Features
Will New Diamond fire be an environmental disaster
by J.A.A.S.Ranasinghe
Former Director and Acting Chairman of Marine Environment Protection Authority
MT New Diamond VLCC, Very Large Crude Carrier, flagged in Panama was reportedly carrying over 300,000 Mt of Crude Oil on its voyage to Pradip Port, India from Al Ahmadi in Kuwait when it caught fire off the eastern coast of Sri Lanka resulting in the death of a crew member and the evacuation of 23, five Greek and 18 Philippine nationals. The fire that broke out as a result of the explosion of a boiler resulted in a massive fire in the engine room and the bridge, which controls the ship. Fortunately, the fire had not spread to the oil tanks which would h ave resulted in a major oil spill. If the three million barrels of oil leaked, it could have spealt devastation to many of the marine mammals that live in vibrant habitats along the eastern coast of Sri Lanka and the vibrant eastern economy where a hive of activities is taking place such as fisheries, tourisms, agriculture and consequently to the livelihood income of the people.
Effects of Petroleum Contamination
Petroleum contamination is a growing environmental concern that harms both terrestrial and aquatic ecosystems equally. However, in view of the major disasters caused to the marine environment, the public and regulatory and scientific communities have given more attention to the contamination of marine habitats. This is because marine oil spills can have a serious economic consequence on coastal activities as well as on those who exploit the resources of the sea. Thus, communities that are at risk of oil disasters must anticipate the consequences and prepare for them. The above mentioned disaster is an eye opener for all the stakeholders to take a serious view.
Marine environmental pollution caused by petroleum is of great concern because of the fact that petroleum hydrocarbons are toxic to all forms of life and harm both aquatic and terrestrial ecosystems. In recent years the pollution of marine habitats has caught the attention of researchers and environmentalists owing to the serious impact of oil spills on marine life, as well as on people whose career relies on the exploitation of the ocean’s resources. Additionally, marine life may be affected by clean-up operations, whatever the precautions taken. It may also be indirectly affected by the physical damage to the habitats in which plants and animals live in.
The writer has had firsthand information while being a former Director of the Marine Environmental Protection Authority (MEPA) and has attended series of scientific and technical sessions delivered by the International Maritime Organization (IOM) and effectively contributed to the deliberations with regard to OPRC (Oil Spill Preparedness and Response) a decade ago and it is with such an authoritativeness, the writer compiled this short essay on the effects of petroleum oil spills on marine life. This exercise would not be a worthwhile attempt, if the economic impact of oil spills on coastal activities with special reference to eastern theatre in which the above major fire brokeout and on the people who exploit the resources of the sea.
GLOBAL OIL SPILL TREND
Over the last 50 years, there has been a marked downward trend in oil spills from tankers. The average number of spills per year in the 1970s was about 79 and has now decreased by over 90 percent to a low of six according to the International Tankers Owners Pollution Federation (ITOPF). The lowest annual number of spills was recorded in 2019 and the highest in 1974. If one were to analyze the quantities of oil spilt, one would note that approximately 5.86 million tons of oil have been lost as a result of tanker incidents globally since 1970. However, there has been a significant reduction in volume of oil spilt through the decades. The total amount spilt per decade has reduced by about 95% since the 1970s.
An interesting pattern of alternating sharp decline and stability can be observed for average volume of oil spilt per decade. Nonetheless, quantity of oil spilt in a particular year or a decade is unpredictable, and the trend can be hugely distorted by a single large spill. In case, the fire caused to MT New Diamond resulted in an oil spill over 270,000 Mts, it would have been the one of the major oil spills recorded in recent times in Sri Lanka. The most frequent causes of oil spills are allisions/collisions, groundings and Fires. However, the proportion of groundings has decreased over the decades, making allisions, collisions and Fires, the current most frequent cause of spills. Today, about 99.99% of oil transported by sea arrives safely at its destination. The positive reports on trends in oil tanker spills endorse the hard work by governments, industry and ITOPF in improving safety and standards of operations.
With a spate of major disasters linked to major shipping routes in the past few years, the time is opportune for the world leaders and the international authorities such as IOM to have the wisdom and courage with a view to taking stock on global shipping reforms. It must be pointed out here that Sri Lanka witness more than 800 vessels passing through Sri Lanka per day posing an imminent threat to the Sri Lankan economy. Hence, it cannot be completely ruledout another disaster of this magnitude, if preventive measures are not taken.
