Conservation Outlook Assessment: Significant Concern

By Professor Emeritus Nimal Gunatilleke

The IUCN World Heritage Conservation Outlook Assessment in its latest assessment cycle of 252 global Natural World Heritage Sites (released on 09 December 2020), has assessed Sinharaja Natural World Heritage Site (SNWHS), the icon of biodiversity conservation in Sri Lanka, as “significant concern”. What it simply means is that the site’s conservation values are threatened and/or are showing signs of deterioration. It recommends that significant additional conservation measures are needed to maintain and/or restore values over the medium to long term. It is, indeed, not a satisfactory report card even before the more recent conservation issues hit the headlines of the national news media.

The IUCN World Heritage Outlook regularly assesses the conservation prospects of all natural World Heritage sites: designated as such because they harbour irreplaceable ecosystems and provide habitats critical to the survival of globally threatened species. It identifies the most pressing conservation issues affecting natural World Heritage sites and the actions needed to remedy those issues, thereby informing the international community, including IUCN, its Members, and partners. IUCN’s assessment shows whether current conservation measures of a given site are sufficient, if more must be done, and where.

Examining the successes and challenges of preserving these landscapes of ‘Outstanding Universal Value’ is an indicator of the effectiveness of protected and conserved areas. It comes at a time when the international community seeks to measure progress towards global biodiversity targets and defines the Post-2020 Global Biodiversity Framework. These sites are globally recognized as the most significant natural areas on Earth and their conservation must meet the high standards of the World Heritage Convention. Our ability to conserve these sites is thus a litmus test for the broader success of conservation worldwide.

Outlook Assessment of Sri Lankan Natural World Heritage Sites

The IUCN has been conducting this global assessment of natural (and mixed) world heritage sites using standardized methodology for protected area assessments, once in every three years, since 2014. As such, the first cycle of assessment was carried out in 2014, the second in 2017 and the third in 2020. The results of the current World Heritage Outlook 3 (in November 2020) indicate that for 63% of all sites (159), the conservation outlook is either ‘good’ or ‘good with some concerns’, while for 30% (75 sites including both Sinharaja and the Central Highlands of Sri Lanka), the outlook is of ‘significant concern’ and for 7% (18 sites) the conservation outlook is assessed as ‘critical’.

The outlook assessment makes a detailed assessment based on the evaluation of three main criteria i) Current state and trend of values of the World Heritage Property, ii) overall threats and iii) overall protection and management. The 2020 outlook assessment has placed Sinharaja WHS in the data deficient and low concern for current state and trend of values (no. i above) suggesting that since new discoveries of plants and animals are still being made, its true biodiversity value is yet to be realized, but it is of low concern. However, its assessment of overall threat (no. ii above) is in the High Threat category due to continued reporting of incidents related to i) encroachment of forest due to agricultural expansion (e.g., tea small holdings), ii) illegal gem mining, iii). deliberate fires, especially in the eastern theater, iv) human dwellings, v) mini-hydro projects, vi) poaching, vii) cardamom cultivation in the natural forest, viii) unsustainable tourism developments, ix) fragmentation due to road construction, x) spread of invasive species and illegal collection of rare and endemic species for international trade.

The Outlook Assessment 3 also states that xi) overuse of agrochemicals in tea plantations bordering the forest can lead to the pollution of streams and rivers and associated aquatic biodiversity, xii) increased visitation beyond carrying capacity during peak seasons and xiii) development of tourism infrastructure are impacting negatively on forest and freshwater ecosystems. These threats, if continued with a ‘business-as-usual’ frame of mind, could seriously compromise the conservation of Sinharaja World Heritage site in the future.

The Outlook Assessment recommends that the management authority i.e., the Forest Department of Sri Lanka needs to take immediate steps to implement a plan of action to address threats and fill management gaps. It places its well-guarded optimism that some of these concerns would be addressed through two recently initiated projects – National REDD+ Investment Framework and Action Plan (NRIFAP) and the World Bank funded Ecosystem Conservation and Management Plan (ESCAMP). The IUCN World Heritage Outlook Assessment believes that with the implementation of the ESCAMP project in accordance with its stated objectives, a ‘Sinharaja Management system’ has been instituted at the Ministry of Environment by the Forest Department to address all issues related to its sustainable management.

