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Background Information

On The New Board of I nvestment Bill

The Bill in its long title states that : -

The Bill provides for the establishment of the Board of Investment; to vestthe Board with such powers as are necessary for facilitating the resurgenceof the economy of the Republic and working towards the development of thecountry by promoting and facilitating investment; to provide for theestablishment of Regional Economic Development Commissions; to repeal

the Board of Investment of Sri Lanka Law No.4 of 1978; and to provide formatters connected therewith or incidental thereto.

The Bill was gazetted on 30.09.2002 and consists of Four Chapters and aSchedule.

The proposed legislation has been presented in Parliament and this new Billhas to be prepared in fulfillment of a pledge of the government to set upRegional Economic Commissions to speed up the process of development

countrywide.

The Bill provides for the establishment of the Board of Investment and alsothe Regional Economic Development Commission and also provides provisionto repeal the Board of Investment of Sri Lanka Law No.4 of 1978. ( Sec t i on 2 & 4 1 )

The Bill seeks to restructure the present Board of Investment of Sri Lanka

and also to demarcate five regions each of these will have a RegionalEconomic Development Commission.

Board known as the Board of Investment will be set up. That It will be acorporate body and will consist of -

1. The Office of the Director General and

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2. The Regional Economic Development Commissions. ( S e ct i o n 1 & 2 )

The Board will consist of a Director General, the Chairmen of theCommissions and three members. The Director General will be appointed bythe President on the recommendation of the Minister concerned. The threemembers will also be appointed by the President on the recommendations ofthe Cabinet of Ministers and will comprise professionals in the field offinance, industry, trade and banking. ( Sec t i on 4 )

The objectives of the Board ( Sec t i on 3 )

The objectives of the Board have been broadly identified as :

? To stimulate the growth, expansion and development of Sri Lankaseconomy by encouraging and promoting investments.

? To formulate investment policies, plans, promotional incentives andmarketing strategies.

? To diversify the sources of foreign exchange earnings and to increaseexport earnings.

? To promote Sri Lanka as an international business centre.

Staff

The Board will have a staff to facilitate its task and it will have disciplinarycontrol over members of the staff. The Board will also determine the salariesand wages of the staff and also determine the terms and conditions of

service of the staff on the general directions issued by the relevant Minister.( S e ct i o n 8 & 9 )

The Director General and powers of the Board

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The Director General will be the Chief Executive Officer and will hold office fora period of three years. The Board is empowered to enter into agreementswith enterprises and engage in community and infrastructure development inareas coming within the purview of the Commissions as well as to providefunds and resources to the Commissions. ( S e ct i o n 5 & 6 ) .

Office of the Board and area of jurisdiction

The Board shall have its principal office in Sri Lanka and may establishbranches outside Sri Lanka. ( S e ct i o n 1 2 )

Areas of Authority and licenced Zones may be declared or established under

the Board and the Commissions by the Cabinet of Ministers and the Boardwill have jurisdiction over such areas and zones. ( Sect i on 13 )

Funds of the Board

A fund will be established for the general financial purposes of the Board toreceive government grants, to credit all rates and levies as provided in theAct, all revenue derived by the Board from services provided by theCommissions and all other sums otherwise accruing to the Board.

( Sec t i on 22 )

Investment Promotion Plan

The Act provides for the preparation of a Investment Promotion Plan. TheBoard is required under the Act to submit to the Cabinet of Ministers onbehalf of the Commissions, a three-year rolling plan or plans for thepromotion of investments in Sri Lanka, formulated in consultation with theCommissions. The focus of such plan or plans should be to stimulate

investment for economic development, promote Sri Lanka as an internationalbusiness centre, foster and general economic development of each regionamong other such matters. ( S e ct i o n 2 6 )

Establishment of the Commissions

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The Act provides for the establishment of five Regional EconomicDevelopment Commissions (Western Region, Southern Region, North-EastRegion, Central Region, North-Western Region) with the purpose ofpromoting investment and generating economic development of the specifiedregions.

Constitution of the Commission

Each Commission will consist of a Chairman, a Director General and threeother Directors with the Director General functioning as the Chief ExecutiveOfficer. Members of the Commission will be appointed for a period of threeyears. ( Sect i on 27 )

Objectives of the Commissions

Among the objectives of the Commissions are:

(a) To promote resource based development within theirrespective regions;

(b) To encourage and promote the establishment ofmanufacturing, commercial, agricultural and service enterprises withinthe region;

(c) To wide and strengthen the base of the regional economy.(d) The Commissions are also required to formulate and submit tothe Board a three year rolling plan or plans for the development of therespective regions.

( A r t 2 8 )

The Commissions will carry out their tasks in consultation with the respectiveProvincial Councils.