Crude oil and its properties
The ill fate MT New Diamond carried crude oil which is a complex mixture of organic compounds. These mainly consist of hydrocarbons, in addition to heterocyclic compounds and some heavy metals. The different hydrocarbons that make up crude oil come in a wide range of molecular weights and structure compounds. These compounds include methane gas, high molecular weight tars, asphaltenes, resins, waxes and bitumen. They also include straight and branched chains, single or condensed rings and aromatic rings such as the monocyclic (benzene, toluene, ethylbenzene and xylene). They additionally include polycyclic aromatic hydrocarbons (PAHs) such as naphthalene, anthracene and phenanthrene. Obviously, the chemical composition of crude oil is injurious not only to the mankind but also to marine ecosystems.
Physical contact is the major route of exposure and usually affects birds and furred mammals. These animals rely on their outer coats for buoyancy and warmth. Consequently, they often succumb to hypothermia, drowning and smothering when oil flattens and adheres to the outer layer. A second general exposure route is through the ingestion or inhalation of the hydrocarbon by organisms that reside on the surface. Exposure by these routes leads to absorption into the bloodstream via the gastrointestinal or respiratory tracts.
Toxicity of oil dispersants
Oil dispersants (57 chemical ingredients approved for use by the US EPA) are a common tool used after oil spills in marine environments. They break up oil slicks on the water surface and increase the oil’s rate of biodegradation. Oil dispersants are quickly used when other means, such as oil containment and removal, are insufficient. However, consequences of the toxicity of oil spill dispersants alone or in the presence of oil must be evaluated. Generally, undispersed oil poses the greatest threat to shorelines and surface-dwelling organisms. However, most dispersed oil remains in the water column where it mainly threatens pelagic and benthic organisms.
Fate of oil spills in the marine habitats
After oil is spilled at sea and with the effect of wind and water current, the oil spreads out and moves on the water surface as a slick a few millimetres thick. At the same time, it undergoes a series of chemical and physical changes. These processes are collectively termed ‘weathering’. Weathering causes the spilled oil to break down and become heavier than water. Some of these processes, like the natural dispersion of oil into water, lead to the removal of the oil from the sea surface and facilitate its natural breakdown in the marine environment. Others, particularly the formation of water-in-oil emulsions, cause the oil to become more persistent and remain at sea or on the shoreline for prolonged periods of time. The speed and relative importance of these processes depend on a number of factors. These include the quantity spilled, the oil’s initial physical and chemical characteristics, weather and sea conditions and whether the oil remains at sea or is washed ashore. Ultimately, the marine environment usually eliminates spilled oil through the long-term process of biodegradation.
Oil spills on marine organisms
Ultimately, the impact of oil on marine organisms depends on the fate of the oil. As previously described, when oil is present in the environment, it is either dispersed in the top layer of the water (littoral zone) or remains on the surface and, consequently, on the coastal areas. If the oil is not dispersed, it remains on the surface. In this case, currents bring the oil towards coastal areas which harms coastal organisms like invertebrates, mammals and birds. However, if the oil is dispersed, organisms, such as fish, plankton and larvae, are immediately subjected to oil toxicity.
Oil spills on planktonic organisms
Zooplankton is a particularly important food resource, especially for baleen whales. It can influence or control the primary productivity by top-down effects in return. Its population dynamic change can influence the biomass of other marine animals like fish by bottom-up effects. Some zooplankton, such as copepods, euphausiids and mysids, assimilate hydrocarbons directly from seawater and by ingesting oil droplets and oil contaminated food. The ingestion of oil by these organisms often causes mortality, while surviving organisms often show developmental and reproductive abnormalities.
Oil spills on coral reefs
In addition, recreational attractions for divers, coral reefs are considered to be important constituents of marine ecosystems. This is because they are important nurseries for shrimp, fish and other animals. The aquatic organisms that live within and around the coral reefs are at risk of exposure to the toxic substances within oil, as well as smothering. They are rapidly deteriorating because of a variety of environmental and anthropogenic pressures. Thus, they are suffering significant changes in diversity, species abundance and habitat structure worldwide. Oil dispersants are potentially harmful to marine life including coral reefs. In a study using coral nubbins in coral reef ecotoxicology testing, found that dispersed oil and oil dispersants are harmful to soft and hard coral species at early life stages.
