Business - be truthful on corruption!

Business leaders should recollect the Julie Andrews song– “Let us start at the very beginning, A very good place to start, When you read you begin with A, B, C….” and recognize at the very beginning, the need to be truthful and accept the significant extent of corruption in Sri Lanka.

This is not so according to the results of a survey conducted and presented by a highly recognized research agency with the objective of gathering evidence and perceptions of the impact of corruption in Sri Lanka.

The survey recognizes that governance in Sri Lanka is perceived as unsatisfactory; international literature shows a bleak picture of governance and corruption; and a number of international organizations (World Bank, Transparency International) have voiced concern that Sri Lanka is plagued with corruption due to poor quality of governance.

However, evidence gathered from private sector local and FDI investors, in large/medium and small scale investments in Colombo, Negombo, Galle, Matara and Hambantota suggests that corruption does not have a significant impact on expansion related investments The respondents have articulated that ‘grease the wheel’ form of corruption is there to some extent; it does not affect investments; this form of corruption is tolerable for a country like Sri Lanka. The investors surveyed have highlighted that the separatist war, poor infrastructure, lack of transparency and inconsistent government policy are a greater problem than corruption.

A former Transparency International Sri Lanka Chapter Chairman, during a critique of the survey results stated that the findings are very dangerous; an open invitation to whitewash the high level of corruption; justifies continuance; and a boon to those in governance to openly quote in their defence. He cites examples of publicly acknowledged instances of corruption associated with the privatisation of high profile institutions and the sale of licences at high prices after the original licences have been assigned to network partners at low costs.

Another former business leader stated that the findings are totally out of line with factual case studies and incidents reported by the private sector to Chamber leaders, commonly discussed instances of corruption, much publicised abandoned investment projects of leading domestic and FDI investors, reported media ‘exposes’, living standards and accumulation of wealth of key players not supported by known sources of income, evidence of a significant black economy, the level of CD’s in circulation, the escalating prices of property, perceived extents of currency conversions, etc. He believed the ‘definition’ of corruption and the acceptable level of ‘grease the wheel’ payments in the minds of the interviewed persons have clouded the findings.

He believed that some private sector entities and individual business leaders do not accept the following, as acts of corruption:
• Payments outside Sri Lanka
• Payments to family members of key officials
• Gifts, entertainment and other non cash benefits
• Payments below 5 % of contract value
• Sharing of gains with officials who facilitated transactions
• Corrupt acts done in a ‘competitive spirit’ to prevent another competitor getting a benefit
• Getting specifications written to suit specific bidders,
• Excessive “grease the wheel” payments He went on to quote incidents that clearly establish acts of corruption prevalent
in Sri Lanka;
• A Chamber develops a proposal of prospects in a sector, invites support from friendly countries and receives firm offers with a comprehensive package of investment options. The Chamber is unable to persuade the responsible Ministry to allow venture negotiations.The Ministry insists that all contracts be channelled through a company connected to the Minister.
•A foreign investor bids for an investment option amongst several others and is assessed by an independent technical panel to be the best bid with technical capability and commitment to support the sector advancements and development.
The Committee is directed to change the award in favour of another on the grounds of the selected party being connected to an opposition party.
•In bidding for the concessions of managing a sector upon privatisation of management, two leading contenders with significant capability are denied consideration on the directions of a political VIP.
•Several instances of land, land lease, licences, concessions, tax holidays related investment options denied to local and foreign investors due to perceived demands of VIP’s f or corruption related payments.
•Construction and supply of equipment related corruption exposed in media.
•EPF and ETF funds being invested in government securities at below market rates based on government directions.
•Power sector corruption and abuse of power .
•The operations of a government fund, by
the private sector operators in a manner dis
advantaging the government and unjustly
enriching themselves and taking a dispro
portionate share of revenue.
• Unsolicited single proposal evaluation
framework.
The values, perceptions and truthfulness of business leaders who facilitated such results to emerge are questionable and need change.
Email:wo_owl@yahoo.co.uk