Navigating Sri Lanka’s maritime governance in an era of conflict

By Dhananath Fernando

Originally appeared on The Morning

The war in the Middle East has come uncomfortably close to Sri Lanka. Quite apart from the macroeconomic consequences that may unfold depending on the length of the conflict, the recent torpedo attack on an Iranian ship within Sri Lanka’s Exclusive Economic Zone (EEZ) should have sent a shockwave through our policy establishment. It should have felt almost as serious as a direct strike within our territorial waters.

The reason is not that Sri Lanka must choose sides in this war. Nor is it only about the possible economic ripple effects through oil prices, shipping costs, tourism sentiment, or remittances.

The real alarm bell is something deeper: Sri Lanka still does not have a clear Standard Operating Procedure (SOP) governing research vessels and other sensitive maritime activity within our EEZ.

This is not simply a diplomatic oversight. It is a strategic blind spot. Sri Lanka’s EEZ is roughly 7.8 times larger than our land mass. In maritime terms, Sri Lanka is far bigger than we often think. Yet our national conversation still treats the ocean as empty space rather than a strategic economic frontier.

Within that maritime zone lies enormous potential. Fisheries, marine biodiversity, ocean science, seabed resources, and new opportunities linked to the emerging blue economy. But resources alone do not create prosperity. Economics teaches us that prosperity comes from clear rules, defined rights, and institutions capable of managing resources productively.

Navigating geopolitical complexities

Property rights matter on land. They matter just as much at sea. The problem is that governing an ocean space of this scale is not easy for a small state. Sri Lanka’s enforcement capacity is limited. Monitoring marine scientific research, regulating foreign vessels, and ensuring compliance with national conditions requires technical expertise, institutional coordination, and consistent policy.

The difficulty, however, does not end there. Sri Lanka also operates in a complex geopolitical neighbourhood. This means we cannot simply permit any research vessel access to our waters without considering wider security implications.

If a scientific mission is perceived as compromising India’s security interests or regional stability, the consequences for Sri Lanka could be serious. At the same time, refusing access arbitrarily can damage relations with other major powers.

We have already seen this dilemma play out. On several occasions Sri Lanka found itself caught in a diplomatic crossfire when Chinese research vessels requested permission to operate near our maritime zone, triggering strong concerns from India.

When a country lacks a clear framework, every decision becomes a political crisis. If Sri Lanka allows the vessel, India is displeased. If Sri Lanka refuses, China is unhappy.

Both countries are critical economic partners. Both are far larger powers than Sri Lanka. But Sri Lanka’s objective should not be to please everyone in the moment. The objective should be to protect sovereignty while maximising the economic value of our maritime space. The only sustainable way to do this is through clear rules.

A shift from reaction to preparation

Sri Lanka needs a well-defined Standard Operating Procedure governing research vessels and other sensitive maritime platforms entering our waters. Such a framework should specify what types of activities are permitted, under what conditions, and with what safeguards.

Any marine scientific research conducted in Sri Lankan waters should be subject to strict conditions. Research data must be shared with Sri Lankan authorities. Sri Lankan scientists must participate in the research. Equipment and research objectives must be disclosed in advance. And the Government must retain the right to halt activities that violate agreed conditions.

If these requirements are unacceptable to a foreign vessel, permission should simply not be granted. This is not about confrontation. It is about governance.

Fortunately, the global legal framework for such governance already exists. The United Nations Convention on the Law of the Sea (UNCLOS) provides the legal architecture for managing maritime zones and regulating marine scientific research. Sri Lanka, India, and China have all ratified this convention.

The task before Sri Lanka is therefore not to invent new law but to translate existing international principles into clear operational rules tailored to the country’s national interests.

Sri Lanka also has a proud legacy in shaping global maritime law. The late Shirley Amerasinghe, one of Sri Lanka’s most distinguished diplomats, chaired the Law of the Sea Conference until his death in 1980. It is no coincidence that soon afterwards Sri Lanka established the National Aquatic Resources Research and Development Agency (NARA), under the leadership of Dr. Hiran Jayewardene, with the intention of building national expertise in marine science and maritime governance.

