Features
Navigating wage increase for plantation workers: A balanced perspective
By. Lalin I De Silva and Dinendra Senarathne
The recent government gazette notification increasing wages for plantation workers in Sri Lanka has sparked significant debate among stakeholders, including plantation companies, workers, and policymakers. This decision, although rooted in the commendable goal of improving workers’ living standards, has also raised concerns about its impact on the plantation industry and broader economic implications. To navigate this complex issue, it’s essential to consider the perspectives of all parties involved and the potential legal, economic, and social ramifications. Furthermore, the absence of a comprehensive plantation policy significantly affects the industry’s response and underscores the need for structured decision-making processes.
The Rationale for Wage Increases *Living Wage and Poverty Alleviation:
Plantation workers in Sri Lanka have historically faced challenging working conditions and somewhat low wages. The wage increase is a step towards ensuring that these workers earn a living wage, which is crucial for poverty reduction and improving their quality of life. Higher wages enable workers to afford better healthcare, education, and housing, contributing to overall social welfare. This will undoubtedly help large scale plantations to attract and retain best talents. These plantations suffer severe shortage of skilled workers.
Worker Productivity and Morale:
Fair wages are directly linked to worker productivity and morale. When workers feel adequately compensated, their job satisfaction and motivation increase, leading to higher productivity levels and lower turnover rates. This can ultimately benefit plantation companies by creating a more stable and committed workforce. The worker productivity measuring and calculating methodologies are available in Human Resources Management domain although not used objectively by all parties.
Challenges and Concerns *Economic Competitiveness:
One of the primary concerns raised by plantation companies is the potential impact on economic competitiveness. Higher wages can increase production costs, making Sri Lankan plantations less competitive in the global market. This is particularly pertinent in industries like tea and rubber, where international prices and demand can be volatile.
Unbearable Overhead Costs:
In the early days of agency houses, the Colombo offices were staffed by only a handful of experts. Today, professional planters continue to manage plantations commendably. What they need now is empowerment and the swift implementation of a high-performance culture. This single decision could enable plantation companies to achieve cost leadership, thus gaining a competitive advantage.
Inflationary Pressures:
Wage increases can also lead to inflationary pressures in the economy. If the cost of labour rises significantly, it can lead to higher prices for goods and services, affecting the overall cost of living. This needs to be carefully managed to avoid negating the benefits of the wage increase for workers.
Arbitrary Decision-Making:
The manner in which the wage increase was decided has also been a point of contention. The perception that the decision was made arbitrarily, without thorough consultation or an investigative process, has led to frustration among plantation companies. Such decisions should ideally be based on comprehensive economic assessments and stakeholder consultations to ensure they are sustainable and well-justified.
Legal Recourse and Strategic Response Given the concerns, plantation companies may consider legal recourse to challenge the wage increase. Here are some steps and considerations for a balanced approach:
Understanding the Legal Framework:
The government issues wage increases through gazette notifications, which have the force of law. However, these decisions can be challenged through judicial review if there are grounds to believe they were made arbitrarily or without proper authority. Companies should consult with legal experts to understand the legal merits of their case.
Focus on Procedural Flaws:
If plantation companies decide to challenge the wage increase, their focus should be on procedural flaws in the decision-making process. They can argue that the decision was made without adequate consultation, lacked a comprehensive economic assessment, or did not follow due process. Strong evidence and documentation will be crucial in supporting these claims.
Engaging Professional Planters and Experts
Professional planters, recognised through gazette notifications, can provide valuable insights and testimonies. Their accounts of the historical context, the impact of previous wage policies, and the practical implications of the current increase can strengthen the case. Additionally, commissioning independent economic and environmental assessments can provide objective evidence to support the challenge.
Public Relations and Coalition Building
Public perception plays a significant role in legal and policy matters. Plantation companies should engage in transparent communication with the public and media to present their side of the story. Highlighting the potential negative impacts on the industry, workers, and local communities can garner public support. Forming alliances with other stakeholders, such as worker unions and industry associations, can also strengthen their position.
Adapting to the New Wage Structure:
While challenging the decision, companies should also prepare to adapt to the new wage structure. This includes exploring ways to increase productivity, reduce costs, and improve efficiency. Investing in worker training, technology, and sustainable practices can help mitigate the economic impact of higher wages. The professional services of value chain consultants teamed up under the Agriculture Modernisation project is available for instant support.