Oil spills on fish
Due to the well-developed hepatic mixed function oxygenase (MFO) system, in addition to the reactivity of the metabolites that would not be released in a toxic form during digestion and absorption, most fish, even in heavily oil-contaminated environments, do not accumulate and retain high concentrations of petroleum hydrocarbons. Thus, they are not likely to transfer them to predators. Thus, no serious threat is predicted.
Oil spills on seabirds
As one of the major routes of exposure, physical contact usually affects birds. For example, thousands of African penguins (Spheniscus demerus) were oiled following the 2000 Treasure oil spill in South Africa.An evaluation of the impact of oil spills on seabirds has not been fully appreciated during incidents, despite pressure from the public concern, media and other interested parties for precise and up-to-date information on the damage. Consequently, the approximate numbers of seabird casualties involved in many major spills have only been estimated, while impacts at the population level have been difficult to determine. Natural variation and the huge range of factors that influence bird population statistics make it difficult to assess the impact of oil spill on sea birds.
Oil spills on marine mammals
Marine mammals include bottlenose dolphins, fins, humpbacks, rights, sei whales, sperm whales, manatees, cetaceans, seals, sea otters and pinnipeds. As previously indicated, the physical contact of oil with furred mammals usually affects these animals because they rely on their outer coats for buoyancy and warmth. Consequently, these animals often succumb to hypothermia, drowning and smothering when oil flattens and adheres to the outer layer.
As part of their activities, all marine mammals spend a considerable amount of time at the surface. Here, they swim, breathe, feed or rest. Thus, the possibility of their contact with a surface slick, water-in-oil emulsion, or tar balls, is high. In heavy pelage marine mammals, such as fur seals, sea otters and polar bears, this contact may lead to fouling. Polar bears and otters groom themselves regularly as a means of maintaining the insulating properties of the fur and may, thereby, ingest oil. Animals with smooth surfaces or relatively little to no pelage, such as whales, dolphins, manatees and most seals, have an advantage as oil would have fewer tendencies to adhere to their surface.
Oil that contaminates a shore is likely to severely affect pinnipeds. Pinnipeds require such areas for nursery and, to a lesser extent, otters and bears. Some of the oil is eventually returned in subtidal sediments, where it may transfer to gray whales, walrus and some seals. Such species feed heavily on benthic animals.
When marine mammals encounter fresh oil, they are likely to inhale volatile hydrocarbons evaporating from the surface slick. These volatile fractions contain toxic monoaromatic hydrocarbons (benzene, toluene and xylenes) and low molecular weight aliphatics with anaesthetic properties. The inhalation of these volatile hydrocarbon compounds is potentially harmful. The inhalation of concentrated petroleum vapours can cause the inflammation of and damage to the mucus membranes of airways, lung congestion or even pneumonia. Volatile benzene and toluene, which can be inhaled, can be transferred rapidly from the bloodstream into the lungs. Furthermore, they can accumulate from the blood into the brain and liver, causing neurological disorders and liver damage.
Oil spills on marine plants
In several aspects, aquatic plants are important to the functioning of ecosystems. These include the fact that they are oxygen producers, their ability to sequester carbon and for their base position in aquatic food chains. In addition, they serve as nursery, feeding and breeding habitats for a variety of animal and plant species, including recreationally and commercially important fish. Plants and animals are affected by the oil in which they come into contact with as a result of an oil spill. In their review of toxicities of oils, dispersants and dispersed oils to algae and aquatic plants.
Communities at risk of marine oil spills/anticipation and preparation
The threatening of marine environments with the petroleum oil spills has caught the attention of many communities, encouraging them to develop their own plans and policy issues. These have ranged from permitting or prohibiting increased oil transport volumes, to developing the capacity to respond to and recover from potential spill disasters.
Local communities that depend on the fishing industry, aquaculture and tourism should realize that the impact of an oil spill is governed by complex factors. These include the oil spill’s volume and location relative to fishing/cultivation areas, currents, tides and wave action. Other factors include whether species harvested in the region are sedentary or mobile, as well as government decisions relating to fishing bans and compensation schemes.
