Yugadanavi deal exposes diplomatic blunder amidst internal clashes

  • Indian Foreign Secretary arrives to expedite Indian projects
  • G-10 government allies continue to object LNG monopoly
  • PM fires warning shots at ministers opposed to LNG deal
  • Sabry pledges to amend PTA, but TNA claims GSP+ all but gone
  • FR details accusations that Lohan tortured PTA prisoners

Multiple crises on the domestic front continue to plague the Government led by President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa, although some respite was offered with the country coming out of a six-week-long quarantine lockdown.

However, doubts over the effectiveness of certain government policies continue to rise, given the fallout experienced during the past few weeks over the action taken to address the issue of rice shortages and price increases, as well as the growing shortage of fertiliser in the country.

The issuing and revoking of gazettes, mainly on essential commodities, especially rice, became a sour point among farmers, millers, traders, and consumers.

The fertiliser shortage prevalent in most parts of the country had further compounded issues faced by the agriculture sector, putting the nation’s food security at risk.

It is amidst all this chaos that the deal between the Ministry of Finance and US-based New Fortress Energy Inc. (NFE) on the Yugadanavi Power Station in Kerawalapitiya continues to be a sour point in the Government’s practices.

It is reliably learnt that the Yugadanavi deal, where the 40% stake of the plant held by the Treasury was divested with the NFE, had resulted in a diplomatic issue as well.

When the Government was initially looking at bringing in a foreign investor for Yugadanavi, three foreign investors representing South Korea, China, and a joint collaboration between Japan and India had expressed interest.

During Dullas Alahapperuma’s tenure as the Minister of Power, it was decided that a competitive bidding process would be called to ensure the deal was handled with transparency, since the countries that expressed interest were long-standing development partners of Sri Lanka.

Following the tender process, the Chinese bidder was to be awarded the Kerawalapitiya project.

However, it was at this point that the Finance Ministry decided to drop China and proceed with NFE, a company that was not part of the tender process.

It could be perceived that the Government of Sri Lanka had opted for a US investment in order to maintain a balance in diplomatic relations, as China already plays a key role in many local development projects. In fact, the initial agreement on the Kerawalapitiya power plant was reached during US Secretary of State Mike Pompeo’s visit to Sri Lanka in 2020.

However, the manner in which the NFE deal was finalised was what had created much discomfort among foreign investors.

Therefore, the Government’s move to finalise the deal with US-based NFE had now resulted in a diplomatic blunder, leaving China, Japan, and India feeling slighted.

For India and Japan, this is the second large-scale project that faced a bitter outcome at the hands of the Sri Lankan Government – the first was the East Container Terminal (ECT) at the Colombo Port. In the ECT case, the Government reneged on a tripartite agreement with India and Japan to develop the respective terminal.

Both India and Japan expressed their displeasure to the Government of Sri Lanka at the time.

Prior to the ECT saga, Japan had yet another bitter experience when the Government decided to scrap the proposed Light Rail Transit (LRT) Project.

As for the Chinese, the Kerawalapitiya deal was cause for concern, as China is viewed at present as Sri Lanka’s closest ally in the development field as well as in international fora.

Indian Foreign Minister S. Jaishankar had raised concerns over the issues faced by international investors in Sri Lanka, especially Indian investments to the country. Jaishankar, it is learnt, had raised these concerns recently during a meeting with Foreign Minister Prof. G.L. Peiris in New York.

The Indian Foreign Minister had also expressed concern over the delay in several Indian-funded projects in Sri Lanka. These issues were raised by Jaishankar in addition to the usual talking topics between Sri Lanka and India.

Foreign Minister Prof. Peiris, for his part, had assured that India played an important role in Sri Lanka, especially in the country’s development agenda. Prof. Peiris had also observed that the Government of Sri Lanka was keen on moving forward with the India-funded projects.

It is in this backdrop that Indian Foreign Secretary Harsh Vardhan Shringla commenced an official tour in Sri Lanka yesterday (2). During his stay, the Foreign Secretary is to travel to Jaffna, Trincomalee, and Kandy.

