Conflicting claims on Legal Status of Proposed MCC Compact

By Shamindra Ferdinando

Amidst conflicting claims on the future of the MCC (Millennium Challenge Corporation) Compact in the wake of damning Prof. Gunaruwan Committee report on the same, Attorney General Dappula de Livera yesterday (14) said that the matter was still under consideration.

The AG was responding to claims that he approved the MCC Compact.

However, a two-page letter, dated Oct 10, 2018, issued during the tenure of De Livera’s predecessor, Jayantha Jayasuriya, PC as AG, says the existing laws do not inhibit the Compact and the Programme Implementation Agreement (PIA).

Jayasuriya now functions as the Chief Justice.

In the run-up to 2019 parliamentary election, the then Finance Minister Mangala Samaraweera said the Attorney General had approved the US project although the Sri Lanka Podujana Peramuna (SLPP) called it a sell-out.

Spokesperson for the AG’s Department Nishara Jayaratne told The Island that the AG would take into consideration the Gunaruwan report as well as observations of several other state institutions, including the Land Commissioner, Survey General and Director General, External Resources. Responding to another query, the State Counsel said that they felt urgent requirement to set the record straight against the backdrop of misleading reports.

The following is the text of the letter captioned ‘Legal Status of Proposed MCC Compact signed by Sanjay Rajaratnam, PC, Senior Additional Solicitor General, addressed to Jonathan G. Nash, Chief Operating Officer, MCC:

“I refer to your communication dated 27th September, 2018 in respect of the above captioned matter. In this regard, I am made to understand that the delegation from the Government of Sri Lanka was able to have fruitful discussion with the Millennium Challenge Corporation Team in resolving some of the outstanding issues.

“Having gleaned through the proposed Millennium Challenge Compact, the draft Program Implementation Agreement (PIA) as well as the Points of Discussion (without prejudice) between the negotiating parties which has been made available to me, I wish to at the very outset opine that no existing laws of Sri Lanka inhibit the Compact and the PIA being implemented in Sri Lanka. If I may elucidate further, the covenants of the Compact and the PIA do not infringe any existing domestic law or any previous undertakings given by the Government of Sri Lanka. It is acknowledged that the Compact imposes legal obligations on both parties to the Agreement

“Further, consequent to the negotiations and discussions had between parties, it is proposed that the Government of Sri Lanka would seek the passage of a law in Parliament to establish the MCA- Sri Lanka as a non-profit Company limited by guarantee under the Companies Act No.07 of 2007 to implement the provisions of the Compact. It is envisaged that the proposed enactment would encompass the Compact and the PIA as Annexures, which would form an integral part of this enactment.

“Thus, I am of the view that the passage of the said enactment by Parliament would result in the Compact and the PIA, having the parity of status of a domestic law in Sri Lanka.

“In the Context of the above, it is requisite that Section 7.1 of Article 7 of the Compact referring to the provisions on Entry Into Force, would be revised with the deletion of the sentence pertaining to the Compact prevailing over the domestic laws of Sri Lanka.

“However, in order to assuage any concerns with regard to the implementation of the Compact, by an unlikely event of a legislation in the future which may impinge or infringe the said compact, upon notification by the Ministry of Finance and Mass Media (the relevant Ministry) of this fact, a legal opinion would be tendered that the proposed legislation if proceeded with would violate the covenants of the Compact. This would enable the relevant Ministry to forward its observations to the Cabinet of Ministers and Parliament, that the Attorney-General has opined that the proposed Bill if enacted would violate the Compact.

“In the circumstances, I believe that the aforementioned matters would confirm the legal status of the Compact and its entry into force.”

“Copies were sent to Ms. Caroline Nguyen,Managing Director- Europe, Asia Pacific and Latin America Millennium Challenge Corporation and J. Charitha Ratwatte,

Head of Policy Development and Chief of Party MCC- Sri Lanka Project.”