Cairn Lanka, a wholly-owned subsidiary of Cairn India, has begun drilling in one of eight blocks in the Mannar Basin off the island’s north-western coast.
 
Sri Lanka’s government claims that seismic data shows potential for more than 1 billion barrels of oil in the Gulf of Mannar.
 
By way of comparison, Sudan’s proven oil reserves of 6 billion barrels (0.5% of world reserves).
 
Of the eight blocks, two have been granted to China and India. Russia’s largest oil company, Gazprom, has also indicated an interest, as has Malaysia’s Petronas.
 
Economic development minister Basil Rajapakse says that if oil is found, Sri Lanka would no longer be dependent on imports from other countries.
 
Bizarrely, he also warned that some western countries may pose a threat to Sri Lanka, like they have done in the Middle East, if Sri Lanka is successful.
 
Perhaps he’s forgotten that Cairn Energy, which owns half of spin off Cairn India, is a British company, which has been trying for over year to off load Cairn India to the Indian company metals and mining giant Vendanta.
 
Both Cairn Energy and Vendata are in the FTSE-100 index of the London Stock Exchange.
 
Meanwhile, Cairn Lanka has been exempted from taxes and import duties until 2016. The decision was introduced by Basil Rajapakse and passed in parliament with 58 votes against four.
 
Exemptions on taxes include all capital goods imported by Cairn Lanka and its sub-contractors, including equipment, machinery and required supplies and consumables.
 
Democratic National Alliance (DNA) leader Anura Dissanayake claims that the exceptions mean that if oil is found, Sri Lanka would only receive 10% of the profit, compared to the 38% without the concessions.

But Basil Rajapakse defended the decision saying that all clauses in the Cairin agreement were in accordance with international norms.
 
This was his explanation:
 
“If a gem is found in a mine, it does not belong solely to the land owner concerned. The profit has to be shared among license holder, land owner and workers. Oil dredging is a similar business. There is an accepted way of doing it. We have stuck to that criterion.”
 
In a related development, Russia’s giant, Gazprom, is interested in oil exploration and the purchase of liquid natural gas with Sri Lanka, the government said, without elaborating.
 
In June, President Mahinda Rajapaksa had invited Gazprom to partner in achieving self-sufficiency in petroleum products, The Hindu reported.
 
Gazprom recently sent a delegation, which met with Minister of External Affairs G.L. Peiris and the President Mahinda Rajapakse during their visit.
 
American and Russian companies from the mid-1960s to 1984 undertook exploration in the Mannar basin, but no commercial oil was produced, Reuters said.

Long supportive of Sri Lanka’s war against the Liberation Tigers, The Hindu newspaper has rarely been critical of Colombo governments.

Not even when Colombo repeatedly, and pointedly, ignored Delhi’s explicit, if softly phrased, requests such as for a political settlement with the Tamils, or to implement the Indian-brokered 13th amendment (in 2006 President Mahinda Rajapaksa rescinded the 1987 merger of the Northern and Eastern provinces. See the justification here and India's plea here).

Indeed, President Rajapaksa, an ultra Sinhala nationalist whose regime has been accused of widespread human rights abuses ever since he came to power, has long had a platform in the paper through its fawning interviews (see, for example, this).

However, the recent comments by his brother, Defence Secretary Gotabaya Rajapaksa, who has a penchant for speaking his mind – and thus making clear the regime’s unvarnished sentiments, seems too much even for The Hindu.

See the paper’s editorial of Tuesday August 16 here.

Sri Lanka has signed a 35 year build-operate-transfer deal with a joint venture between a Chinese state-run firm (which owns 55%) and a local partner.

The deal was signed during President Mahinda Rajapaksa’s visit to China last week.

See LBO’s report here, and China Daily's here.

Colombo International Container Terminal (CICT) is a venture between China Merchants Holdings International, the Hong Kong listed Chinese state-run firm, and local firm Aitken Spence (which owns 30%). The Sri Lanka Ports Authority (SLPA) owns 15%.

“The project will further anchor the Port of Colombo’s position as a trans-shipment hub in South Asia," CMHI says.

CMHI is the Hong Kong subsidiary of China Merchants Group Ltd, one of China's largest state-owned conglomerates.

