The questionable privatization and the Rule of Law

The article appeared in the Sunday Times of December 30, written by Nayantha Wijesundara, in reply to my previous article, begs at least a short reply in the public interest, particularly, as it misrepresented my previous article, while misleading the uninformed public. Suffice it to say that Mr. Wijesundara has picked up one of the points (i.e. Rule of Law) I have raised and connected it to another issue of majority shareholding of the country in order to justify the interests of the President and his entourage.

He has, however, chosen not to pick up all the points raised by me, in defence of his political admirers. I beg to differ with him that there was any public interest element in the President’s return in the context of the visit. By no means had I attempted to justify the questionable privatization process and many other issues that the national carrier has entangled in; the issue here is totally different.

Mr. Wijesundara’s “academic” analysis of rule of law presupposes two key factual errors; firstly he assumes that the concept of equality in the doctrine of Rule of Law permits privileges to a certain class of people such as MPs and, therefore, giving privileges to the President is not contrary to the Rule of Law; secondly, when the government has 50% of shares, the CEO of SriLankan Airlines has no option but to follow the “will” of the majority shareholder. Both these points unfortunately lack any justification in law and particularly in the modern context of governance. Let me briefly demonstrate the two issues separately.
In his display of “in-depth” academic knowledge, Mr. Wijesundara refers to A.V. Dicey but has forgotten to refer to the often quoted administrative law “Report of the Committee on Ministers, Powers” [Cmd (1932) 112] which in no uncertain terms held as far back in 1932 that “what the rule of law requires is that the government should not enjoy unnecessary privileges or exemptions from the ordinary law”. Let us not forget that the doctrine of Rule of Law has developed certainly to control the abuse of power by authorities. In the 2001 general elections, the then President Kumaratunga and few others (privileged groups) exercised voting rights from their respective residences, while a large number of others were prevented from voting at the polling booths. In Thavaneethan vs. Dissanayaka, Justice Mark Fernando analyzed the legality of privileges given to these politicians and held that the grant of special privileges violated equality provisions under the constitution.

Mr. Wijesundara’s statement that under the constitution the President is “above the law” reveals his superficial knowledge on the positive developments. Our courts have repeatedly held that immunity granted to President (Article 35) is a shield for the doer and not for the act (Karunathilaka vs. Disanayaka). Even though the President cannot be prosecuted while in office, those who carry out illegal orders for the President are subject to the normal laws of the country and are subject to even prosecutions. Present Chief Justice Sarath N Silva has in a recent case (Senarath v. Kumaratunga) involving former president’s unlawful entitlements, held that “where the executive being the custodian of the People’s power, abuse of a provision of law in the purported grant of entitlements under such law and securing benefits and advantages that would not come within the purview of law, it is in the public interest to impede such action before court.”

Under what proposition of law, an arbitrary, mala fide or illegal decision of a majority in a company should prevail? Even the corporate/company law has now developed to such an extent that oppression of minority shareholding has specific legal remedies. In public law, the doctrine of constitutionalism has evolved to protect the minority against majoritarianism. In common sense, unless a voting is involved in instances such as elections, in all other instances, decision making authority has to professionally consider the merits and demerits, without fear of majority oppression. Whether Sri Lanka has 51% (majority) shareholding should not be the sole criteria for a decision of the CEO. If Mr. Wijesundara’s argument is correct, minority shareholding is of no use to the management! It is important to realize that for a vibrant and productive corporate sector, there must be rule of law in a country; and for a country to have productive economy, the corporate sector should also display highest standards, including rule of law.

The political immaturity and arbitrary actions of the politicians perpetuate not only because of the arrogance of politicians themselves, but also due to the so-called “educated intellectuals”, who justify blindly the erratic political moves. For them, democracy and rule of law are only academic exercises.