Corporate Social Responsibility

This article appeared in the December 2008 edition of LMD (Lanka Monthly Digest) with the strapline: “Cosmetic Concessions? Michael O’Leary draws attention to what he believes is hidden under the cloak that is CSR.” I have corrected some of the pusillanimous censoring edits that the editors perpetrated.

 

Is Corporate Social Responsibility (CSR) an idea whose time has come or is it a huge cloak woven by big business to conceal the elephant in the room? Many businesses are aware of the concept, but how do they practise it? I’ve been trawling through some Sri Lankan corporate websites and noticed that I  only come up with ‘under construction ‘when I click on the CSR page.

 

CSR has been defined as the continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce and their families as well as that of the local community and society at large.

 

Ambrose Bierce’s Devil’s Dictionary defines a corporation as “an ingenious device for obtaining profit without individual responsibility”. The corporation is a legal construct, a charter granted by the state to a group of investors to gather private funds for a specific purpose. The concept maintains the fiction that the corporation is a person, but the practical reality is that the organism develops in such a manner that the entity cannot be held accountable for morality in the way that a human being could be.

 

If the corporation is a person, that person is a psychopath, according to corporate researcher Joel Bakan. “Human psychopaths are notorious for their ability to use charm as a mask to hide their dangerously self-obsessed personalities.” For corporations, social responsibility may fulfill the same function as charm. “Through it, they can present themselves as compassionate and concerned about others when, in fact, they lack the ability to care about anyone or anything but themselves.”

 

Corporations put into practice the concept named by the German philosopher, Herbert Marcuse, as ‘repressive tolerance’. The most effective means for governments and large organisations to keep their hold on power and to fend off revolt is not by direct confrontation but by co-opting the rebels, inviting them in, offering some cosmetic concessions and making them complicit in the enterprise.

 

Greenpeace and Friends of the Earth went to war with multinational corporations over their environmental depredations. Today, the corporations invite the environmentalists into the fold and seek their advice on how to clean up their act.

 

The number of companies reporting on their CSR activities in the UK has shot up in recent years, which at least demonstrates its growing popularity as a PR tool. Ninety-four per cent of company executives believe the development of a corporate responsibility strategy can deliver real business benefits.

 

A third of businesses in the UK do not pay any corporation tax, which results in a shortfall in the common purse of US$ 93 billion each year. Corporate profits in 2006 and 2007 were the highest on record. Top executives’ remuneration packages in May last year were double what they were ten years ago. The average pay for directors in Britain’s top companies rose 37 per cent in2006, whereas the salaries of workers grew by just 3.3 per cent. CEOs of large US companies make as much money in a day as an average worker makes in a year. The financial meltdown has not seriously brought these profiteers down to earth. It was good for them while it lasted and governments are now bailing out these risk-taking buccaneers.

 

“We do not want children to smoke,” a multinational tobacco giant declares on its website. But in Malawi, Mauritius and Nigeria, the company used marketing tactics that are well-known to appeal to youth: advertising and selling single cigarettes, and sponsoring non-age-restricted, product-branded musical entertainment.

 

Allan M Brandt wrote in his great book, The Cigarette Century, that for US tobacco companies, “responding to critics marked a challenge to be met rather than a moral or ethical dilemma restricting action”. More than one in five American adults still smoke regularly and tobacco kills more than 435,000 US citizens each year. The public in the West has responded to persuasion, to consider the health risks of smoking. Kenneth Clarke was Secretary of State for Health in the UK. His ministry developed and funded a number of ‘Healthy Nation’ projects. After he left office, he was paid GBP 100,000 a year by a tobacco company to peddle cigarettes in the Third World. His bid for the Conservative Party leadership was undermined because he was distracted at the time of the election by visiting Vietnam at the behest of this tobacco manufacturer.

 

It is projected that in the course of the 21^st century, one billion people across the globe will die, probably in protracted agony, of tobacco-related diseases. Gallage Punyawardana of the Swarna Hansa Foundation says that in Sri Lanka, 27,000 people die every year from diseases brought on by the use of tobacco.

 

Senior marketing officers of CTC (Ceylon Tobacco Company) are claiming that their company is a ‘responsible organisation’. What this responsibility means in the real world is shrouded in management jargon about ‘business-building programmes’ and ‘value-added services’ that may very well be a case of avoiding that elephant in the room. The elephant is smelling rather rank.

 

OLYMPUS DIGITAL CAMERA

Lessons from Ireland

This article appeared in the November 2008 edition of LMD (Lanka Monthly Digest) with the strapline: “Michael O’Leary recounts Ireland’s battles with corruption, which tarnished the offices of two of its Prime Ministers”.

 

Corruption thrives everywhere in the world. It is endemic in the US through what are known as ‘earmarks’ or ‘pork’. The saga of the ‘Alaskan Bridge to Nowhere’ has forced one US Senator to face criminal charges while the Republican Vice- Presidential candidate, Alaska Governor Sarah Palin, is now also implicated.

 

Ireland finds itself at a respectable No. 17 in the Corruption Perception Index (CPF) while the Economist Intelligence Unit (EIU) places it at the top of its Quality Of Life Index. Ireland has the world’s fifth-highest

GDP, although world conditions are currently de-fanging the Celtic Tiger. There has been a general recognition that to retain its attractiveness to foreign investors, the Irish state needed to tackle a culture of corruption. The ‘brown envelope’ (or bribing of planning officials) has long been a feature of Irish life – politicians at all levels have had a tendency to confuse party funds with their own personal income. ‘Gombeenism’ describes the kind of parish-pump, pork-barrel politics in which those elected to be legislators devote themselves to cronyism and self-aggrandisement rather than honestly representing their constituents’  interests.

 

It is a matter of public record what a Taoiseach (or Irish Prime Minister, pronounced ‘tea-shock’) earns. On this fairly modest amount, Charles Haughey enjoyed an opulent lifestyle. The McCracken Tribunal in 1997 unearthed illegal payments by businessmen into offshore accounts and Haughey faced criminal charges for obstructing the tribunal. It reported that the bribes, “when governments led by Mr Haughey were championing austerity, can only be said to have devalued the quality of a modern democracy”.

