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Mon, 20 April 2015 07:52:11
Sri Lanka land deals may have procedural flaws: lawmakers
06 Jul, 2011 17:10:21
July 6, 2011 (LBO) - Sri Lanka's recent state land sales to investors have procedural flaws that could result in the contracts being challenged in courts and deemed illegal, opposition lawmakers warned at an economic forum.
Sri Lanka had sold two blocks of state land to CATIC, a Chinese defence contractor, and Shangri La, a Hong Kong based leisure firm, without open tendering.

At least one project has been given sweeping tax breaks under a law relating to projects classified as strategic investments.


Harsha de Silva, a lawmaker and economist, representing Sri Lanka's main opposition United National Party said under the strategic investment law relevant information about the project should be published in a state gazette.

Within 30 days the cabinet of ministers had to approve it and after six weeks a second gazette must be published giving the details of exemptions from the country's tax laws. Within three months it must be brought to parliament for approval.

A gazette had been published relating to Shangri La. De Silva told an economic forum organized by the Ceylon Chamber of Commerce that no gazette had been published on the CATIC deal. Neither have the deals been brought to parliament.

M A Sumanthiran, an opposition lawmaker and lawyer said under Sri Lanka's law for state land to be alienated the relevant provincial council had to make a request.

He was responding to a statement by state management reforms minister Navin Dissanayake that the gazetting and parliamentary presentation was not followed because the projects were approved by the Board of Investment, the government's investment promotion agency.

"Even if it is a BOI (project) no land can be alienated without a request coming from the provincial council," Sumanthiran said.

"That is one of the rulings of the Supreme Court."

He says if Sri Lanka's provincial council in the Western Province did not make a request for alienation of land "for that reason alone that would be an illegal transaction."

Though Sri Lanka's politicians trade charges of corruption once they come to power no action is taken. Sri Lanka's Supreme Court has reversed two privatizations following public interest petitions. Sumanthiran himself has been involved in public interest petitions.

Sumanthiran says to ensure that deals are secure businesses must "scrupulously follow the process set down by the law."

Rule of Law

Vijitha Herath, a member of Sri Lanka's Marxist-nationalist Janatha Vimukthi Peramuna says "some mechanism" is needed to ensure justice and economic growth would increase if corruption is eradicated.

Critics and legal analysts have pointed that Sri Lanka's has problems with rule of law, where public officials no longer have protection to act justly by the citizens, or do the right thing and have security of tenure.

In the past four decades, serious problems with the criminal justice system itself such as selective implementation of law, using the police against the media and critics of the state and withdrawal of charges including murder against members of the ruling administration.

"Many people want to speak out but people are afraid to speak out," de Silva said.

Critics say public institutions were destroyed and arbitrary rule gradually replaced rule of law over several decades after independence.

Legal analysts have traced the final collapse of rule of law and freedom, to two recent constitutions. The entire system of government is based on institutions that operate on a rule of law. The judiciary for example is an institution.

In 1972, a new constitution abolished a public service commission and the institution of permanent secretaries that served as the lynchpin of a system of governance by protecting public officials who did the right and just thing by citizens.

The constitution transferred the power of appointing, transferring and taking disciplinary action against ministry secretaries to the cabinet from the civil service commission.


The secretaries were no longer 'permanent'. The situation was worsened in a 1978 constitution, where the sole authority of appointing ministry secretaries was vested with the president. The civil service collapsed.

A 17th amendment to the constitution attempted to partly fix the problem, but it has now been nullified.

Basil Fernando, a lawyer who has written extensively on the need for constitutional reform says the 1978 constitution destroyed what remained of the public institutions, which has serious implications for economic activity and property rights.

"The law functions through institutions and the implementation of the law depends on these institutions," he wrote earlier this year in an analysis on the link between the development of 19th century law and economic activities under the British.

"The very political system of the government as well as the entire civil service and the institutions of the administration of justice such as the police, the judiciary and the prosecution system are based on these legal foundations.

"Therefore if Sri Lanka is to enter the path of development it is essential that the country faces this legal crisis.

"Development without law is simply an illusion within the modern context. It is not only an illusion but a dangerous exercise for the government as well as for the people.

"Within any discussion on putting the country back on a modern path which is capable of engaging in modern economic activities such as commerce, trade and social development the crisis of the law should be addressed as one of the most important aspects of development."

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