Last week when the Supreme Court asked the government to go back to Parliament and get its approval for disinvesting HPCL and BPCL, it cited an excerpt from a World Bank publication, The Privatization Challenge, to buttress its verdict. Perhaps, the apex court overlooked that the author, early on in the book, makes a persuasive case arguing the exact opposite. In its 20-page order, the SC devotes almost four pages elaborating on an excerpt it uses from World Bank manager Pierre Guislain’s The Privatization Challenge, published in 1997. The verdict quotes the book’s contents stating that a privatization law ‘‘may have the advantage of mobilizing explicit political support and commitment in favour of privatization.’’ And then uses this to make the point that ‘‘success of the programme (privatization) hinges on among other things a basic consensus among Parliament, government and head of state on the scope and broad lines of the programme.’’ About a hundred pages before this, Guislain deals, in detail, the problems of going to Parliament. ‘‘Members of Parliament are usually neither the best informed nor the best placed to take speedy decisions that privatization operations entail,’’ he writes. And that ‘‘some countries have come to realize these shortcomings and have curtailed the role of Parliament during the implementation phase.’’ With the author clearly gives reasons why governments are known to duck taking Parliamentary assent before embarking on such a programme, this is a point the court apparently glossed over. Instead, it quotes from Guislain’s book (pages 296-297) that ‘‘two different issues have to be addressed: does legislation need to be enacted to authorize or facilitate privatization and if so should this new provision take the form of amendments to the pertinent laws or be grouped together in a specific privatization law?’’ While raising the question, the order does not answer it but further quotes from the book saying that ‘‘if legislation is to be brought for privatization, the same should reflect the broad political lines of the privatization strategy and programme and that it should also endow the government or privatization agency with the required implementation powers and it should avoid restrictions that may unduly tie the hands of the executing agencies and slow down the process.’’ However the overriding factor that should guide any privatization policy is the political consensus, the order maintains. Guslain’s book, however, on page 151 clearly outlines the dangers in subjecting the entire privatization programme to the legislative process. The author, a manager in the Bank’s communications technologies policy division, writes: ‘‘International experience with privatization shows that relations between Parliament and government can be very strained at any stage of the privatization process. A government may legitimately wish to limit recourse to Parliament to what is strictly necessary especially when faced with a a narrow window of opportunity.’’ He then underlines this point: ‘‘As a rule Parliaments will want to retain more control where the law gives a lot of latitude to the government. A law clearly limiting the set of enterprises that can be privatized and the privatization techniques and arrangements that can be used is less likely to contain provisions that allow Parliament to intervene during implementation of the programme.’’ Guislain has also cited examples from various countries where governments have fallen on account of privatization programmes. According to him, the best known example of tension between government and Parliament was probably between the Russian federal government, on the one hand, and the national parliament and some local assemblies on the other. Russia experienced countless skirmishes between government and Parliament which culminated in the overthrow of the Supreme Soviet by force in 1993. But the shutdown of Parliament provided some momentum to the privatization by streamlining of the proess. The author also quotes similar examples from Bulgaria.