 

The tribunal concluded that Haughey had received around GBP 10 million from businessmen. A significant portion of funds donated for a liver-transplant operation for his former colleague Brian Lenihan was misappropriated by Haughey for personal use. Charlie’s protégé Bertie Ahern presided as the youngest-ever Taoiseach over a booming Irish economy and helped bring peace to Northern Ireland. Ahern signed the cheques from the Lenihan account, and this and other matters from the past came back to haunt him, forcing Ahern to set up the Mahon Tribunal which brought about his downfall.

 

In 1999, the International Federation of Accountants (IFAC) published a discussion paper, ‘The Accountancy Profession and The Fight against Corruption’, which urged accountants to help root out corruption. In Ireland, bankers and accountants colluded with and were protected by the perpetrators.

Des Traynor, Haughey’s own accountant, helped 120 of the country’s richest men to divert their money through London and the Cayman Islands, and back to Dublin, to evade tax. Allied Irish Banks (AIB) operated 50,000 bogus overseas accounts to avoid Deposit Interest Retention Tax (DIRT). AIB also wrote off Haughey’s huge overdraft. The phrase ‘banana republic’ was often bandied about at the time.

 

So, what is corruption? One definition is “the misuse of entrusted power for private gain”. For ordinary citizens, it is more up-close and personal than an abstract definition. It means citizens struggling to get what should be their right. ‘Speed money’ to fast-track public services might be seen as being akin to tipping a waiter at a restaurant, but this is part and parcel of a toxic culture.

 

Codes of conduct and training will remind officials that they are public servants. Corruption thrives when the wealth and potential of the public sector are used without the consent of those who happen to work in government. Economic theory and empirical evidence both demonstrate that corruption impedes economic growth by discouraging investment, deterring entrepreneurship, diverting public talent, reducing the quality of public infrastructure and distorting public finances. Regression analyses have shown a correlation between corruption and income inequality. Corruption leads to an unfair distribution of state resources and services.

Corruption also inhibits citizen participation, which in turn lowers the quality of public services and infrastructure. The poor suffer disproportionately from low-quality public services. When people perceive that the social system is inequitable, their incentive to engage in productive economic activities declines.

 

In 1997, Professor Robert Klitgaard, the world’s leading expert on corruption, recommended the following:

 

• “Fry a few big fish…”. Major corrupt figures need to be convicted to undermine the culture of impunity.
• Anonymous groups should conduct diagnostic studies of corrupt systems of procurement and contracting.
• Collect information to raise the probability of corruption being detected.
• Link officials’ salaries to success, so they earn enough to control temptation.

 

The corrupt would be comfortable if the citizenry took a pessimistic view that because corruption exists everywhere, nothing can be done about it. No one would argue that because pollution and disease exist in every country, nothing should be done to reduce them.

 

The Irish tribunals made a difference, in that they undermined the public’s tolerance for unethical behavior, and they destroyed the culture of silence in the process. Senior politicians such as Prime Ministers Haughey (death saved him from criminal conviction) and Ahern, Foreign Minister Ray Burke (who was jailed), and EU Commissioner Padraig Flynn and his daughter Minister Beverley Flynn (who was working for a bank when, in the Hiberno-English phrase, “the firm’s cash got mixed up with their own”) were named and shamed – and they paid the price.

 

 

Economic Growth

This article appeared in the November 2008 edition of LMD (Lanka Monthly Digest).The strapline was: “To grow or not to grow? Michael O’Leary goes in search of an answer to this conundrum”. I think that what I was trying to get across to a business audience was that I was not a fan of growth but I would like to see established in Sri Lanka some of the measures of good governance that growth proponents recommended.

Seventeenth-century Spanish Conquistadors in America destroyed all the settlements in their path and returned from their wanderings to starve, because there was nothing left to loot. Are we, 2lst century conquistadors, destroying our planet in the never- ending quest for economic growth?

As long ago as the 1960s, Robert Kennedy warned that GDP “is indifferent to the decency of our factories and the safety of streets alike”. He added: “It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning. Neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile.”

There are four basic arguments against pursuing growth:

• Growth has negative effects on the quality of life. ‘Pleonexia’ means pathological greed that can cause stress, addictions and compulsions, ‘affluenza’ and loss of moral grounding.
• Artificial needs are created. Zygmunt Bauman wrote that capitalism has made consumers immune to satisfaction. Desire no longer desires satisfaction. ‘Desire desires desire’, which is the basis for our new ‘constant greed’.
• Growth depletes natural resources and is ultimately unsustainable. If everyone consumed at the US rate, we would require nearly five more planet Earths! According to the Red Cross’s World Disasters Report, the frequency and cost of natural disasters will increase due to a combination of environmental degradation, climate change, urban population growth and economic globalisation.
• The gap between the richest and poorest is widening. Although there was never enough income at the peak of the pyramid to allow an egalitarian distribution to raise the bottom very high, the magic process of growth would – or so it was thought in the 60s – bring the bottom near to the top during a period of only a generation or two.

In Social Limits to Growth, Fred Hirsch argues that as a society becomes wealthier and more engaged in a positional contest for consumption, it becomes more difficult – not easier – to arrange for the redistribution of income by government. “The flaw in the affluent society lies not in the false values of affluence, but in its false promise,” Hirsch theorised.

Even when Sri Lanka was boasting an official growth rate of 7.5 per cent, this growth was not converted into poverty reduction. The income of the poorest in this country fell from 18.9 per cent of the income of the richest in 1963 to 13.4 per cent in 2002.

In the US, the wealth gap is currently at its widest since 1929.  In 1968, the CEO of General Motors (GM) took home 66 times the amount earned by the typical GM worker. In 2005, the CEO of Wal-Mart earned 900 times the pay of his average employee. There are more than 600,000 millionaires in the UK and35 billionaires. More than 2.5 million children – around a quarter of the total – are living below the official poverty line.