He is scheduled to meet with the President, Prime Minister, Foreign Minister, Finance Minister, and several other government ministers. He is also to meet with members of the Opposition during his stay, which concludes on Tuesday (5).

Shringla is to discuss several key projects in the fields of power and energy as well.

Internal unrest

Amidst the growing debate over the Government’s deal with NFE, Prime Minister Rajapaksa last week took a strong stand against the governing party alliance members.

The Premier stated that the coalition partners of the governing alliance could leave the Government at any time if they so desired, as he (Rajapaksa) would not forcibly hold the parties behind if they wanted to leave.

According to Rajapaksa, it was members of the Opposition who wanted the governing alliance members to leave the Government.

He added that the Government was faced with a unique situation – a global pandemic and rising global prices, which even the Opposition would have had to face if it was in government.

The governing Sri Lanka Podujana Peramuna (SLPP) once again took swipes at alliance partners, mainly the group of 10 governing party allies (G-10), for objecting and raising concerns over the Yugadanavi deal.

SLPP General Secretary MP Sagara Kariyawasam slammed those who opposed the deal, noting that it was beneficial to the country.

Also, Minister of Tourism Prasanna Ranatunga claimed that the cabinet paper on the Yugadanavi deal was submitted to the Cabinet of Ministers and had received the approval of the Cabinet, and that there was no basis for the objections raised by Minister Wimal Weerawansa and several others.

However, Weerawansa has refrained from responding to Ranatunga’s claim.

“If Minister Ranatunga is making such a claim, it clashes with the collective responsibility of the Cabinet because there’s no necessity to reveal something, the manner in which some issues were discussed at the Cabinet,” Weerawansa had noted.

Weerawansa had also noted that the Yugadanavi agreement could be reconsidered, as the controlling shares of the plant were not vested with the foreign company.

“We are sensitive to the issue that the country’s LNG supply was given for a long term solely to a single US company. This is what we want to discuss with the President. The agreement that was signed was to divest 40% of the shares held by the Treasury in the Yugadanavi plant for $ 250 million. During a discussion with the Finance Minister and relevant officials, we asked whether the purchase of 40% of the shares of Yugadanavi would give the foreign company a controlling stake in the plant. The Ceylon Electricity Board (CEB) Chairman responded, saying that it would not. However, the agreement had to be tabled in Cabinet, according to the cabinet paper.

“We can reconsider the agreement if the management of the power plant was not assigned to the foreign company, as pointed out by the CEB Chairman. The Yugadanavi plant will, however, be owned by the CEB after 15 years,” Weerawansa had added.

Meanwhile, Minister of Energy Udaya Gammanpila had said that the prices for gas cargo arriving at the upcoming LNG facility by NFE will be the cheapest.

He made this comment during an interview with Bloomberg, which reported that Sri Lanka was pushing on with LNG imports even as gas prices surged.

NFE, which will operate the terminal, would charge an extra 15% for turning the liquid fuel back into gas, he said.

However, Gammanpila had continued to maintain the stance that the LNG monopoly with NFE would have an adverse impact on Sri Lanka’s oil and gas exploration plans.

He had noted that awarding a contract to a US company to supply gas to Sri Lankan power plants until 2028 will be an obstacle in attracting investors to drill for natural gas in Sri Lanka.

Gammanpila went on to say that the issue at hand was not about the 40% stake, but rather about granting a monopoly in the supply of natural gas to Sri Lanka for a period of five years.

He added that the Yugadanavi deal was discussed without any representative from the Ministry of Energy.

“As the Minister, I submitted two observations to the Cabinet of Ministers on the matter thus far, and another one will be presented soon. I am a person who stands for what is right and I work according to my conscience. I have never gone into hiding no matter how detrimental it might be (for me) politically,” he had concluded.

