The Sunday TimesNews/Comment

07th July 1996

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The collapsing mills

The local textile industry provides direct employment to around 100,000 persons and indirect employment for another 50,000 families. Textile Mills were set up with the twin objectives of employment generation and to save foreign exchange for the country. In the past, high protection was given by import licensing and also higher import duties.

The new economic policy of the U.N.P administration initiated in 1977, began to dismantle import quotas, but continued with licensing, while progressively reducing the import tariff rates. Specific cum advalorem duty was levied to counter under invoicing and also import of stocklots from Singapore and Bangkok. Couriers who brought textiles from India had to be content with narrow personal effects. The textile industry failed to keep up with changes in technological changes elsewhere due to very low surp lus basically due to heavy income taxes, which in the hands of a company and its shareholders amounted to nearly 90 percent. The argument that the industrialists reaped heavy profits behind a tariff wall and license control system is just hollow.

The Presidential Tariff Commission, appointed in 1990 made recommendations on tariff reduction, removal of license, control in an orderly manner to avoid shock treatment. The industries were given time to modernize. The producers accepted the realities and sought assistance, by way of lowpriced term loans to modernize their units. They estimated that nearly US$ 150 Million are needed urgently to modernize these units. They quote the example of Japan, where the Government gave an outright grant for moder nisation of textile mills and as a result Japan leaped to the forefront in textile manufacture. In the absence of such assistance, manufacturers demanded at least an acceptable tariff protection and also a revamped customs administration to combat under invoicing, smuggling and leakage by BOI approved garment manufacturers.

The Alliance Government reduced the tariff rate to 35 percent. The customs duty surcharge to protect handloom weavers was removed. Permission was given to the garment exporters to sell 10 percent of their exports in the domestic market, a policy that virtually killed the local producers. A survey reveals that apart from leakages, even local sales have not borne the customs duty of 35 percent. Daily, textile products are brought from Madras, Trichi and Trivandrum. There is hardly any customs checking. The daily loss of revenue is over Rs.1.5 million. One can easily see this happening at the Airport.

The Government also assured the Textile manufacturers that a preshipment inspection will be implemented in 1996 to arrest customs malpractices. Although offers have been called it is understood that the scheme will not see the light of day.

The then Secretary to the Treasury, Mr. A. S. Jayawardena also assured the textile manufacturers, that loans will be given to them at 8 percent per annum, on their overdue loans. This has now been changed to longterm loans. Although 8 months have passed, the "Interest subsidy" has turned out to be a mirage.

Several manufacturers who were interviewed, expressed their dismay and utter frustration. They pointed out that the industry is folding up due to incompetent policy management. Relief measures that have been agreed upon just remain on paper. They also pointed out that developed countries protect their industries and more importantly jobs. America the high priest of free trade policies protects its textile and leather industries with import quotas. Auto manufacturers are protected through voluntary expo rt restraints, particularly on Japanese exports.

As regards the dairy sector, it is estimated that on an average it costs the American tax payer US$ 10,000 to maintain a cow. Producers of wheat are given subsidy for noncultivation. Exporters of wheat are again subsidized. Japanese farmers produce rice for the home market at US$ 1,000 or more per M/T whereas the world market price is US$ 250 per M/T.

Auto pilots who are in charge of fiscal policy should be guided by national, economic profitability and not just be directed by the IMF and the World Bank, whose interest lie not with poor countries like ours. But with that of the developed countries. Blind acceptance of IMF/World Bank prescription can lead to severe socio-economic problems. Rice produced in Sri Lanka is costly. Free market riders may even recommend that we import rice from Vietnam. We have to adopt a sensible longterm strategy to ma ke agricultural production competitive but not short-term costly policies. Will the Government tell the country what their policy is. Textile quotas are to be phased over a priod of 15 years. Will the uniform tariff of 15 percent announced last year to be implemented soon be an economic disaster?

Current status of the textile industry is perilous. There are three Spinning mills and one is already closed down. The other two may follow suit. Work in these mills have been sealed down and a number of workers have been laid off. Two of the larger weaving mills have posted losses of Rs.290 million in 1995. Stocks are mounting due to fall in demand, ascribed to the tight monetary policy implemented from mid 1994. It is also reported that 43 weaving centers have put up shutters.