The Growth Report recently published by The World Bank (WB) is in no doubt that growth is the answer to the world’s problems, particularly poverty in the developing world: “In short, we take the view that growth is a necessary, if not sufficient, condition for broader development, enlarging the scope for individuals to be productive and creative.”

Since 1950, 13 economies have grown at an average rate of seven per cent a year or more for 25 years or longer. Nine of them are in Asia: China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Singapore, Taiwan and Thailand. They share common characteristics: engagement with the global economy, macroeconomic stability, high rates of savings and investment, the market allocation of resources, and credible and capable governments.

The Growth Report provides a handy checklist of bad ideas:

• Subsidies, except for those targeted at highly vulnerable groups.
• Dealing with unemployment by creating false state-sector jobs.
• Cutting infrastructure investment for short-term gains.
• Providing open-ended protection of specific sectors.
• Dealing with inflation through price controls.
• Treating environmental concerns as an unaffordable luxury.
• Underpaying civil servants, including teachers.
• Excessive interference in the banking system, which prevents the development of an efficient system of financial intermediation and reduces productivity.

Whichever side one takes in the debate about whether the pursuit of growth is good or bad, The Growth Report offers some sound advice about good governance and economic management. It stresses the importance of an effective and accountable civil service free of any taint of corruption: “Government leaders send powerful signals about values and the limits of acceptable behaviour when they decide on how to respond to cases of misbehaviour. Mild responses send the clear signal that while the misbehaviour is not right, it is not all that serious.”

According to the WB report: “The historical record shows that growth requires broadly stable prices, a currency that is not debauched by hyperinflation. Growth is about more than economics. It also requires committed, credible and capable governments …The country’s policy-makers must communicate a credible vision of the future and a strategy for getting there. They must be trusted as stewards”.

Flip Side of Tourism

This article appeared in the August 2008 edition of LMD (Lanka Monthly Digest) with the strapline: “‘Enjoy the real world while it lasts’, Michael O’Leary quips, critiquing contemporary tourism trends.” Except that is not what he said.

 

Over 30 years ago, Professor Emeritus Dean MacCannell composed a study of the phenomenon of tourism. His theme was that the middle classes of the West felt alienated by their comfortably dull lives. Although they had been programmed to believe the fiction that everything centred on the individual, they felt the disjunction of living in a depersonalized historical epoch. If there was an authentic reality, it must be elsewhere. If it was out there, it could be bought.

MacCannell employed Karl Marx’s concept of ‘fetishisation’. Pure experience, which normally leaves no material trace, is manufactured and sold like a commodity. The tourist thinks he or she can buy the authentic experience, which is located somewhere exotic beyond her or his normal experience. The tourist experience is built on the fiction that it is outside historical time, in a virtual world.

The touristic world is filled with people who are just passing through. It is a world furnished by the social production of highly fictionalised versions of the everyday life of traditional peoples, a ‘museum-isation’ of their quaintness. There is inevitably a tension between the moderns’ nervous concern for the authenticity of their touristic experience and the traditional folks ‘difficulty in acting out someone else’s fantasy version of their life. Culture is tailored to suit those who pay for it – until, in the words of a Masai man: “We have ceased to be what we are; we are becoming what we seem…”.

It is but a short step from the museum-isation of culture to the objectification of the people themselves. Tourism often turns people into commodities. There is a conceptual linkage between sightseeing, voyeurism and sexual exploitation. Part of the holiday experience is to hand one’s life over to one’s guide.

A character in a Don De Lillo novel says: “You can exist on this level for weeks and months without reprimand or dire consequence. Together with thousands, you are granted immunities and broad freedoms. You are an army of fools.”

Because the tourist is just passing through and has money to pay for ‘services’, what might be unthinkable back home becomes possible – and any taboo can be broken. For the organised tourist, the other – the ‘native’ of colonial times – is there to serve and to be exploited. The spiritual poverty of the West meets the economic poverty of the post-colonial world. In Thailand, beer is a dollar a bottle and a woman is available for GBP 10 or less. It’s the “last place you can be a white man”, says one bar-owning Westerner. This is the colonialism of the 21st century.

So, how about responsible and ethical tourism? There is a joke in the travel industry: “What’s the difference between an eco-holiday and a normal holiday?” Answer: “Thirty per cent surcharge.”

Between 1999 and 2005, the total GDP of the Galapagos Islands grew by 78 per cent, mainly because of eco-tourism. GDP per head only grew by 1.8 per cent because the population increased by 60 per cent. The fragile ecosystem i s crumbling under the increased population caused by ecotourism.

The Honduran Government designated 107 areas as protected, comprising 24 per cent of the nation’s territory. Almost all of the 80-square-mileis land of Roatin is part of a national marine park. In reality, only eight miles of its shoreline is officially protected. Locals make jewellery from the shells of critically-endangered turtles to sell to the ‘eco-tourists’ and those passing through on cruise ships.

The prospect of jobs has enticed people from the mainland to start building shanty towns without septic tanks. When the rains come, untreated sewage will slither down to the ‘protected ‘eight miles. The sediment reduces the amount of sunlight that reaches the coral, killing it – which, in tum, slowly kills the fish that live there.

Tourism is an extractive industry and not much of its benefits go to locals. Resorts are usually operated by foreign companies. Any local benefits that do accrue must be offset against the downside – such as the commandeering of scarce, clean, fresh water by resorts to the detriment of local communities.

Travel is supposed to broaden the mind, but tourists are not encouraged to be self-reliant. I remember being on a boat in the middle of Lake Titicaca when the engine failed. I was not worried, because I had paid for this experience and had an inalienable right to be rescued.

Tourism is based on delusion. Before I came to Sri Lanka, I studied the Lonely PIanet Travel Guide and was interested to read about some local initiatives that sounded very worthy. After living here for many years, I realise that those initiatives are dubious enterprises that bear no relation to the guidebook’s description.

Somewhere in Colombo, a UK-based website employs Sri Lankan students (who may never have left Sri Lanka) to plagiarise other websites peddling fantasies about hotels all over the world. This website tells its visitors that Bom Jesus do Monte is in County Cork, in Ireland – whereas, in the real world, it is in Portugal. Does it matter? This is globalisation and fantasy tourism in action.
So, enjoy the virtual world – the real one is fast disappearing. . .