The country’s Mannar Basin holds nine trillion cubic feet of potential gas reserves and two of the four wells drilled in the area had struck gas, according to Gammanpila.

The Energy Ministry was planning on inviting international companies to develop offshore gas reserves. A regulator for the upstream oil and gas industry would be established next month.

Be that as it may, the G-10 leaders had expressed that none of them had any issue with the divestiture of the Treasury’s 40% stake to a foreign company, as the controlling stake remained with Sri Lanka, and that they also had no objections to NFE.

A senior leader of the G-10 told The Black Box: “We have no issue with the divestiture. In fact, it should happen. Our concerns are not about that. We have concerns over the manner in which the deal was reached. Given that a tender was opened for the respective project and three foreign investors – South Korea, China, and Japan, together with India – had expressed interest and even submitted bids for the tender, it was not ethical to have reached a deal with a party that was outside the tender process. It is a violation of good governance principles.”

According to the G-10 leader, the governing party allies were opposed to the granting of an LNG monopoly that impacts Sri Lanka’s energy security and warned of the adverse impact it would have on the country’s planned oil and gas exploration programme.

“The diplomatic issue is in addition to these issues,” the G-10 leader added.

Adding to the chorus of concerns against the Government’s move to grant an LNG monopoly was former Minister of Petroleum and Petroleum Resources Development Chandima Weerakkody.

He had claimed that he lost his portfolio during the former Yahapalana Government due to his opposition to the Yugadanavi Power Station deal.

The former Minister had said that his conscience was clear, as he had no participation in such dealings.

He made these revelations during a media briefing in Galle recently.

He had further noted that he did not regret losing his portfolio, since he was more concerned about the interests of the nation.

“I was led to act in line with my conscience in this matter. Back in the day, I lost my cabinet portfolio because of this. I do not oppose the US, nor do I oppose foreign direct investments. All we know is (that) a massive project was implemented to source natural gas in our country. My opinion was that laws should be formulated to attract investors and be presented to Parliament. I was removed when 11 of the largest corporations were preparing tenders,” Weerakkody had said.

Weerakkody went on to say that handing over the supply of natural gas in the country without calling for tenders would cancel out opportunities for investors.

EU monitoring

Amidst the many internal battles, the Government had to also put its best foot forward before the European Union’s (EU) Generalised Scheme of Preferences-Plus (GSP+) trade concessions Monitoring Mission for the Third Cycle that arrived in the country last week.

The Tamil National Alliance (TNA) had noted during a meeting held last Tuesday (28 September) with delegates of the visiting EU mission that the EU’s focus should not be limited to the Prevention of Terrorism (Temporary Provisions) Act No. 48 of 1979 as amended (PTA).

TNA Leader MP R. Sampanthan had stressed on the need to find a long-term solution to the problems faced by the Tamil community in the country through a new constitution.

“Our delegation met with the visiting EU delegation and emphasised on the need to repeal the PTA and to formulate a new constitution to resolve the Tamil national ethnic question, in addition to updating them on the land grabs and other intrusions into the rights of the Tamil people,” the TNA noted in a statement.

Following the discussion, TNA MP Shanakiyan Rasamanickam told The Morning: “Sampanthan was adamant about finding a long-term solution, through the means of a new constitution. He urged the delegation to not just limit their focus on the PTA. We also brought up the issues of how the Archaeology Department, Mahaweli Authority, and other government institutions were being used for political purposes by the Government. The delegation seemed to have been already aware of this.”

Meanwhile, TNA MP M.A. Sumanthiran stated that the EU delegation visiting the country had already decided to revoke the GSP+ concession offered to Sri Lanka.

“They have already decided to revoke the GSP+ concession, the reason being that despite the Government promising back in 2017 to revoke the Prevention of Terrorism Act, nothing has been done even after four years. We said that this Act must be revoked immediately. Actions under this Act are unfair, and once again, they (Government) have started using this Act,” Sumanthiran noted.

He further noted that the detainees under the PTA must be released, and the delegation was informed about the alleged militarisation of the country that is currently taking place.