Meanwhile, Sri Lanka is also offering tariff concessions to shippers and liners willing to divert their cargo from Colombo Port to the newly built Hambantota port.

See The Island’s report here.

According to SLPA Chairman Priyath Bandu Wickrama, "Colombo is too congested and vessels have to anchor several days before entering the harbour, and this is a significant cost to shipping lines, so many are willing to call on Hambantota instead.”

It is not clear why concessions have to be offered in this case.

On a related note, Sri Lanka is considering ordering vehicle importers to use the Hambantota port instead of Colombo’s. This is despite the Hambantota port having none of the facilities that Colombo has for processing vehicle imports.

See the Sunday Times’ report here.

According to industry experts, 60% of imported vehicles are registered and used in Colombo and just 10% in the South, where Hambantota is located.

The cost of delivering the imported cars from Hambantota to Colombo is presumably to be borne by the importers. But the move will produce business for Hambantota.

TYO-UK remembers the 5th anniversary of the attack on Sencholai orphanage and the children who lost their lives in the air raid.

On the 14th of August 2006, sixteen bombs were dropped by Sri Lankan Air Force jets killing 53 female students and injuring many more. The students had been attending a first aid course in an orphanage. Only a short-while before the bombings, the coordinates of the orphanage had been given to the ICRC who in turn had informed the Sri Lankan state.

Though the Sri Lankan government predictably accused the young girls of being LTTE cadres and the orphanage of being a training camp, UNICEF, the SLMM and the UN severely condemned the attack as the massacre of innocent children. There has been no inquiry into the attacks at Sencholai and no one has been held accountable for the killings.

This atrocity was not an isolated incident. Sadly, it was but another point in the long systematic genocide of Tamils by the Sri Lankan state, under the pretence of fighting terror.

The harrowing crimes broadcast in ‘Sri Lanka’s Killing Fields’ the documentary by Channel 4 were being committed by the same members of the security forces that are still in charge of ‘security’ of the Tamil people in the North-East of the island. The report by the UN panel of experts accused Sri Lanka’s military and paramilitary forces of rape, abduction and murder of Tamil children, particularly once they had been compelled into and effectively imprisoned inside IDP camps. The Sri Lankan government has not made any meaningful attempt at investigating these crimes.

Whilst much of the world’s focus is on the mass killings of May 2009, it must not be forgotten that the slaughter of over 40,000 civilians was not the result of an unexpected tragedy, but a part of the genocide unleashed on the Tamil Nation.

Five years on and tens of thousands of deaths later, the genocide of Eelam Tamils continues.

Fifty three school girls were killed, along with three staff, on August 14, 2006, when Sri Lankan air force jets attacked an orphanage in Vanni. Photo TamilNet.

August 14 is the fifth anniversary of the massacre of fifty three school girls by Sri Lankan Air Force jets which bombed an orphanage in Vanni. Three staff were also killed.

Four SLAF jets dropped sixteen bombs in repeated passes over the children’s home run by the charity Sencholai.

See the list of victims here, and their photos here.

Also see a survivor’s account of the airstrike here, and photos of the aftermath here and here.

The children's home had been designated a humanitarian zone and its GPS coordinates had been passed to the Sri Lankan military via the UN children’s agency, UNICEF, and the International Committee for the Red Cross (ICRC).

As news of the massacre broke, the Sri Lankan government claimed it had bombed a training camp of the Liberation Tigers (LTTE) and killed “50-60 terrorists.”

That claim was rejected by international ceasefire monitors of the Sri Lanka Monitoring Mission (SLMM) and UNICEF.

"These children are innocent victims of violence," said Ann M. Veneman, Executive Director of UNICEF said in a statement.

UNICEF’s Colombo chief, JoAnna VanGerpen told reporters: "we don't have any evidence that they are LTTE cadres."

UNICEF staff from a nearby office immediately visited the compound to assess the situation and to provide fuel and supplies for the hospital as well as counselling support for the injured students and the bereaved families.

After visiting the site of the massacre, the Head of the SLMM, Ulf Henricsson said: “We couldn’t find any sign of military installations or weapons. … This was not a military installation, we can see [that].”

SLMM monitors said they found at least 10 bomb craters and an unexploded bomb at the site.

