World Bank to provide $ 70 m to uplift Sri Lanka’s plantations sector

Tuesday, 6 December 2016

The World Bank will provide Sri Lanka $ 70 million to modernise the estates and factories of Regional Plantations Companies (RPCs), the Ministry of Plantation Industries said in a statement.

The funds will mainly be utilised for replanting, improving roads and tea factories, and water management to deal with climate change impact.

The World Bank support has been given following the talks held recently between the Minister of Plantation Industries, Navin Dissanayake and World Bank officials to explore possibility of obtaining assistance to upgrade and develop tea plantations managed by RPCs to enhance their profitability.

According to the Ministry statement, World Bank officials agreed to allocate $ 70 million for the project and it was proposed that 50% of the amount would be released as a concessionary loan and the balance as an outright grant.

“This facility is for the replanting of tea which has been badly neglected over the years and to upgrade the dilapidated roads network in tea estates,” the statement said.

Part of the fund will be used to cluster a suitable number of scattered tea factories into a centrally located large scale automated tea processing plant that will improve the quality of tea produced at a lower cost. It was proposed to mitigate the negative impact of climate change and erratic rainfall patterns by introducing novel water management techniques such as sprinkler irrigation to drought stricken tea fields enabling year-round harvesting of tea leaves.

The Ministry statement also said a suggestion was made to market, tea, directly to consumers by the tea factory owners or producing estates, bypassing tea auctions to help increase the profit margins of producers.

“This project is expected to enhance the competitiveness of most of the tea estates and benefit many of the estate workers and employees,” the Ministry of Plantation Industries said.

Vickramabahu's attacker bailed out

 Dec 05, 2016

A person who attacked Nava Sama Samaja Party leader Vickramabahu Karunarathne calling him “a traitor and should be killed” has been released on bail by the Kaduwela Magistrate.

The attack took place at a restaurant, Sonora Thalawatugoda where Dr Karunarathne was having dinner with two of his friends after his book on philosophical notes ‘Yathawadi Vimasuma’ was launched on November 24. The man who attacked him, Mirihanage Manoj Buddhika Hemachandra was released on a cash bail of Rs 200,000 on Tuesday (Nov 30 Case No B4824/ 16). Commenting on the incident, Dr Karunarathne said that the attacker has furiously shouted at him, accusing him of “selling the county to Tamils and Muslims”. He said “Last week I had a terrible experience.

Two friends, Kithsiri Alwis and Nandana Hapu Arachchi, invited me to a dinner at a reputed restaurant at Thalawatugoda. As we were seated the man in the front table walked up to me and verified my name. Having got that, he became furious. He shouted abuse claiming that I am selling the county to Tamils and Muslims, I am a traitor, and hence I should be killed. Then he attacked with his fist, but my friends covered me. One fell hard on Nandana. I telephoned Thalalangama police; when he heard police is coming he vanished with his wife and two daughters. I was told he is an executive in a well known company, Orient Finance Corporation Ltd. He was arrested and later bailed out. I indicated to SP Nugegoda that I am dissatisfied with the ruling of Kaduwela Magistrate.” The NSSP leader known-for voicing for the rights of the Tamils and Muslims said that it was a terrible and shocking experience, at a time when the country is focusing on post-war reconciliation.  However, he added the mere police arrest will not be enough to neutralize the mass racist campaign led by deposed President Mahinda. “The police action alone is not enough. We have to campaign to neutralize the mad ideas spread by the fascistic group of Mahinda Rajapaksa,” Dr. Karunarathne said.

Earlier this year, the NSSP leader was summoned to the Kirillapone police station to record a statement following a complaint by the Sinhala nationalist Buddhist monk party, Bodu Bala Sena (BBS) that he burnt the national flag at the Centre for Society and Religion (CSR) in Maradana. He said that is false; the Lion flag displayed by BBS (not the Sri Lankan national flag) was only the symbol of the “Sinhala race” and therefore cannot be accepted by the other communities in the country.

Decision To Award Controversial Tender: “Fair” Play Or “Foul” Play?

By Gamini Jayaweera –December 5, 2016

Gamini Jayaweera

Recent reports in the national newspapers state that the Ministry of Sports has recommended to award a Design and Construct contract to re-lay the 400m and 200m training tracks at the Sugathadasa Stadium Sports Complex to a tender submitted by a Joint Venture between Access International (Pvt) Ltd. and Conica-Veritas for the sum Rs. 334,291,610 excluding VAT. Based on the reports published in the newspapers, there are a few questions that need to be clarified by the Minister of Sports and the other responsible parties for the interest of the general public that due process has been followed to award this contract to the most economically advantageous tender. After all we are dealing with a large sum of public money and as such the authorities have a public accountability to demonstrate that no irregularities have taken place in the process of appointing the successful tenderer.

