Sri Lanka is overwhelmed by various international awards given by obscure foreign organisations. Now a state agency has joined the throng of companies and individuals willing to pay for recognition from a dubious Spanish outfit. Earlier this month, State Engineering Corporation (SEC) which comes under the Ministry of Construction, Engineering Services, Housing and Common Amenities, [...]

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Debt-ridden, loss-making SEC pays for dubious award

By Charundi Panagoda
Spends half a million rupees for recognition from a questionable company in Spain
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Sri Lanka is overwhelmed by various international awards given by obscure foreign organisations. Now a state agency has joined the throng of companies and individuals willing to pay for recognition from a dubious Spanish outfit.
Earlier this month, State Engineering Corporation (SEC) which comes under the Ministry of Construction, Engineering Services,

Housing and Common Amenities, announced that it had won the “International Star for Leadership Quality” award from the Business Initiative Directions (BID). The debt-ridden and loss making SEC paid 3,900 euros (about Rs. 646,952 at exchange rate of Rs. 166 per euro), for the award, according to SEC Assistant Media Manager Anuradha Seneviratne.

However he disputed the claim that the SEC bought the award.

“We didn’t buy an award,” he said. “We paid the registration fee, for the trophy, logo, hotel charges and advertising. It was paid through the SEC budget as an official transaction.”

Chairman Jagath Kumara Perera said the SEC did not apply for the award but it came to know about its achievement through a letter from the BID.

Proud to be a winner: State Engineering Corporation Chairman Jagath Kumara Perera accompanied by Housing and Construction Minister Wimal Weerawansa show the BID award, which the SEC paid and won, to President Mahinda Rajapaksa. This is a handout picture

Mr. Perera accompanied by General Manager M. R. Jeyachandran, Director Prashantha Diaz and a Deputy General Manager attended the BID awards ceremony in Paris on June 24 and 25. They obtained diplomatic visas to go to Paris.
“We got selected, we don’t know how. The BID told us that the selection process was confidential,” Mr. Perera said.
Any awarding institution should be recognised and credible for an award to be merit-worthy, and the little-known BID is neither.

The BID is registered in Madrid as a “Publicity and Public Relations” company. But the company website, bid-org.com, while advertising plenty of awards does not clearly state their purpose. The company has multiple domains, including bid-star.com, which lists broad criteria such as “Business and Brand name Prestige” for the International Star award.

When the Sunday Times called the number listed on the BID’s website, a representative said conducting awards ceremonies was the company’s business. For 3,900 euros, the International Star award package includes marketing tools, hotel accommodation for two people for two nights and an official letter to apply for a visa. When the Sunday Times pressed for company credibility, the representative refused to provide information.

“It’s our company policy not to disclose information regarding our company practices to journalists,” the representative said.
An official at the Spanish Consulate in Mumbai told the Sunday Times that the BID’s practices were questionable.
“In verifying the authenticity of the company, BID, we inform that after our investigation, the data matches except for the phone number ensuring that BID is a fraudulent company,” the Spanish mission’s Administrative Executive Prianca-Marie Dias said in an email.

Agustin Llanas, Sri Lanka’s Honorary Consul in Spain, told the Sunday Times in an email interview that the BID was possibly a scam company.

He said that going by the company’s website, he believed that it was one of those companies that offered awards upon payment that covered all their expenses.

But SEC chairman Perera insisted that they checked on the company’s credibility “as much as we could” before making the payments online. He said he even inquired from Cooperative Insurance (COI), which won a BID award in 2008, regarding the award’s reputability and was told it was a “good award.”

Chairman Perera and Mr. Seneviratne said they also contacted the Sri Lankan Embassy in Paris regarding the award. Chairman Perera said he thought the embassy officials would verify BID’s legitimacy before forwarding a letter of invitation.
COI Chairman’s secretary Sujatha Peiris said an SEC official inquired about travel expenses and ticketing agencies.
Yoshitha Jayasuriya, Second Secretary at the Sri Lankan embassy in Paris, denied that the SEC asked the embassy to check the legitimacy of the BID. The SEC only asked to forward an email to Mr. Perera, she said.

The SEC chairman claimed that the corporation did not use any public funds for the award or for travel. However, he did not disclose the total amount the SEC spent on travel and accommodation.

The SEC comes under the purview of the Ministry of Construction but is a self-financed agency with an independent budget, the Ministry’s Chief Accounting Officer S.A.E.P. Gunawardena said. SEC accounts are overseen by the Ministry Secretary and state auditors.

