Maldives Parliament on Saturday voted to put a cap on the value of monetary compensation the state can award under settlement agreements.
The current government has been obligated to compensate several private companies in massive numbers due to termination of contracts between the parties and the former government. Statistics published by the Finance Ministry show the government has issued over MVR one billion as compensation to parties thus far since it began administration in November 2018.
A resolution was submitted to the parliament by Thulhaadhoo MP Hisaan Hussain that called on the parliament to establish policies that do not burden the state in awarding compensation for terminated contracts. The Public Finance committee reviewed the resolution and forwarded a report to the parliament floor which was approved with 62 members voting in its favor.
The report by the Public Finance Committee recommended to instruct the Finance Ministry to amend the Public Finance regulations to put a cap on the maximum monetary compensation that can be awarded, which would mandate all government entities to abide by the limit. It further recommended to instruct the Attorney General to state the value on agreements with the state.
The report also recommended to instruct the Attorney General to formulate bills on Civil Procedure and the Public Finance Act. If the state is held liable due to the negligence of a government employee, the employee should personally be held accountable for the losses under the Public Finance Act, the recommendation said.
Additional recommendations include instructing the Attorney General's Office to draft a policy under which parties that violate contracts can be held accountable as per the Contracts Act.
President Ibrahim Mohamed Solih's administration has been issuing compensation to parties for violated contracts before the three stages of appellate courts are completed. The compensations are being awarded as damages for contracts terminated by the previous government.
The opposition has been accusing that the government is awarding compensation to companies that are linked to senior officials of the current government. A complaint has been filed at the Anti-Corruption Commission alleging the involvement of corruption in awarding compensations. The case is being investigated by the commission.
