The discussion was moderated by Shamindra Kulamannage, producer of Lanka Business Report. (More related links at the bottom of the page)
The following is the text of the speech delivered by Arittha Wikramanayake, precedent partner of Nithya Partners and a former securities regulator.
I must admit to you that I am not as passionate or disturbed as some of you, on this issue. This is not the first time that these issues have arisen, and it certainly won’t be the last.
The present agitation, as far as I see it, is fuelled by three judgments, each dealing with transactions that are definitely not of the same kind or quality. In my humble opinion, one might arguably be good, the other bad, and the third, at least a little bit ugly. To condemn public interest litigation or fundamental rights procedures, and to argue that the private sector or transaction relating to public assets should be immunized from the process is therefore a little thick.
Let’s look at the facts dispassionately.
First and foremost, one cannot, by any measure, even claim that public interest litigation or fundamental rights litigation is something that should be shunned. These areas probably account for the fastest or most significant development of legal principles, especially in areas like human rights, environmental and consumer protection. It is also the only avenue to justice that most, less privileged sectors of society have to the legal system. Though India is the best example, we, in Sri Lanka, have also benefited from this process. Take for instance, the judgments dealing with issues ranging from sand mining, noise pollution, and the preventing of eviction of minorities. I am sure, most of us cheered at that time. To turn against the process, now that a judgment or two affects us, rightly or wrongly, would be very short sighted.
The argument that these judgments stifle activity is also not new. Inasmuch the private sector complains that this process stifles investments, we have heard similar arguments being trotted out by others who have been at the brunt of it: policemen when they are pulled up for torture; bureaucrats when they abuse their powers; the list goes on…. I am sure that no one suggests that their arguments are valid or that they should be immunized from the process. So why should the private sector or transactions relating to public assets be treated as sacred cows?It is also argued that a waiver of the 30 day time bar inhibits business operations. Though this is true to an extent, since it does undermine predictability in business transactions, at times, flexing of this time bar is certainly not new. In fact, this was a practice that had begun over 15 years ago, in respect of application stemming from illegal detention, and then applied generally in respect of fundamental rights applications. And, there is a rationale to it: being that one should not be permitted to carry out a transaction under the cloak of darkness and run the clock past the 30 days after which it cannot be challenged.
The argument that it inhibits investment (local and foreign) is also not very convincing. I don’t think anyone can claim that there has been a dwindling of inward investments because of these judgments or procedures. The fact is that there has been little activity in those areas because of other factors, like the war, and the fact that it has been Government policy not to proceed with transactions related to public assets. I would say that this is therefore just another red herring, similar to the blame being previously directed at labour regulations, the war, and corruption. In a sense, this is just the flavour of the month. I must also point out that for many years there were complaints that investment was being affected because of corruption, (and this is probably true) and if the judgments seek to address this, we cannot complain about the process.
Having said all this however, I must concede that there are some lessons to be learnt here, and that is that we should all look at what needs to be done to avoid a repetition of these developments. The fact is that transactions relating to public assets should be carried out transparently and with accountability. I am not for a moment suggesting that at least some of these transactions that were set aside were not carried out transparently. But there were others that were certainly not, and if you recall, it was the private sector itself that complained about there being no level playing field. We all have short memories.
Another lesson which I think should be learnt is that records should be kept during these transactions. If you look at many of these transactions, they are certainly not corrupt in the sense of dishonesty, but they certainly lacked documentation, especially on why decisions were taken. Again, I would hasten to say there probably were reasons for this: mostly the lack of resources and time. However, when such decisions are taken, one must appreciate the possibility that there might not be material to support the decisions if they were to be examined later on. That is why the law places the responsibility on institutions and not individuals in carrying out such functions. What we must understand however is that when we deal with public assets, one cannot be flippant about it.
There are some other issues in the list of items provided which I would briefly comment on. Firstly, immunity for politicians and penalties for public servants. I don’t think it matters whether it is a public servant or politician involved. If there is wrong doing, the blame should lie there. There is also an issue raised on parties unrelated to the transaction, being found fault with. I don’t know what the actual reference is to but to the best of my knowledge, the law requires that those against whom a finding is made should be heard. If it was not so, the law has a mechanism by which such matters can be canvassed. There was no such canvassing, presumably because there was no such findings.
I hope my comments have not touched a raw nerve. They are certainly not personal since almost all of the parties to these transactions are known to us. However, we must be objective about it and the process cannot be compromised for the sake of individuals.
Click on related links for more on the forum