MCC IN SRI LANKA; LETTERS SENT WITHOUT AGS APPROVAL

Colombo (News 1st); Attorney General Dappula De Livera on Tuesday (19) advised the Secretary to the President that the MCC (Millennium Challenge Corporation) Compact & Programme Implementation Agreement, as well as the Articles of Association of MCA (Millennium Challenge Act), are inconsistent with Written Laws & the Constitution. The Attorney General in a 20-page report sent to Dr. P.B. Jayasundera, Secretary to the President had stated the observations made by the relevant government bodies and ministries as well as the report of the committee appointed by the Prime Minister were taken into consideration. Further, conditions and provisions mentioned in the Millennium Challenge Corporation Compact and related articles, observations made by the External Resources Department and the Ministry of Foreign Affairs were taken into consideration by the AG, said State Counsel Nishara Jayaratne, the Coordinating Officer to the Attorney General. Accordingly, the Attorney General had pointed out a legal impediment exists with respect to the implementation of the said agreements. The Final Report of the Committee appointed to review the MCC agreement found the agreement itself contained many harmful elements, and thereafter the President’s Office on 03rd of September 2020, sought the AG’s opinion on the MCC Compact and related matters. However, according to reports, the AGs Department on two previous occasions - October 10th 2018 and June 10th 2019 - sent letters to Jonathan G. Nash, the Chief Operating Officer of MCC, and the Director General, External Resources Department, respectively, noting that MCC and the Programme Implementation Agreement (PIA) were in line with the Sri Lankan law. But, credible sources said the letters sent during Jayantha Jayasuriya’s tenure as the Attorney General and Dappula De Livera's tenure did not have their approval. According to the letter dated the 10th of June 2019 seen by News 1st, Senior Additional Solicitor General Sanjay Rajaratnam states the initial drafts of the MCC Compact and the Program Implementation Agreement are in order and there exists no legal impediment to execute them. "However, I do not venture to opine on the technical and financial aspects of these agreements, it is presume that all requisite approvals have been obtained from the relevant agencies and authorities," the letter concluded. MCC Review Committee Following a Cabinet decision taken on December 18, 2019, the Committee was appointed with effect from January 01st, 2020. Prof. Lalithasiri Gunaruwan of the University of Colombo is the Chairman of the Committee while former Secretary to the Ministry of Transport Dr. D. S. Jayaweera, President’s Counsel Justice Nihal Jayawardena and architect Nalaka Jayaweera are the other members. On the 25th of June 2020, The Final Report of the Committee appointed to review the MCC agreement found the agreement itself contained many harmful elements. The review committee said the Former Government signed the agreement in two phases in 2017 and 2018. Prof. Lalithasiri Gunaruwan, the Chair of the Committee while handing over the report to the President said after signing the agreement in two phases, grants amounting to 7.4 Million USD and 2.6 Million USD were given to Sri Lanka. Prof. Lalithasiri Gunaruwan said the accounts of the said money is unaccounted for. According to the President’s Media Division, the Commissioner of Lands had noted the agreement cannot be implemented in a legal manner. “After the agreement is passed in parliament as an act, moving a counter-proposal is in violation of the agreement,” said Prof. Lalithasiri Gunaruwan, quoted by the PMD. The committee appointed to review the Millennium Challenge Corporation Compact (MCC) also found that any condition in the agreement can be changed by letter exchanged among two representatives and Prof. Lalithasiri Gunaruwan had added such a decision was in direct violation of the mandate of Parliament. He pointed out the agreement had created an environment where the Attorney General would not be able to represent the Government of Sri Lanka in a court of law. US Response On the 26th of June 2020, The US Embassy in Colombo denied releasing any financial grant to Sri Lanka under the Millenium Challenge Corporation (MCC) agreement. The US embassy responded with a timeline of events related to the program, according to which Sri Lanka had qualified for the MCC grant in December 2015. Between January and November 2016, the government had hired Harvard University, which identifies weak transport infrastructure and land administration as binding constraints to a country’s growth. The detailed project proposal was submitted to the MCC in November 2017, following which it had been approved in July 2018. In September that year, the then President had met with the Chief Executive Officer of MCC in New York. A month later Sri Lanka, led by the treasury secretary and an MCC delegation had negotiated compact and its terms of assistance, according to the timeline. In April 2019, the MCC had approved the USD 480 mn grant agreement while the project centered around land administration and the transport sector had been approved in October. The US embassy said, in February 2020 that the US and the Sri Lankan governments discussed the next steps of the project.