Bribery & corruption in Sri Lanka's public revenue system: An unholy nexus?
Kishali Pinto-Jayawardena, senior media columnist, & Navin Karunatilaka, attorney at law, Sri Lanka
"Public sector corruption in Sri Lanka is a key factor driving poverty and the country is losing two percentage points of economic growth a year from resources lost to sleaze, a senior economist said.¡¨ (President of the Sri Lanka Economics Association [SLEA] A D V de S Indraratne, speaking at the annual sessions of the SLEA, as reported in The Sleaze Factor, Lanka Business Online, 11 August 2007)
Prevalent debates in Sri Lanka on fiscal reforms focus on a simplified tax structure, revised financial sector regulations, abolition of tax holidays and the consolidation of existing taxes. In a post-war stage, a commission report on tax reforms is expected to recommend tough measures to this effect and expectations are heightened towards a better future, based on the fact that terrorism is no longer perceived to be a problem to economic growth. Greater fiscal devolution is one of the cries made at this stage. However, are these recommendations and measures, which are being vigorously debated in the public forum, sufficient to resolve the problem of fiscal indiscipline? Are these debates bypassing the key factor underpinning the essential success of taxation reforms in any country, namely effective controls of bribery and corruption in the public sector?
In a context where the primary tax collection body, namely the Inland Revenue Department itself has been plagued by monumental corruption scandals as discussed in this paper, are we not losing sight of the sleaze factor, which could be counted as among the most important obstacles to effective tax collection?
The observation made by one of Sri Lanka's senior economists in 2007 with which this paper commences draws attention to the 'elephant in the room', so to speak, by pointing out that "public officials and politicians fight shy of even mentioning it as a cause of our poverty, and even among us economists, only a very few have shown interest in the study of this nexus between corruption and inequity and poverty". Dr Indraratne remarked aptly that if state revenues had not been lost due to corruption, they would have gone to reduce the burgeoning budget deficit. Interestingly, he was of the view not only that there was rampant corruption in infrastructure projects both at central and provincial government levels, resulting in contractors engaging in sub-standard work pilfering inputs, not using specified materials, by giving commissions and by giving kickbacks to officials or elected representatives who are overlooking such projects but also but also that the poor had to give bribes local officials or the police to avail themselves of public services that should be due to them without charge. This rule applied even to supply of material inputs such as fertilizer, seed paddy and water. Those who could not afford to pay were denied access to these public services and were denied justice, thereby worsening their poverty.
Bribery is defined in West's Encyclopaedia of American Law online as "the offering, giving, receiving, or soliciting of something of value for the purpose of influencing the action of an official in the discharge of his or her public or legal duties". Corruption, a wider concept than bribery, is harder to define but has been referred to in the United Nations Declaration against Corruption and Bribery in International Commercial Transactions as "any offer, promise or giving of any advantage to another person as undue consideration for performing or refraining from the performance of that person's duty, or the soliciting or accepting of any advantage as undue consideration for performing or refraining from the performance of one's duty" or also as an extension of the concept of bribery, as when the 9th UN Congress held in Cairo in 1995 declared "corruption is bribery or any other act relating to persons vested with responsibility, aimed at influencing the performance of their official duties and at obtaining any improper advantage for themselves or for others".
Bribery and corruption are twin evil forces that impede economic progress and cause hardships to many whilst enriching a few. This is a worldwide phenomenon but most acute in developing countries or countries with transitional economies. Sri Lanka, where bribery and corruption are major concerns, is ranked 92nd out of 180 countries and has been given a dismal grade of 3.2 on the corruption perception index by Transparency International. Furthermore, it was recently estimated that corruption in the public sector in Sri Lanka amounts to approximately one hundred billion rupees per annum by the Parliamentary Committee on Public Accounts. According to a June 2007 report of USAID, this figure represented 9 per cent of the Annual Gross Domestic Product of Sri Lanka in 2006. The financial, social and economic impact of corruption in Sri Lanka is vast and tragic.
This paper will examine the nexus between some of these core issues, which are at the heart of any discussion on bribery and corruption in Sri Lanka. It will examine the current legal framework in place within Sri Lanka; including anti-bribery and corruption laws and institutions, examine the frauds and scandals that have taken place in the public sector with particular emphasis on the VAT (Value Added Tax) scam that exposed the corruption prevalent on the part of some officers of the Inland Revenue Department, evaluate whether existing laws and institutions satisfy the standards set by the international conventions and institutions which have been established for the prevention of bribery and corruption, study other Asian legal frameworks designed to prevent bribery and corruption, and finally propose feasible reforms that would help increase the efficiency and effectiveness of our national legal framework.
Domestic legal framework relating to bribery and corruption
Sri Lanka currently has the benefit of one of the most comprehensive legislative frameworks to combat bribery and corruption whilst being signatory to numerous international conventions. The legal mechanisms for the control of bribery have been in place since 1883, with the enactment of the Penal Code. However, its offences were limited to acts done by or relating to 'public servants', and thus excluded persons elected to public office. This lacuna in the law was filled in 1942 with the enactment of section 20 of the State Council (Powers and Privileges) Ordinance, which was followed by the Public Bodies (Prevention of Corruption) Ordinance, 1943. The amendments provided that it is "an offence to offer, accept or receive any fee or reward for the promotion or opposition or any bill or resolution before the (state) council" and any local authority. However, the provisions did not provide for criminal sanctions against the offenders and the punishment was limited to the expulsion from elected office.
The Bribery Act of 1954
The introduction of the Bribery Act (No. 11 of 1954; hereinafter the Bribery Act) significantly altered the law that existed and--together with subsequent amendments described below--to date forms the core legal framework available to combat bribery in Sri Lanka.
The Bribery Act was enacted with the idea of containing bribery within the public sector. It made members of parliament and judicial officers amenable to it. Inter alia, it stated that "the offering, soliciting or acceptance of a gratifications as an inducement or reward for doing or forbearing to do any act in his capacity as a member of parliament or in his judicial capacity" as offences. The term "gratification" was granted a wide and inclusive definition. The provisions were further strengthened by Act No 40 of 1958; it provided a much easier method for the establishment of an offence of bribery. Section 23A of the amended act provided for bribery to be established through circumstantial evidence, even if there is no direct evidence to prove the acceptance of gratification. It provided for an inference of bribery if inconsistency was to arise between the sum total of a person's income or revenue that could be explained as lawfully attained and the sum total of that person's capital assets which have been acquired or owned by that said person.
