Sri Lanka's Supreme Court Puts Forward Series Of Recommendations On Economic Transformation Bill

COLOMBO (News 1st); Speaker of Parliament, Mahinda Yapa Abeywardena, informed the house, the Determination of the Supreme Court concerning the Bill titled “Economic Transformation.”

The Supreme Court, acting under Article 121(1) of the Constitution, reviewed the Bill and proposed a series of amendments to ensure its alignment with constitutional principles.

The Supreme Court's determination highlighted several key areas in the Bill that require revision to safeguard constitutional integrity.

Key recommendations include the deletion of certain clauses, amendments to empower the Economic Commission, clarification of qualifications and procedures, and removal of inconsistencies with the Constitution.

Determination Of The Supreme Court:

The determination of the Supreme Court as to the constitutionality of the Bill concludes and upon a careful consideration have suggested amendments that will render the provisions of the Bill consonant with the Constitution as follows:—

1) Clause 8 of the Bill should be amended by deleting Article 4 contained therein, as parliamentary supervision is adequately covered by Article 43 and 148.

2) Clause 13 (b) requires to be deleted as the creation of an independent regulator could be established by an amending legislation.

3) Clause 13 to be amended to empower the legal entity “Economic Commission” to purchase, hold and sell shares, stocks, debentures and similar assets.

4) Clause 15 is inconsistent with the Constitution and can only be passed with a two-thirds majority and a referendum. But if amendments recognizing the power of the President in regard to alienation or disposition of State land are passed in the manner and form as discussed by this Court, the provision can be passed with a simple majority.

5) Clause 26 requires to be amended to prescribe the qualifications, experience and the terms and conditions of employment of the EC Director General through regulations for the purposes of clarity and transparency.

6) Clause 45 to be amended to replace the term ‘investor’ with ‘investment’ for purposes of clarity, highlighting the importance of the term ‘investment’ within the context therein.

7) Clause 46 (5) should be amended to specify a timeframe for the Minister to refer to the Cabinet of Ministers any refusal, denial, or failure by a Specified Institution to respond to an inquiry or request under subsections (2) or (4), thereby mitigating unnecessary delays.

8) Clause 48 (2) shall be revised to remove the requirement for consultation with the Secretary to the Department of Treasury regarding the appointment of members to the Invest Sri Lanka Board.

9) Clause 55 (2) (b) to be amended to remove all references to the repealed law in the aforementioned clause.

10) Clause 57 to be amended to include a requirement that every Order made under this section to be laid before Parliament for approval within three months of its issuance.

11) Clause 64 (d), granting Zones SL the power to acquire properties for establishing investment zones, is to be deleted. This amendment reflects that Zones SL’s authority is limited to recommending lands required for investment zones to the Economic Commission, and does not extend to land acquisition.

12) Clause 75 to be revised to specify that the qualifications, experience, and terms and conditions of employment for the Chief Executive Officer of Zones SL shall be prescribed by regulations. This provision aims to ensure the appointment of individuals with adequate qualifications and experience, thereby preventing appointment of unqualified individuals to higher positions such as Chief Executive Officer.

13) Clause 90 (2) to be amended to extend the period for Specified Institutions to provide written reasons for refusal or denial from fifteen days to twenty-one days, ensuring enhanced procedural fairness and transparency in the approval process.

14) Clause 90 of the Bill to be amended to include a new sub-clause stipulating that if a Specified Institution declines, denies, or fails to respond to an inquiry or request, Zones SL must promptly notify the Minister. Within two weeks thereafter, the Minister shall escalate the matter to the Cabinet of Ministers for appropriate action. This amendment is aimed at ensuring timely resolution and accountability in cases of denied information requests.

15) Clause 94 (2) (5) of the Bill requires to be amended to delete the words “under the provisions of the Board of Investment of Sri Lanka Law, No. 4 of 1978;” because any terms and conditions relating to employment have not been laid down in the BOI Act.

16) Clause 96 should be amended to require that every Order issued under this section be submitted to Parliament for approval within three months of its issuance. The Order shall only take effect upon Parliament’s approval. The amendment shall be incorporated to ensure consistency with other clauses of the Bill where orders made under the Bill are referred to Parliament for its approval.

17) Clause 147 to be amended to include that the qualifications, experience and the terms and conditions of the Executive Director of the Productivity Commission to be prescribed by the regulations.

18) Clause 175 is to be amended to specify that the qualifications, experience, and terms and conditions of the Director of the Institute of Economics and International Trade shall be prescribed by regulations.

19) Clause 192 (1) and (2) are required to be removed in their entirety.

20) Clause 194 (2) (m) to be amended to remove references to the repealed law in consistency with the amendment proposed at Clause 55. Furthermore, a proviso to be added which states that the period that an employee served with the BOI shall be taken into consideration when calculating the statutory payments that are payable to such employee.

21) Clause 194 (2) (n) to be amended to incorporate specific time periods in respect of the operation of the voluntary retirement scheme.

22) Clause 195, the interpretations clause, to be amended in respect of the placement of the acronym ‘BOI’ and the interpretation of the word ‘Minister’.

23) Clause 196 to be amended to rectify the reference to ‘any other written law’ and it to be read as, “In the event of any inconsistency between the Sinhala and Tamil texts of this Act, the Sinhala text shall prevail”.

24) Proviso to Clause 55 (2) (b) (iv) has to be amended by deleting the reference to the Board of Investment Sri Lanka Law, No. 4 of 1978 as such a reference would not reflect the true position.

25) Clause 55 (2) (b) (v) has to be deleted to render the rule making power consistent with the Constitution.

Subject to the above, the Supreme Court is of the opinion that, if these necessary amendments are made, the Bill and its provisions will become consistent with the Constitution and could be passed with a simple majority.