Sri Lanka’s Supreme Court ruled Tuesday (May 18) that some provisions of the Chinese-backed Colombo Port City Economic Council Bill (the bill) are “inconsistent” with the country’s constitution. However, the Sri Lankan Supreme Court added that these provisions can be put into effect if changes are made.
Earlier, the Sri Lankan government tried to fast-track the bill through parliament. However, some provisions of the bill were opposed, and at least 19 petitions were filed in the Supreme Court challenging the constitutionality of the bill.
At the heart of the controversy over the bill is the fear that the $1.4 billion port city could be turned into a Chinese military base or colony. Chinese official media Xinhua described the Colombo port city project as a key cooperation project in China’s “One Belt, One Road” plan. The port city project is seen as a lifeline for the Sri Lankan government, which is in desperate need of foreign investment to blood its economy after being hit hard by the new crown epidemic.
Sri Lanka’s Supreme Court said Tuesday that the bill contains provisions that could empower the proposed five- to seven-member commission to make and enforce rules in the port city, thus weakening the legislative powers of parliament.
Another provision in the bill provides for hefty fines and long prison terms for those found to have violated its provisions. The Sri Lankan Supreme Court said this provision, as well as the above-mentioned provisions that allegedly weaken the legislative powers of the parliament, would require approval by a two-thirds majority in the 225-seat parliament and public approval through a referendum.
The Associated Press reported that the Sri Lankan Supreme Court also pointed out other problems with the bill, such as provisions exempting companies operating in the port city (soon to be a special economic zone) from various laws on the grounds that they are of strategic importance.
These include laws related to taxation, customs, gaming and wagering taxes, employee termination, entertainment taxes, foreign exchange and casino business laws.
The Supreme Court said some of the other provisions do not require a referendum, but do require approval by a two-thirds majority of Parliament. The government can amend the bill to comply with constitutional provisions. Parliament tabled the debate Wednesday and is expected to vote Thursday (May 20).
Observers expect the provisions in question to be highly likely to be approved in parliament, as the government got a two-thirds majority when it voted on the constitutional amendment.
Opposition parties say they want the port city project to succeed, but fear Sri Lanka will loosen its grip on the region.
Sri Lanka is a key partner in China’s “One Belt, One Road” initiative. “The Belt and Road Initiative has led many countries to “lease” ports, airports and other facilities to China because they can’t pay their debts. The most typical case is the Hambantota port in Sri Lanka. The Sri Lankan government had to “lease” the deep-water port of Hambantota to China for 99 years in 2017 because of its inability to repay a huge loan from China.
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