The Impact of Lack of a Plantation Policy on Legal Challenges by Plantation Management Companies
The absence of a comprehensive plantation policy by the government can indeed be a significant point in favour of plantation management companies challenging the recent wage increase. This argument can be bolstered by comparing it to global best practices, which emphasise the importance of structured, transparent, and consultative policy-making processes.
Policy Frameworks in Leading Plantation Countries: Indonesia
Comprehensive Policy:
Indonesia has a well-defined policy framework for its palm oil industry, including regulations on land use, sustainability, labor standards, and economic incentives. The Indonesian Sustainable Palm Oil (ISPO) certification system is a key component of this framework.
Consultative Process:
Policies are developed through extensive consultations with stakeholders, including plantation companies, small holders, environmental groups, and local communities. This ensures that policies are balanced and consider the interests of all parties.
Malaysia: National Policy
Malaysia’s National Commodity Policy outlines clear guidelines for the plantation sector, covering aspects such as sustainability, productivity, and labour welfare. The Malaysian Palm Oil Certification Council (MPOCC) oversees compliance with these guidelines. –
Stakeholder Involvement: The policy development process involves input from various stakeholders, ensuring that the policies are comprehensive and inclusive.
Brazil: – Regulatory Framework:
Brazil has a robust regulatory framework for its agricultural sector, including plantations. Policies are aimed at promoting sustainable practices and protecting workers’ rights. –
Research and Data:
Decisions are based on extensive research and data collection, ensuring that policies are evidence-based and effective.
Importance of a Comprehensive Plantation Policy – Clarity and Predictability:
A clear and comprehensive plantation policy provides clarity and predictability for plantation companies. It outlines the rules and expectations, allowing companies to plan and operate with a clear understanding of regulatory requirements.
Sustainability and Fairness:
Comprehensive policies often include guidelines on sustainability and fair labour practices, ensuring that the industry operates in an environmentally and socially responsible manner. This is crucial for maintaining the industry’s long-term viability and public support.
Stakeholder Confidence: –
Policies developed through a consultative process build confidence among stakeholders. When stakeholders feel that their voices are heard and considered, it leads to greater cooperation and compliance with regulations.
Legal Argument: Lack of a Plantation Policy – Procedural Flaws and Arbitrariness:
The absence of a comprehensive plantation policy can be used to argue that the government’s decision to increase wages was arbitrary and lacked a structured, consultative process. This undermines the decision’s legitimacy and fairness.
Lack of Due Process: –
Without a clear policy framework, it is challenging to ensure that all relevant factors were considered and that due process was followed. This can be a strong legal argument in favor of plantation companies.
Impact on Competitiveness:
A well-defined policy helps ensure that the industry remains competitive by providing guidelines for efficiency, productivity, and sustainability. The lack of such a policy can lead to ad-hoc decisions that harm the industry’s global competitiveness.
Recommendations for Plantation Management Companies
1. Document the Lack of Policy Framework: –
Collect evidence demonstrating the absence of a comprehensive plantation policy, including government documents, public statements, and expert opinions.
2. Highlight Global Best Practices:
– Present examples from countries like Indonesia, Malaysia, and Brazil to show how comprehensive policies contribute to fair and effective regulation of the plantation industry.
3. Focus on Procedural Flaws:
– Emphasise the procedural flaws in the government’s decision-making process, including the lack of stakeholder consultation and the arbitrary nature of the wage increase.
4. Engage Experts and Stakeholders: – Engage independent experts to provide assessments of the decision’s impact and involve other stakeholders, such as worker unions and industry associations, to build a broader coalition.
5. Public Relations Strategy:
– Communicate transparently with the public and media about the importance of a comprehensive policy framework for the sustainability and competitiveness of the plantation industry.
6. Globally Lethal Rubber Leaf Disease:
Rubber cultivation has nearly come to a standstill in Sri Lanka because of the rapid spread of a deadly leaf disease. Despite directives from His Excellency Ranil Wickremasinghe, the authorities have failed to develop a research protocol acceptable to CARP (Council for Agriculture Research Policy). This protocol is crucial for scientifically identifying the root causes of the disease spread across all 18 rubber planting districts.
