Expropriating the people's rights

| by Lasanda Kurukulasuriya

(November 13, Colombo, Sri Lanka Guardian) Not since the passing of the 18th Amendment to the constitution in September last year has a move by the government generated so much controversy as the so-called Expropriation Bill passed in Parliament on Wednesday.

While a two thirds majority in Parliament enabled the government to bulldoze the Bill's passage into law, expressions of protest over its content and the hasty manner in which it was enacted, have been widespread. It was reported that even the government's coalition partners the Jathika Hela Urumaya (JHU) and National Freedom Front (NFF) were absent during the vote. Sections that called on the government to reconsider or withdraw the Bill, apart from members of the Opposition were, the Chambers of Commerce, the Bar Association, the Maha Sangha and civil rights activists.

A large part of the controversy has arisen from the surreptitious manner in which the law appears to have been drafted and sneaked past a bewildered public, labeled as "urgent in the national interest."

The opposition has said there is no rationale for this tag. Legal experts have pointed out that by designating the Bill as "urgent" the government was able to get a Supreme Court determination on its constitutionality within 24 hours, bypassing the usual procedure of publishing it in the Gazette seven days prior to its being taken up in Parliament. The normal procedure would have given citizens time to challenge it in court.

As things turned out with the Bill being rushed through, there was no time for public discussion or input by stakeholders. The enterprises targeted have been completely taken by surprise, and given no opportunity to respond to the allegations of "underperformance" or "underutilization" of their assets which, it is claimed, have necessitated their takeover. As a result of this indecent haste in enacting a controversial piece of legislation, the biggest expropriation that has taken place, it would seem, is that of the people's right to know what their elected representatives are doing, and why.

Out of the 37 entities listed for takeover under this Bill the most high-profile case relates to Sevanagala Sugar Industries Ltd., owned by prominent UNP entrepreneur and Provincial Councilor Daya Gamage, who is the party organizer for Amparai district. The bona fides of the government seem to be particularly suspect in this case as it is replete with the trappings of political victimization. Gamage himself has made no secret of the pressures he has had to face with regard to his properties and his business. He claims Sevanagala Sugar has been making substantial profits for several years running. It is unfortunate that Gamage has to make his protestations through the media rather than through an opportunity that should have been extended to these entities to defend their record of performance.

Government spokespersons have also been constrained to make their retorts either in Parliament -- during the brief space of a single day allocated for debate -- or to the media. Some of their arguments sound strange, and unrelated to the stated aims of the Bill. Listening to MP Jagath Pushpakumara for instance one would be led to believe that this is a Bill to legislate public morality. Pushpakumara is reported to have said that Sevangala was being taken over because it made profits through the sale of spirits and not sugar. "At a time when the government was trying to decrease alcohol usage in the country it was disappointing to see sugar factories contributing to the cause," the deputy minister reportedly said. Several interesting questions arise from his statement.

One is whether the government has become the authority that decides what an entrepreneur may and may not produce. Another is, if alcohol is 'bad' then won't the government be deprived of large amounts of tax revenue through its sale, which (logically) should be prohibited? And then again, when politicians bring their 'supporters' to events won't the organisers be inconvenienced if they are not allowed to keep everybody's spirits up, so to speak? Or would ginger beer suffice?

Economic Development Minister Basil Rajapaksa has argued that Sevanagala had not met the conditions of its agreement with the BOI. Whatever the merits of these many and varied arguments, would it not have been better for all concerned if they had been presented to the business leaders concerned, giving them a fair chance to respond, instead of being randomly thrown at the opposition during a single day's debate in Parliament, to be reported in turn by the hapless media?

Unlike the 18th Amendment the effects of the Expropriation Bill will be directly felt at many levels as it will affect diverse social strata -- the investors, the larger business community, employees and, in the case of Sevanagala, thousands of sugarcane farmers. Contrary to the impression created by government, by all accounts Sevanagala is a stable company whose operations are well integrated with the requirements of the farming community and the vagaries of cultivation in the area. Sugarcane farmers are given loans by the Daya Group's own micro finance company, Bimputh Lanka Investment Ltd. (BLI) and their produce is purchased by Sevanagala Sugar Industries Ltd (SSI) after harvesting. A well known credit rating firm reporting on BLI in February referred to Sevanagala, which is BLI's largest shareholder, as follows:

"SSI is one of the three sugar factories in the island which produce approximately 15% of the nation's sugar requirements. SSI supports around 6,000 farmers in the growing, harvesting and transporting of sugar cane in Sevanagala, an area populated by relatively poor citizens.

"SSI is perceived to be a relatively financially strong entity, with healthy operating cash flows and a strong balance sheet." The report described Daya Group's founder and chairman Daya Gamage as "actively involved in the promotion of economic, religious, social and cultural activities of the ethnic communities in this region. As such, he has a keen interest in the welfare of the people, and the Daya Group operates with a development objective focusing on agricultural activities in this region."

The repercussions of this law and the manner of its passing will be felt not only in business circles but at grassroots level, by farmers, factory workers and others dependent on these industries for a livelihood. One of the three fundamental rights petitions challenging it has been lodged by a group of sugarcane farmers. Coming as it does in the wake of allegations relating to land grabs and corruption in high places, the question now is whether the government has, with this highhanded act, set in motion a discontent within the very constituencies that brought it to power.