Noise about Silence

This article appeared in the August 2011 edition of Living magazine.

OLYMPUS DIGITAL CAMERA

There has been a lot of noise about silence, a lot of words expended.

For example, Sara Maitland wrote a lot of words about silence.  Before writing A Book of Silence, published in 2008, she spent silent time in silent places – on Skye in the Hebrides; in the Sinai Desert; in forests and mountains; in a flotation tank; in monasteries and libraries. Then she did a lot of talking to promote the book.

I used to live in Lewisham and even without rioters it was noisy. As well as the usual car and burglar alarms, there were police helicopters flying low in the small hours of most mornings. Skulks (that is the collective noun apparently) of foxes used to sun themselves on the surrounding  lawns and at night forage in dustbins and set about reproduction. The nocturnal screaming of ravished vixens was indescribable.

Later we lived  in sparsely  populated rural Ireland and became  used to a certain level of quietness.  Meditation was relatively easy in our little cottage surrounded by fields.  I first visited Sri Lanka in 2001 and spent  twelve days in a meditation centre, practising the art of “noble silence”. Sri Lanka was a bit of a shock to the senses, especially hearing.

I wrote a poem about it at the time.

The Silence Within

A bhikkhu sneezes. Anicca. Bless you.

Inside the meditation hall, buttocks squirm,

Noses sniffle, throats tickle and phlegm.

Geckos squeak. Outside, temples and mosques

Decibel their faithful to prayer. Sirens police the roads.

Helicopters take the air highway to the war.

Semtex gouges rock from the earth. Rifles shoot wild boar.

A demon hectors on my left shoulder, mocking

My ambition of equanimity.

One can hope for quietness but  it’s all relative. In 1952 at  the Maverick Hall  in Woodstock,  New York State, the penultimate piece of a piano recital by the young piano virtuoso David Tudor  was John Cage’s latest “composition”, 4’33”. Tudor shut the piano and sat still. The wind rustled in the maples and rain could be heard falling on the roof.

The American Catholic monk, Thomas Merton wrote: “I make monastic silence a protest against the lies of politicians, propagandists and agitators” . The more accepted theory behind the practice of monastic silence is that it is a means to access the deity, to develop self-knowledge and to live more harmoniously.

Jenny Diski found it difficult to live harmoniously with her neighbours because of their Led Zeppelin albums. She also discovered that she suffered from tinnitus and found that there is a medical condition known as hyperacusis  – an inability to tolerate everyday sounds. Many sounds that were previously perceived as  normal can be painful, annoying, seem amplified, or irritating.

It seems to me that what Sara Maitland is writing about is not silence, which is unattainable, but solitude. One reviewer  of A Book of Silence commented, “One unmentioned side effect of silence, on Maitland at least, seems to be solipsism.” Maitland’s craving for partial isolation raises significant questions as to the nature of silence and relationships. Monastic silence and monastic solitude might be liberating but could also cause derangement and hallucinations. Patrick Leigh Fermor wrote in  A Time to Keep Silence: “I had asked for quiet and solitude and peace, and here it was; all I had to do now was to write. But an hour passed, and nothing happened. …So much silence and sobriety! The place assumed the character of an enormous tomb, a necropolis of which I was the only living inhabitant.”

Visitors from Colombo to our mountain retreat  remark on the meditative calm. However, it is certainly not as silent as the tomb. Sometimes I find Colombo quieter.  Mother Nature is a noisy old whore.  As I write this,  hornbills are cackling derisively, squirrels are noisily complaining about the attentions of the dogs, monkeys are fighting over guavas, parrots are just scolding for the fun of it.

There is no such thing as silence.

Does the Customer Care about Customer Care?

This article appeared in the July 2008 edition of LMD (Lanka Monthly Digest) with the strapline: Demand Better Service! The customer has to care enough to benefit from quality customer service, Michael O’Leary points out.

Max Hastings wrote that Margaret Thatcher would be forever remembered as the warrior queen who toppled the Argentinean junta and castrated the British miners; John Major would be remembered for one little thing: Major’s big idea – which, to Hastings, was a little thing, was the Citizens’ Charter. The mechanisms of initiatives such as citizens’ charters can be mere rituals to be endured to receive a badge.

 

Some years ago, this writer was planning to move home from London to rural County Cork. I arranged an appointment with a removal firm festooned with customer-care accreditations. Its representative was two hours late and said he couldn’t take my goods all the way to my new home, but would drop it off somewhere for me to collect. I suggested that there was a disparity between performance and accreditation. The response was a phone call saying I was talking “rubbish”. I asked the caller to puts me on to the managing director. He informed me that he was the managing director!

 

More recently, I had an exchange with one of the largest banks in the UK. I had been given the same incorrect information in two letters and the staff at the call centre teetered on the precipice of insolence while conveying an indoctrinated message through gritted teeth. The response from the ‘Senior Customer Advisor’ was: “Our staff are trained to deal with all customer queries as efficiently as possible.”

 

Hastings was wrong. The concept of a Citizens’ Charter is a profound and noble idea. It involves the very essence of ethical philosophy going back to ancient times. The ‘Golden Rule’ is the best guide to living, whatever your religion. It is about empathy – do unto others as you would have others do unto you. In the words of Joe South: “Just walk in my shoes.”

 

Major was not being grandiose when he talked about the concept of a citizens’ charter being the “central theme for public life”. According to the BBC, his attempt to establish measurable and accountable public services was his most important legacy.

 

The problem is how to prevent the ritual substituting for the substance – gritting the teeth and going for the accreditation.

 

Dr. Madsen Pirie of the Adam Smith Institute, a pioneer of the Citizens’ Charter concept, said: “It is all too easy for the idea to be absorbed and neutered by the civil service. The trick is to ensure that the system does not dissolve into a set of vague objectives couched in the language of management-speak, which helps nobody.” In any organisational set-up, one has to have a framework to translate a mission into practice- but if individual workers do not understand or feel the core values, they will merely pay lip service and perform the rituals.