Conclusion The decision to increase wages for plantation workers in Sri Lanka is a complex issue with significant implications for all stakeholders. While the goal of improving workers’ living standards is commendable, it is crucial to ensure that such decisions are made through a transparent, consultative, and evidence-based process.
The lack of a comprehensive plantation policy by the government can indeed be a strong point in favour of plantation management companies challenging the recent wage increase.
By highlighting procedural flaws, drawing comparisons with global best practices, and engaging stakeholders, companies can build a compelling case that emphasises the need for structured and transparent policy-making processes. This approach not only strengthens their legal argument but also promotes a more sustainable and fairer regulatory environment for the plantation industry in Sri Lanka.
A decrease in the number of employees results in lower national production and reduced export income. The President could announce a plan to double Sri Lanka’s GDP to $160 billion and ensure all ministries align with this goal. This could serve as a comprehensive solution for the myriad challenges faced by financially troubled Sri Lanka.
(Lalin I De Silva is former Senior Planter,Agricultural Advisor/Consultant, Secretary General of Ceylon Planter’s Society, Editor of Ceylon Planters Society Bulletin and free lance journalist. Dinendra Senarathne is a senior lawyer.)
by Dr Gotabhya Ranasinghe
Senior Consultant Cardiologist
National Hospital Sri Lanka
When we sought a meeting with Hon Dr. Ramesh Pathirana, Minister of Health, he graciously cleared his busy schedule to accommodate us. Renowned for his attentive listening and deep understanding, Minister Pathirana is dedicated to advancing the health sector. His openness and transparency exemplify the qualities of an exemplary politician and minister.
Dr. Palitha Mahipala, the current Health Secretary, demonstrates both commendable enthusiasm and unwavering support. This combination of attributes makes him a highly compatible colleague for the esteemed Minister of Health.
Our discussion centered on a project that has been in the works for the past 30 years, one that no other minister had managed to advance.
Minister Pathirana, however, recognized the project’s significance and its potential to revolutionize care for heart patients.
The project involves the construction of a state-of-the-art facility at the premises of the National Hospital Colombo. The project’s location within the premises of the National Hospital underscores its importance and relevance to the healthcare infrastructure of the nation.
This facility will include a cardiology building and a tertiary care center, equipped with the latest technology to handle and treat all types of heart-related conditions and surgeries.
Securing funding was a major milestone for this initiative. Minister Pathirana successfully obtained approval for a $40 billion loan from the Asian Development Bank. With the funding in place, the foundation stone is scheduled to be laid in September this year, and construction will begin in January 2025.
This project guarantees a consistent and uninterrupted supply of stents and related medications for heart patients. As a result, patients will have timely access to essential medical supplies during their treatment and recovery. By securing these critical resources, the project aims to enhance patient outcomes, minimize treatment delays, and maintain the highest standards of cardiac care.
Upon its fruition, this monumental building will serve as a beacon of hope and healing, symbolizing the unwavering dedication to improving patient outcomes and fostering a healthier society.We anticipate a future marked by significant progress and positive outcomes in Sri Lanka’s cardiovascular treatment landscape within the foreseeable timeframe.
by Fr. Emmanuel Fernando, OMI
Jesuit Fr. Aloysius Pieris (affectionately called Fr. Aloy) celebrated his 90th birthday on April 9, 2024 and I, as the editor of our Oblate Journal, THE MISSIONARY OBLATE had gone to press by that time. Immediately I decided to publish an article, appreciating the untiring selfless services he continues to offer for inter-Faith dialogue, the renewal of the Catholic Church, his concern for the poor and the suffering Sri Lankan masses and to me, the present writer.
It was in 1988, when I was appointed Director of the Oblate Scholastics at Ampitiya by the then Oblate Provincial Fr. Anselm Silva, that I came to know Fr. Aloy more closely. Knowing well his expertise in matters spiritual, theological, Indological and pastoral, and with the collaborative spirit of my companion-formators, our Oblate Scholastics were sent to Tulana, the Research and Encounter Centre, Kelaniya, of which he is the Founder-Director, for ‘exposure-programmes’ on matters spiritual, biblical, theological and pastoral. Some of these dimensions according to my view and that of my companion-formators, were not available at the National Seminary, Ampitiya.
