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The Petroleum Bill – its quiet passage and disquieting politics

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by Rajan Philips

The Petroleum Products (Special Provisions) (Amendment) Bill had a quiet passage in parliament with a majority of 60 votes, 77 for and 17 against. What is disquieting is that only 94 of the 224 MPs (excluding the Speaker) were in parliament for the vote on a Bill on petroleum products, the mismanagement of which turned the country upside down in a matter of months this year. The Bill itself is not some masterpiece of legislation to foster proper management of the petroleum sector, but a simple seeming amendment to the Petroleum Products (Special Provisions) Act No. 33 of 2002. It underscores the point that in the absence of real infrastructure and supporting policy regime, there is no legislative, regulatory or constitutional way out of the crisis in the petroleum sector or any other economic sector.

The legal purpose in both the principal enactment in 2002 and the new amendment is to enable the granting of licenses to entities outside the Petroleum Corporation “to import, export, sell, supply or distribute petroleum.” While the 2002 law vested the licensing power in the “Energy Supply Committee” established under the Energy Supplies Act (No. 2, 2002), the new Amendment transfers that responsibility to a (new) committee appointed by the Cabinet of Ministers. The Amendment also redefines the subject Minister by the words “the Minister” instead of “the Minister in charge of the subject of Power and Energy,” as it was in the original Act.

The Bill was challenged before the Supreme Court over the constitutionality of some of its provisions and the whole Bill itself. The Court held that the Bill itself in one respect and some of the provisions were indeed inconsistent with the constitution but suggested changes to the Bill to remove the inconsistency and the necessity for a two-thirds majority in parliament and even a referendum. Parliament has now passed the bill into law presumably including the changes suggested by the Supreme Court.

Media reports have been calling the amendment as a law to “liberalize the petroleum sector,” obviously taking the cue from the Minister of Power and Energy, Kanchana Wijesekera, who said in parliament that the new Amendment “will allow global suppliers to enter as retail operators, eliminate the monopoly of the Ceylon Petroleum Corporation (CPC) on Jet Fuel and liberalize energy sector.” There is nothing in the eight clauses and four pages of the new Amendment that is not already in the main Act that is going to cause global suppliers to drop everything and rush with petroleum products to cashless Sri Lanka. If at all the new Amendment might be used to create the path of least obstacles to local petroleum wheeler dealers by replacing one obscure committee with another. This aspect of the Bill came up in the hearing before the Supreme Court.

Petroleum Saga

In an earlier article (July 24) I alluded to the saga of the petroleum industry – from pre-nationalization to nationalization in 1961, selective privatization thereafter, and the shift from CPC monopoly to CPC-LIOC duopoly – being a crucial case-study backdrop to the current fuel crisis. Any such case-study should be an exercise in political economy and not constitutional interpretations. Tragically, however, for all the political tumults about the supply and delivery crisis of petroleum products there has not been any corresponding ‘agitation’ in parliament either at the level of soliciting and securing up-to-date information on the supply and status of petroleum products, or at the level having some serious discussion about the petroleum crisis, its causes and potential solutions.

While no one in parliament is showing any serious interest in these matters, it is left to the Supreme Court to step in to fill the void. But filling the void is not solving the crisis and it is not in the business of the solve anything. Nonetheless, the Court’s ruling on the amending bill provides a good summary account of the “existing legal framework” for the regulation (I would add ‘and deregulation’) of the petroleum sector, beginning with the Ceylon Petroleum Corporation Act, No. 28 of 1961.

The current Minister who is now claiming that his new law will eliminate the monopoly of the Ceylon Petroleum Corporation, should know from the Supreme Court ruling (if he is not directly familiar with the CPC Act) that the 1961 law that nationalized the petroleum industry has always included provisions permitting the supply or distribution of petrol, kerosene, diesel oil or furnace oil by non-CPC entities with the approval of the Minister or CPC Board of Directors.

These provisions were not utilized by governments not because, as was suggested during the Court hearing, the CPC Act did not ‘contemplate’ regulatory measures for their application but because no government until after 1977 contemplated using them for the import, supply or distribution by non-CPC entities. This included both the governments of the Left and the Right. In fact, it was the UNP government of Dudley Senanayake that entrenched the monopoly of the CPC by building a new refinery in Sapugaskanda with the capacity to meet virtually the entire domestic demand for petroleum products by importing and refining crude oil from Iran.

