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Crisis caused by decades of misuse public resources, corruption, kleptocracy – TISL

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The Transparency International of Sri Lanka has presented a set of 15-point recommendations for anti-corruption law reforms.

The TISL said in a statement: 2022 has so far been a tumultuous year for Sri Lanka. With the country teetering dangerously close to defaulting, economists have noted that the situation will only get worse before it can get better.

TISL says the prevailing crisis has been caused by decades of misuse and mismanagement of public resources, kleptocracy, systemic corruption and an overall lack of transparency and accountability in both governance as well as in the public service sector.

At this important juncture, the decisions taken and the action or inaction of the leaders of the country will determine the uplifting or complete breakdown of the economy, with direct consequences to the lives of citizens. Therefore, ensuring maximum transparency and accountability of decisions at the highest level and taking immediate action to curb ongoing and possible corruption are essential if the country is to effectively implement any economic recovery plan. Hence, it is paramount that loopholes within the Constitution, national policies, laws, structures and systems are addressed in a manner that would minimise opportunities for corruption.

While a robust economic recovery plan is the need of the hour, if the people and systems that are entrusted with implementing such a plan are corrupt or perceived to be corrupt, there will be little to no acceptance from the people, who will have to bear the burden of this recovery plan.

In the light of the above, TISL hereby presents a set of recommendations that lays down the main anti-corruption reforms that are crucial immediately and in the medium / long terms, if Sri Lanka is to rise above the present crisis and bring about a real change:

1. Set the tone from the top – It is paramount that those who take leadership must have a clean track record that demonstrates their integrity and genuine commitment to serve the country, coupled with the required basic knowledge and expertise for their roles. A strong “zero-tolerance policy for corruption” needs to be adopted by the leaders, where they go beyond their word and reflect such principles in their actions.

2. Ensure transparency of all decisions taken with regard to solving the present crisis –Introduce an open digital platform to share all information related to the foreign donations and loans obtained, along with detailed information on how such funds are utilized and on decisions made by the Finance and other relevant Ministries and the Central Bank. It is essential to have frequent and regular press conferences to keep the people informed of the actions being taken on economic recovery and to conduct open consultations with relevant stakeholders prior to making important decisions.

3. Repeal the 20th Amendment –This amendment that removed essential accountability measures in governance should be repealed in order to bring back the checks and balances in governance that were brought in by the 19th Amendment.

4. Introduce provisions to strengthen Parliament’s oversight on Public Finance –It is crucial to tighten the controls on public finance by converting the outdated financial regulations into a comprehensive Finance Law that will cater to the present times and ensure parliamentary oversight as well. In addition, Constitutional recognition and empowerment is required for watch dogs on public finance – the COPE (Committee on Public Enterprise), COPA (Committee on Public Accounts) and CPF (Committee on Public Finance), to enhance their effectiveness.

5. Introduce mandatory accountability measures on public procurement –As public procurement is a process that is heavily targeted for grand corruption, it is essential to convert the existing National Procurement Guidelines to a law, and to establish mandatory procedures to follow in case of unsolicited proposals. Re-establishment and empowerment of the National Procurement Commission to oversee public procurement is also important.

6. Abolish the executive presidency –The Executive Presidency as designed in our Constitution has proven to be an avenue that leads to the concentration of great power on one individual, often leading to the abuse of such entrusted power to the detriment of the country. Therefore, it is important to create a mechanism with a Prime Minister and Cabinet that is accountable to the parliament.

7. Empower the law enforcement authorities and ensure their independence, so that they can take action to end impunity, by fearlessly, proactively and vigorously pursuing the perpetrators of corruption, irrespective of their political power or social status.

8. Begin the process to de-politicize the public service, by introducing required Constitutional amendments that would enhance the independence of the public officials.

9. Act Immediately on the findings of COPE, COPA, COPF, which have continuously unraveled massive abuse of public resources within public institutions.

10. Conduct an immediate audit of all SOEs –A financial audit and an overall review of all State-Owned Enterprises (SOEs) need to be conducted to ascertain losses and misuse of public resources and to take immediate action to stop ongoing corruption. These savings will help the Government to channel more public funds to secure essential goods and services.

11. Recovery of stolen assets –Law enforcement officials need to take steps to immediately commence investigations, asset tracing and the asset recovery process in relation to questionable assets of public representatives and public officials held within and outside of the country.