Cyntex and Jafferjees, largest producers of fabrics are feeling the full disastrous impact of unsound industrial and financial policies. Already a number of employees have been laid off. Similarly, it is reported that Kuruwita and Hybrite Mills have closed most of the weaving sheds and are contemplating closure of the rest. On top of mismanagement comes the impact of power cuts, which adds further burden. Can manufacturers pay wages without production and trade?

Manufacturers are desperate and say promises are made and they continue to be excellent on paper. But incompetency in all areas of policy and administration will throw thousands of workers on to the roads.

Situation is very serious but alas Nero continues to fiddle!


How right is our human rights?

By Kishali Adhikari

Back in February 1993, a beleaguered UNP Government under international siege regards its atrocious human rights record hit upon a brilliant idea. The formation of a National Human Rights Commission would lessen some of the pressure emanating from Geneva and New York, they reasoned. The idea had already been discussed at the All Party Conference in 1990 if only needed giving effect to.

It took till January 1994 however for the Cabinet to order that draft legislation be prepared for this purpose. When the elections of August 1994 swept the PA into power, the papers were still to be finalized. The new Government eager to proclaim its purity, was only too happy to push through the necessary legislation. In August 1995, the Human Rights Commission Bill was presented to parliament. Come this Tuesday, it will be debated in the House to the inevitable hosannahs of the Government and the inevi table breast beating of the opposition.

But what of the Bill itself? Could it be hailed as being sufficient to set up a powerful, effective and independent body that would gather all the already existing human rights mechanisms in the country under its wing? One cannot be too wildly enthusiastic when one looks at the piece of legislation currently before parliament. When the Bill was first presented to parliament, it was met by a storm of protests from human rights lawyers, academics, activists and pressure groups islandwide who took very stro ng exception to certain clauses in the Bill. It was then referred to a standing committee which suggested incorporating some of the proposed amendments. Many of the important changes have however still not been made, claim disgruntled rights activists in the country.

For a commission of this nature to be worth more than the paper it is written on, certain important criteria has to be satisfied. It has to provide relief in a quicker and more effective manner than our over worked law courts, yet not usurping the work of the courts.

It must possess the powers needed to accomplish this task and it must not only be independent but must be seen to be independent.

How does the proposed commission fare on these tests? The commission consisting of five members is given the power to monitor executive and administrative practices, investigate complaints of fundamental rights violations and advise the government on how to comply with international human rights standards. Note the difference. The commission can only inquire into "fundamental rights" violations, not "human rights violations". Fundamental rights are only those rights declared and recognized in our constit ution, whereas human rights are those rights set down in the international covenants on civil and political rights and social and economic rights.

Fundamental rights are therefore very much narrower than those human rights set out in the international instruments. But one is hard put to understand why the commission has not been given the power to investigate and inquire into human rights violations as well. Perhaps the framers of the Bill were wary of opening the floodgates. But this caution is highly overrated. In the first place, the commission by its very nature will only conciliate and mediate regards the alleged rights violation, not engage i n spectacular decision-making. Therefore, widening of its mandate would not invite any dangers. Secondly, the PA Government itself is pressing forward a constitutional package that includes a whole host of new rights such as the right to life, right to property and freedom of privacy. The aim is to make our Fundamental Rights chapter more in tune with international standards. In this context, widening of the mandate of the commission can only demonstrate the credibility of the government.

In any event, having the commission only investigating fundamental rights makes it a needless duplication of the supreme court which is already empowered to look into fundamental rights violations. Moreover, why then call this commission, a Human Rights Commission? One should rather call it a Fundamental Rights Commission.

Other problems with the mandate of the commission are apparent. The Commission can only look into executive and administrative action that might constitute a fundamental rights violation. Again, this is a duplication of the already existing constitutional provisions, the commission has not been given any wider powers. The alternative could have been to give the commission the power to inquire into state action as well. This is a much wider area than executive and administrative action and in the United States for example, violations of rights by private individuals affecting the public interest has been held to come within the term "state action."

The Bill does allow the commission to proceed against private groups in one instance. The commission is given the power to investigate a fundamental rights violation that has arisen as a result of an act of terrorism arising under the Prevention of Terrorism Act. Terrorist groups therefore are brought within the ambit of the commission. While the urge to hold terrorists responsible for their brutal acts is understandable, one cannot help but wonder at the effectiveness of such a provision. Is the commiss ion expected to mediate with or conciliate such groups? What kind of effective recommendations can the commission make with regard to these groups? Does not adequate provision already exist in the law to deal with these issues - what can the commission hope to achieve more?