It is, indeed, the wish of conservation conscious citizenry of Sri Lanka and the world at large that when the next cycle of assessment comes round in 2023, the Sinharaja Assessment indicator would be moving towards ‘Good with Some concerns. With the efficient implementation of the ‘Management Plan for Sinharaja Rain Forest Complex’ which is being under preparation at the present moment with financial and technical support from the ESCAMP project, it is hoped that the above threats could be minimized and consequently, the conservation outlook of the Sinharaja World Heritage Site would improve, significantly.

Potential threats to Sinharaja since Outlook Assessment 3

The IUCN World Heritage Outlook Assessment 3 was released on its website in November 2020. For Sri Lankan World Heritage properties i.e., Sinharaja and the Central Highlands, information gathering for this exercise started more than a year ago consulting a host of experts knowledgeable on the two properties both within and outside Sri Lanka. However, none of the recent events that hit the headlines of national news media such as i) Lankagama road project, ii) possible obstructions to the elephant migration patterns and iii) construction of reservoirs within the newly declared Sinharaja Rain forest Complex were included in this assessment. These, along with many other threats, their impacts and mitigatory measures adopted would be assessed in the Outlook Assessment 4 in 2023.

One of the most recent major concerns that was raised by both national and international environment-conscious public is the potential threat to the recently gazetted ‘Sinharaja Rainforest Complex’ from the proposed Gin-Nilwala Diversion Project (GNDP). The multipurpose development of Gin, Nilwala and Kalu rivers has been initiated way back in 1968, under the ‘Three Basin Development Project’ proposal made by the Engineering Consultants Inc. (ECI), Colorado, USA.

The present Gin-Nilwala Diversion Project is proposed as a multipurpose development project to fulfill the water requirement of Greater Hambantota Development Area, meet the irrigation deficit of Muruthawela and Walawa systems and introduce commercial agriculture developments, ostensibly by diverting ‘excess’ water from the upper reaches of the Gin-Nilwala basins to SE dry zone during the SW Monsoon period.

Among the added benefit claimed by the project proponents are i) the regulation of the flooding of the downstream areas of the Gin-Nilwala Basins (flood mitigation at Neluwa & Pitabeddara), especially during then SW monsoonal period and ii) road and infrastructure development from Neluwa – Lankagama road (15 km), Lankagama – Deniyaya road (14 km) and minor roads in Madugeta, Kotapola and Ampanagala areas. ( ).

Geological investigations of the GNDP, for most part, have been completed by May 2019 and revised feasibility studies on the locations of the dams, weirs and tunnel traces have been carried out based on detailed geo-engineering investigations that involve geological and structural mapping, core drilling, geomorphological, hydrogeological, and geotechnical investigations.

The Gin-Nilwala Diversion Project design, based on publicly available information as at present, consists of two concrete dams, a fixed weir and three trans-basin canals. The proposal of the project includes a Roller Compacted Concrete (RCC) Dam across the Gin Ganga at Madugate at the upper reaches of Gin Ganga with a diversion tunnel up to Kotapola to transfer the water from Gin basin to Nilwala Basin. At Kotapola, it has proposed a concrete weir across the Nilwala Ganga with a diversion tunnel up to Ampanagala to transfer water from Kotapola to Ampanagala reservoir. At Ampanagala another RCC Dam is proposed to be built across Siyambalagoda Oya, which is a major tributary of Nilwala Ganga with a diversion tunnel up to Muruthawela to transfer water from Ampanagala to Muruthawela (Figure 1).

The project system is Madugeta Reservoir→ Madugeta Tunnel→ Kotapola Weir→ Kotapola Tunnel→ Ampanagala Reservoir→ Ampanagala Tunnel → Muruthawela Reservoir.

