Divi Neguma: A community-based development intervention

Are rural agriculture and fishery communities excluded?

The Divi Neguma Act which was certified into law on 11 January 2013 and published in the Gazette of the same day is designed to promote a development intervention based on the community. The Act creates two basic institutions at the community level (see Organigram of Divi Neguma). In Part II of the Act sections 9 to 14, it creates the Divi Neguma Community Based Organisation. By Part VI, sections 25 to 28 the Divi Neguma Community Based Banks are created.

Community is defined by the Interpretation Section of the Act, Section 45, as follows: ‘community’ means plantation, urban or industrial sectors of the public. It is an accepted general principle in the law relating to the Interpretation of Statutes that when the word ‘means’ is used in describing what an entity is, it limits the application of the meaning to the exact same words that follow. In other words the use of the ‘means’ is a limitation of a definition. It excludes the inclusion of any other entity into the category. On the contrary, when the word ‘includes’ is used, it is taken to mean that nothing is excluded, the entities that follow the word ‘includes’ and as well as other entities of the same or generic type can be included.

The word ‘means’ limits the class of entities in the category while the word ‘includes’ expands the class. The dictionary meaning of ‘mean’ is ‘to have such a meaning’. This is consistent with the interpretation that no other thing can be within that meaning, other than what is expressly provided for. ‘Include,’ according to the dictionary, is the opposite of ‘exclude’. Exclude in the dictionary is given to mean ‘to deliberately not include’.

Stroud’s Legal Dictionary is even more definite: ‘the use of the word “means” is a hard and fast definition and no other meaning can be assigned to the expression than what is put down in the definition,’ quoting Master of the Rolls, Lord Esher in Gough v. Gough (1891 2 QB 85). On use of the word ‘include,’ Stroud quotes a judgment in R. v. Kershaw (26LJMC) 19 – “‘include’ is a phase of extension and not of a restrictive definition”. Advocate E.B. Wickramanayake, in his ‘Legal Dictionary for Ceylon’ (1948) quotes a 4 N.L.R. 12, case which held that the words ‘shall include’ in a definition clause mean ‘shall have the following meanings in addition to its proper meanings’. Osborn’s Concise Law Dictionary (1947) quotes a Latin maxim – ‘Inclusio unius est exclusio alterius’: ‘the inclusion of one is the exclusion of another’.

Effect of defining community

If these principles of interpretation are applied to the definition of ‘community’ in Section 45, what is the effect? The opposite correlative of what has been expressly included in Section 45, i.e. of the ‘plantation sector’ – would be people engaged in non-plantation small-scale agriculture. The opposite correlative of the ‘urban sector’ is the village or rural sector. The opposite correlative of ‘industrial sector’ would be the agricultural and fisheries sectors.

Since the ‘plantation’ community has been expressly referred to, it would indicate that the non-plantation agricultural and fisheries communities are not included. Does this mean that the non small-scale agriculture sector, the villages and rural areas and the small-scale fishing sector are those which the Divi Neguma Act does not apply, due to the restrictive definition of ‘community’?

This issue is a matter which is bound to cause controversy, more so due to the reason that the Divi Neguma Bill gazetted on 27 July 2012 did not have a definition of ‘community’. This seems to have been introduced at the Committee stage of the bill being debated in Parliament. When the Supreme Court considered the constitutionality of the Bill, this definition would not have been there. One wonders what the independent highest Court would have thought on the constitutionality of a law which, in its Preamble purports to “alleviate poverty… ensure social equity… improve the family, group, and community centred livelihood development activities,” by definition leaves out 80% of the population living in rural areas engaged in subsistence farming and fishery?

The introduction of this definition at the Committee stage in Parliament means it must necessarily been done deliberately with some specific purpose. Whether it was to ensure the non applicability of the Divi Neguma community-based development process to non-plantation agricultural groups, the small-scale fisheries sector, the villages and rural areas, or just some careless unprofessional and irresponsible drafting, which we have sadly seen in many instances in the recent past, is the moot point. Clearly the will of the people, as of now, manifested in legislation enacted by Parliament, is that Divi Neguma will not apply in rural agricultural and fishery communities.

