Economic crisis should spur a National Maritime Policy: Dr. Anil Vitarana

Given the geo-political intensity in the Indian Ocean, the country needs a definitive policy in handling such matters rather than on an ad-hoc case by case basis

• Says lack of a national policy has hindered Sri Lanka’s progress not just in the maritime industry but in oil and gas exploration, the exclusive economic zone and the law of the sea

As an island nation, Sri Lanka is heavily dependent on its ocean with the seaports, particularly Colombo serving as an entrepôt for the country’s import and export trade. The ports themselves form a crucial backbone for Foreign Direct Investment. 

However, while the sea is a blessing, it could also be a threat as Sri Lanka has experienced for centuries.  As an island nation, Sri Lanka was easily colonised because of its location; the absence of naval resources to battle invaders on the coastline being a glaring fault. The coast needed protection during the thirty-year war with the LTTE too. Then there was the fire on the MV X-Press Pearl and resultant environmental damage to the marine and fishery industries and the catastrophic tsunami clearly demonstrating that friendly seas could at times be a dangerous foe.

Nevertheless, oceans are critical to Sri Lanka’s survival and therefore, a well-structured National Maritime Policy (NMP) would be a given. Unfortunately, Sri Lanka has no existing NMP.

Dr. Anil Vitarana’s experience in the shipping industry spans four decades in Sri Lanka, Kuwait and the United States including at the Ceylon Shipping Corporation and the United Arab Shipping Company (the national shipping line for six Arab Gulf countries -which later merged with Hapag Lloyd - of which he was President of their USA organisation for 20 years. He has been conferred with the prestigious Connie Award by the Containerisation and Intermodal Institute in 2006 for his contribution to the shipping industry.  He provides some insights on the importance of an NMP for an island nation.

Even the most developed countries such as the USA, EU & China have protectionist areas for their maritime interests, far beyond the very limited protection afforded by Sri Lanka’s Licensing of Shipping Agents Act

By Savithri Rodrigo

Q: Do you believe that the lack of an NMP is inhibiting the development of the maritime sector in the country?

Absolutely! The scope of a National Maritime Policy goes much beyond just the maritime industry.  It incorporates a holistic view of the total marine environment including the country’s territorial sea, its continental shelf, the 200-mile exclusive economic zone, the related Law of the Sea and MARPOL Conventions, oil and gas exploration and hydrographic services etc. In some of these areas, there are sectorial policies but these must be combined to create a cohesive and comprehensive National Maritime Policy. 

The X-Press Pearl catastrophe amply highlighted the weaknesses in the lack of a cohesive policy and the country lost valuable time in effectively managing the threat. Even now, the damage claims caused by that pollution remain murky. 

Similarly, there was lack of clarity in the country’s position when it had to deal with the port call of the Chinese research vessel Yuan Wang 5 in August this year. 

Given the geo-political intensity in the Indian Ocean, the country needs a definitive policy in handling such matters rather than on an ad-hoc case-by-case basis.

Q: What would a National Maritime Policy involve?

Due to the expanse of its scope and the involvement of a multitude of stakeholders, a National Maritime Policy cannot be created within a short span of time. It is not just about formulating a document but incorporating the necessary structure, systems and processes for its effective implementation.

This is why I believe that despite having visionaries such as Lalith Athulathmudali, P.B. Karandawela and Hamilton Shirley Amerasinghe (who was the President of the UN Conference of the Law of the Sea) the country still lacks a much needed NMP. 

The way forward, in my opinion, would be to initially create sectorial policies and thereafter link them together where connectivity is needed to create a single National Maritime Policy, with appropriate consultation among all stakeholders. 

Q: What do you think it should focus on?