by Usvatte-aratchi

Ediriweera Sarachchandra, the most celebrated man of letters in our country in the 20th century, wrote the prescient novel ‘With the begging bowl’. I have not read it but learnt that it was, in part, a reaction to his experience in Paris, where he was our ambassador and where Sri Lanka Aid Group annually met in those years. Why aid? Because our economy was crippled and we needed crutches to make the least move. The cause of the disease was our profligacy with so little effort to earn the income that we spent. I have written on these pages about this consistently undisciplined behaviour of ours, which we cover under the cloak of bad government. It is salutary to remember that in this country, unlike in dictatorships, government is us and the agents who activate our wishes are government. If our government acts irresponsibly, foolishly and as knaves, we must turn them out of office forthwith. The reserve of rights rests with the people and it is indeed our responsibility to throw out governments that behave as thieves, knaves and criminals – more easily said than done. Our governments are run by such knaves that a high dignitary in a church has been rightly able to publicly call a former President of the Republic to account and has gone unchallenged. They have been and are so common in our governments that it is not unreasonable to question our being able to govern ourselves responsibly. However, what is manifest is that we the people don’t realise that government acting in our name may lead us to ruin. One of the most admirable features of governments that ruled Germany after Hitler’s war, in which such unspeakable horrors were visited upon their own citizens and those peoples whom they conquered, is their acceptance of responsibility for those crimes. The reaction of the Ambassador of Germany here to a dangerous statement of a minister in this government is symptomatic of that behaviour. The ready acceptance of 1.2 million refugees in 2015-16, mostly Moslem, about 1.5 percent of its population by the people of Germany, I suspect, lies in the collective memory of the people of Germany that they poisoned to death, enslaved and chased away, among them so many of both ordinary and extraordinary achievements in their society. The recurring feature of our society is its inability to remember that year after year in the last 60 years or so, the rest of the world does not owe us a living and that we must live within our means, taking a few years moving one way or another. Those who governs us, whom we elect, have been more than willing to spend freely, if the expenditure included a packet of a few million dollars that would go into their bank accounts, maintained offshore secretly. We refuse to recognise the need for austerity, when bankruptcy stares in our face. We turn from one set of lenders to another and willingly accept conditions laid down by new lenders, our governments hiding behind a façade of blaming previous lenders. It may look smart, but in reality it is we the people who are forced to go a begging. We go abegging while those who run government wallow in wealth. A more blatant failure of principal failing to hold agent to account is hard to imagine.

It is not true that an economic entity, including a nation, cannot borrow and grow to be prosperous and strong. Experience does not support such contention. Young enterprises and well-established corporations borrow in the market and grow out of debt because with new resources they grow to be larger, stronger and more profitable. The huge market in debt in capital markets bears evidence of this. Lehman Brothers in New York City used to advertise ‘We were built of bonds.’ Enterprises borrow because the present owners do not want to dilute ownership and open themselves to the risks of changes in policy including those of merger and acquisition by allies of new owners. The fast dismantling of TWA airline is a case in point. A country that borrows and fails to grow out of debt runs the same risks, that creditors will determine its policies and even come to own parts of that country – that is in other words, a debt trap. Several countries in Africa run the risks of assets vital to it, running into the ownership of lenders. The government of Mahinda Rajapaksa undertook a policy of growing out of debt in 2010. That policy, in itself, was not unwise. Government investments grew rapidly, financed with debt. GDP at constant prices grew at rates above 7 percent in each of the years 2010 to 2014, if you believe their figures. That growth was built on higher government investment. The investments were in infrastructure. Those projects failed to give returns soon enough. The other constructions in Colombo were of a similar nature. In fact, they, including the Hambantota Port and the Beira Column, have failed to yield adequate returns yet, even now in 2021. The problem lay not in the strategy of growing out of growing out of debt but in the unwise choice of projects. That choice was perfect for China which was a savings surplus economy. At that time domestic savings in China was around 50 percent of its GDP. And foreign savings poured in steadily as investment. That part of domestic savings that did not go into domestic investment went into foreign investment, giving China a massive stock of foreign investments now totaling in excess of $ 4 trillion. That is sufficient information for one to see prima facie a case for long term investments: a far flung network of railways, aqueducts underground carrying water several thousand kilometers from Guangdong to Beijing, the three gorges dam and developing cities like Chongqing. That pattern did not fit Sri Lanka with domestic savings below 10 percent, little foreign investment and the balance of payments persistently in deficit, adding to indebtedness abroad: entirely the opposite of China. The problem lay not in the strategy of borrowing to grow out of debt but in the foolish choice of investments, which after nearly decade do not give a surplus to service those debts. We keep on borrowing to pay debt, not different from the Ponzi Game that Bernie Madoff went to jail for 150 years, where he died a few days ago. A Ponzi Game is one where debts due for repayment are repaid with new debt. It collapses when new debt does not come forth.

