BOiC’s legality may be subjected to SC scrutiny

Council: The National Council, yesterday, resolved to seek the Supreme Court’s opinion over Business Opportunity Information Centre’s (BOiC) legality, but only after submitting the issue to His Majesty the King, as per the procedure outlined in the Constitution.

Through a majority vote, the Council adopted the special committee’s recommendation to seek the opinion of the Supreme Court, and hence submit the issue to His Majesty the King to decide.

Presenting a report on BOiC, special committee’s chairman, Dasho Karma Y Raydi, expressed concerns over the legality of establishing BOiC outside the civil service.

Members also felt that if the establishment of such agencies went unchecked, it might set a bad precedence and negatively impact the future of democracy in the country.

As per the Council’s interpretation, the government is not arbitrarily authorised to establish BOiC as it contravenes certain provisions of the Civil Service Act 2010 and the Financial Services Act 2011.

The special committee submitted that, based on these provisions, it was clear that the government was authorised to create or abolish divisions and departments under the ministries, but if a component of the civil service was to be de-linked, it must be approved by Parliament.

“It is obvious that, if the approval of Parliament is required to separate an agency or professional group from the civil service, the creation of new institutions outside the civil service would require the parliament’s approval,” the report stated.

The Constitution and the Civil Service Act provides a legal basis for the government to approve the establishment of BOiC as a time bound autonomous agency “in the economic affairs ministry”, the committee submitted. 

“If the BOiC was a civil service agency covered by the Civil Service Act, an agency “in the economic affairs ministry” would mean an agency within the civil service staffed by civil servants,” stated the report.

However, members argued that, on implementation, BOiC was established as a non-civil service office, employing staff that resigned from the civil service or corporate organisations.

Since the legality issue came up, some members also argued that, as BOiC provides funds and loans to people, it has to obtain a financial institute license and be governed by the Financial Service Act.  The eligibility and interest rates, members said, should be dictated by the monetary policy of the central bank and not the government.  With the money being channeled through the Bhutan Development Bank ltd, the BOiC does not offer financial services directly.  However, members argued that the funds were owned by the centre and all loan appraisals and approvals, which are key elements of the banking business, were done by the centre.

Last June, during a question hour session, the Council questioned the Prime Minister on the legality of BOiC.   The Prime Minister then said that if BOiC was illegal, he was ready to close it; but in defense referred to the creation of Agency for Promotion of Indigenous Crafts (APIC), Royal Education Council, and Royal University of Bhutan under an executive order during the previous government’s tenure.

The Prime Minister had also asked the council to justify how the government had breached existing legislations in establishing BOiC.

During the 14th session last December, the Council recommended the government to urgently take measures to legitimise BOiC and APIC, so that such agencies are established only after Parliament’s approval in future.  Besides, the Council had also recommended the government to ensure that its public policy decisions were backed by an Act.

As a follow up to the resolutions of the 14th session, the Council was informed that the government sought legal opinion from the Office of the Attorney General (OAG) on the establishment of the BOiC.   On receiving the legal opinion, if a bill was required, the government stated that it would draft one and table in the Parliament.

However, members said it has been almost a year since the council had not heard of the OAG’s opinion on BoiC’s establishment from the government, and that a mere interpretation of law should not take that long.

BOiC was established, following an executive order in December 2013 to implement Nu 1.9B of the Economic Stimulus Plan, by providing concessional loans to entrepreneurs to create employment, generate exports and substitute imports.

Members said such establishments, if not intervened, could set a precedence, with every new government creating a new institution to create jobs for its supporters.

Paro’s council member Kaka Tshering, felt that the government should be given some more time to get OAG’s interpretation on the legal aspect, while Zhemgang’s Pema Dakpa said that establishment of the BOiC was not illegal.

Pema Dakpa said the establishment of the centre was part of the government’s economic stimulus plan (ESP) in the budget and appropriation bill of the 11th Plan that the National Council endorsed.

Autonomous agency, as per the definition stated in the Civil Service Act, he said, could be established under three conditions through the Royal Charter or kasho, executive circulars and through an Act passed by Parliament. “It’s just a difference of interpretation,” Pema Dakpa said.

Pema Dakpa added that such misunderstandings arose in the absence of the Delegated Legislation Act, which exists in most countries that covers such issues. “Such misunderstandings are bound to appear in future too, if we don’t have an Act like the delegated legislation,” he said, volunteering to draft the Act if the house feels there was a need for one.

By Kinga Dema

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