The Hon. (Dr.) (Ms.) Kaushalya Ariyarathne

¶ 01 Hon. Deputy Speaker, I must briefly respond. Those journalists were not sent by the Government; it was a private tour sponsored by the Israeli Government, not by ours. Many countries invite journalists for such visits—some via foreign ministries, some otherwise. About 20,000 Sri Lankans work in Israel; regardless of our views, they are there. To suggest cutting all diplomatic ties and closing embassies shows a lack of practical understanding.

¶ 02 Turning to the Agreement, which the previous speaker did not address, this is an important treaty. Investment treaties arose as decolonization led to capital from the global North returning to invest in the South; traditionally, these regimes protected Northern corporates. Now, Southern states have pushed to rebalance. Without that, opening markets leaves structural power with wealthy states and corporates. We are reshaping the regime to protect our people’s welfare while attracting investment.

¶ 03 Sri Lanka was, regrettably, the first state ever to be held liable under an investment treaty: Asian Agricultural Products Ltd. v. Sri Lanka (1990), which led to a large award against us. In 2016, in Raymond Charles Eyre and Montrose Developments (Pvt) Ltd. v. Sri Lanka, a delay by the Urban Development Authority led to an award of around US$10 million.

¶ 04 I compared this new bilateral treaty to earlier ones with the UK and China. It is improved from the outset. The preamble references three critical elements absent in earlier treaties: sustainable investment; the state’s right to regulate; and environmental protection. Definitions of “investment” and “investor” are clearer and narrower, reducing scope for abusive claims by powerful corporates and their lawyers.

¶ 05 Notably, Article 5 clarifies fair and equitable treatment (FET) and full protection and security. Past cases in other jurisdictions expanded FET to cover broad “legitimate expectations,” but here we tie it to customary international law standards, which is better for a smaller state with limited bargaining power.

¶ 06 Transfers and balance-of-payments safeguards: even if transfers are allowed, in severe economic or BoP crises the state may temporarily restrict outflows of profits to protect stability—crucial given our recent distress.

¶ 07 Crucially, investor obligations are recognized—compliance with domestic law and responsible business conduct—and the treaty allows for joint interpretations by the state parties, which bind tribunals, helping preserve public welfare.

¶ 08 Going forward, we can further improve with mechanisms like Brazil’s dispute-prevention ombudsman model to resolve issues before arbitration, and by developing Sri Lanka as an arbitration venue to save costs.

¶ 09 In sum: we need investment and we will protect investors, but not by compromising our people’s welfare. This treaty moves us in that direction.