That vision remains relevant today. Unfortunately, Sri Lanka’s institutional capacity has not kept pace with the strategic importance of our maritime domain. We are still reacting to events instead of preparing for them.

If domestic capacity is insufficient, Sri Lanka should draw on partnerships with countries that possess strong maritime research systems. Nations such as Norway and others with advanced ocean governance frameworks could support Sri Lanka in building technical capacity, developing institutional structures, and training local experts.

An untapped economic opportunity

Strengthening maritime governance is not merely a defensive exercise. Done properly, it can generate economic benefits.

Sri Lanka can capture knowledge rents through shared research data about the Indian Ocean. We can build expertise by training Sri Lankan marine scientists and expanding opportunities for research institutions and private sector collaboration. Ports can generate additional commercial revenue through logistics, services, and maritime support activities. And the country can position itself as a credible neutral hub for humanitarian maritime services in the Indian Ocean.

In short, maritime governance is not just about security. It is also about economic opportunity. This is why it would be a mistake to view the Middle Eastern conflict only through the narrow lens of tourism losses or remittance risks.

Sri Lanka’s strategic thinking must go deeper. The real question is whether we are capable of turning our geography into an advantage rather than a vulnerability.

Because the uncomfortable truth is this: Sri Lanka’s greatest vulnerability is not that we refuse to choose sides. It is that we continue to operate without a rulebook. And in an increasingly contested Indian Ocean, that is no longer a luxury we can afford.

In the Port City debate, hypocrisy is bipartisan

Originally appeared on The Daily FT

By Prof. Rohan Samarajiva

It is hypocritical for a political coalition that demonised the then Government and minorities by vigorously promoting the principle of ‘one country, one law’, to then propose to carve out the Port City development as a geographical area exempt from many of the laws and practices prevalent in the country. Those who sow the wind, reap the whirlwind. Because of this hypocrisy, the Government has great difficulty doing what it knows is the right thing for the country.

It is hypocritical for members of the dominant party in the previous Government (now split) to protest vociferously against the special treatment proposed for investors by the Colombo Port City Economic Commission Bill. They full well know the dysfunctions of the investment environment in Sri Lanka. The then Government was working on a bill on the same lines. There was discussion on placing the financial city within the jurisdiction of the English courts then.

It is not hypocritical for the Bar Association and other interveners to object to the proposal to establish an International Commercial Dispute Resolution Centre and to the associated legal workarounds. But it is wrong and self-serving. Members of the legal profession, more than anyone else, should know how dysfunctional the country’s legal system has become.

At the 47th Annual Convocation of the Bar Association, the Minister of Justice said that the average time to enforce a commercial contract in this country is 1,318 days (3.5 years). It is said to take one year to get a date for an appeal to be fixed for hearing on a criminal matter.

All of us who worked on improving Sri Lanka’s rank in the Ease of Doing Business Indicator know that the legal-system-related factors are a major factor in Sri Lanka being relegated to the back of the class. Poor performance in resolving insolvency and enforcing contracts are major contributors to Sri Lanka being ranked 99th out of 190 countries. On enforcing contracts, we are ranked 164th.

So, the previous Government was right when they considered placing contracts of investors in the Port City under English commercial courts. The experts who crafted the present bill were right in making arbitration by the International Commercial Dispute Resolution Centre mandatory and allowing for a fast-track engagement with the Sri Lankan courts as needed. Commercial arbitration is nothing new in Sri Lanka. To argue that it violates our Constitution is a little farfetched.

But of course, professional associations rarely allow logic and the national interest to come in the way of the financial and related interests of the members. The Sri Lankan legal system is one of the worst in the world, partly because the powerful private interests of the legal professionals are given priority over the interests of litigants and the country. It is not in their interest to admit how broken the system, they profit off, is. The Colombo Port City Economic Commission Bill is an indictment of that system. Lawyers, individually (as a prominent politician/President’s Counsel so vividly demonstrated) and collectively, are likely to oppose it.

