The world’s first ever RTI rating analysis conducted to find out how strong are the provisions of RTI law in 90 countries which have implemented the RTI Act, has thrown up surprising results with lesser known countries having stronger laws
Consider this: When, The Associated Press, in early 2011, filed Right to Information (RTI) request for information on terrorism charges and convictions in 105 countries, it got its reply from Turkey within a week; India, within a month; Mexico within two months; while the Canadian government sought a 200-day extension to give the reply. According to news reports, only 14 countries responded with the full information within their legal deadline; most countries did not provide any of the information asked for. The FBI too took six months and at the end of it, gave only vague replies.
Hence, it is not surprising that leading countries with otherwise good governance like USA and UK are ranked 39th and 28th in a comprehensive world-wide RTI Rating Project undertaken by Centre for Law and Democracy based in Canada (which stood 52nd) and Spain-based Access Info Europe. The results of the two year study were recently unveiled and showed that India ranked second having scored an impressive 130 out of 150 points with Serbia ranked first with 135 points.
The study was “a comprehensive comparative analysis of the legal frameworks for accessing information in each of the 90 countries where such a system exists.” Which means, the focus was only on how strong are the provisions in the RTI laws of the 90 chosen countries and not on how effective is the implementation, as that would be a cumbersome and complicated endeavour. Besides being assessed on 61 main indicators, the rating was given under seven different categories: Right of Access, Scope, Requesting Procedures, Exceptions and Refusals, Appeals, Sanctions and Protections, and Promotional Measures. The total count was 150 points. “The indicators were drawn from a wide range of international standards on the right to information, as well as comparative study of numerous right to information laws from around the world,” states the http://www.law-democracy.org website.
The study was initiated by Toby Mendel, president of Centre of Law and Democracy, Canada. Before founding the Centre for Law and Democracy in January 2010, Toby Mendel was for over 12 years senior director for law at ARTICLE 19, a human rights NGO focusing on freedom of expression and the right to information. He has provided expertise on these rights to a wide range of actors including the World Bank, various UN and other inter-governmental bodies, and numerous governments and NGOs in countries all over the world. Experts who reviewed India’s scoring points were Venkatesh Nayak and Anjali Bhardwaj for India and members of Commonwealth Human Rights Initiatives (CHRI), which works to raise public awareness of RTI amongst people and communities.
Some of the indicators amongst many others that favoured India were: “Right to information has been recognised as constitutional by the Indian Supreme Court on numerous occasions; information can be sought in writing or electronically or orally with a minimum of required procedure; it is available for the illiterate; for the disabled; for those below the poverty line; there is a mandatory public interest override so that information must be disclosed where this is in the overall public interest, even if this may harm a protected interest.”
In the comments, Venkatesh Nayak and Anjali Bharadwaj have made the following observations which give a balanced overview of the RTI Act in India: “India has long been recognised as one of the most advanced countries in the world when it comes to access to information, but its failure to top this ranking is demonstrative that global standards of the right to access have advanced considerably since India’s law was first passed. This is not to say that India's legal framework is bad.
“As this score indicates, it remains one of the top countries in the world, but there are several problems with India's access regime. Chief among these are the blanket exceptions in Schedule 2 for various security, intelligence, research and economic institutes. Instead of such broad and sweeping exclusions, these interests should be protected by individual and harm-tested exceptions. The Indian legal framework also does not allow access to information held by private entities which perform a public function, and several of the law’s exclusions, including for information received in confidence from a foreign government, cabinet papers and parliamentary privilege, are also problematic”.
As for the USA, the leading country of the world, expert observations were: “Overall, the USA is a good example of a country where practice outstrips the legislative framework, and it is quite possible that this score undervalues the true openness of the United States government. Nonetheless, there are significant problems with USA’s access regime which negatively impact the right to information in that country. For instance, exceptions within the law are in many instances not harm-tested and there is only a very limited public interest override. The United States also lacks a specialised appeals body and, while American courts have been somewhat good in defending the right to information, they cannot do the job as effectively or expeditiously as an independent appeals body.”