UN Secretary-General Kofi Annan was described by a spokesman as “profoundly concerned at the rising death toll including reports of dozens of students killed in a school as a result of air strikes in the northeast.”

However, the air strike on the schoolgirls did not draw condemnation from the Co-Chairs of the peace process - US, UK, EU and Norway.

The Swiss government described the bombing as “an outrage.”

In a statement, the Tamil National Alliance (TNA) said:

“The heavy aerial bombardment on the premises clearly indicates that the attack was premeditated, deliberate and vicious. The heavy repeated aerial bombardment of the same premises clearly indicates the bombing was definitely not accidental. The ferocity of the attack clearly indicates that its objective was to cause the maximum possible casualties. The objective was to kill the maximum number of Tamil children.

“We appeal on behalf of the Tamil speaking civilian population to the International Community particularly to India, to take the earliest possible action to stop the Sri Lankan State from proceeding with its genocidal program.”

Extracts from our editorial of August 23, 2006 (see full text here):

“Despite its Buddhist pretensions, the Sinhala state invariably and swiftly resorts to a strategy of collective punishment when faced with what- in moments of forgetful sincerity - it calls ‘Tamil terrorism.’ Embargos on entire districts, bombardments of whole villages and towns, massacres of entire neighborhoods, pogroms. These are the tools Sri Lanka’s state intuitively deploys against the Tamils.

“The massive forced displacements of the past month, and the earlier waves that began in April, have all been directed to punish the upstart Tamils for defying Sinhala rule. Some Tamil writers have again raised the charge of genocide. How else to describe a strategy of driving 160,000 Tamils from their homes and then denying them access to food and clean water? How else to describe the readiness with which heavy artillery and air strikes are unleashed against Tamil villages, places of worship and children’s homes? And what other logic can underpin the blocking of aid convoys to the displaced Tamils or the massacre of aid workers seeking to help?

“The simple fact is that Sri Lanka’s government doesn’t give a damn for international opinion. For a very good reason: the state will always be backed, irrespective of its infractions. …. Unfortunately that has left the Tamil community as exposed (as it always was) to Sri Lanka’s racist ambitions.

“The violence will now soar. …It is no good lamenting the slide to the war or calling for both sides to ceasefire. The international community must restrain the state. Above all, it is the policy of collective punishment that must be stopped. Else Sri Lanka will establish its own norms and develop its own local dynamics. International humanitarian law and other international norms will dissolve in a mutually intelligible cycle of atrocity amongst the island’s communities.”

Realisation that economic sanctions and international isolation will be needed to compell the recalcitrant Sri Lankan regime to ensure an independent, international investigation into war crimes and crimes against humanity is growing.

The calls for such decisive action are most vocal in India and particularly Tamil Nadu where the chief minister J. Jayalalitha is calling for India to impose economic sanctions, following a unanimous resolution condemning Sri Lanka passed in the state assembly.

Little wonder these developments have triggered a furious tirade from Colombo.

Defence secretary Gotabhaya Rajapakse - who sits at the top of command responsibility for war crimes - has launched a series of attacks on Jayalalitha, most recently telling her to “mind her own business and not interfere in the internal affairs of Sri Lanka”.

On Thursday power and energy minister Champika Ranawaka also joined the fray, with some peculiar arguments.

Speaking at a press conference by the ultra-Sinhala nationalist JHU party  in Colombo, Ranawaka responded to international accusations of war crimes by deriding the United States’ conduct in Iraq.

He then proceeded to demand a boycott of Tamil Nadu.

“We should also boycott Indian goods and most food stuffs from India which are coming to Sri Lanka from Tamil Nadu” said Ranawaka. He did not elaborate what these were.

Amid reports of Sinhala Buddhist pilgrims being attacked in Tamil Nadu, Ranawaka warned:

“We will launch an awareness campaign among the Buddhists in India about the atrocities committed by the Tamil Nadu administration against Sri Lankan pilgrims and their duplicity.”

See also: 'India's opposition parties unite behind Eelam Tamils'

Angry mobs attacked police stations in Valaichennai, Samanthurai and Potuvil in Sri Lanka’s east on Thursday and Friday respectively, ColomboPage reported.

See reports here and here.

