Jul 27

The word devolution is being employed freely by divers persons and institutions as the principal component of constitutional change needed to solve the problems associated with poor governance and the ethnic controversy.  However, it is not difficult to show that the use of the term devolution in these contexts is illogical.  As set out below, a rational description of the process required would be Arestoration of sovereignty to the People.

Although the 1972 Constitution made Parliament supreme, Article 3 of the 1978 Constitution corrected this flawed provision by stating that A… sovereignty is in the People and is inalienable.  Sovereignty includes the powers of government, fundamental rights and the franchise. When we move on to Article 4, it states that the People’s legislative, executive and judicial powers shall be exercised respectively by Parliament, the President and the Courts.  In other words, the People do not give up their sovereignty but merely delegate the exercise of their powers to Parliament, the President and the Courts, whilst firmly retaining their prerogatives in respect of their fundamental rights and the casting of their vote. Regrettably, the 1978 Constitution, whilst asserting the sovereignty of the People, largely negated this very sovereignty by giving Parliament, the President and the Courts almost unlimited powers, with little regard for the fact that the People could do much better for themselves in many areas of governance without central government intervention or interference. Parliament ignored the invaluable principle of subsidiarity, which stipulates that a central authority should have a subsidiary function, performing only those tasks which cannot be performed at a more local level.

Why the term devolution is illogical may be understood by considering the following scenario. Let us say that Mr A owns a business but wishes to get someone else to manage it.  So, he gives Mr B a Power of Attorney to run the business but excluding the power to sell the business or lease it to anyone else.  There is no question that Mr A legally retains the authority to revoke the Power of Attorney at any time.  Just because he has arranged for Mr B to exercise certain powers belonging to him, there is no logical reason why he should go pleading to Mr B to devolve back to him any of the powers that he gave Mr B in the first place.  This rational relationship is not reflected in our Constitution because the People, who had only delegated their powers to Parliament, the President and the Courts, are now having to beg of Parliament to restore to them a certain proportion of those very powers which are part and parcel of the sovereignty of the People.

It is, therefore, inappropriate to talk of getting Parliament to devolve the powers exercised by it, the President and the Courts to the more fundamental units of government.  What is required is that Parliament should let the proposed Grama Rajyas (the primary units of government) retain the parts of the People’s sovereignty which would enable them to carry out those tasks which are well within the capabilities of these primary units, and fund these units appropriately.   Similarly, Parliament should let the Pradeshiya Sabhas (the secondary units of government) retain the parts of the People’s sovereignty which would enable these secondary units of government to carry out those tasks which are well within the capabilities of these secondary units, and fund these units appropriately.  This arrangement would be replicated with the District Councils (tertiary units) and the Provincial Councils (quaternary units), assuming that we keep to the current configurations.  It is only the powers which are left over from the application of the subsidiarity principle which would be shared by Parliament, the President and the Courts (three quinary units).

In practical terms, if, say, a Grama Rajya has to choose between repairing a school roof or putting up a useless, expensive, one-day pandal for a Parliamentarian’s visit, it would undoubtedly choose to repair the school roof, provided it has the necessary independent powers and funds.   Similarly, if a Pradeshiya Sabha has to decide between putting up a memorial to a long dead politician or rebuilding a dilapidated bridge of the kind often shown on television, it would certainly choose to repair the bridge properly providing it had the pertinent powers and funding.  The District and Provincial Councils would also have their priorities in a different order to that of the central government.  The importance of restoring as much powers as practicable to the primary, secondary, tertiary and quaternary units becomes manifest as shown by the simple examples given.

It is also important to emphasise that the totality of the powers of the People is divided into five separate components and that there is no question of one component being at a higher level than another.  Hence, the talk of the transfer of power downwards from Parliament is another unwarranted concept.  The People are supreme and, therefore, there is no question of Parliament being placed on a pedestal at a higher level than the People.  It is because we have allowed this wrong picture to be created that many Parliamentarians have come to delude themselves into thinking that they are superior to the voters who elected them.

CIMOGG presented the concept of subsidiarity to the Dinesh Gunawardene Committee on Electoral Reforms as far back as September 2003 but there is plainly great reluctance on the part of Parliament to give up those components of the People’s sovereignty that they need to restore to the other units of government and to release the necessary funds to let these units function independently within the agreed limits.  Hence, it is up to concerned citizens to form small groups of their neighboring voters to lobby their District MPs to recover enough of their sovereignty to help minimise the waste, corruption and the lack of accountability that we presently see in superabundance.

Jul 02

Our bigger companies, in their Annual Reports, boast of their contributions to Corporate Social Responsibility (CSR) programmes.  The reality is that their idea of social responsibility is to respond to the requests of their friends and important acquaintances by spending a small proportion of their revenues on projects which make the directors look good in the eyes of the beneficiaries and interested members of the public.

