15th April 2021, The Centre for Policy Alternatives and its Executive director (the Petitioners) challenged the constitutionality of the Colombo Port City Economic Commission Bill (the Bill). The matter is listed to be taken up before five judges of the Supreme Court on 19th of April 2021.
CPA notes several concerns in this brief comment, some pertaining to provisions in the Bill, others on process and broader implications. The Petitioners argued that the Bill violates Articles 3, 4, 12 and 14 of the Sri Lankan constitution and thus requires to be passed by the people at a referendum in addition to being passed by two thirds majority of Parliament. The Bill establishes a parallel administration known as the Colombo Port City Economic Commission (CPCEC) which will inter alia exercise sweeping executive power, control over public finance and to an extent some law / rule making power within the Port City area. The CPCEC has the ability to give entities access to sweeping tax concessions and other benefits with little or no objective criteria. Whilst it exercises these broad powers, the CPCEC is not accountable to Parliament and is appointed at the sole discretion of the President (or if it is assigned to a Minister, by the said Minister).
The Petitioners argue that among other things the sweeping tax concessions granted by the Bill are arbitrary and discriminatory and will have a detrimental effect on the national economy. The Bill directly excludes the operation of a swath of legislation enacted by Parliament including tax legislation, it could also indirectly exclude the operation of the provisions of the Companies Act and the Banking Act in relation to companies’ operating within the Port City area. Thus, the Bill attempts to put in place a framework to create a business environment where a few well-connected entities will be able to obtain substantial benefits and an unfair competitive advantage to the detriment of citizens of Sri Lanka.
Further, CPA is concerned with the speed with which the government is proceeding with a Bill that has such serious implications. To date there has been little to no public consultation on the contents of the Bill and its implications. CPA notes that over a period of several years, including during the previous government’s tenure, media reports informed of the drafting of this Bill. However, no specific information was provided to the public on this. This raises a serious question as to which stakeholders, if any, were in fact consulted during this long-drawn-out drafting process. Moreover, the government is also attempting to rush through the Bill by placing it on the order paper of Parliament just prior to the Sinhala and Tamil New year celebrations and amidst a slew of public holidays. Such behaviour is a clear attempt by the government to prevent citizens from scrutinizing and challenging the Bill, raising concerns as to the intentions of the government.
Amidst these concerns, CPA also notes that the Bill raises other fundamental concerns. This government has been vigorous in its opposition to any international involvement in the protection of human rights in Sri Lanka, terming such interventions “foreign interference with Sri Lanka’s sovereignty”. Despite such claims, this Bill in its present form represents the most far-reaching involvement of non-citizens in Sri Lanka’s economy and would result in far more invasive foreign involvement than was envisaged in relation to any proposed human rights mechanism. For example, it would be possible for all members of the CPCEC to be foreign nationals, an entity that is provided significant powers as per the Bill. Further, the proposed International Commercial Dispute Resolution Centre would also see the participation of international arbitrators and lawyers in the compulsory arbitration proceedings in relation to disputes that arise in the Port City area. It is also hypocrisy of the highest order to accept international participation in entities provided in the Bill and decry it in relation to proposed human rights mechanisms. CPA has previously commented on the participation of foreign individuals in proposed mechanisms in Sri Lanka and notes that the present proposals with much wider implications will require much more careful study and debate.