The Minister of Finance in 1965, U. B.Wanninayake, presented the Budget for1965-66 and observed that the country was living far beyond its means; the government was getting deeper and deeper into debt, and the foreign exchange reserves of the country were falling at an alarming rate.

“As at the end of June, 1965, the country’s net external assets amounted to Rs. 303 million … the outstanding short term liabilities of Ceylon payable in foreign exchange amounted to 292 million at the end of June 1965 ….

Ceylon’s external assets are now at a precariously low level…”

Deputy Minister of Finance G. L. Peiris presented the budget for 1997 said: ‘We are heirs to over 17 years of haphazard, lackadaisical economic set up, that had no consistent perspective and was merely content to exist from hand to mouth….

Concessional assistance in the form of project loans from multilateral and bilateral sources are estimated to increase… to SDR 321 million in 1996. …. gross international reserves of the country are likely to further strengthen to SDR 1,747 million in 1996 ….”

It reads like a comment on the present government. In 2020, Mahinda Rajapaksa, the Minister of Finance presented the budget for 2021. He showed little concern about the foreign exchange problem, devoting that subject a paragraph at the end of that part of the budget speech. Perhaps, he and his advisors considered it a problem manageable in the normal course of business. So have they shown so far in the year. However, those that see their way kilometers away rather than ‘viyath’, understand that the problem requires much more serious attention.

A few days ago, China graciously offered to us 600,000 vaccines produced in that country, and the President of the Republic himself went to the airport to receive them. A few months ago, WHO gave us some vaccines for which we did not have to pay. Several weeks earlier, India was very generous to offer us several hundred thousand vaccines, produced in their facilities. So, do we go begging for medications, that we need to keep the pandemic at bay. It is symbolic of our mendicity. In a way it has to be accepted. Those whom we respect most in our society are bhikkhu who beg for their food.

They depend on others to sustain them, (pindapatha) to give them clothing (chievara), to give them lodging (senasana) and to cure them when sick (gilanapratya) and perhaps in the back of our minds we expect other peoples to do that for us. Pie in the sky.

When I was young in the 1950s, every prominent building in Colombo had been designed and built by the British, when they ruled us. Parliament met in one such building and the most important departments of government were housed there. The current President has his offices in that building. It took more than 30 years to move to Kotte and Battaramulla. The first imposing building in Colombo that was built anew was the Central Bank building. Outside the western province, the only major project for which the government of Sri Lanka paid from its own funds was the Gal Oya Valley Project. It is now home to a thriving community. Buildings in the Peradeniya University – The Senate Building, the Arts Building, buildings for the faculty of engineering, the magnificent halls of residence (Hilda Obeysekera, Sanghamitta, Arunachalam, Jayatilleke, Marrs, James Pieris and Ramanathan) were put up by local construction companies. I recall the name Samuel & Sons, who in 1955, were giving final touches to the Arts Theatre (Room A) on Galaha Road. Why weren’t they and their successors given opportunities to construct? Late in the 1960s, I had some association with the Irrigation Department. Some of brightest engineers of the department were working on the preliminary plans and designs of the Mahaweli Project. There was incessant talk about the importance of local construction companies working with foreigners in all aspects of the projects, including designing and construction. We seem to have thrown aside that wholesome practice and now even unskilled labour is imported. Perhaps, that practice is an integral part of the contract to lend as is the practice of bribing local politicians.

When I step out of my house in Colombo all I see are structures put up by Chinese, some of them gifts from the Chinese. The massive structures of Jetavanarama, Ranmali (Sonnamali is the Pali term; it has nothing to do with ruvan veli, gems and sands) seya and other structures leaves anyone, who can imagine the marvels of those constructions, in awe. Now we cannot build our own National Hospital. Those achievements make it sharply painful to step out of one’s house in Colombo now only to see foreigners build the simplest constructions for us. It takes a particular kind of folly to laugh at foreigners that were nowhere near us in their achievements, 700 years ago, and now go begging to the same barbarians for help to survive.