The reports indicate that this is a Design and Build tender open to a selected few pre-qualified tenderers. Normally, pre-qualification of tenderers is required for larger projects such as this to ensure that most suitable tenderers are selected because the complexity and the high commercial value involved with the project. Generally, six (6) to eight (8) tenderers are selected from the pre-qualification process to proceed to the next level which is the post-qualification tender stage. So, it is important to find out the criteria that are considered in a pre-qualification document to select the potential tenderers who would qualify for competitive tendering.

The pre-qualification process is different from the post-qualification tendering stage because it does not include price, programme, and constructability etc. A standard Pre-qualification document should have covered establishing the tenderers ability to design and construct the Works based on the professional experience of the Design team, Construction experience, Organisational capacity, Financial standing, Health & Safety records, and Reputation etc. Having scrutinized the above mentioned information in detail, it is generally accepted that under normal circumstances, any one of the pre-qualified tenderers has the capacity and the experience to carry out the specified works. It appears that the pre-qualifying the six (assumed 6) tenderers for this project the procurement team has followed the due process. So far so good. Appears to be Fair play.

Following the pre-qualification, the post-qualification tender documents should have been prepared and issued to the pre-qualified tenderers based on the Client’s brief which generally includes the Specification, Safety & Quality requirements, Specified Design and Construction Periods, the Period required by the client for Acceptance of Design, Approval process for the Construction, and the total Tender Sum to complete the Works amongst other things. The tenderers should have been notified that their tendered sum should be submitted with a priced Activity Schedule which helps the Authorities to analyse the commercial elements of the tenders. It also provides the basis for the authorities to certify the interim payments based on completed activities during the implementation stage.

But it appears as indicated in the press reports, a Clause has been included in the post-qualification tender document to disqualify the pre-qualified tenderers based on their ability to carry out the works. According to the newspaper reports, the Clause 3.5 states “Synthetic Track Manufacturer / Installer with experience in installing minimum of Ten (10) IAAF Class 1 tracks including at least one (1) in South Asia and minimum of Ten (10) IAAF Class II Synthetic athletics tracks including at least five (5) in south Asia.” This Clause should not have been included as part of the Specification in the post-qualification tender document because it is a prequalification Clause that should have been used to select the tenderers rather than for specifying the works that are required to be carried out. It is unfair and unreasonable to introduce such a Clause in the post-qualification tender document as the selected tenderers have already gone through the pre-qualification process. If the authorities wanted to disqualify the tenderers who do not fulfil the requirements of the Clause 3.5 they should have included such a Clause in the pre-qualification document to exclude the unwanted tenderers tendering for the project. The newspaper reports indicate that based on this Clause 3.5, five (5) tenderers have been disqualified. If these reports are true it is unfair and unreasonable to disqualify these tenderers on the basis of the Clause 3.5.

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G. L. Accused Of Busting Rs. 870 Million

by Sujith Mangala -Monday, December 05, 2016

A controversial purchase of a property in Brazil by the former government has been revealed with the former Minister of Foreign Affairs Professor G. L. Peiris being accused of direct involvement. The purchase was made in order to establish the Sri Lankan Embassy in Brazil’s Rio de Janeiro spending a colossal sum of Rs. 870 million.

“A formal complaint will be lodged with the FCID, CID, Bribery commission and the Presidential Commission investigating allegations of serious fraud or corruption by a group of UNP Ministers,“ sources said.

The government is believed to have unearthed vital details in connection to the said purchase without the approval of the cabinet and the Central Bank of Sri Lanka has spent the amount thus squandering public funds.

This has once again raised concerns about the approach of the Mahinda Rajapakse administration which had unlawfully maneuvered the Central Bank, UNP sources said.

It is alleged that Professor G. L. Peiris had persuaded the purchase and recommended the property introduced to him by a third party closely associated with him.

SL to buy Chinese Xian Y20 military-cum-civil transport planes

2016-12-05

Sri Lanka is to buy China-made Xian Y20 military-cum civil transport planes, Prime Minister Ranil Wickremesinghe told South China Morning Post. 

“I have travelled around in some of the Chinese transport planes we have. They are good workhorses. Some people have raised questions about their quality but I have always said, ‘Look, as far as I am concerned, I will always underwrite Chinese military transport planes’. We will buy two more,” Wickremesinghe said. 

China’s newly developed Xian Y-20 would be in contention if Sri Lanka is looking to buy more Chinese military transport craft, making it one of the first countries outside China to get the new plane. 

Codenamed “Kunpeng” after a mythical Chinese bird, Y-20 makes China the third nation after Russia and the United States to design and develop its own heavy military transport aircraft. 

Y 20 is the largest military aircraft currently in production and the first cargo aircraft to use 3D printing technology. It was officially inducted into service by the People’s Liberation Army Air Force in July.

 “The only thing is getting the US federal aviation clearance, without which there might be insurance issues for Western tourists. Since our airports have excess capacity, we will try to get dual-use military planes that can also carry tourists. We are talking to the Chinese to see if we can get planes that can conform to these norms,” Wickremesinghe said.