“Despite the fact that these actions and decisions have been taken by the Government, the EU will take action against all the people. It is only in the face of such pressure that the Government will change their ways,” Sumanthiran added.

Meanwhile, the Sri Lanka Muslim Congress (SLMC), during its meeting with the EU delegation last Tuesday (28 September), raised concerns about the Government’s use of the PTA to unfairly target persons such as Attorney-at-Law Hejaaz Hizbullah and teacher and poet Ahnaf Jazeem.

“The delegation asked us about allegations that the PTA was being used to hunt those who oppose the Government. We spoke about how Hizbullah, who worked on many human rights issues, was detained for a lengthy period of time under the PTA. We also highlighted the case of Jazeem, who was also under detention, without charges against him, for over a year now,” SLMC Leader Rauff Hakeem had said following the discussion with the EU delegation.

The SLMC had stressed on the need to repeal the PTA, backing the call for the same made by the TNA earlier that day.

The SLMC had noted that they would not accept any “plaster solutions” put forward by the Government regarding the matter.

Hakeem had added that the delegation had also focused on the emergency regulations that were imposed by the Government at the end of August to ensure that the supply of essential goods was not hindered. The SLMC had claimed that these regulations and other laws in operation due to the Covid-19 pandemic were being used to oppress the Opposition.

“We also expressed our disappointment about the politicisation of the investigations into the Easter Sunday terror attacks of 21 April 2019. The Government has not taken adequate steps to properly conduct them,” Hakeem had said.

The EU mission also met with Opposition Leader Sajith Premadasa at the Opposition Leader’s Office last Tuesday.

During the meeting, Premadasa had noted that the EU should continue to extend the GSP+ facility, as it greatly benefits the people of Sri Lanka.

He had noted that while pressure should continue to be placed on the Government of Sri Lanka over issues related to human rights, the people should not be made to suffer due to the failures of the Government.

MPs Lakshman Kiriella and Dr. Harsha de Silva had also attended the meeting.

Meanwhile, the Standup Movement Lanka organisation had written to the EU, requesting that it intervene to ensure that the rights of workers in export processing zones (EPZs) were addressed prior to deciding on whether or not to extend the EU’s GSP+ trade concessions to Sri Lanka.

“There are 350,000 workers in the 15 EPZs under the Board of Investment (BOI), whose efforts pave the way for Sri Lanka to earn 14% of its annual export earnings. However, many local labour laws, the United Nations Guiding Principles on Business and Human Rights, and obligations under international conventions such as the International Covenant on Economic, Social, and Cultural Rights (ICESCR) were ignored by factory owners. The EU must address workers’ rights and unjust and illegal employment policies and practices in the EPZs before granting (extending) GSP+ privileges to Sri Lanka,” the organisation had stated in a letter to Ambassador Extraordinary and Plenipotentiary of the Delegation of the EU to Sri Lanka Denis Chaibi.

The European Parliament, earlier this year, called on the Government to repeal the PTA and the European Commission (EC) to consider the temporary withdrawal of the GSP+ from Sri Lanka if it was not done.

The EU mission currently in Sri Lanka is scheduled to conclude its visit on Tuesday (5).

The mission comprises EC Senior Advisor on Trade and Sustainable Development Nikolaos Zaimis, European External Action Service (EEAS) South Asia Division Head Ioannis Giogkarakis Argyropoulos, EC GSP Trade Preferences Co-ordinator Guido Dolara, EC Directorate General for Employment, Social Affairs, and Inclusion Unit Head Lluis Prats, EEAS Desk Officer for Sri Lanka Monika Bylaite, and EEAS Human Rights Policy Officer Paolo Salvia.

Amending PTA

The EU GSP+ trade concessions monitoring mission last week also met with Minister of Justice Ali Sabry.

In a statement, Sabry said that key areas of co-operation and the current judicial reforms programme were discussed.

