COPE: Exposure and beyond

Transparency International Sri Lanka (TISL) under its outreach programme ‘Sambhashana’ discussed ‘COPE Exposure and Beyond’ at the OPA Auditorium recently. On the panel were Rajiva Wijesinha, Wijeyadasa Rajapakshe PC and Professor A.D.V. de S. Indraratna. The moderator was Lakshman Gunasekera. Below is the presentation by Professor Indraratna:

This is not the first time that the Committee on Public Enterprises (COPE) has exposed the irregularities, waste and corruption of public sector enterprises, i.e. Government Departments, Ministries and SOEs. What was the sequel or the result of such exposure? Persons like Wijeyadasa Rajapakshe know about it more than I.

It is common knowledge that often people who are instrumental in the exposure of acts of irregularities, waste and corruption have to make sacrifices or suffer penalties rather than the people who are actually responsible for them.

How about the most recent or 2011 COPE Report presented by D.E.W. Gunasekera, COPE Chairman? Before speaking about ‘Beyond its Exposure,’ let me briefly speak about it.

In a matter of about 15 months, the D.E.W. Gunasekera Committee comprising 31 members including the Chairman, under its Main and three Sub-Committees, had examined 229 public sector institutes or institutions, 37 of which were loss-making. They had identified and/or discussed around 900 acts of irregularity, waste or corruption.

Sri Lanka Cricket, universities, Bank of Ceylon, BOI and Consumer Affairs Authority were the worst culprits, with BOI having to face examination of 26 acts and CAA 20. COPE’s task was thus a formidable one and the Committee and its Chairman should be commended and congratulated for this fearless exercise, particularly because the Committee has subjected to scrutiny all of the allegations irrespective of the position of the parties responsible for them, not sparing even their ministerial colleagues.

The Committee has not been able to assess the loss of revenue to the Government, and thereby the loss of resources for GDP growth, or growth of the economy, resulting from the exposed acts. I have not been able to do it either, in the short notice of one week I have been given to make this presentation. I hope that the Sri Lanka Economic Association will be able to undertake this as an addendum to the Report on ‘The Impact of Corruption on Poverty and Economic Growth’ authored by it and published by the USAID in June 2007.

Notwithstanding the inability to give at this stage a measure of the serious damage caused by the exposed acts of corruption in this COPE Report (using here a definition of corruption with its widest coverage such as “misuse or abuse of entrusted power or authority by officers, officials or authorities through various acts or practices including theft of state assets and diversion of state revenue, for their personal gain in cash or kind, or of others connected to them”), the mere exposure itself is very valuable and momentous, because it has opened a door for looking beyond this exposure for actions and remedies for reducing the extent of damage which may be caused by them as well as help to close the loop holes for their recurrence in the future.

Towards this end, let me first briefly examine (i) the significance of an institution like the COPE (ii) how effective it has been, and (iii) how its effectiveness can be enhanced.

Open economy and corruption

The public sector of no country can claim to be completely or 100 per cent free of corruption. The degree varies from country to country. Transparency International measures this degree by what is known as the Corruption Perception Index, ranging from 10-0, that is the least corrupt to most corrupt.

Sri Lanka has been placed somewhere around 3 on this Index. Overall, Sri Lanka has been classified as a corrupt country. Let us have no debate on this. It is only a perception of an international body committed to fight corruption.

Before 1972, under the Soulbury Constitution, in Sri Lanka, (then Ceylon), there was separation of powers between the Legislature, Executive and the Judiciary. Independence of the judiciary was guaranteed and there was an independent public service under an independent Public Service Commission. The Government was not “big.” There were no large foreign funded projects. Financial Regulations and Establishment Code rules were strictly adhered to. All in all, there was good governance in the sense of management of limited resources with efficiency, transparency and accountability. Under such a system there was little room for acts of irregularity, waste or corruption.

After 1972, with the promulgation of the new constitution, the political system changed. Public service could no longer remain independent with the control of the executive/public service, including the judiciary taken over by the ruling party and the Cabinet of Ministers. Separation of powers and independence of the judiciary began to diminish denting the structure of good governance.

Things became much worse with the opening – or globalisation – of the economy, at the end of 1977 and the introduction of the Executive Presidential System with its preferential electoral system entailing mushrooming of ministries, departments and institutions with gay abandon, under the JR Constitution of 1978.

Governments became “bigger”; giant foreign funded projects started flowing in, and privatisation became commonplace. With decentralised budgets and legislators getting a hand in district development with the public servant having none or very little say, bad governance became pervasive with inefficiency, waste and corruption in the public sector.

It is to arrest corruption inherent in such a political system that “watchdogs” are considered necessary. The Department of the Auditor-General (AG) and COPE are two such watchdogs. The Auditor-General audits the annual accounts of every public sector institution and reports to Parliament. These reports are discussed by the Parliament Consultative Committees (PCCs) with the respective ministries and the departments concerned with a view to amelioration or correction.

PCCs cannot impose any punitive action. Firstly, there is no legislative obligation or requirement for them to do so. Secondly, most of the legislators lack the competence to analyse the observations of reports of the AG which are placed before them, or even if they have, may lack the political will to follow them up. On the other hand, the AG is only a watchdog and not a bloodhound. Therefore, this task has fallen on COPE.