Ever since that time, our Oblate formators/ accompaniers at the Oblate Scholasticate, Ampitiya , have continued to send our Oblate Scholastics to Tulana Centre for deepening their insights and convictions regarding matters needed to serve the people in today’s context. Fr. Aloy also had tried very enthusiastically with the Oblate team headed by Frs. Oswald Firth and Clement Waidyasekara to begin a Theologate, directed by the Religious Congregations in Sri Lanka, for the contextual formation/ accompaniment of their members. It should very well be a desired goal of the Leaders / Provincials of the Religious Congregations.
Besides being a formator/accompanier at the Oblate Scholasticate, I was entrusted also with the task of editing and publishing our Oblate journal, ‘The Missionary Oblate’. To maintain the quality of the journal I continue to depend on Fr. Aloy for his thought-provoking and stimulating articles on Biblical Spirituality, Biblical Theology and Ecclesiology. I am very grateful to him for his generous assistance. Of late, his writings on renewal of the Church, initiated by Pope St. John XX111 and continued by Pope Francis through the Synodal path, published in our Oblate journal, enable our readers to focus their attention also on the needed renewal in the Catholic Church in Sri Lanka. Fr. Aloy appreciated very much the Synodal path adopted by the Jesuit Pope Francis for the renewal of the Church, rooted very much on prayerful discernment. In my Religious and presbyteral life, Fr.Aloy continues to be my spiritual animator / guide and ongoing formator / acccompanier.
Fr. Aloysius Pieris, BA Hons (Lond), LPh (SHC, India), STL (PFT, Naples), PhD (SLU/VC), ThD (Tilburg), D.Ltt (KU), has been one of the eminent Asian theologians well recognized internationally and one who has lectured and held visiting chairs in many universities both in the West and in the East. Many members of Religious Congregations from Asian countries have benefited from his lectures and guidance in the East Asian Pastoral Institute (EAPI) in Manila, Philippines. He had been a Theologian consulted by the Federation of Asian Bishops’ Conferences for many years. During his professorship at the Gregorian University in Rome, he was called to be a member of a special group of advisers on other religions consulted by Pope Paul VI.
Fr. Aloy is the author of more than 30 books and well over 500 Research Papers. Some of his books and articles have been translated and published in several countries. Among those books, one can find the following: 1) The Genesis of an Asian Theology of Liberation (An Autobiographical Excursus on the Art of Theologising in Asia, 2) An Asian Theology of Liberation, 3) Providential Timeliness of Vatican 11 (a long-overdue halt to a scandalous millennium, 4) Give Vatican 11 a chance, 5) Leadership in the Church, 6) Relishing our faith in working for justice (Themes for study and discussion), 7) A Message meant mainly, not exclusively for Jesuits (Background information necessary for helping Francis renew the Church), 8) Lent in Lanka (Reflections and Resolutions, 9) Love meets wisdom (A Christian Experience of Buddhism, 10) Fire and Water 11) God’s Reign for God’s poor, 12) Our Unhiddden Agenda (How we Jesuits work, pray and form our men). He is also the Editor of two journals, Vagdevi, Journal of Religious Reflection and Dialogue, New Series.
Fr. Aloy has a BA in Pali and Sanskrit from the University of London and a Ph.D in Buddhist Philosophy from the University of Sri Lankan, Vidyodaya Campus. On Nov. 23, 2019, he was awarded the prestigious honorary Doctorate of Literature (D.Litt) by the Chancellor of the University of Kelaniya, the Most Venerable Welamitiyawe Dharmakirthi Sri Kusala Dhamma Thera.
Fr. Aloy continues to be a promoter of Gospel values and virtues. Justice as a constitutive dimension of love and social concern for the downtrodden masses are very much noted in his life and work. He had very much appreciated the commitment of the late Fr. Joseph (Joe) Fernando, the National Director of the Social and Economic Centre (SEDEC) for the poor.
In Sri Lanka, a few religious Congregations – the Good Shepherd Sisters, the Christian Brothers, the Marist Brothers and the Oblates – have invited him to animate their members especially during their Provincial Congresses, Chapters and International Conferences. The mainline Christian Churches also have sought his advice and followed his seminars. I, for one, regret very much, that the Sri Lankan authorities of the Catholic Church –today’s Hierarchy—- have not sought Fr.