Legal Labyrinth

Contemplation, if any, to use non-CPC sources for the supply and distribution of petroleum products began after 1977 with the changes in economic direction and philosophy, under a different UNP government led by PM turned President, JR Jayewardene. His government enacted the Petroleum Products (Regulation and Control of Supplies) Act No. 34 of 1979 to provide for the regulation and control of the distribution and use of petroleum products. Nothing much came out of it, and the JRJ government, as I wrote earlier, baulked from making a serious and considered decision about the petroleum sector (or the electricity sector) – whether to continue the CPC monopoly, ‘liberalize’ the whole sector, or selectively ‘unbundle’ it to create a healthy blend of both public and private sector involvement.

The next set of laws came after more than 20 years, in 2002, when Ranil Wickremesinghe was Prime Minister, co-habiting with President Chandrika Kumaratunga. There were three pieces of Legislation – the Energy Supply Act, the Petroleum Products Act and the Public Utilities Commission of Sri Lanka Act, all enacted in 2002. The Energy Supply Act was enacted to purportedly deal with the emerging energy crisis in the country, and the Act enabled the creation of a new Committee, the Energy Supply Committee, but it also provided for the of regulation of “activities of persons engaged in the importation, exportation, storage, distribution and supply of petroleum and petroleum products.”

However, the Energy Supply Act was in operation only for a period of two years from March 2002 to March 2004, and would seem to have died with the sacking (through dissolution of parliament) of the peace-process government of Ranil Wickremesinghe by President Kumaratunga. At the same time, the Petroleum Products Act that was also enacted in 2002 by the Wickremesinghe government has survived his alternations in and out of power and, according to the Supreme Court, has provided “a more empowered regulatory regime over the petroleum industry.”

The Court ruling suggests that the Petroleum Products Act (PPA) “sought to regulate the downstream petroleum sector by removing the monopoly of the CPC and providing for the issue of licences subject to prescribed conditions.” With respect and in policy parlance, the PPA legislation actually sought to achieve the opposite: to deregulate the petroleum sector! Pertinent to the new amendment to the PPA legislation, the latter provided for the licences for the import, export, sale, supply or distribution of petroleum products to be issued by the Minister on the recommendations of the Energy Supply Committee. The latter committee would somehow seem to have survived the demise of its enabling legislation. As I have indicated at the outset, the new Amendment is replacing the Energy Supply Committee by a new Committee.

A word on the Public Utilities Commission of Sri Lanka (PUCSL) Act to round off this legal labyrinth, and the underlying overlapping of vested interests. The intended purpose of the Commission (and the Act) is to provide “a framework for the regulation of public utilities industries, which originally included (in the Act’s schedules) only the Electricity Industry and the Water Service industry. The Petroleum Industry was added to the PUCSL list four years later, in 2006, just after Mahinda Rajapaksa became the new President.

As the Court duly noted in its ruling, it was unclear “during the hearing whether there was agreement amongst parties on whether the PUCSL did exercise any regulatory power in terms of the PUCSL Act over the petroleum industry.” And the Court concluded that “the PUCSL does not have any power of regulation over the petroleum industry merely upon it being included in the Schedule to the PUCSL Act.”

What next?

The question now is what difference is the new amendment going to make to the operation of the petroleum sector? The Minister might think that he now has a freer hand to break the monopoly of the Ceylon Petroleum Corporation and get non-CPC entities to import and supply petroleum products for local distribution. If the Minister, or the government, wants to really end the monopoly of the CPC, even though there is no monopoly now anyway, it must bite the bullet and privatize the CPC. That way whoever is willing to take over the CPC can use its infrastructure the same way the CPC used the infrastructure of the multinational oil companies after nationalization. In trying to create a parallel system besides the CPC, the government is only leading the country into the worst of both (public and private) worlds. The same way the JRJ government destroyed the bus industry and the school system. Very soon there might be an international university on climate change headed by a new Jennings from Norway!

As for falling into the worst of both worlds, the Supreme Court ruling has laid down the markers to indicate where things easily go wrong. The Court held that in three areas the new Bill was inconsistent with the Constitution and suggested changes. First, the Court directed the new Committee to be restructured to include two additional Ministry Secretaries similar to the Energy Supply Committee. Second, it struck Clause 7, a deeming provision that made any previous act by the Energy Supply Committee legal and unchallengeable in courts. Third, the Court held the whole Bill inconsistent with the Constitution insofar as new Committee was kept outside the purview of Bribery Act. The Court directed the Bill to be changed to include the Committee as a Scheduled Institution under the meaning of the Bribery Act.