This matter will become relevant when the effect of Part X of the Divi Neguma Act is enforced. Section 44 in Part X provides that all activities of the Commissioner General of Samurdhi Development Authority shall continue to be carried out under the Divi Neguma act. All assets of the Samurdhi Authority, the Southern Development Authority and the Udarata Development Authority, will according to the Divi Neguma act vest in and be deemed to be property of the Government.

What if a non-plantation small-scale agricultural group, say a community of rice farmers, a Govi Samithiya, or a fisheries community, a Dheewara Samithiya, in a rural or village are, challenges this takeover of Samurdhi Authority, Southern Development Authority or Uda Rata Development Authority assets in their area, by the Divi Neguma Department, before the Judiciary, on the grounds that the Divi Neguma ct , the enabling law, by its very definition of ‘community’ does not and cannot apply to non-plantation, small-scale agriculture and small scale fisheries groups in rural areas and village areas? The Court of Law will have to take a decision on this interpretation.

Section 48 of the Divi Neguma provides that ‘in the event of any “inconsistency” between the Sinhala and Tamil texts of the Act, the Sinhala text shall prevail’. There is no inconsistency here, but out of curiosity I looked at the Sinhala original of the Act. Section 47 provides, inter alia, ‘Prajawa (community) yannenn Wathu (plantation), Naagarika (urban) ho (or) Karmantha (industrial) ahsritha jana kotas (sectors of the public) adahas way.’ The operative words are “yannen… adahas way”.

Malalasekera’s English Sinhala Dictionary does not provide a translation for ‘means’ in this context. However, it provides an equivalent word for ‘includes,’ which is ‘athulath, adangu’. Therefore the Sinhala for ‘includes’ is definitely not ‘yannenn’. Meanwhile the Madura Online Dictionary translates ‘means’ as ‘adahas karanawa, hangenawa’… It can therefore be argued that ‘yannen....adahas way’ translates into Sinhala as ‘means’. Or legally, Sinhala being the original, ‘yannen… adahas way’ in English is ‘means’. This may be of some help to us to conclude that as the word used in the Act is ‘yannen… adahas way’ translates correctly into English as ‘means’.

We therefore have to necessarily deduce that ‘yannen’ in English is translated as ‘means,’ as in reality is provided for in the English translation of the Act No. 1 of 2013. Following this, the legal principles applying to the Interpretation of Statutes, cited above, the restrictive definition, will apply to the interpretation of the word ‘community’ in Act No. 1 of 2013. So all other ‘communities’ other than ‘Plantation, Urban or Industrial’ are excluded from the operation of the Act, i.e. from the Divi Neguma development intervention.

Divi Neguma (D) Organigram

A Divi Neguma (D) Organigram, see illustration, provides the two basic institutions; the act creates at the community (as defined in the act) level. Part II creates the Divi Neguma Community-Based Organisation (CBO). This unit can be for a portion of a Grama Niladhari (GN) division or for a cluster of GNs. The Minister decides this. The act by S.9 says that the beneficiaries will ‘voluntarily’ participate. Interesting that volunteerism is prescribed by statute.

Section 10 and 11 provide for the Objects and Powers of the D-CBO. S.10 subsections (a) to (j) are worded in such a way that all possible functions of government and civil society are covered. It is telling that the traditional ‘omnibus clause’ to catch up anything left out is not enacted – there is no need, everything under the sun is included in the D-CBO’s objects. Re Sec. 10 the powers of D-CBO, again is wide ranging from social security, to mobilisation, to finance, to collect savings, obtain grants and loans execute contracts marketing, providing services, own property, etc. Again no omnibus clause, it is redundant! The same would apply to Sec. 12 on functions of D-CBO. Sec.13 provides that funds of the D-CBO will be deposited in the D-Community Bank (Com Bk.)