Section 20 of the 1958 amendment also created the office of the Bribery Commissioner. This office functioned under the aegis of the attorney general and the Ministry of Justice and was provided with comprehensive investigative powers such as the power to:
...summon persons and question them; procure affidavits and documents; obtain asset declarations and full financial disclosure from the subject of an investigation; require Government departments to produce documents; search Government buildings; apply to public servants for assistance; and arrest or detain suspects (Sunil Ponnamperuma, Permanent Commission to Investigate Allegations of Bribery and Corruption 1994-1999: A Study in Institutional Failure, p. 278).
However, the law did not permit the commissioner to conduct an inquiry against a member of parliament without the prior approval of the speaker of parliament, or an inquiry against a judicial officer without the consent of the Judicial Service Commission.
Commission to Investigate Allegations of Bribery or Corruption and Amendments to the Bribery Act (No. 20 of 1994)
The commission to investigate allegations of bribery or corruption was established in 1994 amidst much promise at a time when it was widely perceived that bribery was rampant and immediate action necessitated curbing the menace. In fact, one of the main issues in the general election of 1994 was the menace of bribery and the urgent need to curb it.
On 5 October 1994 the bill to establish a permanent commission to investigate allegations of bribery and corruption was passed as Act No. 19 of 1994. The justice minister at that time addressing parliament compared the old law to the newly passed bill and stated that "the conditions that fostered opportunities for corruption had to be reduced by greater transparency and accountability in Government dealings" (Parliamentary Debates [Hansard], vol. 94, no. 7, 5 October 1994, col. 406). The commission was to consist of three members with two of them retired judges of the appellate courts and the other to be from a law-enforcement background. The period of office was five years and security of tenure was guaranteed.
Anton Fernando and R M B Senanayake (in Synopsis of Anticorruption and Related Laws, August 2007, pp. 1-2) described the main powers of the commission as
1. To procure and receive all evidence written or oral and to examine
all such persons as the Commission may seem to be necessary.
2. To summon and examine persons relevant to the investigation.
3. To summon a person to produce any document.
4. To notice any Bank to produce any checks or any other documentary evidence relating to the investigation against any person in respect of an allegation.
5. To notice the Commissioner General of the Inland Revenue to furnish information required by the Commission in respect of the investigation of such a person.
6. To notice any Government department, local authority or any State Corporation, to produce documents relevant to such investigations.
7. To require the person against whom an allegation of bribery is made to furnish an affidavit disclosing his assets liabilities and that of others members of immediate family.
8. To notice any other person to make a sworn statement setting out the assets and liabilities of such person.
The act also considered "corruption" and "gratification" in a wide manner. Its section 7 as amended defined corruption as including all possible mala fide activities including nepotism, misconduct, misuse of information, induced omissions or commissions contrary to law etc. Its section 90 as amended defined gratification as including anything of monetary value or convertible to monetary value, any office or contract, or any other form of protection.
Despite these provisions and wide powers entrusted to the commission, in actual practice the legislation proved to be of little value. There are manifold reasons for this and an interview with a former bribery commissioner by Rohan Abeyawardena ('Bribery Commission Blows the Whistle', Ratathota.com, 16 May 2010) shed light on several of these reasons. The commission had to rely on the Inspector General of Police for its officers to conduct investigations and the Ministry of Public Administration for officers to do administrative work, as it did not have its own officials. The commission lacked police officers that were directly answerable and responsible to it. Instead, the commission had to rely on the regular police force to carry out its orders. As shall be elaborated later, this is in contrast to some commissions in other countries that have had better success in curbing corruption. Apart from this, the director general of the commission was appointed by the president and answerable to him and not to the commission itself. Anonymous or pseudonymous complaints could be made but in the generality of cases they were not inquired into. Thus many critics referred to the commission as a classic case of "plans that looked good on paper or in the abstract, but went awry in the implementation" (Ponnamperuma, p. 301). The functions of the last commission wound up in March 2010 and a new body is yet to be appointed.
The Declaration of Assets and Liabilities Law
The purpose of this law (consisting of Acts No. 1 of 1975, No. 29 of 1985 and amending Act No. 74 of 1988) was to monitor the acquisition of wealth by public servants, politicians and others through bribery and corruption. The categories of people required to make declarations of assets and liabilities as at March 31 each year are referred to in section 2 of the act. Declarations are to be made to the speaker by ministers of parliament, to the president by all appointees of the president and heads of departments by other persons under them. It is considered an offence if any one fails to submit the declaration to relevant authorities within three months of the due date, to submit a false statement or to wilfully omit any assets or liabilities owned by them.
Section 7 provides that a complaint can be lodged regarding the recent acquisition of wealth by any person to the attorney general, bribery commissioner, Commissioner General of Inland Revenue, Principal Collector of Customs, or the Head of Department of Exchange Control. Section 9A of the act provides that a complaint regarding any false statement or omission in a person's declaration could be made to a magistrate.
However, this law too has proven ineffective as it provides for no central authority with the power to receive and monitor the filing of declarations. Further, if a private citizen makes a complaint according to section 9(a), the individual must make a deposit for costs and damages which would effectively shut out such complaints.
Prevention of Money Laundering Act
This act (No. 5 of 2006) makes it an offence to engage in financial transactions to hide the identity or source of money generated from illegal activities as defined in section 38 of the act. The illegal activities include bribery. Sections 20 and 21 stipulate some of the offences under the act. They include destruction of information regarding money laundering activities. The act also paves the way for better intergovernmental agency interaction through the Financial Intelligence Unit (created by Act No. 6 of 2006) and enables cooperation of foreign nations in the investigation of money laundering activities (under section 3 of the Mutual Assistance in Criminal Matters Act, No. 25 of 2002).
Financial Transactions Reporting Act
This act (No. 6 of 2006) should be read together with the above Prevention of Money Laundering Act. This legislation provides that the institution accepting money or valuables should verify the identity of the customer. Sections 4 and 5 of the act place a duty upon institutions to maintain proper records regarding customers/clients and conduct due diligence on any business relationship on an ongoing basis. It is incumbent on a financial institute to coordinate with the Finance Intelligence Unit established by the Central Bank to ensure that all relevant information is properly disclosed regarding financial transactions.
The Office of the Parliamentary Commissioner for Administration (Ombudsman)
The office of the ombudsman was established under the Second Republican Constitution to offer the public with an opportunity to have their injustices and disputes resolved in an economical and expeditious manner. The ombudsman is appointed by the president and security of tenure is guaranteed. Act No. 26 of 1994 enhanced the purview of the ombudsman and now the public can directly canvass his office in respect of a perceived violation of a fundamental right or other injustice by a public official or tribunal. Should the ombudsman find that indeed such an injustice has happened, he can recommend his determination to the relevant minister or head of department and the public petitions committee. If no action is taken he can inform the president and parliament.
