ISSN: 1391 - 0531
Sunday, March 11, 2007
Vol. 41 - No 41
Financial Times  

Are you a network partner in this process?

Benchmark Transparent Governance Structure

During a keynote address at a recent workshop on the “Right to Transparent Governance,” the foremost legal educator and top legal professional stated that a unique transparent governance process is now in place in Sri Lanka, with persons on all sides of non transparent transactions, very openly engaging in such transactions with full visibility before the civil society.

Sri Lanka is certainly unique in that respect, as it is usual for parties to non transparent transactions to carry them out in secret and attempt to hold audit trails out of reach of other stakeholders. Wise Old Owl picked up from cocktail circuit conversations, the following independently unverified information, that appears to confirm the unique status now attributed to Sri Lanka;

* New, benchmark demands are now openly established in connection with large volume commodity imports, where lump sum up front payments are demanded by key political and other decision makers, in addition to the usual volume linked payment per ton, that too at a rate 10 times the previous norm (the new standard is $10 per ton, whereas the normal industry reservation for such incentive payments was only $1 per ton). The new demand requires those submitting tenders, if they wish to be successful with the trade opportunities, to adopt new pricing formulae or in the alternative to resort to specification/quality related adjustments detrimental to end consumers.

*An importer from the region, wishing to take advantage of trade agreements had arrived in Sri Lanka with much hope of establishing a long term export contract for a mineral resource and had sought an appointment with a political decision maker. He returned home in shock, without the planned meeting taking place, on being informed of a new benchmark minimum upfront commitment fee to be guaranteed per ton of the exported mineral, prior to the interview being granted with the decision maker.

* A successful foreign construction contractor, based on the assessment of a model construction project already successfully completed, had received, following an open tender process, a letter of intent for a series of similar constructions in other designated cities. Based on this letter of intent, the contractor had mobilized resources and made all arrangements for the work to commence. To his utter surprise, the letter of intent had been withdrawn and awarded to another contractor, whose local agent is well endowed with powerful networks of support.

* A major multi million dollar capital project for a much needed infrastructure development that was in the pipe line for many years is to be on offer soon with international funding. A team of foreign consultants had been engaged to carry out the preliminary study, feasibility and specifications for tender. These consultants were first openly conveyed guidelines for adoption in developing tender specifications, with the intimation coming from the immediate political decision maker on the subject matter. Quickly thereafter, in a very transparent manner, guided by a more powerful advisor, the consultants were directed to amend specifications to one that will obviously fit another interested party.

* The commitment to transparent, good governance led, accountable and corruption free administration centred securing of military hardware on a monopoly basis, was justified by establishing a private company fully owned by government. Close circuit network partners were appointed as directors of the company and all transactions are now processed via that company. Whilst the general public believe in this open transparent act, no one points out that these government transactions using public funds are out of scope and out of reach of the Auditor General’s review, being contacts of a private company. The enabling legislation providing for the Auditor General’s review, in the form of the draft National Audit Act, yet remains gathering dust in the shelves without being enacted.

In the name of security, all new ministers are to be provided with imported bullet proof vehicles at a cost of Rs 80 million each. A village leader having read this news item said “it must be a printers devil, with all new vehicles costing the reported sum” and later when faced with reality, was seen tearing apart her hair in disbelief and anger stating “Eighty new village development projects could be started with the cost of one vehicle.”

It is usual good governance practice in the private sector for those who take up new positions of trust and direction within a company by appointment to the board or top team executive positions to be formally introduced to the stakeholders, with the transparent publication of their curriculum vitae, thus justifying their suitability, capability and value they bring to the management of the affairs of the company. This good governance principle, 17th Amendment requirements and review by the Parliamentary High Posts Committee appears not to apply persons recently appointed to high posts and as Presidential Advisors, despite some of them being foreign passport holders with their career details overseas not known to the stakeholders of society
The government and NGO’s appear to account for resources on a cash basis only, with occasional publication of output figures. The modern day best governance practices of pre committing and post implementation assessing of outcomes ( not outputs) and the delivery of agreed goals and value for money are totally ignored by both NGO’s and government.

With the transparent goal of easing traffic congestion (whilst not publishing that it is in fact to assist the security of VVIP movements) Rs 400 million unplanned allocation of funds have been committed and no one appears interested in evaluating the outcomes, including the traffic jams and petrol waste consequent to VVIP movements within a framework of a list of ever increasing VVIP’s.

Parliament has by a rule adopted with transparency but without financial justification, assessment of affordability (especially of the consequential pension costs) approved 65% upto 150% salary increases to the President, Ministers, Parliamentarians and Provincial Ministers and members, who in addition receive a gift capital gain in the form of a duty free vehicle, a benefit denied to fellow public servants. To cap it all, those who hold the scales of justice at the highest level have denied other public servants even the right to have their fundamental rights in this instance to be determined by the highest court of justice.
The list of similar acts done in the name of transparent governance is endless.

Business leaders must specifically examine whether they are in clasped hand position with those engaged in such transparent acts. Business leaders must be encouraged to compulsorily see the Hindi film “Guru”, now running at a Colombo film theatre and asked to compare whether their own actions and justifications are the same as that adopted by the “Guru”. They must reconcile their commitment to corruption free operations by a self critique of their own past actions and especially like the “Guru” assess in the name of relieving a heavy burden whether they have ever corrupted even the normally incorruptible persons. Let these leaders cross their hearts and state that sharing venture profits with politicians and officials are acts of corruption, irrespective of having up to now chosen to label these payments and perks as “sharing of profits”.

The shame on society is that not only the opposition in parliament but media, chamber leaders and civil society also just keep watching this circus performance continue in the name of transparent governance. Should not civil society apply pressure on those in governance ( government/public administration /NGO’s) ( corporate sector leaders to have a similar responsibility to shareholders) to adopt a code of conduct similar to that introduced by the UK in 1994 for persons in public life, noted below;

* Selflessness – Holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their families, or their friends

* Integrity- Holders of public office should not place themselves under any financial or other obligations to outside individuals or organizations that might influence them in performance of their official duties

* Objectivity- In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for reward and benefits, holders of public office should make choices on merits

*Accountability- Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office

* Openness- Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands

* Honesty- Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interests

* Leadership – Holders of public office should promote and support these principles by leadership and example

* Civil society must further insist that holders of all key public office be called upon to submit annual sworn affidavits of compliance with the above code to the Parliament. Similarly NGO and corporate sector leaders should be called upon to publish as a part of their governance report in annual reports, a sworn affidavit of compliance with the code.

The affidavits of corporate sector leaders should also be specific in that neither they nor the business entity have engaged in any acts of bribery, corruption or transactions of non transparent nature.

Let leaders commit to this task with a commitment to a goal, that they will together, within the next five years take Sri Lanka to the positive upper quartile list of countries in the opacity index and also score high positive marks on transparency, corruption and accountability oriented governance factors of the global competitiveness index and ease of doing business index.

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Copyright 2007 Wijeya Newspapers Ltd.Colombo. Sri Lanka.