Economic impact of oil spills in the Eastern Region
Though Eastern Province (EP) has primarily an agriculture-based economy, it has an appreciable contribution to the national economy by way of Fish production and tourisms. Approximately, 25% of the nations fish production is generated by the EP and livelihood income of the fishing community employed in the coastal belt has a tremendous impact of the socio-economic status of the people. The EP has also received an unprecedented development in the tourism sector in the last few decades in that Pottuvil Arugam Bay, Lahugala Panama Beach, Pigeon Island, Nilaveli Beach have become attractive tourist destinations. Hence, any possible oil spill of a huge magnitude could have a devastating impact on all these vibrant economic sectors. Marine oil spills can have a serious impact not only on marine life, but on the gamut of all economic coastal activities and the communities that exploit the resources of the sea as seen above.
Involvement of multiplicity of Players
All in all, the joint efforts put in by Sri Lanka Navy, Air Force, Ports Authority and our Indian counterparts in dousing this fire have to be commended. His Excellency’s timely appreciation to all the players in averting this major calamity is most praiseworthy. It would be grossly unfair, if the names of the Chairperson and the General Manager of the Marine Environment Protection Authority namely Mrs. Dharshani Lahandapura and Dr. Terny Pradeep Kumara gone unnoticed for the magnificent roles they played behind the scene in educating the public and the media as to the possible marine consequences that could have arisen of this catastrophe as well as the mitigatory measures silently adopted to meet the possible oil spill.
Ironically, the above incident has raised many unanswered questions as a whole. As organizations, how much of advanced preparedness the authorities have set in motion to avert maritime catastrophes of this magnitude. Sri Lanka is woefully lacking the sources and resources to meet any eventuality of this magnitude, though it is claimed as a major maritime hub. As committed institutions, what proactive measures have we taken as a nation to deal with the sensitive marine ecosystems referred to above. It is intended to deal with these aspects in a separate column in due course.
by Dr Gotabhya Ranasinghe
Senior Consultant Cardiologist
National Hospital Sri Lanka
When we sought a meeting with Hon Dr. Ramesh Pathirana, Minister of Health, he graciously cleared his busy schedule to accommodate us. Renowned for his attentive listening and deep understanding, Minister Pathirana is dedicated to advancing the health sector. His openness and transparency exemplify the qualities of an exemplary politician and minister.
Dr. Palitha Mahipala, the current Health Secretary, demonstrates both commendable enthusiasm and unwavering support. This combination of attributes makes him a highly compatible colleague for the esteemed Minister of Health.
Our discussion centered on a project that has been in the works for the past 30 years, one that no other minister had managed to advance.
Minister Pathirana, however, recognized the project’s significance and its potential to revolutionize care for heart patients.
The project involves the construction of a state-of-the-art facility at the premises of the National Hospital Colombo. The project’s location within the premises of the National Hospital underscores its importance and relevance to the healthcare infrastructure of the nation.
This facility will include a cardiology building and a tertiary care center, equipped with the latest technology to handle and treat all types of heart-related conditions and surgeries.
Securing funding was a major milestone for this initiative. Minister Pathirana successfully obtained approval for a $40 billion loan from the Asian Development Bank. With the funding in place, the foundation stone is scheduled to be laid in September this year, and construction will begin in January 2025.
This project guarantees a consistent and uninterrupted supply of stents and related medications for heart patients. As a result, patients will have timely access to essential medical supplies during their treatment and recovery. By securing these critical resources, the project aims to enhance patient outcomes, minimize treatment delays, and maintain the highest standards of cardiac care.
Upon its fruition, this monumental building will serve as a beacon of hope and healing, symbolizing the unwavering dedication to improving patient outcomes and fostering a healthier society.We anticipate a future marked by significant progress and positive outcomes in Sri Lanka’s cardiovascular treatment landscape within the foreseeable timeframe.
by Fr. Emmanuel Fernando, OMI
Jesuit Fr. Aloysius Pieris (affectionately called Fr. Aloy) celebrated his 90th birthday on April 9, 2024 and I, as the editor of our Oblate Journal, THE MISSIONARY OBLATE had gone to press by that time. Immediately I decided to publish an article, appreciating the untiring selfless services he continues to offer for inter-Faith dialogue, the renewal of the Catholic Church, his concern for the poor and the suffering Sri Lankan masses and to me, the present writer.