The office of the ombudsman can be a powerful tool to combat corruption where the public can directly address a senior constitutionally mandated official to have injustices arising from corruption corrected. However, the law is often seen to be made impotent where the directions given by the ombudsman are completely ignored as his powers are limited to drawing attention to a violation of a fundamental right or injustice and then recommending steps to grant relief.
The 17th Amendment to the Constitution
The 17th Amendment to the Constitution bought about an important change with regard to depoliticizing of many vital departments and institutions of the government. Under the amendment, a Constitutional Council was established which comprised 10 members: prime minister, speaker, leader of the opposition in parliament, one person appointed by the president, five others on appointment by the president on the recommendation of the prime minister and the leader of the opposition, and one person nominated by a majority of the parliament, representing one of the independent groups or parties not represented by the prime minister or leader of the opposition.
The Constitutional Council was mandated to provide recommendations to the president on members that shall be appointed to several commissions that carried out the appointment, transfer and disciplinary matters of public officials. Some of the commissions are the Elections Commission, the Public Service Commission, the National Police Commission, the Human Rights Commission of Sri Lanka, the Permanent Commission to Investigate Allegations of Bribery and Corruption, the Finance Commission and the Delimitation Commission. These changes sought to restrict the President¡¦s powers of appointment and de-politicize the public administration of the country.
However, the 17th Amendment was (in the main) properly implemented only from 2002 to early 2005. The lack of political will on the part of those entrusted to govern Sri Lanka resulted in the president's failure to appoint members to the Constitutional Council in its second term, thereby crippling the council. Most facets of the 17th Amendment have been altered with the recently passed 18th Amendment to the Constitution. According to this new amendment, most senior public officials--including superior court judges--are directly appointed by the president and the middle level public officials are controlled by a new set of commissions, the members to which are also appointed by the president, who is required merely to consult a toothless Parliamentary Council on the appointees. The initial aim of de-politicising a generally corrupt public service that underpinned the 17th Amendment seems to have been lost.
International standards and conventions relating to bribery and corruption
Apart from the manifold domestic constitutional and statutory mechanisms available to counter bribery and corruption in Sri Lanka, the country is signatory to several of the major international conventions relating to bribery and corruption.
United Nations Convention against Corruption
The United Nations Convention against Corruption (UNCAC) was adopted by the UN General Assembly on 31 October 2003 and came into force on 14 December 2005. As of November 2007 it had been signed by 140 nations and as of September 2008 ratified by 125. Sri Lanka signed the convention on 15 March 2004 and ratified it on 31 March 2004.
In its eight chapters and 71 articles, the UNCAC compels states parties to implement a detailed and broad range of anti-corruption measures affecting not only their laws, but also their practices and institutions. The aim of these measures includes the prevention, detection and sanction of corruption. According to the Transparency International website, "UNCAC is unique as compared to other conventions, not only in its global coverage but also in the extensiveness and detail of its provisions." Led by the United Nations Office on Drugs and Crime (UNODC), UNCAC was negotiated for a period of over two years with representation from over one hundred countries and representatives from civil society organisations such as Transparency International. The main categories of obligations for state parties via the convention are:
1. Provisions on the ways, means and standards of preventive measures in both the public and private sectors.
2. Criminalisation of a vast range offences relating to both public sector corruption and private sector (private-to-private) corruption.
3. An international cooperation framework, which provides room for potential improvement in mutual law-enforcement assistance and in the processes of extradition and investigations.
4. A global asset recovery framework. The provisions on technical cooperation and information are seen as key to the overall balance and composition of the UNCAC, as it highlights the importance of providing financial and material assistance to developing countries, without which some countries like Sri Lanka would be unable to implement the UNCAC requirements.
5. An implementation mechanism, which includes both the periodical reviewing of implementation and the provision of recommendations to improve the convention and its implementation.
United Nations Convention against Transnational Organised Crime
The United Nations Convention against Transnational Organised Crime (UNTOC) was adopted by the UN General Assembly on 15 November 2000. As of October 2005 it had been signed by 147 nations, being open to all countries and regional economic organisations, it came into force from 23 September 2003. Sri Lanka became a signatory to the convention on the 13 December 2000 and ratified it by 22 September 2006.
The UNTOC recognises that corruption plays a key part in
trans-national organised crime, and thus believes that it must be dealt
with in the process of combating organised crime. The obligations
imposed by the UNTOC upon state parties fall into four main categories:
1. Development of effective measures to promote the integrity of, and prevent corruption of, public officials and to provide public authorities with adequate independence, so that they are able to operate without having inappropriate influences.
2. Criminalisation of corruption, particularly of public officials as a part of the international framework for addressing transnational organised crime. Furthermore, it calls for effective measures to detect and punish the corruption of public officials.
3. Criminalisation of money laundering and the establishment of a domestic regulatory and supervisory regime to combat money laundering.
4. A broad framework for mutual legal assistance, extradition and law enforcement cooperation and technical assistance and training, in order to fulfil the convention's aim of addressing cross-border aspects of organised crime. These provisions are mainly mandatory and cover specific aspects of law such as gathering and transferring evidence and assisting investigations and prosecution. The UNTOC has broad judicial provisions which can be used to create a national legal framework for combating corruption.
Facts of bribery and corruption in Sri Lanka
Despite these manifold laws and regulations, Sri Lanka remains one of the most corrupt nations in the world. Although there is strong public condemnation of bribery and corruption, which means that up to now they are not considered acceptable to most people, the following illustrations indicate the seriousness of the problem and the inability of Sri Lankan institutions to deal with them.
The VAT scam
In 2004, one of Asia's biggest tax scandals was exposed by the Auditor General¡¦s Department in Sri Lanka, popularly referred to as the VAT scam. VAT (Value Added Tax), a consumption tax that is levied at each stage of production based on the added value to goods or services, was introduced in Sri Lanka in 2002. However, the VAT payments of industrialists who add value to their goods and services (and thereby are amenable for the payment of VAT) for the purpose of exporting are reimbursed by the government of Sri Lanka as an inducement to encourage exports. By producing certain fraudulent invoices and fictitious documents of exports that never took place, fraudsters obtained VAT refunds. Subsequent to investigations into the matter, a report was released by the Auditor General¡¦s Department to parliament. The report concluded that either "willfully or negligently" the Inland Revenue Department has incurred a loss of 441 billion rupees of computed costs (further stating that the costs that could not be computed could not be fathomed) (Sunday Times, 27 January 2008).
