2021 Port City Bill

Colombo Port City Economic Commission -An authority without any real authority By Basil Fernando

The Colombo Port City Economic Commission Bill has been passed. However, the Bill that was passed was not what the Government wanted. The decision of the Supreme Court which held that 25 of the proposed Clauses contravened the provisions of the Constitution and that 9 of them require a referendum meant that the Government had to revise the Bill. From a legal point of view, these revisions are of a fundamental nature. Therefore, the Bill that was passed is substantially different to the Bill that the Government wanted to have the consent of the Parliament for.

Perhaps the one issue on which there is general consensus in Sri Lanka is that the country has become a lawless society and that this fact is at the root of all the management problems that the country is faced with.

These substantial alterations are not just a matter of the letter of the law. They have far reaching economic and political consequences. The Government’s design for the original Bill would have been at the request of the investors who wanted certain conditions for engaging in business and bringing in investments to the Port City. The Government originally agreed to these conditions and drafted the original Bill in keeping with these demands. Now, the Government has disappointed the investor or the investors. The conditions that they thought were prerequisite for the security of their investments are no longer available.

Now, besides this disappointment, there is a further factor about the nature of the authority that is the nature of the Commission which was supposed to have all the power to run this City. Because of the intervention of the Supreme Court, the Government had to give some guarantees about who will be appointed to this Commission. That at least five of them will be Sri Lankans has now been agreed upon. This would also mean that at the management level itself there is a conflict between what the investor or the investors wanted and what has now been stipulated upon. That is a major distinction in the design of the management of the City itself. That the investor or the investors are going to be able to dictate their own terms and carry out those terms in the manner that they think fit is now under challenge. That too would be a problem of a very substantial nature.

All of this leads to the kind of authority that the Port City Commission would have in the actual practical administration of the City. If the authority itself cannot function in the manner that the investor or the investors wanted, then there is bound to be conflicts of a very serious nature that would develop from the inception of any attempt to implement this Law.

That brings up the issue as to why the investor or the investors wanted the type of conditions that were included in the original Bill that was presented to the Supreme Court. While there can be many reasons, one important reason is that the investor or the investors have through their previous intelligence gathering and previous knowledge and experience of Sri Lanka become aware that the country’s system of governance is in serious crisis and that the strict enforcement of the laws to guarantee security for investment is not possible in Sri Lanka. This of course does not come as a surprise to anyone.

Perhaps the one issue on which there is general consensus in Sri Lanka is that the country has become a lawless society and that this fact is at the root of all the management problems that the country is faced with. At the very moment when the Law was passed, there was a great conformation of this management failure by way of the spread of Covid-19 throughout the country and the cries of help that are heard from all over the country.

It is in a country like this that this Port authority is to function. It will function within that sea of mismanagement. It is to be a small island within a sea of instability and lawlessness.

The country’s system of management is unable to respond even to such a huge cry for help as it is felt today. It may not be an exaggeration to say that such a. huge cry has never been heard in the recent history of Sri Lanka, despite the fact that the country has gone through very hard times of instability for several decades. At the moment, from every house in Sri Lanka, there is heard, cries of anxiety and in a considerable number of instances, cries arising from the loss of life and the threat of the loss of life.

The management system is in such a crisis that it is unable to prioritize spending in order to deal with the major crisis in the country. In any country, when a crisis reaches this kind of proportion, the entire country will be put on the greatest possible alert and all the expenditure that is necessary will be made and all the pleas will be made to the population itself to contribute as much as possible within their power in order to get over this problem as soon as possible. There are countries which when faced with most desperate situations went on to the extent of contributing by way of the sale of even their very personal belongings like gold and other items to deal with the crisis. However, a Government that is not willing to spend out of its own purse all the necessary resources in order to deal with the crisis cannot demand such sacrifices from the people. That is the extent of the management crisis that exists in Sri Lanka.

It is in a country like this that this Port authority is to function. It will function within that sea of mismanagement. It is to be a small island within a sea of instability and lawlessness.

That brings us to a question about the nature of the authority that could be exercised by the to be established Port authority. It is well known that the development of any city implies a huge increase in crime. A fundamental problem about urbanization is that it brings with its progressive aspects also very negative aspects such as the tendency towards extremely serious crimes particularly relating to finance, trade and other issues which are to be dealt with by the law enforcement authorities. We know that at the moment the country’s law enforcement mechanism which works primarily within the framework of Sri Lanka’s policing system has reached its lowest depth. It is completely unable to manage the situation of crime and the greatest manifestation of this is the much talked of bomb blasts relating to the Easter Sunday attacks in 2019. The talk in every corner is about crime both on a big and small scale.

