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Wednesday May 12th, 2021

Sri Lanka Colombo Port City Commission given undefined powers, equal opportunity denied: SJB

ECONOMYNEXT- A bill to set up a Commission to govern a Colombo Port City has given it too much discretion, denied equal opportunity to Sri Lankans who did not have black money stashed abroad, the opposition Samagi Jana Balawegaya has said.

The possibility of non-nationals being appointed to the Commission could end up with the fate of the people in the area being decided by foreigners, lawyers representing Samagi Jana Balawegaya (SJB) said.

A bill to set up a Port City Commission where the Board is to be appointed directly by President Gotabaya Rajapaksa and has been exempted from a number of laws including contracts law has brought opposition from several quarters.

“All the time we thought this Port City project as a project through which the country can get benefits but now it would turn out to be a harmful project if this Bill is enacted,” Legal Secretary of SJB, President’s Counsel Thisath Wijegunawardana said to reporters.

The SJB has filed two petitions to the Supreme Court challenging the Colombo Port City Economic Commission bill, one petition by the party’s General Secretary Ranjith Mad-duma Bandara and the other by SJB MP Harshana Rajakaruna.

Wijegunawardana said that the party decided to file these petitions after coming to conclusion following a thorough study of the Bill which showed that the bill violates the sovereignty, human rights and the constitutional provisions of Sri Lankans.

Unknown Powers

He argued that the bill was loosely worded to allow the Commission gave wide discretion. Section 3 (1) of the bill, gave the reasons or the establishment of the Commission and the reason for it.

“With the administration, regulation and control of, all matters connected with businesses and other operations, in and from the Area of Authority of the Colombo Port City,” he said quoting from the Bill.

He said since the words “other operations’ is not clearly defined in the bill, those words vest huge powers on the commission.

“So not only about regulating and controlling businesses in the port city but a huge function, sometimes, even regard to the security of the Port City,” he added.

Also, he said that according to the Second Schedule of the bill, it has mentioned the enactments from, or under, which exemptions or incentives may be granted to the businesses in port city.

These enactments include,

1. The Inland Revenue Act, No. 24 of 2017
2. The Value Added Tax Act, No. 14 of 2002
3. The Finance Act, No. 11 of 2002
4. The Finance Act, No. 5 of 2005
5. The Excise (Special Provisions) Act, No. 13 of 1989
6. The Debit Tax Act, No. 16 of 2002
7. The Customs Ordinance (Chapter 235)
8. The Ports and Airports Development Levy Act, No. 18 of 2011
9. The Sri Lanka Export Development Act, No. 40 of 1979
10. The Betting and Gaming Levy Act, No. 40 of 1988
11. Termination of Employment of Workmen (Special Provisions) Act, No. 45 of 1971
12. The Entertainment Tax Ordinance (Chapter 267)
13. The Foreign Exchange Act, No. 12 of 2017
14. Casino Business (Regulation) Act, No. 17 of 2010

Further, he said that the third schedule of the bill mentions the enactments which shall have no application within the port city.

Those include,

1. The Urban Development Authority Act, No. 41 of 1978
2. The Municipal Council Ordinance (Chapter 252)
3. The Commercial Mediation Centre of Sri Lanka Act, No. 44 of 2000
4. The Town and Country Planning Ordinance (Chapter 269)
5. The Strategic Development Projects Act, No. 14 of 2008
6. Public Contracts Act, No. 3 of 1987
7. The Board of Investment of Sri Lanka Law, No. 4 of 1978

He said that the Port City did not come under the jurisdiction the Colombo Municipal Council.

“So then the port city will only be governed by the laws and regulations defined by the commission,” he said.

Foreign Commissioners?

He said the areas could be governed by the Commission with foreign commissioners.

Section 7 (1) of the bill says “The Commission shall consist of not less than five members and not more than seven members, who shall be appointed by the President”

“Since there is no mention of which kind of people should be appointed if the president wants he can appoint all foreigners as the members of the commission,” Wijegunawardana said.

“If all foreigners are appointed to the commission then they will completely control the port city through the commission.

“So if section 7 (1) is to be enacted then the area called the Colombo Port city will become a foreign colony which will be governed by the foreigners based on their laws and regulations and to which most of the Sri Lanka laws are not applicable.”

The ability of Sri Lankans or Sri Lankan businesses to invest in Colombo Port city is completely prevented, as per section 27 (3) and (4) of the bill where it says,

“(3) Every application shall specify the total value of the proposed foreign direct investment, to be made in any designated foreign currency other than Sri Lanka Rupees, which shall also be set out in the relevant agreement to be executed by the Commission and the authorised person in terms of section 32 of this Act,”

“(4) No foreign currency deposit in an account maintained or operated in Sri Lanka, in any licensed commercial bank or licensed specialised bank within the meaning of the Banking Act and no foreign currency raised through a foreign currency loan obtained from any such licensed commercial bank or licensed specialised bank shall be used by an authorised person for the purpose of such investment, within the Area of Authority of the Colombo Port City,”

“We know that Sri Lankan businesses do transactions in Sri Lankan rupees and if they have foreign currency then it is deposited in resident accounts, So they have prevented the local business and Sri Lankans from investing their rightly earn money in the port city,” he said.

Equal Opportunity

Under the provision of the Bills foreign money has to be brought to invest and qualify for tax breaks. However local are allowed to buy land with rupees.

But some locals had money stashed away abroad would be able to invest.

“We know that they have their accounts in abroad and the bill has allowed their black money to be invested in the port city,” he claimed.

The bill had violated the constitutional provision which says that equal opportunities should be given to all Sri Lankans, he said.

He also said that a license should be obtained by businesses to do their business in the port city through the commission.

If the commission is made up of foreign members then foreigners will decide who will do business, who will not do business and how should the business be done in the port city which is a part of Sri Lanka.

Petti Kade fined?

However, he said that if people like cart vendors in Galle face tries to push their cart to the port city and sell inside the port city without a permit, then he will be subjected to 2-year imprisonment and a fine of Rs 3 million.

Wijegunawardana said that according to section 48 (1), the auditing authority of the accounts of the commission and the fund established for the commission is not given to the Auditor General but an international audit firm can audit them

This removed the Port City Commission removed from the subject area of Committee of Public Enterprises and Committee of Public Accounts results in a commission which is not accountable to parliament.

Sri Lankans who buy product and services within the port city will have to pay levy when their exiting the port city,

Section 40 (2), states “Any levy as may be required to be paid by a citizen of Sri Lanka or a resident on goods purchased at retail facilities as set out in subsection (1), when leaving the Area of Authority of Colombo Port City, shall be as prescribed.”

“So this functions as another country within Sri Lanka,” he said.

He said the exemption from taxes will reduce tax revenues to the country making the Port City less useful. (Colombo/April17/2021)

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