Even though many arrests were made at the time, several of the accused have managed to escape to countries such as Australia, New Zealand, Singapore, Japan and Thailand. The alleged "king-pin" of the scam, Kamil Kathubudeen, has to this date not been found, although the case was directed to Interpol. Former Inland Revenue Deputy Commissioner G. Z. Jayathilake and Assistant Commissioner A. W. Ambeypitiya are still imprisoned; however, former Commissioner General A. A. Wiyepala, who is alleged to be indirectly involved, later served as chairman of the National Insurance Trust (Sunday Times, 7 February 2010).
Former Auditor General Sarath Chandra Mayadunne in his report revealing the VAT scam pointed out two main errors in the current tax collection system. First, the current system is based upon a series of guesstimates as opposed to precise forecasted figures based upon accurate economic data, leaving space for human error. Second, the department has a severe staff shortage. According to him the department is running "with less than forty percent of the staff it requires" and thus is highly inefficient and prone to error (Arajuna Ranawana, Global Integrity Report 2007). It has been more than six years since the VAT scam was uncovered and the country is yet to see investigations carried out and the perpetrators brought to justice.
According to the World Economic Forum Global Competitiveness Report 2008-2009, the tax system lacks transparency and thus is seen to encourage corruption. Even though at present the procedures have been simplified and the number of tariffs have been reduced, according to the World Bank & IFC, on average a medium sized company has to make 62 payments to the tax authorities, have at least five visits from tax officials and spend approximately 256 hours per annum preparing, filing and paying taxes. Furthermore the Tax Department of Sri Lanka has wide discretionary powers, allowing it to act corruptly without fear of public scrutiny. Therefore, the occurrence of large scandals such as the VAT scam cannot come as a surprise.
Report of the auditor general
In Sri Lanka, the origins of the auditor general's office can be traced to 1799. The 1931 Donoughmore Constitution and the 1947 Soulbury Constitution of Ceylon considered giving the auditor general a larger degree of scope and provided for the accounts of government departments to be audited by the auditor general; however, there was no provision for audits to be conducted of local authorities and state corporations. This was amended with the Constitution of 1972, which gave the auditor general the powers to audit those institutions as well. The Auditor General's Department was established to increase public accountability of state institutions and authorities. According to the department¡¦s website, its key functions are to perform an "audit of the accounts of all Departments of the Government, Provincial Councils, Local Authorities and Public Corporations and of any Business or other Undertakings vested in the Government under any written law and to report to Parliament annually and as and when necessary on the discharge and performance of the duties and functions for the accomplishment of the above mission".
The annual report for the auditor general provides a summary of the expenditures, incomes and discrepancies of certain government departments and institutions. It is primarily a financial performance analysis of the said departments.
The Annual Report 2006 analyses the financial situation of six main government branches: the Inland Revenue Department, Department of Customs, Department of Motor Traffic, the ministries, health sector, and local authorities.
Inland Revenue Department
The Inland Revenue Department (IRD) was the subject of controversy in 2006 due to a four billion rupee loss incurred from the VAT scam. The report goes on to further point out the weaknesses within the internal system of the department. These weaknesses include accounting errors such as variations between opening and closing balances for the years 2003-2007, and failure to accurately record information received by the department. Furthermore there were disparities between the figures recorded for income tax and VAT between the IRD and the Central Bank Report. Thus the 2006 report strongly emphasized the need for improvement with regard to quality of management within the IRD; this included strengthening the internal control system and information system of the department (p. 46).
Confidential interviews conducted with several employees of the IRD to ascertain their perspectives in view of the VAT scam disclosed some interesting perspectives. An officer who wished to remain anonymous stated that the main reasons for the failures of the department are the lack of coordination with other departments (especially customs), corruption within the department itself, and political reasons. However, he also noted that there have been some improvements, including in the recruitment of new staff.
Department of Customs
The Department of Customs is the institution that collects the second highest amount of public revenue (after the IRD). This department experienced losses within the year under reportage due to weaknesses and lapses of the system and its failure to adhere with statutory requirements; however, unlike the IRD, the Department of Customs has faced losses due to setting unachievable and unrealistic figures for revenue collections where the revenue collection estimate was higher than what could be realistically gained (pp. 51-52).
Department of Motor Traffic
The Department of Motor Traffic experienced losses, according to the 2006 report. These losses were incurred as a result of cars being registered falsely as trucks and thus having paid a lower customs duty. Therefore the actual revenue collected from duty was so low that it caused heavy losses to the department. The auditor general's report pointed out the flaws in the file maintenance system of the department where in certain instances the files were either incomplete or untraceable, making it difficult to conduct investigations properly (pp. 53-55).
Ministries and departments
The auditor general's report revealed many flaws within ministries and departments that it audited. There were no long term, medium term or short term corporate plans which set out the role, mission, requirements and goals for the ministries and departments. The 2006 report identified a failure to establish action plans with monthly, quarterly and yearly targets for the said ministries and departments. Furthermore, the action plans that have been drafted have failed to be in accordance with budgetary allocations of the ministries and departments. The report also highlighted the lack of communicative channels with the stakeholders, the deficiencies of information systems within the ministries and departments, as they fail to monitor and analyse performance efficiently, and the lack of appropriate training facilities. Furthermore, many clerical errors were detected, such as classification errors, material omissions, delays in presenting back reconciliations and lack of board surveys and annual verifications. The report strongly recommended the correction of these deficiencies in order to prevent wastage of resources by ministries and departments (pp. 61¡V62).
Local authorities incurred a total loss of 1,545.52 million rupees in 2006, according to the report. They owed the banks a total of 5,435 million rupees in loans and overdrafts. The report again emphasized that such losses were incurred as a result of the breakdown in internal control and internal audit systems (pp. 75-77). The report pointed out that the there was room for corruption as a result of the lack of accountability and transparency within various branches of government (p. 65).
According to investigations carried out by researchers collaborating in the writing of this paper, employees of the Auditor General's Department expressed several concerns. The gravest problems are corruption, political involvement and general negligence in carrying out duties by the employees of the department. Moreover, they mentioned concern for their safety and political victimisation. Also, the need to have resources independent of other government institutions was stressed, as it was felt that certain government institutions failed to provide sufficient assistance in carrying out investigations.
The Auditor General's Department although established under the Second Republican Constitution is not completely independent (especially so with the enactment of the 18th Amendment) and lacks the ability to recruit and train suitable persons. There have been reports of intimidation of departmental personnel by other government employees, and questions have also been raised about the forthrightness of the most recent reports, due to political influence and fear of reprisals. Incidentally, a draft "Audit Act" was approved by the Cabinet of Ministers in 2005; however, it was not presented to parliament.
