A controversial law entered the country's statute book on Friday but some of the scars it left behind are certain to linger for months if not years.
Speaker Chamal Rajapaksa gave his assent to the Revival of Underperforming Enterprises or Underutilized Assets Bill on Friday night. Since Parliament passed it as an urgent piece of legislation "in the national interest" on Wednesday, the Ministry of Finance has been in touch with the Speaker's office to obtain the assent early. This was to ensure that follow up action was taken without loss of much time. No sooner had the House approved it on Wednesday night, Police armed squads moved in to secure some of the 37 ventures that the government wanted to takeover. They included both the Sevanagala Sugar Industries Limited and the Pelwatte Sugar Industries Limited. The physical takeover of these ventures is expected to take place in the coming week.
For the private sector, whose case against the law was made by six different trade chambers and organisations before President Mahinda Rajapaksa just days earlier, concerns remained high. They were assured that the legislation would be "one off" and no other ventures taken over. However, this assurance was not among the amendments moved when the Bill was at the Committee Stage on Wednesday. In fact the government has armed itself with a provision to take over any venture on the grounds that it is either "underperforming" or "underutilized."
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| For whom the bell tolled - Posters announcing the commemoration of the death anniversary of Rohana Wijeyaweera by the JVP. Pic by Nilan Maligaspe |
Clause 2 (1) of the new law states, "With effect from the date of the coming into operation of this Act, where any of the Underperforming Enterprises or Underutilized Assets specified in Schedule I or II to this Act, are having an adverse impact on the national economy and thereby on the public interest, the shares of such Underperforming Enterprise and Underutilized Assets shall with effect from the date of coming into operation of this Act, stand vested in the Secretary to the Treasury for and on behalf of the State."
This means the government has the power to vest in the State any enterprise it deems is either "underperforming" or has "underutilized assets." What is required is a gazette notification either under Schedule I (underutilized assets) and Schedule II (underperforming enterprises). Thereafter it will come under the purview of the Secretary to the Treasury. That such a takeover could be carried out within hours remains in the statute is no good news for the private sector or prospective investors.
"We are told that a list containing more ventures is ready. If this is true, it will be a further blow to the private sector. Earlier, investors were hesitant to come to Sri Lanka because of the poor human rights record. Now, with this new law, the last nail in the coffin has been driven,"said Mangala Samaraweera, head of the United National Party's Communications Unit.
He said that the new law would have a negative impact on Sri Lanka. He charged that wrong information had been given by those supporting the Bill that the country's business climate had improved. An index was read out to show that Sri Lanka was in the 87th position among growing economies whereas it should be 127th.
"The new law has also sent shockwaves among those at Shangri La who have purchased land near the Galle Face for a luxury hotel and shopping complex," he claimed. Even they are frightened they could be taken over one day, he pointed out.
UNP deputy leader Karu Jayasuriya said in a three-page statement that "any foreign investor with a modicum of intelligence will re-think of investment in Sri Lanka for fear of their ventures being arbitrarily appropriated. That too is without any prior determination of how they function and at the whim and fancy of the rulers."
He added, "The catalogue of state ventures which are continuing to incur losses amounting to billions of rupees is too long and too well known. The ultimate burden of sustaining all these is through public funds. This is why the people are being called upon to pay more for their fuel, an act that has heaped greater burdens with living costs soaring. They will soon be told to pay more for many other basic needs including electricity, bus and rail fares. Public suffering will exacerbate. For the first time since this Government was voted to power, there was a strong message for the rulers. Though a handful, some of their constituent partners refrained from voting for the pernicious piece of legislation. They are obviously conscious about the harmful effects it would cause and were courageous whilst many of their colleagues, we have reason to believe, could not do so out of fear."
In an unusual development, there were only two speakers who spoke in favour when the Bill was moved in Parliament on Wednesday afternoon. One was Economic Development Minister Basil Rajapaksa who took almost all the time. The other was Jagath Pushpakumara, (Minister of Coconut Development and Estate Development - MP for Moneragala District) who made a brief speech. The fact that no other cabinet minister spoke on the Bill, presented in Parliament by Prime Minister D.M. Jayaratne, raised some queries. Pushpakumara is the political arch-rival of Daya Gamage, Chairman of Daya Group that owned the Sevanagala Sugar Industries Limited. Gamage is the UNP organiser for the Ampara electorate and a key financier of his party. In view of his role, his wife Anoma was nominated on the UNP National List as an MP.