I have rambled on a bit. Therefore, let me sum up what I said. We are and have been indebted to the rest of the world, for many decades. That is fundamentally because we have used more resources than we produced. To live at standards that we have enjoyed so far and to pay back the accumulated debt, we must either temporarily go into austerity or grow fast enough to spend as we have done so far and at the same time earn a surplus to pay back debt. There seems little desire for belt tightening. It is foolish to expect that the rest of the world owes us a living, as the bhikkhu sangha does from the laity. To grow fast, we must not invest in projects with long gestation periods. The change in patterns of demands in external markets and new technology for production has made it feasible to for economies to invest and obtain results in a few years. Those products are usually for export. To do that we do not need infrastructure development so much as good policies. That seems too far for our leaders either to grasp or to reach.

by Shamindra Ferdinando

Justice Minister M.U.M. Ali Sabry, PC, on Sunday (18) declared that the commissioning of the Colombo Port City was an occasion to celebrate. Declaring that the high-profile project is turning point for post-war Sri Lanka, Minister Sabry explained how the mega project could transform the country.

Sabry, who had served as the Treasurer and as the Deputy President of the Bar Association (BASL) on many occasions, assured there was absolutely nothing to worry about the project.

 Former President of the BASL U.R. de Silva, PC, Chief Advisor to the Justice Ministry, too, defended the project. Among those who defended the project were lawmakers Prof. G.L. Peiris, Keheliya Rambukwella, Ajith Nivard Cabraal, Shehan Semasinghe and Namal Rajapaksa.  

 The government responded following an unexpected attack from former President of the BASL Dr Wijeyadasa Rajapakse, PC. If the former Justice Minister, while being a member of the current administration’s parliamentary group, had not mounted such a frontal attack out of the blues, the government wouldn’t have had to mount such a strong defence of the Colombo Port City project. Wijeyadasa Rajapakse, attack was followed by the BASL declaration that it would move the Supreme Court against the establishment of an Economic Commission (EC) to manage the Colombo Port City. Saliya Pieris, PC, in his capacity as the President of the BASL, moved the SC against the government move. In nearly 20 petitions filed against the proposed Bill, the defendant is Attorney General Dappula de Livera, PC.

One-time internationally recognised top law academic Prof. Peiris emphasised that the proposed Bill was in line with the Constitution and received the sanction of the AG before being presented to the Cabinet of ministers.

It would be pertinent to mention that the CHEC Port City Colombo (Pvt) Limited had been the main sponsor of the National Law Conference 2020 on Feb 14, 2020 at Jetwing Blue, Negombo, during the tenure of Kalinga Indatissa, PC, as the President of the BASL. The CHEC Port City Colombo (Pvt) Limited had been among nearly 40 sponsors. USAID had been among the group. On the following day, Dr. Harsha Cabral, PC, and Dr. Asanga Gunawansa addressed the members on ‘Port City-Development of the law, local and international arbitration’. There were several related sessions which dealt with offshore financing, banking investment and FDI and its legal regime. Saliya Pieris and Manohara de Silva addressed the gathering on fundamental rights, labour laws and conflict of laws.

At the end of the inauguration of the event, on Feb 14, CHEC Port City Colombo (Pvt) Limited distributed a 51-page report titled ‘Economic Impact Assessment of the Port City Colombo’ prepared by leading multinational audit firm PricewaterhouseCoopers (Pvt) Limited. The distribution of the report followed the briefing given by the CHEC Port City Colombo (Pvt) Limited. In spite of the PricewaterhouseCoopers (Pvt) Limited declaring the report was meant for general guidance as regards matters of interest only and should be taken as investment advice, it presented an attractive picture of the project.

The Presence of President Gotabaya Rajapaksa, Chief Justice Jayantha Jayasuriya, PC, Attorney General Dappula de Livera PC and Justice Minister Sabry PC underscored the importance of the event. The writer was present on the occasion.

Clash over China project

 All political parties should bear in mind that the current pathetic state of the economy cannot be blamed on China or any other country. If Parliament fulfilled its primary obligations as regards ensuring financial discipline and enactment of laws, the country wouldn’t have been in an extremely dicey situation, financially. Politicians now opposing the China led project, as well as those backing it, should keep in mind how the political parties, they represented ruined the national economy through their profligacy and downright mismanagement.

During the yahapalana administration, BASL received quite a bit of negative media coverage following revelation it received Rs 2.5 mn sponsorship from the disgraced Perpetual Treasuries Limited (PTL) for the three-day Law Asia 2016 Golden Jubilee Conference in August, 2016 during President’s Counsel Geoffrey Alagaratnam’s tenure as its President. The sponsorship was accepted over a year after the first Treasury bond scam perpetrated in late Feb 2015 caused a national stir.