Reports of the Committee on Public Enterprises and the Public Accounts Committee
The Committee on Public Enterprises (COPE) and the Public Accounts Committee (PAC) are the main parliamentary watchdog committees.
Committee on Public Enterprises
According to the parliament, "The Committee on Public Enterprises has been established on 21.06.1979 [under Standing Order 126] to ensure the observance of financial discipline in Public Corporations and other Semi Governmental bodies in which the Government has a financial stake" (2006 Parliamentary Publications No. 12).
COPE conducted investigations and observed 26 key government entities in 2007. Its report was widely spoken of at the time, as it revealed many irregularities, corrupt conduct and deficiencies of the entities investigated. Seven of the most controversial were: the Central Bank of Sri Lanka, the Ceylon Electricity Board, the Bank of Ceylon, the Ceylon Petroleum Corporation, the Board of Investment, the Airport and Aviation Services, the Sri Lanka Ports Authority, and the Samurdhi Authority of Sri Lanka.
According to the 2007 report, the Central Bank of Sri Lanka, the main financial regulatory authority and reserve bank, had failed to take serious action against several bogus financial institutions, which were functioning illegally without prior approval from the Monetary Board. Such institutions have adverse effects upon the economic stability of the country. Furthermore, the committee pointed out that the Central Bank has been unwilling to recover the staggering seven billion rupees it had granted to financial institutions that had become insolvent. However COPE went on further to commend the governor of the Central Bank for his willingness to take initiatives in appointing a committee to inquire into a pyramid scheme¡¦s functions which had affected the exchange rate.
Ceylon Electricity Board
Due to its inefficiencies and mismanagement, the government-run Ceylon Electricity Board (CEB) had according to the 2007 report suffered a debt of 15 billion rupees. Furthermore, the report revealed that the CEB's internal audit division was deceitful and not up to standard, as it had not disclosed many fraudulent activities of the board. COPE pointed out that the appointment of the deputy general manager to the Kerawalapitiya power plant was done whilst he was under allegations from the internal audit division and he continued in office even when suggestions were made to remove him from his post. Thus COPE ordered that the retired deputy general manager was to not be given any benefits until his disciplinary inquiry was over, and requested that inquires against other officials be speeded up.
Bank of Ceylon
According to the report, the Bank of Ceylon (BOC), which is the largest state-owned commercial bank, had spent up to 127 million rupees within a four-year period on a foreign financial controller who failed to provide adequate services. The committee went on further to point out that efforts should be made to recover non-performing loans amounting to 12 billion rupees and adopt proper procedure when granting loans. Furthermore the committee pointed out that the cost revenue of the bank was 74 per cent whilst other private banks managed to keep the rates lower than 56 per cent. The committee also noted that BOC had granted loans and overdrafts amounting up to 340 million rupees and 300 million rupees to an international firm and these sums remained unpaid. Thus COPE expressed its strong discontentment towards the treasury for not performing its mandate to control and minimize the losses suffered by the BOC.
Board of Investment
COPE concluded that the Board of Investment (BOI), the investment authority established to encourage foreign investment, had been running without suitable corporate or action plans for a long period of time. The committee also expressed its unhappiness in the BOI attempting to mislead parliament by presenting false documents of nonexistent corporate plans for the board. COPE went on further to point out the wastage in resources of the BOI occupying several floors of the World Trade Centre building (amounting to nine million rupees in rent per month) when it had in its possession a building which had been vacant since 1999. It was also revealed by COPE that BOI has failed to monitor the financial control and performances of itself and thus had adversely affected the economy. As a result COPE concluded that the government was to take responsibility of monitoring the import and export procedure of BOI via a body such as the customs department.
Aviations Services Limited
COPE has recommended that legal action be initiated concerning a seven-million rupee transaction of Aviations Services Limited, a government-owned company. The transaction had occurred without prior approval of the board. Furthermore, COPE recommended that revised corporate and action plans be submitted by the company.
Sri Lanka Ports Authority
The Sri Lanka Ports Authority had no Director of Finance during the time period in which the observations were made and thus there were reports of serious irregularities such as the deterioration of accounting standards, loss of control over accounts and inaccuracy and lack of transparency in most of the accounts.
COPE revealed that the Samurdhi Authority has been functioning without a corporate plan. Further, it was learnt that the authority had failed to recover a sum of five and half million from its debtors.
Overall, when analysing the COPE report, a pattern of institutional failure becomes evident. Most units of government have incurred large losses due to not having made corporate plans or action plans. Most institutions had been functioning without the existence of targets and monitoring systems. Furthermore, administration was often not up to standard.
Committee on Public Accounts
The Committee on Public Accounts (PAC) was established under Parliamentary Standing Orders 125 to investigate the government, its ministries, departments, provincial councils and local authorities. PAC submits a report to Parliament with findings and recommendations. The PAC report for 2002-04 revealed fraud and corruption within government institutions; the report was divided into three sections: the executive summary, income arrears and differences in accounts in calculations of income tax.
Executive summary of the PAC report
The PAC report revealed details regarding the 3.6 billion rupee VAT scam that occurred between November 2002 and August 2004. The report went on to point out that as a result of the inefficiency and irresponsibility of the IRD and its senior officials, the value of the VAT repayments of the scam is was higher than revealed. PAC also learnt that the auditing officers in charge had been lenient in providing evidence on the scam. Furthermore it was exposed that the IRD had not only failed to conduct an investigation on issues raised by the auditor general, but it also falsely stated that the reason for this failure to conduct an inquiry was due to the advice of the attorney general. The PAC also concluded that the VAT scam was a result of the department functioning whilst neglecting constitutional needs and financial regulations (pp. 1-3).
The PAC provided a series of recommendations to the IRD. Most importantly was that the IRD conduct an investigation under the supervision of the PAC, so that they would reveal other repayment frauds besides the "VAT scam". Furthermore, the committee stressed upon the importance of establishing a new data system with an internal control system and a management and accounting information system. The PAC also recommended the amendment of the tax procedure in order increase efficiency. And the PAC suggested that the IRD follow its code of ethics more effectively in order to regain public trust and confidence that was lost as a result of the VAT scam.