Pakistan, which implemented the law in 2002 is ranked 66th. According to an article based on this study in International The News of Pakistan, “Pakistan is among the last 20 countries in the Global Right to Information (RTI) rating, ranking 72 out of a total of 90 countries surveyed, with neighbouring India coming in at third place and other countries in the region, such as Nepal and Bangladesh, also doing exponentially better than Pakistan. Even Mexico, otherwise considered very hostile to journalists, has been ranked seventh while Ethiopia, another country described unsafe for journalists, has earned the tenth position. Yemen too boasts of more liberal access to information than Pakistan, ranking 20th on the index.
“Citizens’ right to information is also a fundamental human right affirmed in the Universal Declaration of Human Rights. However, here in Pakistan, Sherry Rehman’s Right to Information Act has been floating around from one standing committee to the next for the last few years, with no logical end in sight. This is unfortunate, given that a working right to information law could enable people to ask important questions about the government and rightly unearth fraud, corruption and poor governance. Legislation on the right to information is part of the fundamental task of redistributing power in any democratic framework. While other countries in the region are redefining and reinventing vibrant forms of democratic participation, Pakistan keeps moving further back in time, incrementally isolating its citizens from the processes and practices of governance. This must change.”
Scores of some important countries are: Germany-54; Russia- 60; Japan-67; China-72; Canada-79; Australia-84; USA-89; and UK-97.
For those complaining about the power of the RTI Act in India, this would not only be an eye-opener but should inspire us to use it effectively and in large numbers.
(Vinita Deshmukh is the consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte. She can be reached at [email protected].)
India has one of the largest proven reserves of coal, but we are still forced to import the mineral instead of achieving production from indigenous sources. Surely this can be avoided
In the last few days more reports have appeared in the press that confirm public suspicion that, prima facie, some of the allottees of coal blocks between 2006 and 2009 were indeed given away these blocks due to undue favours. The Central Bureau of Investigation (CBI) probes are continuing.
Media has faithfully reported SEBI’s decision to change F&O eligibility criteria as a move to curb manipulation. But nobody has asked what was NSE doing all this while? Moneylife has highlighted brazen manipulation in creating the F&O list several times in the past
On Tuesday market regulator Securities and Exchange Board of India (SEBI) announced changes in the benchmarks for scrips to be eligible for trading in the derivatives or futures & options (F&O) segment. As a result, 51 stocks have been dropped from the F&O list. Every single media outlet reported this event as a simple regulatory move to curb market manipulation. None of them have asked what it says about the role of the stock exchanges, which have the primary responsibility of curbing manipulation. The fact is, SEBI’s move is really a slap on the face of National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), both of which have been in an unhealthy competition to boost volumes at any cost with the NSE, a private entity running a monopoly public utility, leading the way in creating frothy volumes to keep playing the “valuation game”.
Even as SEBI has stepped in to change the eligibility criteria for F&O nobody seems to have gone into what is, on paper, the role and responsibility of the stock exchanges. Indeed, in a supreme irony, while SEBI’s move is designed at checking manipulation by doing away with illiquid stocks, the bourses have either encouraged manipulation or turned a benign eye towards them.
According to the new norms, scrips with a minimum trading volume of Rs10 lakh and market-wide position limit (MWPL) or market capitalisation of Rs300 crore would be eligible for entry into the F&O segment, SEBI said in a circular. From now on the minimum Median Quarter Sigma Order Size (MQSOS), which indicate liquidity or order size in a scrip, has been revised to Rs10 lakh, from Rs5 lakh at present, for it to be included in the F&O segment. Scrips which fail to maintain a minimum MWPL requirement of Rs200 crore would cease to be in the F&O segment. Earlier this limit was a mere Rs60 crore. The scrip would exit the derivative segment if MQSOS falls below Rs5 lakh. Earlier this limit was only Rs2 lakh.