So much for the mandate of the proposed Human Rights Commission. A closer look at its powers will now be appropriate. The commission can look into allegations of fundamental rights violations without requiring a formal complaint. Complaints can moreover be forwarded by a group of persons acting on behalf of the victim where a rights violation is discovered to exist, the commission can attempt to solve the matters by conciliation or mediation. Where this is not possible, the commission may recommend suita ble measures to be taken that includes referring the matter to court. Persons to whom such recommendations are addressed are required to report back to the commission on the action taken. Where there is failure to submit such a report or the report is inadequate, the commission is empowered to submit a report to the President who is bound to place it before parliament. The commission can therefore recommend and no more. Its enforcement powers are non-existent.

Apart from this, the investigation powers of the commission should not be limited to individual complaints. Instead, it should be able to investigate large scale incidences of human rights violations in any part of the country at any given time, as for example the Embilipitiya disappearances. This would relieve the government of appointing adhoc commissions to investigate these matters whenever the need arises. Moreover, the commission should be specifically given the facility of an independent and effec tive - investigating unit for this purpose. At present, though the commission is given the power to investigate, it is not clear in practice how this is to be done. Obviously, the police cannot be expected to be given the responsibility. The Bill should therefore provide for independent investigative machinery.

Coming to the provisions of the Bill dealing with the independence of the commission, again one finds many omissions pointed out by human rights groups that have not yet been rectified. To be a member of the commission, it is necessary only that one should have "knowledge of or practical experience in matters relating to human rights". Rather it was suggested that the stricter test of having "proven expertise and competence in the field of human rights", be adopted. The suggestion has not been accepted.

Again, it was pointed out that the method of appointment of the members is unsatisfactory. Right now, the Bill provides that the members be appointed by the Constitutional Council which is an adequately representative body. However until the Council is established, the members would be chosen by the President, the Prime Minister, the Speaker and the Leader of the Opposition. Appointment is therefore unduly political. The appointment process should instead have the participation of the judiciary as well as independent non political persons and bodies reputed in human rights issues.

In general, although the Human Rights Commission Bill has been under review for quite sometime, it is apparent that there are still some glaring deficiencies to be corrected. While the willingness of the government to accept criticism and comment has to be acknowledged, a greater flexibility in actual implementation of these criticisms and comments might be welcome. At present, the Human Rights Commission Bill does not possess any special aura that distinguishes it from other laws setting up other commis sions in the past. Sri Lanka has been a multitude of such institutions. The Human Rights Task Force, the Human Rights Center of the Sri Lanka Foundation Institute, the Commission for the Elimination of Discrimination and Monitoring of Fundamental Rights and the Commission on Involuntary Disappearances are only some of them. All these commissions, committees and bodies set up in a merrily uncoordinated manner have been hampered by inadequacy of power, resources and funds. Ultimately, their reports lie forlor n in some bureaucrats' desk.

Perhaps it is time that the Sri Lankan Government takes a closer look at what really constitutes a healthy human rights policy. In its recent comments on the situation in Sri Lanka, Amnesty International, the reputed human rights watchdog body pointed out that though the creation of a Human Rights Commission is important, it can never replace safeguards provided by an independent, impartial, adequately resourced and accessible judiciary. This should go hand in hand with a thorough review of existing secu rity measures and legal remedies such as fundamental rights and habeus corpus petitions. Most importantly, an independent machinery into the investigation of human rights violations should be established, other than the police.

The need for this has been felt for a long time. It has even been suggested that there should be a Public Prosecutor of Human Rights Violations. Ideally, the Commission shortly to be set up could have been entrusted with this task. The Bill however does not appear to invest the commission with such a responsibility. A determined government policy aimed at holding perpetrators of human rights violations fully accountable is also necessary. At present, State lethargy in prosecuting these offenders continue unchecked. In 1994, the Supreme Court recommended disciplinary action against 46 police officers found guilty of human rights violations. There is no information regards what steps have been taken in this respect. In one judgment given after examining six fundamental rights petitions, the Supreme Court declared:

"It is not once or twice that we ordered the IGP to take action against errant police officers but the IGP has not acted on Court Orders excepting in one case where a Sub Inspector was dismissed from service. To give him another order would be to make the judiciary a mockery."

A coherent and comprehensive national human rights policy is aimed at establishing accountability for past human rights violations and the prevention of abuses in the future. Setting up a body which claims the grandiloquent title of "Human Rights Commission" and little else will not further such a policy. Much more needs to be done if the tears in our national human rights fabric are to be fully mended.


