Reform of the Anti-Corruption Act – Part III

by A Special Correspondent
(Continued from yesterday)

The most dangerous job in Sri Lanka today is that of a public servant. Even those who have never taken a bribe or enriched themselves unlawfully, can still be accused of corruption by ‘causing a loss to the government’ and all public servants now live with the constant possibility of arrest and prosecution while holding office or even after retirement. This is a developmenthat has taken place in the past several years due to misguided policies and bad politics.

When the Central Bank was set up in 1949 under the guidance of John Exeter of the US Federal Reserve, the following provision was included in the Monetary Law Act of 1949.

“47.(1) No member of the Monetary Board or officer or servant of the Central Bank shall be liable for any damage or loss suffered by the bank unless such damage or loss was caused by his misconduct or wilful default. (2) Every member of the Monetary Board and every officer or servant of the Central Bank shall be indemnified by the bank from all losses and expenses incurred by him in or about the discharge of his duties, other than such losses and expenses as the board may deem to have been occasioned by his misconduct or wilful default.”

Until 1994, Section 47 provided all the protection that Central Bank officials needed. But after Section 70 was introduced to the Bribery Act in 1994, and ‘causing a loss to the government’ became an offence amounting to corruption, even Central Bank officers technically lost their immunity. Acts that cause a loss to the government are very much a part of the Central Bank’s functions. If the Central Bank allowed the Rupee to depreciate, the cost of servicing foreign debt goes up and causes a loss to the government. A slight increase in the interest rate increases the cost of servicing government debt and causes a loss to the government.

The only reason that officers of the Central Bank were not prosecuted under Section 70 after 1994 was because nobody got the bright idea of making a complaint against them. As pointed out earlier, Section 70 remained dormant for many years after 1994. However, the dogs were let out after 2015 and today, no public servant is safe. In the post-2015 era, petitioners have gone to courts arguing that an economic crisis was precipitated because a government reduced taxes, did not allow the Rupee to depreciate, and delayed seeking IMF assistance. Now, there is nothing to stop another set of petitioners from going to courts arguing that yet another economic crisis has been precipitated because of high taxes, a depreciating Rupee, and strict IMF conditions!

So, public servants including Central Bank officials who play a major role in economic decision making are exposed and vulnerable. The Monetary Law Act of 1949 was replaced by the Central Bank Act of 2023 and Section 47 of the old Monetary Law Act still continues to exist in a way in the Central Bank Act of 2023 in the form of Sub-section (1) of Section 121.

Jail time for public servants

However, there is a crucial difference between Section 47 of the old Monetary Law Act and Section 121 of the 2023 Central Bank Act because the new provision has been promulgated to suit the new era of criminal charges and jail time even for public servants who have not taken bribes or enriched themselves unlawfully.

While Sub-section (1) of Section 121 of the new Central Bank Act encapsulates the essence of the old Section 47, the Central Bank Act of 2023 has a new Subsection (2) of Section 121 which basically states that if an officer of the Central Bank is faced with an investigation or court proceedings, the Central Bank will meet the legal costs of that officer. This legal aid comes with the proviso that if any wrongdoing is proven, the offender will have to reimburse the money spent to the Central Bank.

It should be borne in mind that under the present law, the wrongdoing that needs to be proven under is not that the said Central Bank officer took bribes or enriched himself, but of having caused a loss to the government. So in reality, there is no protection for Central Bank officers who have no option but to cause losses to the government as a part of their day to day duties especially when it comes to exchange rate and interest rate management.

While Section 121(2) of the 2023 Central Bank Act thoughtfully provides for the legal costs of Central Bank officers under investigation or prosecution, it has not provided for the time that officer will have to spend in remand prison. For the sake of completeness, there should have been a Sub-section (3) to Section 121 stipulating that if an officer of the Central Bank under investigation or prosecution ends up in remand prison, a peon of the Central Bank will be assigned to take food and other essentials to the remand prison on a daily basis!

At least the Central Bank Act of 2023 has explicit provisions to help their employees with legal support if the need arises. But other public servants in less well-paid, less powerful branches of the public service or state institutions have no such safeguards. What is necessary is to prevent bribe-taking and unlawful enrichment by public servants but this has to be done without undermining the decision-making and problem-solving powers of public servants and thereby paralysing the entire system of governance.

As we saw in the previous article, the Indian system allows those who bear actual responsibility for running the country to decide whether a prosecution or an investigation into the conduct of an official is warranted in the circumstances if there is no evidence of bribe taking or unlawful enrichment. That enables those running the country to act on irregularities without undermining the system of governance.