Minister Rajapaksa said, "Constitutionally we can bring laws to develop the country and also are bound to prevent the abuse of state property. It is to fulfil these obligations that we are bringing these laws. We are not rushing through these laws. It was first mentioned in the budget speech by the President last year. The President said"despite having been approved, since many BOI investments are non-performing, I propose to cancel forthwith, all BOI approvals granted before 30th June 2010, if such investment has not commenced or has remained closed as of today".
"He mentioned about land as well. Thereafter a special committee was appointed and details of underperforming enterprises were collected. Based on the information, he presented a Cabinet paper on July 29 and it was submitted to the Attorney General for approval after cabinet approval was granted on August 3. It was sent again to the cabinet and approved by the ministers. It was decided to bring this as an urgent bill. There were reasons for that as persons will be against such bills. Most businessmen will plunder property.
"Ms Sirimavo Bandaranaike took over land by not bringing laws to Parliament, but through the cabinet making it effective in one day. If it was known in advance, lands would have been written to others fraudulently. Such decisions need to be taken to protect public property. If it was political vengeance the President could have done it in one letter. Because it is not so we are presenting it to Parliament for approval. "We did this based on information collected. I have to mention that one of the properties listed to be taken over belongs to a ruling party MP and even he is voting for this Bill. There is another one which belongs to an influential Chairman. One of the lands belongs to a relative of the President. We have a list of the other enterprises in the BOI which are being taken over and the losses they suffered. Some of them have not paid the EPF to the employees; in some the services of workers have been terminated without compensation. These lands are in the Free Trade Zones and we are unable to offer them to attract investments.
"Speaking of Sevanagala Sugar factory there are two agreements. Under these proposals for phase I and Phase II Rs. 2,808 million have been promised. This has not been fulfilled. Under a BOI agreement tax concessions for eight years and thereafter 15 years have been received. It says the number to be employed is 1,599, but only 157 have been employed. If claims have been made that the enterprise was making profits income tax should have been paid. This too has not been done.
"During the production of sugar, a by-product molasses is created. But in this case the company has sought permission from the Excise Commissioner to import 250 Metric tonnes of cane molasses. The Sugarcane Research Institute objected to this. Since permission was rejected, the matter was taken up in the Court of Appeal. In the case of Lanka Tractors it was not a loss-making institution when it was privatized in 1994. Later some 550 employees lost their jobs and compensation was not paid. They have two valuable lands in Pettah and Narahenpita.
"There is another argument that institutions like the CEB and the SLTB are loss making. They are providing a service to the people. Some argue that even religious institutions can be taken over. We guarantee that will not happen. We will not take private houses or private institutions. I wish also to say that the overall ranking in doing business in Sri Lanka has improved. I call upon the private sector to work hard and protect the businessmen who work hard; the President will give all support for that."
Although the Economic Development Minister quoted remarks by President Mahinda Rajapaksa during the last budget speech to assert that mention had been made about the takeover of the 37 enterprises, the position appears quite different. According to the official text of the budget speech, President Rajapaksa said, "……Further, despite having been approved, since many BOI investments are nonperforming, I propose to cancel forthwith, all BOI approvals granted before 30th June 2010, if such investment has not commenced or has remained closed as of today. Those who have not commenced work but wish to proceed must obtain fresh approvals. The BOI law will be amended to create a position for a Director General to ensure continuity in executive responsibilities." Though Minister Rajapaksa said the President "mentioned about this land as well," (meaning the lands given to the 37 enterprises) there is no such reference in the budget speech.
