ISSN: 1391 - 0531
Sunday, April 01, 2007
Vol. 41 - No 44
Financial Times  

Sri Lanka's case of the continental shelf

Local newspapers have reported that the Sri Lankan government has obtained the services of James Services Company Ltd of the United Kingdom to 'assist in oceanographic geophysical surveys in order to demarcate Sri Lanka's Continental shelf before presenting Sri Lanka's case to the United Nations Commission on the Continental Shelf. The total costs involved would not exceed US$ 5.2 million.' However, a retired Economic Affairs Officer of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) Dulip Jayawardene who was in charge of Marine Affairs from 1990 to 2003 has written that since there is a lack of transparency on the project from its inception, he questions as to whether James Services is a subsidiary of the parent company from Norway as contracted last year.

In this article, Jayawardene says:
The United Nations Convention on the Law of the Sea (UNCLOS) was ratified by Sri Lanka on July 19, 1994 after a signing on December 10, 1982 . The convention itself entered into force on November 16, 1994 after receiving 60 ratifications or accessions. In accordance to Article 76 titled "Definition of the Continental Shelf" states parties have the provision to extend its continental margin beyond the 200 nautical mile Exclusive Economic Zone (EEZ) if certain criteria are fulfilled.

The term "continental shelf" is used by geologists generally to mean that part of the continental margin which is between the shoreline and the shelf break or, where there is no noticeable slope, between the shoreline and the point where the depth of the superjacent water is approximately between 100 and 200 meters.

However the term used in Article 76 as a juridical term means the submerged prolongation of the land territory of the coastal State. Accordingly the coastal State may establish the foot and margin of the continental slope by meeting the requirements stated for thickness of sedimentary rocks and other criteria such as depth of waters and geomorphologic requirements.

Under the Final Act of the UNCLOS Conference contained in Annex 11, a Statement of Understanding Concerning a Specific Method to be used in Establishing the Outer Limits of the Continental Margin was agreed to and resolved. This recognizes that States not withstanding the provisions of Article 76 may establish the outer edge of the continental margin by straight lines not exceeding 60 nautical miles in length connecting fixed points at each of which the sediment thickness is not less than 1 kilometre. This method may be utilized by a neighbouring State for delineating its outer edge of its continental margin on a common geological feature. It is specifically related to the establishment of the outer edge of the continental margin of the States in the southern part of the Bay of Bengal . In this regard it is evident that Sri Lanka will have to finally negotiate with India on this continental boundary resolution.

The Commission on the Limits of the Continental Shelf was established under Annex 11 of UNCLOS after it entered into force in 1994. The Commission initially informed member States to submit its technical data within a period of 10 years after UNCLOS entered into force. However the Conference of State Parties (COP) which meets regularly in New York to examine the progress of the Commission decided that the 10 year period should commence from May 1999 after the adoption of the Scientific and Technical Guidelines i.e. 2009. It was also decided that the time for making submission would be further extended beyond the 10 year period where a State Party such as Sri Lanka was unable to do so for technical reasons.

Delimitation of the Continental Margin Project (DECOM)
On 1 July 1999, a Joint Cabinet Paper was submitted by the Minister of Foreign Affairs and the Minister of Fisheries and Aquatic Resources Development requesting approval for two reasons. The first was to seek assistance of the Commission on the Limits o the Continental Shelf for scientific and technical advice to compiling data including the sediment thickness and on the limits of the continental shelf. The second was for mobilizing necessary local funds as well as to negotiate and arrange for foreign funds and technical assistance to complete this task.

Para 7 of the Cabinet Paper said, "In order to present Sri Lanka's claims for extended jurisdiction Sri Lanka has time only till November 2004." However a state will not lose its claim on extended jurisdiction and there is no time bar. In fact only very few countries namely the Russian Federation, Brazil, Australia, New Zealand, Ireland and Norway have made preliminary submissions up to mid-2007. What was the hurry for Sri Lanka, a developing country without any experience in technical evaluation of off shore sediment thickness rushing into this DECOM Project? Perhaps the answers could be ascertained from the following facts.

A contract was signed on June 11, 2001 between the National Aquatic Resources Agency (NARA) Geological Survey and Mines Bureau (GSMB) and a Norwegian Company called Ocean Geo Consultants. This company was assigned to formulate a project proposal for the delimitation of the Continental Shelf of Sri Lanka. The Director of this Norwegian company is a Sri Lankan naturalized in Norway. There are no Board resolutions either at GSMB or NARA on the entry into this agreement or approvals from the relevant Ministries or the Cabinet. It is also revealed that a sum of US$ 117,000 was paid to the Director of the company by NORAD through the Norwegian Embassy in Colombo without reference to External Resources. The Sri Lankan naturalized in Norway charged a fee of US$ 117,000 as an honorarium! The original agreement signed by the Director General NARA and a GSMB Board Member from the General Treasury is not available for public scrutiny. It is also agreed that Ocean Geo resources will act as consultants to the DECOM Project.

