14 August, 2022


Port City Bill Violates Sovereignty, Needs Approval At A Referendum

By Jayampathy Wickramaratne

Dr Jayampathy Wickramaratne PC

The Colombo Port City Economic Commission Bill was presented in Parliament on 08 April 2021, while the country was getting ready to celebrate the traditional New Year. With the intervening weekend and three public holidays, citizens had just two working days to retain lawyers, many of whom were on vacation, and file applications challenging the constitutionality of the Bill in the Supreme Court within the one-week period stipulated in the Constitution. One wonders whether the timing was deliberate.

The Bar Association of Sri Lanka said in a statement that it was extremely concerned about the limited time given for scrutiny and discussion of this important Bill, as well as the timing of placing the Bill on the Order Paper of Parliament, which was after the suspension of sittings of the Supreme Court, a time when many members of the legal profession are unavailable. Because the period of one week within which the Bill could be challenged before the Supreme Court to determine its constitutionality, included not only the weekend but also three public holidays, members of the public have been deprived of a meaningful opportunity to scrutinise the Bill and to discuss its merits.

Special economic zones are common. They are created mainly to attract foreign investments. In return, investors are offered various concessions so that their products are competitive in the global market. Several negative effects of such zones have also been highlighted. The sole purpose of this article, however, is a discussion on the constitutionality of the Bill.

High-powered Commission

The Bill seeks to establish a high-powered Commission entrusted with the administration, regulation and control of all matters connected with businesses and other operations in and from the Colombo Port City. It may lease land situated in the Colombo Port City area and even transfer freehold ownership of condominium parcels. It operates as a Single Window Investment Facilitator for proposed investments into the Port City.

The Commission would exercise the powers and functions of any applicable regulatory authority under any written law and obtain the concurrence of the relevant regulatory authority, which shall, as a matter of priority, provide such concurrence to the Commission.

Clause 3 (5) of the Bill is as follows:

The Commission shall, in the exercise, performance and discharge of its powers, duties and functions, where so required by the respective written laws applicable to any Regulatory Authority, obtain the concurrence of the relevant Regulatory Authority in respect of the subjects vested in or assigned to, such Regulatory Authority and to the extent specifically provided for in this Act: Provided that, the concurrence of the relevant Regulatory Authority sought shall be limited to the implementation, within the Area of Authority of the Colombo Port City, of the respective written laws applicable to such Regulatory Authority.

Clause 3 (6) states: The relevant Regulatory Authority from whom such concurrence is being sought by the Commission, shall as soon as practicable in the circumstances, as a matter of priority, provide such concurrence to the Commission.

The discretion and powers of such other authorities under the various laws thus stand removed.

The Commission consists of five members who need not be Sri Lankan citizens, quite unlike the Urban Development Authority, the Board of Management of which must comprise Sri Lankan citizens only. One issue that arises is that the vesting of such powers upon persons with loyalties to other countries, especially superpowers, would undermine the free, sovereign, and independent status of Sri Lanka guaranteed by Article 1 of our Constitution. It would also impinge on the sovereignty of the People of Sri Lanka guaranteed by Article 3 read with Article 4.

The removal of the discretionary powers of the various regulatory authorities is arbitrary and violative of the right to equal protection of the law guaranteed by Article 12 (1).

Discriminatory of Sri Lankan Citizens

Under Clause 26, only persons authorized by the Commission can engage in business in the Port City. Clause 27 requires that all investments be in foreign currency only. What is worse is that even foreign currency deposited in an account in a Sri Lankan bank cannot be used for investment. Thus, Sri Lankans cannot invest in the Port City using Sri Lankan Rupees; neither can they use foreign currency that they legally have in Sri Lanka. The above provisions are clearly arbitrary and discriminatory of Sri Lankans and violate equality and non-discrimination guaranteed by Article 12. They also violate the fundamental right to engage in business guaranteed by Article 14 (1) (g).

Under clause 35, any person, whether a resident or a non-resident, may be employed within the Port City and such employee shall be remunerated in a designated foreign currency, other than in Sri Lanka Rupees. Such employment income shall be exempt from income tax. Clause 36 provides that Sri Lankan Rupees accepted within the Port City can be converted to foreign currency. Under clause 40, Sri Lankans may pay for goods, services, and facilities in Sri Lankan Rupees but would be required to pay a levy for goods taken out of the Port City, as if s/he was returning from another country! The mere repetition of phrases such as ‘in the interests of the national economy’ throughout the Bill like a ‘mantra’ does not bring such restrictions within permissible restrictions set out in Article 15.

