CASA responds to article ‘All at sea over mysterious shipping Gazette No. 2069/38’

The Ceylon Association of Ships Agents (CASA) has sent the following statement over the Daily FT article of 5 July under the headline ‘All at sea over mysterious shipping Gazette No. 2069/38’ (see http://www.ft.lk/opinion/All-at-sea-over-mysterious-shipping-Gazette-No--2069-38/14-658387).

There had been many articles written lately with misleading and deceptive information written to misguide the general public. Therefore this response will present readers with factual points related to the Gazette and the role played by CASA. 

Content of the letter 

The article claims that the letter from the Central Bank of Sri Lanka dated 20 March instructs to remove them as a regulator and to allow market forces to determine tariffs between ship owners and agents. This is factually incorrect. What the Central Bank letter states is that they no longer involve themselves in industry specific issues and requests the Ministry of Ports and Shipping to remove their involvement as required in the Gazette (Extraordinary) No. 684/9 dated 17/10/1991. This is as a result of the Exchange Control Act being replaced by the Foreign Exchange Act No. 12 of 2017.

The Gazette (Extraordinary) No. 684/9 dated 17/10/1991 consists of the Regulations made by Minister of Ports and Shipping under section 3(5) and 10 of the Licensing of Shipping Agents Act No. 10 of 1972, as amended by Act No. 9 of 1981 and Act No. 16 of 1982. Therefore, licensing of shipping agents and all matters connected thereto come under the Ministry of Ports and Shipping and this has been so from 1972 and continues to be so after liberalisation of shipping in Sri Lanka in 1991.

Claiming CASA to be a monopolistic organisation

CASA is not a monopolistic organisation as the article implies. It is a democratically operated association of shipping agents established in 1944 first as the Ceylon Shipping Committee and then known as Ceylon Association of Steamer Agents in 1966 and as Ceylon Association of Shipping Agents in 2015. Elections are held annually and the affairs of CASA are run by an elected Executive Committee consisting of 15 member company representatives. CASA is represented by 129 member organisations and is a fair representation of both Large and Small Scale Entrepreneurs. 

Shipping agents are appointed by the Principals, after assessing the agent’s strengths and capabilities. It is a selection based on merit and therefore the argument of a monopoly is baseless.

These local agents have created jobs, contributed to exchange earnings and have diversified their businesses locally and are going global with their investments. Many of these ship agents have invested on local freight stations, container depots, and third party logistics and even stepped into the construction industry. Some of these agents have expanded regionally bringing in more exchange earnings to the country. Investments in the maritime education sector by the shipping agency companies as well as finding placements for Sri Lankan seafarers have contributed immensely to employment generation as well as additional generation of foreign remittances. These agency companies have been at the forefront of driving new businesses such as ship owning /operating, ship management and repairing, other ancillary services, managing international ports, servicing of maritime security companies, attracting of non-containerised business as well as promoting Sri Lanka as a hub for all maritime related activities in all the ports in Sri Lanka.

Malicious attempts to discredit the industry

Malicious attempts are being made by interested and misguided parties to mislead the public on matters of the shipping industry and discredit our efforts. We play an active role by providing consultation to the government in matters relating to the industry and by sharing and implementing best practices of the global shipping industry. Our agents have also volunteered in pilot programs such as E vessel clearance initiative taken by Customs because our interest is to see the industry grow. 

The article has mentioned about the articles written by CASA on relevant and timely topics and interpreted them as an effort to safeguard our private interest. The articles covered diverse areas such as infrastructure requirements, policy and regulatory changes, technology and innovation, education, etc. and were written with the objective of disseminating information and open a dialogue between all stakeholders. 

The Tariff of CASA

The Tariff of CASA is in place to protect the local shipping industry and ensure reasonable revenue and foreign exchange earnings for services rendered to foreign ship owners. The tariff is designed to provide rebates to increase volume. Volume rebates proposed and implemented by CASA in consultation and approval of the Ministry of Ports and Shipping will ensure there is no erosion in revenue to Sri Lanka while at the same time it spurs growth and incremental volume generation.

It is a shame that people with vested interests are attempting to destroy a flourishing industry growing at a rapid pace with the contribution of all stakeholders. From 2008 to 2016 the container throughput has increased by 100% and the first quarter of 2018 has shown a 16% growth from the corresponding quarter last year. Colombo Port in particular became the 13th best connectivity port in the world and handled over 6.1 million TEUs in 2017. These achievements wouldn’t have been a reality if not for the contribution of all stakeholders. Therefore we appeal to the government to stop these malevolent efforts made by few individuals to bring disrepute to the industry and negate the achievements of the industry.