The sectoral areas I would suggest are:

• Preservation, exploration and security of the country’s territorial sea, continental shelf and the exclusive economic zone and all waters governed by national jurisdiction
• Use of the seas as a maritime transportation mode and the development of the related infrastructure
• Development of the maritime industry 
• Promotion of marine research and education and the creation of a maritime consciousness among the public including the impact of climate change
• Exploration of marine resources without harming the marine environment 
• The adoption and implementation of international maritime conventions and agreements, and aligning the NMP with international and domestic legal regimes

Q: Should shipping be liberalised as a precursor to creating a National Maritime Policy?

Sri Lanka’s shipping was liberalised in the early 1990s when the Central Freight Bureau’s role as the exclusive booking agency for export cargo was dismantled and the cargo protection given to Ceylon Shipping Corporation as the national carrier was lifted. Since then, all foreign shipping lines are free to call at Sri Lanka’s ports and compete for a share of the country’s import & export cargo.

Currently over 70% of the containers handled at the Port of Colombo are at terminals that are fully or partially owned and operated by foreign companies. The Hambantota International Port is operated by China Merchant Ports. 

There is a provision in the Licensing of Shipping Agents Act of 1992 that limits the foreign shareholding of local agencies to 40%. Some commentators have misconstrued this provision to argue that shipping in Sri Lanka is not liberalised and acts as a barrier to FDIs in the maritime sector.

An examination of the facts would clearly show that this argument is a red herring!

Q: So, does the limiting of the foreign shareholding to 40% create a barrier for FDIs in this industry?

The South Asia Gateway Terminal (SAGT) incorporated in 1999 is the first public-private partnership of container terminal operators at the Port of Colombo. Among the shareholders of SAGT is APM Terminals, a unit of Danish shipping company Maersk’s transport and logistics division and the Evergreen Group. These are the second and sixth largest container shipping lines in the world.  

Besides SAGT, the Colombo International Container Terminal and the Hambantota International Port are operated by China Merchant Ports, while India’s Adani Ports is billed to operate the Colombo West International Terminal. 

The parent company of Colombo Dockyard PLC is Japan’s Onomichi Dockyard Co. Ltd. The company is growing in stature and in 2020 received an order for 4X5000 DWT EcoBulk carriers; the first of which was delivered on 21 September 2022. 

Sinopac: a Chinese company invested in bunkering operations at the Hambantota Port through Lanka Marine Services.

These FDIs total over $ 4 billion and clearly demonstrate that the Licensing of Shipping Agents Act is not a barrier to FDIs in any way. 

Moreover, even the most developed countries such as the USA, EU and China have protectionist areas for their maritime interests, far beyond the scope of the Licensing of Shipping Agents Act. This reiterates that having limitations on foreign shareholding does not limit or inhibit operations in any way, nor does it intimidate or lessen the prospects of FDIs. 

Q: Do you believe that Sri Lanka’s current economic crisis inhibits the development of a National Maritime Policy?

Charles Dickens in A Tale of Two Cities wrote: “It was the best of times, it was the worst of times.” Following this adage, I would say that the economic crisis should not be a barrier but should in fact spur the development of a National Maritime Policy.  It should be a two-pronged approach. 

On the one hand, it should focus on the income generating potential via avenues such as more FDIs in the maritime sector, oil, gas and mineral exploration within the EEZ and the continental shelf and the development of the fisheries industry.

On the other is the need to enhance the country’s naval and policing capability against the backdrop of increasing geo-political conflict and the country’s vulnerability to the impact of climate change. While some of the resources are becoming available through foreign aid including the US Coast Guard vessels donated by the US Government and the ‘Maritime Domain Awareness’ program between India, Maldives and Sri Lanka; the growing external and internal threats (drug and human trafficking and a possible resurgence of terrorism) necessitates a renewed and urgent reassessment of the country’s capability to protect our shores. 

So yes, a National Maritime Policy is now an imperative and should be a priority if we are to move forward and take advantage of the resources we have in this enviable location in the Indian Ocean. 

The writer is an award-winning journalist with over three-decade experience in the media.