When the Greater Colombo Economic Commission (GCEC) was sought to be established in 1978 under the 1972 Constitution the Bill provided that several enactments would not apply in the GCEC area. The Constitutional Court held that such exclusion violated equal protection and required a 2/3 majority. JR Jayewardene, although he had a 5/6 majority, nevertheless amended the Bill at the Committee stage to fall in line with the Court’s determination. Under the 1972 Constitution, there were no referenda. But under the 1978 Constitution, a violation of fundamental rights consequently violates Articles 3 and 4 and a Referendum is needed. The Supreme Court has held so in the case of the Eighteenth Amendment Bill of 2002 and the Twentieth Amendment Bill in 2020.

Courts to be by-passed

Clause 62 requires that all disputes involving the Commission be resolved through arbitration. The jurisdiction of Sri Lankan courts is thus ousted. In any legal proceedings instituted on civil and commercial matters, where the cause of action has arisen within the Port City or in relation to any business carried on in or from the Port City, Clause 63 requires Sri Lankan courts to give such cases priority and hear them speedily on a day-to-day basis to ensure their expeditious disposal. The inability of an Attorney-at-Law to appear before the court even for personal reasons, such as sickness, shall not be a ground for postponement. These provisions are arbitrary and violate Article 12.

Undermines legislative power

Clause 73 provides that several Sri Lankan laws listed in Schedule III would have no application within the Port City. Such laws include the Urban Development Authority Act, Municipal Councils Ordinance, and the Town and Country Planning Ordinance. Under Clauses 52 and 53, exemptions may be granted by the Commission from several laws of Sri Lanka, including the Inland Revenue Act, Betting and Gaming Levy Act, Foreign Exchange Act, and the Customs Ordinance.

The Commission being empowered to grant exemptions from Sri Lankan laws undermines the legislative power of the People and of Parliament and violates Articles 3 and Article 4 (c) of the Constitution.

Devolution subverted

Several matters dealt with by the Bill come under the Provincial Councils List. They include local government, physical planning, and betting and gaming. Article 154G (3) requires that such a Bill be referred to Provincial Councils for their views. As Provincial Councils are not presently constituted, passage by a two-thirds majority will be necessary in the absence of the consent of the Provincial Councils.

The exclusion of the Municipal Councils Ordinance from the Port City area is not possible under the Constitution. In the case of the GCEC Bill in 1978, a similar exclusion was held by the Constitutional Court not to be arbitrary. Since then, under the Thirteenth Amendment under the 1978 Constitution, local government has been given constitutional recognition and included under the Provincial Council List. Under the present constitutional provisions, therefore, the Port City cannot be excluded from laws on local government.

The writer submits that in the above circumstances, the Colombo Port Economic Commission Bill requires to be passed by a two-thirds majority in Parliament and approved by the People at a Referendum. Quite apart from the constitutional issues that arise, such an important piece of proposed legislation needs to be widely discussed. It is best that the Bill is referred to a Parliamentary Committee before which the public, as well as citizens’ organizations and experts in the related fields, could make their submissions.

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Latest comments

  • 26

    SL is becoming a Chinese colony which will attract attacks from USA and India.

    USA must impose sanctions on any company that invests in Port City and on the family members of the directors and staff of those companies.

    • 14

      Wasting time in local procedures like Supreme Court of referendum are waste of time. Look for ways to sue Aanduwa in GATT, WTO, UNCLOS, ICC, ICJ…. or some other international agencies who have provision to deal with this. Ask the UN’s intervention on violating Lankaweyans sovereignty by building a new country within their limit. This country is going to deprive the International Trade of Lankawe. Some foreigners sitting on this isle going to swindle all the trade that are supposed to come to Lankaweyans. Give up the lost communism and ask US, EU & India to directly get involved in this matter. Other than that nothing can be done with any local actions, all locally possible is doing some hiwar talks, standing on the junctions of the villages.

    • 1

      “USA must impose sanctions on any company that invests in Port City and on the family members of the directors and staff of those companies.”

      Isn’t that going against democratic freedom that USA wants to promote?

      • 4


        Already worried?

        The two masterminds behind this are US citizens! They own substantial assets in USA and in SL denominated in US currency!

        Manoj Rajapaksa, Ayoma Rajapaksa, Pushpa Rajapaksa, Sewwandi Rajapaksa, Thejani Rajapaksa, Bimalka Rajapaksa and Ashantha Rajapaksa are American citizens too!

        USA must impose sanctions on them and investigate their assets. They can bring assets earned through sanctioned Chinese companies into USA.

        • 1

          Fathi Akka keep its up.
          Anyway Eagle doesn’t waste time to dig up anything. He just say that all Rajapaksas went to USA are Parai Singaloya taken there by Dutch rulers for manual labor in Southern states’ Tobacco fields.

