib Razak's resignation during an August rally in Kuala Lumpur.

But the new law appeared likely to deepen existing concerns outside Malaysia about civil liberties in the country.

The Malaysian government already has inordinate control over the media within the country, with much of it either state-owned or subject to strict regulation.

The website Malaysian Insider, owned by The Edge Media Group, was shut down earlier this year after the government blocked access to it over its reporting on 1MDB. Two of The Edge's other publications were suspended for several months last year.

Najib's administration was able to push through the new security law despite his ties to a multi-country investigation over state fund 1MDB.

In July, U.S. prosecutors said they were seeking to seize more than $1 billion of assets tied to an international conspiracy to launder funds funneled away from 1MDB, marking the biggest action ever taken under the Kleptocracy Asset Recovery Initiative.

The U.S. Department of Justice said officials at 1MDB, their relatives and other associates diverted more than $3.5 billion in total from the state fund and laundered it through complex transactions and shell companies with bank accounts in Singapore, Switzerland, Luxembourg and the U.S.

Media reports citing unnamed sources said the complaints' 32 references to "Malaysian Official 1," who allegedly received hundreds of millions from 1MDB, were to Najib.

Najib has repeatedly denied wrongdoing. In January, Malaysia's Attorney General Mohamed Apandi Ali said that no criminal offense had been committed in the government's handling of 1MDB.

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—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1