Features
Should industrial action by trade unions be banned for the next five years?
by Sanjeewa Jayaweera
A few weeks back, the Ceylon Electricity Board (CEB) United Trade Union Alliance announced they would resort to trade union action unless the Government of Sri Lanka (GOSL) agrees to suspend or abrogate the agreement to divest 40 per cent of shares of Yugadanavi Power Plant in Kerawalapitiya to New Fortress Energy (NFE) a US firm. They have now been joined by the Ceylon Electricity Board Engineers’ Union (CEBEU) who have stepped up its work-to-rule campaign, making six demands, including the cancellation of the deal with NFE and the continuation of the LNG tender process that had been progressing when this backdoor deal was struck.
Several other trade unions, including those from the Ceylon Petroleum Corporation (CPC) and Sri Lanka Port Authority (SLPA), both critically necessary to the daily functioning of the country, have announced that they too would join in solidarity with the CEB unions.
Adding fuel to the fire, several constituent parties who are part of the government have announced that they too are opposed to selling the shares. One presumes that their opposition is more due to their socialist ideology. A prominent minister opposed to the sale of shares has slammed the Finance Minister for having included the cabinet paper under any other business and for not having circulated the same for study and comments at the cabinet meeting.
There is a lack of transparency regarding this transaction which no doubt contributes to the controversy. This, of course, is nothing new as successive governments are guilty of not placing sufficient information before the public and other stakeholders when it comes to important transactions or legislative enactments. It is a reflection of the sheer disregard and contempt for public opinion.
The Supreme Court will consider several Fundamental Rights (FR) petitions filed against the NFE deal on December 16.
In my opinion, the unions’ proposed industrial action is not the way to compel the GOSL to suspend the transaction as those who will suffer untold hardship from such will be the public. Many of us remember the sheer agony we went through for 72 hours in 1996.
In addition, the manufacturing sector serving the local and the export market will come to a standstill causing further financial losses in addition to those suffered due to the pandemic related lockdowns. The public and the commercial sector can ill afford to endure additional hardships.
Over several decades the unions attached to public utilities in our country have used their considerable power mainly through the threat of industrial action to prevent much-needed reforms. As a result, the CEB, the Ceylon Petroleum Corporation (CPC) and the National Water Supplies and Drainage Board (NWSDB) have operated at a considerable loss to the taxpayers. I hasten to say that the losses are primarily a result of ill-conceived policies by successive governments. No organization can be operated profitably if, at a minimum, the cost of providing the service is not passed on to the consumers.
I believe electricity and water tariffs have not been revised for nearly four years despite incurred losses. Currently, the world over, the sharp increase in oil prices are passed on to the consumers through higher pump prices. In Sri Lanka, despite a recent hike, we are not doing so in line with world prices.
It is no secret that reforms are needed at the CEB, CPC and NWB, and all other state-owned enterprises (SOEs) to improve supply, service levels and cost management efficiency, all of which will benefit the consumer. As a result, the governments of most developed and developing countries have since the mid-1980s divested the utility companies to the private sector, albeit with regulatory oversight. That model has proven to be a winner, with cash strapped governments relieved of supporting loss-making enterprises and the sale raising funds and the consumers benefiting from efficient service.
However, the trade unions in Sri Lanka have successfully thwarted such reforms or, should I say, thought of such reforms! Although, to be honest, the trade unions have not had to do too much as successive governments have lacked the political will and intelligence to go through such an exercise. From 2001 to 2003, under Chandrika Bandaranaike Kumaratunga and Ranil Wickremesinghe, a study was undertaken with World Bank funding to work towards some reforms at the CEB and CPC. However, the dismissal of the government of RW by CBK resulted in the study being abandoned. Since then, nothing has been done, a sure reflection of why our country is in its current predicament.
The trade unions have used the threat of industrial action to negotiate wages, perks and work norms that are not in the country’s interests and, importantly, the consumers who are also taxpayers. A significant portion of the public is not aware of the high remuneration and benefits that employees at these enterprises earn.
In Sri Lanka, unfortunately, any proposed divestiture of government-owned assets is politicized. The often-used slogan is “apey sampath wikunanawa”, which means selling the family silver. It is a slogan supported by whichever party is in opposition, the left-wing parties, trade unions, nationalistically minded intellectuals and the media. As a result, the commercial benefits and necessities are forgotten. The abrogation of the undertaken given to India and Japan to allow their nominated parties to invest in developing the East Container Terminal (ECT) at the Colombo port is a classic example of how “thuggery” won over commonsense.