  • 13

    I suggest, good doctor, to canvass your case before the Courts for a determination that the bill requires not only two thirds majority but a referendum as well. But if by any chance the court rejects your contention don’t find fault with the courts saying this and saying that. The reality is that had even SRP and subsequently the SJB had won both the Presidential and Parliamentary elections then a law on similar line would come up to be included in the statute books. Look what happened to Hambantota. The Rajapakses built this through Chinese assistance for starters. Wickramasinghe and company gave it lock stock and barrel to the Chinese for some reason or the other. Instead of crying foul it is important, particularly for the Western world to take practical steps to prevent SL being a fully-fledged Chinese colony thus shrinking their Indo-pacific area to Pacific only.

  • 11

    As rightly pointed out By Dr Jayampathy Wicramaratnae, Special Economic Zones SEZs were established and successfully managed by many countries in the world..

    SEZs are a way out for developing countries to bring in more foreign direct investments, promote exports and create employment within the host countries..

    China has many Special Economic Zones within China established when China began to experiment with Socialist Market Economy.and Ireland is another country that has managed Special Economic zones within Ireland successfully.

    Under Yahapalanaya government, 70 percent stake of the Hambantota Port was leased to China Merchants Port Holdings Company Limited for 99 years for $1.12 billion.

    There were no separate Acts of Parliament, still it is called Special Economic Zone whereas Colombo Port City is not sold or leased out to any other country, but the GOSL has proposed Colombo Port Economic Commission Bill to manage the Colombo Port City.

    The bill must be methodically studied before enacting it as an Act of Parliament.

  • 8

    Is this ‘apartheid’ SL style?

    Will the average SL citizen benefit from the Port City or will it be another tax burden for its upkeep? Reminds me of the animated movie ‘over the hedge’ where the dumb animals of a forest wake up to a new world of ‘human development’ separated by a hedge.

    • 2

      “Is this ‘apartheid’ SL style?”
      Are guys suffering from ‘Defeat-Syndrome’ jealous of Sri Lanka’s achievements?

      For Sinhala tax payers who had to waste their money to rehabilitate Tamil terrorists, pay compensation to families of LTTE carders, resettle Tamil IDPs, repair infrastructure destroyed by Tamil terrorists, operate an Office of Missing Persons (declared as missing and living in foreign countries under new identities) and pay for reconciliation projects, maintaining Port City is not a burden.

      • 0

        “For Sinhala tax payers who had to waste their money to rehabilitate Tamil terrorists, pay compensation” What Sinhala taxpayers? The government’s biggest income comes from Muslim and Tamil exporters, not the ones strutting about in fancy uniforms.

  • 19

    This is the sort of thing that will happen when the leadership of the country is entrusted to a retired Lieutenant-Colonel who later occupied himself as a supermarket assistant and as a gas station attendant.

    • 4

      Captain Morgan,
      Sinhalayo did not entrust the country to a retired Lieutenant-Colonel who later occupied himself as a supermarket assistant and as a gas station attendant.
      Sinhalayo entrusted the country to a person who served in the Sri Lanka Army and had the guts to confront the Tamil terrorists branded as the deadliest terrorists in the world by FBI. He, along with Mahinda Rajapakshe, Sarath Fonseka and Sri Lanka Armed Forces gave a humiliating defeat to Tamil terrorists who bragged that they can never be defeated militarily.

      You guys entrusted the country to a ‘Grama Sewakaya’ who ruined the country by allowing Muslim terrorists to carry out terrorist attacks.

  • 7

    For once there is a statement that elaborates on the worrisome aspects of the proposed bill.
    There are some aspects for which there are precedents in the Free Trade Zones set up after 1978. They may be hard to fight. Also there are exceptions that have been made for BOI projects. And they may be justified on those grounds.
    Should this not be occasion for reviewing the foreign investment policy as a whole since liberalization in 1978.

  • 2

    ok boss.

  • 5

    Sri Lanka ranks in the bottom of the world in the ease to do business one wonders why when we have opposition think tanks like this fool .

    All the wingers on CT keep saying and asking why Sri Lanka has not improved much in 70 years, it is because of clowns like Wijedasa , Jayampathy. and the lot. How can a country develop when there is a civil service that undermines the leadership and opposition like this?

    We need to realize that the investors have many options. There are 100s of countries waiting to facilitate investment. They dont just look at the beaches, they look at the taxation structure they look at the possibility of making money , how and anything be done with these fools?

    • 1

      Investors- in the plural.
      You have asked for enslavement by the latest Colonial Power.

  • 10

    I thought Port City was renamed Colombo International Financial City as a rival to Dubai and Singapore financial centres. Why is the government reverting back to the name Port City?

    is it because China objected to referring to port city as an extension to city of Colombo ?
    But Port City whose port city ? where is it?
    is it in Sri Lanka? or is it an extension of China ?