It was in 1988, when I was appointed Director of the Oblate Scholastics at Ampitiya by the then Oblate Provincial Fr. Anselm Silva, that I came to know Fr. Aloy more closely. Knowing well his expertise in matters spiritual, theological, Indological and pastoral, and with the collaborative spirit of my companion-formators, our Oblate Scholastics were sent to Tulana, the Research and Encounter Centre, Kelaniya, of which he is the Founder-Director, for ‘exposure-programmes’ on matters spiritual, biblical, theological and pastoral. Some of these dimensions according to my view and that of my companion-formators, were not available at the National Seminary, Ampitiya.
Ever since that time, our Oblate formators/ accompaniers at the Oblate Scholasticate, Ampitiya , have continued to send our Oblate Scholastics to Tulana Centre for deepening their insights and convictions regarding matters needed to serve the people in today’s context. Fr. Aloy also had tried very enthusiastically with the Oblate team headed by Frs. Oswald Firth and Clement Waidyasekara to begin a Theologate, directed by the Religious Congregations in Sri Lanka, for the contextual formation/ accompaniment of their members. It should very well be a desired goal of the Leaders / Provincials of the Religious Congregations.
Besides being a formator/accompanier at the Oblate Scholasticate, I was entrusted also with the task of editing and publishing our Oblate journal, ‘The Missionary Oblate’. To maintain the quality of the journal I continue to depend on Fr. Aloy for his thought-provoking and stimulating articles on Biblical Spirituality, Biblical Theology and Ecclesiology. I am very grateful to him for his generous assistance. Of late, his writings on renewal of the Church, initiated by Pope St. John XX111 and continued by Pope Francis through the Synodal path, published in our Oblate journal, enable our readers to focus their attention also on the needed renewal in the Catholic Church in Sri Lanka. Fr. Aloy appreciated very much the Synodal path adopted by the Jesuit Pope Francis for the renewal of the Church, rooted very much on prayerful discernment. In my Religious and presbyteral life, Fr.Aloy continues to be my spiritual animator / guide and ongoing formator / acccompanier.
Fr. Aloysius Pieris, BA Hons (Lond), LPh (SHC, India), STL (PFT, Naples), PhD (SLU/VC), ThD (Tilburg), D.Ltt (KU), has been one of the eminent Asian theologians well recognized internationally and one who has lectured and held visiting chairs in many universities both in the West and in the East. Many members of Religious Congregations from Asian countries have benefited from his lectures and guidance in the East Asian Pastoral Institute (EAPI) in Manila, Philippines. He had been a Theologian consulted by the Federation of Asian Bishops’ Conferences for many years. During his professorship at the Gregorian University in Rome, he was called to be a member of a special group of advisers on other religions consulted by Pope Paul VI.
Fr. Aloy is the author of more than 30 books and well over 500 Research Papers. Some of his books and articles have been translated and published in several countries. Among those books, one can find the following: 1) The Genesis of an Asian Theology of Liberation (An Autobiographical Excursus on the Art of Theologising in Asia, 2) An Asian Theology of Liberation, 3) Providential Timeliness of Vatican 11 (a long-overdue halt to a scandalous millennium, 4) Give Vatican 11 a chance, 5) Leadership in the Church, 6) Relishing our faith in working for justice (Themes for study and discussion), 7) A Message meant mainly, not exclusively for Jesuits (Background information necessary for helping Francis renew the Church), 8) Lent in Lanka (Reflections and Resolutions, 9) Love meets wisdom (A Christian Experience of Buddhism, 10) Fire and Water 11) God’s Reign for God’s poor, 12) Our Unhiddden Agenda (How we Jesuits work, pray and form our men). He is also the Editor of two journals, Vagdevi, Journal of Religious Reflection and Dialogue, New Series.
Fr. Aloy has a BA in Pali and Sanskrit from the University of London and a Ph.D in Buddhist Philosophy from the University of Sri Lankan, Vidyodaya Campus. On Nov. 23, 2019, he was awarded the prestigious honorary Doctorate of Literature (D.Litt) by the Chancellor of the University of Kelaniya, the Most Venerable Welamitiyawe Dharmakirthi Sri Kusala Dhamma Thera.
Fr. Aloy continues to be a promoter of Gospel values and virtues. Justice as a constitutive dimension of love and social concern for the downtrodden masses are very much noted in his life and work. He had very much appreciated the commitment of the late Fr. Joseph (Joe) Fernando, the National Director of the Social and Economic Centre (SEDEC) for the poor.