As Jayasuriya has pointed out, this is the first time that two constituent partners of the UPFA government had abstained from voting. National Freedom Front (NFF) leader Wimal Weerawansa was absent at voting time. So was Venerable Athureliye Rathana Thera of the Jathika Hela Urumaya (JHU). The JHU leader Champika Ranawaka, Minister of Power and Energy, was in the Maldives as part of President Rajapaksa's entourage for the SAARC summit. They returned to Colombo yesterday. Whether the UPFA leadership will ignore their dissent or call upon them to explain remains a critical question. Whilst in the southern Maldivian Addu atoll, Rajapaksa has been keeping a close touch on developments in Sri Lanka. He was apprised of opposition calls for a postponement of last Wednesday's debate on the grounds that the Supreme Court was hearing cases against the Bill. He was also informed of the abstentions.
On Friday, a five-member bench of the Supreme Court was named to hear the Fundamental Rights petitions filed by three parties ahead of the Parliament debating the Bill. The bench will comprise N.G. Amaratunga, S.I. Imam, Suresh Chandra, Sathya Hettige and W.P.G. Dep. The petitions will be heard on Tuesday (November 15). The petitions have been filed by Ven. Thiniyawala Palitha Thera, Chief incumbent of the Nugegoda Nalandaramya and Bhikku in charge of the Chennai Centre of Maha Bodhi Society of Sri Lanka, workers of the Sevanagala Sugar Indusries and sugar cultivators. They have cited Treasury Secretary P.B. Jayasundara, the entire cabinet and the Attorney General as respondents. Last Wednesday, when the matter came up before a three-judge bench of the Supreme Court, Romesh de Silva PC called for a fuller bench of five, seven or more judges since important issues such as sovereignty of the people were involved. The Supreme Court hearing comes in the backdrop of the Bill now becoming law.
The main opposition United National Party (UNP) seemed united in its opposition to the new law though rumblings within the party continued at least behind the scenes. Leader Ranil Wickremesinghe, it appears, had reined in his arch-rivals, styling themselves as reformists, from reacting publicly to any of his recent actions. That has once again placed him in full command of the party. First was Wickremesinghe's meeting with President Mahinda Rajapaksa on Saturday November 5. He did not inform his two deputies, Karu Jayasuriya and Sajith Premadasa. Nor did he take any other party members with him for the meeting. Though earlier billed as one-on-one, it is now known that Ministers Basil Rajapaksa and Dinesh Gunawardena took part together with President Rajapaksa. The two Ministers were also to explain issues to Wickremesinghe. This is where the latter made an appeal to exempt at least three enterprises - Sevanagala, Pelwatte and Lanka Tractors - from the 37 ventures to be taken over.
The second is Wickremesinghe's letter to Speaker Chamal Rajapaksa naming Chief Opposition Whip John Ameratunga to deputise for him. Wickremesinghe left for Britain last Tuesday night to attend the annual sessions of the International Democratic Union (IDU) leaders on Thursday and Friday. He was accompanied by Ravi Karunanayake (MP - Colombo District) and Ruwan Wijewardene (MP - Gampaha District). In a letter to Speaker Rajapaksa, Wickremesinghe said, "I write to inform you that I will be out of the country from 8 to 17 November 2011 on official business. John Ameratunga, Chief Opposition Whip, will deputise for me in Parliament."
On all previous occasions when he travelled abroad, Wickremesinghe had named Jayasuriya to deputise for him in Parliament. The UNP leader told the party's parliamentary group somewhat nonchalantly that Ameratunga, as Chief Opposition Whip, was conversant to deal with procedures in Parliament. It is relevant to mention that this deputation to act for him in Parliament is the only means through which the UNP leader has in the past delegated responsibility to a deputy as acting leader. In conveying that to the Speaker and informing other political parties in Parliament, Wickremesinghe has thus made clear who would performing his tasks as Leader of the Opposition.
