TISL report sheds light on private sector corruption

Transparency International Sri Lanka (TISL) recently unveiled the ‘Corruption Risk Mapping Research: A Study on Sri Lanka’s Private Sector at the BMICH in Colombo.

Shattering the myth that the private sector in the country is generally above board, TISL has presented an in-depth analysis of corruption risks in Sri Lanka’s private sector and possible measures to address them.

The research, compiled by an Independent Researcher, documents and narrates alleged experiences and examples of private sector corruption, possibly for the first time in Sri Lanka, according to TISL.

Text of the TISL statement: “Corruption in Sri Lanka for the most part has been seen as a public sector problem. This research, however, indicates that the private sector often functions as the “supply side” of corruption. The allegations narrated showed a high risk of corruption when dealing with relevant government departments for approvals and licences across all industries. The Report also documents allegations of corruption when bidding for government contracts, particularly in relation to pharmaceuticals and large-scale infrastructure projects.

Allegations of corruption, documented in the report between private sector entities, includes kickbacks, gratifications and favours, fraud, unethical manipulation of procurement processes, conflicts of interest, nepotism and favouritism. Interestingly, the research also revealed allegations of private sector entities engaging in political lobbying and significant market manipulation through the creation of monopolies. The research showed that gender dynamics also affected the nature of corruption. Respondents alleged that women were at a higher risk of being solicited for sexual bribes in exchange for jobs, promotions or even to provide a service.

The Report highlights that while public listed companies are heavily regulated, their unlisted subsidiaries face fewer regulations. This enables the parent company to outsource their corruption to a subsidiary or sub-subsidiary. The Report identifies the lack of a strong regulator, internal controls, and regular financial and social audits as some of the risk factors that lead to private sector corruption. It has also been found that new market entrants often resort to corruption as a means of survival in the absence of a conducive business environment.

The Report proposes the private sector to adopt robust anti-bribery and corruption policies with whistle-blower protection, and to pursue collective action to mitigate corruption. It calls on the Government to establish stronger regulatory bodies, digitalize processes, and enhance procurement practices.

The Report Launch was followed by a Panel Discussion, titled “Beyond Compliance: True Business Integrity in a Box-Ticking World”. Ms. Averil Ludowyke, an Independent Non-Executive Director at several leading private sector organisations, and Ms. Rukshani Wanigasekara, Senior Manager Corporate Legal – Cargills Ceylon, were panellists and the session was moderated by Gowthaman Balachandran, Chief of Party for Transparent and Accountable Governance Project supported by USAID.”

Link to Full Report: https://www.tisrilanka.org/crmr/