 “Logically it makes sense for Sri Lanka to buy strategic transport aircraft because the old ones are not serviceable in a cost-effective manner,” he added. 

But according to IHS Jane’s aerospace analyst, Ben Moores, the plane wouldn’t come cheap.

 The Sri  Lankan Prime Minister, however, wouldn’t let on which way he is swinging with fighter jets which his country is going to buy. 

Although there is no war in Sri Lanka now and there is no threat from outside either, the Sri Lankan Air Force needs to replace its ageing fleet of Russian and Israeli fighter bombers and train itself to face a future threat despite the burden any new purchases will foist on the debt-ridden country. 

  Colombo was expected to sign a deal to purchase up to 12 JF-17s co-developed by Pakistan and China in January. The deal was cancelled after intense diplomatic manoeuvres by India, which has been trying to sell its own “Tejas” to the strategically located Indian Ocean island nation. 

“China, India, Sweden and Russia have made offers, we are studying them,” Wickremesinghe said. 

Although India offered the Tejas, it was not ready at that time, as it was undergoing development and trials. Since then, a squadron has joined the Indian Air Force. But the Indian Navy has rejected the aircraft saying that it is unsuitable for use in aircraft carriers and that it has to undergo further development. 

Apparently, Sri Lanka is not particularly interested in acquiring fighter jets now because there is no threat either from the LTTE or any country in the region. But it is interested in transport aircraft, especially if they can be used for military and civil purposes. Sri Lanka needs planes which can carry passengers and cargo. The island has many air fields of World War II vintage but these have remained unused because governments have not developed domestic air transport preferring to rely on road transport.

 A recent report said that government is going to ask the Air Force to run a domestic airline. During the war ,the Air Force had run a service between Colombo and Jaffna on  a commercial basis, replacing some private operators.(Indian Express)

Lanka sugar stuns with sweet R 1Bn turnaround

Dec 05, 2016

The state owned entity Lanka Sugar, which previously reported heavy losses, has now emerged with splendid financial performance as a result of Industry and Commerce Minister’s initiatives.

“I am pleased to inform the House that for the first time, Lanka Sugar Company (Private) Limited under my Ministry earned Rs  one billion profit” stated Minister of Industry and Commerce Rishad Bathiudeen on December 2.

Minister Bathiudeen was tabling his Committee Stage (budget) speech on the evening of December 2. The speech summarised the performance of various institutions under his Ministry.

“I am pleased to inform the House that for the first time, Lanka Sugar Company (Private) Limited under my Ministry earned Rs one billion profit. The profits came this year and it’s even more important to inform that last year, the Company made a Rs one billion loss” said Minister Bathiudeen and added: “As a result of latest profits, I believe that this is a great success story among state owned business enterprises. I praise Hon Finance Minister’s proposals for sugar industry development in this budget such as imposing a minimum price of Rs. 5,000 per Metric Tonne for sugarcane with effect from 1st January 2017, calling local and foreign investors to invest in Sugar Mills in Monaragala, Batticaloa, Kilinochchi and Ampara districts with a minimum plant size of 2,000 Tonnes etc.  Lanka Sugar reported a profit of Rs one billion by third quarter of 2016 in comparison to the loss Rs one billion in 2015. It plans to establish Sugar Cane Juice Extractor Factory and 2000 Hectare Sugar Cane Plantation in Vavuniya district Settikulam Division. The Company also intends to produce a sugar pricing formula based on incentive to be competitive with any commercial crop in Sri Lanka.”

Upto third quarter (3Q) of 2016, Lanka Sugar’s Pelwatte and Sevanagala facilities cultivated 13164 hectares of sugar canes (an increase of 7.6% compared to the entire 2015), harvesting 561,067 MT of cane resulting in 44059 MT of sugar output (an increase of 2.5% from Y2015). According to Company financials, the Company reported a net loss before tax of Rs 1,030 Million in FY 2015 but reported a stunning turn-around “net profit before tax” of Rs 1018 Million, as of third quarter of FY 2016.

Adaptation – Part II

By Ranil Senanayake –December 5, 2016

Dr Ranil Senanayake

Preparing for the future by looking back.

Understanding the issues and options before us.

The central mountains of Sri Lanka drain radially to the sea, through 103 distinct watersheds. A watershed of a river is that area of land whose rainfall feeds the river and begins in the mountains. As commented by the Rt. Hon. D.S. Senanayake :

“With the evidence daily accumulating of the wisdom of our forefathers, we need scarcely doubt that it was not merely the idea of making the mountain country difficult of approach by the foreign invader that caused them to preserve unfilled and uncleared the dense vegetation of their mountain slopes. We may readily believe that they deliberately left these untouched in order to provide that abundant supply of water on which they might draw for the benefit of man.”

