Columns

• SLFP wants electoral reforms before new Constitution, but UNP wants both together; two parties to discuss the matter further
• President meets civil society groups to discuss current issues; secret revealed – a UNP minister ordered STF security for Sajin Vaas
• PM swings into action to deal with problems arising from Britain’s exit from EU, appoints expert committee
• Shockwaves from Panama Papers; one firm sought offshore facility in Virgin Islands for Sri Lankan Government deals in 2010

By Our Political Editor
Whether it would be electoral reforms or a new Constitution for Sri Lanka first is becoming a contentious issue between the two main partners of the Government – the Sri Lanka Freedom Party (SLFP) and the United National Party (UNP).
The SLFP wants a 20th Amendment that will incorporate the electoral reforms to be presented in Parliament first. Its finer parameters are yet to be worked out. On the other hand, the UNP is in favour of these reforms being incorporated in the new Constitution for which a Constitutional Assembly has already started work. The SLFP’s position played out at a recent meeting of its Central Committee. It was after Minister Nimal Siripala de Silva, a member of the Steering Committee, part of the constitution making process, briefed them on the latest developments. An important revelation at the discussion was the position taken by President Maithripala Sirisena that the executive presidency should be abolished. He even strongly admonished State Minister Dilan Perera for suggesting that it should remain. Perera argued that the Executive Presidency was an antidote to situations where elections led to a hung Parliament. More so, he pointed out, was because a Westminister style of government is what is being envisaged. To back his claims further, he quoted from the advice of a reputed Norwegian expert who was in Colombo for talks with political party leaders.

Those arguments apart, President Sirisena, had assured SLFP parliamentarians when the 19th Amendment to the Constitution was passed last year that he would ensure the passage of the 20th Amendment with electoral reforms. This was done particularly to dissuade them from insisting on these reforms being part of 19A. If the SLFP Central Committee was unanimously in favour of electoral reforms coming in the form of 20A, most members did not support Perera’s proposal to retain the Executive Presidency. Hence, Sirisena’s insistence on abolishing the Executive Presidency amid the support voiced by the party’s CC members is an interesting pointer. If indeed this highest office in the country is abolished, either through electoral reforms or through a new Constitution, obviously the question of Sirisena contesting does not arise. That raises the all-important question – whether the SLFP would field him as its Prime Ministerial candidate? There is little doubt he would be the obvious choice with other would-be contenders having lesser credentials.

Such a move, no doubt, would be a windfall for his political arch-rival Mahinda Rajapaksa. It may come as an incentive to form his own party, an idea he has been toying with. That he is scoring marks with little or no positive action on his part due to people’s economic woes is no secret. The latest is the closure of shops in different towns protesting over VAT. It is known that opposition groups have been behind the campaign. The latest this week was in Gampaha. Small traders countrywide are the source of not only essential commodities to lower income groups but a blessing to them, for they would sell even small quantities, unlike supermarkets. An example is how they sold milk powder by the spoon to those who could not afford a packet. That in one stroke the Government has alienated most of them has come as manna from heaven for the opposition. Issues are being delivered on the platter to them and there seems no strategy to counter, not even at the party level of both the SLFP and the UNP. That also has bad forebodings for local government elections if they are held next year.

There are a number of issues that would have to be overcome before the SLFP could push its demand for urgent electoral reforms. Firstly, the party would have to formulate its own concept – how many to be elected through the First-Past-the-Post (FPP) system and how many through Proportional Representation. An important issue would be over how many members should be in Parliament. Once, these are in shape, the next phase for the SLFP would be to talk to its partner, the UNP. The latter’s views have to be obtained to reach a consensus, and even more importantly, to win its accord to present it in Parliament ahead of the new Constitution.

The UNP’s position was articulated by its leader and Prime Minister Ranil Wickremesinghe. He said he was aware of different views within. He said the Steering Committee involved in the Constitution making process was studying the different views expressed by political parties. Those would be discussed and debated. “Ideally, it would be better to have the three elements – electoral reforms, devolution proposals and the change in executive presidency together,” Premier Wickremesinghe told the Sunday Times.