Predominantly, Valaichennai is inhabitated by Tamils, Samanthurai and Potuvil by Muslims.

Police fired tear gas to contain a volatile situation erupted following a demonstration in Pottuvil town in Amparai district Friday.

One person was shot dead and a curfew was imposed until 6am Saturday.

The demonstrators were demanding the release of four persons arrested by security forces in connection with an incident where two police officers were assaulted and a jeep was damaged.

Police deployed additional squads and Army personnel were called in to control the demonstration.

On Thursday night, Samanthurai police station, also in Amparai district, came under a stone attack by people of the area.

They were angry over police failure to arrest persons they had identified as persons they identified as 'grease devils'.

Comments by Alex Neve, Secretary General of Amnesty International Canada. For full text click here.

"It has been more than two years now. Early 2009 was a frightening, chilling time for hundreds of thousands of Tamil civilians in Sri Lanka. Trapped between an advancing Sri Lankan military offensive and the retreating armed opposition LTTE (or Tamil Tigers), they were caught in the middle of intense, unrelenting fighting and suffered abuses from both directions. Thousands of women, men and young people were killed and there were massive levels of displacement.

Sri Lanka now faces immense challenges in reconciling communities that have been trapped in vicious cycles of armed conflict and human rights abuse for more than three decades. It is a considerable challenge, as those deadly final weeks in early 2009 were but one of many wrenching chapters of widespread suffering and injustice over the years.

Throughout those decades of conflict and violence, it is clear that one formidable obstacle to human rights protection has been the deeply entrenched impunity that has surrounded those individuals responsible for the abuses. With no price to pay for such crimes, it is sadly inevitable that violations have only led to more violations.

Impunity is by no means unique to Sri Lanka. Right around the world, human rights violators have long been shielded from facing justice for war crimes, crimes against humanity, torture, mass rape and other unspeakable atrocities.

The one initiative launched by the Sri Lankan government, a Lessons Learned and Reconciliation Commission, is so deeply flawed and lacking independence that human rights organizations such as Amnesty International took the position that we could not and would not participate in its work.

More is needed. There needs to be an international level investigation, as called for by the UN Panel of Experts. Canada—a respected global champion of international justice and home to a sizeable Sri Lankan diaspora community—must become a visible leader, working closely with other governments, in efforts at the UN to make sure that happens."

From a recent Reuters’ fact-box (see full text here), with added details from the BBC and others:

Trade

In the first half of 2011, trade between China and Sri Lanka was worth $1.28 billion - but Sri Lankan exports to China were worth just $68 million.

Lending

China was Sri Lanka's largest lender in 2009 and 2010, giving $1.2 billion and $821 million respectively.

China Development Bank Corporation has agreed to provide $1.5 billion within three years for construction of roads, bridges, power plants and water and irrigation schemes.

However, the projects China is financing are built by Chinese contractors and use large numbers of Chinese workers, the BBC reports.

China has lent $400 million for the first phase of the new Hambantota Port and China’s state-owned Exim Bank has lent $77 million for an oil bunkering facility there.

Both contracts were given to Chinese firms, (see here and here), without a tender (see here).

China has also lent $190 million for Sri Lanka's second international airport - also in Hambantota, President Mahinda Rajapaksa's home constituency.

Work has started on the airport - with the same Chinese state-owned company as contractor, the BBC reports.

China has lent another $810 million for the second phase of the Hambantota port – again with a Chinese firm as the contractor.

Sri Lanka has signed a $450 million deal with a Chinese conglomerate and a local one, to boost the Colombo port's cargo-handling capacity. The Chinese firm has a 70% stake, Reuters learnt.

Exim Bank has loaned Sri Lanka $455 million for the first phase of first coal-powered generation station - built by a Chinese firm, using 2,000 Chinese labourers (see here and here).

China has offered an $891 million loan for the second phase

China has also pledged $760 million for road construction across the country, including $302 million for projects in the north.

Exim lent $310 million for the Colombo-Katunayaka express road to be completed next year. It is being built by a Chinese firm.

Exim has lent $102.5 million for Sri Lanka to buy 13 new diesel railway engines – from Chinese manufacturers.

Loan conditions

Asantha Sirimanne of Lanka Business Online told the BBC in November:

“The [loan] rates offered by China are higher than those offered by the World Bank, and direct government loans from Japan. But it is definitely lower than commercial bank rates."

