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Provisions allowing the sale of lands to foreigners and foreign companies Under Proposed New Land Laws could be detrimental to the land rights of Sri Lankan citizens especially landholders of farmer settlements


Sugeeswara Senadhira

Red Indian Chief, Seattle, in his speech known as ‘letter’ made a ‘powerful, bittersweet plea for the respect of Native American rights and environmental values.’ President Maithripala Sirisena quoted Seattle at the inauguration of the Moragahakanda-Kaluganga Multi-purpose project and said that the wars since ancient times were for either land or water which would continue forever because of the importance of land and water to human beings.

The proposed amendments to the Land Act were discussed at length by the Cabinet, and President Sirisena made several observations for its inclusion. However, when the Bill was presented later, the President found that some of his observations were not taken into consideration. They include land rights, regulations on selling of land to foreigners and foreign companies, devolution of land powers to Pradeshiya Sabhas and the removal of restrictions on the division of estate lands.

Addressing the officials, the President said that when one surveys the destruction caused by the Pradeshiya Sabhas, land powers should be taken away from them. He said the proposal to give the Pradeshiya Sabhas authority to draft the minimum and maximum limits of all lands except paddy fields and irrigation lands would be disastrous. Minimum divisions mean powers are given to divide lands. This enables the wealthy to purchase land, and thereby destroy the poor community in the country, he said.

He said removing regulations on lands would be a mistake. All lands would then be divided and sold. The wealthy community, chairmen of companies will purchase them, and insisted that the observations submitted by him be accepted.

The SLFP General Secretary Dayasiri Jayasekera said earlier this week that the proposed Land Bill had many questionable provisions, which eroded the previous safeguards to ensure that arable land was protected from commercialization. He argued that several recommendations made by President Sirisena, i.e. to maintain existing inheritance laws, prevent the break-up of large tracts of land, and ensure that the Mahaweli project is exempt from being covered by the new regulations, were not included in the document moved before Parliament.

“The law states that when changes are recommended, they have to be included in the proposed legislation, and presented to Cabinet a second time before being presented to Parliament. These regulations ensure transparency and protect public interest. They give the public time to go before the Supreme Court to check whether the legislation is against the Constitution. But that has not happened here,” Jayasekera said.

The proposed Bill on the restriction on transfer of land states:

(1) Notwithstanding any provision to the contrary in any other written law, the transfer of title of any land situated in Sri Lanka, shall be prohibited if such transfer is (a)to a foreigner; or, (b)to a company incorporated in Sri Lanka under the Companies Act where any foreign shareholding in such company, either direct or indirect, is fifty per cent or above; or (c)to a foreign company, unless exempted as provided in section 3.

Section 3 states the exemption from the application of the provisions of section 2 as follows:

(1) The provisions of section 2 shall not apply to— (a)any land the title of which is transferred to a Diplomatic Mission of another State within the meaning of the Diplomatic Privileges Act or to an International, Multilateral or Bilateral Organization recognized in terms of that Act; (b)a condominium parcel specified under the Apartment Ownership Law.

These provisions allowing the sale of lands to foreigners and foreign companies could be detrimental to the land rights of Sri Lankan citizens, especially, landholders of farmer settlements such as in Amapara, Galoya and Mahaweli schemes.

Jayasekara questioned why the Government has linked the State Land Bill to the $480 million grant from the Millennium Challenge Corporation, which will provide funding to measure land to establish a Land Bank in Sri Lanka, and also set up the Colombo-Trincomalee economic corridor. “Why did the Government ask for funds from the MCC? Why are they working on this with a US entity? If the Government wants to have a central place where all land details are recorded, why ask it to be funded by a foreign organisation? As an island, Sri Lanka has limited land resources and they need to be protected. A similar piece of legislation was presented by the UNP Government in 2003, and at the time the Supreme Court said a two-thirds majority in Parliament was needed, along with a referendum. That is how serious this is,” Jayasekara pointed out.

The Land Act Amendment also deals with transfer of lands to foreigners. Clause 2 states that for the purpose of maintaining the legal validity of a transfer of land to a company incorporated in Sri Lanka under the Companies Act, with less than fifty per cent of foreign shareholding, the foreign shareholding of such company shall remain less than fifty per cent, for a minimum period of 20 consecutive years from the date of transfer.This is subject to exemption for companies listed in the Colombo Stock Exchange (with a minimum number of 200 shareholders in the case of a DiriSavi Board and 1,000 shareholders in the case of a Main Board). It also states that in compliance with the provisions of that paragraph, the transfer of land referred to, shall be deemed to be legally valid, with effect from the date of restoring the foreign shareholding of such company to less than fifty per cent.

As part of a Government policy to build 620,000 houses by 2019, Cabinet has approved the establishment of the country’s first Land Bank by a Special Task Unit (STU), aimed at managing the limited resource of land. The STU is to be established as a limited liability company under the General Treasury as per a Cabinet proposal. The unit has presented a plan to establish a Land Bank allocated for housing projects under the program.

Land banks are not financial institutions. They are public or community-owned entities created for a single purpose: to acquire, manage and maintain, vacant, abandoned, and foreclosed properties – the worst abandoned houses, forgotten buildings, and empty lots. In the case of abandoned properties on State land the Government can reclaim ownership. Still, it is important that the operation of a Land Bank be fair and transparent.

The role of the Land Bank would be critical if the MCC proposal to establish an economic corridor from Hambantota to Trincomalee is to be implemented. However, the MCC proposal is currently on hold and is likely to be taken up after the elections.

Courtesy:Sunday Observer