Why was it excluded from the purview of the Bribery Act in the first place? The answer is because the real intent behind half-baked attempts at licensing is to create the path of least obstacles to local importers and their foreign suppliers. Even with privatization, it is the responsibility of the government to ensure that proper processes are in place for setting criteria and standards, for competitive bidding, and for the granting of licenses and contracts. That has not been the case at all in Sri Lanka, starting from 1977 and made worse after 2010.

Specific to the petroleum sector, the legislative changes in 2002 under Ranil Wickremesinghe and in 2006 under Mahinda Rajapaksa leaves one to opine if, after all, Mahinda Rajapaksa was continuing from where Ranil Wickremesinghe left. Is it now the other way around? And is national politics now reduced to the two trying to rise together via Ekwa Negitimu? Not to mention, as has been reported, the long distance conversations between Ranil Wickremesinghe and Basil Rajapaksa to consummate a no-contest electoral marriage between the UNP and the SLPP.



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Credibility in governance through elections and not security forces

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Ranil Wickremesinghe

By Jehan Perera

President Ranil Wickremesinghe’s warning that he is prepared to declare a state of national emergency and use the military to suppress any public protests for change of government would reflect the pressures he is under. The manner in which he has used the security forces to deal with the protest movement has been unexpected. His words and deeds are contradictory to what he has previously stood for as a five-time former prime minister. This is especially true in the case of the ethnic and religious minorities who have consistently voted for him and his party at elections. They have felt safer and more secure under his governments which always sought to reduce the heavy hand of state oppression in which national security is given pride of place. He has always promised them much though he has been unable to deliver on much of what he promised.

Notwithstanding the unfortunate rhetoric and actions of the present time the belief still persists that President Wickremesinghe is the best of the available options. Recent pronouncements of the president have reignited hope that he will address the problems of the religious and ethnic minorities. He has stated that he does not want to leave this problem to the next generation. He has said that he wants to resolve this intractable national problem by the country’s 75th independence anniversary on February 4 next year. The hope that the president will make a fresh effort to resolve their problems has led the main Tamil party, the TNA, to desist from voting against the budget which passed with a relatively small majority. Their spokesperson, M A Sumanthiran said in Parliament that due to the president reaching out to them, stretching out his hand, they did not vote against the budget although they disagreed with it.

It is not only in words that the president has reached out to the ethnic and religious minorities. Reports from the north and east indicate that the Maveer (Heroes) Day commemorations this year took place without incident. During the past two years scores of people were arrested and a massive presence of security forces blocked the people from participating in public events. On this occasion the security forces did not get involved in any attempt to stop the commemorations. University students distributed sweets and even cut a birthday cake to celebrate slain LTTE leader Velupillai Prabhakaran’s birthday. The analogy that the president drew to himself being seen as a Hitler who exterminated ethnic and religious minorities is misplaced. The release of those held under the Prevention of Terrorism Act for engaging in similar acts in the past would further contribute to the reconciliation process.

WORSENING CRISIS

In this context, the president’s use of militaristic rhetoric can only be understood in relation to the growing economic crisis that shows no sign of abating. The anticipated IMF bailout package is at risk of getting indefinitely delayed. It was initially anticipated to come in September then in November but now January is being targeted. Japan’s top brokerage and investment bank, Nomura Holdings Inc, has warned that seven countries – Egypt, Romania, Sri Lanka, Turkey, Czech Republic, Pakistan and Hungary – are now at a high risk of currency crises. Sri Lanka is in third place on the table of risk. The next devaluation of the rupee could see another spike in inflation that will make the cost of living even more unbearable to the masses of people.

The president is on record as having said that the economic crisis will get worse before it improves. Both anecdotal and statistical evidence indicates that it is indeed worsening. University teachers at the University of Sabaragamuwa reported that attendance in their classes was down by at least a quarter. Students who come from other parts of the country are unable to afford the cost of meals and so they stay at home. A study by the Institute of Policy Studies has shown that about four percent of primary, 20 percent of secondary and 26 percent of collegiate students had dropped out of school in the estate sector, which is the worst affected. The future costs to the country of a less well educated population is incalculable and inhumane.

