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Thursday May 13th, 2021

Sri Lanka’s Right to Information Law should not promote industrial espionage and hurt investment

COLOMBO (EconomyNext) – There has been much debate about the 19th Amendment conferring rights to foreigners, albeit foreigners who went to the trouble of setting up unincorporated associations along with three Sri Lanka citizens.

The matter was settled by an amendment to the Gazetted text, approved by the Supreme Court.

Let us leave aside the vexed question of whether foreigners should benefit from the right to information (RTI). An important question that has been neglected in the rush is whether foreigners or companies owned by foreigners or entities have any safeguards to prevent their competitively sensitive information being released by our government in response to RTI requests.

RTI is a partial solution to the information asymmetry that exists in the Principal-Agent relationship between the public (Principal) and the government (Agent). The government, as the Agent of the public, is mandated to act on behalf of the public, not exceeding the mandate and being prudent especially about the public’s resources. But the public (the Principal) lacks the information with which to monitor what its Agent, the government, is doing. Thus, RTI.

Makes sense as a general principle. But there must be, and are, exceptions. Modern governments collect enormous amounts of information from citizens and companies. What if citizens use RTI to extract information about fellow-citizens who have entrusted such information to government? What if companies use RTI as a mechanism to obtain competitively-sensitive information about other companies who have provided such information to government?

There is an accepted exception, included also in the third draft of the Sri Lanka RTI Bill as S.5(d): “the disclosure of such information would reveal any trade secrets or harm the legitimate commercial interests or the competitive position of any person, unless that person has consented in writing to such disclosure.”

The problem is the definition of the "person" whose legitimate commercial interests are safeguarded: "a person or any body of persons, whether corporate or unincorporated or registered in Sri Lanka." A non-citizen or a foreign company is not protected.

Let’s take an example. The government puts out a call for proposals to run an air-freight hub out of Mattala Airport utilizing its newly-granted seventh-freedom rights (the right of an airline not registered in Sri Lanka to operate flights that do not start or end in its home country). Multiple proposals are received, all including commercially-sensitive information needed to persuade the government of the merits of the respective business plans.

One clever bidder (or even a non-bidding air-freight company) uses a Sri Lankan proxy to request copies of the submitted proposals. The responsible government agency’s first reaction is to refuse the request that reeks of industrial espionage. But the Information Officer finds she is compelled to yield to the request because all the bidders fall outside the scope of the exceptions set out in s. 5.

Is this right? Is this the way we go about attracting the investment and skills needed to move Sri Lanka out of the middle-income trap?

I used the example of a foreign company because that should get the attention of the Minister of Investment Promotion. I could also easily show how a non-citizen’s personally identifiable information, privacy, etc. could be compromised by their exclusion from the exceptions set out in s. 5 of the draft Bill.

The solution is simple.

Retain the current definition of who is entitled to make requests for information under the RTI Law to placate the nationalists. All that the foreigners have to do is ask through a Sri Lankan proxy.

But do not create disincentives for foreigners and foreign companies not to share confidential information necessary for conduct of normal business. The applicability of section 5, which specifies the exceptions, should be broader, encompassing foreign citizens and companies.

Rohan Samarajiva, heads LirneAsia, a regional think tank.


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