A section of the Opposition, some members of the civil society, and SLPP Colombo District MP Dr. Wijeyadasa Rajapakse, PC, are up in arms over the proposed establishment of an Economic Commission (EC) to manage the Colombo Port City. Some trade unions, affiliated to political parties, too, are opposed to the move. As to how sincere their loud outcry is yet to be determined by the highest court in the land.

 JVP leader Anura Kumara Dissanayake, MP, compared what he called a future Chinese administration of the Colombo Port City with that of China-administered Hong Kong. The same JVP turned a blind eye when the yahapalana government with which they were then openly cavorting with, gave away the Hambantota Port on a platter to Beijing on a 99-year lease.

Those opposed to the proposed EC asserted that as the Colombo Port City would be outside the purview of Parliament, it wouldn’t be subjected to domestic laws. The Cabinet of ministers, recently sanctioned legislation that once gazetted and passed in Parliament it would enable the setting up of an EC.

Samagi Jana Balavegaya lawmaker Attorney-at-Law Lakshman Kiriella warned of the Colombo Port City becoming a federal structure beyond the financial control of the Central Bank, Monetary Board and the Finance Ministry. Among those who moved the Supreme Court against the proposed Bill are the BASL, Purawesi balaya, Centre for Policy Alternatives (CPA), the JVP and the UNP. Three civil society activists, Oshala Herath, Dr. Ajantha Perera and Jegan Jegatheeswaran, too, filed cases.

 Rebel lawmaker Wijeyadasa Rajapakse last Thursday (15) flayed the entire political system with the focus on the incumbent government over the move. MP Rajapakse basically repeated what JVP leader Anura Kumara Dissanayake said several days ago. What is really interesting is where the former Justice Minister addressed the media. Many an eyebrow was raised when the MP lambasted the government at Abayaramaya, Narahenpita, with Ven Muruththettuwe Ananda by his side. 

Some monks are sullying the robe by getting involved in virtually every other brouhaha raised in the political arena, when they should essentially be guiding the adherents of Buddha’s teachings on that path.

 On the following day, the former minister claimed that President Gotabaya Rajapaksa blasted him over the statement made on the previous day. Lawmaker Rajapakse acknowledged that he wouldn’t hesitate to take a decision regarding his political future with the SLPP government. The government parliamentary group is likely to be undermined by this development. It would be pertinent to mention that the government overcame opposition to the 20th Amendment to the Constitution from its ranks. The 20th Amendment required two-thirds majority.

President Gotabaya Rajapaksa presented the Colombo Port City EC Bill to the Cabinet of ministers. The 76-page Bill provides for the establishment of an EC authorised to grant registrations, licences, authorisations, and other approvals to carry on businesses and other activities in the Special Economic Zone (SEZ) to be established within the Colombo Port City.

The proposed EC will consist of not less than five members and not more than seven members, including its Chairman and they will be appointed by the President, under whose purview the Colombo Port City functions.

The Bill, titled the ‘Colombo Port City Economic Commission Act’, is expected to be presented to Parliament within the next few weeks.

Lawmaker Dissanayake declared that Parliament should defeat the move. However, with the ruling party enjoying a two-thirds majority in Parliament with its group numbering 145 members, the dilapidated Opposition is not in a position to thwart the government’s mega project.

A US warning

Against the backdrop of continuing US-China rivalry, Sri Lanka should be extremely cautious in finalizing the Colombo Port City Economic Commission Act. Unsolicited and clearly interfering, the US advice into the country’s internal affairs in this regard shouldn’t be ignored. 

The media recently quoted the US Ambassador to Sri Lanka and the Maldives Alaina Teplitz as having said: “Any legislation relating to the Port City has to be considered very carefully for its economic impact. And of course, among those un-intended consequences could be creating a haven for money launderers and other sorts of nefarious actors to take advantage of what was perceived as a permissive business environment for activities that would actually be illegal.” Teplitz was further quoted as having said: “I do recognize that the government of Sri Lanka wants to take advantage of the investment that has already been made in creating the Port City foundation, but the legislation really needs to be reflected to address these challenges and to be careful of what it might be to open doors to bad practice and unfair competition for the rest of the country.”

