25th December 2016

Eran Wickramaratne Esq.

Deputy Minister of Public Enterprise Development,

Ministry of Public Enterprise Development,

Levels 13 & 37, West Tower, World Trade Centre,

Echelon Square, 

Colombo 01.

Dear Mr. Wickramaratne,

An Open Letter in Response to Your Willingness to be “Open as a Government” and “Consent to Review Suggestions and Take Reform Action”

Civil society congratulates you on your recent announcement that the Government is open to discuss suggestions; and following such submissions ready to take reform action. This indeed is the fervent expectation of the citizens, who voted in your government, believing in its commitment to democratic good governance.

In the context of your above call, the civil society implores that you take steps to review the following suggestions and take timely positive governance based reform action with transparency, abiding by the aforesaid principles committed to by the government in its 2015 election manifestos;

1. Review and publicly debate the presumptive three alternative scenarios of governance open to the Government, as articulated recently by Dr. Razeen Sally and take timely reform action to assure a future filled with peace, ethno religious harmony and sustainable macro-economic growth and stability, whereby citizens can enjoy the benefits of equity, inclusiveness and prosperity, as residents of this independent nonaligned nation.

2. In the context of recently reported incidents and unacceptable public announcements by some members of the government and some leading members of the Executive, take immediate steps to uphold the freedom of expression and the right to information of citizens, facilitated by effectively activated and duly empowered independent public institutions especially set up for that purpose. As a priority inform the public of any pending challenges in the power sector.

3. As a follow up to the process of selection by the Constitutional Council of designated public officials and members of public institutions, either expand the scope and terms of reference of the said Constitutional Council or establish an adjunct body with independence and capability to select other key high office holders including but not limited to the following;

a. All Secretaries of Ministries  

b. All Chief Accounting Officers

c. All Heads of Departments

d. The Governor and members of the Monetary Board

e. The Heads of and the Senior Deputies of the Armed Forces and the Police

f. The Chairpersons and members of all Regulatory bodies and Institutions

g. All persons appointed as Ambassadors and High Commissioners

h. All persons appointed to represent Sri Lanka in International bodies including the bodies administered by United Nations, International Financial Institutions etc

i. Chair persons and Council Members of Universities, Vocational Educations Institutions,  and Research Institutions

j. Chairpersons and members of State Banks and Banks Controlled by the State 

k. Chairpersons and members of the Boards of State Corporations and State Owned Enterprises

l. Members of all Commissions of Inquiry and Advisory Committees appointed for Policy Development, Policy Implementation Oversight and Policy Reforms

4. Take urgent steps to expand the scope, coverage and accountability of the Code of Best Practice in Corporate Governance for State Owned Public Enterprises (see box; also available at http://www.treasury.gov.lk/documents/63940/182428/codeofbestpractice.pdf/107546ab-4ffc-4b83-b3a6-8ed0011d8859) incorporating new/revised provisions suggested in the attached schedule.

5. Establish parallel Court Systems dedicated to hear corruption related cases, with daily hearings to a finish, operating on a two shift basis (9 a.m.- 1.30 p.m. and 2.30 p.m.to 7 p.m.) facilitated by electronic interfaces and communications, where evidence, network facilitations and witness connectivity will be enabled via remote access information communications technology options - Refer an Indian example https://www.youtube.com/watch?v=oaBTUJBfBEI 

6. In order to provide a conducive environment to progress on a timely basis, the cases covering serious financial and other crimes currently pending successful judicial proceedings resulting in the  optimal recovery of proceeds of crime, introduce an incentive scheme, whereby a percentage of proceeds of crimes and fines collected (say 20%) is pooled to be distributed to improve the infrastructure facilities, capability of human resources, and welfare as well as a special performance bonuses of those public servants engaged in investigations, prosecution and allied services.

7. In the context of reported serious flaws, lack of transparency, purported cronyism  and other controversies surrounding mega tender awards under the Yahapalanaya Government, take urgent steps to establish a high level Policy Review Committee ( comprising of independent, capable persons with a track record of achievement and unquestioned integrity)  to review and revise the processes and procedures governing the award of tenders connected with state and state enterprises, covering all mega projects and significant spends exceeding Rs one Billion, with the aim of strengthening the transparency, controls, compliances and adoption of international  best practices, assuring sustainable socio-economic benefits to Sri Lanka and its citizens and optimum return on such investments.