Ineffectiveness of COPE

Up to about 2007 when Wijeyadasa Rajapakshe Report was placed before Parliament and there was a big outcry for its implementation (what happened is now history and we need not dig into that unpleasant past!), COPE had not been rendered very effective.

Its task had come down to almost an academic exercise of merely examining the observations made by the AG along with the annual reports of the respective organisations and putting down some decisions. There has been very little follow-up. No punitive action could be taken against the culprits due to lack of legislation to that effect.

Many reasons can be given for this ineffectiveness of COPE. Among them are:

• Appointment of legislators who are not competent to understand and analyse the AG’s observations or auditors’ reports in the annual reports of organisations;

n   Appointment of legislators who are not known to be above board or incorruptible;

• The lack of equal representation for opposition parties in COPE;
• (A study of the composition of the past COPE committees would reveal the validity of these three.)
• Infrequent meetings of COPE; (COPE met only in May 2007 before the meeting of D.E.W. Gunasekera Committee on 8 June 2010.)
• Excessive work to be completed in one year;
• Absence or non-participation at meetings by COPE members. ( I do not have the data of attendance but Dr. Rajiva Wijesinha, who has been a member of the D.E.W. Gunasekera Committee of 31, would know about the average attendance at these meetings.)
• Lack of legislation for the implementation of its decisions;
• Lack of political will for implementation of the decisions.

The task of COPE has also been rendered difficult because of the inefficiency and non-compliance with rules and regulations and the Establishment Code by government institutions due to acts such as:

• Non-submission or late submission of corporate plans, annual plans and annual reports not enabling COPE to get a clear idea of the activities of the respective institutions;
• Failure and ineffectiveness of internal audit and management committees with Treasury representatives who are obligated to be Chairmen of these Committees
• often being lethargic or indifferent;
• Neglect of duty or responsibility by the Secretary to the Treasury or other Ministry
• Secretaries who are CAOs in respect of monitoring and supervision of activities of departments and institutions under them

These lapses lead to an unduly large number of institutions having to come before COPE making its task both time consuming and complicated. This is quite evident from the large number of institutions (229) which had to come before the D.E.W. G. Committee and more than 900 acts they had to examine, taking more than 15 months to complete its work. This makes it impossible for COPE to issue a report every year which is necessary to make it an effective instrument.

Then there are the more harmful factors which make COPE’s follow-up action (should we say ‘bloodhound’?) almost impossible. They are:

• Political patronage or politicisation of institutions;
• Nepotism and favouritism instead of merit in the appointment to high posts (Ref: S.L. Gunasekera – ‘Family Bandyism’ in the ‘Island’);
• Condoning or connivance of inefficiency, waste and corruption by acts such as reappointment or transfer to equally high posts without complete removal or dismissal of officers in high posts found guilty by COPE;
• Lack of responsibility on the part of the Government in regard to enforcement of existing legislation such as the Declaration of Assets and Liabilities Law;
• Absence of obligatory legislation for the Government or Parliament to respond to, leave aside the implementation of COPE’s recommendations, etc.

Recommendations beyond 2011 COPE exposure

In order to enable COPE to serve as an effective watchdog as well as a bloodhound when it comes to the follow-up of implementation of punitive action against wrong-doers, it is not enough to ameliorate the constraints internally present as mentioned by me in nos.1-8. There must be a more or less complete overhaul of the political system and a change in the political culture, which are corruption-prone.

1.Constitutional changes for separation of powers ensuring independence of the judiciary and the public service and electoral reforms to do away with proportional representation and preferential voting;

2.Restoration of a mechanism/s for achieving meritocracy without any room for political patronage or politicisation or sycophantism in the public service, with adequate remuneration for public servants;

3.Constitutional provision to make it obligatory for the Government to respond to COPE recommendations;

4.Strengthening the watchdog function of the AG by making it answerable only to Parliament and depend on Parliament for resources rather than the Treasury;

5.Strict enforcement of the Declaration of Assets and Liabilities Law with an independent authority to receive, monitor the declarations, and prosecute those who break the law;

6.Strengthening the hands of the Commission Investigations into Allegations of Bribery Or Corruption (CIABOC) with increased power to prosecute on its own initiative, other than on referral by other watchdogs, not only brazen acts of corruption, but also acts of favouritism and nepotism;

7.Restoration of the independence of the police;

8.Introduction of legislation for the Right to Information and Public Interest Litigation;

9.A Parliamentary Committee on Good Governance (COGG) and Code of Ethics for MPs

10.Strengthen the CAA with Anti-Monopoly Legislation;

11.The review and revision of the method of disbursement and utilisation of the decentralised budget.

All these reforms, though necessary, may not be sufficient without the political will on the part of the Legislature and the Head of State on the one hand, and active participation of an enlightened and alert civil society on the other.

While the creation of a strong political will could be left in the hands of the COGG and the Ethics Committee of Parliament, the system of education in the country should be revamped to, inter se, instil into minds of the youth a sense of what is right and wrong with self-discipline and tolerance of the rights of others, in collaboration with parents, teachers, the clergy and the (independent) media.

The fulfilment of these reforms in the next five years, 2012-2016, would help to achieve a corruption- country and a place in the Corruption Perception Index closer to10, and this, with an enabling environment, with good government, enable sustain a high (double or near double digit) growth rate which would make this country looked up to by others as the ‘Wonder of Asia’.

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