Different smaller political parties hold diverse views on electoral reforms. For the Government, winning the support of such parties which are backing it, needless to say would be important. However, there were those who were bitterly opposed to views expressed by senior SLFPers on electoral reforms, which they say, would spell doom for their parties. This is one of the thorny issues that would become more controversial whenever electoral reforms are finally formulated.

Responding to a call by the Joint Opposition, traders in Gampaha, Galle and Matara have closed their shops and launched street protests against the increased Value Added Tax, the rising cost of living and the loss of business. This picture shows empty streets and closed shops in Matara town. Pic by Krishan Jeewaka Jayaruk

Brexit impact on Lanka
These issues seem to have been overtaken this week by economic factors, particularly the vote by Britons to leave the European Union. Results announced on Friday showed that 51.9 percent Britons voted to quit EU whilst 48.1 percent wanted to remain. What seemed a faux pas in this regard by the Government was the task assigned to a group of Government MPs to travel to London and canvass Britons, particularly the naturalised Sri Lankans, to vote against moves to leave the EU. One need hardly say they could have swayed a hundred votes except to speak to former Sri Lankans but that is not the issue. In doing so, the Government has opened the doors for any foreign groups or even individuals to come to Sri Lanka and canvass for a person or party of their choice at an election. The philosophy it has created is that they could interfere in our internal affairs as much as we have done so. They need not fear about their visas being revoked or their being declared persona non grata. One of those who were in Britain was none other than Deputy Foreign Affairs Minister Harsha de Silva. Others were Ministers Harin Fernando, Susil Premajayantha and Dayasiri Jayasekera and former UNP Parliamentarian Rosie Senanayake. All expenses including travel for Ms Senanayake were met from funds in the Prime Minister’s Office whilst in the case of all others, they were paid out by the Ministry of Foreign Affairs.

One of the Government’s major concerns after the vote in Britain is the feared rise in interest rates when a bond issue is announced for US$ 2.5 billion tomorrow (Monday). The money, Government sources said, was urgently needed to pay off outstanding loans and thus prevent a further deterioration of the balance of payments situation. Within hours of the news that Britian would leave the EU, Premier Wickremesinghe swung into action.

He tasked a committee of officials to study the economic impact on Sri Lanka and recommend corrective measures. The Committee members are Charitha Ratwatte, a former Secretary to the Treasury (Convenor), Treasury Secretary R.H.S. Samaratunga, Sarath Rajakaruna, a former IMF official now attached to the Presidential Secretariat, R. Paskeralingam, Advisor, Indrajit Cumaraswamy, Arjuna Mahendran, Saman Kelegama, Gishan Dissanayake, Srimal Abeyratne, Murtaza Jafferjee, Nishantha de Mel and Anushka Wijesinghe. Premier Wickremesinghe said once the Committee recommended measures necessary, they would be placed for approval by the Cabinet of Ministers. “We are keeping a close watch on the situation,” he added.

One of the key areas that will receive the attention of the committee is the Government’s current efforts to urge the European Union to restore to Sri Lanka the GSP tariff preferences. A formal request is to be made in Brussels tomorrow. Exports to the European Union from Sri Lanka exceed three trillion US dollars. Of this, some 34 percent or over a trillion dollars is to Britain. Separate appeals in this regard would now have to be made to Britain which is importing apparels and large quantities of tuna from Sri Lanka. Whilst the apparel exports are being described as “low profit margin projects,” Government officials point out that an increase in fish exports would only lead to a spiral in local prices. Premier Wickremesinghe has told committee members to immediately prepare a ‘contingency plan.’ Matters relating to the adverse balance of payments situation has also prompted Malik Samarawickrema, Minister of Development Strategies and International Trade, to leave for China on Friday. A Government source said he would discuss projects as well as possible loans but details were not immediately available.