The strength of Hong Kong is its commitment to the rule of law, in the most meaningful sense of that phrase. That is what Sri Lanka lacks.

It is also well known that the Sri Lankan criminal investigation capacity is at the moment at the lowest level. Due to political reasons of wanting to avoid prosecutions arising from crimes that have been previously investigated, the criminal investigation system has been brought under the most serious undermining that it has ever experienced. With many of the achievements of the system in the past now having been lost with any serious investigator fearing that due to political reasons, he or she could get himself or herself into more serious trouble by conducting investigations into crimes rather than avoiding investigation. Therefore, the question arises as to who will keep the law and order within the Port City. As said before, being a City, it has to be expected that it would bring in among other things, the problems of very serious crimes. Big money always brings in big crimes and big criminals. To bring in very serious crimes without having a criminal investigative capacity and criminal administration capacity is to invite a disaster. What is worse is that it will make the administration by the new Commission almost a very difficult task. Attempting to manage where law enforcement is not possible particularly within an urban context is to pursue an illusion.

Thus, the new Law relating to the Colombo Port City Economic Commission has brought more problems to the Government, to the investor or investors and to the population at large than it could ever contribute to resolve.

Some spokesmen try to compare the proposed Port City to a place like Hong Kong. That reveals that they have no clue about the way Hong Kong is administered. Hong Kong had the same laws that the British introduced over 200 years back. It also has a most independent Judiciary, and a policing system that is capable of dealing with crimes.

Above all, it has the Independent Commission Against Corruption (ICAC), one of foremost anti corruption agencies in the world. It is this legal foundation that has made Hong Kong an investor friendly place. It is the totality of Hong Kong, that attracts investment and not some small ghetto, which is what the proposed Port City is. The strength of Hong Kong is its commitment to the rule of law, in the most meaningful sense of that phrase. That is what Sri Lanka lacks.

Till this problem is resolved, Sri Lanka cannot expect investors to take serious notice of Sri Lanka.

The new Law on the Port City Economic Commission has messed things up even further.

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The risks pertaining to attracting and facilitating black money: Serious concerns linger about new Colombo Port City Law – TISL

The hasty process adopted failed to uphold the right to information of the people.
Parliamentarians were not given adequate time to review the revised version of the Bill.
Establishment and inadequate oversight of offshore banks and companies could lead to Port City attracting money laundering and illicit financial flows.
Lack of public access to beneficial ownership information could lead to Port City becoming a secrecy jurisdiction that provides a safe haven for proceeds of crime.
Sri Lanka faces the risk of being downgraded by the FATF due to the Port City.

On the 20th of May 2021, the Parliament of Sri Lanka passed the Colombo Port City Economic Bill into law. Two days prior to the vote on the Bill, the Speaker of Parliament revealed to the members of Parliament and the general public the determination given by the Supreme Court of the Country with regard to the constitutionality of the Bill. Transparency International Sri Lanka (TISL) was one of the petitioners that had challenged the Port City Bill. While welcoming the determination of the Supreme Court, TISL continues to have serious concerns about the new legislation.

At the outset it should be noted that the manner in which the legislation was rushed through, was an affront to the right to information of the citizens of Sri Lanka. The proposed bill was not gazetted in advance, and there was no opportunity given for public consultation and public review, even after the Supreme Court determination was announced, as the Bill was debated soon after and passed, even amidst the height of the third Covid wave in the country. Such timing of this critical Bill raises the concern as to whether the constitutionally guaranteed fundamental right to information of the people of Sri Lanka was respected in this crucial endeavor to impose a law with such far reaching impact on the country. TISL notes with grave concern that this process did not even provide sufficient time for Sri Lanka’s Members of Parliament to fully review and understand the changes made and to reach an informed decision.

One of the primary concerns that TISL raised through its petition against the Bill, was that the establishment of offshore banks and companies could open pathways for money laundering and illicit financial flows. The Supreme Court determination has eased some of these concerns by expressly stating that The Convention on the Suppression of Terrorist Financing Act No. 25 of 2005, Prevention of Money Laundering Act No. 5 of 2006 and the Financial Transactions Reporting Act No. 6 of 2006 apply within the Area of Authority of the Colombo Port City. However, the Registrar of Companies has limited control over offshore companies, and the Supreme Court has not expressly stated whether the Banking Act would apply to these offshore Banks.

