An eventful week if ever there was one. What took centre state as the week drew to a close was the confrontation between the judiciary and the executive on the question of petrol prices. The Supreme Court order to reduce the price of petrol to Rs 100 per liter would of course be welcomed by all those who use cars, three wheelers or motorcycles, and that represents a good proportion of the population. When news of the order reached the president, he discussed the issue with the prime minister, Susil Premajayantha, Dullas Alahapperuma, Rajitha Senaratne the Central Bank Governor Cabraal and the secretary to the finance ministry and went for the cabinet meeting where he explained that it is parliament that decides on imposing or reducing taxes and that this was a government that had provided many tax concessions on essential items.

He explained that with the revenue from taxes, subsidies for fertilizer, education and free health services were being maintained and expenditure on projects like road construction was also met with this income not to speak of the expenditure on the war. He stated that on every occasion that crude oil prices increased, the government had not increased the price of petrol and that the effects of price increases had been cushioned by the government and that very recently petrol prices had been reduced.

The government in a bind

The prime minister said that this was a popular court decision and that the UNP has been able to obtain several such court rulings to cause discomfiture to the government. He mentioned the ruling to remove road blocks as an example and said that they should make a decision now as to whether they are going to rule the country according to the way the courts want or whether they are going to go before the people. Dr Sarath Amunugama said that the judiciary had begun to function in the executive and legislative spheres as well. Minister Bandula Gunawardene stated that the prices of gas, milk food and certain other essential food items was being reduced and taxes were being removed and if the price of petrol is reduced that could wreak havoc with the budget estimates and even cause the collapse of the economy.

The president stated that he could not fight on many fronts while prosecuting the war against the LTTE. He said that a war that had been dragging on for thirty years had been brought close to a resolution in just two years and that after the war is over, he will tackle the problems of corruption, waste, the underworld and many other problems besetting the country. He will do whatever it takes to finish this war, even if he has to impose emergency rule.

There were calls in cabinet from some ministers for an impeachment, but Professor G.L.Peiris said that judges like Percy Collin-Thome and Chief Justice Neville Samarawickreme had been summoned before parliament and that this problem should be settled through parliament. With the Supreme Court judgments on the hedging deal and the price of petrol, the man who gained the most mileage from this is Ravi Karunanayake who filed action in the Supreme Court against the high price of petrol and the hedging deal. The Supreme Court cannot act on its own without someone bringing forward a motion and arguing a case. Obviously, the case presented by Karunanayake was convincing enough for the court to decide in his favour.

The most important thing for a politician is to get noticed and Ravi K has succeeded in that as no one has in recent times. Everybody is talking about Karunanayake now and even if nothing comes of the court ruling and the government refuses to budge, still Karunanayake would have had his moment in the sun as the UNP’s newly appointed shadow finance minister. His ‘alternative budget’ proposals which he put forward last month was to say the least, an embarrassment to the UNP as it lacked credibility. It read more like a wish list than a serious proposal. Nobody in the country took the salary hike of Rs. 7,500 for public servants and a basic salary of Rs. 40,000 for military personnel seriously. But with the success of the petroleum matter, the opprobrium attaching to him for that budget faux pas has all but vanished. He undoubtedly, was the politician of the week.

Ravi K had another reason to be happy last week. He has always been a supporter of S.B.Dissanayake and last week, the Supreme Court issued an order preventing the elections commissioner from taking SB’s name off the electoral list until the court decides whether he has his civic rights or not. Karunanayke was one of the few prominent UNPers in court that day to show solidarity with SB. The International Human Rights Committee set up under the provisions of the International Covenant on Civil and Political Rights had earlier decided in SB’s favour and called upon Sri Lanka to restore his civic rights and to pay him compensation for wrongful imprisonment. The Supreme Court had earlier decided that decisions of the International Human Rights Committee had no legal validity in Sri Lanka, so SB got no compensation. But this raised some interesting issues which are now being discussed again because of the petrol pricing issue.

The separation of powers

The International Human Rights Committee had issued the order to restore SB’s civic rights and to pay him compensation to the government of Sri Lanka which is the executive branch. But SB was not imprisoned or deprived of his civic rights, due to any action of the executive branch but of the judiciary. Yet, the International Human Rights Committee was insisting that the government should reverse the decision of the court, restore his civic rights and even pay him compensation for what the court did. The question to ask was how was the government to do this, without a conflict between the executive and the judiciary? If the executive branch, at the behest of a foreign judicial body was to administratively reverse decisions of the Supreme Court, where would that have left the Sri Lankan judiciary? The Sri Lankan government took no action with regard to the decision handed down by the International Human Rights Committee (as it ignored an award by the same body in favour of Ravaya Editor Victor Ivan) and a showdown between the judiciary and the executive was averted. What is happening now, is probably the best possible thing in the circumstances – for the judiciary itself to make a final decision with regard to SB’s civic rights matter.