Aloy’s expertise for the renewal of the Catholic Church in Sri Lanka and thus have not benefited from the immense store of wisdom and insight that he can offer to our local Church while the Sri Lankan bishops who governed the Catholic church in the immediate aftermath of the Second Vatican Council (Edmund Fernando OMI, Anthony de Saram, Leo Nanayakkara OSB, Frank Marcus Fernando, Paul Perera,) visited him and consulted him on many matters. Among the Tamil Bishops, Bishop Rayappu Joseph was keeping close contact with him and Bishop J. Deogupillai hosted him and his team visiting him after the horrible Black July massacre of Tamils.
Sri Lanka-Singapore Free Trade Agreement
By Gomi Senadhira
senadhiragomi@gmail.com
“You might tell fairy tales, but the progress of a country cannot be achieved through such narratives. A country cannot be developed by making false promises. The country moved backward because of the electoral promises made by political parties throughout time. We have witnessed that the ultimate result of this is the country becoming bankrupt. Unfortunately, many segments of the population have not come to realize this yet.” – President Ranil Wickremesinghe, 2024 Budget speech
Any Sri Lankan would agree with the above words of President Wickremesinghe on the false promises our politicians and officials make and the fairy tales they narrate which bankrupted this country. So, to understand this, let’s look at one such fairy tale with lots of false promises; Ranil Wickremesinghe’s greatest achievement in the area of international trade and investment promotion during the Yahapalana period, Sri Lanka-Singapore Free Trade Agreement (SLSFTA).
It is appropriate and timely to do it now as Finance Minister Wickremesinghe has just presented to parliament a bill on the National Policy on Economic Transformation which includes the establishment of an Office for International Trade and the Sri Lanka Institute of Economics and International Trade.
Was SLSFTA a “Cleverly negotiated Free Trade Agreement” as stated by the (former) Minister of Development Strategies and International Trade Malik Samarawickrama during the Parliamentary Debate on the SLSFTA in July 2018, or a colossal blunder covered up with lies, false promises, and fairy tales? After SLSFTA was signed there were a number of fairy tales published on this agreement by the Ministry of Development Strategies and International, Institute of Policy Studies, and others.
However, for this article, I would like to limit my comments to the speech by Minister Samarawickrama during the Parliamentary Debate, and the two most important areas in the agreement which were covered up with lies, fairy tales, and false promises, namely: revenue loss for Sri Lanka and Investment from Singapore. On the other important area, “Waste products dumping” I do not want to comment here as I have written extensively on the issue.
1. The revenue loss
During the Parliamentary Debate in July 2018, Minister Samarawickrama stated “…. let me reiterate that this FTA with Singapore has been very cleverly negotiated by us…. The liberalisation programme under this FTA has been carefully designed to have the least impact on domestic industry and revenue collection. We have included all revenue sensitive items in the negative list of items which will not be subject to removal of tariff. Therefore, 97.8% revenue from Customs duty is protected. Our tariff liberalisation will take place over a period of 12-15 years! In fact, the revenue earned through tariffs on goods imported from Singapore last year was Rs. 35 billion.
The revenue loss for over the next 15 years due to the FTA is only Rs. 733 million– which when annualised, on average, is just Rs. 51 million. That is just 0.14% per year! So anyone who claims the Singapore FTA causes revenue loss to the Government cannot do basic arithmetic! Mr. Speaker, in conclusion, I call on my fellow members of this House – don’t mislead the public with baseless criticism that is not grounded in facts. Don’t look at petty politics and use these issues for your own political survival.”
I was surprised to read the minister’s speech because an article published in January 2018 in “The Straits Times“, based on information released by the Singaporean Negotiators stated, “…. With the FTA, tariff savings for Singapore exports are estimated to hit $10 million annually“.
As the annual tariff savings (that is the revenue loss for Sri Lanka) calculated by the Singaporean Negotiators, Singaporean $ 10 million (Sri Lankan rupees 1,200 million in 2018) was way above the rupees’ 733 million revenue loss for 15 years estimated by the Sri Lankan negotiators, it was clear to any observer that one of the parties to the agreement had not done the basic arithmetic!
