By: Staff Writer
July 06, Colombo (LNW): A sweeping parliamentary investigation has placed the Sri Lanka Bureau of Foreign Employment (SLBFE) under renewed scrutiny over the management of billions of rupees in migrant worker funds, exposing decades of administrative failures that left hundreds of compensation recipients untraced while public money remained locked away.
The inquiry, driven by the Committee on Public Enterprises (COPE), extends beyond the Rs. 5.1 billion Kuwait Compensation Fund to include more than Rs. 18 billion in fixed deposits held by the Bureau, raising broader questions over the stewardship of migrant workers’ money.
Senior Labour Ministry officials said the National People’s Power (NPP) administration intends to appoint a special parliamentary sub-committee to conduct an aggressive audit of the Bureau’s reserves, with particular attention on how dormant funds have been managed over the past three decades.
Central to the investigation is the fate of 948 workers who never received compensation awarded after the 1990 Gulf War. Despite repeated audit observations and Finance Ministry reviews, officials acknowledge that the Bureau failed to establish an organised mechanism to locate eligible recipients once payments stalled.
According to official findings, the absence of reliable identity records, labour documentation and personal files from the early 1990s made verification increasingly difficult as the years passed. Instead of investing in systematic tracing programmes, auditors found that the Bureau retained the money as a capital reserve, allowing interest to accumulate while unresolved claims remained outstanding.
The Auditor General has repeatedly criticised the SLBFE for lacking a structured strategy to identify beneficiaries or their legal heirs, arguing that passive administration effectively prolonged the compensation process indefinitely.
The latest investigation intensified following COPE’s discovery that former Bureau leadership allegedly bypassed Cabinet approval to divert more than Rs. 1.25 billion towards projects considered unrelated to the institution’s core mandate, including promotional ventures such as the “Global Fair.”
Government officials say those findings prompted an immediate review of financial controls and resulted in a decision to freeze discretionary spending that falls outside approved policy objectives.
Rather than continuing to treat the Kuwait Compensation Fund as a dormant financial reserve, the government now plans to channel future earnings into carefully regulated migrant worker welfare initiatives. These include vocational training programmes designed to improve overseas employment prospects and long-term pension schemes aimed at strengthening financial security for returning workers.
Officials stress, however, that outstanding compensation claims will remain subject to legal verification before any permanent reallocation of funds proceeds.
The reforms also align with the government’s wider digital transformation programme under the 2026 Budget. Authorities are integrating legacy migrant worker records into modern electronic databases, creating what officials describe as the first realistic opportunity to reconnect decades-old records with surviving beneficiaries or their descendants.
The Kuwait Compensation Fund traces its origins to the United Nations Compensation Commission, which awarded Sri Lanka approximately US$320 million after nearly 90,000 Sri Lankan workers were repatriated during the 1990 Gulf War. While between 87,000 and 93,872 workers ultimately received compensation, the remaining unresolved cases have become one of the country’s longest-running public accountability issues, now firmly back under the parliamentary spotlight.