The PTA would be amended within the next six months, Justice Ministry Secretary M.M.P.K. Mayadunne had told The Morning.

This assurance was given to the visiting EU mission.

“We assured the delegation that the PTA will face some necessary amendments within the next six months. The Cabinet Subcommittee appointed to make recommendations with regard to this is done with almost 95% of its work. The delegation seemed happy with the discussion,” Mayadunne had said.

According to him, the wider discussion also focused on the extensive justice reforms programme, which is currently being conducted by the Justice Ministry, with a special emphasis on the digitisation and digitalisation of the justice system.

It is in this backdrop that the Government reiterated its commitment to reviewing the PTA and to bring it in line with international norms within a time-bound process by the next meeting of the EU-Sri Lanka Joint Commission in early 2022.

This assurance was given during the fifth meeting with the Working Group on Governance, Rule of Law, and Human Rights in Colombo on Wednesday (29 September).

The Working Group meeting took place in the context of regular bilateral exchanges between the EU and Sri Lanka.  

During the discussion, the EU reiterated the importance of fostering social, economic, and political inclusion through justice, reconciliation, and accountability.

The two sides had discussed the 20th Amendment to the Constitution, independence of the Judiciary, separation of powers, and the ongoing work of independent institutions. Both sides had reiterated the importance of the effective functioning of independent institutions.

Sri Lanka had updated the EU on the extensive legal reform programme undertaken by the Justice Ministry, through consultative processes that brought together officials, sector experts, and members of the official and unofficial Bars. The EU had encouraged Sri Lanka to consider a broad consultation process in this undertaking.

Both the EU and Sri Lanka had agreed on the importance of engaging civil society and giving it the necessary space to function in all its diversity.

The discussion had also underlined the need to uphold international norms and standards of human rights while countering terrorism and violent extremism.

Both sides had discussed co-operation with the Human Rights Council, including treaty bodies, special procedures, and universal periodic reviews.

FR by prisoners

A fundamental rights (FR) application (SCFR 297/2021) was filed before the Supreme Court last Thursday (30 September) by eight Tamil political prisoners.

It was reported that the application was filed against former State Minister of Prison Management and Prisoners’ Rehabilitation Lohan Ratwatte.

This comes after an allegedly inebriated Ratwatte reportedly attempted to degrade and punish these prisoners held at the Anuradhapura Prison Complex by allegedly ordering them at gunpoint to kneel in front of him.

The petitioners had stated that their FR guaranteed under Articles 11, 12 (1), and 12 (2) of the Constitution were infringed by the aforesaid incident.

They had stated that they were fearful of their lives unless the interim reliefs prayed for in the application were granted, as grave and irremediable mischief and irreparable loss and harm would be occasioned to them.

The petitioners sought an interim order transferring them to a prison in the Northern Province where their cases are lodged.

The petitioners stated that on 12 September, at around 6.05 p.m., 10 detainees were asked to enter the prison complex’s courtyard and that the State Minister, another person who appeared to be his Secretary, some others who looked like his security detail, and some prison guards were present.

They had further stated that the State Minister had told the detainees to stand in a semi-circle and ordered them to kneel before him.

The petitioners alleged that the State Minister had started to abuse them in Sinhala, saying that the President had given him all the power in relation to PTA prisoners and that he could either release them or shoot them dead. The petitioners had further said the State Minister had a pistol in his hand and appeared to be intoxicated.

“The State Minister then demanded to know what crime each of the detainees had committed. He kept shouting abuse(s) at the detainees for a while and then ordered (the) eight petitioners to go in. The detainees were all in great shock and fear. Later, the prison officials told them that the (State) Minister had gone out of the prison and for them not to be fearful,” the petitioners had stated.

The prisoners had filed this application through their Attorney-at-Law Moahan Balendra.

TNA MP Sumanthiran and Attorney-at-Law Kesavan Sajanthan will appear on their behalf.

The Superintendent of Prisons at the Anuradhapura Complex, the Commissioner General of Prisons, the Minister of Justice, the Attorney General, and Ratwatte himself were named as respondents.

