What’s the deal with the Port City Bill?

As Opposition members charge that the Port City could become a Chinese Colony, Government members say India and the United States are attempting to sabotage the completion of the Chinese funded project

The United States recently issued a warning for countries to ‘manage risk’ when dealing with China and its subsidiaries

In his submission to the court, Wijeyadasa said that the draft Bill was not for the development of Sri Lanka, it was only for the development with the particular zone, which would be administrated as a separate State in the future 

The most explosive revelation concerning the Port City Draft Bill came from former Justice Minister Wijeyadasa Rajapakshe, who stated that the Bill was a threat to national security, in addition to stating that the Port City was an imminent safe haven for money launderers

According to the Montevideo Convention the state as a person of international law should possess the following qualifications: a permanent population, defined territory, government and capacity to enter into relations with the other states

With the dawn of a new week following the Sinhala and Hindu New Year, the Supreme Court began hearing petitions challenging the moves to set up a panel (Commission) to oversee investments into the Colombo Port City.
The project, which attracted much criticism since the Gazette of the Colombo Port City Economic Commission Draft Bill, has been the point of contention in Sri Lankan political circles this past week.

Over a dozen petitions lodged by individuals and organizations are being considered in court. Their concern, the constitutional integrity of a panel that is claimed to be overseen by the President of Sri Lanka as well as the lack of an accepted regulatory mechanism.

The court is considering petitions from 20 individuals and organizations concerned over the Constitutional integrity of the panel overseen by the President, and the lack of direct oversight by regulators, including the Central Bank of Sri Lanka. 

“The President or in any event that the subject of the Colombo Port City is assigned to a Minister, such Minister, may for the purposes of this section, issue such general or special directions in writing to the Commission, if it is so required in the national interest or in the interest of the advancement of the national economy” the Bill states, which has troubled many Opposition lawmakers as well as civil society activists.

The government introduced the Colombo Port City Economic Commission draft bill in Parliament this month.
Among the petitioners against the Draft, Bill were political parties including the United National Party (UNP) led by Chairman Vajira Abeywardena and its General Secretary Palitha Range Bandara as well as the General Secretary of Samagi Jana Balawegaya (SJB) Ranjith Madduma Bandara.

Petitions were also lodged by Parliamentarian Wasantha Samarasinghe, the Bar Association of Sri Lanka (BASL) and the Center for Policy Alternatives (CPA).

The petition filed by the Chairman of the Association of Information Technology Professionals Engineer Kapila Renuka Perera states that the bill would impede national security as well as become a threat to the national economy. 

The petitioner requests Supreme Court to issue an order that the bill should only be passed by a two-thirds majority vote in Parliament or by a public referendum.

Troubled by political and environmental pressures since its inception, the Colombo Port City project is primarily funded by Chinese loans and is touted to be a major economic opportunity in terms of maritime trade.

In September 2014, Chinese President Xi Jinping inaugurated the $1.4 billion project and signed a series of agreements during a brief State visit to the island.

President Xi and then Sri Lankan President Mahinda Rajapaksa cut a ribbon to officially launch the project during a much publicised grand ceremony. The move was seen as a challenge to neighbouring India’s traditional dominance in the region.

Meanwhile, the BASL in its petition said that the bill in its present form would affect the administration of justice, possibly violating several articles of the Constitution. It added that certain clauses of the Bill were contrary to the Independence of the Judiciary.

In a surprise move, Buddhist clergy often associated with the Rajapaksa faction has also named the Bill as an attempt to form a Chinese colony on the Sri Lankan soil.

However, the members of the Government including State Minister Ajith Nivard Cabraal have refuted claims made by Opposition groups, stating that the project will help drive Sri Lanka’s ailing economy forward, by improving the ease of doing business for potential investors.

Members of the Government including Ministers Kanchana Wijesekara and Jayantha Samaraweera have alleged that India and the United States are attempting to sabotage the completion of the Chinese funded project, in fear of disruption and also to secure their respective political and economic objectives. 

The United States also recently issued a warning for countries to ‘manage risk’ when dealing with China and its subsidiaries.

The US Ambassador speaking to media in Colombo cautioned Sri Lanka, stating that any legislation pertaining to the Port City must be deliberated with care.

However, the most explosive revelation concerning the Port City Draft Bill came from former Justice Minister Wijeyadasa Rajapakshe, who stated that the Bill was a threat to national security, in addition to stating that the Port City was an imminent safe haven for money launderers. 

The former Minister spoke to the media and also appeared with Gamini Hettiarachchi for the petition filed against the Port City Bill by petitioners Ven. Muruththettuwe Ananda Thera and Attorney-at-Law Dasun Nanayakkara.

In his submission to court Wijeyadasa Rajapakshe said that the draft Bill was not for the development of Sri Lanka, it was only for the development with the particular zone, which would be administrated as a separate State in the future. 

In a televised briefing the former Minister also said that with the passage of this Bill, the Port City qualifies to be a State. He alleged that several recent decisions concerning the State were not made by President Gotabaya Rajapaksa, but his brother Basil Rajapaksa.

He noted that the Special Economic Commission of the Port City would also be able to enter into special agreements with foreign States, essentially making it a state of its own.

“The Hambantota port was sold by Ranil Wickremesinghe after signing an agreement. They hesitated to use the word sold, stating that it was an investment. You can interpret this in many ways. But it was sold for four generations,” Rajapakshe said. 

“But in this case, it is not just an agreement. They are going to bring an Act to Parliament and give it to China through this Act. There is a map illustrating and defining what our country is. 446 hectares have been reclaimed and according to this Bill it is not owned by Sri Lanka, nor the Western Province. It does not come under the purview of the Colombo Municipal Council. Instead a Commission is to be appointed for its governance, and it will meet the wishes of the Chinese investor.” 

“If passed, this land would not be under the Urban Development Authority or any other local authorities. Meaning there is no Sri Lankan governance. This area would also be exempt from the Inland Revenue Act. But more importantly, the President will only gazette the regulations imposed on this land, and would not bring it to parliament. There is no parliamentary regulation,” the former Justice Minister said.

“According to the Montevideo Convention , Port City qualifies to be a state. All four of the requirements for this city to be considered a state are here,” Rajapakshe said. The Montevideo Convention the Rights and Duties of States is a treaty signed at Montevideo, Uruguay in 1933, and enacted in 1934. According to the convention the state as a person of international law should possess the following qualifications: a permanent population, defined territory, government and capacity to enter into relations with the other states.