In Sri Lanka, a few religious Congregations – the Good Shepherd Sisters, the Christian Brothers, the Marist Brothers and the Oblates – have invited him to animate their members especially during their Provincial Congresses, Chapters and International Conferences. The mainline Christian Churches also have sought his advice and followed his seminars. I, for one, regret very much, that the Sri Lankan authorities of the Catholic Church –today’s Hierarchy—- have not sought Fr.
Aloy’s expertise for the renewal of the Catholic Church in Sri Lanka and thus have not benefited from the immense store of wisdom and insight that he can offer to our local Church while the Sri Lankan bishops who governed the Catholic church in the immediate aftermath of the Second Vatican Council (Edmund Fernando OMI, Anthony de Saram, Leo Nanayakkara OSB, Frank Marcus Fernando, Paul Perera,) visited him and consulted him on many matters. Among the Tamil Bishops, Bishop Rayappu Joseph was keeping close contact with him and Bishop J. Deogupillai hosted him and his team visiting him after the horrible Black July massacre of Tamils.
Sri Lanka-Singapore Free Trade Agreement
By Gomi Senadhira
senadhiragomi@gmail.com
“You might tell fairy tales, but the progress of a country cannot be achieved through such narratives. A country cannot be developed by making false promises. The country moved backward because of the electoral promises made by political parties throughout time. We have witnessed that the ultimate result of this is the country becoming bankrupt. Unfortunately, many segments of the population have not come to realize this yet.” – President Ranil Wickremesinghe, 2024 Budget speech
Any Sri Lankan would agree with the above words of President Wickremesinghe on the false promises our politicians and officials make and the fairy tales they narrate which bankrupted this country. So, to understand this, let’s look at one such fairy tale with lots of false promises; Ranil Wickremesinghe’s greatest achievement in the area of international trade and investment promotion during the Yahapalana period, Sri Lanka-Singapore Free Trade Agreement (SLSFTA).
It is appropriate and timely to do it now as Finance Minister Wickremesinghe has just presented to parliament a bill on the National Policy on Economic Transformation which includes the establishment of an Office for International Trade and the Sri Lanka Institute of Economics and International Trade.
Was SLSFTA a “Cleverly negotiated Free Trade Agreement” as stated by the (former) Minister of Development Strategies and International Trade Malik Samarawickrama during the Parliamentary Debate on the SLSFTA in July 2018, or a colossal blunder covered up with lies, false promises, and fairy tales? After SLSFTA was signed there were a number of fairy tales published on this agreement by the Ministry of Development Strategies and International, Institute of Policy Studies, and others.
However, for this article, I would like to limit my comments to the speech by Minister Samarawickrama during the Parliamentary Debate, and the two most important areas in the agreement which were covered up with lies, fairy tales, and false promises, namely: revenue loss for Sri Lanka and Investment from Singapore. On the other important area, “Waste products dumping” I do not want to comment here as I have written extensively on the issue.
1. The revenue loss
During the Parliamentary Debate in July 2018, Minister Samarawickrama stated “…. let me reiterate that this FTA with Singapore has been very cleverly negotiated by us…. The liberalisation programme under this FTA has been carefully designed to have the least impact on domestic industry and revenue collection. We have included all revenue sensitive items in the negative list of items which will not be subject to removal of tariff. Therefore, 97.8% revenue from Customs duty is protected. Our tariff liberalisation will take place over a period of 12-15 years! In fact, the revenue earned through tariffs on goods imported from Singapore last year was Rs. 35 billion.
The revenue loss for over the next 15 years due to the FTA is only Rs. 733 million– which when annualised, on average, is just Rs. 51 million. That is just 0.14% per year! So anyone who claims the Singapore FTA causes revenue loss to the Government cannot do basic arithmetic! Mr. Speaker, in conclusion, I call on my fellow members of this House – don’t mislead the public with baseless criticism that is not grounded in facts. Don’t look at petty politics and use these issues for your own political survival.”
I was surprised to read the minister’s speech because an article published in January 2018 in “The Straits Times“, based on information released by the Singaporean Negotiators stated, “…. With the FTA, tariff savings for Singapore exports are estimated to hit $10 million annually“.
As the annual tariff savings (that is the revenue loss for Sri Lanka) calculated by the Singaporean Negotiators, Singaporean $ 10 million (Sri Lankan rupees 1,200 million in 2018) was way above the rupees’ 733 million revenue loss for 15 years estimated by the Sri Lankan negotiators, it was clear to any observer that one of the parties to the agreement had not done the basic arithmetic!
