By Sri Lanka’s Corruption Crisis: Business Community Also to Blame, Says Supreme Court Judge
Government officials are not the sole culprits in Sri Lanka’s deep-rooted corruption—the business community also shares responsibility, Supreme Court Judge Yasantha Kodagoda, PC, stated this week.
Speaking as Chief Guest at the Annual General Meeting of the National Chamber of Commerce in Colombo on Thursday, Justice Kodagoda posed a critical question:
“Can anyone in officialdom accept a bribe unless there are willing givers of bribes?”
He directly addressed the private sector, challenging business leaders on their role in perpetuating corruption. Would they not offer bribes to secure contracts, evade law enforcement, or expedite applications? He further questioned the common practice of businesses sending end-of-year hampers to public officials or allocating budget percentages for ‘business facilitation payments.’
Strong Legal Framework, but Corruption Persists
While the Anti-Corruption Act (2023) grants extensive powers to the Commission to Investigate Allegations of Bribery and Corruption (CIABOC) to prosecute bribery and illegal wealth accumulation, corruption remains entrenched. The government must enforce laws, prosecute offenders, and implement the Prevention of Money Laundering Act and the upcoming Proceeds of Crime Act.
Business Community’s Role in Fighting Corruption
Justice Kodagoda outlined four key responsibilities for the private sector to combat corruption:
Expose Corruption: Businesses with knowledge of bribery, concealed proceeds of crime, or illicit property dealings must report to CIABOC.
Cooperate with Investigations: When requested, businesses must provide information and documents, make statements, and testify in court.
Reject Bribery & Unfair Business Practices: Avoid bribing officials, offering gifts to secure contracts, allocating budgets for bribery, or seeking unfair advantages in government procurement.
Build a Culture of Integrity: Companies should appoint integrity officers, encourage whistle-blowing, and ensure auditors report suspected corruption to company boards.
Business Community’s Counterargument: “What Choice Do We Have?”
While Justice Kodagoda places significant blame on businesses, many in the private sector argue that corruption is often a necessity, not a choice. They claim that in a system where bribery is embedded in governance, refusing to engage in such practices could mean losing contracts, facing administrative roadblocks, or being excluded from key industries.
A business leader, speaking anonymously, stated:
“What else can we do? If we refuse to pay bribes, our competitors will, and they will get the contracts. If we don’t ‘grease the wheels,’ government approvals will take years, crippling our operations. Officials expect bribes as part of the process—it’s not about greed, it’s about survival in an unfair system.”
Does Bribery Create Economic Efficiency?
Some economists argue that in emerging economies, bribery can actually introduce dynamism by bypassing inefficient bureaucratic processes. In countries with rigid administrative structures, businesses may see bribery as a way to speed up approvals and avoid unnecessary delays.
A study published in the Asian Business & Management journal suggests that while corruption can create short-term advantages, it ultimately harms long-term economic development by increasing transaction costs and reinforcing inequality. Another analysis of global data found that reducing corruption is linked to higher economic growth, with a one-unit improvement in a country’s Corruption Perceptions Index correlating with a 1.7% increase in annual GDP per capita.
However, the long-term risks outweigh the short-term benefits. Corruption discourages foreign investment, distorts market competition, and creates uncertainty in business operations. This suggests that while bribery may provide short-term efficiency, it ultimately weakens institutions and erodes trust in economic systems.
Who Bears the Ultimate Responsibility?
The business sector argues that the root of the problem lies with government officials, who create an environment where bribes are often the only way to get things done. They call for systemic reforms, including:
Streamlining bureaucratic processes to eliminate the need for facilitation payments.
Ensuring transparency in government contracts to prevent favoritism.
Holding corrupt officials accountable instead of only blaming businesses.
The Way Forward
Justice Kodagoda insists that businesses must take the first step by rejecting bribery, but the private sector argues that real change will only come when the government itself eliminates the culture of corruption from within.
The debate remains: is bribery an unavoidable tool for efficiency in emerging economies, or does it undermine long-term growth? Until Sri Lanka tackles this issue head-on, corruption will continue to hinder its economic progress.
Gagani Uthpala Weerasiri
