Columns

• Huge medicinal drug contracts given to Indian company dealing in Ayurveda medicine and garlic oil
• MPs call for Parliamentary Select Committee to probe health sector malaise, hold bipartisan meeting to discuss malpractice in procurement
• IMF issues statement telling government to address 16 areas of concern before obtaining second tranche; state finance minister says, “We are on track”

By Our Political Editor

However, the deterioration of the health services—widespread corruption, import of poor-quality medicinal drugs or their nonavailability and medical negligence among others—is fast ruining this image. Ironic enough, it is affecting a vast segment of Sri Lankans, from the rich to the poor, fearfully raising the spectre of death than a healthy life.

This explains why a group of government and opposition MPs, casting their differences aside, gathered at a bipartisan event in a room in Parliament, with Opposition Leader Sajith Premadasa in the chair, last Thursday to discuss the growing malaise. That many parliamentarians vent their feelings over the health sector during a vote of no-confidence on Health Minister Keheliya Rambukwella on September 8 did not deter them. Not even though it was over the alleged importation of substandard medicines and surgical equipment. That move, the motion said, weakened the health sector and caused the deaths of several patients receiving treatment at public hospitals. The vote on the motion went on party lines. Voting against were 113 whilst 73 voted in favour. Thirty-eight members were absent.

“We discussed how to proceed with a serious situation that is worsening due to corruption and other malpractice at the Health Ministry and the health sector,” Samagi Jana Balawegaya General Secretary Ranjith Madduma Bandara told the Sunday Times. Revelations during the no-confidence motion, he said, had not led to any improvement in the situation. To the contrary, it had worsened, he said. He added that the opposition would now call for the appointment of a Parliamentary Select Committee (PSC) to study the current situation in detail and recommend immediate remedial action.

Wasantha Yapa Bandara, one of the convenors, was highly critical of the National Medicines Regulatory Authority (NMRA), the state body responsible for authorising the import of medicinal drugs. He charged that the signature of the Chief Executive Officer had been allegedly forged to import drugs. He quoted Minister Rambukwella as saying during his no-confidence motion debate that complaints regarding this had been made to the Criminal Investigation Department (CID). He said shipments had been cleared from Customs using the forged documents. The question is: what happened to the medicinal drugs imported with such forgeries? Were they of poor quality and thus a health hazard?

Another serious issue, he said, was medical negligence. The body of a person who died due to the alleged negligence of a doctor was simply handed over to the next of kin. There was no legal mechanism to disciplinarily deal with the doctor. The meeting decided to call upon Yapa Bandara, an attorney-at-law, to study the existing laws relating to medical issues and submit a report. He was one of the convenors of the meeting. The other convenor, Kavinda Jayawardena, has been tasked to formulate a report on how to deal with medical negligence.

Among those taking part in the meeting were Channa Jayasumana, Gamini Waleboda, Duminda Dissanayake, Udaya Gammanpila, Sajith Premadasa, Ranjith Madduma Bandara, Vasudeva Nanayakkara and Gunapala Ranasinghe, Prof. Channa Jayasumana alleged that an Indian company had been registered only to supply ayurvedic drugs and garlic oil. It had been awarded a billion-rupee tender to supply human immunoglobin. This is one of the most important therapies used to treat severe antibody deficiencies, which is the most common type of primary immunodeficiency. “We are told the import has been made on forged documents. If this is so, it is an extremely serious issue for which the NMRA is responsible,” he said.

Health Minister Keheliya Rambukwella, at the centre of multiple crises affecting the health sector, addresses a news conference on Monday, drawing attention to a Sunday Times story

Added Gamini Weleboda: “The meeting discussed alleged malpractice in the NMRA. There are issues with imports. There are three different signatures and three different stamps (seals) of the Chief Executive Officer issued to three different companies. “It is revealed that one of the lifesaving drugs was imported from an Indian supplier who is known to supply Ayurveda medicine and garlic oil, that supplier never had supplied medicine to the country before.”

“The best joke is that when we inquire about it, the same persons who are accountable at the NMRA are filing cases with the CID saying that the documents were forged. Though the no-confidence motion was won by the government, the malpractices are continuing. What we can say is that Health Minister Rambukwella should remove the NMRA officials responsible.”