As it is the situation is a dire one for large swathes of the population. Research from the University of Peradeniya has revealed that close to half of Sri Lanka’s population, 42 percent (up from 14 percent in 2019) are living under the poverty line. Professor of Economics Wasantha Athukorala has said there is a dramatic increase in the poverty level of over three-hold across the past three years. In 2019, nearly 3 million people lived below the poverty line, but that number has increased to 9.6 million in October 2022. In these adverse circumstances stability in a polity can be ensured either through legitimacy or through force. It would be tragic if the latter is the choice that is made.

ELECTORAL SOLUTION

President Wickremesinghe has been stressing the importance of political stability to achieve economic development. His recent statement that the security forces will be used to negate any unauthorised protest is a sign that the government expects the conditions of economic hardship to escalate. The general public who are experiencing extreme economic hardship are appalled at the manner in which those who committed acts of corruption and violence in the past are being overlooked because they belong to the ruling party and its cliques. The IMF has made anti-corruption a prerequisite to qualify for a bailout, calling for “Reducing corruption vulnerabilities through improving fiscal transparency and public financial management, introducing a stronger anti-corruption legal framework, and conducting an in-depth governance diagnostic, supported by IMF technical assistance.”

It is morally unacceptable even if politically pragmatic that the president is failing to take action against the wrongdoers because he needs their votes in parliament. As a start, the president needs to appoint a credible and independent national procurement committee to ensure that major economic contracts are undertaken without corruption. Second, the president needs to bite the bullet on elections. The country’s burning issues would be better accepted by the country and world at large if they are being dealt with by a statesman than by a dictator. Government that is based on the people’s consent constitutes the sum and substance of democracy. This consent is manifested through free and fair elections that are regularly held. Local government elections have been postponed for a year and are reaching their legal maximum in terms of postponement. These elections need to be held before March next year.

Elections will enable the people to express their views in a democratic manner to elect their representatives for the present. This would provide the government with guidance in terms of the decisions it is being called to take to revive the economy and place the burden in a manner that will be acceptable to the people. The provincial council elections have been postponed since 2018. Democratically elected provincial councils share in the burdens of governance. The devolution of power that took place under the 13th Amendment was meant to promote ethnic harmony in the country. The president who has taken the position that he is for a solution to the ethnic conflict should seriously consider conducting the provincial council elections together with the local government elections se their financial costs. By doing so he will also gain legitimacy as a democratic statesman and not a dictator.

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WEDNESDAY – Movie Review

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The Addams Family is back with a new tale to tell! Originally created by Charles Addams as a comic strip published in The New Yorker, it offered readers a sarcastic take on the ‘typical nuclear family’ by substituting it with a more macabre bunch of strange and eerie individuals. Since then the titular family has been adapted on to the big screen many times, from live action movies to animated versions, the Addams Family has gained many fans throughout the years. Created by Alfred Gough and Miles Millar, with Tim Burton working on four episodes of the eight-part series, Wednesday is a welcoming tale for young fans, but unfortunately fails to think outside the box and remains anchored to the floor with a messy storyline.

Dead-eyed Wednesday Addams (Jenna Ortega) is a stubborn, independent and intelligent teenager in this new series. Her penchant for attracting trouble wherever she goes alarms her parents, Morticia (Catherine Zeta-Jones) and Gomez (Luis Guzmán). With an already strained relationship with her parents (specifically her mother), Wednesday is enrolled at Nevermore, an academy for outcasts like herself. Having attended the academy themselves, Morticia and Gomez are hopeful that their daughter will ‘fit right in’. Caught between trying to build her own identity and other teenage complexities, Wednesday soon finds herself in the middle of a twisted mystery.

This is the first time audiences are introduced to a teenage Wednesday, which allowed the creators to build a new world on their own terms, but while keeping true to the original nature of the character. The creators do a fair amount of world building by introducing other outcasts like the Fangs (vampires), Stoners (Gorgons), Scales (sirens) and Furs (werewolves), among others. Nevermore Academy itself is beautiful and comes with the classic package of creepy crypts, hidden rooms and secret societies. The series also offers a decent amount of gore, although they could have added more given Wednesday’s proclivity for gore-related activities. The series deals with classic young-adult tropes which includes teenage crushes, bullies, relationships and even prom, among other things. The series navigates through Wednesday’s journey of self-discovery, which is a new avenue for both the character and the fans. From understanding and displaying her emotions to discovering her identity and understanding her peers, the series takes a deep dive into heavy material.