 

Major’s concept was about better quality for consumers through the publication of service standards, establishing the right of redress, performance monitoring, penalties for failures by public services and tighter regulation of privatised utilities. Published charters set out the standards of service in many sectors of provision – both public and private – that consumers have a right to expec and in some cases, compensation could be claimed where performance is found to be deficient.

I have detected a certain degree of cynicism about whether the concept of citizens’ charters can ever flourish on Sri Lankan soil. In a speech at the opening of a special Consumer Court at Aluthkade recently, the Chief Justice said that the cause of the consumer had become utterly hopeless. He said that those who rob the country would end up in hell.

 

Citizens have written to the newspapers that government officials do not show the simplest courtesy of acknowledging receipt of any correspondence. A toxic miasma of sloth and arrogance permeates some offices.  Controllers see themselves as technicians, not managers, so departments are not managed.

 

One correspondent wrote: “Will the ministers do something about this situation?” The answer is that they won’t – if the customer remains passive. The customer has to care enough to insist on real customer care.

 

A citizens’ charter should make it easier for the customer. Perhaps, those sufficiently interested could

try to see to it that the provisions of Section 7 of the Consumer Affairs Authority Act (No. 9 of 2003) are observed. The CAA has among its responsibilities the duty “to protect consumers against unfair trade practices and to guarantee that consumers interests shall be given due consideration”. One of the CAA’s functions is to “promote, assist and encourage the establishment of consumer organisations”. It takes a mere 15 members of the public to set up a consumer organisation which can register with the CAA. You can contact the CAA at caaoffice@sltnet.lk.

 

In the UK, customers have achieved great victories in curbing the rampant profiteering of banks. Philip Cullum of the UK National Consumer Council wrote: “This isn’t about being anti-business. At the National Consumer Council, we want the good guys to make profits and the bad guys to lose out. The challenge is to create markets where companies are fighting for consumer attention, which in turn leads to efficiency and innovation. The days when British consumers were reluctant to say boo to a goose are gone.”

 

Persevering customers will prevail. Passive ones will be persecuted.

Sri Lanka as One Nation

This article appeared in the June 2008 edition of LMD (Lanka Monthly Digest) under my real name of Michael O’Leary. The strapline was: “Will Sri Lanka be able to forget its past and fashion a new entity that subsumes history, culture and ethnicity? muses Michael O’Leary.”

 

In Ireland, nationalist rebels fought to unite the north-east with the rest of the island. In Sri Lanka, nationalist rebels fight to separate the north-east from the rest of the island. ‘Nationalism’ became a common concept in the mid-19th century. Today, most people live in multi-ethnic independent nation-states. Eric Hobsbawm defined a nation-state as “a territory, preferably coherent and demarcated by frontier lines from its neighbours, within which all citizens – without exception – come under the exclusive rule of the territorial government and the rules under which it operates”‘

 

Benedict Anderson wrote: “It is the magic of nationalism to turn chance into destiny'”. Nations “loom out of an immemorial past” and “glide into a limitless future”. Kemal Atatürk – founding a modem secular nation – co-opted the Hittites and Sumerians into the project. Ernest Gellner asserted: “Nationalism is not the awakening of nations to self-consciousness- it invents nations where they do not exist.”  Paul Ignotus wrote about Hungary: “A nation is born when a few people decide that it should be.” It has been said that the literary renaissance in Dublin, which helped to forge the Irish national consciousness, probably came about because five or six people happened to be neighbours and cordially hated one another.

 

Sri Lankan nationalists such as AE Goonesinha were stimulated by accounts of Parnell, Davitt and the Irish freedom movement, and closely followed Irish events in the late 19th and early 20th century. Ratmalana Sri Dharmarama Thero and Ananda Coomaraswamy wrote of an ancient, highly-developed Lankan civilisation. Modern-day Sri Lankans might echo Adamantios Koraes’s 1803 remarks about his contemporary Greeks’ relation to their classical ancestors. He said: “We must either try to become again worthy of this name, or we must not bear it'”. Anagarika Dharmapala wistfully dreamed of a dazzling past: “We must wake from our slumber … We were a great people'” Ponnambalam Arunachalam wrote in his diary: “Thought much of the unhappy conditions of our country and what a glorious thing it would be for Ceylon to emulate and excel her great past.”

 

Historical symbols are selectively reinterpreted to create a myth of historical continuity, including a community of common ancestry and destiny. Anderson uses the term ‘imagined communities’. He describes how Indonesia, a vast polyglot multi-ethnic accumulation of 3,000 islands under the colonial rule of the Dutch, imagined itself into a nation.

 

A very different nation is Switzerland, a country of three (or should that be four?) languages which was, until recently, poor and backward. The Swiss Confederation was supposed to have been founded 700 years ago. In fact, the Swiss nation only came about in 1891.

 

How did these very different agglomerations imagine themselves into nations?

EM Forster wrote: “If I had to choose between betraying my country and betraying my friend, I hope I should have the guts to betray my country.”” Orson Welles had a similar attitude: “Ask not what you can do for your country. Ask: ‘What’s for lunch?”

 

A country is an aggregation of rocks, soil, plants, animals and humans existing under certain climatic conditions in a geographical location. Can the result of a succession of such accidents inspire love? Nations can inspire profoundly self-sacrificing love –Dulce et decorum est pro patria mori.  Anderson said: “Dying for one’s country -which usually one does not choose – assumes a moral grandeur which dying for the Labour Party, the American Medical Association or, perhaps, even Amnesty International cannot rival … for these are all bodies one can join or leave at easy will.”

 

Albert Einstein and Sigmund Freud exchanged letters on this topic. Freud believed that the human psyche is motivated on one side by erotic instincts that seek to “preserve and unite” and on the other by destructive instincts that seek to “kill and destroy”. Politics embodies an aspiration to promote identification and love, alongside permission to foster aggressiveness. It is unfortunate that love of country often has to entail hatred of something else.