The processes to be reviewed by the Committee to, include tenders awarded via:

1. International/Local Open Bid Invitations to Tender

2. Tenders requiring Long term local or foreign financing 

3.    Requests for Proposals based Tenders 

4. Long Term Supply Contract s based tenders

5. The Swiss Challenge Processes connected tenders

6. Bi-lateral or Multi-lateral aid/financing connected tenders

7. Technology transfers leveraging tenders and Others

It is recommended that the stakeholders of society, including chambers of commerce and industry, policy development and good governance focused institutions, academia, professionals and independent civil society activists, be consulted and engaged in the above process.

It is the sincere hope of the civil society that the above suggestions will receive your early attention and will lead to transparent engagement and reform action facilitated by you.

Yours Sincerely,

Chandra Jayaratne

Expand the scope, coverage and accountability of the Code of Best Practice in Corporate Governance for State-Owned Public Enterprises

1. Pending any Constitutional or Legislative amendment required, the Code must bring all state owned Corporations/Enterprises and effectively state funded or controlled state corporations and state enterprises (irrespective of the corporate structure of such entities), including any subsidiaries, sub-subsidiaries, associate corporate entities, and all special purpose vehicles set up by such enterprises, under the control, direction and oversight supervision of;

a. A relevant Ministry and

b. The Chief Accounting Officer of the relevant Ministry

2. Pending any Constitutional or Legislative amendment required, the Code must empower the Auditor General to Audit, exercise all powers vested in the Auditor General and perform all such other associated functions in respect of all state owned Corporations/Enterprises and effectively state funded or controlled corporations and state enterprises (irrespective of the corporate structure) including any subsidiaries, sub-subsidiaries, associate corporate entities, and all special purpose vehicles set up by such enterprises.

3. Whilst Public Enterprises enjoy the autonomy in implementing market based, performance related incentive systems as per 6.1 of the Code, all such systems must be introduced only with the formal approval of the ultimate parent entity of the enterprise and the relevant Ministry    (and where deemed appropriate Cabinet approval as well) and the operation of such schemes must be under the oversight review of such parent entity and the relevant Ministry.

4. Annually the Chairman, the members of the Board of Directors, the Chief Executive Officer and the top tier Senior Management members of State Corporations and State owned Enterprises covered by the Code, will be required to set before Chief Accounting Officer of the relevant Ministry, a certificate of due compliance stating that they together with their key supporting Officers have in the course of the discharge of their duties and responsibilities of office, have 

a. Acted as “fit and proper” persons avoiding conflicts of interest and related party transactions, 

b. Adopted and followed best practices of transparency, good governance, accountability, and ethical conduct 

c. Ensured compliance with all statutory requirements and provisions of the applicable financial regulations and establishment codes

d. Ensured effective controls, systems and procedures to minimise any negative outcomes due to nepotism, waste, mismanagement, fraud, bribery and corruption

e. Ensured efficiency, effectiveness, and economy in service delivery, the use of resources, investments and corporate spends

f. Ensured the safety and protection of all state property under their accountability

g. Assured and upheld the principles of inclusivity and equity sans any bias by way of ethnicity, religion, caste, status and residency in the allocation and spend of national resources

h. Positively contributed to the protection and sustainability of the environment, ecology and natural resources

i. Positively contributed to the realisation of the sustainable profitability, value addition and realisation of optimum return on investments

5. Require all covered entities to adopt Business Standards dealing with;

a.  Safeguarding State Property

b. Improving the Transparency, Accuracy and Completeness of public disclosures

c. The Control over Gifts and Entertainment

d. The Control of Bribery and Corruption

e. The Discouraging of Political Contributions and Related Promotional Spends

f. Managing Charitable Contributions 

g. The Management of Conflicts of Interests and Related party Transactions

h. Prevention of Insider Dealings and Market Abuse

i. Anti-Money Laundering and Terrorism Financing

j. Promoting Equality and Diversity 

k. Preventing Harassment and Bullying at the work place

l. Safeguarding Employee Wellbeing

m. Whistle Blowing

n. Assurance of Confidentiality and Information Security

o. Management of the Environmental Foot Print 

p. Competition and Anti-Trust

q. Avoidance of Illicit Trades

r. Avoidance of Sanctions and Fines

6. Require all covered entities to have in place effective Risk Management Plans following risk analysis, risk identification, risk awareness and development of risk mitigation strategies