Russia's search for status

It was Alexander Lebed's victory as much as President Boris Yeltsin's. Besides Mr. Yeltsin is a sick man. So General Lebed may call the shots. Just a week before the polls, a panic-stricken President dismissed seven generals, all outspoken critics of the Yeltsin administration and its attitude to the armed services. In the next few months, we may be hearing more about Alexander Lebed and the army than about President Yeltsin's cabinet. And needless to add, about an economy in pretty bad shape. Financial stabilization had not yet delivered the promised economic revival, and GDP in May had contracted by three percent compared with May last year, admitted Mr. Yebgeny Yasin, the Russian Minister of Economic Affairs.

The same report by correspondent Chrystia Freeland said industrial production had dropped by four percent. Though inflation had been contained, and the IMF targets met," capital flight out of Russia had increased over the past few months. "Will the investors return now that Gennadi Zyuganov and the "red menace" have been crushed or their menacing advance halted?

The fate and fortunes of President Yeltsin's second term will be decided by how well the Russian economy will be managed, and the flow of foreign investment, and the confrontation, quite predictable, of the Yeltsin Presidency, and a Parliament dominated by Communists, nationalists and other hostile parties. But we cannot possibly neglect a major subjective factor, a factor that proved its importance in the election campaign - the President's health and his capacity to govern a far from stable or settled Russia. Speculation and rumours may have lost President hundreds of thousands of votes. More critically, it made General Lebed, his National Security Adviser, the key decision-maker. And Lebed's power-base, for obvious reasons, is the army, where he seems to control a faction, the upper echelons. President Yeltsin sacked (or was advised to sack) seven top generals. And these generals had been branded "Grachev loyalists", meaning trusted supporters of General Pavel Grachev, the Russian Defence Minister no le ss! It was a purge, old-style. Among the casualties were the head of the Foreign Intelligence Service (F.I.S.), a re-organised K.G.B. Another causualty was the boss of the Presidential Guard.

With President Yeltsin hardly able to do a full day's work, the new pro-Lebed service commanders would now control "internal security". The 'rebels', all Grachev loyalists, included General Victor Barynkin, first deputy head of the General staff, General Vladimir Shulikov, deputy commander of the land forces, and General Lapshov, head of the Defence Minister's personal staff. The rank of these "purged" rebels or dissidents, suggests how seriously this pre-election initiative of the National Security Advi ser should be taken by all students of the current crisis. And the crisis will not be resolved soon or smoothy, President Yeltsin's convincing 54% notwithstanding. President Yeltsin's health and the condition of the national economy will shape political developments in the immediate future.

Known devil

Communism has made quite a strong come-back in some of the eastern European countries, former members of the Warsaw Pact and COMECON but better known in a western media influenced by the Cold War as "satellites". The Commonwealth of Independent States (CIS) were disturbed by certain remarks made by candidate Zyuganov during his election campaign.

Eastern Europe has advanced much further on the road to economic reform and adopted western parliamentary practice. "We are horrified to think that the Russian people may be carried away by the nostalgia for the past."

But the past has expressed itself strongly enough to win a forty per cent vote. It would be foolish to ignore that fact.

New status

Russia is not a superpower, except militarily. But does the concept of a one-dimensional superpower make sense? Russia's nuclear status, its military strength and vast resources qualifies it to membership in any Big Power club. But we are dealing here not just with "security" as defined by pundits on security - national, regional or global, but mass psychology, in this instance the mind-set of a people who have watched the collapse of the mighty Soviet Union. Gennadi Zyuganov's advisers were smart when t hey proposed that he should be the candidate of a National Patriotic bloc. National, patriotic both words seek to answer the problem of insecurity and pride. It was President Carter's National Security Adviser Zbigniew Brzezinski who argued in the Nyk Times that "Mr. Yeltsin's presence at a Group of Seven (G7)" satisfies a craving for continued status as a world power, and Moscow officials have begun calling the meeting the P-8, Political Eight", instead of Group of Seven.

President Yeltsin has won comfortably. But the challenges that face him are monumental, from the economy to Chechnya. For that gigantic failure he blamed the Russian army, and General Grachev personally. Mr. Yeltsin has no scapegoats, no excuses now. He must crush the secessionist Chechen uprising. It won't be easy. Or will he have the courage to give the Chechens a free choice?

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