For the Government, issues seem to be mounting on the economic front. While there is a lockdown of traders in different parts of the country against VAT, it has fallen on Premier Wickremesinghe to go on emergency mode to raise more loans. A Government source admitted “the situation is serious” but refused to divulge details. Ironically, the loans are needed to repay ones borrowed largely by the previous administration. The real crunch of Britain’s exit from the European Union on Sri Lanka and the volume of loan repayments that are recurring are factors that remain to be fully assessed. To this extent the Government faces a daunting task. President Sirisena is being kept briefed on developments as he is engaged in a number of issues raised by civil society groups.
Sirisena on Sajin Vass security

On June 17, he met representatives of National Trade Union Federation, Puravesi Balaya and the National Movement for Social Justice. There were seven representatives present. One of the first issues to be raised in the presence of both Sirisena and Premier Wickremesinghe was not to extend the term of Central Bank Governor Arjuna Mahendran. Wickremesinghe said he would discuss the matter with the President and withdrew from the meeting. He was scheduled to address a news conference. Later that evening Sirisena and Wickremesinghe held a meeting on the subject. It was agreed that Mahendran should step down. His re-appointment will be after the outcome of the ongoing investigation over him by the Committee on Public Enterprises (COPE). On Friday, Mahendran met the Board of Governors of the Central Bank for the last time in his present tenure and announced he was quitting. He said this was until the probe against him was over.

During the meeting with President Sirisena, one participant from civil society movements also raised the case of Sajin de Vass Gunawardena, Monitoring MP of the Ministry of External Affairs under the previous Mahinda Rajapaksa administration. He said there were a string of corruption allegations against him and charged that the President had even provided him security from the Special Task Force (STF), the commando arm of the Police. Sirisena reached out to his telephone and asked the operator to connect him to Police Chief Pujith Jayasundera. The speaker on the telephone was switched on so those present could listen to the conversation. He asked who directed that STF security be provided to Vass Gunawardena. The IGP replied that it was not done under his tenure but by his predecessor N.K. Illangakoon.

Sirisena thereafter asked the operator to connect him to Illangakoon. Like on the earlier occasion, he switched on the speaker phone and asked those present to listen in. He asked the former Police Chief who had given orders to provide Vass Gunawardena with STF security. He replied that instructions came from Temple Trees. Sirisena asked who from Temple Trees gave that order. The President was angry when he heard the answer. “Now you all have heard what has happened. Why have you been blaming me, saying I gave him STF security,” he asked those present. It turned out that the instructions to give STF security to Vass Gunawardena has been given not by Premier Wickremesinghe or Law and Order Minister Sagala Ratnayake from Temple Trees. It was another member of the Cabinet of Ministers. When the meeting was over, Sirisena directed that the STF security be withdrawn. STF personnel pulled out from duty ‘protecting’ Vass Gunawardena from Thursday. The Sunday Times has learnt that the Police will proceed with action against the former Monitoring MP on the cases they are investigating.

The meeting with Sirisena by the three civil society groups came amidst a moratorium President Sirisena has placed on arresting senior Government officials. This was revealed exclusively in the Sunday Times (Political Commentary) of June 5. The move, it can now be revealed, came after some 135 senior state sector officials serving in high positions sent in a petition to President Sirisena. This moratorium, the Sunday Times has learnt, also applies to members of the clergy, military and businessmen who face allegations of bribery, corruption and other malpractices. They will, however, be indicted.

The move has placed the state investigation agencies in a quandary. The Attorney General’s Department, which has been very active clearing files where investigations had concluded, has directed that arrests be made. However, the different agencies are now moving cautiously. In one recent instance, where the Financial Crimes Investigation Division (FCID) had forwarded its findings, the AG’s Department had recommended arrest but at the same time advised the Division to use its discretion. This is by no means a suggestion that action on investigations completed would see no action. An influential Government source who did not wish to be identified declared, “they will be brought to book notwithstanding all the pressure and influence peddling.”
Panama Papers: More revelations

One of the knotty areas for the Government in dealing with malpractices is how to cope with names and other details of those found in the Panama Papers (PP), a treasure trove of information revealed jointly by Germany’s Suddeutsche Zeitung newspaper and the Washington based International Consortium of Investigative Journalists (ICIJ). The involvement of 18 Sri Lankans has been made public in the PP together with 42 others from the ICIJ probe into the Singapore based Portcullis offshore accounts, as revealed in the Sunday Times (political commentary) of May 15. The number of Sri Lankans in the PP is less than miniscule compared to more than eleven million documents now being mined by the Sunday Times.