The country’s tax revenues have plunged in 2020, raising concerns over debt and the fiscal path, credit downgrades and Sri Lanka’s ability to sustain vital public services to the people, while managing loss-making state enterprises.

Let me examine shocking revelations in Parliament, pertaining to waste, corruption and irregularities as the fiscal environment continued to deteriorate. Evaluation of reports released by the Communication Department of Parliament as regards inquiries conducted by the Committee on Public Enterprises (COPE), the Committee on Public Accounts (COPA) and the Committee on Parliamentary Finance (COPF) chaired by Prof. Charitha Herath, Prof. Tissa Vitharana and Anura Priyadarshana Yapa, respectively, would enable the public to grasp the gravity of things that had been perpetrated and the resultant situation.

The country celebrated Sinhala and Tamil New Year in an utterly bad financial environment, undoubtedly exacerbated by the pandemic as has happened world over. Televised celebrations also involving lawmakers representing the SLPP and the SJB highlighted the absurdity of a deteriorating situation. Lawmakers joined celebrations amidst continuing controversy over unprecedented slashing of duty on sugar imports, importation of contaminated coconut oil, destruction of forests and unbridled corruption.

Horrifying picture

Statements issued by the Communications Department revealed a horrifying picture. A pathetic situation caused by those who enjoyed political power since the introduction of the JRJ Constitution in 1978. Interestingly the two major political parties primarily responsible for the current predicament are no longer in power. The last general election, in August 2020 reduced the UNP to just one National List MP. The SLFP parliamentary group consists of 14 members with only one of them elected on the SLFP ticket. The rest entered Parliament through the SLPP. Political parties essentially engineered, encouraged and conveniently turned a blind eye to corruption. The examination of the House Communication Department statements revealed how the political set up, public sector and the private sector perpetrated corruption.

Parliament faces challenges

 COPE Chairman Prof. Herath explained the growing financial indiscipline among those enterprises coming under his purview when he presented their first report to Parliament on March 10, 2021. SLPP National List lawmaker alleged that the power of Parliament to supervise public sector enterprises had been challenged. Prof. Herath cited the Auditor General’s report on the Lakvijaya coal-fired power complex at Norochcholai, Puttalam, as an example to highlight the financial lawlessness. One-time Media Secretary questioned how some public sector enterprises were excluded from the AG’s scrutiny.

Another SLPP lawmaker Shantha Bandara pointed out how various public sector institutions blatantly ignored instructions issued by parliamentary watchdog committees.

Speaker Mahinda Yapa Abeywardena, himself under fire for accommodating the members of his family and relatives on his staff assured that ways and means to address those issues would be addressed through the proposed new Constitution. Abeywardena insisted that the current situation could be addressed only through the enactment of a new Constitution.

Can Speaker Abeywardena’s assurance be accepted under an extremely volatile fiscal situation? How can tangible measures required to address the crisis be further delayed on the assurance that such issues would be dealt with through the proposed new Constitution. Unless Parliament accepted its responsibilities namely (a) enactment of new laws and (b) financial discipline, the country faces an extraordinary crisis.

The statement issued on April 12 by the Chinese Embassy in Colombo, ahead of the Sinhala and Tamil New Year, is a grim reminder of Sri Lanka’s predicament. Sri Lanka’s Ambassador in Beijing Dr. Palitha Kohona signed the loan agreement with the China Development Bank at the Sri Lankan Embassy in Beijing. The latest loan is the balance of USD 1 billion, out of which USD 500 million was received last year.

Before examination of COPE, COPA and COPF reports, let me remind what Secretary to the Finance Ministry S.R. Attygalle told Parliament on Dec 07, 2020 in response to a query pertaining to discrepancy in pensions. The Communications Department of Parliament quoted Attygalle as having said that the annual salary, pension and gratuity payments cost the Treasury a staggering Rs 1.1 trillion. In addition to that amount, the absorbing of 50,000 graduates to the public sector in terms of a 2021 budget proposal as well as 100,000 employment opportunities to the poorest of poor families, too, would cost a hefty sum.

When the writer sought a clarification from Attygalle on April 15th morning, the official explained the salaries amounted to a staggering Rs 800 bn annually and the rest for pension and gratuity.