How lax were the earlier norms? Currently, 220 scrips trade in the F&O segment in NSE. After the new norms, more than half will have to be dropped.
This is not a surprise for us. Our columnists R Balakrishnan and Sucheta Dalal and readers Sham Shekar and Hemant Gupta and also this have pointed out how the eligibility criteria for F&O list is so flawed that a host of dubious stocks have found easy entry into them. We have heard of promoters and large speculators bragging that they know how to get a stock included in F&O.
As Ms Dalal wrote “From time to time, the occasional analyst or trader has dared to talk about the dubious quality of several stocks that have been admitted to the Futures & Options (F&O) segment. The inclusion triggers frenzied speculation, which also impacts the underlying cash prices of these scrips. Who chooses these stocks? And, if there is a statistical rationale to the selection, why isn’t it being re-examined to eliminate shares that represent doubtful corporate antecedents? Stock exchanges happily disclaim any responsibility—they say that SEBI chose to take away their decision-making power in this regard.”
Earlier, R Balakrishnan had written that “price manipulation starts with the lack of application of mind by the exchanges while adding stocks to the list of Futures & Options (F&O). When a stock with a small free float is included in the F&O list, someone with deep enough pockets can take it on a one-way ride. Regular punters who think that the stock is genuinely overvalued will come in and go short on the futures. Those with money can squeeze the shorts very easily and the stock can shoot up further. Since a majority of the stocks in the current F&O list should not have been there, you can imagine the magnitude of the problem…
“Today, the futures prices often move the prices of underlying shares, because many stocks in the F&O segment often have such poor liquidity that you cannot buy or sell even a few thousand shares without impacting the price. The other strange thing is that we have seen even newly listed companies being included in the list of stocks that forms a part of the F&O list. Of course, brokers love the current system as much as the NSE, since most run a casino-type operation where the staple is intraday trades from habitual die-hard clients, proprietary trades by the brokers themselves—and retail punters dealing in small lots in F&O… It is also common for most businessmen to have their ‘house’ broker “make a market” in their company’s stock futures and facilitate benami trades to help the promoter… SEBI should step in and clean the mess. The F&O list should include only stocks with a 5-10 year history, free float of at least 40% of paid-up capital and a minimum of 100,000 shareholders. Also, it has to ensure that there is a thriving and efficient stock-lending mechanism for F&O stocks.”
Hemant Gupta a high net worth investor who knows market players very well corroborated Mr Balakrishnan’s comments with this stinging example. “Ispat Industries has recently been included in F&O category. Almost everyone in India will agree that few companies match the wretched track record of this company. At a time, when the steel industry was witnessing highest buoyancy, Ispat was still not showing profits. There have been several allegations about diversion of funds by promoters and inflation of project costs. Their loss-making record is a pointer in that direction. There are whispers in the market about cash sales as well. I agree that liquidity/floating stock should be a major criterion for eligibility in F&O section. However, should it be the only criterion? Is it not the moral duty of decision-making authorities to give some weightage to promoters’ or company’s track record?
It appears that SEBI is intent on encouraging speculation and protecting investors from fraudulent promoters (through pre-emptive measures) is never a priority. Could there be a bigger travesty? If a small-cap (or any company listed on the BSE) company wants to list on the NSE, it must have a two-year dividend-payment record. NSE has refused to list several companies that have paid one dividend even if they are willing to declare an interim dividend for the next year to meet the two-dividend criterion. Does this mean that the bourse believes that big is honest and small is dishonest?
Worryingly, there is more to this than meets the eye. Bringing strange new scrips into the F&O segment appears to be a big scam. It was common knowledge in the stock market since September 2007 that Ispat will come in F&O when share price was hardly Rs15. I had dismissed such talks as implausible. Does this mean that there are hidden hands working at getting particular scrips transferred to F&O after a good two-three-month interval to allow knowledgeable people to buy low and make a killing? The F&O inclusion by SEBI needs investigation.”