One only needs to appreciate the significant improvement in service levels achieved at Sri Lanka Telecom due to the part divesture and management control given to a Japanese investor in the 1990’s. Had that change not been made, I shudder to think how the country would have coped up with the rapid advancement made in the fields of communication and information technology in the last quarter-century. Many of the mobile communication providers in our country are foreign investors. This should not be lost on those who oppose foreign investment on ideological grounds.
We must also not forget the significant service efficiency and improvement in the operational and financial performance of the national carrier under the management of Emirates. As I remember, the opposition at that time, the United National Party (UNP), said that they would abrogate the share sale and management agreement when they came to power. That did not happen because they were aware of the benefits of the transaction. Unfortunately, in our country, the main opposition party, whoever it might be, opposes everything the government proposes despite knowing well of the benefits. They mislead the public to cause controversy and score some cheap points, and much-needed initiatives to take the country forward are delayed and at times discarded. The ultimate loser is the public, misled due to lack of information, transparency, and constructive debate and a misguided notion that these are our sampath.
In my view, very few people in our country understand and appreciate how disruptive and damaging the actions of trade unions in the public utilities, the GMOA and Teachers and Principals have on the nation viz a viz the public. Furthermore, the people are unaware that nearly all industrial action resorted to by these particular trade unions are motivated solely to maintain their high salaries (teachers and principals excluded), perks and insanely bloated numbers resulting in large scale inefficiency.
Unfortunately, successive governments are responsible for this state of affairs as they have repeatedly used state enterprises to give non-existent jobs to the “boys.” Instead of developing the economy with sound policies, they had taken the easy route by creating jobs when none existed. The SLPA employs nearly 10,000 staff to operate one terminal at the Colombo port. The other two terminals operated by private companies handling almost 70 per cent of volume manage their operations with a staff of less than 2,000. Incidentally, the former Chairman of the SLPA, a retired Army General, said that in his view, the maximum needed was around 3,000. The fact that the 7,000 employed in excess earn high salaries and perks at the cost of the taxpayers of this country is lost on the public.
The deplorable trade union action resorted to by the teachers and principals over several months impacting our children went on as long as it did due to the government’s failure to deal with it decisively. The GOSL continued to pay the striking teachers and principals their salaries despite not reporting to work. It is a fact that remuneration is a right when a service is provided. Therefore, it was necessary, or should I say mandatory, that GOSL should not have paid those not reporting to work their salaries.
Had the GOSL so acted, the strike would have been called off no sooner it started. I need to emphasize that I believe that our teachers are not paid adequately. It is agreed that successive governments have not invested sufficiently in education. The net result is that our educational system is in shambles. However, resorting to industrial action penalizing students during a pandemic and an economic meltdown is unacceptable. To make matters worse, they disregarded covid restrictions that the rest of us adhered to. I am not sure what sort of example they set the students who invariably look up to teachers for guidance.
In the private sector, dealing with unreasonable trade union demands more often results in wasted valuable management time and energy. Many initiatives needed to improve efficiency, productivity and cost management are either not implemented or delayed due to the intransigence of the trade unions. In most instances, the rank and file of union membership are amenable. However, those who hold positions in the union hierarchy at the National and Branch level pursue policies that are part of their own personal agenda and not necessarily their memberships’. There are many instances that I can share with the readers based on my 25 years in the private sector. Due to space constraints, I shall restrict it to just one.
In 2016 there was a sudden increase in demand for the products that the company I was working for was manufacturing. But, unfortunately, the manufacturing capacity was insufficient, and it was going to take the company over 12 months to order machinery from overseas and install additional capacity. So the senior management team of which I was part approached the trade union and requested that the practice of shutting down the production line for lunch be changed. Our request was for the workers to go for lunch in batches so that the production line could continue to operate, and the 40 minutes lost when shutting down the plant and restarting after lunch could be saved and utilized for much-needed production.
I was bewildered by the reply we got “For so many years we have enjoyed our lunch looking at the face (seated opposite) of my friend, and now you are asking us to agree to have lunch looking at the face of a person who may not be my friend? How can we enjoy our lunch?” I was livid by the response. The Managing Director pacified me a bit saying, ” Sanjeewa, you are lucky. They used to stand on the table of the Finance Director (my predecessor) previously when they were unhappy!”
Given the precipitous state of our economy, the GOSL and the private sector would need to make difficult and unpopular decisions in the future if some meaningful solutions are to be rolled out towards some recovery. In that context, I believe that the country will be well served if industrial action, particularly in those classified as “essential services”, is banned for the next five years. I am aware that some might not favour such a proposal saying that it will infringe on personal freedom. However, as a person who experienced and had to deal with stubbornness and lack of common sense from trade unions when trying to find solutions to commercial problems, I believe there is no alternative unless we collectively wish Sri Lanka to sink into extreme poverty.
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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