But the confrontation between the judiciary and the executive which was averted in SB’s case has come to a head with regard to the pricing formula for petrol. The judiciary has decided that the tax suggested by the treasury for petrol was excessive and issued an order to reduce the tax component, thereby reducing the price of petrol. But it is parliament that has the discretion to lower or raise taxes. This why people wait anxiously for the budget each year to see which taxes are going to be raised and which reduced. The court’s order to reduce the petrol tax thus initiates a conflict between itself and the executive and legislative branches. In fact just a few weeks ago, the Supreme Court declared in a judgment on the appropriation bill that it was inconsistent with the constitution for the executive branch to shift large sums of money around without informing parliament, and while it acknowledged the need for some flexibility in these matters, the ruling was that the sums that had been shifted around and the reasons there for, had to be communicated to parliament with two months of such transfer of funds. Hence it may be the case that the executive cannot even if they want to, reduce the tax component on petrol without informing parliament. It will be interesting to watch the developments in this regard.

The Lanka Indian Oil Company (LIOC) which had also been served with a copy of the Supreme Court judgment, has reduced their price to Rs. 100 as ordered. The LIOC moved to reduce the price only after minister Fowzie told CEYPETCO dealers that the Petroleum Corporation will compensate them for any loss resulting from the uncertainty with regard to prices. If the government compensates the CEYPETCO dealers, LIOC is banking on the fact that they too will qualify for a bailout if the tax structure on petrol is not changed by the government. Indeed the government should compensate the LIOC as well because this is a foreign owned company that cannot hide behind cabinet decisions like CEYPETCO and has to abide by a court order that has been delivered to its doorstep. If the government says that LIOC has to pay petrol taxes as usual for this period as well, they are going to suffer colossal losses and that would not be too good for the consumer who is given a much better service by the LIOC than by CEYPETCO dealerships.

LIOC which also had hedging arrangements was not burdened with the kind of corruption and incompetence that the CPC was burdened with. Once again, the credit should go to Karunanayke for having moved the Supreme Court to issue an order on the hedging matter exposing not just state sector corruption but also private sector corruption. What needs to be underscored is the fact that one cannot talk of state sector corruption without talking of private sector corruption because those who give politicians and public officials their kickbacks and commissions are in the private sector. It may be pertinent to observe in the context of this latest scandal that after Chandrika Kumaratunga came into power in 1994, she tried her best to fix members of the UNP on corruption charges but she came even close to it only in the case of Wijepala Mendis for obtaining undervalued state land. In contrast to the UNP of 1977-94, today’s politicians on both sides of the divide are flat footed.

Flat-footed crooks

Chandrika who tried to fix Wijepala Mendis for obtaining grossly undervalued state land now has identical allegations against her for having given land to Prima at Rs. 100 per perch on long lease, not to speak of the Water’s Edge scandal. One would think that she would have tried to avoid being accused of doing the very same things that she tried to fix her political opponents on. Then the UNP, which carried out some very questionable privatizations in 2001-2004, was unable to explain how a valuable piece of urban land which was not in the original agreement, had found its way into the Lanka Marine Services deal. The UNP leader was caught flat footed trying to blame President Chandrika Kumaratunga for the irregularities that took place during the UNP regime on the grounds that the president was the head of the cabinet, which took these privatization decisions! Now, the present government has been caught with its pants down on the hedging issue where corruption is painfully obvious. It is only when one sees such amateurishness that one realizes what maestros the UNPers of 1977-94 were. With all of Chandrika’s venomous investigations, not a thing could be pinned on anybody except Wijepala Mendis; and even his case fell through on a technicality!

Today, it is not just the politicians who are flatfooted, but the private sector as well. How could the private banks involved in the hedging deal have thought that such an obvious fault as the lack of an escape clause in the hedging deal in the event of a price reduction, would have gone unnoticed? How could a leading blue chip company have thought that something as physically obvious, as a large piece of real estate in the case of the Lanka Marine Services deal, would go unnoticed for long?

The week before last, everything was overshadowed by Karu Jayasuriya’s crossover and the appointment of Rukman Senananyake as assistant leader of the UNP and Gamini Jayawickreme Perera as party chairman went almost unnoticed. Let it be said at the outset that Wickremesinghe has rarely made appointments as deserving as these. Senanayake, completely apart from his family background, as the grandson of the party founder and the nephew of Dudley and Sir John, has had the courage to stand up for what he thinks is correct, and at times, even to strike a discordant note with the rest of the party hierarchy as he did some weeks ago with his forthright statement that terrorism had to be crushed. He also said the UNP must support the government in this and that Janaka Perera was assassinated by the LTTE and not, as some big shots in the UNP made out, somebody else. The UNP at that time was trying to get some ill-conceived political mileage by trying to insinuate that the government was behind the assassination.

