Right to Information in Private Sector

Author: Mr. Nitish, UPES, Dehradun.

Introduction 

“A right-based enactment is akin to a welfare measure. [It] should receive a liberal interpretation”.

The Right to Information Act, 2005 (hereinafter RTI Act) was enacted by the parliament of India “to provide for setting out a practical regime of right to information for citizens” and replace the erstwhile Freedom of Information Act, 2002. Under this Act, information can be sought by any citizen from a “public authority”, who is required to dispense it expeditiously within thirty days. The Act also requires every public authority to computerize their records for wide dissemination. Previously, information disclosure in India was restricted by the Official Secrets Act, 1923 and various other special laws, which is relaxed by the new Right to Information Act. This law was passed by Parliament on 15 June 2005 and came fully into force on 13 October 2005. The state-level RTI Acts were first successfully enacted by the state government of Karnataka in 2000, Goa in 1997, Rajasthan in 2000, Tamil Nadu in 2001, Delhi in 2001, Maharashtra in 2002, Assam in 2002, Madhya Pradesh in 2003, Jammu and Kashmir in 2004, and Haryana in 2005.

Freedom of information, defined as the freedom to “seek, receive and impart information and ideas through any media regardless of frontiers”, has received a spectacular legislative response in recent years. As per the global survey, nearly 70 countries had adopted comprehensive Freedom of Information Acts until June 2006.

In this globalization and anti-nationalization era, the involvement of the private bodies in the public activities are vital and to impose accountability through transparency in relation to private as well as public functionaries is inevitable. The promotion of access to Information Act, 2000 of South Africa prepared to accept a healthier experiment by including the private sector in the regime of right to information. However as per the above-mentioned act, if any information with regard to a private body is with the public authority, such information can be accessible or available to disclosure after issuing a notice to the private body. 

Right to Information in Private Bodies

Private bodies were not included in the Act by the Indian legislators directly. In the landmark decision of Sarbajit Roy v. Delhi Electricity Regulatory Commission, the Central Information Commission also reaffirmed that privatized public utility companies continue to be within the RTI Act, notwithstanding their privatization. The common misconception that has been raised presently is that only entities and organizations which are substantially aided or funded by the Government are covered under the RTI Act but the fact is that private entities are covered under the RTI Act irrespective of whether they are substantially aided or funded by the Government.

Private Entities are not covered under Sec 2(a) of the Act

As per Section 2(a), “appropriate Government” refers to a public authority which is established, constituted, owned, controlled or substantially financed by funds provided directly or indirectly—

(i) by the Central Government or the Union territory administration,

(ii) by the State Government,

But Private Entities are covered under section 2(f) of the Act

As per Section 2 (f) “information” means any material in any form, including records, documents, memos, e-mails, opinions, advice, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force;

Also, Section 8 (j) is relevant here which provides that the information which cannot be denied to the Parliament or a State Legislature shall not be denied to any person. To summarize the argument/point of view:

• Private Entities are not covered under Section 2 (a) of the Act.
• Private Entities are covered under Section 2 (f) of the Act.
• With reference to Section 8 (j) of the Act, one can reasonably infer and conclude that: Provided that the information which cannot be denied to the Public Authority with which the Private Entity is registered shall not be denied to any person.

Hence, Private Entities are covered under the RTI Act through the Public Authority with which they are registered. It becomes imperative to find the public authority with which the particular private entity has registered itself. For example, Co-operative Societies register themselves through Deputy Registrar of Co-operative Society’s and Banks through the Reserve Bank of India M.M.Ansari Information Commissioner at the Central Information Commission told a national daily that as long as these companies reported to a regulator or a government department, they were within the purview of the law.

The commission said that the companies would not have to appoint information officers to deal with the right to information demands, unlike the government entities. Applicants shall route their requests through the relevant agency. Information on telecom companies such as Bharti Airtel, the largest mobile telephony firm, could be accessed through the Telecom Regulatory Authority of India for banks through the Reserve Bank of India; and on brokerages and foreign investors active in stock markets from the Securities and Exchange Board of India.

“Applicants have every right to seek information on a private company even though it is in the private sector if it reports to a government body,” said Ansari. It was also added by him that only applications that served public interest would be dealt with, not those that sought to erode a company’s competitive position. For instance, any citizen can ask a Cola company for details on how much water is used and where the water came from, but not the formula of its fizzy drink. If there is any difference of opinion on what constitutes public interest and what doesn’t, the commission will arbitrate and decide.

According to a number of authoritative sources, “the act is under-utilized when it comes to gathering information on the private sector, but it does have a provision for seeking information on the corporate sector”.