People’s Tribunal

In an unprecedented effort to achieve justice in the killing of journalists, three leading press freedom groups had established a People’s Tribunal to investigate the murders and hold governments accountable.

The Tribunal, a form of grassroots justice, relies on investigations and high-quality legal analysis involving specific cases in three countries, including the case of Lasantha Wickrematunge.

Additionally, the Tribunal seeks to indict the Governments of Mexico and Syria as well, for failing to deliver justice for the murders of Miguel Ángel López Velasco and Nabil Al-Sharbaji.

Renowned human rights lawyer Almudena Bernabeu will lead the prosecution for the opening hearing. A keynote address will be delivered by Baroness Helena Kennedy of the Shaws QC, member of the High Level Panel of Legal Experts on Media Freedom.

The opening hearing will take place from 9 a.m. to 6 p.m. (Central European time) on 2 November 2021, in The Hague.

This comes after Free Press Unlimited (FPU), Reporters Without Borders (RSF), and the Committee to Protect Journalists (CPJ) requested the Permanent People’s Tribunal to convene a People’s Tribunal on the Murder of Journalists.

People’s Tribunals are designed to hold states accountable for violations of international law by building public awareness and generating legitimate evidence records, and play an important role in empowering victims and recording their stories. The People’s Tribunal on the Murder of Journalists will indict the Governments of Sri Lanka, Mexico, and Syria for failing to deliver justice for the murders of Lasantha Wickrematunge, Miguel Ángel López Velasco, and Nabil Al-Sharbaji.

Discussing Diaspora

Sri Lanka and the UK, meanwhile, had discussed relations with the Tamil Diaspora based in the UK.

The focus on the Diaspora came after President Rajapaksa recently stated that he was willing to have talks with the Tamil Diaspora.

Foreign Minister Prof. Peiris and British Minister of State for South Asia, United Nations, and the Commonwealth Lord Ahmad of Wimbledon held a discussion recently at the Sri Lanka Mission in New York.

The Ministers had discussed a wide range of issues including trade and investment opportunities available in the Port City and elsewhere, the resumption of tourism, and matters relating to development and reconciliation with particular reference to relations with the Diaspora.

Prof. Peiris had reportedly briefed Lord Ahmad in detail about the substantial progress on the ground in a variety of sectors by domestic institutions, despite constraints imposed by the Covid pandemic.

Lord Ahmad accepted with pleasure the invitation by Prof. Peiris to visit Sri Lanka at his early convenience.

Lessons from South Africa

Sri Lanka and South Africa recently held talks on the reconciliation process.

South African Minister for International Relations and Co-operation Dr. Naledi Pandor had received Foreign Minister Prof. Peiris at the Permanent Mission of South Africa in New York for a bilateral meeting, on the sidelines of the 76th Session of the UN General Assembly.

The Foreign Minister was accompanied by Foreign Secretary Admiral Prof. Jayanath Colombage.

Dr. Pandor had congratulated the Minister on his appointment as Foreign Minister and recalled the close and friendly bilateral ties between the two countries.

Prof. Peiris had recalled his long association with South Africa dating to his doctoral work, where he had visited South African universities and conducted a series of lectures on constitutional law.

Prof. Peiris had also noted that Sri Lanka had closely looked at South Africa’s rich experience and unique history in the areas of reconciliation and truth. He had further noted that Sri Lanka had carefully reflected on aspects that were particular to South Africa’s own national experience.

Minister Prof. Peiris had briefed his South African counterpart about Sri Lanka’s own initiatives, including its own Office on Missing Persons (OMP) and Office for Reparations (OR) as well as their contribution towards Sri Lanka’s post-conflict development and national unity.

Minister Dr. Pandor had observed that South Africa was pleased to share their experiences and lessons with countries looking to address post-conflict issues and that they continued to learn lessons in addressing past human rights abuses and on issues related to reparations.