This ‘uncleared and dense vegetation’ that evoked so much gratitude in our founding father, had been existant on the mountains of Sri Lanka for a period exceeding 20 million years and over this time built a soil that contained a treasure in organic matter. Soil organic matter is the living fraction that drives the ecosystem that lies above it. Sustainable agriculture and forestry will be an impossibility without the optimum levels of organic matter for that soil. The organic matter of soil when extracted is seen as a dark, amorphous solid mass. On closer examination this ‘solid mass’ is seen to be comprised of billions of organisms. In fact, any one acre of farmyard soil contains as much biomass as an Elephant. One gram of ordinary farmyard soil can contain over 1 billion individual bacteria, over 100 million individual actinomyctes and over 1 kilometer of fungal hyphpae, notwithstanding plants like algae and animals like collembolids, nematodes or worms. In Sri Lanka the soil ecosystem is further enhanced by presence of many genera and species of soil dwelling snakes, lizards etc; all massive predators in this ecosystem that suggest the age and the massive nature of the soil bank this nation once possessed.

Photo – From poor tea to poorer chemical agriculture

A forest soil, if undisturbed will develop humic acid molecues that allow carbon to be sequestered in the soil for periods exceeding 15,000 years. These soils are deep and ‘spongy’ allowing them to soak up and retain rainwater, to feed springs and rivers below. This function of our mountain forests came to an end with the advent of the colonial adventure. Fredrick Lewis in his book Sixty Four Years in CEYLON makes this observation on the destruction of the mountain forests in the Agra Patana area;

“I know of no more awe-inspiring sight, than that of a thousand acres on fire. Sheets of flame appear to leap into the air, and yell with a sort of devilish delight at their victory over the magnificent trees they are reducing into charred masses of cinder and charcoal. It is more than impressive, it is fearful, yet grand ! After the fire has completed its work, the land is covered with .black logs, lumps of charred timber, masses, and often great fragments of stones, broken by the heat that has swept over them. A deep black covers the landscape; impressive, but depressing.
It was in a burned wilderness like this, that I found my new home. It lay at the extreme end of one of the many blocks of land that had been simultaneously burned off. My path, for road it could not be then called led over hundreds of fallen and charred logs, and followed the valley of the Agra stream……. 

When morning broke upon the day following the events recorded at the conclusion of the last chapter, I found myself gazing upon a scene not altogether unfamiliar to me. All around me lay hundreds of charred black logs, stumps in fantastic shapes and outlines: fallen branches, broken and distorted by fire: cinder heaps, and little rivulets of sodden ash: all indicative of the fierce, merciless fire that but a few weeks ago, had raged over a spot that so lately had been a beautiful forest land. 

It was now a blackened wilderness, to be changed into fields of coffee, by the labour and patience of man. A strange picture; fascinating in one respect: fearful in another  and yet so full of a strange mixture of possibilities was this wild heap of ruins, this uncouth mass of slaughtered giants of an inarticulate, yet eloquent world, to be transformed by , industry in the pursuit of fleeting wealth.”

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Taxation in Sri Lanka: The need for radical change? 

Tuesday, 6 December 2016

A country’s fiscal and taxation system is a major determinant of macro-economic policy and sustainable growth, particularly in areas such as government revenue, public debt, fiscal deficit, inflation as well as resource allocation, income distribution and economic stability.

Currently, Sri Lanka’s fiscal and taxation system is at a critical juncture. While overall GDP as well as per capita income have been steadily increasing, the total government revenue and tax revenue have been decreasing over time (Table 1).

As indicated in the table, the total government revenue, tax revenue and even non-tax revenue have declined. The increase seen in 2015 was due to the one-off taxes such as the Super Gain Tax and other levies implemented during that year.

Respective governments have recognised the critical nature of the situation and the necessity to reverse this trend. The Presidential Taxation Commission Report of 2010 as well as the successive recent Budget Speeches have stressed this issue.

Reasons for the decline

The main reasons for this decline include; 

• Unplanned ad hoc tax incentives in the form of various tax holidays, reliefs and concessions, duty waivers, etc., which have eroded and narrowed the tax base. The tax loss is estimated to be around 1.35% of annual GDP.
• Narrow tax base and coverage; the total number of taxpayers being about 3% of the population.
• Increase in allowable expenses in computing statutory income and profit.
• Periodic increases in tax free allowances and ad hoc reductions in rates of tax both corporate and non-corporate sectors.
• Ad hoc changes to the tax system to meet short-term cash flow requirements of the government consequent to lack of consistency in fiscal policy leading to uncertainty among tax payers.
• Lack of elasticity and buoyancy in the tax system both being less than unity.
• Existence of a large informal economy resulting in large-scale tax evasion and avoidance as well as black money. 
• The grant of periodic tax amnesties (11 since 1964) which have been largely failures, not producing the expected results.
• A complicated tax system and weaknesses in tax administration and its mechanism.

