Proposed Resort in Uchchimunai raises grave concerns

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Whilst the country is amidst one of the worst economic crisis, several have voiced their views against the lease of the Uchchimunai Island in Kalpitiya behind closed doors observing that the relevant Agreement was entered into without taking  due consideration of environmental factors.

The Uchchimunai Island in Kalpitiya, which is the second-largest Island of the 14 Islands in the Kalpitiya Peninsula off the West Coast of Sri Lanka, was given on a 30-year lease to a Switzerland company for the development of a resort for USD 417.5 Million.

While the primary concern about the said Lease Agreement is the failure to carry out an Environmental Impact Assessment (EIA) prior to entering into the Agreement together with the failure to involve relevant stakeholders in the process; the residents of the area are also now at a risk of losing their land.

Environmental Impact Assessment (EIA) and social impact

Chair of Friends of Earth International and senior adviser to the Centre for Environmental Justice (CEJ) Hemantha Withanage said while Kalpitiya is known to be a tourism hotspot with a high tourism potential, the authorities have failed to carry out an Environmental Impact Assessment (EIA) prior to entering into the Lease Agreement.

He added Kalpitiya is also a biodiversity hotspot due to which an EIA would have been vital to assess the cost-benefit analysis, the climate impact and the overall impact on the environment by using the land for such purpose.

Withanage also noted that there is no assurance of what would happen to over 200 people residing in the Island and the social impact eventually brought about by the said Agreement. The details of the Agreement and the procedure adopted have been requested from the relevant authorities and are yet to be received.

Legal issues

Environmental Lawyer, Dr. Jagath Gunawardana said, the primary Act in relation to the tourism industry in Sri Lanka is the Tourism Act and according to Section 26 of the Act, the Minister may on the recommendation of the SLTDA from time to time, declare by Order published in the Gazette, any area to be a Tourist Development Area.

Dr.Gunawardana noted that when an area is so declared as a Tourist Development Area, according to Section 29 (1) of the Act, the SLTDA shall for a period of ten years, be vested with all the powers necessary for the environmental planning and preservation of archaeology under the National Environmental Act, No. 47 of 1980 and the Antiquities Ordinance (Chapter 188), to such extent on the same is necessary for the implementation of the development plan within the declared area.

He added, according to Section 29 (2) of the Act, the Central Environmental Authority (CEA) shall, in respect of any matter where the SLTDA is vested with the power in terms of Subsection (1), be required to submit its recommendation to the SLTDA within the prescribed period.

Dr. Gunawardana said, according to Section 29 (3) (a), upon the declaration of any Area in terms of Section 26, it shall be lawful for the Minister, notwithstanding anything to the contrary in the National Environmental Act, No. 47 of 1980 to make regulations in consultation with the Minister-in-Charge of the subject of Environment to prescribe the criteria to be followed in respect of environmental planning within such area. The procedure to be followed by the CEA in this respect and the time within which such recommendations have to be made shall be as prescribed.

He observed, while the legal provisions in this regard is set out as such, when observing the lease for the Uchchimunai Island, the question arises as to whether the recommendations and directives of the CEA have been obtained prior to leasing the land in accordance to Section 29 of the Act.

He further said the question as to whether recommendations of the North Western Provincial Environmental Authority have been obtained for this purpose remains, while stating that when the authorities attempt to lease a land without following the relevant environmental procedures, no foreign investor with repute and legitimacy would desire to invest in such a project.

‘’Sri Lanka’s past experiences have proven that investors who do not rightfully assess to ascertain whether if Sri Lanka has followed the relevant legal procedures prior to entering into an agreement  have had ulterior motives that are  counterproductive and not mutually beneficial ’’ he added.

Environmentally-sensitive area

Dr. Gunawardana said, according to the Kalpitiya Town Development Plan 2019-2030, Uchchimunai area is highly sensitive and that generally those investing in such sensitive areas would tend to scrutinise whether relevant Environmental assessments have been carried out.

‘’The question as to whether an investor (domestic as well as foreign) who makes an investment without such scrutiny is either expecting huge returns from a very small investment or is acting in a certain illegal manner or both persists’’.’’ he added.

