In a bid to protect the EPF, the superannuation benefits of persons employed in the private sector, from the risky investment, eleven trade unions in Sri Lanka filed a fundamental rights vilolation petition in the Supreme Court on 5 October 2012. The next hearing on the petition will take place on 31 October. The unions are calling upon the court to direct the Attorney General to launch a criminal investigation on the alleged fraud and market manipulation of the EPF.
Trade unions argue that the objective of creating the EPF was solely for the purpose of superannuation benefits for its members and it “was based on the principle that all benefits accruing to the EPF should accrue and/or be able to accrue to the benefits of its members”. Accordingly, the EPF organization cannot endeavour to obtain any benefit that will not accrue to or pass on to its members. Thus the Monetary Board is required to act as the custodian and is legally and morally bound to ensure that the operations of the fund stay within the legal framework.
However, the past investment practices demonstrate that the finances of the EPF are being abused for collateral purposes and trade unions allege that these are not in the best interest of its members. The investments were not reported in the EPF’s annual reports and were beyond the purview of the Investment Policy of 2002. Risky investments of EPF were utilized to artificially raise the share prices, enabling some of the shareholders of such companies to sell their shares at the artificially high prices.
In the petition to the Supreme Court, trade unions called upon the court to direct and issue orders, to responsible authorities to:
- invest the EPF only in blue chip companies;
- make all EPF investment process transparent including disclosure of investment details and genuine consultation with trade unions;
- immediate withdrawal of all equity investment in banks and such investment practices are restrained in future; and
- to declare that purported changes in the disclosed investment policy as null and void.
Including an IndustriALL Global Union affiliate, the Free Trade Zone and General Services Employees’ Union, the other trade unions that approached the court comprises of Ceylon Bank Employees’ Union, Inter Company Employees’ Union, Jathika Sevaka Sangamaya, Lanka Jathika Estate Workers’ Union, Commercial and Industrial Workers Union, Federation of Media Employees’ Union, Independent Port Employees’ Union, Insurance Employees’ Union, United General Employees’ Union and Ceylon Estate Staffs’ Union.
Respondents in this case are the Monetary Board of Sri Lanka, Central Bank of Sri Lanka, Secretary to the Finance Ministry, Commissioner General of Labour, Securities and Exchange Commission and the Attorney General.