Ameratunga himself was upbeat. He told the Sunday Times, "The Leader of the Opposition Ranil Wickremasinghe wrote to Speaker Chamal Rajapaksa before he left the country stating I would be deputizing for him. There is nothing to get excited about it. I am the Chief Opposition Whip and the most senior person. I am more senior than the two deputy leaders of the party." There is little doubt in his claims but the question is why Ameratunga has not been made a deputy leader, if he was so senior, so he could always deputise for the party leader. In naming him this time, Wickremesinghe has sent a strong signal to his two deputies that holding the party's number two slots did not mean that they any longer qualified to deputise for him in his absence. There has not been even a murmur from either Jayasuriya or Premadasa. Not even a letter to Wickremesinghe asking whether his actions amounted to a vote of no confidence on them and whether they should offer their resignations. They have chosen instead to take the beating and continue as Wickremesinghe's deputies. From now on, it is clear; it will be on Wickremesinghe's terms.
This is the fallout from the ill-advised political blunder caused by both Jayasuriya and Premadasa in July this year. Premadasa announced at a news conference that Jayasuriya, at his request, had agreed to take on the leadership of the United National Party. He said "…some of the MPs, former MPs and UNP activists met with Deputy Leader Karu Jayasuriya and requested from him that we should take some steps to prevent the party deteriorating. Therefore my team asked Karu Jayasuriya to take over the leadership from today (July 28) onwards to strengthen the party. I presented the request. He gave a positive response. He said with our blessings he was willing to take that step. Mr. Jayasuriya will further explain this…." In a subsequent statement Jayasuriya declared that he was willing to accept "any challenge put before me and do whatever is in my power to accept their support to unite and take the party forward."
The months that followed saw less and less dialogue between the leader and the two deputies. Even if Wickremesinghe may not command much support at the grassroots-level organisations of the party, an overwhelming majority in the Working Committee, the party's policy-making body, are his staunch supporters. Many of them have been appointed by him and hence enjoys an unassailable position. This is how the Working Committee at its meeting on October 28 unanimously endorsed a four-point "decree" to his own party members. The UNP leader said he was acting under section 8.9 of the party's constitution.
In terms of the first decree, "All statements should be in the direction of party unity. No person in the party shall make public statements creating controversy within the party, critical of the party, on the leadership and officials. They should not act contrary to decisions taken by the Working Committee. All members should act according to the decisions taken by the Working Committee. Prior approval is needed from the Party General Secretary or the Chairman of the Media Committee for all media statements."
The last sentence meant that either General Secretary Tissa Attanayake or Media Committee Chairman Mangala Samaraweera had to approve statements issued by even the Deputy Leader and the Co-Deputy Leader.
However, on Friday Jayasuriya released a three-page strongly worded statement without recourse to the two who are authorised to approve them. It was hard hitting on the government. Some excerpts:
"…………This week, the Media Ministry has ruled that those websites should register with them. Several have been blocked thus denying access to internet users in Sri Lanka. In an era where the information super highway has transcended national barriers, internet users are still able to access these websites through proxy servers. Thus, most sites have recorded more hits after the Government's call to register. This shows that the Media Ministry is engaged in a pyrrhic exercise governed by sheer ignorance and utter idiocy. However, the ploy behind the move, to censor news not favourable to the Government, is too transparent. This is why both the United States and the European Union too have voiced serious concern.
"A national daily reported last month that the Military Intelligence Corps of the Army has been increased to six battalions. On the basis of this, at least 6000 Army personnel have been deployed for intelligence gathering. This is more than two years after the military defeat of the LTTE, which was the largest threat factor. Even more disturbing, this is in addition to the State Intelligence Service (SIS), the state intelligence arm functioning under the Police Department. Both members of the opposition as well as those in the government have come under the watchful eyes of intelligence cadres. Political activists, journalists, university students, trade unionists, lawyers and a wide variety of other civil society leaders are among those under close watch. The law and order situation is continuing to deteriorate. As recent incidents have revealed, the enraged public are attacking lawbreakers or law enforcers reflecting their lack of confidence in justice and fair play being meted out. There is one set of laws for drug barons backing the Government and another for those not with them. Bribery and corruption have reached unprecedented levels spawning millionaires by the day.
"More and more military camps are coming up countrywide. This week there were public protests in the East over allegations that camps are being set up on private land. The country has witnessed increased military intrusion in previously civilian dominated areas. Military expenditure in the upcoming budget has been increased phenomenally and more recruitment is under way. The question before all Sri Lankans today is where their beloved motherland is headed……….."