Six years later, according to a report published by “The Morning” newspaper, speaking at the Committee on Public Finance (COPF) on 7th May 2024, Mr Samarawickrama’s chief trade negotiator K.J. Weerasinghehad had admitted “…. that forecasted revenue loss for the Government of Sri Lanka through the Singapore FTA is Rs. 450 million in 2023 and Rs. 1.3 billion in 2024.”
If these numbers are correct, as tariff liberalisation under the SLSFTA has just started, we will pass Rs 2 billion very soon. Then, the question is how Sri Lanka’s trade negotiators made such a colossal blunder. Didn’t they do their basic arithmetic? If they didn’t know how to do basic arithmetic they should have at least done their basic readings. For example, the headline of the article published in The Straits Times in January 2018 was “Singapore, Sri Lanka sign FTA, annual savings of $10m expected”.
Anyway, as Sri Lanka’s chief negotiator reiterated at the COPF meeting that “…. since 99% of the tariffs in Singapore have zero rates of duty, Sri Lanka has agreed on 80% tariff liberalisation over a period of 15 years while expecting Singapore investments to address the imbalance in trade,” let’s turn towards investment.
Investment from Singapore
In July 2018, speaking during the Parliamentary Debate on the FTA this is what Minister Malik Samarawickrama stated on investment from Singapore, “Already, thanks to this FTA, in just the past two-and-a-half months since the agreement came into effect we have received a proposal from Singapore for investment amounting to $ 14.8 billion in an oil refinery for export of petroleum products. In addition, we have proposals for a steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million), sugar refinery ($ 200 million). This adds up to more than $ 16.05 billion in the pipeline on these projects alone.
And all of these projects will create thousands of more jobs for our people. In principle approval has already been granted by the BOI and the investors are awaiting the release of land the environmental approvals to commence the project.
I request the Opposition and those with vested interests to change their narrow-minded thinking and join us to develop our country. We must always look at what is best for the whole community, not just the few who may oppose. We owe it to our people to courageously take decisions that will change their lives for the better.”
According to the media report I quoted earlier, speaking at the Committee on Public Finance (COPF) Chief Negotiator Weerasinghe has admitted that Sri Lanka was not happy with overall Singapore investments that have come in the past few years in return for the trade liberalisation under the Singapore-Sri Lanka Free Trade Agreement. He has added that between 2021 and 2023 the total investment from Singapore had been around $162 million!
What happened to those projects worth $16 billion negotiated, thanks to the SLSFTA, in just the two-and-a-half months after the agreement came into effect and approved by the BOI? I do not know about the steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million) and sugar refinery ($ 200 million).
However, story of the multibillion-dollar investment in the Petroleum Refinery unfolded in a manner that would qualify it as the best fairy tale with false promises presented by our politicians and the officials, prior to 2019 elections.
Though many Sri Lankans got to know, through the media which repeatedly highlighted a plethora of issues surrounding the project and the questionable credentials of the Singaporean investor, the construction work on the Mirrijiwela Oil Refinery along with the cement factory began on the24th of March 2019 with a bang and Minister Ranil Wickremesinghe and his ministers along with the foreign and local dignitaries laid the foundation stones.
That was few months before the 2019 Presidential elections. Inaugurating the construction work Prime Minister Ranil Wickremesinghe said the projects will create thousands of job opportunities in the area and surrounding districts.
The oil refinery, which was to be built over 200 acres of land, with the capacity to refine 200,000 barrels of crude oil per day, was to generate US$7 billion of exports and create 1,500 direct and 3,000 indirect jobs. The construction of the refinery was to be completed in 44 months. Four years later, in August 2023 the Cabinet of Ministers approved the proposal presented by President Ranil Wickremesinghe to cancel the agreement with the investors of the refinery as the project has not been implemented! Can they explain to the country how much money was wasted to produce that fairy tale?
It is obvious that the President, ministers, and officials had made huge blunders and had deliberately misled the public and the parliament on the revenue loss and potential investment from SLSFTA with fairy tales and false promises.
As the president himself said, a country cannot be developed by making false promises or with fairy tales and these false promises and fairy tales had bankrupted the country. “Unfortunately, many segments of the population have not come to realize this yet”.
(The writer, a specialist and an activist on trade and development issues . )
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