The Port City bill is a workaround. It is needed because our systems are broken. President J.R. Jayewardene established the Greater Colombo Economic Commission (predecessor to the Board of Investment) as a workaround solution, by Act No. 4 of 1978 because our systems were a barrier to the attraction of needed foreign investment. We have the Katunayake and Biyagama zones and the various value-added manufacturing industries that are keeping our economy afloat, thanks to that workaround.

The tragedy is that 43 years later we are still doing workarounds. We need these stopgap measures, but we need to give the highest importance to fix all the systems that affect all our citizens, not just the foreign investors. Despite the specific mention of the doing business indicator in the Port City Commission Bill, the indicator is not done for enclaves but for the country as a whole. Improving the key systems across the country is what others are doing. India is now more than 30 places ahead of Sri Lanka, thanks to dedicated task forces. China is ranked 31st, more than 30 positions ahead of India and more than 60 ahead of Sri Lanka. I invite the readers to look at how well our competitor, Viet Nam, is doing.

If we do not improve the ease of doing business for all, we will be overtaken by Pakistan soon. They are taking concerted action to improve performance on the components and are now just nine places behind. Do the work around, but for God’s sake, focus on system improvements throughout. Define threshold levels in the Port City Bill itself when the workarounds can be discontinued, and we can celebrate living in a country where the legal system does not require bypass.

Rohan Samarajiva is founding Chair of LIRNEasia, an ICT policy and regulation think tank active across emerging Asia and the Pacific. He was CEO from 2004 to 2012. He is also an advisor to the Advocata Institute.

Interdependency, the framework for India-Sri Lanka relations

Originally appeared on The Daily FT

By Prof. Rohan Samarajiva

Governments on both sides have changed several times since work began 18 years ago on a comprehensive economic partnership agreement between Sri Lanka and India. One constant has been the failure to complete the agreement.

This is cause enough to step back and reassess strategy and tactics.

Is a legally-binding agreement necessary?

China’s investments and trading activities in Sri Lanka are growing rapidly, with no agreement in place. Perhaps this indicates that agreements are not necessary.

Because most economic actors in both India and Sri Lanka have a degree of autonomy from the state, companies will not simply invest as directed by political authorities to satisfy strategic objectives.

I recall the lack of enthusiasm on the part of India’s majority-State-owned IOC to take over the colonial-era oil tanks in Trincomalee in 2002, in the absence of a viable business plan. They obeyed their Government’s directions only when the tanks were bundled with a fuel-distribution business.

Private entities will take risks, but they would prefer reduced risks of administrative expropriation. What bilateral or other trade and investment agreements do is reduce risks flowing from state action.

Economic actors who are immersed in “deal culture” dislike legally binding trade and investment agreements. They prefer deals worked out through favorably disposed politicians and officials. Their opposition is not worded in this language, but is clothed in the rhetoric of national sovereignty.

In practice, the authorisations for employment of foreign professionals and for investment in the telecom and IT industries in Sri Lanka were GATS Plus, or more liberal than the legal commitments that had been made.

I pointed this out to a leading opponent of the IT sector commitments in the India-Sri Lanka agreement. His response was that unilateral liberalisation could be withdrawn, which was not the case with treaty-level bilateral agreements. The external investor or trader is thus exposed to risks of rule changes damaging to his business case. This can only be mitigated by partnering with a deal maker.

The deal maker gets fees and a share in the operating entity, in return for greasing palms. I recall a well-educated and connected Sri Lankan then residing in the US coming as part of a delegation to talk about a satellite telephony license when I served as Director-General of Telecommunication. As the group was leaving, he tells me quietly in Sinhala to mandate a local partner so he can get in the game. No licenses were given so the question of creating a legal requirement to pay fees and a share of earnings to the deal maker did not arise.

