Conflict of interest
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I was woken up on Thursday morning by a call from ‘Human Resource’ pundit HR Perera, popularly known as HR, who interestingly wanted to discuss conflict of interest. It seems we were on the same page, as I too had decided the previous day to discuss this issue in this Sunday’s column.Why? Our attention was drawn to a report in India’s Hindu newspaper last week and reproduced here by local newspapers, where it was stated that India’s Chief Justice and his colleagues have publicly pledged to “refuse post-retirement jobs”.
“Chief Justice of India B.R. Gavai has said that he and his colleagues in the Supreme Court have publicly pledged to not undermine the public’s trust in judicial integrity by accepting post-retirement roles or positions from the government. Speaking at a roundtable discussion at the Supreme Court of the United Kingdom, CJ Gavai observed that post-retirement posts that align former judges completely with the government of the day ‘can create a perception that judicial decisions were influenced by expectations of future political or governmental roles’,” the report said.
“What are the rules locally pertaining to judges in the post-retirement phase?” asked HR. “I don’t think they can practice as attorneys-at-law after retirement,” I said, citing a provision in the 1978 Constitution which states as follows: “……..no person who has held office as a permanent judge of the Supreme Court or of the Appeal Court may appear, plead, act or practice in any court, tribunal or institution as an attorney-at-law at any time without the consent of the President.”
“Are there similar rules that apply for other professional categories where integrity is a sine qua non in such professions like Central Bank officials (on retirement) and members of audit firms?” asked HR again. “I think the Central Bank brought in new rules pertaining to their officers while in some audit firms there is a ‘cooling off’ period (which stipulates a period in which an auditor on retirement can accept another position),” I said.
Looking at Sri Lanka’s judiciary in the post-retirement phase, at least two former Chief Justices have and are serving the country as the UN Ambassador in New York. There are also instances where such personalities have served in banks as a director and later chairpersons. Other examples are high-level health officials, on retirement, taking up top seats in the pharmaceutical or milk industry, which in their former persona they have been regulators of.
Could these instances be considered a conflict of interest? The Indian CJ’s position could serve as a wake-up call in the context of integrity, proper conduct, impartiality and transparency.
The Hindu report quoted Mr. Gavai as saying that he and many of his colleagues have publicly pledged not to accept any post-retirement roles or positions. “This commitment is an effort to preserve the credibility and independence of the judiciary,” the CJ added, speaking on ‘Maintaining Judicial Legitimacy and Public Confidence’. The report said a former chief justice of India, Ranjan Gogoi, now an MP, was widely criticised for accepting the Modi government’s offer to take oaths as a member of Parliament just 16 weeks after retiring as the top judge of the Supreme Court.
Mr. Gavai spoke of how the judiciary must not only dispense justice, but also be seen as an institution that serves ‘to hold truth to power’. “Judiciary derives its legitimacy from the public trust, which has to be earned by upholding constitutional values with independence, integrity and impartiality,” he said.
India’s Constitution prohibits a retired judge of the Supreme Court from practising before any court or authority in India. But it does not explicitly prohibit retired judges from accepting post-retirement assignments or appointments.
A larger issue of conflict of interest pertains to Central Bank officials here and their role in society after retirement. The same issue also governs members of audit firms – should they accept positions in companies whose accounts they have previously audited as independent auditors?
There were many instances many years ago, during a particular period, where two retired deputy governors of the Central Bank and two other officials were appointed chairpersons of four commercial banks in a move seen as an attempt by the banking regulator to control these banks. What a position of authority! These retired officials, after sitting in judgement over the affairs of many banks in their role at the Central Bank, were now running these banks with access and knowledge of confidential information of rival banks which they could use at their discretion.
A ‘cooling- off period’ should have been in place at that time. Ironically, since last year, the Central Bank has imposed a “new cooling-off period” of three years for all employees. No such long cooling-off periods exist elsewhere locally or internationally, the bank said in a statement last year.
In the public space, there are many conflicts, in particular in the Colombo stock market and other forums. During the height of ‘insider trading in the stock market’ many years ago influential investors, accused of insider dealings, forced the resignation of two chairpersons of the Securities and Exchange Commission (SEC) who were probing ‘insider’ deals in the market.
Conflict of interest was also a major issue in the now infamous Central Bank bond scam involving the then Central Bank Governor and his son-in-law whose company secured most of the bonds issued at that time, acting on confidential information that he had access to.
Walking into the kitchen, I was keen to find out whether the trio, during their weekly get-together had any ‘conflicts’ among themselves? It seems they had. “Mokakda thiyena prashney apey palath palana sabha wala. Aanduwata bari aei eva palanaya karanna, egollanta wedi ganak manthri waru innawa-nam (What is the problem with local authorities? Why shouldn’t the government be allowed to run these institutions where they have more councillors than other parties),” asked Kussi Amma Sera.
“Eth viruddha pakshayata ita wedi ganak manthri-waru innavanam mokada karanney. Ethakota egollanta avasthawak denna oney-nae (But what if the entire opposition has more members? They should be given that chance),” argued Serapina. “Aiyo…..den randu wenna patan ganna epa (Aiyo…….now don’t start fighting),” pleaded Mabel Rasthiyadu.
Just as I prepared to complete the column, my thoughts were on the need for rules and a code of conduct for officials dealing with sensitive subjects and their role post-retirement – judges (and maybe even officials of the Attorney General’s Department) and auditors.
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