‘Expropriation Bill’ is evil?

Main Opposition the United National Party (UNP) yesterday alleged the upcoming “Expropriation Bill/Act” was evil and urged the Government to withdraw it if it truly values democracy, economic freedom and prosperity in the country.

UNP MP and party’s spokesman for economic affairs, Dr. Harsha de Silva flanked by MPs Ajith Perera and Ruwan Wijewardena exposed the dangers of the impending new legislation, which the Government is tabling in Parliament next Wednesday as an urgent Bill.

The short title of the legislation is Revival of Underperforming Enterprises and Underutilized Assets” and it has been cleared by the Supreme Court as not contravening the Constitution. Its objective is to takeover after paying compensation enterprises with state exposure and a host of assets (mainly land, building etc) of defunct BOI approved private ventures and revive either via restructuring or entering into new management contracts.  

• UNP claims SLFP’s old habits die hard as nationalisation returns via new legislation
• Says Government is the biggest underperformer
• Questions validity, purpose, criteria and secrecy of urgent bill; Alleges loss of economic freedom
• Warns end of local businesses, flee of foreign investors and ruin of economy
• Opines US Chapter 11-type legislation to deal with bankruptcy would have been a progressive move

Though the Bill comes with a schedule of specified entities, the UNP warned that the Government could add more enterprises or assets by bringing in amendments to Act in the future.  The UNP questioned the urgency and purpose of the Bill as well as credibility of the arbitrary, undisclosed criteria used to classify enterprises and assets as underperforming and underutuilised.

“There is no need to bring this as an urgent bill,” declared Dr. de Silva adding the Government has existing legislation if it wants to address issues faced by these enterprises and assets. “For starters some of these enterprises and assets have been distressed for decades without being adequately addressed via existing means so why bring an urgent bill. This is not a matter of life and death,” said the UNP MP who is also a consultant economist.

“We are also against the process which the Government opted to deal with this issue. There must be proper and prior consultation than trying to force draconian legislation down people’s throats,” Dr. de Silva added.  “This is not democracy,” he alleged and added “on all counts the Government has crossed the line with this Bill.”

He also said that there was no recourse for companies listed in the schedule to contest Government’s criteria used for classifying them as underperforming or underutilized. It was pointed out that atleast two listed enterprises Sevanagala Sugar Industries and public quoted Pelwatte Sugar Industries were making profits whereas Hingurana Sugar and others which are loss making or inactive haven’t been included.

The UNP pointed inclusion of Sevenagala as an act of political victimization since it is owned by two MPs of the party Daya and Anoma Gamage. With regard to Pelwatte, Dr. de Silva said it was recently acquired by proven business leader Harry Jayawardena.

“Is the Government via this Bill implying that it could do a better job in development Pelwatte  than a person in the caliber of Jayawardena,” queried Dr. De Silva.

It was emphasised that on the one hand the Government was trying to promote local entrepreneurship and attract foreign investors and on the other via this Bill was trying to kill same. The Article 157 of the Constitution guarantees security of all foreign investments in Sri Lanka but this Bill is threatening takeover.

MP Ajith Perera said for any developing economy there is a need for good local and foreign investors but the Bill will scare away both. He recalled that SLFP regimes are notorious for nationalization of well run enterprises by local entrepreneurs and cited past examples of taking over transportation, insurance, mining, plantations etc. “This Bill will destroy local businesses in addition to driving away foreign investors,” Perera claimed. Government is only sending wrong signals locally and globally,” he added.

The UNP also alleged that the Government was treating State assets as private booty or is planning to sell them to their cronies. “We feel this Bill is also an attempt to silence or victimize entrepreneurs and enterprises which may not side with the ruling party,” it claimed.

The party also said that Government could have looked at a progressive legislation like the US Chapter 11 for bankruptcy than opting to bring forth a draconian blanket  policy that threatens existing businesses.

MP Ruwan Wijewardena said the Bill was anti democratic would lead the economy and the country to ruin unless withdrawn. “At a time when local entrepreneurs need to be supported this Bill threatens their very future. It could also victimize those who may not be partisan to the ruling party,” he opined.

Dr. de Silva also said that as per the Bill, even a flagship project like Shangri-La’s could be under threat in the future if the Government classifies it as underperforming or underutilized by its unknown criteria.

“This Bill isn’t fair and is a departure from good governance. Whilst the valiant forces sacrificed to usher peace by defeating terror, this Bill is threatening to take economic freedom of the people,” Dr. de Silva claimed.