Composition of revenue –  direct and indirect

Another aspect in the current tax system, which needs change, is the composition of tax revenue. Direct taxes comprise on average less than 20% of tax revenue (2% of GDP) while indirect taxes comprise over 80% or 8% of GDP. In this context, both the 2010 Presidential Taxation Commission and recent Economic Policy Statement (EPS) of the Prime Minister set the target of achieving a 40:60 ratio of direct to indirect taxes by 2020. This has also been reiterated in the 2017 Budget speech. 

Fiscal and tax incentives

In respect of tax incentives granted both under Law 17 of the BOI and IRD, there are both pros and cons in granting such concessions particularly in relation to attracting Foreign Direct Investment (FDI). On average, Sri Lanka has attracted around $ 500 million (about 1.5% of DGP) as FDI during the last decade. However, the tax incentive regime if considered necessary in a competitive international context, must be designed, and implemented in a more methodical and cost effective way. Their cost-benefit should be properly examined and subjected to continuous review so that the impact on revenue is minimised and the required economic objectives realised.

The 2017 Budget also proposes to minimise tax exemptions by removing exemptions applicable on the income from investment on listed securities, dividends, Unit Trusts and other instruments. Notional Tax Credit applicable on secondary markets are also to be removed.

Base and coverage

One of the important elements in securing a satisfactory level of tax revenue is the base and coverage of the taxes. While certain steps to broaden the tax base and coverage have been taken (for example, the inclusion of public servants hitherto exempt from income tax, widening the base of the VAT and NBT by adding the wholesale and retail sectors among others), the base and coverage still need to be enlarged. This includes a re-examination of the tax free allowances, the enhanced allowable expenses under Section 25 of the Inland Revenue Act and other sections.

Further, the constant changes in the rate structure, the multiplicity of rates, the recent rate concessions for “professionals,” and the recent proposals to change the basis of the corporate rate structure have tended to further complicate the system. 

Capital gains

Capital gains were introduced in Sri Lanka in 1959. It underwent several changes and was abolished in 2002. However, realised, capital gains are: equivalent to income; minimise opportunities for tax avoidance; accrue generally to the property owning class; and concentrated in higher income brackets. Hence, the government in its 2017 Budget announced its re-introduction from 1 April 2017 at the rate of 10%. 

VAT debate

The VAT introduced under VAT Act No. 14 of 2002 has drawn much attention and debate recently, particularly its recent amendments. In principle, a VAT system is superior to other forms of sales taxation due to its non-cascading character; about 160 countries have a VAT system in some form or other. However it has also several weaknesses.

In terms of revenue performance, the VAT in Sri Lanka has not shown regularity and reliability. It has been characterised by volatility and the need for complex manipulation to prevent revenue erosion in the form of input credits and refunds. The problems of VAT in Sri Lanka relate to constant changes in the threshold, a large number of exemptions, zero rating list and rate structure. Problems also arise in the area of wholesale and retail trade, financial services and existence of fraud. The much vaunted self-checking and self-policing feature of the VAT system has been found to be wanting. The VAT system is an ideal instrument for a market economy but ill-suited due to administrative capacity. The 2017 Budget proposals envisages certain measures such as the removal of the SVAT schemes, further broadening of the VAT base and consolidating VAT Act to incorporate all amendments up to date.

Customs duties, Excise duties, and other taxes and levies

Customs duties in the form of three band tariffs of zero, 15% and 30%, brought in Rs. 132 billion or 9% share of revenue in 2015. Excise duties including Special Excises are a potential source of revenue and generated 34% share of tax revenue. There are other miscellaneous taxes and levies including cesses, PAL, Telecom Levy, Stamp Duty, Share Transaction Levy etc., which contributed to 17% of the revenue in 2015. The complicated tax system in Sri Lanka of over 22 taxes and levies needs simplification. Simplification however does not depend on legislative measures alone but also on administrative procedures and regulations.

Provincial and local taxation

Apart from national taxes, provincial and local taxation is also a significant part of the Sri Lankan tax system. From a revenue point of view, however, Provincial taxation is unsatisfactory, bringing in only 4% of Central government revenue or 0.6% of GDP. Provincial expenditure is around 11% of government revenue and the deficit is met by grants from the Centre.

The problem has been complicated by the abolition of BTT in 2011, its main source of revenue and its replacement by 100% Stamp Duty, 70% of motor vehicle fees and 33 1/3 % of NBT from the Centre. Local government revenue may also undergo change with the proposed Grama Rajjaya Concept involving the creation of 2500 new units at grassroots level.

Revenue administration

It is the level of efficiency of the revenue administration, which determines the effectiveness of the revenue system. In the current context, with the declining tax ratio and the urgent need to increase government revenue, the effectiveness of the tax administration, its structures, systems and processes need thorough examination, its weaknesses identified and measures to rectify them and make the administrative system an efficient and effective instrument of tax collection.

