Friday, 07 May 2021 10:18 GMT

China-funded US$ 1.4 billion Colombo Port City project faces legal challenge

(MENAFN - NewsIn.Asia) Colombo, April 16 (newsin.asia): A five-judge bench of the Sri Lankan Supreme Court will go into a number of petitions filed against the US$ 1.4 billion China-funded Colombo Port City Commission Bill presently in parliament.

The petitioners contend that the proposed legislation is in contravention of the Sri Lankan Constitution. They have sought a two-thirds majority and a referendum to get the controversial bill passed.

Among the petitioners are: the United National Party (UNP) General Secretary Palitha Range Bandara, Janatha Vimukthi Peramuna (JVP) MP  Wasantha Samarasinghe, the Bar Association of Sri Lanka (BASL), Transparency International Sri Lanka (TISL), the Centre for Policy Alternatives (CPA) and Engineer G. Kapila Renuka Perera.

The petitions filed by Perera and CPA will be taken up on Monday next before a panel of five judges headed by Chief Justice Jayantha Jayasuriya comprising of Justices P.B. Aluwihare, Priyantha Jayawardena, Murdu N.B. Fernando and Janak de Silva.

The petitions said that several clauses of the Constitution would be breached by the passage of the Port City Commission Bill. Several petitions called for the Bill to be changed only through a two-thirds parliamentary majority and a referendum.  

Transparency International Sri Lanka raised corruption concerns, including the possibility that the Bill could pave the way for facilitating or enabling illicit financial flows and money laundering. The TISL also drew attention to the lack of transparency in the ownership of the 'offshore' businesses that will be set up at the Port City, since the ultimate owners of the businesses need not be disclosed. TISL said it is concerned also about the lack of transparency in offshore banking operations that could be free from the purview of the regulatory framework governing local Sri Lankan banks.

Several petitions also alleged that the Bill evaded parliamentary oversight on public funds, which they argued, infringes the rights of the  Sri Lankan public.

The Bar Association of Sri Lanka questioned why the government decided to enter the Bill into the order book ahead of the New Year holidays, which severely limited the amount of time for the public to exercise their right to examine the bill and offer their comments.

'The Executive Committee of the BASL notes that the provisions in the Bill that directly affect the judiciary and the legal profession which are found in Part XIII (International Commercial Dispute Resolution Center) and Part XIV (Priority Hearing in Legal Proceedings) of the Bill. These could lead to an ouster of the jurisdiction of Courts, infringe on judicial discretion and violate the principle of the equality of parties before the law and therefore may violate Articles 3, 4, 12 and 14 of the Constitution. The aforesaid Articles of the Constitution pertain inter alia to the Sri Lankan State, the Unitary Status of the Republic, the Sovereignty of the People, the fundamental rights of the people and the powers of Parliament,' the BASL statement said. 

The BASL committee appointed to study the Bill recommended that the Association should file a petition before the Supreme Court, challenge the constitutionality of the Bill under Article 120 of the Constitution, call for observations from its Members, including Members who have the required expertise, and request the Government to defer any further action on this Bill for a reasonable time to enable the BASL to engage with and consult the relevant stakeholders and contribute fully in this important national endeavor.

'The Interim Report and the recommendations of the Committee were unanimously approved and adopted by the Executive Committee at a Special Meeting on 12 April. Therefore, in furtherance of the Objects of the Association set out in Article 2.1 of the Constitution of the BASL, the Executive Committee directed the President and Secretary to challenge the Bill under Article 120 of the Constitution before the Supreme Court and also to write to the President and the Prime Minister bringing to their attention the concerns of the BASL,' the statement added. 

The Executive Committee of the BASL appealed to the government to defer further action on the Bill, until the views of all stakeholders, including the public, are sought and given due consideration. Shortly after the statement was released, Bar Association President Saliya Peiris also filed a petition before the Supreme Court.  

The Government has, however, maintained that the Bill will not undermine the Constitution or infringe on the sovereignty of the people.


The Colombo Port City project, which China considers as being part of President Xi Jinping's Belt and Road Initiative (BRI), has had many hiccups. The previous Sri Lankan government headed by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe had alleged high corruption indulged in by the Mahinda Rajapaksa regime and stalled the project for a year and a half in 2015-16. Ultimately, no corrupt act could be proved and the government settled the matter with the Chinese State owned company concerned through some give and take.

The land for the project, reclaimed from the sea, is now ready to be parceled and sold to investors. The Port City will not have industries but only financial and commercial institutions and the laws applicable to it will be international, very different from Sri Lanka's laws.

But the former as well as the present Gotabaya Rajapaksa regimes took an inordinately long time to finalize the special laws for the Port City. President Xi Jinping had to talk to President Gotabaya Rajapaksa to get the project moving.

Given the abject dependence of the Lankan government on China for financial help to meet its expenditures on COVID control and meet international debt obligations, the bill to manage the Port City was hurriedly finalized and placed in parliament. When the contents of the bill were published in the newspapers, concerns arose among a cross section of Sri Lankans.

The matter now rests with the Supreme Court. If the court has no objections to the bill, government will be able to pass it easily as it has two thirds majority in parliament. But if the court says that the bill has to be amended (drastically to fit into the present constitution) the government will have great difficulty. On the one hand it will have to manage China, its sole financial benefactor, and on the other it will have to get the bill passed in a referendum which is not going to be easy given the strength of nationalistic sentiments among Sri Lankans.       


Bill China Colombo Port City Commission Sri Lanka Supreme Court


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