The recently enacted Porty City Bill does not make it mandatory for Companies operating out of the Port City, to disclose beneficial ownership information. Disclosure of information of individuals who ultimately own the companies is paramount to prevent misuse of legal entities for money laundering or terrorist financing. While law enforcement may be able to access such information, the lack of public accessibility would result in minimal scrutiny over such entities by the public, which will lead to many illicit transactions not being apprehended. Publicly accessible beneficial ownership information is not only a best practice, but also allows for the observation of trends and red flags in transactions.

The rise of risks pertaining to attracting and facilitating black money, could also lead to Sri Lanka being downgraded in the Financial Action Task Force (FATF) rankings, which in turn would have a detrimental effect on the country’s ability to obtain foreign aid, loans and lawful investments.

According to the Tax Justice Network, an estimated US$21 TO $32 trillion of private financial wealth is located, untaxed, in secrecy/offshore jurisdictions around the world. These offshore jurisdictions result in corporate tax abuse, private and capital tax evasion as well as cross border illicit financial flows. Targeting the United Nations Special Session of the General Assembly (UNGASS) against Corruption that is scheduled to be held on the 24th of June 2021.

Transparency International (TI) has submitted a public interest petition to UNGASS calling for “an end to the abuse of anonymous companies and other legal vehicles that facilitate cross-border corruption and other crimes”. It urges the United Nations Member States to make firm commitments to create online public registers of the beneficial owners of companies. Following the exposure of Panama Papers and Paradise Papers since 2006, TI expects that identifying the beneficial owners will end secrecy and uncover systemic corruption and legal entities that enable companies around the world to hide proceeds of crimes, launder public funds and evade taxation.

TISL notes with regret that while the world is coming together to redouble its efforts to tackle illicit financial flows through beneficial ownership transparency, Sri Lanka through the passage of the Port City bill, has created a financial hub that falls short of taking sufficient steps to address the issue of illicit financial flows.

26 May 2021

( Statement issued by the Transparency International Sri Lanka Section)

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Namo, Namo, Cheena! – Lucine Rajakarunanayake

The Island cartoon yesterday by Jeffrey Kelaart stuck more than a nail in my heart.

The Ceylon Chamber of Commerce now offers its members the opportunity to purchase AstraZeneca Covid vaccines for Rs, 5,000 each. This is the alarm that most of those, like me, have obtained the first dose of its many weeks, and nearly two months ago, face today.

Are we moving to a huge fraud – a Vaccine Black Market – as the country suffers the swelling spread of the Covid pandemic?

Meanwhile, the GMOA, which has been largely silent on the questionable actions of the government and official health authorities on the Covid issues, has also called for a National Vaccine Strategy in the current crisis. Timely no doubt. An action that should have been thought of by the government, at least when the second wave of the pandemic began last year. What we see today is not any Vaccine Strategy, but a vastly growing Vaccine Fraud – in keeping with the political dominance of the Raja Vasala.

This Vaccine Fraud is the stuff of husbands of Health Power, Ministers of Official Communication, and performers on the political stages of this government. This Vaccine Fraud or Ennath Vanchava will soon dominate the social structure of the country, giving a new meaning to the Saubhagyaye Dekma that is guiding the entire structure of governance today.

With the Colombo Port City Act adopted by a simple majority in parliament, after many items contrary and threatening to the Constitution being suitably altered, thanks to the Supreme Court, we are now in process unveiling the actual politico-economic strategies of this government. A two-day debate for such an important piece of legislation, giving just two days – from the seven days allowed under the law – to file objections in the Supreme Court, and the absence of any wide public discussion and debate on it, shows the government’s overall contempt for democracy.

Far away in Beijing, there must have been a Chinese celebration on the passage of this Act, with plenty of fire-crackers and loud cheers from key members of the Chinese Communist Party. We may soon learn that the Chinese Communisty Party would also donate another 500,000 of a Chinese vaccination to Sri Lanka. Sri Lankans will have to keep a watch as to when the Chinese flags are fully raised over the Colombo Port City, and the Chinese language dominates the name boards, signboards and street signs of this place.