There were suggestions at the meeting that the group conduct public meetings in every district to educate the people on the status of the Health Ministry and the health sector. However, Opposition Leader Premadasa was not in favour of such a move.

This raises the issue of the resignation of Health Minister Rambukwella on September 30, as reported in these columns. It was also reported that Plantation Industries Minister Ramesh Pathirana would take over the portfolio. Of course, there was considerable pressure from sections of the SLPP over Rambukwella’s removal.  Last Wednesday, he had a lengthy meeting with President Ranil Wickremesinghe. It is not immediately clear whether he will be allowed to continue to hold the same portfolio in the light of this. There was also an error last week over the appointment of a new Inspector General of Police. It is the Constitutional Council that wrote to the Presidential Secretariat saying it would not entertain a third extension of service for the present Police Chief, C.D. Wickremeratne and not the Police Commission.

These developments come in a week amidst the prospects of a delay in the disbursement of the second tranche of the International Monetary Fund (IMF). The IMF delegation leader, Peter Breur, told a news conference at the end of talks in Colombo that the next tranche was not time, bound though government leaders were hopeful it would come by September.

President Ranil Wickremesinghe flanked by Environment Minister Nazeer Ahmed, who is likely to lose his parliamentary seat after a Supreme Court ruling on Friday, arriving for the Fifth Asia Pacific Forum of Ministers and Environment Authorities at the Shangri-La Hotel on Thursday.

Concerns over governance issues

Early this week, the IMF issued a statement setting out its position and calling upon the government to fulfil 16 different demands. Here are the highlights:

“The International Monetary Fund (IMF) has recommended sixteen priority actions in its recently released Governance Diagnostic Assessment (GDA) on Sri Lanka to address systematic and severe governance weaknesses and deep-rooted corruption vulnerabilities across State functions in order to unlock the country’s growth potential.

“Sri Lanka became the first country in Asia to undergo an IMF governance diagnostic under the global lender’s rescue package. Accordingly, an International Monetary Fund (IMF) mission undertook a governance diagnostic assessment from the 9th of March to the 31st of March this year.

“The technical assistance report released last week revealed widespread corruption vulnerabilities and governance weaknesses originating from ad-hoc tax policy practices, half-baked approaches to Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT), lack of a robust legal framework and poor processes utilized in SOEs, the absence of public procurement legislation, ad-hoc tax policy practices frequently modifying tax laws, conflict of interest concerns of Central Bank managing EPF and regulating NBIFs, and absence of clear mechanisms for information sharing among tax authorities.

“Despite the widespread public outcry leading to mass protests and social unrest last year, the report pointed out that the authorities were yet to take action on recovering stolen funds, while civil society participation remains discouraged.

“Current governance arrangements have not established clear standards for permissible official behavior, acted to deter and sanction transgressions, nor pursued individuals and stolen public funds that have exited the country. Regular civil society participation in oversight and monitoring of government actions is restricted by limited transparency, the lack of platforms for inclusive and participatory governance, and by the broad application of counter-terrorism rules.

“GDA stressed that the impunity for misbehaviour enjoyed by officials continues to undermine trust in the public sector and compounds concerns over limited access to an efficient and rule-based adjudication process for resolving disputes and hurts the integrity of the judiciary.

“Although the new Anti-Corruption Act (ACA) is in force, it noted that key accountability institutions, including the Commission to Investigate Allegations of Bribery and Corruption (CIABOC), lack both the authority and competency to successfully fulfill their functions.

“Improvement brought about by the passage of the ACA needs to be complemented by the drafting and enactment of a modern law on Asset Recovery. Rapid operationalizing of the ACA will be critical to address current corruption vulnerabilities associated with the lack of a functional system for receiving, publishing, and reviewing asset declarations by public officials, and procedural and competency issues in the investigation and prosecution of corruption cases.

“Among priority actions, the GDA has recommended the government abolish or suspend the application of the Strategic Development Projects Act until the promulgation of an explicit and transparent process for the evaluation of proposals and costing of investment promotion conditions………

“…….It noted that a holistic, impartial, and transparent analysis is required to decide whether a specific project is viable and whether the potential benefit exceeds its social costs – which include revenue forgone, an increase in administrative costs, market distortions, and potentially perceptions of unfairness.