"Chinese loans by Exim bank are mainly offered to buy Chinese products and services." 

The contractors, the subcontractors and even labourers involved in these major projects are Chinese nationals, he adds.

"And all raw material is imported from China."

Investment

Proposed Chinese investment of $1 billion is for a 500-room hotel and a shopping mall, both in Colombo.

(The latter has run into an issue, with President Mahinda Rajapaksa questioning whether the land should be sold as first agreed by his brother, Economic Development Minister Basil Rajapaksa, or given on a long-term lease)

“As evidence of the Sri Lankan army’s mass killings mounts, President Mahinda Rajapaksa’s charm offensive is proving to be a futile exercise. It’s time the president and his younger brother Gotabhaya Rajapaksa stopped seeking solace in a deliberate state of denial and realised that they can no more cover up the horrendous crimes committed against innocents on their orders.

“Sri Lanka’s stand has the support of a handful of countries that do not have an enviable human rights record. Yet, there’s no way President Rajapaksa can escape the growing clamour for justice. The UN chief has so far not been vociferous but he will be forced to take a more decisive stand. The Americans, the British and others cannot elude their responsibility of taking a more decisive stand. India too may be forced to take a clearer stand. But with China there to rescue him, Rajapaksa may be feeling a bit comfortable.”

- Oman Tribune’s editorial Wednesday August 10. See the full text here. The Oman Tribune is described as the leading English newspaper for decision-makers and the international diplomatic corps in the country.

The International Committee of the Red Cross (ICRC) released Wednesday a report drawing attention to one of the most crucial yet overlooked humanitarian issues of today: violence against health care.

The 24-page report is available here.

The ICRC has been documenting violence against health-care facilities and personnel, and against patients, since 2008 in 16 countries where it is working.

Sri Lanka is one of them.

In a press release announcing the report, the ICRC states:

“The number of [attacks] that have been recorded is striking. But statistics represent only the tip of the iceberg: they do not capture the compounded cost of violence – health-care staff leaving their posts, hospitals running out of supplies and vaccination campaigns coming to a halt. These knock-on effects dramatically limit access to health care for entire communities, many of whose members may be suffering from chronic or war-related health problems.”

“The ICRC is launching a major campaign to raise awareness of this pressing issue, and mobilizing a community of concern. This global initiative will last four years and aims at making a crucial difference for people affected on the ground.”

These are comments on Tuesday by US State Department spokesperson Victoria Nuland came in response to questions posed by Headlines Today television’s Washington correspondent Tejinder Singh.

Tejinder: In an interview with Headlines Today, Sri Lankan Defense Secretary Rajapaksa rejected calls from the UN, US, and international communities for a neutral international investigation into the war crimes.  And the top Sri Lankan diplomat today reiterated his stand. So what is the latest from the US for these people who are homeless and in the camps?
 
Nuland: Well, we have said repeatedly for a long time that we support a full and credible and independent investigation of alleged violations of international human rights and law and international humanitarian law in Sri Lanka.  We want to see the Sri Lankans do this themselves in a way that meets international standards.  So what I would say to Sri Lankan critics [of international demands for accountability] is take your responsibility and mount an investigation that meets international standards.  And we continue to urge the Government of Sri Lanka to do just that and to do it quickly.  And we hope Sri Lankans will do this themselves. But if they do not, there’s going to be growing pressure from the international community for exactly the kind of international action that Sri Lankans say they don’t want.

Tejinder: During her visit last month, Secretary [Hillary] Clinton spoke to Tamil Nadu Chief Minister Jayalalithaa and said, to quote, “that the U.S. is looking at innovative and creative ideas,” unquote, to break the impasse, which is going on for people living in the camps and not able to go back home.  Can you update us on this?
 
Nuland: I’m not prepared today to go further than the Secretary went during her trip.  But again, if Sri Lankans want to take their responsibility to solve these issues themselves, then they need to do it and they need to do it quickly.

Tejinder: And another – just a last one.  Are you going to put a time period that you’re going to give the Sri Lankans?  Can it be 10 years, 20 years, or 10 months?

Nuland: I’m not going to speculate on timelines.