CASE STUDY ON DIRECT RESPONSIBILITY VS. VICARIOUS RESPONSIBILITY.
LESSONS FOR young and even senior BUREAUCRATS AND BUSINESS MANAGERS.
What I write here will apply equally both to private sector and public sector.
PUBLIC SECTOR
Public Sector includes Government Departments, public Corporate bodies, and Companies in which Government or its entities may hold majority shares.
PRIVATE SECTOR
Private Sector includes both closely-held Companies and widely-held Companies. Closely-held Companies include family-Corporate-groups. Widely-held Companies include MNCs and Professionally managed Companies.
I have used the words 'administrators' and 'managers', synonymously to cover both bureaucrats and commercial managers.
Before, proceeding with my analysis, I shall quote the trigger for this post.
Quote from Business Standard. Link to see full report:-
Click to go to Business Standard article
The Comptroller and Auditor General of India, in its report on coal allocation, had said Parakh recommended doing away with the opaque system of allocating blocks through the Screening Committee route. The CAG called him a "whistleblower", saying Parakh highlighted the difference in the cost of coal procured through linkage and those that were mined captively. Today, CAG's whistleblower has become CBI's conspirator.
Another quote from the same article.
...He was, beyond doubt, an extremely upright and honest officer. In fact, he was the first person to have taken a bold stand in favour of auctioning of coal reserves and doing away with the Screening Committee for allocation. ...
We shall take up two more quotes from the side of Mr. Parakh.
Link to see full report: NDTV.Com
...The PM cleared the decision... he is the final decision-maker...
...Even when you do the right things, you are victimised..."
Quotes from elsewhere.
...myself are conspirators, then why did they not think of the Prime Minister as a co-conspirator, then everyone is part of the conspiracy. ...
A bureaucrat's quote.
...Parakh will possibly end up spending his entire pension on fighting the case slapped against him...The underlying lesson for us seem to be to confine ourselves to just pushing files, and avoid any interaction with business representatives, NGOs or other experts to delve deeper into the issues...
...A meeting with anybody who is aggrieved because of a decision does not become a conspiracy. Even if it is a wrong decision it does not become a crime.
I think my decision was fair because both the companies - Neyveli Lignite Corporation and Hindalco - were equally entitled to the block. Hindalco is no less financially or technically strong and both the companies were equally eligible. But Neyvelli as a government company could have been given any other coal block under the government dispensation, whereas Hindalco (as private company) could not be. It could only be given blocks which were earmarked as captive blocks. I don't find any reason to believe that Neyveli has in any manner lost in this case,
ANALYSIS
Managers in key positions are to take decisions all the time. They cannot just push files.
Decision-making includes, making recommendations.
--solely.
--chairperson of decision-making, recommending, committees, work-groups, standing-committees, whatever nomenclature is used.
Managers may make mistakes while making decisions. Erroneous decisions again need further classification into many categories.
Environment-forced decisions.
Decisions arising out of inadequate job knowledge.
Decisions arising out of negligence.
Decisions arising out of fatigue and uncontrollable workload.
So on and so forth.
Another important classification.
Deliberate incorrect decisions, with conscious knowledge of their incorrectness.
Inadvertant incorrect decisions. Managers would not have taken these decisions, had they come to their notice, then and there.
MOST IMPORTANT CATEGORY:
Corrupt decisions.
TWO CATEGORIES OF CORRUPT DECISIONS.
Sole corruption of the decision-maker with help from his colleagues, and subordinates (downward-sharing of spoils).
Participation of the decision-maker in the trickle-down corruption from top-to-bottom.
TWO TYPES OF PARTICIPATION IN CORRUPT DECISION
Active Participation. The decision-maker takes initiative.
Passive Participation. The decision-maker acquiesces, when his area is encroached by others, believing that he was not a part of the scam or scandal.
TWO TYPES OF ACQUIESCIENCE
Acquiescence, when there was a duty to intervene, and assert one's own rights and obligations to discharge duties.
Acquiescence, when there was no duty to intervene.
THIN DIVIDING LINE
Dividing lines (delineations) among the above classifications are very thin. Besides, there is scope for overlapping circles (Venn diagram).
Mr. Parakh was bringing out his memoirs as a book, to serve as a lesson to aspiring bureaucrats.
One blog post will be too long for testing all these criteria in the Parakh-Birla case study.
PRELIMINARY OBSERVATIONs
ybrao a donkey's observation
What is this 'could have been given any other coal block under the government dispensation?' Was the Neyveli Lignite Corporation given any such coal block to compensate for the block diverted to Hindalco? Was Neyveli simply armtwisted to share the coal-block with Hindalco. Did Mr. Parakh and his Screen Committee heard, what Neyveli had to say about the diversion?
It is very clear that injustice was done to a Government Corporation. A Government Corporation is owned by Indian Nation and Indian State. Hindalco is owned by private individuals who do business for profits and build empires, collect huge dividends and bonus shares. Private Sector CEOs squeeze millions as salaries and perquisites from their Companies, whereas public sector CEOs are paid pittances. Parakh can never say that Neyveli and Hindalco are equally meritorious. His logic is outright defective. This gives rise to suspicion of corruption. Only question which will then remain, is whether Coal Minister, PM, PMO, and others who pushed through the proposal have shares in it. It could not have been a sole affair of one Screening Committee chairman! The buck cannot end there.
First-of-all CBI should collect complete evidence to prove under which classification the decision falls. It is not just sufficient to say that there was a criminal conspiracy.
Incorrect decisions do not become crimes. CBI should prove corruption on the part of Mr. Parakh. Else case will go to dogs and CBI will become a laughing stock.
Withdrawing coal intended for a Government Corporation, and alloting it to a Private Company, is sufficient evidence to arouse suspicion. But it will not be suffice to convict Mr. Parakh.
CBI should thoroughly check up whether Mr. Parakh has received any quid pro quo for his decision, whether right or wrong. In India, bribes, kickbacks, and quid pro quo are common, even for taking RIGHT decisions.
CBI should check up whether Mr. Parakh accumulated assets disproportionate to his known sources of income and wealth.
CBI should check up whether Mr. Parakh has stashed any funds abroad in tax-haven islands and countries which allow code-numbered accounts.
CBI may have to track foreign accounts and real-estate deals of all the connected officials in PMO, Coal Ministers from time to time, as well as the Prime Minister himself, even if a formal case is not registered against them. This should be a part of conducting comprehensive inquiries/investigations. No need of registering cases or arresting people, or formally questioning people.
This investigation needs a decade of unwavering, competent, dedicated and hardwork. CBI itself admited before Supreme Court, that CBI lacks independence. Hurrying up things under courts' directions or slowing down under direction from bosses will waste public money, as had happened in case of Bofors Guns case.
About Prime Minister's involvement (as Coal Minister as well as Prime Minister), we have to discuss first-of-all whether he was a part of decision-making or not; whether his responsibility is direct or vicarious.
In other words, we have to write at least ten blog posts here.