There were three main areas of concern for the PAC regarding income arrears. Firstly, the PAC was concerned as to why the IRD failed to present financial reports at the necessary time periods, delayed the annual balances by up to eight months and as to why even the commissioner general neglected his duty to present the mid-term report on taxes, which is considered essential. As a result, the PAC found that the processing done by the department and the collection of arrears had been delayed. More importantly, the PAC pointed out those delays created an environment heavy in corrupt and fraudulent behaviour. Secondly, the PAC noted that there have been significant increases in tax arrears: 22.7 billion rupee increase in tax arrears and 33.5 billion rupees in VAT arrears, due to an increase in arrears in VAT, income tax, and economic service tax, the lack of supervision and expertise and also having no proper system for receiving data and information. Thirdly, PAC pointed out that the tax collection process has become more lenient due to the Tax Amnesty Act, No. 10 of 2003 and due to the Goods and Services Tax procedure being halted. Both these changes encouraged a delay in the collection of taxes, encouraged tax payers to refrain from paying taxes, and more importantly, affected the drafting of financial policies and the formulating of annual budget allocations (pp. 13-14).
The PAC stressed that the presenting of relevant reports should become a main priority of officials, and failure to do so should result in stern action being taken against them. The PAC also suggested that the IRD ought to use a modified computer system which would enable it to carry out functions of the department more efficiently. Furthermore, the importance of establishing a data bank and modified systems within the department was pointed out by the PAC with reference to the increase of tax arrears. The PAC also proposed to remove the discretionary powers of the commissioner general over the withholding of taxes and the releasing from fines of tax evaders, and the giving of those powers to a separate team of officials, so that this discretion would be used justifiably and in a transparent manner. Finally the PAC suggested that stern action be taken against officials who neglected their duties with regard to collecting taxes appropriately (pp. 22-23).
Differences in calculations of income tax
The PAC revealed two main areas in which there are differences in income tax calculations. Firstly, there were contradictions between the state accounts and the accounts of the IRD; where the accounts under four headings of the IRD did not match the state accounts under the same headings, costing 14.3 billion rupees and 0.6 billion rupees for the years 2004 and 2005. The PAC stated that the contradiction in these accounts was obvious; however, it was shocking that the commissioner general of the IRD has failed to identify the importance of them and conduct an investigation as why these contradictions had occurred. The PAC however concluded that these differences were caused as a result of the necessary working lists not being provided to the relevant officials each year (pp. 87-89).
Secondly, the PAC noted differences in data between the Customs Department and the IRD. The computerized data of the Customs Department did not match the data of the IRD. Upon investigation is was found that computer data of the Customs Department and the BOI were directly received by the IRD; however, it was also found that the IRD data only matched the data of the BOI but not with customs. Furthermore the PAC was thoroughly dissatisfied and frustrated with the IRD officials for providing contradictory views regarding this matter (pp. 90-92).
In its concluding thoughts the PAC revealed that the main loopholes that were highlighted by the auditor general have not been addressed by the relevant officials of the IRD. Furthermore it was recommended that the state accounts and the IRD accounts be compared on a monthly basis. Finally the PAC concluded that the financial/annual reports were not up to par as a result of the chief auditing officers not performing their tasks adequately (pp. 98-99).
Corruption, delays and case mismanagement in courts
Legal measures that have been taken in order to eliminate bribery and corruption in Sri Lanka are severely flawed and need review. In practice the law is applied in a prejudiced manner and, in the words of former Inspector General of Police, Frank de Silva, "conviction itself is discriminatory; the small fry are netted in, the big fish escape" (Sri Lanka Guardian, 24 July 2010). Even though several studies on the relevant law and legal machinery have been conducted, these have had little practical impact on the actual performance of the country's institutions that are in place for the purpose of controlling bribery and corruption. In Sri Lanka, the public administration including the administration of justice has failed to be accountable when it comes to bribery and corruption.
The problem lies within the government strategy, as even though there has been considerable effort and expenditure put in by the government, the strategy has proven to be inefficient. The key to solving the inefficiencies within the legal framework lies in a strategy that permits law enforcement and administrative measures to operate simultaneously in a successful manner.
The term 'law enforcement' invites one, again in de Silva's words, to discuss not only the "different notions of law enforcement but also the law and its adequacy" and "the limited idea of investigation".
Contrary to popular literary opinion law enforcement is not limited to police investigation. Law enforcement is a linked chain of four components: the law, investigation, prosecution and adjudication. Many legal writings fail to express law enforcement as a continuous course of action involving all these components and view it as merely the investigatory process done by the police; this analysis is flawed. Therefore it is vital that an efficient court administration system and judicial system exist along with an efficient police system.
Investigation is an important part of the process, yet despite the amount of critique about it, it is still severely flawed. One concern comes from the fact that in order for an investigation to commence a formal complaint needs to be lodged. In the case of small bribery and corruption offences this method works fine, however to "fry bigger fish" this method has proven ineffective. As stated by de Silva,
"Collapsing bridges and buildings, doctored ledgers, outdated drugs and a range of evident circumstantial evidence of corruption, known to the public at large, are not brought before the Bribery Commission for investigation, simply because there is not an aggrieved complainant to invoke the law."
This is seen as a loophole within the legal process for control of corruption.
Hence it can be stated that the scope and conception of the legal process is limited. As de Silva stated, "The legal machinery and legal process for control of bribery and corruption are plainly inadequate and ineffective in the face of the problem confronted."
A sad example of the utter failure in law enforcement is the Bribery Commission itself. The CIABOC website gives information in relation to one of five convictions handed down by the courts during 2010. However, the website is misleading as it gives the impression that the commission is still in operation and states the names of the previous commissioners who stepped down from office in March. Upon placing a request to find the case names and details of the convictions cited on the website we were informed that a member of public is not permitted to gain access to such information.
Corruption and wastage within parliamentary premises
It is interesting to note that incidents of corruption have been recorded even within the parliamentary premises and in institutions where parliament has direct supervision.
The MPs' Madiwela housing scheme scandal was a recent revelation that again indicated the extent to which bribery and corruption is rampant in the country.
Responding to a request made by MPs, the speaker of the house sought the assistance of the army to renovate approximately thirty houses which were part of the Madiwela housing scheme. The 2006 Auditor General's Report addressed a range of irregularities and shortcomings pointed out by sources. Such allegations made by sources include that certain houses had been fitted with pantry cupboards twice in a year, and others pointing to the waste and corruption concerning maintenance of the scheme. Despite the report being highly detailed and highlighting several of the main financial irregularities, parliament is yet to take it up. The problem here lies within the lack of power of the auditor general, as he is merely permitted to make recommendations and as Shaminda Fernando has written, has "no authority to prod Parliament in the right direction" (The Island, 20 July 2010).
The parliament modernisation project funded by the United Nations Development Programme is another example of a mismanaged project. It failed to fulfil many of the expectations placed upon it. The AG's inquiry into the matter, Fernando notes, "revealed a spate of violations with regard to financial laws and regulations governing Parliament". However no corrective action has been taken by the government or parliament.
