The Supreme Court has delivered a stinging rejection of the Government’s Port City bill, ruling that several provisions of the highly controversial legislation were inconsistent with the Constitution of Sri Lanka.

Jayantha Jayasuriya CJ

The Speaker of Parliament read the determination by the Supreme Court of Sri Lanka to the House a few moments ago. The determination by the court is that many provisions of the Port City Special Economic Zone Bill (Port City Bill) require either a super majority in Parliament to be enacted, and in some cases both a two thirds in the House and a referendum of the people.

The determination strikes a deathblow to the Nandasena Gotabaya Rajapaksa administration’s hopes to push the bill through Parliament in the form Beijing preferred, with sweeping powers vested in a special commission that would govern the reclaimed city with no oversight from mainland Sri Lanka or its national legislature.

Foreign media reports indicated that major concessions by the Nandasena Government on this piece of legislation that will govern the China built island in Colombo were part of the negotiations between Colombo and Beijing, as it negotiated an economic lifeline of USD 500 million to service external debt.

It is the first major defeat the former Defence Secretary’s government has faced in court.

The rebuke is particularly stinging because the Government did everything in its power to limit the time-frame open for citizens to challenge the bill in the Supreme Court. The bill was tabled in Parliament in the middle of the New Year holiday season in April. However the Supreme Court heard from 19 or more petitioners including political parties, Buddhist monks, Transparency International, Center for Policy Alternatives. The bill is fraught with controversy, after the Government vested supreme control in an economic commission that would rule the reclaimed island off Galle Face.

The bill made Port City companies exempt from customs and inland revenue regimes, parliamentary oversight and control over taxation and other financial measures. Adding insult to injury, members of the Commission did not have to be Sri Lankan citizens. Critics accused the Government of President Gotabaya Rajapaksa of trying to create a separate administrative region for China to control within the territory of Sri Lanka. Anti-corruption watchdogs warned that the bill could pave the way for the Port City to become a money laundering hub.

Further compounding matters, it was exposed that an extremely close associate of Presidential Secretary Dr. P.B. Jayasundera was the main legal consultant for Colombo Port City, and negotiated the controversial draft legislation and even drafted parts of it. Jaysundera, as Secretary to the President, appeared in the Supreme Court as an intervenient petitioner, to defend the Port City bill. Appearing as counsel for Jayasundera, Romesh De Silva PC argued that a foreigner could even be Chief Justice of Sri Lanka because there were no constitutional barriers to this.

Legal experts warned that the Government could still attempt to “sneak in” the powers to the Commission when the bill is in Commission stage, where every amendment will pass with only a simple majority. Successive governments have utilized this major lacuna in the law to enact provisions that are never subject to judicial oversight. Sri Lanka’s constitution does not provide for post-enactment judicial review of legislation.

Attorney Gehan Gunetilleke tweeted the key provisions of the Port City Bill the Supreme Court has found to be inconsistent with the constitution. In some cases, the Court has suggested amendments to bring the provisions in line with the constitution.

Full determination of the Supreme Court on Port City Bill can be read here