Part III creates the D-Regional Organisation (RO). Sec. 15 provides that not less than five D-CBOs will constitute a D-RO, and their function is to ‘supervise, monitor and evaluate’ the D-CBO. A D-RO will consist of (Sec. 15(2)) - Chairperson of D-CBO, D-Dept. officer in charge of region, Senior Manager of D-Com. Bk., three other nominees of DG-D involved in development activities. Sec15 (3) provides Chairperson and Secretary of D-RO to be elected. Sec.15 (4) says that the Divisional Secretary (DS) of the relevant Division will be an advisor. Sec. 16, 17 and 18 provides for objects, powers and functions, of D-RO as wide ranging as possible. Part IV creates the D- District Committee (D-Com). It consists of all chairpersons and secretaries of D-RO, senior managers of all D-Com. Bk’s, the relevant officer of the D-Dept., three other persons nominated by DG-D.

Sec. 20, 21 and 22 provide for objects, powers and functions of DD-Com. The fact that they are wide ranging need not be laboured. Part V provides for D- National Federation (D-NF). Sec. 23 provides that it consists of representatives of all D-CBO. The minister will preside over meetings. Sec. 24 provides that national policy and planning matters relating to D-process is the mandate of D-NF.

Sec. 7 creates the D-National Council. Consisting of the DG-D, who will chair, the Director of the Department in charge of D-CBO, the Director of the Department in charge of livelihood, the secretary to the Treasury or his representative, the secretary to the Ministry of Divi Neguma and five other persons nominated by the minister. Sec.8 (1) empowers the minister to create administrative zones, consisting of two or more existing administrative districts.



(The writer is a lawyer, who has over 30 years experience as a CEO in both government and private sectors. He retired from the office of Secretary, Ministry of Finance and currently is the Managing Director of the Sri Lanka Business Development Centre.)



Sec.8 (2) the cabinet of ministers to appoint a head for such administrative zones, who will have the similar status to the head of a government department. This structure is similar to the one adopted by the Sri Lanka National Federation of Youth Clubs, with the addition that the youth clubs are federated at the provincial level too. It is not a modern nuclear ‘flat’ organisation, decision making and implementation will be slow and convoluted. The youth clubs have a built in dynamism due to the ‘fire’ of the youth, but D-D-CBO will consist of more mature participants.

The second institutional entity, created by Act No. 1 of 2013 is the D-Com. Bk. Part VI, by Sec. 25 provides that a D-Com.Bk for one or more D-CBOs to promote micro finance (MF) among D-beneficiaries. The minister will determine registration procedure and all other matters. The D-Com. Bk. is body corporate, a legal person with perpetual succession. Sec. 26, 27 and 28 provide for objects, powers and functions of D-Com.Bk. The whole gamut of financial, services is provided for, including accepting deposits from beneficiaries and members, also disbursing government subsidies.

Part VII creates the D- Com.Bk. Societies (Socs), Sec. 29 provides that a D-Com Bk. Soc. will consist of all D-Com Bks. within a D-RO. The intention is to establish a viable micro financial banking network. The D-Com Bk. Socs: will also be legal persons. Sec. 30, 31 and 32, provide for the objects, functions and powers of the D-Com, Bk. Socs. again covering the whole gamut of credit plus micro financial services.

Sec 32 provides that Board of Management of D-Com.Bk. and D-Com. Bk. Socs. will consist of DG – Dept. of Divi Neguma, representative of Secretary to the Treasury, the Director Banking of Divi Neguma Dept., the Secretary to the Divi Neguma Ministry, three persons appointed by the minister.

Sec. 34 creates the D-Com. Based Banking Union, of all D-Com. Bk. and DF-Com Bk. Socs: This is a flatter organisation that the D-CBO. Sec. 35 removes the Divi Neguma financial service sector from the supervision of the Monetary Board of the Central Bank of Sri Lanka by stating that the Banking Act and the Finance Business Act will not apply. This ensures that there will be no independent prudential regulation of the D-financial services sector at all. A very high risk situation.

The Divi Neguma Department is created by Part I of the Act. Part VIII creates the D- Development Fund (DDF) by Sec. 36. All funds will be credited to the Consolidated Fund and voted by Parliament to the DDF. Sec. 37 creates the D-Revolving Fund which appropriates all funds lying to the credit of the Samurdhi Authority, the Southern Development Authority and the Uda Rata Development Authority.