Senanayake’s stand was similar to that taken by J.R.Jayewardene in 1971 during the JVP’s first insurgency when the UNP was in the opposition. JRJ pledged his support to the democratically elected government and allowed prominent UNPers like Ranjan Wijeratne to play a major role in brining things under control. Helping a democratically elected government to handle challenges to democracy, will not necessarily be to the detriment of the democratic opposition and Senanayake represents that reasoning within the UNP. As for Jayawickreme Perera, he is not known for holding positions that differ from the party establishment. He is a well accepted figure within the party and in the country, particularly in his home ditrict of Kurunegala. When in fact the UNP (Democratic) group was on the verge of breaking away to join the government, one of the minimum demands that they put forward was that Jayawickreme Perera be appointed as general secretary of the party and not Tissa Attanayake who was seen at that time, to be a protégé of Malik Samarawickreme.

But Wickremesinghe appointed Attanayake as general secretary and the UNP(D) group left to join the government. The appointment of Jayawickreme Perera as party chairman to coincide with the return of Karu Jayasuriya to the party may be interpreted as a case of offering an olive branch to the UNP dissidents. Another thing that seems to be clear from these latest appointments is that the party has managed to change - at least for the time being - Wickremesinghe’s proclivity to appoint newcomers with no experience in politics to important political positions. When Wickremesinghe had his own way, for a few years the general secretary of the party was not a politician or anyone with experience in politics but a business executive fresh form a leading private company and later a retired senior public servant!

Such a thing would be unthinkable within the SLFP where the general secretary is a veteran politician Maithripala Sirisena and before him, it was S.B.Dissanayake who held that position. Before SB, it was Dharmasiri Senanayake and however further back one goes, it can be said that the SLFP has never had newcomers to politics in the general secretary’s position. The appointment of politicians to party positions now seems to be one of the concessions the long suffering hoi polloi of the UNP has managed to wrest from their leader. Even though the UNP(D) group opposed it on partisan grounds, Attanayake’s appointment as general secretary is not bad at all as he is a politician who has risen, Premadasa-like, right from the bottom.

Ranil’s red herrings

Last week, when Karu Jayasuriya arrived at Sirikotha to assume duties as deputy leader, he arrived in the same vehicle with Wickremesinghe in a show of unity. Speaking on this occasion, Wickremesinghe said that the Indian foreign minister was due to visit Sri Lanka but that some parties within the ruling coalition were opposing the visit. Speaking about the Indian issue is one way to keep hope alive within the UNP. The hope is that the Indians will force a ceasefire and that the rug the government has been standing on would be pulled from under its feet. Once a ceasefire is in effect, the government will not be able to win elections on military victories. In fact, one day in October when India was putting out increasingly strident press releases about the war in the north, a rumour swept through UNP circles to the effect that all operations in the north had ceased following a telephone conversation between the Indian prime minister and President Rajapakse. But operations have continued and opposition hopes have wilted and this long awaited visit of Mukerjee is that grand event that the UNP is waiting for to see a reversal in its fortunes.

What is the actual position with regard to this visit? The government of Sri Lanka had in October this year extended an invitation for the Indian Foreign Minister to visit Sri Lanka and that invitation still stands. Subsequently, a delegation of Tamil Nadu politicians led by M.Karunandhi visited New Delhi and asked Prime Minister Manmohan Singh to send his foreign minister to Sri Lanka to ask for an immediate ceasefire between the LTTE and the Sri Lankan government. But up to this moment, there has been a deafening silence from Delhi about sending Mukerjee to Sri Lanka.

In the case of the European Commission, the Sri Lankan government flatly refused to allow any investigation to take place whereas they were open to a dialogue on any issues that may cause concern to the EC. But in the case of India, the Sri Lankan government has not said or done anything to discourage a visit by the Indian foreign minister and the fact that he has not yet turned up is because the Indian central government probably does not see any need for him to visit Sri Lankan at this particular juncture even though pressure has been brought upon them by Tamil Nadu

To call for a ceasefire in Sri Lanka. The Indian central government obviously does not want to make foreign policy decisions with a gun held to its head by Tamil Nadu as this could result in things getting out of control. The very forces in Tamil Nadu that are now calling for a ceasefire in Sri Lanka could be the precursors of a separatist problem in Tamil Nadu and obviously the Indian central government is proceeding cautiously because the LTTE will in the long term be a much greater threat to India than the disorganized Muslim terrorism that India is faced with at present.

When the JVP politburo met last week, party leader Somawansa Amarasinghe was full of criticism for the government over the manner in which they decided to have provincial council elections. He said that if they wanted to have PC elections, they could have held all the elections together and that by holding these elections on a staggered basis, the government was attempting to dominate parliament, the PCs and the local government institutions as well and that they were treading a very undemocratic path. He also commented that the elections were not being held according to the proper time table, but according to the whims of the government. General Secretary Tilvin Silva said that the government will be holding PC elections without having appointed the constitutional council and the independent commissions and that therefore the elections can’t be expected to be free and fair.