 

Peace has descended on the north of Ireland and the south has been blessed with wealth. Those who sought peace have been marginalised and those who cynically destroyed power sharing and devolution now share power in a devolved statelet, advising other countries – like Sri Lanka – how to achieve peace. After some 30 years and 3 000 deaths, Paisley and McGuinness are now a double act as lovable as Laurel and Hardy. The IRA s bombs failed to achieve a united Ireland. It was the EU that brought peace, because republicans and loyalists could join together in cross-border pan-European institutions without ‘surrendering’ to the institutions of the old enemy’.

 

As the old imperial blocs disintegrated, regions and aspirant nations voluntarily subsumed themselves in other blocs. Could Sri Lanka strengthen its unitary sovereignty and economy by subsuming its disparate parts in a larger Asian association?

 

Ernest Renan wrote that nationhood requires forgetting many things. He cited the massacre of the Huguenots on St Bartholomew’s Day as a symbol of what France needed to forget in order to be a nation. Will Sri Lanka be able to forget and fashion an entity combining all cultural histories as successfully as its cricket team?

Stop Exporting our Women

This article appeared in the May 2008 edition of LMD (Lanka Monthly Digest).

The strapline was: Should a state depend on poor female migrant workers who are being exploited and abused overseas? Michael O’Leary’s answer is crystal clear.

Travelling by air to and from Sri Lanka, particularly via Dubai, one often shares the aircraft with armies of women migrant workers. Sometimes, one notices a disdainful attitude towards them from middleclass Sri Lankan travellers. Nevertheless, the nation glories in the money that these women earn – and remit to their homeland. LMD‘s December 2007 issue noted that it is now the norm for remittances from migrant workers to bear the main burden of containing Sri Lanka’s fiscal deficit. For the eight months ending August 2007, these remittances surged 17 per cent to over US$ 1.75 billion. In fact, remittances from migrant workers represent more than nine per cent of GDP. Sri Lanka receives US$ 526 million more in remittances than it does from foreign aid and foreign direct investment combined. These remittances are now a greater source of revenue than our tea exports.

 

The Chairman of the Association of Licensed Foreign Employment Agencies boasted to a Sunday newspaper that Sri Lanka would be able to increase the current annual remittances of migrant workers to Rs 300 billion in 2008. Migrant women workers are treated as an export commodity that is marketed to wealthy, oil-producing countries where demand is high and human-rights protection is virtually non-existent.

 

LMD’s January 2008 issue quoted a former Finance Minister, in its BENCHMARK TV Supplement: “There is no way that we can go on relying on the hard-earned money of three categories of women: the poor women working in the Middle East as well as other countries and remitting their funds, women who work in garment factories and women working on tea estates. The Sri Lankan economy is run by women: they are the money earners for Sri Lanka – the men are just gobbling it up!”

 

To say that women run the Sri Lankan economy suggests that they have some power and control. Some academics have argued that female bargaining power increases with migration, because many women become income-earning members of households. However, the males continue to rule the roost, even while they vegetate with their cronies and send their wives to work overseas.

 

Some research suggests that remittances facilitate investments back home in housing and education, which increases productivity in the long run and results in higher living standards and improvements in family nutrition. One academic paper found that more than one-third of women sampled wanted to work overseas again, which was cited as supporting a positive view of migration. The numbers who suffered ill-treatment were played down; but of those sampled, physical ill-treatment led over 17 per cent to return home, while almost six per cent returned because of excessive workloads and underpayment of wages.

 

Much depends on how you interpret the statistics. You could say two-thirds (a majority) did not want to work overseas again and almost a quarter suffered ill-treatment or exploitation. The paper did acknowledge the downside of migration – such as higher divorce rates, disruptions to family life, lasting repercussions on children’s personality development (there is evidence of sexual abuse of children who are left without a mother), increased alcoholism and gambling. Where is the female empowerment here?

 

There is an abundance of evidence provided by organisations such as Caritas’s Mental Health Clinic, Human Rights Watch (HRW) and the Lebanese NGO Forum that rape and suicide are serious issues among migrant female workers. The Sri Lankan Government reports that 50 migrant domestic workers return to Sri Lanka “in distress” each day and Sri Lankan embassies and consulates abroad are flooded with workers complaining of unpaid wages, sexual harassment and overwork.

 

A survey of 70 interviews with Sri Lankan women in Lebanon reveals how the host country’s legal and social arrangements lead to migrants being trapped in abysmal living and working conditions. When the maids arrive at Beirut airport, immigration officers take their passports and hand them over to their respective employers, who take them to the agency, where a contract in Arabic – often bearing no resemblance to what they agreed to back home – is signed. With no money and no passport, they cannot choose not to sign these papers.

 

The number of suicides is increasing. In the past four years, 45 Filipinas, 50 Sri Lankans and 105 Ethiopians have killed themselves. A pathologist says that in many cases, the corpses were covered in bruises, bites or burns.

 

HRW says that the Government of Sri Lanka “deserves credit for initiating important steps to manage the outflow of migrant workers and to start providing protections”. The Government set up an institutional structure, the Sri Lanka Bureau of Foreign Employment, in 1985, to ensure that workers migrate through legal channels, and that corruption and exploitation by recruitment agencies are minimised, and that the flow of workers’ remittances is facilitated.

 

Perhaps, a more important issue is “right livelihood”, the fourth category in the noble eightfold path of Buddhism. Should a nation’s livelihood depend on the sufferings of a group of its citizens? Should a state manage its finances by depending on poor women who are being exploited and their family lives disrupted? If the state is to benefit, it should ensure that its benefactors are respected and well-protected from abuse.

Raw Deal for the Public

This article appeared in the March 2008 edition of Lanka Monthly Digest.

 

 

In November 2001 , I read a  local newspaper columnist arguing  that Sri Lanka should avoid commercial borrowing and embrace Public-Private Partnerships (PPPs) as being a more prudent option. He cited the Private Finance Initiative (PFI) in the UK, which began in 1992 under John Major’s premiership and was continued by New Labour. So, how prudent has British PFI been in practice, and has it enabled the Government to save public funds as well as harness the expertise and entrepreneurship of the private sector?