Institutions to combat bribery and corruption in other Asian
As illustrated above, in Sri Lanka despite the various legal mechanisms available to combat corruption, it remains a very real problem. In such a scenario it is important to compare and contrast the regulatory framework that exists in neighbouring countries and discuss the relative success in curbing corruption in those jurisdictions.
Hong Kong -- Independent Commission Against Corruption
The Independent Commission Against Corruption (ICAC) of Hong Kong was established on 15 February 1974 when Hong Kong was under British rule. Its main aim was to get rid of endemic corruption in the various departments of the Hong Kong government. This was done through law enforcement, prevention and community education. Since the transfer of sovereignty in 1997 the ICAC has been headed by a commissioner, who is appointed by the State Council of the People¡¦s Republic of China on the recommendations of the Chief Executive of Hong Kong. The Basic Law of Hong Kong stipulates that the ICAC shall function independently and be accountable to the Chief Executive. At present, the ICAC has about 1200 staff, most of them serving on contracts.
The ICAC has adopted an exclusive strategy to combating corruption on three fronts, known as the three-pronged approach, embodied in the Commission's three departments, it has been essential in developing a new public consciousness. According to the ICAC website, "It was recognized that prevention was as important as the deterrent of prosecution, and the battle against corruption could only be won by changing people's attitude towards graft. The strategy has proved effective and remains the ICAC¡¦s guiding strategy today." Many believe that this was the key in transforming Hong Kong from one of the most corrupt to one of the least corrupt countries in the world.
Singapore -- Corrupt Practises Investigation Bureau
Established by the British colonial government in 1952, the Corrupt Practices Investigation Bureau (CPIB) is a government agency in Singapore which investigates and prosecutes corruption in the public and private sectors. It is authorized to investigate other criminal cases in which corruption may be involved, despite the fact that its primary function is to investigate corruption. It is independent from the Singapore Police Force and other government agencies so as to prevent any undue interference in its investigations, as it is incorporated within the Prime Minister¡¦s Office. The bureau is headed by a director who reports directly to the prime minister.
The Prevention of Corruption Act has provided the CPIB with three main powers: the power to investigate not just the suspect, but also the suspect's family or agents and to examine their financial and other records; the power to require the attendance of witnesses for interview; and the power to investigate any other sizable offence which is disclosed in the course of a corruption investigation. The CPIB has two main divisions. The Operations Division executes the main function of the bureau in investigating offences under the Prevention of Corruption Act. It compromises of four investigation units and an intelligence unit. Secondly there is the Administration and Specialist Support Division which again compromises of four main units. From the CPIB website,
the Administration Unit which is responsible for corporate and investigation support services, including registry, finance, procurement and personnel matters; Prevention & Review Unit which carries out reviews of the work procedures of corruption-prone Government departments to identify the administrative weaknesses, which could facilitate corruption and malpractices, and thereafter recommends appropriate preventive measures; Computer Information System Unit which undertakes computerisation projects and develops application systems to manage the records and enhance the effectiveness of the Operations Division; and the Plans & Project Unit which undertakes various staff work relating to planning projects, operations support and policies.
Singapore has managed to reduce corruption significantly as a result of the CPIB. In recent years, it has been ranked by the Transparency International Corruption Perception Index as amongst the top five least corrupt countries in the world.
Possible reforms to tackle bribery and corruption in Sri Lanka
As illustrated above, Sri Lanka has a wide range of laws and regulations to combat bribery and corruption. However, the problem has reached epidemic proportions with no signs of improvement. As mentioned, Sri Lanka can learn and adopt much from regional nations that have successfully combated corruption. Moreover, there are also several suggestions put forth by eminent jurists and commentators in Sri Lanka that may be beneficial in combating the menace.
The public trust doctrine
The public trust doctrine is a Roman law principle that has been developed to mean that the state should be a steward of a nation's natural resources and it is the responsibility of the government to protect the public's right with regard to those resources. The "public's rights" generally include access and proper and equitable usage by the state so as not to trample the citizens usage rights of those resources. However, Justice Mark Fernando advocates extending this doctrine beyond natural resources to all state departments and enterprises, thereby conferring the public as the rightful holder of state resources.
Justice Fernando writes of the several means under which Sri Lankans may actualise the public trust doctrine. He states that the doctrine can be realised through the "sovereignty principle" as enunciated under articles 3 and 4 of the Constitution, the several articles of the fundamental rights provision in Chapter III of the Constitution, the Directive Principles of State Policy and Fundamental Duties under the Constitution, and the expansion of the rules of locus standi for public interest litigation.
Justice Fernando points out that article 3 of the Constitution stipulates that "in the Republic of Sri Lanka Sovereignty is in the People and is inalienable. Sovereignty includes the powers of Government, fundamental rights and franchise." People, he notes, thus are entrusted with the power to delegate powers "to the Legislature, the Executive and the Judiciary, to be exercised in good faith for the benefit of the people for the purposes for which they have been delegated ¡V and not corruptly, to the prejudice of the People for the benefits of their delegates" ("In tribute to a judicial colossus", LST Review, 2009, p. 53) Accordingly, "public trust" is an intrinsic part of the sovereignty of the people and cannot be infringed upon by government for any reason whatsoever.
It is important to note that despite it being a sovereign right for people to be free of corruption, this right is not in Chapter III (under fundamental rights whereby a special remedy for enforcement is provided for) or article 3 of the Constitution, which speaks of the sovereignty of the people. However it does not mean that if a right is not acknowledged in Chapter III it fails to be seen as a right. A good example would be the right to life, which although not mentioned under Chapter III of the Constitution, is a right nonetheless (Kottabadu Durage Sriyani Silva v. Chanaka Iddamalgoda, 2000). Therefore, although a right may not be stated as fundamental right it would not be prudent to reject the availability of an un-stated right (Griswold v. Connecticut, 1965).
Moreover, article 12(1), the provision relating to rule of law, stipulates that all people are equal before the law and are entitled to the equal protection from the law. This has been interpreted to mean that the constitution is founded on the rule of law; that the high concept of the rule of law underlies it (Perera v. Jayawickrama, 1985). The rule of law is inferred to have several meanings, out of which one represents that government is to be conducted under a framework of principles and rules which limits the discretionary powers of public bodies and officials. As a result of this, the law grants power to public bodies and officials and should it be conferred that the powers have been placed upon them as a matter of public interest and to be used to benefit the public. Thus where the rule of law exists there is no room for power to be exercised in an unlawful manner that is arbitrary and unreasonable. As Justice Fernando writes, "Interpreted in the context of its foundations, article 12(1) establishes, expressly or by necessary implication, norms governing the exercise of (and the refusal to exercise) governmental powers ¡V namely, the powers vested and delegated by article 3 and 4." Therefore it can be seen that the public trust doctrine can be justified on the basis of the rule of law as well as article 12(1), independent of the sovereignty provisions.