However, in Sri Lanka, governments led by short-sighted and small-minded people have a tendency to come into power with their garments hitched up high, and perform various ill-advised antics to please the gallery. Hence, what works as a safeguard in India may actually be turned into an instrument of political persecution in Sri Lanka with every succeeding government mindlessly sanctioning investigations and prosecutions against holders of high office in the previous government.

In Sri Lanka, when power changes hands, the winner-takes-all and commonsense, far-sightedness and even the medium to long term self-interest of the winners themselves, go out of the window resulting in a ‘monkey with a razor blade’ situation. The Sri Lankan public service is too weak to be able to hold things steady and they too tend to get carried away by whatever political wind may happen to be blowing at a given time.

The elusive sense of balance and proportion

However, all is not lost. From the time of independence until Section 70 of the Bribery Act was introduced in 1994, public servants could be prosecuted only for actually taking bribes or possessing unexplained wealth. Even after Section 70 was introduced in 1994 to prosecute a public servant for corruption by causing a loss to the government even if there was no bribe taking or unlawful enrichment, prosecutions under this provision were not instituted for many years. So, there is a history of rational behaviour in Sri Lanka as well. What is necessary is to find some balance and a sense of proportion when it comes to public servants who take bona fide decisions that are open to interpretation as ‘causing a loss to the government’ even though that person has not taken bribes or enriched himself unlawfully in the process.

In some instances, a decision taken by a public servant may benefit some individual and it may cause a loss of revenue, loss of property or a need to make a payout on the part of the government. A given set of circumstances would require remedies within a certain range. In making such a decision, the rationale therefor and any precedents would obviously be recorded by the public servant. If a complaint is received, an internal board of inquiry should be able to ascertain whether there was anything unusual in the decision taken.

If redacted versions of such internal inquiry reports are made publicly available, anyone who is not satisfied with the conclusion should be able to challenge it with the board of inquiry, the CIABOC, the police the courts or even in the media. When an allegation relates to a loss incurred by the government and there is no evidence of bribe taking or undue enrichment, there should be some sort of a halfway house without an all-powerful external inquisitor rushing into the matter with arrests, imprisonment, investigations and prosecutions. Unless something is done to address this issue, what we are staring at, is creeping governmental paralysis over a period of time.

(Concluded)

The terrorist war, which was launched in the 1970s to create a separate state, was ruthless and created political and economic instability. Sri Lankan governments, during this period, were pushed, and sometimes forced, by internal and external forces to talk ‘peace’ with the terrorist faction. The terrorists made use of the peace initiatives and strengthened their forces by procuring arms, recruiting personnel and exploding bombs in the city centres and massacring civilians

But Sri Lankan forces, who were determined to defeat the terrorist group, continued to exert pressure on the enemy with unparalleled heroism. President Mahinda Rajapaksa, too, was determined to get rid of the ferocious enemy and with the then Secretary of Defence, Gotabaya Rajapaksa, senior officers of the Army, the Navy and the Airforce, planned a full-scale operation to wipe out the enemy.

The LTTE killed many Tamil political leaders and also took with them more than 25,000 Tamil civilians, by force, as a human shield, when they retreated to the East. The civilians were finally liberated by the Sri Lankan armed forces. Many thousands of Tamil children were recruited as child soldiers, depriving them of their innocent childhood. Some were trained as suicide bombers. Many of them were killed in the battles while the remaining ones were rehabilitated by the Sri Lanka government.

When the situation changed for the better, after 18th May, 2009, one of the darkest chapters of Sri Lankan history was ended by the war heroes, assisted by the Police, and the members of the civil defence force.

Finally, around 7,000 members of the armed forces sacrificed their lives, while nearly 30.000 members were injured. The nation should be ever grateful to these war heroes who survived and liberated the land and others who were killed and also injured  fighting for the land.

RANJITH SOYSA 

On May 15, newspapers reported a tragic incident in Wilgamuwa: a 56‑year‑old father and his 25‑year‑old daughter were killed in a wild elephant attack while travelling on a bicycle. The father had been on his way to drop his daughter at her workplace when they were attacked by the elephant.

Who will compensate the family of these two innocent persons, who were travelling in a legitimate and peaceful manner?

If a person kills an elephant to protect his life, property, or plantation, there is an immediate hue and cry, and prosecution follows. Yet, when poor villagers are killed or maimed by elephants, the victims’ families are left devastated, often losing their breadwinners who struggled daily to provide for them.

Why does our legal system and state regulation fail to work reciprocally?

Should not the same urgency and accountability apply when human lives are lost?

D Rajapaksha