“While the BoI is likely well-positioned to understand the investment potential of specific projects, it lacks an understanding of the wider fiscal framework and budgetary needs which are necessary to evaluate the net social value of a specific project. The DoFP should evaluate and guide the design of all tax incentives, including those based on the SDP Act and the Port City Act,” it added.

“The analysis also scrutinized the high corruption vulnerabilities in public procurement due to the absence of a procurement law, which has led to high levels of political engagement in the selection of procurement winners, poor contract management, limited transparency, and a number of other issues. Hence, it has been suggested to enact a Public Procurement Law that reflects international good practice by December next year.

“In addition, it was highlighted that the lack of information on beneficial ownership of companies increases the risk of conflicts of interest in the awarding of contracts.

“While anti-money laundering mechanisms have the potential to reduce corruption vulnerabilities, the report was critical of current approaches to Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT), which has largely failed to support effective state action.

“Issues in legal definitions and processes to capture and share information on the beneficial ownership of companies have not been addressed, since they were first observed in 2015………..

“……Meanwhile, it also highlighted governance weaknesses associated with increased risks of corruption around Contract Enforcement and Property Rights, which has constrained private sector development.

“Multi-year waiting times for the resolution of contract disputes prevent reliance on courts for effective and fair resolution of disputes and encourage disputants to find ways, not always legal, to speed up adjudication. Widespread confusion over the allocation of property rights and the lack of progress in digitizing property records generate extensive long-term legal disputes and similarly promote resort to opaque means to influence the resolution of disputes.

“Corruption risks around state-owned land, estimated at approximately 80 percent of the country, are particularly severe due to the combination of lack of clarity around titles, the absence of a property registry, and ambiguity in processes for the divestiture of state property.

“As a result, it noted that the integrity of the judiciary has eroded over time and private parties have moved to use illicit payments to resolve disputes.

“…the strong incentives of private parties to use illicit payments as a way to solve legal problems that have little chance of being resolved in the near term, and have focused attention on the need to strengthen the independence and competency across the legal sector.

“The recommendations are expected to contribute to the formulation of governance and anti-corruption policies and programmes, improvement of the legal and institutional frameworks, as well as governance and anti-corruption reform measures agreed to in the Staff Level Agreement for an Extended Credit Facility Arrangement for Sri Lanka.

“As a result, it noted that the integrity of the judiciary has eroded over time and private parties have moved to use illicit payments to resolve disputes.”

State Finance Minister Shehan Semasinghe responded in Parliament to the IMF statement. He said: “Sri Lanka reached a staff-level agreement with the IMF on September 01, 2022. As part of the agreement, the IMF presented a set of policy recommendations to the government. While some of the objectives set by the IMF could not be achieved in the specified timeframe, we are still on the right track.

“When we introduced the Domestic Debt Restructuring (DDR) Programme, some parties went to court against it. As such, we could not implement those laws until the Supreme Court made its decision and sent it to Parliament. We informed the IMF about this issue. Those who went to court over the DDR programme did so due to political motivations. Their intention was to delay the IMF programme for as long as possible in order to place the government and the people in more difficulty. We, however, were equal to the challenge.

“The Opposition Leader is raising questions today regarding our economic reforms implemented with the agreement of the IMF. Though a majority of his group wanted to support those same reforms, they were forced into opposing them due to pressure exerted by the opposition leader. We also saw him making many false statements. I saw that he had claimed that the IMF representatives told him that the government’s administration was corrupt. No such mention was made anywhere (by the IMF). We achieved extremely positive results. We still need to discuss several matters in order to reach a staff-level agreement. The President too took part in these discussions. The government will not take any steps to further burden the people through taxes or other measures. We can still reach a staff-level agreement through broader discussions.

“We are also being supported financially by the World Bank and other financial agencies. If the opposition leader questions us about the assistance we have obtained in this manner, we can provide all necessary information. Strengthening the social security network is one condition of the IMF. When fulfilling this condition, we need to spend Rs. 187 billion more than we spent the previous year. We are implementing various strategies towards this purpose. The World Bank is helping us on that. I saw the opposition leader speaking in Ampara claiming that the World Bank has not provided any new funds and that we are only being given funds that have been repurposed. I don’t believe he knows what repurposing even means because the World Bank has already reached an agreement to provide us USD 850 million for this financial year.