 

The Adam Smith Institute, a champion of free enterprise, found costs to be higher for PFIs than for traditionally procured projects.

 

This is how the trick works. The company’s initial bid provides only broad outlines, not detailed specifications. The Government accepts a tender; and then, its partner discovers new costs such as inflation of labour and materials. Adjustments are then slipped in to huge spreadsheets and the Government hasn’t a clue as to how it is being short-changed.

 

Renovating a hospital in Coventry should have cost GBP 30 million, but that wouldn’t have delivered sufficient profits to the private sector so, the government spent GBP  311 million on a new hospital with fewer beds than the two hospitals it replaced.

 

The Cumberland Infirmary in Carlisle was the first British hospital built under PFI at a cost of GBP 87 million. Carlisle’s consultants committee pronounced the scheme as being “clinically unworkable”. When the hospital opened, there was a major power outage and one of the back-up generators failed. A transformer caught fire in radiotherapy, and equipment in  theatres and intensive care switched to battery power. The operating theatre was flooded with sewage.

 

Dr Paul Dyson, Chairman of the Cumberland Infirmary’s medical-staff committee, said: “We feel maintenance and construction standards were skimped in the first place and it is all part of PFI’s desperate desire to cut costs and make profits.”

 

A Department of Health study suggests that every GBP 200 million spent on privately financed hospitals will result in the loss of 1,000 doctors and nurses. Professor  Jean Schaoul of Manchester Business School estimates that the rate of return for the companies involved with 12 large PFI hospitals was 58 per cent. This comes out of the hospitals’ budgets, so less is available for health care. Beds are reduced by 30 per cent with the first wave and budgets for clinical staff cut by 25 per cent. Many health trusts are in serious difficulty and some will become insolvent.

 

US examples demonstrate the pernicious influence of commerce on education. Education Alternatives Incorporated (EAI) won a contract to run nine schools in Baltimore for five years. Baltimore terminated the contract because EAI students did worse in reading and the company had made claims for nonexistent students. In Hartford. Connecticut -where EAI contracted to run all 32 schools – the experiment ended when the company sacked 300 teachers to increase its profits.

 

The latest trend in US education is to cut deals with brands such as Coca-Cola or Pepsi- Cola to market their products to children. In 1998, Greenbriar High School in Georgia, in fact, created a curriculum around Coke.

 

Although defenders of the free market hail the risk-taking, adventurous spirit of the private entrepreneur, the private arm of certain PPPs cannily avoids risk. So, it is the Government that carries the burden of risk. Accounting conventions on both sides cover up the real situation. The PFI does not show the costs of buildings, for example, on its balance sheet. Its main asset is the Government’s contractual obligation to pay for the building.

 

The Government, in turn, can hide the fact that it is spending public money on a long-term basis. It can omit the building and long-term obligation to pay for it from the state’s balance sheet by paying a single unitary charge for the building and its maintenance, so that it can be classified as a revenue item. The UK Accounting Standards Board has called PFI an “an off balance sheet fiddle”, because the Government can move the cost of public works out of the public sector’s borrowing requirement.

 

PPP can only be implemented through an anti-competitive process, which leads to corruption. Major corporations wouldn’t be interested if it were otherwise. For little investment, companies can be sure of long-term profits that are, in effect, guaranteed by the taxpayer. If the consortia bidding for a project had to supply a detailed bid for the final contract before they were chosen, rather than merely a broad outline, they would have to spend much more on their tender document. When a consortium negotiates a contract after it’s been won, it can develop its bid at public expense, with no fear of loss. If the process were reformed, PFI would come to an end, major corporations have warned.

 

Sri Lankan proponents of PPP stress the need for transparency, cost-effectiveness and fairness. But is this going to happen in Sri Lanka – especially when it doesn’t happen in other countries? Unfortunately, corruption is inherent in the system and transparency is impossible because of commercial confidentiality.

Does Sri Lanka Deserve the Blessing of Oil?

This article appeared in the February 2008 edition of Lanka Monthly Digest (LMD)

 

 

Each year, Sri Lanka imports nearly 30 million barrels of oil at a cost of some US$ 2.2 billion, which is used to generate electricity as well as for transport. Add to this the cost of subsidies, the knock-on effect of transport costs on prices and the never-ending cost of war – and one can see why the Government would like to have its own oil.

 

Azerbaijan’s ambassador to Sri Lanka recently announced that his country could help Sri Lanka develop its oil production and, in August 2007, Petroleum Resources Development Minister AHM Fowzie met a slew of representatives of oil companies on a junket to Baku. According to Fowzie, Sri Lanka may be able to produce oil by 2010 and the Government has demarcated eight exploration blocks in the Mannar Basin, two of which have been earmarked for India and China.

 

But before we rejoice, let’s see how other oil-rich countries have fared. In Azerbaijan, President Geidar Aliyev promised to cut poverty and create 200,000 jobs, but about half his country’s population still lives below the poverty line. A dynasty has been established and oil-rich families from the clan networks of Nakhichevan retain their power base by resorting to arrests, torture and suppression of media freedom.

 

Oil generates US$ 17 billion each year for Nigeria -which, if shared, would provide 15 years of wages for every man, woman and child. Instead, the proportion of Nigerian households living on less than one US Dollar a day rose to 66 per cent in 1996. Around 70 per cent worked in agriculture, but oil has stifled diversity and agricultural production has not kept pace with the increase in population. In 1962, agriculture contributed 78 per cent of the nation’s revenue; in 1977, it contributed just above one per cent. The contribution of crude oil rose from 13.3 per cent to 98.9 per cent over the same period.

 

Nigerian President Olusegun Obasanjo was praised in the West for rooting out corruption. Two rear admirals were imprisoned for effectively hijacking a tanker full of oil, while over 100 customs officials were sacked and the Inspector-General of Police resigned. However, Nigerians were not impressed by the PR spin from the likes of GoodWorks International, an Atlanta-based US company that benefits from investment in African kleptocracies. Out of36 Nigerians state governors, 3l have been investigated by the Economic and Financial Crimes Commission. Halliburton, a company linked to US Vice-President Dick

Cheney, admitted paying US$ 2.4 million in bribes to a Nigerian tax official.