Several measures have periodically been taken to remedy these weaknesses and improve the efficiency of the tax administrative system at Customs, Finance Ministry, and Inland Revenue. The 2017 Budget contains further proposals such as establishing a National Tax Council and Tax Ombudsman office, smart E-invoice devices for VAT and Excise, streamlining Customs procedures among others. However, there is still a long way to go; further measures are needed to improve revenue administration and co-ordination.

[This article is based on a recently released Institute of Policy Studies of Sri Lanka (IPS) publication, ‘Taxation in Sri Lanka: Current Trends and Perspectives’, authored by D.D.M. Waidyasekera, Consultant at IPS. The publication can be obtained from the IPS Publications Unit; contact 2143107 or visit www.ips.lk for details.]

Envoy clears the air, denies Udayanga hiding in Russia

MiG deal, killing in Rostov-on-Don

By Shamindra Ferdinando-December 5, 2016, 10:08 pm 

Russian Ambassador in Colombo Alexander A. Karchava, yesterday said one-time Sri Lankan Ambassador in Moscow Udayanga Weeratunga was not involved in the killing of a Sri Lankan in Rostov-on-Don on June 11, 2014.

The Ambassador was responding to a query at a media briefing at the Russian Embassy at Bauddhaloka Mawatha.

Ambassador Karchava pointed out that a Russian national had been found guilty of killing Sri Lankan Noel Ranaweera, who had been attached to the Sri Lankan mission in Moscow. The diplomat said that another Russian had been found guilty of shooting a junior Sri Lankan diplomat on the same day.

After the change of government in January 2015, a fresh inquiry was ordered into the killing.

There had been a fight between Sri Lankans and the Russians hired by the embassy to transport the baggage of a visiting Sri Lankan delegation, Ambassador Karchava said.

Asked whether Russia had been protecting fugitive Weeratunga wanted in Sri Lanka in connection with an alleged corrupt deal to acquire MiGs from Russia during the war, an apparently amused Ambassador Karchava pointed out that Sri Lanka had bought aircraft from Ukraine. The Ambassador said that Weeratunga also had been Sri Lanka’s ambassador to Kiev though he was based in Moscow.

The Financial Crimes Investigation Division (FCID) is currently probing the aforesaid alleged aircraft transaction.

The Katunayake-based MiG 27 No 12 squadron played a pivotal role in the combined forces campaign against the LTTE with several hundred successful sorties in the Northern region during the final three-year phase of the war. Sri Lanka acquired MiG 27s in 2000 to back multi role Kfirs.

Ambassador Karchava asserted that no country would punish its own citizens for crimes committed by others. Ambassador Karchava strongly denied assertion that Weeratunga was in Russia.

At the conclusion of the media briefing, The Island sought a comment from Ambassador Karchava as regards Weeratunga having to explain the circumstances under which Sri Lanka had acquired MiGs. Declining to be drawn on the issue Ambassador recalled that Weeratunga had over the phone explained his plight to him early this year.

The Ambassador said that the Russian now serving a jail term had purposely run over the victim following a dispute over the payment for the services rendered. The Russians had asked for much more than the agreed amount, the Ambassador said, assuring that Russian authorities had acted promptly in the wake of the incident.

Increase in fines is illegal!

Dec 05, 2016

The fines imposed from the budget on traffic law violations are illegal, reports say. Several veterans in the legal field told us that the finance minister had considered the proposing of new taxes and imposing fines to be the same. However, it will be a violation of the constitution if a fine is imposed in the same manner a tax is imposed, they said.

Explaining further, they said the constitution does not prevent the introducing of new taxes and enforcing same with immediate effect, without waiting until they had been made part of the law. The imposition of a fine could be proposed through a budget. However, if that fine is to be implemented, an act of parliament should necessarily be introduced first. Also, that fine becomes law only after parliament passes it and the speaker signs the approved document. The constitution does not provide for the backdated imposition of a fine. That is clearly mentioned in 13-06 clause of paragraph 111 on fundamental rights in the constitution, that a punishment for an offence should not exceed the punishment spelt out by the law at the time the offence was committed, they noted. Ruling party MP, president’s counsel, Dr. Jayampathy Wickramaratne too, referred to this recently. “When the finance minister said the fines will be increased, everybody knew that to implement it, an act is needed. That is not so for taxes. For taxes, laws can be introduced later, to become effective backdated. If fines or prison terms are increased, that can be implemented only from the day the amended or the new law is passed and the speaker certified it,” he said.

 

Veterans in the legal field said further that the finance minister introduced through budget 2016, without considering the long term implications, an amendment to the Value Added Tax (VAT), and the Supreme Court subsequently ruled to annul it, as that was not in line with the provisions in clause 152 of the constitution and the parliamentary standing order 133. The issue did not aggravate into a clash between the legislature and the judiciary due to the balance of power prevailing at the time. They added that the finance minister should act more responsibly in such sensitive matters.