“We will definitely reach a staff-level agreement with the IMF in the near future. After that agreement is submitted to the Executive Board for approval, we will be able to obtain the second tranche of the IMF loan.

“The opposition leader also spoke yesterday about the IMF’s Governance Diagnostic Assessment (GDA). The Governance Diagnostic Assessment conducted by the IMF under its technical assistance to Sri Lanka has now been published. There are 16 key recommendations in the GDA. It is observed that many of the recommendations are not new for Sri Lankan authorities and in fact, some are already being implemented as part of the policy of the government, and many others have already been planned to be implemented by the government, including through the forthcoming Budget in 2024. We will bring amendments needed to implement some of the recommendations in the GDA in the upcoming Budget. As such, the opposition cannot oppose them. By December, we will get to see how the opposition leader behaves.

“The IMF, Sri Lankan Government and the President have all spoken about the issues raised by the IMF. We have already introduced some of the reforms recommended by them while the timeframe for introducing others stretches into 2024. It seems the opposition leader is thinking that he can use the GDA to paint a black mark on the government. But we are on the right path now. The World Bank earlier predicted that our economy would contract by 4.2% but has now revised that to 3.8%. Our target, however, is to ensure that the economy does not contract by the end of 2023 and achieves growth in 2024. The background for that has already been laid.”

Supreme Court’s landmark ruling

A politically significant event this week was the Supreme Court ruling that will deprive Environment Minister Nazeer Ahmed of his parliamentary seat. He represents the Batticaloa district. A three-judge bench headed by Justice Pathman Surasena and comprising Justice S. Thurairajah and Mahinda Samayawardhena upheld a decision by the Sri Lanka Muslim Congress (SLMC) to expel him.

The SC held in a 62-page judgement that the Petitioner (Nazeer Ahmed) had pledged that he would be loyal to the Party; shall recognise honour and submit to the authority of the hierarchy of the Party; abide by and honour its decisions, rules, regulations, directives, policies of the Party as decided by the High Command. But the Petitioner has not only breached this solemn pledge but also has deliberately refrained from giving any explanation for his conduct. He has also determined not to submit himself to the authority of the Party. In those circumstances and for the foregoing reasons, I hold that the decision made by the SLMC to expel the Petitioner from the party by letter dated April 23, 2022, is valid in law.

Justice Samayawardhena noted that “The gravamen of the Petitioner’s complaint is that the decision to expel him from the Party was taken without giving him a hearing in violation of the rules of natural justice – audi alteram partem. If it is correct, I accept that “the decision must be declared to be no decision”. However, on the facts and circumstances of this case, I cannot subscribe to the assertion that the rules of natural justice were violated. [Expulsion 01/ 2022] Page 58 of 62

The Secretary of the Sri Lanka Muslim Congress sent P9 (a letter) to the Petitioner requiring him to show cause for his decision to vote in favour of the Appropriation Bill for 2022 (Budget) in violation of the decision of the Party High Command taken at the Meeting held on 21.11.2021. P9 dated 27.11.2021. A letter written by Nazeer Ahmed, the learned judge noted “if read contextually it is clear that the Petitioner was more concerned about his suspension from the post of the Deputy Leader of the Party than showing cause to the main allegation that he violated the decision of the Party High Command in relation to the voting for the Budget. His request in P10 (a letter) for a copy of the Party Constitution is related to his removal from the High Command position and is irrelevant to the matter under consideration in this application, which is expulsion. By P10 he sought a period of one month to show cause.

“There was some correspondence exchanged between the Petitioner and the Party during that time. He was granted extended time to show cause. Nearly five months after P10 (the letter) whereby the Petitioner sought a period of one month to show cause, the Petitioner wrote P14 (a letter) to the Party Secretary. By P14, the Petitioner did not show cause, which he undertook to do by P10 but merely quoted the contents of [Expulsion 01/ 2022] Page 60 of 62 P10 verbatim. He did not seek further time to show cause why he voted in favour of the Budget.”

President Ranil Wickremesinghe told government parliamentarians this week that it was not possible to implement everything the IMF wanted. This by no means is a hostile stance against that international institution. Other than enforcing what is possible, he is underscoring the prospects of making alternatives and discussing them. More so when he is becoming busy with next month’s budget. State Minister Semasinghe has declared that it would not place burdens on the people. A nation awaits that phase.