On Thursday night calls were made by a strong loyalist of Sajith Premadasa that a group of Buddhist monks of the UNP Bhikku Front were to meet the Co-Deputy leader at Siri Kotha, the party headquarters, on Friday morning. This was reportedly to hand over a letter protesting their removal from the Front. They were to speak to the media thereafter. At least 20 journalists including photographers and TV crews turned up. They were told there was no such event organized. Premadasa's private secretary P. Samarasinghe turned up and denied that an event had been organised. When he was confronted that it was (name of the pro-Premadasa organiser was mentioned), and told he has been keeping the media informed about Premadasa's events.
Samarasinge said (naming the key supporter) that "he is not in the staff of Mr Premadasa. We cannot take responsibility for what he says." Premadasa also denied any knowledge about the planned meeting. However, one of the Bhikkus who spoke on grounds of anonymity said a meeting had in fact been planned. It is those on the outer fringe of the party who are now carrying out a campaign against Wickremesinghe even threatening to "charge sheet" him. Publicly such a move has not received either the backing or the endorsement of the so-called revisionists. Wickremesinghe is clearly wielding the big stick and has forced his adversaries to toe the line.
If the crisis within the UNP is now played out behind the scenes, the rift in the Jantha Vimukthi Peramuna (JVP) has widened. The extremist faction and the old guard, who now hold official control of the party, are planning to commemorate IL Samaruwa to mark the deaths of their comrades including Rohana Wijeweera today. The event by the extremists is being held at the Sugathadasa Indoor Stadium whilst the old guard has set the Vihara Maha Devi Park outdoor arena as their venue. The extremist group leader Kumar Gunaratnam, extremist sources say, would make his debut at the event and speak on the left movement in Sri Lanka and its expansion. The old guard is to release a book titled Athdakeem Keepayak (Many Experiences), a book written by their late leader, Rohana Wijeweera. It is said to set out the history of the JVP and the internal conflicts faced by the leadership. The events will come as test of strength for both sides. Each is making statements to win over members from the other side.
Statements attributed to Anura Kumara Dissanayake, spokesperson for the Democratic National Alliance (DNA), last week said the JVP had admitted to four different mistakes. However, Dissanayake this week moderated his position. Instead of using the word "mistake," he called them "different contradictory decisions" from 2004 to 2010 thereby creating a "wrong impression among the public." Addressing a seminar at the Galle Town Hall, he said the decision to join in an alliance with the government in 2004, leaving the Chandrika Kumaratunga government, supporting former General Sarath Fonseka at the Presidential election and contesting under the 'Trophy' symbol were the decisions.
Explaining the decision to back Fonseka's candidature at the presidential election, Dissanayake told the Sunday Times that the JVP had had taken certain decisions to ensure that the separatist movement was defeated. "It is because of the support we extended to the government that it was able to achieve the war victory. Through the strength provided by the JVP, the government was able to reach a strong position. This is regretted by many of our party members and we see the fact that our support has been used to strengthen another party as a shortcoming," he said. Even if he was trying to be polite over the JVP distancing itself from the former Army Commander, the party's predicament is clear. It had to appease and win over at least a few from the extremists.
Unlike the opposition political parties, the tasks for President Mahinda Rajapaksa will be onerous as he turns 66 on Thursday. As Minister of Finance, he is busy with preparations connected with the budget which he will present in Parliament on November 21. Ahead of that, next Sunday, the Lessons Learnt and Reconciliation Commission (LLRC) will hand over its final report to him. He told the media during his participation at the SAARC summit in Addu City in the Maldives that he proposed to table the LLRC report in Parliament. Many countries, particularly those in the West, are awaiting the findings in the report. They have been closely monitoring developments in the past weeks. Thus, the UPFA faces many challenges in the weeks and months to come. One such challenge to hold the Commonwealth Games in Hambantota turned unsuccessful despite millions being spent on the campaign.
Sri Lanka received only 27 votes as against Australia winning 43. In marked contrast to a Sri Lanka delegation of some 160 members who went on a chartered SriLankan Airlines flight to St Kitts in the Caribbean, the Australian delegation was only made up of 20 members.
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