Three killed in Balapitiya shooting


2016-12-05

At least three members of the same family including a four-year-old child were shot dead following a shooting incident in Balapitiya this evening, police said.

 The victims were identified as 31-year-old man, his 28 year-old wife and five year-old child. They were in front of a garment factory in the area, when a gunman opened fire at them. 

Soon after the incident, the critically injured victims were admitted to the Balapitiya hospital, where they succumbed to their injuries.

Tamil Nadu CM Jayalalithaa dies, supporters grieve in streets

A woman walks past a portrait of J. Jayalalithaa, Chief Minister of the southern state of Tamil Nadu, in Chennai, India, March 13, 2012. REUTERS/Babu/File Photo

Tue Dec 6, 2016

One of India's most popular politicians, Jayalalithaa Jayaraman, died on Monday following a massive cardiac arrest, setting off an outpouring of grief among thousands of supporters gathered outside.

Her political party and the hospital where she was being treated confirmed the popular former film actress and chief minister of southern India's Tamil Nadu state, widely known as "Amma" or "Mother", had died at the age of 68.

"Our beloved leader, The Iron Lady of India ... is no more," tweeted her AIADMK party, the third-largest party in India's lower house of parliament in New Delhi.

Her death deprived her regional ruling party of its only charismatic leader, whose portrait adorned placards and posters around her home state and who was tipped as a possible future Indian prime minister.

Jayalalithaa had gone into cardiac arrest on Sunday night, the Apollo Hospital in Chennai said, following her admission with fever and dehydration in September.

Despite being resuscitated and put on life support, "her underlying conditions rendered her unable to recover and she passed away at 11:30 p.m.", the hospital said in a statement.

Prime Minister Narendra Modi led the tributes, tweeting that Jayalalithaa's death had left a huge void in Indian politics.

"Jayalalithaa ji's connect with the citizens, concern for welfare of the poor, the women and marginalized will always be a source of inspiration," Modi said.

The news of her death was met with howls of grief and tears from the crowd of supporters outside the hospital. Rumours earlier in the evening that she had died, which proved to be false, led to brief unrest.

CULT FOLLOWING

About 2,000 policemen were deployed around the hospital in case crowds of devoted supporters reacted strongly to Jayalalithaa's death. Supporters have been known to commit suicide in reaction to bad news.

"Nothing can kill Amma," said one man holding a picture of the leader outside the hospital earlier as doctors battled to save her life.

Aloof and powerful, Jayalalithaa had a cult following among the people of Tamil Nadu that endured even though she went to jail for corruption more than once.

She began a film career at 16 and rose to stardom with dozens of hit Tamil films, often with her screen partner M.G. Ramachandran, an actor-turned politician who then served three terms as chief minister of Tamil Nadu state.

With voters ready to confer god-like status on their matinee idols, she also went into politics and trumped her mentor by serving five times as head of the state government.

Jayalalithaa leaves behind a legacy of populist schemes, including giving away free cellphones, laptops and kitchen grinders that endeared her to millions of voters. She also drew foreign investors to India's second largest state economy.

Auto giants Ford Motor (F.N), Daimler (DAIGn.DE), Hyundai (011760.KS) and Nissan (7201.T) have operations in Chennai as has U.S.-listed outsourcing firm Cognizant (CTSH.O) .

LEADERSHIP VACUUM

Her death opens up a leadership vacuum in her AIADMK party, which she ran with an iron hand with designated successor.

During her latest illness, her picture was put in a chair at the head of the table at state cabinet meetings.

O.P. Panneerselvam, a cabinet colleague, has stood in for Jayalalithaa in the past, but he has repeatedly made it clear he was not replacing her. He pointedly refused to take her place at the head of the cabinet table while she was ill.

"There is no second line of defence here, and these are emotive times. There is a chance of violence," said T.R. Ramachandran, an independent expert on Tamil Nadu politics.

The AIADMK and its bitter rival, the DMK party, are the main political groupings in Tamil Nadu. Both are built around a personality cult of their leaders, both of whom are drawn from the Tamil film industry.

India's two national parties, the ruling Bharatiya Janata Party and the opposition Congress, have little political presence in the state, despite decades of efforts.

The death of Jayalalithaa's mentor Ramachandran, or MGR as he was known, sparked looting and rioting across Tamil Nadu by his grief-stricken supporters in 1987.

The U.S. consulate in Chennai asked American citizens to avoid areas where demonstrations were happening and be vigilant because of the chance of violence.

"U.S. citizens are reminded that even gatherings intended to be peaceful can turn confrontational and escalate into violence," the consulate said in a notice posted on its website.