Public finances are in turmoil. COPE, COPA, COPF as well as Parliamentary Consultative Committees essentially highlight waste, corruption and irregularities. The following are some samples of revelations.

The COPA on March 26, 2021, revealed the failure on the part of the Inland Revenue Department to collect taxes. The Communications Department reported how the Inland Revenue Department received 6,878 dishonoured checks worth Rs. 240 million as at 31 Dec, 2020. It was also revealed at the COPA meeting that Court cases had been filed by Inland Revenue Department in the Colombo Magistrate’s Court to recover Rs. 2670 million in tax arrears from casinos.

The Communications Department of Parliament on March 24, 2021, on the basis of Consultative Committee of the Ports and Shipping Ministry, reported a highly contentious matter involving Sri Lanka Customs. The Consultative Committee was told how due to failure on the part of the Sri Lanka Ports Authority (SLPA) to pay due taxes to the Customs for the importation of gantry cranes, the latter was now entitled to 50 per cent of the fine imposed on the SLPA. The Consultative Committee, while asserting such a payment to the Customs was a major problem recommended talks with relevant officials, including the Secretary to the Treasury to recover the money as a payment to the government. The Communications Department quoted Ports and Shipping Minister Rohitha Abeygunawardena as having said that the issue at hand should be also discussed with the COPA.

The Communication Department of Parliament on March 2, 2021 reported the shocking revelation of how Lanka Mineral Sands Limited caused substantial revenue loss at a time the country was facing an extremely serious financial crisis. The report dealt with the COPE meeting held in Parliament on the same day. COPE Chairman Prof. Charitha Herath instructed the Secretary to the Ministry of Industries, Anusha Palpita, to immediately investigate and submit a report on the tender awarded by Lanka Mineral Sands Limited for the sale of 85,000 metric tonnes of ilmenite at USD 147 per tonne to the third-place bidder instead of the prospective winning bidder, who had offered the highest price of USD 165 per tonne of ilmenite. Lanka Mineral Sands claimed that their decision was based on a recommendation made by a tender subcommittee appointed by the Cabinet of Ministers and that the transaction received Cabinet approval. Questioning the rationale in awarding the tender to the third-placed bidder, COPE discussed the possibility of the Lanka Mineral Sands Limited deceiving the Cabinet of Ministers. The inquiry revealed that the current price of a metric tonne of ilmenite is close to USD 240. Many an eyebrow was raised when it was revealed that substantial part of the sold stock to a buyer in October 2020 was still stored in the Pulmudai at the expense of the Lanka Mineral Sands. The buyer hadn’t paid the full payment, the COPE was told.

The Island received the entire set of statements issued by watchdog committees. A communiqué issued on March 15, 2021 by the Communications Department of Parliament revealed the failure on the part of the Finance Ministry, Inland Revenue and the Justice Ministry to take remedial measures in respect of laws delay. Their failure seriously affected the revenue collecting process.

The Commissioner General of Inland Revenue H. M.C. Bandara has told COPA that his department had not been able to recover billions of rupees in tax arrears due to lengthy judicial process and the attendant delays. The COPA assured that the Ministry of Justice, the Ministry of Finance and the Inland Revenue Department would be summoned for a discussion. That promised meeting is yet to take place. During the COPA meeting held on March 10, 2021, it was also pointed out the deficiencies in a list that contained names of tax defaulters. The COPA also pointed out the shortcomings in Legacy and Ramis computer systems that controlled tax files and the revelation of Rs 107 bn in tax arrears according to Legacy system, out of which only Rs 224 mn have been recovered exposed the chaotic situation.

The government needs to address shortcomings in the revenue collection process without further delay. In an utterly corrupt system, delays, failures and shortcomings seem to be deliberate and well calculated. With the country on the brink of financial disaster, it would be the responsibility of parliament to take remedial measures. Perhaps, the Presidential Commission inquiring into the Customs should summon parliamentary watchdog committees at the onset of public sittings to obtain a clear picture of the ground situation before it proceeds.

 Readers should not think we are merely scare mongering, but the truth remains that we must be responsible for our future instead of ever being ready to beg for handouts or rescue packages from outside. True that unlike most powerful Western nations and their lending arms China has not been behaving like the proverbial Shylock. But we have an inherent duty not to live beyond our means.