12. Show us the money – Political parties need to respect the call of the people to demonstrate their commitment to transparency and accountability and make relevant policy decisions to voluntarily disclose their Asset Declarations to the general public, thereby paving way for a social audit of their assets. Steps need to also be taken to Amend the law on Asset Declarations, making public disclosure of asset declarations mandatory and introducing provisions to centralize the record maintenance and for regular review and proactive investigations on discrepancies.

13. Hold the enablers accountable –Public Officials, Big businesses, Banks and Financial Institutions, lawyers, accountants, real estate agents etc. are all part of the kleptocracy circle that pave way for, facilitate, support and benefit from grand corruption. Oversight entities such as the Public Service Commission, Financial Intelligence Unit of the Central Bank, the Chamber of Commerce, The Bar Association, Chartered Institute of Management Accountants etc. and the citizens need to act as watchdogs and demand greater transparency and accountability from these parties as well.

14. Introduce the proposed composite law on Proceeds of Crime –Through this law Sri Lanka could establish an independent Asset Management Authority to manage recovered assets. This law will deal with all matters relating to recovery of stolen assets held overseas.

15. Introduce legislation to regulate election campaign financing, which is a starting point of corruption of public representatives.

Commenting on the current situation, TISL’s Executive Director Nadishani Perera stated “We urge the citizens to continue to actively seek information and knowledge on the types and impact of corruption and to be informed of the essential systemic and cultural changes needed to uplift the country. We stand with the citizens in demanding accountability and corrective action from our public representatives in a peaceful manner. Together we can weather this storm and create the change we thought may not be possible in our lifetime.”



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Prime Minister joins Gandhi Jayanti Commemoration

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Prime Minister Dr. Harini Amarasuriya attended the Gandhi Jayanti commemoration held at Temple Trees on October 2nd to mark the 157th birth anniversary of Mahatma Gandhi, the pioneer of non-violence.
The commemoration was held under the patronage of the Prime Minister and the High Commissioner of India to Sri Lanka,  Santosh Jha. During the event, the Prime Minister and the Indian High Commissioner paid floral tributes to the statue of Mahatma Gandhi. The ceremony was organized to recall the message of peace, non-violence, and harmony that Mahatma Gandhi bestowed upon the world through his life and philosophy.
The High Commissioner of India to Sri Lanka,  Santosh Jha, Secretary to the Prime Minister, Pradeep Saputhanthri, along with state officials and officers from the Indian High Commission, were present at the occasion. Prime Minister’s Media Division

[Prime Minister’s Media Division]

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Unions resist tripartite EPF management plan

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… warn of dire consequences

A group of trade unions and civil society groups has requested President Anura Kumara Dissanayake to abandon his government’s controversial plan for the proposed tripartite management of the EPF.

The group has told the President: “We strongly object to the government’s plan to transfer the EPF to a tripartite board—jointly promoted by the Employers’ Federation of Ceylon (EFC), International Monetary Fund (IMF) and the International Labour Organisation (ILO)—and to increase the investments of those funds within private equity and debt markets.

“While the EFC and the government jointly project this plan as a ‘modern governance framework’, it poses a serious threat to the EPF’s financial stability, fiduciary conduct, and returns to workers’ life savings, with severe consequences for broader macroeconomic stability. Rather than replacing the corruption existing in the public sector, this tripartite framework paves the way for a corporate takeover of the EPF. Through this, the fund is exposed to unlawful business practices such as insider trading using internal information of EPF investments, conflicts of interest and corporate bailouts of unstable private companies.

“Sri Lanka’s corporate sector has a tremendously negative track record, which you alluded to during your victorious election campaign in 2024. This was recently unravelled by the multi-billion-dollar illicit capital flight through trade misinvoicing, which your administration is now actively working to curb in the imports sector.

“The recent banking sector fraud exceeds Rs. 13 billion; widespread corporate tax evasion destabilised the fiscal position (Sri Lanka Auditor General’s Department Annual Reports) and consequently inflated the tax burden on the general public. The EFC has found it convenient to remain silent about these crimes, possibly assuming that their silence would preserve their social standing. Considering this inherent corruption within Sri Lanka’s corporate sector and its disregard to the living standards of the general public, there is no realistic basis to integrate corporate interests to actively manage the EPF. The corporate sector of Sri Lanka has not developed sufficiently on technical and ethical grounds to safely entrust the largest retirement savings pool in the country. The EPF is a captive fund that has no mechanism for the owners to divest if the management is corrupt. This further increases the possibility of corporate fraud when the management of the fund is jointly held with the corporate sector.