(Reporting by Anuradha Nagaraj; Additional reporting by Parikshit Mishra and Malini Menon; Writing by Sanjeev Miglani and Douglas Busvine; Editing by Tom Heneghan)

Israel’s judges taken to court in Chile

An Israeli bulldozer carries an uprooted olive tree to make way for Israel’s wall, near the occupied West Bank town of Beit Jala and the Jewish settlement of Gilo, adjacent to the Palestinian city of Bethlehem, 20 August 2015.Oren ZivActiveStills

Charlotte Silver-5 December 2016

Palestinians in Chile are suing three Israeli high court justices in a Chilean court for their role in authorizing the construction of Israel’s wall in the Bethlehem area of the occupied West Bank.

Several Chilean lawmakers, spanning the spectrum of political parties in the country, joined Palestinian plaintiffs, some of whom are Chilean nationals.

But a Chilean court rejected the suit on 2 December after reviewing the complaint over the course of last week.

Five Chilean judges were assigned to investigate the allegations, according to the Tel Aviv newspaper Haaretz, which first reported the lawsuit. The judges were scheduled to issue their first determination in the case in mid-December.

Supreme court appeal planned

The legal team says they will appeal the decision to the Chilean supreme court.

Nicholas Paves, a former Chilean governor, filed the complaint.

Paves says the lower court’s rejection was based on erroneous reasoning, including that Israel has not ratified the Rome Statute, which established the International Criminal Court, and that the region is not in a permanent state of conflict and therefore not subject to international humanitarian law.

Paves says that Chile’s constitution allows the suits because it enshrines the concept of universal jurisdiction, and that the construction of the wall uproots a population that is protected under international humanitarian law.

The lawsuit alleging crimes against humanity was filed on 28 November under Chile’s doctrine of universal jurisdiction, which allows Chilean courts to prosecute suspects of international crimes even if they are from countries that are not members of the International Criminal Court.

Though Israeli military leaders and politicians have previously been pursued in several countries under universal jurisdiction, this is the first known case against members of the judiciary. The complaint cites the Nuremberg trials which established a precedent by prosecuting lawyers and judges who helped implement and execute the policies of the German Nazi regime.

In 2004, the International Court of Justice issued an advisory opinion stating that Israel’s wall violates international law.

The Chilean lawsuit names former Israeli chief justice Asher Grunis and justices Neal Hendel and Uzi Vogelman as defendants.

On 2 April 2015, after a nine-year legal battle, the three justices accepted the Israeli military’s proposal to build the wall so that it would keep the religious complex composed of a Catholic monastery and women’s convent on the same side as the Palestinian village of Beit Jala and the rest of the West Bank, but annex the surrounding agricultural lands in the Cremisan Valley.

The ruling instructed the military to provide an opening in the wall to allow Palestinians access to their agricultural lands.

The Chilean lawsuit asserts: “In this particular case, it is the defendants who create, through their resolutions, a legal scaffolding that pretends to give an image of legality to that which is clearly criminal.”

Livelihoods cut off

Though the April 2015 ruling cut off Palestinian landowners from their land, at the time it was celebrated as a relative victory.

The military’s original path of the wall would have separated the monastery from the convent as well as from the Palestinian villages to which it is intricately connected.

The entire path of the wall is within the occupied West Bank and critics argue that its real purpose is to confiscate fertile Palestinian land for Israeli settlements.

In July 2015, the Israeli high court ruled the military could begin construction on a segment of the wall dividing land belonging to the town of Beit Jala.

In August, the military moved into the area, uprooting olive trees and preparing for construction of the wall. But the military disregarded the court’s order and proceeded with construction along the same route the justices had earlier invalidated.

This action severed dozens of families from their land and livelihoods. Nader Abu Ghatas, 55, told the Israeli human rights group B’Tselem that on 17 August 2015, he was surprised to see Israeli bulldozers working on his family’s land.

“The other landowners and I were given no prior notice of confiscation or planned work on our plots,” Abu Ghatas said. “I stayed in the area throughout the day and watched the bulldozers and tractors uproot the ancient olives trees and wrecking the plots. It was a huge disaster for me and for my neighbors.”

Residents immediately appealed to the high court to halt the construction, but the justices refused to intervene.

Over the next six months, Palestinians exhausted legal measures to halt the wall’s construction. In January 2016 the Israeli high court made its final ruling against the villagers.

The Chilean lawsuit holds that the Israeli judges’ decisions are a “clear example that the defendants form part of the system of occupation itself and therefore its decisions will only go in one direction: to justify and endorse the unjustifiable from the perspective of international law.”

The suit notes that as the case advances through the courts in Chile, more people may be named as defendants. Haaretz reports that the justices who eventually authorized the wall’s route were Hendel, Zvi Zylbertal and Miriam Naor, who succeeded Grunis as president of the Israeli court.

As part of the investigation, Chilean judges could summon Israeli judges for questioning or interrogate them in Israel.

Chile has a large Palestinian diaspora, many of whose members trace their roots to the Bethlehem area.

The lawsuit emphasizes this historic connection between Palestine and Chile.