The stuff in the draft law on the Colombo Port City gives the impression it may not have been drafted in Sri Lanka. How could the Attorney General’s Department and/or the Legal Draftsman’s Department have brought in more than Twenty-five violations or clear departures of the Constitution of Sri Lanka? Did the learned in law in the government and the Cabinet of Ministers not know of these huge, and dangerous departures from the Constitution?

Would the learned lawyer and President’s Counsel, Ali Sabry, the Minister of Justice, have missed so many violations of our constitutional process? Or was it silence, to make way for the anti-constitutional thinking of the power that manipulates government policy today – the fingertips of Saubhagyaye Dekma?

We head Professor of Law, Minister G.L. Peiris, who is Minister of Education, tell parliament that this Bill could be passed with a simple majority. He was certainly trying to educate MPs, but how come he glossed over the multiple violations of the Constitution that the original Bill carried?

To get back to the Vaccine Fraud or Ennath Vanchava that we see developing within the government, the Port City Act adopted with such speed and lack of public discussion has all the promise of a huge and disastrous Governmental Fraud – an Aandukrama Vanchava – which moves far away from the democratic principles and processes this country has tried to maintain, with much failures and difficulties since independence in 1948.

The violations of the democratic process we have seen under Sirimavo Bandaranaike, and much worse under J. R. Jayewardene, are now taken to a situation of disaster. Let’s not forget that the Pro-Chinese Port City Law is a complete departure from democracy, launched by the 20th Amendment to the Constitution.

This is a huge fraud in the governmental process, paving the way for a Beijing dominated, Sino-Lankan governance, where Sri Lankan will do much more for China than the Belt and Road Project. It may not be very far when we sing ‘Namo, Namo Cheena”, when we should be singing Namo, Namo, Matha.

The dawn of the Cheena Saubhagyaye Dekma

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Sri Lanka police to prosecute two main opposition parties over anti-portcity protests!

Opposition claims Covid health guidelines followed during protests
DGHS’ health guidelines, Quarantine Ordinance, Penal Code violated: DIG Ajith Rohana
Port City Law will affect unborn generations: Dr. Harini Amarasuriya

The Police are to take legal action against Opposition parties, the Janatha Vimukthi Peramuna (JVP) and the Samagi Jana Balawegaya (SJB), over recent protests conducted by them near the Parliament against the Colombo Port City Economic Commission Bill.

Speaking to The Sunday Morning, Police Media Spokesman DIG Ajith Rohana said that legal action would be taken against both protests due to the alleged violation of quarantine-related rules and regulations.

The JVP, which is represented in the parliamentary Opposition under the National People’s Power (NPP) alliance, staged the said silent protest at the Polduwa Roundabout on 19 May, while the protest of the main parliamentary Opposition party, the SJB led by party Leader and Opposition Leader Sajith Premadasa, was held near the Parliament Roundabout on 20 May.

The protests demanded that the Government not be allowed to pass the said Bill in the midst of the heightened Covid-19 pandemic environment in the country.

The Bill was, however, passed in Parliament on 20 May with a super majority.

DIG Rohana said that according to the B Report filed in the relevant court by the Officer-in-Charge of the Welikada Police, approximately 150 people had taken part in the JVP protest at the Polduwa Roundabout. The protestors had, according to him, violated the quarantine rules and regulations, especially the provisions in the gazette published on 15 October 2020, the health guidelines published by the Director General of Health Services (DGHS), provisions of the Quarantine and Prevention of Diseases Ordinance, and certain provisions of the Penal Code.

Legal action would be taken against the perpetrators after identifying them from the closed circuit television footage, DIG Rohana added.

Accordingly, action is to also be taken against the SJB protest where, it is learned, approximately 30 people had participated.

However, speaking to The Sunday Morning, NPP parliamentarian Dr. Harini Amarasuriya said that the party is not afraid of any legal action since they conducted the protest in connection with a national concern.

“If this Colombo Port City Economic Commission Bill is approved, we won’t be able to revise it for another 99 years. People should know the upcoming danger and the damage that could happen to the country by approving it. This could have an effect over the unborn generations as well,” she claimed.

According to Dr. Amarasuriya, the protest was not against the quarantine rules and regulations. “We did it while observing the social distancing rule and by wearing masks. So how could they say that we violated the law?”

By Dinitha Rathnayake/The Morning

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