    I have not read the Port City Bill placed in front of the Parliament …does the bill any where refer to Port City as part of Sri Lanka or as a city in no mans land?

    • 6

      Colombo Port City will not be an appealing name to many investors.
      Am attractive name would be found with or without any foreign prompting.
      The name has to reflect the potential of the place.
      A big influence will for sure be astrologers, including the numerologist and Fengshui kinds.
      As for not having read the Bill, do not worry, many who object have not a clue about the Bill.

      • 2

        Macau II, is a Chinese autonomous region in Hindian Ocean.

      • 2

        I don’t find anything too objectionable in this Bill, that hasn’t been done before. About employees being paid in foreign currency, that is already in the contracts of many people who work in outsourcing. In any case, that doesn’t come out of the public pocket.
        The problem is that the True Believers like WR and the clueless hamuduruwos, actually believed what they were shouting from the rooftops about soverereignty, but forgot they were rooting for a man who didn’t want his children to live in the country that he is supposed to be developing.
        I hope Gota , before he’s trumped by the military geniuses in the wings, will send out some white vans to round up the deluded patriots and a lot of yellow ones for the uppity know-it-all hamuduruwos. It’s about time something was done about these two categories.

      • 0

        SJ -not worry, many who object have not a clue about the Bill.
        the pathetic situation is that Many who are going to vote for it have not read it and no clue about.

  • 3

    It is universally accepted that foreign Direct Investment is the panacea for the economic stagnation and it will promote growth and prosperity.

    The present world order is neo liberal and you have to pay a price for FDI.

    JR called as far back as 1978 “Let the robber barons come”, It was an appropriate slogan at the correct time and the world economic situation was favorable, but unfortunately JR mishandled the emerging Tamil nationalism and lost the opportunity, never to recover.

    Ranil under Yahaplanaya could not take off due to unfavorable world situation and internal bickering.

    Now Gota makes a fresh start when corruption and nepotism within the country were rampant and miss-governance and dictatorial tendencies make success extremely unlikely.

    • 3

      “JR mishandled the emerging Tamil nationalism and lost the opportunity,”
      JR did not mishandle the emerging Tamil nationalism. Our ‘Big Brother’ used separatism of Tamils to sabotage JR’s plans to develop the country. ‘Big Brother’ that had got bogged down in socialism did not want to see a prosperous capitalist country in its backyard.
      Tamil terrorist campaign promoted by the ‘Big Brother’ prevented foreign investors coming to Sri Lanka.

  • 2

    Port City Bill may be a blessing to the Separatist Diaspora Tamils. If the Port City Bill passes, then the Western Countries can pool their money, which would be multiple folds compared to the proposed Chinese investment in Port City and ask for a similar Bill for the Northern and Eastern Provinces. The Govt will be obliged to pass this Bill as there will be the Chinese Colony Port City Bill as a precedence. If not those Western Countries to which we export to and import from would bring in trade embargo which would completely ruin Sri Lankan economy. By this act the Western Countries would have a foot inside Sri Lanka in an area bigger than Port City and also contrary to the wishes of the petty minded Sinhala Buddhist Southern politicians and racists wishes the Northern and Eastern Provinces would develop much faster.

    Are the Rajapakse brothers ready for such a scenario??

  • 1

    Country is moving backwards since independence due to this so call experts that created incompetence void with uneducated law makers. They cannot even write a part constitution with out argy bargy and created the whole mess in SL constitution.
    For the record, date that this bill was presented create mischief and open for question. Second its being challenged in HC and hope these learned judges make proper judgement and if needed ask for adjustments.
    Some are paid by foreign interest to stop this project and for the countries sake we need this project to go ahead so that our youngsters have some future with out looking outward to find employment.
    SL companies go to S’pore for arbitration with foreign companies with high cost and this need to revisit since its one sided towards foreign company’s favour due to cost. We need expert commercial arbitration in SL and also remove red tape.
    S’pore got there due to their hard work and when i was giving a presentation in S’pore and after that one S’pore minister asked my help drafting certain bill towards new technology area. Since that I helped them with IDA and MDA which are now merged and all these free of charge since I run global technology design firm.
    IDA used to run Internet policy and MDA used to run media policy are both govt. regulators.

    • 0

      “Country is moving backwards since independence due to this so call experts that created incompetence void with uneducated law makers. They cannot even write a part constitution with out argy bargy and created the whole mess in SL constitution”
      Yes, such great writing on your part.

  • 0

    Blind Eagle alias HLD will be appointed as Chairman of brothels, massage parlours, gambling dens and supplying dog meat to the port city Cheenans. He will do very well I am sure.

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