All-Ceylon Tourism Service Providers’ Association on the Agreement

The All-Ceylon Tourism Service Providers’ Association (ACTSPA) in a contradictory view said plans are underway to sell the Uchchimunai land to the said Switzerland Company while noting that the Agreement was signed in a backdrop where there was no Cabinet Minister-in-Charge of the subject matter, at the time.

They observed that nobody knows the exact contents or provisions of the Agreement and those in the industry have also not been involved in the procedure while noting that the land should have instead been handed over to the local developers.

Clarification from the authorities of the procedure and lease

Former Chairperson of Sri Lanka Tourism, Kimarli Fernandoobserved that while the Island has not been sold, it has been leased out to a Swiss investor for a term of 30 years, after which the property and any developments will be brought under the custodianship of SLTDA. Leasing SLTDA land for tourism projects is part of the core job of SLTDA.

She added, the said valuation of the property was initially done in 2019 and then later re-done in 2020 by the Department of Government Valuation adding that the signing of the said lease was upon obtaining prior approval along with the SLTDA Board approval (which includes industry representation), Minister of Tourism’s approval and all related stakeholders.

‘’ The total value of 417.5 USD million is not paid to SLTDA or the Government of Sri Lanka or any of its related stakeholders or line agencies. The figure merely represents the commercial value of the investment stated value creation by the investor, who has stated that the tourism project will be implemented in stages,’’ she said.

In no way does the government receive liquid cash as a result of signing a lease agreement and the recent Rupee appreciation has no correlation with the signing of the lease agreement; a result of two-year work since 2020, she added.

‘’We had the necessary confirmation to sign the lease agreement on 11 May. We note a tourism association has put up a social media post raising concerns. Possibly with a view to bringing disrepute to the SLTDA, a practice they have followed for the last 29 months. Prior to starting the project, all necessary line agency approvals needs to be in place, as with all projects,’’ she said.

Sri Lanka Tourism Development Board Authority’s (SLTDA) response

SLTDA noted they had followed the proper procedure and obtained all necessary approvals to lease out the property to a foreign investor for 30 years as per land alienation policy. ‘’The approval process was completed in late 2020 for a USD 417.5 million project and signing of the lease agreement was delayed due to the request made by the investor,’’ SLTDA noted.

‘’ The investor’s representatives arrived in Sri Lanka on 8 May to sign the lease agreement, and the SLTDA signed the agreement on 11 May 2022, as the investor was scheduled to leave the island the same day,’’ they said.

SLTDA observed that as per the Tourism Act No.38 2005, SLTDA is mandated to lease out SLTDA owned lands to potential investors to develop and operate tourism hotels and resorts in a planned and sustainable manner.

‘’ SLTDA as in the past has continued to do so, attracting both foreign and local investments, and has been answerable to the Committee on Public Enterprises (COPE) for any delays in signing of lease agreements for ‘already approved’ projects,’’ they noted.

Land grabbing in Kalpitiya

‘Land grabbing’ has been observed as a common practice in Kaplitiya and a report titled ‘’an investigative report on the looting of sustenance lands belonging to Kalpitiya Island inhabitants’’ by the National Fisheries Solidarity Movement observed that land grabs are actually enveloped in deeper deals involving various interested groups and employing multiple stages of
preparing, negotiating, contracting and operationalising none other than the Kalpitiya Integrated Tourism Development Project/Plan.

It was stated that land grabbing has actually been described as a “new form of colonialism that has gradually intensified while noting that in Kalpitiya, however, the land grabbing process had its early beginnings in 2002, even before the tsunami, but accelerating at a faster pace since 2010 after the end of the war.

They also noted clear violations of the rights of the people in Kalpitiya including socio-cultural, economic, civil and political and environmental rights.

‘’The land and water resources are precious to the people in Kalpitiya and they are sustainably preserving it while deriving sustenance. The tourism development plan, on the other hand, most certainly lacked the participatory and transparency processes and procedures prior to the approval and operation of the businesses and the overwhelming infrastructure building activities. Almost all the sites have already been environmentally abused. These are clear indicators of the irresponsibility of the government and law enforcement agencies, the exploitation of investors and the negligence of funding institutions,’’ the report said.

Therefore, it is vital for the authorities concerned to refrain from embarking on development projects with emphasis on material factors alone but to rather incorporate all parameters including environmental, procedural, input and unanimity of all stakeholders.

By Faadhila Thassim