One of the positive points of the last Parliament was the strengthening and increased transparency of Parliamentary Oversight Committees, which include the Committee on Public Enterprises (COPE) and the Committee on Public Accounts (COPA). The former especially excelled under the stewardship of former JVP MP Sunil Handunetti, who did much to increase transparency of Government decisions and functions of State enterprises.
This work was largely possible due to the chairmanship being given to Opposition members, which has now been reversed. The new COPE Chairman is MP Dr. Charitha Herath of the Sri Lanka Podujana Peramuna (SLPP), and it is hoped that he will work to take forward the efforts made by his predecessor.
This is of particular importance because the former COPE had its work suspended at the crucial moment. It was scheduled to convene to examine the forensic audit reports prepared as part of the investigation into the Central Bank bond scam.
The forensic audit reports, which had earlier gained much public attention, were only to be seen by relevant officials, as the Attorney General was concerned they may contain information that could be used as evidence in ongoing investigations and future legal action.
In addition, last year, COPE also called for a new investigation into the colossal losses of SriLankan Airlines in Parliament, insisting a wide-ranging investigation was needed to understand the causes of the losses of the national carrier, identify people responsible for the losses and hold them accountable.
The latest COPE has to continue pushing for more awareness among the public and bring wrongdoers before the law. With the SLPP holding a two-thirds majority and the 20th Amendment gutting the Audit Commission, which could have helped to identify governance lapses, the temptation will be to cherry-pick issues.
Sri Lanka is a country that has had a large State sector for decades. Currently, Sri Lanka has about 400 SOEs, according to the Treasury, with over a million employees. Yet, only a handful of these SOEs make profits or generate returns for the public, and are largely seen as employment providers, rather than service providers. But they do consume an extraordinary amount of resources, and possess impressive assets.
Even though SOEs occupy significant space in the economy, it is by no means a reflection of their potential or capacity. Clearly, these business enterprises have not been performing at full potential and SriLankan has been an issue for many years. The reasons include a lack of good governance, lack of clear accountability mechanisms, issues associated with policy and legal frameworks, and a weak supervisory role played by management. This is the case for many SOEs and not just SriLankan.
In mid-2017, Moody’s Investors Service put Sri Lanka’s public enterprise debt at a whopping 14% of GDP and warned the Government of additional risks to its finances should such debt require any State support, which is likely to become the case as most cannot support their debt repayment.
This translates into a massive debt pile of little under $ 12 billion, or Rs. 1,848 billion, that has accumulated due to the continuous annual losses. According to Moody’s, the total liabilities include Government guarantees, outstanding SOE debt to the banking system, and outstanding SOE foreign borrowings.
COPE should continue open sessions with media to throw more light on how deep-seated the issue of mismanagement and wastage is in many SOEs. The new members could also explore allowing experts to give their views on how management can be improved in SOEs and for those recommendations to also be allowed to be incorporated into the oversight process.
COPE is undoubtedly an important process but accountability requires more stakeholder involvement and ultimately legal redress to truly uphold public interest. If the Government is truly committed to fighting corruption, this is a space that can be used to prove this intent and save taxpayer rupees.