The significant feature of the more common CSR programmes is that they work on the premise that it is acceptable to give contributions to your old school, to institutions which deal with the elderly and the physically disadvantaged, to look after company employees, to protect the environment, to encourage sports, and similar causes.  What they do not do is to give anything at all to institutions or movements which work to promote the Rule of Law, democracy, human rights, anti-corruption and other ingredients of good governance.  Furthermore, our companies believe quite mistakenly that, if only better fiscal and taxation policies are followed, and the ethnic problem is solved, everything else will look after itself.  No call is made upon the People’s representatives to account for the way in which they utilise the powers and the resources which the People have entrusted to them.

The principal privately-avowed reason of company directors for ignoring their responsibility to help establish good governance is that they are reluctant to incur the possible displeasure of the politicians and the administrators with whom their companies maintain warm relations for the purpose of business advancement.  Whether the benefits of these relationships are secured lawfully or otherwise is not discussed.  Their position appears, at best, to be that it would not be in the interest of shareholders to get involved in matters of governance.  It is our view that, since their loyalty to their shareholders takes blanket precedence over their responsibility to society at large, it is wrong for companies to use the term ACorporate Social Responsibility to identify the type of programmes that they currently support.

If we go a little deeper into this subject, there can be seen to be other issues which are more serious than the mere failure of companies to participate actively in working towards good governance.  For example, certain revelations were made recently by the Committee on Public Enterprises (COPE) broadly to the effect that a few big household names in the private sector, including prominent fiduciary professional firms, working in collusion with powerful political and administrative figures, have employed far from ethical methods to undervalue and acquire, or to help others to acquire, public assets at manipulated low prices.  In other words, misappropriation of the people’s wealth is not the prerogative of politicians alone.

Another example is the VAT swindle.  Whether the amount lost to the State be in the region of Rs 6 Billion (the figure favoured by some in the Treasury) or Rs389 Billion (the figure computed by the Auditor-General’s Department), or anywhere in-between, who benefited from these scams?  Mostly public and private companies, some of whom are very proud of their CSR programmes.

The list of company activities which are inconsistent with genuine social responsibility does not end with these two examples; well-informed readers will undoubtedly be able to come up with hundreds of other examples, both big and small. In short, CSR, as practised currently, is totally self-serving and cannot be considered to be an instrument which is used for the general benefit of society.  If companies want to stick to the term ACorporate Social Responsibility, what is required is for them to redistribute their CSR expenditures in a different way.

If, say, a company sets aside Rs5 Million to build 10 houses, at a cost of Rs500,000 each, in order donate them to 10 families which do not have houses, the company may feel reasonably proud about what it is doing.  The reality is that perhaps about 40 citizens (at an average of four persons per family) would benefit from this exercise but the rest of the population would get no significant benefit.  If, on the other hand, say, only 8 houses are built and the balance Rs1 Million is spent towards setting up or helping autonomous organisations which are active in public interest litigation, lobbying for right to information legislation, anti-corruption activities, lobbying for press freedom, the establishment of independent non-governmental bodies to monitor public expenditure concurrently, establishing the Rule of Law and so on, these companies would be doing something that would benefit all 20 Million citizens of this country.  Furthermore, by the resulting reduction of corruption and the increase of public sector efficiency, there would be savings of many times the Rs1 Miilion originally diverted to establish good governance, leading to a Awin-win situation.

Now, if we look at the statistics on the 10 leading companies in Sri Lanka, their net annual revenues add up to a total of over Rs150 Billion.  If just one-hundredth of one per cent of this total were allocated to set up or to help organisations which are geared to give the public accurate and timely information regarding major national projects and problems, and to get voters from all areas of the country to lobby the MPs from their districts to work in accordance with good governance requirements, there would be a huge pressure built up on Parliament to strengthen the Rule of Law, democracy, accountability and so on.  Predictably, change will not occur overnight but there would be irresistible progressive improvement because MPs would not be able to ignore sustained, organised public opinion in the way they disregard the sporadic, lone voices which now plead for the re-establishment of legislative, executive and judicial accountability.

There are several NGOs which are currently working in some of the areas which are related to good governance but they are all funded from foreign sources and attract a great deal of criticism implying that they are working traitorously to non-national programmes, and that too much of the funds are spent on expensive vehicles, 5-star hotels and foreign travel.  If the private sector were to set up an autonomous organisation, funded and monitored locally, the more facile types of criticism would be eliminated from the outset and public acceptability would undoubtedly be higher.

The most satisfying aspect of implementing the proposal made here would be that the shareholders of companies would find that, whilst they are individually unable to help create change, they would be able to participate collectively in doing so.  The present sense of hopelessness of shareholders – as citizens – to try to reverse Sri Lanka’s downward movement in the Afailed states index would become a thing of the past.