Private Sector & The Purview of RTI: Detailed Analysis

While the Right to Information Act states that only those private organizations which have “substantial” funding from the government come under the purview of the RTI Act, in cases where these entities are in partnership with the government, it is possible to get necessary information out of them. With municipal corporations, state and central governments increasingly opting for Public-Private Partnerships (PPP), transparency could take a beating, as private organizations have been given an opportunity to duck under the Right to Information Act. The Act says that only if private organizations are “substantially” funded then they come under the purview of the public domain. But the question about the authority which is going to make decisions regarding “substantial funding” remains unanswered. Benefitting from this loophole, the private bodies take cover and refuse to give information to the person or group.

A sterling case is that of the Ideal Road Builders (IRB), a private agency that collects toll fees from most of the highways in Maharashtra, including the Pune-Mumbai Expressway. It is impossible to procure information regarding the data of toll collection. However, in such cases, since their partnership is with a government body, a citizen can get access to such information from the government organization. Strangely, the Maharashtra State Road Development Corporation (MSRDC), the government body in this case which is mandated to monitor the toll collection itself has not monitored the revenues of the IRB despite appointing an independent engineering consultant, STUP Consultants Pvt. Ltd. However, citizens demanded this information under RTI Act; and thereby the MSRDC was compelled to request the IRB to send the data of toll collection, year-wise. One of the officials confessed that they had only recently asked the IRB to supply information due to the pressure of RTI queries which was previously untouched.

Similarly, Metros that are being “forced” upon citizens in several towns and cities across the country, without proper planning, are mostly constructed by the Delhi Metro Rail Corporation (DMRC). Here too, the DMRC is a private body and any query under RTI is denied. In the case of the Pune Metro, the DMRC has disastrously planned the metro and submitted a shoddy and superficial Detailed Project Report (DPR). Despite the project report not satisfying the Pune Municipal Corporation’s (PMC) terms of reference and is not abiding by the central government guidelines while making the DPR, the PMC’s general body and the administration have blindly passed the project. It now lies with the state government, which failed to allot finance for it in the current budget. The scandal of this Rs10, 000-odd crores’ infrastructure that is going to add to the chaos of the already congested roads in Pune and become a heavy tax burden for citizens for many years, came to light due to the RTI invoked at the PMC. Thus, in private-public partnerships, one can get access to public documents by putting a query to the ‘public partner’.

The key approach and philosophy of the RTI Act appear to be that since the State acts on behalf of the citizens, wherever the State gives money, the citizen has a right to know (right to information). In my opinion, if the money given for the running expenses is over either 20% of the running expenses or Rs. 1 Crore, the body should be considered as receiving ‘substantial finance’ and is covered in the definition of a ‘public authority’.

Private Sector Companies with minor Government stake under RTI: High Court

The Delhi High Court said that even those companies in which the government has a minority stake can be brought under the purview of the Right to Information Act and declared National Agricultural Cooperative Federation of India Ltd (NAFED) as a public authority. Interpreting the Act, Justice S. Muralidhar said there is no need to have deep or pervasive government control over an institution to bring it under the ambit of the transparency law.

“The absence of an adjective like deep or pervasive qualifying the word controlled in the RTI Act means that any control over the body by the central government will suffice to make it a public authority,” the court said adding “a controlling interest through shareholding does not necessarily mean majority shareholding.”

Issues Involved in Extension of Right to Information Laws to the Private Sector

If the information accessed from a private body reveals wrongdoing, it indicates that an obligation is imposed on the private body to fix the problem.  For this reason, the private sector may resist transparency beyond a certain point to preserve its repute in the market. Extension of the right to information laws can increase the costs of collection and provision of information. This is one important criticism leveled against this extension issue. 

Conclusion

I would like to conclude this article by suggesting some recommendations in favor of implementing or extending the scope of the right to information laws in the private sector. The competent authorities need to make specific rules to facilitate the seeking of information from private bodies by the people. The rules must clearly lay down the obligations of the concerned public authorities and private bodies, and specify the procedures that need to be followed to process applications demanding information from private bodies under section 2(f)

Appropriate governments should periodically inform the private sector about their obligations under section 2(f) of the RTI Act, as most of them are unaware that they are covered by the act. The appropriate governments should also bring out a guide indicating the type of information that can be accessed from different private bodies under various provisions of law. This would greatly help the public in using the RTI Act to access information from the private sector, thereby significantly increasing their accountability.

With an expansion in the public sector, it is undertaking many public functions that were conventionally performed by the government.  This change has occurred due to rapid privatization,  deregulation, and economic globalization. As a result, a substantial amount of information about public functions, which was previously in the possession of governments,  now belongs to the private sector.  Information related to private banks, telecommunication companies, hospitals, and universities can be considered as an example. 

The private sector from the  RTI laws effectively means that individuals can no longer access information from these important sources.

Public demand for expanding RTI law to the private sector is increasing because this expansion of the private sector has put much information outside the scope of the law introduced in 2005. Therefore, a need is being felt to bring in more private organizations under the purview of the RTI  law, particularly those involved in building and maintaining hospitals, schools, leisure, and sports trusts. The extension of the right to information laws to the private sector is necessary to supplement the disclosure regimes for improving their effectiveness.