Therefore, according to Justice Fernando the public trust doctrine is actualised in Sri Lanka through its Second Republican Constitution and the manifold provisions of the document enable Sri Lankans to play an active role in fighting bribery and corruption.
Freedom of information law and empowering citizens
Another provision that would strengthen a citizen's participation in the fight against corruption is the existence of a freedom of information act. It has been the experience of several countries that a freedom of information act can be a useful tool in the hands of ordinary citizens as it empowers individuals and civic-conscious groups to compel governments and government-related bodies to furnish information. This is based on the recognition that citizens of countries have a right to know about the activities of their governments. In Sri Lanka too efforts were made to enact a freedom of information act. There have been several attempts to enact such an act; however, all efforts have been in vain due to several reasons described below.
The first such attempt was in 1995 by the Committee to Advise on the Reform of Laws effecting Media Freedom and Media Expression, chaired by R.K.W. Goonesekera. This committee recommended that the right to information be included in the draft constitution that was being considered at that time. It recommended the enactment of the act to buttress the intended constitutional provisions under consideration. The proposals contained a wide definition of information and attempted to provide access to most of state matters and documents. These proposals were also supported by media industry bodies, as included in them was a comprehensive programme of media law reform. However, they were not implemented, and the media environment worsened and instead steps were taken to enforce further secrecy measures. For instance, in 2000 the cabinet announced that it would implement section 3 of Chapter XXXI, Volume 1 and section 6, Chapter XLVII, Volume 2 of the Establishment Code, which prohibits public officials from disclosing any information to the media. The threat led to jittery public servants refusing to release information of any kind to the media, and even refusing to confirm or deny information that was already in the hands of journalists or giving statistical information without the sanction of the secretary of the ministry concerned.
A draft Access to Information Bill was submitted to the Ministry of Justice by the Law Commission in 1996. This draft contained more modest proposals than the earlier version. However, it was not pursued. In 2003, a drafting committee headed by the then-attorney general, the late Mr K.C. Kamalasabeyson, and comprising the then-justice secretary, the Additional Legal Draftsman, editors, media lawyers and academics drafted a fresh set of wide ranging proposals in a draft Right to Information Act which also included limited whistleblower protection. The draft envisaged the right to obtain information relating to projects by government authorities above a particular monetary value. Clause 8 of the draft placed an obligation on the relevant minister/government body to divulge documents in relation to foreign funded projects (where the value exceeds one million United States dollars) and locally funded projects (where the value exceeds five million rupees). The information would be released according to guidelines prescribed by the Right to Information Commission, to be established in terms of the law. The draft was approved by the cabinet in 2003 but shelved thereafter with the change of government.
Later, the Law Commission of Sri Lanka approved a second law which
was more liberal than its first attempt in 1996 but still retained the
grounds of parliamentary privilege and contempt of court as bars to
access to information. In March 2010, the outgoing justice minister
proposed a further revised draft taking into account, the experiences of
the past but failed to win a seat at the parliamentary elections held
soon thereafter. Currently, the main opposition party has unsuccessfully
attempted to table a private member¡¦s bill relating to the enactment
of a right to information law. The government has promised the enactment
of such a law but has shown no actual commitment in this regard.
Critics claim that the bill will not be passed, as many government
officials enjoy working behind a closed curtain, and the bill if enacted
would reveal many scams within departments.
Undoubtedly, the enactment of such a law would increase transparency within departments and institutions. Such a bill would give the public the right to access official information in the custody of public authorities. This will avoid the recurrence of instances such as in relation to the 2003 VAT scam where it became very difficult for members of the public to gain information regarding the operations of the Inland Revenue Department.
Another law that needs strengthening is the Assets and Liabilities Law. At present, as mentioned above, ordinary citizens are precluded from petitioning relevant institutions under this law as section 9(a) provides that a sum of money must be deposited before doing so. In order to strengthen the process, instead of the deposit, a sworn testimony (affidavit) could be introduced. It is submitted that this would enable anyone with credible information to initiate action under this law, thereby empowering the ordinary citizen.
Lack of autonomy and resources for institutions
In Singapore, as illustrated above, the head of the institution to combat bribery reports directly to the prime minister and the department is assured the required resources and the proper legal framework to act independently. In contrast, in Sri Lanka, the local Bribery Commission is understaffed and devoid of the necessary resources. The 2007 Annual Report of the Commission to Investigate Allegations of Bribery and Corruption in Sri Lanka listed 79 vacancies out of a total of 183 positions approved for the Investigation Division (p. 86). Moreover, there are a further 20 vacancies in the legal and administrative division (p. 85). Under such a situation it is unlikely that the commission can function properly.
The lack of resources and especially the lack of autonomy is an all-pervasive problem for most government departments and divisions in Sri Lanka. As mentioned above, the repeal of many of the provisions of the 17th Amendment by the 18th Amendment to the Constitution further institutionalises political interference in the day-to-day administration of government, thus making it even more difficult to arrest the ever-growing cases of bribery in the country.
"Every public institution in Sri Lanka is corrupt. They include judges, politicians and bureaucrats. Every time someone comes into power, either politically or officially, they take it as a license to rob this country." (Prominent anti-corruption journalist, cited in Arjuna Ranawana, Global Integrity Report 2007)
Assuredly, all humans are susceptible to corruption if the price is right and the circumstances so compel. Consequently all the laws in the world will not result in the scourge of bribery and corruption being minimised in Sri Lanka if the popular will balks at demanding fiscal accountability from the public sector and from our politicians. The best mode of combating corruption rests in the hands of the ordinary citizen, through the utilisation of the public trust doctrine or the other manifold laws and regulations. Individuals and civic groups need to continue to impress upon our legislators to introduce legislation such as a freedom of information act that would provide the framework for citizens to take action.
More than ever, however, we need to take the current debates on taxation and tax controls out of the realm of a purely taxation-focussed environment and acknowledge that the effective control of bribery and corruption is a key to a successful strategy in this regard.
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Footnote: This paper was written in September 2010 and reflects the state of discussion at that time. Kishali Pinto-Jayawardena is a human rights advocate, senior media columnist and published author. Navin Karunatilaka is an attorney-at-law and researcher.