Part IX of the Act, by Sec. 38 provides that District Secretaries are Additional Directors General of the D-Department. Sec. 39 provides for the secrecy clause, which has been criticised, but defended on the ground that financial information is being handled, which is confidential. Sec. 40 empowers the D-Dept. to call for information and also provides that such information will be privileged. Sec. 41 creates offences under the act. Sec. 42 empowers the minister to make regulations, which must be placed before Parliament and, if not approved within three months, are null and void, but all steps taken in the interim are valid. Part X Repeals and Savings and the transfer of assets, employees, etc. of Samurdhi, Southern Development and Uda Rata Development to Divi Neguma. Sec. 46 provides that this act will prevail over all other written laws.

Sec. 47 is the interpretation section. The issue on the definition of ‘community’ has already been dealt with. The definition of micro finance in this section is also different from the definition of micro finance in the proposed draft Micro Finance Bill. Since Divi Neguma is now law, the definition in the micro finance bill will have to be amended, but that definition is specific to the design of the prudential regulatory system provided by the drat Micro Finance Bill, the matter is somewhat complicated, but will have to be resolved, since the Government seems to be working at cross purposes. Sec. 48 provides that the Sinhala Act will prevail in case of inconsistencies.

Big Bang

The Divi Neguma Act provides a wide ranging structure for development of the specified communities. It is in effect a Big Bang, and not incremental. The whole spectrum of human, social and economic development is covered. There is the power to create new administrative units. The existing district structure is amalgamated into the Divi Neguma structure by the divisional secretaries and the district secretaries being given roles in the D-structure.

It is noteworthy that the provincial structure is not incorporated except at the divisional level. These are some of the issues which the Supreme Court raised when the Bill was before them. The consent of the provincial councils and the two thirds majority of Parliament were required due to those issues. This is probably one of the most ambitious attempts at grass root development which has even been attempted in this country. The span of control will be challenging. Even the Janasaviya program was phased in, division by division, sequentially. This is a humongous, one-off, all-island attempt.

The experience of rural development societies, community centres, young farmers clubs, women’s organisations, youth clubs, and gramodaya mandalayas in the Government sector and non-government players like Sarvodaya, Sewa Lanka, the Hambantota Women’s Development Federation, the Wilpotha Kantha Ithurum Parishramaya, YMCA Batticaloa and other civil society organisations which partnered the Janasaviya Trust Fund (JTF) and thousands of micro finance institutions have indicated a path of development, with many pitfalls. The role of existing civil society organisations must be recognised and they be provided the space to operate in concert with the Divi Neguma process. A marginalisation must be avoided at all costs.

Inclusivity

In other words the Divi Neguma intervention must be ‘inclusive’. Even indigenous organisations which successfully mobilise people, like the death aid societies (marana adhara samithi) and business groups (viyaparika samithi, velanada mandalayas and chambers of commerce), all religious/faith organisations (sasana aarakshaka samithi, panasal dayaka sabhawa, etc.) Sports clubs, service organisations (Rotary and Lions school SDS, OBA, OGA, etc.) must be included. There should be no exclusion and also no coercion to participate; they should be given the free choice and incentives to participate. The Divi Neguma Development Fund and the Revolving Fund can be utilised to bring them into the fold and to use their capacities to strengthen the Divi Neguma process.

The Divi Neguma Act itself has some design and inherent weaknesses. These can be addressed. The challenge is daunting. But if it is an inclusive process, leaving nobody out, drawing all the State and civil society players and working in cooperation, the target might be, indeed, achievable. Past experience being built into the process is the critical factor.

As Chairman Mao famously said: “There is nothing new under the sun,” All these interventions have been tried before, in some form, manifestation, or other. The lessons must be learnt, internalised and the mistakes not repeated. Certainly our people deserve the benefit of the fruits of development envisaged by the Divi Neguma process.





(The writer is a lawyer, who has over 30 years experience as a CEO in both government and private sectors. He retired from the office of Secretary, Ministry of Finance and currently is the Managing Director of the Sri Lanka Business Development Centre.)