“Furthermore, during the recent public discussion with trade unions, Deputy Minister of Finance Dr. Anila Jayantha pointed out that the domestic debt restructuring (DDR) would inflict a loss of Rs. 600 billion to the EPF. Our independent calculations—formally submitted as an affidavit to the Supreme Court approved by the Federation of University Teachers’ Associations in 2024—reveal that nominal loss alone is Rs. 634.4 billion. When factoring in foreclosed reinvestment returns, the true loss skyrockets to Rs. 1,711 billion, wiping out 48% of the fund’s projected gross income for the 2023 – 2028 period. Under the pretext of safeguarding the banking system, this colossal robbery preserved high yields on government bonds held by commercial banks and high-net-worth individuals, subsequently reaping them astronomical profits. Now, the exact same plunder is rearing its head again disguised as a tripartite committee.”

“The main arguments supporting our resistance and viable alternatives for optimising EPF management directly under the Central Bank of Sri Lanka (CBSL), are outlined below.

“Objections to the government’s tripartite proposal:

1. The “International best practice and conflict of interest fallacies”

The government holds that tripartite management of pension funds is the “international best practice” and that there is a “conflict of interest” in CBSL managing the EPF. They are key pillars justifying government’s tripartite proposal.

These two positions are shockingly misleading given that four of the five largest pension funds in the world, in Norway, Japan, the U.S., and Singapore, are managed directly by state bodies or central banks. Therefore, ‘international best practice’ in pension fund management is the exact opposite of what the government and the IMF are proposing. We hence reject these baseless positions.

2. Corporate captivity and bailouts

It is clear that the EFC is desperately pushing for this proposal at a time of global uncertainty, to cushion the effects of the crisis and maximise gains. Under corporate influence within the proposed tripartite board, the private conglomerates can use the multi-trillion-rupee EPF to continue their unstable commercial operations without having to risk their own capital or savings to do so. This will severely erode the financial stability of the EPF and its returns.

3. Risk of front running

“Because the EPF is a colossal fund, its investment decisions can alter asset prices. This creates immense monetary value for the information generated by its investment decisions. Corporate representatives on the proposed tripartite board will be perfectly positioned to use this information to trade ahead of the EPF (front-running), buying assets cheaply and dumping them onto the EPF at inflated prices for guaranteed corporate gain, resulting in a reduction of returns to the EPF.

4. Unavoidable loopholes

“Presence of a separate group of investment analysts, trade union representatives and government officials within the proposed tripartite structure cannot prevent pre-market corporate access to EPF’s investment decisions. Investment proposals made by the analysts has to be first approved by the proposed tripartite committee, making it impossible to prevent corporate access to insider information on EPF investments.”

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Two arrest warrants issued for Gnanasara thera

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Galagoda Aththe Gnanasara

The Colombo High Court and Court of Appeal yesterday issued arrest warrants for the Bodu Bala Sena general secretary Galagoda Aththe Gnanasara in a case involving an alleged statement insulting Islam.

The arrest warrants were issued on Tuesday and Wednesday. The Court of Appeal issued an open warrant two weeks after the court rescinded the presidential pardon granted to the thera when he was serving a six-year term for contempt of court.

The Appeals Court also imposed a travel ban on the monk and ordered that the Controller General of Immigration and Emigration be informed of the restriction.

The case was taken up before Colombo High Court Judge Buddhika C. Ragala. Gnanasara Thera was not present when the case was called.

A medical report was submitted stating that Thera was unwell, while his sureties also failed to appear before court. His counsel, Asoka Weerasuriya, told court that his client wished to bring the case to an early conclusion and that representations had been made to the Attorney General in that regard.

However, after considering the submissions, the High Court judge said he was not satisfied with the medical report submitted on behalf of the accused. The court also noted the failure of the sureties to appear.

The judge subsequently ordered that Gnanasara Thera be arrested and produced before court.The Attorney General filed the case under provisions of the Penal Code, alleging that remarks made by Gnanasara Thera concerning the Holy Quran amounted to an insult to Islam.

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