These rent-seekers must be marginalised in the national interest. But they draw their strength from the power of national-sovereignty rhetoric, especially in relation to India, the focus of atavistic fears going back to the depredations of Kalinga Magha in the 13th Century CE. The public and the politicians are persuaded more by these appeals to emotion and less by evidence-based claims about the benefits of trade and investment.

A new frame

What people fear is dependency. If the electric grid is connected to India, they fear it will be shut off or constricted. They see how Bhutan’s election was influenced by constrictions on fuel supplies and fear Sri Lanka’s internal decision making may be compromised because of dependence on India. India is 50 times the size of Sri Lanka. Dependency on India is feared.

These fears can be overcome by changing the frame to that of interdependency. India could have crippled the Bhutanese State if they stopped purchases of electricity, which constitutes 70% of Bhutan’s exports and makes up most of Government revenues. Yet, a halt in electricity purchases is unlikely because that would cause massive disruptions to the economies of West Bengal, Bihar, Odisha, and Jharkhand. Disruption of the relationship would cause damage to both sides. Keeping it going benefits both. This is interdependency.

The continued success of the Port of Colombo depends on its use for trans-shipment by India. If not for Indian volumes (over 70% of the total), Colombo would not be 25th largest container port in the world and would not be the 19th best-connected port according to UNCTAD. Especially before elections, Indian politicians talk up the need for a hub in South India to retain the trans-shipment payments now flowing to Colombo.

Recently, Prime Minister Modi announced a trans-shipment port in the Great Nicobar Island, which could damage Colombo’s position as a regional hub. If Indian containers are routed elsewhere, Colombo will soon lose its attractiveness to the shipping alliances. Sri Lankan exporters will lose direct and frequent sailings and the port would lose earnings from trans-shipment related services. India will have to invest massively in building up a new hub which may or may not have the proven efficiencies of Colombo. Definite loss for Sri Lanka; uncertain and costly outcome for India.

Addressing India’s concerns

India may be seeking to invest billions of dollars in a new port because they fear dependency on a foreign port with significant Chinese presence for vital freight movements. How can the India’s legitimate concerns be addressed?

One way is to allow India an equity stake in the Colombo Port. That was at the heart of the conversations with India about Sri Lankan ports since at least 2003, the latest manifestation being the tripartite agreement about Indian and Japanese investment in the East Container Terminal in the deep-draft South Harbour.

If this were completed as agreed, the incentives of India and Sri Lanka will be better aligned. In addition to enjoying the benefits of Colombo’s efficiencies and network economies, India would now also benefit as an equity investor. Security concerns would be assuaged.

India and Sri Lanka may also consider a bilateral agreement governing port services between the two countries. The 2003 report of the Joint Study Group on the India Sri Lanka Comprehensive Economic Partnership Agreement included negotiated language to this effect, wherein India would recognise the port of Colombo as a hub within the southern Indian maritime transportation system. The intention then was to include this as one element of the overall agreement covering trade in goods and services, in investment, and in cooperation and confidence building.

The two countries have failed to conclude a comprehensive agreement in 18 years. An interim solution would be narrow agreements wherever possible, one for maritime transportation, another for aviation, another for grid connectivity, and so on, each anchored on, and presented to stakeholders and the public in both countries framed in the language of, interdependency and win-win. In each case, concrete benefits will be gained, and confidence built. Objections based on fear of dependency and foreign stranglehold of key economic facilities may be refuted not just with arguments, but with ongoing experience of mutually-beneficial sectoral collaborations.

If a policy window opens for a comprehensive agreement, the opportunity can be taken. But even here, would it not be better to have ongoing “pilot projects” from which lessons can be learned? Pursuit of the comprehensive approach has been unproductive, so far. A different, incremental approach is worth trying.

Rohan Samarajiva is founding Chair of LIRNEasia, an ICT policy and regulation think tank active across emerging Asia and the Pacific. He was CEO from 2004 to 2012. He is also an advisor to the Advocata Institute.