Six years later, according to a report published by “The Morning” newspaper, speaking at the Committee on Public Finance (COPF) on 7th May 2024, Mr Samarawickrama’s chief trade negotiator K.J. Weerasinghehad had admitted “…. that forecasted revenue loss for the Government of Sri Lanka through the Singapore FTA is Rs. 450 million in 2023 and Rs. 1.3 billion in 2024.”
If these numbers are correct, as tariff liberalisation under the SLSFTA has just started, we will pass Rs 2 billion very soon. Then, the question is how Sri Lanka’s trade negotiators made such a colossal blunder. Didn’t they do their basic arithmetic? If they didn’t know how to do basic arithmetic they should have at least done their basic readings. For example, the headline of the article published in The Straits Times in January 2018 was “Singapore, Sri Lanka sign FTA, annual savings of $10m expected”.
Anyway, as Sri Lanka’s chief negotiator reiterated at the COPF meeting that “…. since 99% of the tariffs in Singapore have zero rates of duty, Sri Lanka has agreed on 80% tariff liberalisation over a period of 15 years while expecting Singapore investments to address the imbalance in trade,” let’s turn towards investment.
Investment from Singapore
In July 2018, speaking during the Parliamentary Debate on the FTA this is what Minister Malik Samarawickrama stated on investment from Singapore, “Already, thanks to this FTA, in just the past two-and-a-half months since the agreement came into effect we have received a proposal from Singapore for investment amounting to $ 14.8 billion in an oil refinery for export of petroleum products. In addition, we have proposals for a steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million), sugar refinery ($ 200 million). This adds up to more than $ 16.05 billion in the pipeline on these projects alone.
And all of these projects will create thousands of more jobs for our people. In principle approval has already been granted by the BOI and the investors are awaiting the release of land the environmental approvals to commence the project.
I request the Opposition and those with vested interests to change their narrow-minded thinking and join us to develop our country. We must always look at what is best for the whole community, not just the few who may oppose. We owe it to our people to courageously take decisions that will change their lives for the better.”
According to the media report I quoted earlier, speaking at the Committee on Public Finance (COPF) Chief Negotiator Weerasinghe has admitted that Sri Lanka was not happy with overall Singapore investments that have come in the past few years in return for the trade liberalisation under the Singapore-Sri Lanka Free Trade Agreement. He has added that between 2021 and 2023 the total investment from Singapore had been around $162 million!
What happened to those projects worth $16 billion negotiated, thanks to the SLSFTA, in just the two-and-a-half months after the agreement came into effect and approved by the BOI? I do not know about the steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million) and sugar refinery ($ 200 million).
However, story of the multibillion-dollar investment in the Petroleum Refinery unfolded in a manner that would qualify it as the best fairy tale with false promises presented by our politicians and the officials, prior to 2019 elections.
Though many Sri Lankans got to know, through the media which repeatedly highlighted a plethora of issues surrounding the project and the questionable credentials of the Singaporean investor, the construction work on the Mirrijiwela Oil Refinery along with the cement factory began on the24th of March 2019 with a bang and Minister Ranil Wickremesinghe and his ministers along with the foreign and local dignitaries laid the foundation stones.
That was few months before the 2019 Presidential elections. Inaugurating the construction work Prime Minister Ranil Wickremesinghe said the projects will create thousands of job opportunities in the area and surrounding districts.
The oil refinery, which was to be built over 200 acres of land, with the capacity to refine 200,000 barrels of crude oil per day, was to generate US$7 billion of exports and create 1,500 direct and 3,000 indirect jobs. The construction of the refinery was to be completed in 44 months. Four years later, in August 2023 the Cabinet of Ministers approved the proposal presented by President Ranil Wickremesinghe to cancel the agreement with the investors of the refinery as the project has not been implemented! Can they explain to the country how much money was wasted to produce that fairy tale?
It is obvious that the President, ministers, and officials had made huge blunders and had deliberately misled the public and the parliament on the revenue loss and potential investment from SLSFTA with fairy tales and false promises.
As the president himself said, a country cannot be developed by making false promises or with fairy tales and these false promises and fairy tales had bankrupted the country. “Unfortunately, many segments of the population have not come to realize this yet”.
(The writer, a specialist and an activist on trade and development issues . )
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