Thursday 10th July, 2025

Parliamentary proceedings in this country are characterised by references to political rejects or riff-raff or dregs. On Tuesday, the attention of the legislature was drawn to a different kind of waste—refuse tea, which has led to serious problems that successive governments have failed to solve, and evolved into a kind of shadow industry, thriving outside regulatory oversight, feeding illegal supply chains and ruining Sri Lanka’s reputation as a quality tea producer.

An MP asked Minister of Plantation and Community Infrastructure Samantha Vidyarathna what action the government was planning to take to tackle the well-entrenched, lucrative refuse tea racket; he also wanted to know, among other things, whether any action would be taken to regulate the illegal tea waste trade so that the state would gain financially, as there was a market, both here and overseas, for discarded sweepings from factory floors, or whether the racket which adversely affected tea smallholders would be brought to an end.

Admitting that refuse tea continued to enter the market, Minister Vidyarathna said there were laws to deal with that racket, and action had been taken to tackle it. He claimed the government was working towards optimising the production of quality tea and reducing the refuse tea generation to a bare minimum. His response was not much different from those of his predecessors who also made similar pledges in Parliament but did precious little to fulfil them.

Refuse tea, which enters the market, masquerading as pure Ceylon tea, tarnishes Sri Lanka’s reputation internationally and poses health risks to consumers here and overseas. The most effective way to tackle all these problems is to eliminate their root cause—refuse tea, which must be destroyed at the source, under official supervision, like other edibles and drinkables unfit for human consumption.

So, it defies comprehension why there should be any discussion, in Parliament or elsewhere, on exploring ways and means of regulating the illegal refuse tea trade or adopting band-aid remedies. An illegal practice must not be given any legitimacy through regulation; instead, it must be brought to an end. Refuse tea, by definition, is waste and it must be treated as such. It must not be allowed to leave the factories where it is generated. Let that be the bottom line.

The illegal refuse tea trade is reportedly dominated by some underworld gangs that use threats and bribes to further their interests. Underworld leader Makandure Madush, described as Sri Lanka’s Napoleon of Crime, operated from Dubai and facilitated tea waste smuggling operations. He even issued death threats to high-ranking state officials who tried to stop it. He is long dead, but in the netherworld of crime, narcotics, etc., when a gang leader dies, other criminals move in to fill the vacuum. The connivance of some state officials and politicians has made the task of eliminating the refuse tea trade even more difficult. Not even the Special Task Force has been able to neutralise the organised gangs involved in the racket. Not that the elite tactical force lacks the capability to accomplish that task. It has not been given a free hand; the racketeers have political connections and the wherewithal to prevent the law enforcement officers from going all out to put an end to their illegal operations. President Anura Kumara Dissanayake recently vowed to eliminate what he described as ‘mini governments’ in the country; one of them is apparently controlling the refuse tea trade.

Meanwhile, there is a pressing need to conduct regular tests on tea consumed by ordinary Sri Lankans to ensure that it is fit for human consumption. Much of it looks more like black dust than tea, and its impact on health is anybody’s guess. It is high time random samples of unhygienic tea freely available across the country were obtained and tested scientifically.

Wednesday 9th July, 2025

The Opposition has been asking the NPP government to release the report of a special committee appointed by President Anura Kumara Dissanayake to probe an alleged racket where 323 red-flagged freight containers were green-channelled at the Colombo Port in January 2025. Its efforts have been in vain. The government has sought to deflect criticism by saying that the committee report will be presented to Parliament ‘in due course’.

The President’s Office, during previous governments, drew criticism for its reluctance to disclose information about matters of national importance. It was expected to uphold transparency and promptly respond to requests for information after last year’s regime change, but sadly the status quo remains.

President Dissanayake should be able to release the committee report at issue immediately if his government has nothing to hide. Minister of Ports, etc., Bimal Rathnayake, whom the Opposition has blamed for the questionable release of containers, has claimed that the probe committee has rubbished his rivals’ allegation. If so, he, as the Leader of the House, should have the committee report presented to Parliament forthwith.

However, one should not be so naïve as to expect a committee appointed by a President to hold those in his inner circle accountable for a serious transgression and trigger a political storm. One may recall that in 2015, a committee consisting of three lawyers, appointed by the then Prime Minister Ranil Wickremesinghe, to probe the Treasury bond scams, cleared Central Bank Governor Arjuna Mahendran of wrongdoing while recommending further investigation.

Meanwhile, it has been reported that some MPs who shielded the bond scammers are likely to face a probe. Dozens of MPs benefited from the largesse of the Treasury bond racketeers and got off scot-free. Legal action should have been taken against them then. Interestingly, the JVP had no qualms about defending the UNP-led Yahapalana government even after the release of the damning report of the Presidential Commission of Inquiry which probed the bond scams. It threw a political lifeline to PM Wickremesinghe in 2018 vis-a-vis the then President Maithripala Sirisena’s efforts to sack him. It helped him muster a parliamentary majority and fought a legal battle, enabling him to stay in power.