 

Oil-related conflict brings thousands of violent deaths each year to the Niger Delta, which region is emulating Chechnya. The residence of the Vice-President of Nigeria, in Bayelsa State, was destroyed by the Movement for the Emancipation of the Niger Delta (MEND). Elections in Nigeria are low-intensity armed struggles in which thugs mobilized by rival politicians clash in the streets and polling stations trying to gain the upper hand engage in competitive rigging’.

 

Nigeria has graphically demonstrated that oil can bring poverty, corruption, environmental damage, conflict, foreign exploitation, and an erosion of human rights and media freedom.

 

Over the past 25 years, Venezuela earned US$ 300 billion from petroleum – yet, more than half its population live in poverty, unemployment averages 25 per cent and over 200,000 children have survived by begging, while a small number of families accumulated wealth and influence.

 

 

Angola received around three to five billion US Dollars from oil in 2001, but a quarter of Angolan children die before the age of five and one million internally-displaced people remain dependent on international food aid.

 

Equatorial Guinea has oil revenues of US$ 500 million a year, but 65 per cent of its approximately 500,000 population live in extreme poverty and the country is placed third from the bottom on the UN human-development index.

 

 

Prof. Michael Ross of the University of California in Los Angeles has produced a chart which maps oil sales against literacy and malnutrition rates. In it, every five per cent rise in oil exports was matched by a three month fall in life expectancy and a one-point rise in childhood malnutrition.

 

Oil and corruption are natural partners. The ever-expanding Saudi royal family has squandered around one trillion dollars, but done little to develop its country. The West is complicit in this. The UK’s Serious Fraud Office uncovered huge bribes being paid to Saudi princes over British arms deals.  Former Prime

Minister Tony Blair had the investigation stopped.

 

President Nursultan Nazarbayev of Kazakhstan has deposited millions of dollars in illegal commissions from Chevron and Mobil in overseas banks for his own benefit. The brutal regime of President Obiang Nguema of Equatorial Guinea has millions of dollars of blood-stained money at Riggs Bank, which is situated close to The World Bank in Washington D.C.

 

In Angola, Western oil companies pay secret bonuses into offshore accounts for the benefit of executives of the state oil corporation, Sounagol. The International Monetary Fund has confirmed that US$ 1.7 billion of annual Angolan oil revenue went missing between 199l and 2001, and millions of dollars went to President José Eduardo dos Santos himself.

 

Oil revenues from the Chad-Cameroon pipeline have been difficult to estimate because Cameroon’s ‘Perpetual President’ Paul Biya regarded them as his personal income and did not include them in government budgets. Biya is an amateur compared to the oil corporations, which will receive 7I per cent of the estimated profit of US$ 8 billion, while Cameroon will only receive seven per cent and Chad 22 per cent.

 

Oil companies jettison moral principles in virtually all countries where they operate. Mobil Oil was accused by Business-Week of complicity in massacres close to its installations in Indonesia and the company admitted supplying food, fuel and equipment to soldiers. In Burma, the French company Total and its American partner Unocal joined with Myanmar Oil and Gas to exploit the Yadana gas deposits and build a pipeline. The junta uses slave labour and summary executions to get the work done. BP provides the Colombian army and police with arms and training.

 

Oil causes resentment among local people and disruption of their way of life, livelihood and environment. The US occupation of Iraq is only an extreme example of a foreign power seizing a nation’s sovereignty for the sake of oil, but it happens all over the world.

 

 

Militant groups target pipelines in furtherance of their own agendas. In Colombia, guerrillas bombed a single pipeline 178 times in 2001 and pipelines were attacked more than 1,000 times in 13 years, spilling 2.9 billion barrels of crude oil. Even in Canada, between 1997  and 1998, there were 160 attacks on pipelines. Recently, an LTTE aircraft dropped two bombs on petroleum facilities near Colombo.

 

There has long been a link of anxiety in Sri Lanka between petroleum, terrorism and the environment. There was opposition to building a massive refinery near wildlife-rich areas such as Bundala and feeding grounds of flamingos and other waterfowl, as well as beaches frequented by egg-laying marine turtles.

Now, there may be drilling in the seas off Hambantota.

 

As far as Sri Lanka goes, the ‘easy oil’ has already been discovered – so, new explorations are costly and involve environmentally-sensitive areas. Seismic vibrations damage buildings and noise displaces wildlife, and chemicals and river warming deplete aquatic life. Soil and water are contaminated when a well blows out and emissions of flammable hydrocarbon cause fires, making land infertile and retarding photosynthesis. Ruptured pipelines, instrument failures and sabotage cause pollution.

 

Employment for locals is not necessarily guaranteed, even if oil exploration in Sri Lanka proves to be successful. The number of local people employed after the construction phase of the Chad-Cameroon

pipeline was negligible in Cameroon and around 350 in Chad. In Ecuador, 50.000 new jobs every month were promised, but there have been only 9,000 new jobs so far – mostly unskilled and temporary.

 

 

A nation heavily dependent on oil sees its currency soar, making it harder for local manufacturers to export. Skilled workers leave manufacturing and agriculture to service the rich. Using oil as collateral, governments incur foreign debts and squander national funds to buy support. Profits go to the elites and existing power imbalances are further compounded. The elites see no advantage in sharing the benefits of oil with the poor. Oil enables clannish elites to become even richer and establish dynastic kleptocracies that cling to power.

 

It increases the risk of conflict – particularly where there are separatist tendencies and ethnic tensions

– and gives terrorists targets for sabotage. The need to protect installations against terrorists brings repression and the desire of the elites to protect their ill-gotten gains threatens freedom of speech and human rights in general.

 

 

So, does Sri Lanka want to be a nation where foreigners call the shots – a nation plagued by poverty, inequality and ethnic conflict; where corruption, dynastic elites and nepotism compromise good governance and erode human rights?

 

 

Does Sri Lanka deserve the ‘blessings’ of oil?