Breaching Consensus, EPFO Appoints Investment Consultant

The secretariat of the CITU has issued the following statement on February 21:

IN an yet another deviation from the practice of arriving at a decision through a process of consensus, the Central Board of Trustee of the Employment Provident Fund, chaired by the labour minister, K Chandra Shekar Rao, decided by majority to appoint M/s Mercer Human Resource Consulting, Mumbai to conduct a study ‘for identifying new avenues for investment of social security funds and to establish a road map for investment after studying national/international best practices’.

This was opposed by the representatives of the CITU, AITUC, HMS, UTUC-LS and the BMS, with the INTUC being the lone supporter of the move from the workers’ side. Such a study will only be an exercise in futility as the EPFO is bound by the guidelines issued by the government of India (read ministry of finance) in all matters of investment. Moreover, the terms of reference to the consultants, inter-alia, include ‘examining the legal issues involved in investment of PF funds in the modern investment instruments’ and ‘to design and develop an institutional and legal framework to facilitate investment of social security fund like PF etc. in multilaterally guaranteed international investment instruments’. These are directed only towards diverting social security fund to the speculative share market and place them at the disposal of international financial agencies.

The EPFO will end up spending a fat sum of over Rs 33 lakh on this score, without any ostensible benefit to the workers of the EPF organisation itself.

The CITU disapproves the manner in which the consensual mode of decision-making process in the CBT has been breached for the second time under UPA governance and urges the minister of labour to uphold the time- honoured tradition of arriving at decisions only through consensus.

 (INN)