Ministry Secretary P. H. L. W. Perera said he could not comment on the case as the transaction occurred before he assumed duties.

Deputy Auditor General U. G. S. Wijesinghe said government Administrative (AR) and Financial Regulations (FR) apply for state-sponsored institutions only if the agency doesn’t have approval for its own AR and FR. Chairman Perera said SEC goes by government AR and FR.

Explaining the SEC’s decision to get the award, Chairman Perera said, “We got this award with genuine intentions to use it as a marketing tool. We didn’t use it in a bad way. We’ve had our problems in the past recovering dues. We are currently working on borrowed credit and we wanted to build up our name.”

Last year, the Parliamentary Committee on Public Enterprise (COPE) investigated the SEC on several cases. It was questioned about an unrecovered debtor balance of Rs. 335 million, losses in 47 contracts between 2007 and 2010 and a loss of Rs. 301.3 million on 64 constructions in 2009 and 2010.

Not an isolated incident

An industry observer said paying for international recognition was a widespread practice in the business community.
“These unknown foreign companies expect you to pay hotel fees, entry fees and PR fees. These are all moneymaking tactics,” he said. “The media or a government body should check the veracity of these awards, certificates or ratings.”
Dubious awards-selling companies are not confined to Europe. In the United States, the League of American Communications Professionals (LACP) has even offered its awards to well-known private sector companies in Sri Lanka.
Just as the BID website, the LACP’s website, lacp.com, does not name anyone associated with the titular league or state the company’s credentials. The website lists five “entry options” for “2011 Vision Awards”, the cheapest “Basic” package going for US$ 295 and the “Complete” package going for US$ 895.

The phone number listed online for LACP goes to an automated voice system, and a representative named Joshua on live chat described the company as a “host for competitions and resources for public relations professionals.” LACP refused to disclose its panel of judges “as per privacy terms,” and refused to answer when asked whether it had been accredited in the US.
An LACP award participant defended the organisation claiming even big international companies such as the British advertising agency WPP and Netherland’s Heineken admit winning LACP awards. The LACP also lists big American companies such as Walmart and Exxon Mobile as participants but these companies do not acknowledge receiving LACP awards.
Mr. Perera also defended the BID award claiming that Walmart and India’s Tata Group had won BID awards, all listed only on the BID’s websites.

Award-selling companies with dubious credentials cite well-known companies as award recipients so that they could woo more customers. The Sunday Times learns that the BID had requested recommendation quotes from the award-winner SEC to include it in a letter to be sent to an Indian company.

Even private individuals can be targets of awards schemes. An official in the Ministry of Health recently won the “Man of the Year 2012″ award by the American Biographical Institute (ABI). Other ABI awards recipients include former National Institute of Education Director General Upali M. Sedere, former Lions Club President M. Ashroff Hussain, and Dr. Romesh Jayasinghe who claims to be a “Non-Diplomatic Sovereign Ambassador” for ABI.

ABI awards, all for a price, have been denounced as “scams” by foreign journalists, agencies and government officials including John Lenders, former Consumer Affairs Minister in Victoria, Australia.

“WA ScamNet suggests that ABI is just a ‘vanity’ publisher who appeals to people who want a plaque on their wall or see their name in a book, even if the honour has no real credibility,” says the Western Australian Department of Commerce website. “Don’t be a ‘Fool of the Year’ by falling for this nonsense.”

No complaint, no advice: CAA

Consumer Affairs and Information Director H.D.C.N. Thilakarathne said Consumer Affairs Authority could not investigate dubious awards without consumer complaints. “We haven’t received any complaints. So we cannot advise consumers on that topic,” she said.

“Besides, regulating international trade is the responsibility of the foreign groups involved.”American Center Director Christopher Teal said the US embassy could not “vouch for any individual American company” involved in awards schemes.

Dilipan Tyagaraj, the European Chamber of Commerce of Sri Lanka President, said consumers and potential victims should remain vigilant as to “apply the principles of prevention versus cure.”“There are specific European Union regulations in place with regard to unsolicited mail communication, and other regulations pertaining to anti-fraud measures,” Mr. Tyagaraj said in a statement.

“There are further regulations in place with regard to organisations awarding certifications… ECCSL is in a strong position to ascertain the credibility of such organisations and provide advisory and policy recommendations when requested.”




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