President Dissanayake’s predecessors demonstrated a remarkable ability to swallow committee/commission reports, as it were. Those who expected President Dissanayake to make a difference and handle such documents in a transparent manner must be really disappointed.

Time was when Dissanayake, as an Opposition MP, would aggressively call upon the previous governments to present agreements and commission/committee reports to Parliament, and thereby respect the people’s right to information. His calls struck a responsive chord with the public. Today, he is under pressure from the Opposition to release the report of a committee he himself appointed to probe an alleged racket!

The NPP came to power, promising to practise good governance, which the UNDP has defined as “the exercise of economic, political and administrative authority to manage a country’s affairs at all levels. It comprises the mechanisms, processes and institutions through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations and mediate their differences”. Transparency is one of the cornerstones of good governance, others being participation, the rule of law, responsiveness, consensus orientation, effectiveness, efficiency and accountability. Good governance without transparency is a contradiction in terms. Lack of transparency creates an ideal breeding ground for corruption, misinformation and arbitrary decision-making—all of which are antithetical to good governance.

It is a supreme irony that the SJB MPs who, as members of the Yahapalana government, prevented the presentation of the first COPE (Committee on Public Enterprises) report on the Treasury bond scams to Parliament, went so far as to dilute the second COPE report on the scandal, with a slew of footnotes, and unashamedly defended that corrupt administration with the help of the JVP are now campaigning for transparency and the people’s right to information.

Tuesday 8th July, 2025

Sri Lanka, which is struggling to put its worst-ever economic crisis behind it, finds itself in another dilemma. It had to ban vehicle imports to rebuild its foreign currency reserves. That method proved effective in the short run. But the adoption of extreme measures, such as import restrictions or bans, to tackle a foreign exchange crisis only provide short-term relief; they are unsustainable and need to be tapered off for the long-term economic health of the country. Vehicles were not imported for nearly two years, and a significant amount of much-needed forex could be saved, but the ban on vehicle imports took its toll on the government’s tax revenue, which has to be increased to resolve the rupee crisis.

Government revenue is expected to reach 15% of GDP in 2025, according to media reports, but this figure is considered relatively low . The government is under IMF pressure to increase its revenue significantly. It must do everything in its power to do so because gone are the days when money could be printed according to the whims and fancies of politicians in power. Direct and indirect taxes are already beyond tolerance levels for many. Further increases therein are bound to spark protests which might even spill over onto the streets. So, the only way the government apparently could think of increasing its revenue was to allow vehicle imports to resume so as to rake in taxes. The Customs revenue has increased as expected, but vehicle imports have led to another problem which was not unexpected.

The ban on vehicle imports was lifted in February 2025, and since then as many as 18,000 vehicles have been imported at a cost of USD 742 million, we are told. The forex limit the government has imposed on vehicle imports for the current year is USD 1 billion. The Customs has earned Rs. 220 billion by way of import duty on vehicles. A sharp increase in imports following the lifting of a ban is something to be expected owing to what is termed pent-up demand. However, at this rate, expenditure on vehicle imports could exceed USD 1 billion in a month or two.

It is highly unlikely that the government will allow the amount of forex spent on vehicle imports to exceed USD 1 billion on any grounds. The country should be able to pay for essential imports and service debt. One may recall that in 2022, there were hundreds of thousands of vehicles waiting in long fuel queues as the country lacked dollars to pay for petroleum imports. Nobody wants to face a similar situation again.

The government’s catch-22 is to manage vehicle imports in such a way that state revenue will not decrease, and it will be possible to keep the country’s forex reserves above the safe threshold. This is a balancing act of the highest order that has to be performed successfully to steer the economy out of both rupee and forex crises. The situation is far too complex for the government to cut the Gordian knot; imposing a ban on vehicle imports again is one of the least desirable options, according to experts, for such a course of action will adversely impact the vehicle market again, and government revenue will drop steeply, making it even more difficult to meet the IMF-prescribed revenue targets.

Since decreasing interest rates have led to an increase in vehicle imports, some economists are of the view that serious thought should be given to adjusting them. The depreciation of the rupee may also bring the demand for vehicle imports down, they have pointed out. But the appreciation of major foreign currencies, especially the US dollar, against the rupee will adversely affect all imports, causing increases in the prices of essentials. Taxes on vehicle imports are also very high, and it may not be possible to increase them further to curtail the growing demand. The challenge before the government is to find a way out, with the help of all other stakeholders.