Ortega’s performance as the titular character plays a major role in keeping audiences glued to the screen. This is also the first time viewers are shown a teenage Wednesday Addams, which works to Ortega’s benefit as she depicts more dimensions to the ghoulish, morose character many are associated with based on previous renditions. Her facial expressions and ability to deliver on seriously emotional moments strengthens her role as the lead. The rest of the Addams Family, even with limited screen time, lack the eccentricities their characters should have. Hopeless romantics Morticia and Gomez seem incompatible in this version and Uncle Fester is far less crazy than he ought to be. The only member worth mentioning is the Thing—a severed hand— who brought more character and spirit to the series acting alongside Ortega. With barely any room to develop a majority of the characters are prosaic and tedious, even though they remain vital to the plot.

Apart from Ortega, Gwendoline Christie and Emma Myers deserve honorable mentions for their roles as Nevermore’s head teacher, Larissa Weems and the peppy Enid Sinclair respectively. Enid quickly became a fan favorite as the character was the polar opposite to Wednesday. Her character is vital to Wednesday’s character development and their journey to find common ground as mismatched individuals is amusing.

Christina Ricci who played Wednesday in the 90s returns as ‘normie’ teacher, Miss Thornhill and unfortunately barely stands out and this in large part due to the messy storyline. The series is bogged down with numerous subplots and overlapping tropes and the characters with potential for growth are completely overlooked. With love triangles, bullies and killer monsters on the loose, the series self-destructs and the climax sinks into disappointment.

At the end of the day, Wednesday plays to the beat of the new generation and touches on new themes, which is welcoming seeing as the character should grow up at some point. While not everyone may relate to Wednesday’s teenage perils, it is interesting to witness her growth and her journey as an ‘outcast’ or ‘weirdo’. And while Wednesday doesn’t exactly offer a distinctly unique story, it gives audiences a small taste of what Jenna Ortega’s Wednesday is capable of. Creating a story around a well-established franchise is a difficult task, and in this case the creators fail to add value to their visions. If the series continues, the creators will have the opportunity to think further outside the box and push the limits to Wednesday’s character and give audiences a bone-chilling experience. Wednesday is currently streaming on Netflix.

 

 

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Stage set for… AWESOME FRIDAY

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The past few weeks have been a very busy period for the new-look Mirage outfit…preparing themselves for their big night – Friday, December 2nd – when they would perform, on stage, for the very first time, as Donald Pieries (leader/vocals/drums), Benjy (bass), Niro Wattaladeniya (guitar), Viraj Cooray (guitar/vocals), Asangi Wickramasinghe (keyboard/vocals), along with their two frontline female vocalist, Sharon (Lulu) and Christine.

They have thoroughly immersed themselves in their practice sessions as they are very keen to surprise their fans, music lovers, and well-wishers, on opening night…at the Peacock, Berjaya Hotel, in Mount Lavinia.

Action starts at 8.00 pm and, thereafter, it will be five hours of great music, along with EFFEX DJs Widhara and Damien, interspersed with fun and excitement…for the whole family!

Yes, opening night is for the whole family, so you don’t need to keep some of your family members at home – kids, especially.

Working on their repertoire for Friday, bassist Benjy says “what we will dish out will be extra special, with lots of action on stage.”

It would be interesting to see Sharon (Lulu) doing her thing with Mirage, after her early days with the Gypsies, and, I’m told, a dynamic performance from Sharon is what is in store for all those who make it to the Peacock this Friday

Edward (Eddy) Joseph (centre) with Donald and Benjy

While the band was at one of their practice sessions, last week, they had a surprise visitor – Edward (Eddy) Joseph, a former member of the group Steelers, who is now based in Germany.

Eddy is here on a short visit and is scheduled to return to Germany, tomorrow (30).

He spent an hour with Mirage, at their practice session, and says he is disappointed that he would not be around for the group’s opening night.

However, there is a possibility of several well-known personalities, in the showbiz scene, turning up, on Friday night, to experience the sounds of the new-look Mirage, including Sohan Weerasinghe and Joey Lewis (from London).

Rajiv Sebastian, too, says he is keen to be a part of the fun-filled evening.

You could contact Benjy, on 0777356356, if you need to double check…their plans for AWESOME FRIDAY!

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