The enormous volume, as declared early, is heavily time consuming. It is baring not only names but also details of other activity that will send shockwaves in different circles including banking, trade, industry, politics, and media. There were also ones that reflect a strange paradox. One example is akin to a scenario like what happens if those in the World Food Programme (WFP) steal the food meant for those starving after being hit by disasters and manmade calamities. Of course such a situation will not occur since the UN operates a credible system where there are checks and balances. The local example cannot be described any better. Then there are the commercial institutions well known in their field of activity and even banks.

What has come to be known as the Panama Papers is a trove of files with the largest volume of insider information data to be leaked by an unknown source, first to the German newspaper Suddeutsche Zeitung. Later, the newspaper sought the help of the ICIJ to carry out a wider investigation into the activities of Mossack Fonseca, a Panamanian law firm with 40 offices worldwide, offering tax havens the world over including to Sri Lankans. The firm also offers advice to clients on commercial law, trust services, investor guidance and on how to run business structures.

Among the heap of details, in one instance, a company styling itself a ‘consultancy firm’ approached Mossack Fonseca headquarters in Panama in 2010 with a request. The Government of Sri Lanka, it said, was giving it a ‘shopping list’ of commodities it may require. The ‘firm’ had negotiated payment terms with the supplier and was forwarding it to the Government. All aspects, the ‘firm’ said, would be ‘transparent,’ but sought help from the Panamanian law firm to open an offshore account in British Virgin Islands for this purpose. The ‘firm’ dealt in items like fertilizer including urea with Sri Lanka. It is not clear how any Government Department, Corporation or agency could simply hand over to a foreign concern a ‘shopping list.’ Yet, the prospect of a person making such promises awaiting a financial benefit cannot be ruled out.

There were numerous instances where Sri Lankan diplomats serving overseas in different capacities have been named. So have those who have been appointed Sri Lanka Consul Generals in different countries. They have used their name tags to obtain business advantage with adverse results. One was the son-in-law of a leading country’s Prime Minister who eventually ended up in disgrace. Also coming into adverse notice over different issues were four former parliamentarians from Sri Lanka and one time top officials. The search continues.

UNHRC sessions
These developments come at a time when the ongoing 32nd sessions of the UN Human Rights Council (UNHRC) will discuss Sri Lanka on June 28 (Tuesday). Human Rights High Commissioner Zaid Ra’ad Al Hussein will give an oral brief on the progress made by the Government on last year’s joint resolution by the United States and Sri Lanka. Diplomatic sources in Geneva say that his brief is likely to be posted on the UNHRC website by tomorrow (Monday), in what seems an unusual move. It would give member countries the opportunity of making their own observations.

The same sources said Zaid is expected to take note of the developments that have taken place. This will include the Government allowing different UN Rapporteurs to visit the country, signing different conventions, release of land to private owners in the once war-torn areas and the setting up of an Office on Missing Persons among others. According to the source, he is likely to highlight what he perceives as a lack of co-ordinated strategy and the lack of engagement in a public discourse on the part of the Government.

Tamil groups have been meeting UNHRC officials and also Keith Harper, the US Permanent Representative to the Council. Though Harper was quoted as telling them that no provisions in the resolution were now up for negotiations, a reference to the Government’s position that there would be no foreign judges in an alleged war crimes inquiry, the issue itself failed to generate any major controversy. The Tamil National Alliance (TNA), the key player on the ground, has remained muted on the issue. The only formal remark from its leader Rajavarothayam Sampanthan, made to the Sunday Times was that all provisions in the resolution should be enforced.

In contrast, the London-based Global Tamil Forum (GTF) said in a statement that the involvement of “Commonwealth and other foreign judges, defence lawyers and authorised prosecutors and investigators” is crucial and called upon Council members and the High Commissioner to call upon the Sri Lanka Government not to renege. Of course High Commissioner Zaid is expected to make reference to the matter but the mood among most Council members is more sober. While acknowledging what has been done, they want to give more time to Sri Lanka to accomplish what remains.

All in all, the challenges for the Government are growing. Its domestic economic woes are transcending to political issues. Remaining oblivious is only going to aggravate issues.