Again on September 18, 2001, a Joint Cabinet Paper was submitted by the Minister of Foreign Affairs and the Minister of Fisheries and Aquatic Resources Development and approval was sought (1) for approval of the total project amounting to approximately Rs.557 million (US$ 6.18 million) and (2) for approval of a budgetary allocation of approximately Rs.84 million (the local counterpart funding component) for the three years from 2002 to 2004 on the basis of Rs.28 million each year.(3) to establish a High Level Task Force as outlined in the paper.

Accordingly there are some critical issues I would like to highlight on this project. The GSMB Director is reported to have visited Oceanographic Institutions in the Russian Federation and the US for the purpose of collecting valuable scientific and technical data. There is no record as to who approved these visits and how the travel and other costs were made.

However a Board Paper presented by him dated 20 May 2005 had stated that the GSMB has been identified as the implementing agency for the DECOM project. The GSMB Director is not geophysicist nor a sedimentary geologist or a petroleum geologist and the only qualification he had and supposedly has now is to be on board a deep sea-drilling vessel for a period of 42 days! However the Cabinet paper under reference stated that nearly 65% of the relevant data was collected on these visits. It is questionable as to whether the GSMB Director had the technical knowledge and experience to evaluate such data.

The Cabinet Paper also refers to the Norwegian consultant Company, Ocean Geo Consultants which was selected to do the desk study and Project formulation. The cost of the study, US$ 117,000 was not included in the Cabinet Paper. It is interesting to learn whether this Project was advertised and how this Norwegian company was selected. It is also revealed that the Agreement with the Norwegian company was signed on 11 June 2001 before the presentation of the Cabinet Paper on 6 September 2001.

The Cabinet Paper contained a cost breakdown of the DECOM Project prepared by the Norwegian company that was also approved without any local scrutiny. It is also revealed that Norway decided to fund the foreign component of this Project of US$ 6.18 million.
The total cost of the Project was as follows:

-Foreign component of US$ 6.18 million for a three-year duration commencing in 2002
-Local component of Rs. 85 million for three and a half year duration.
The DECOM Project is headed by the former Director GSMB whose salary is US$ 1,500. According to the qualifications stipulated even by Ocean Geo Services, the present Director is not qualified to fill the post. Also for some strange reason this post was not advertised so that the other qualified scientists from NARA and other institutions could apply.
The Ceylon Petroleum Corporation at that time had qualified scientists such as geophysicists to fill this post.
I shall now examine the detailed budget of this project as approved by the Cabinet on figures submitted by Ocean Geo Services of Norway.

The acquisition of 2D seismic data (6300 kms) was estimated at US$ 3,720,000. The present contract awarded to GEMS of UK will not exceed US $ 5.2 million. It is suspicious as to why an exact figure could not be given if there were other offers. A down payment of 15% has to be made before mobilization of vessel and crew for the 2D seismic survey. The total length of seismic lines is not given. Who were the other tenderers for the Project?

It has also been reported that another company called CGS was awarded a contract for 2D seismic surveys on 25 January 2006 but never materialized. The explanation given for the termination of the award was that it was not signed. However it is also reported that the vessel hired from Singapore for the offshore survey had some Russians aboard who lost their lives due to alcohol poisoning. The truth is that CGS is a Norwegian Company registered under the Oslo stock exchange and had chartered a state of the art seismic vessel, Mezen, from JSC Large of Russia.

It is also interesting to know who the Chairman and members of the Technical Evaluation Committee were for the Cabinet appointed Procurement Board. Did they have any background on applied off shore geophysics or were they only academics? There are also contracts for US$ 390,000 for Data Processing as well as for consultants for a total of US $ 1,535,000. The consultant selected by Norway for the DECOM is the naturalized Sri Lankan who was earlier paid US $ 117000 for the formulation of the DECOM Project. It is interesting to know whether this consultant is still with DECOM and draws a major portion of the consultancy fees.

There is also provision of US$ 35,000 for the training of two local geophysicists in interpretation of 2D and 3D seismic data as well as refraction data. Where are these geophysicists now if the training was completed or was this training initiated at all and who was the trainer? Further there is also provision of US $ 80,000 for the purchase of data. What data was or is to be purchased? No clarification has been made. A sum of US$ 315,000 is provided for computer hardware and software. It is best to examine what has been installed in the DECOM Project Office located at NARA. Also a sum of US $ 105,000 has been allocated for Special Studies. Who was competent to evaluate these special studies and were these studies carried out or are being contemplated?

It has been stated that the Cabinet has accepted all costs given in the Project formulated by the naturalized Sri Lankan, a close friend of the Director DECOM without any evaluation by a local Committee. It is again proved that the DECOM has no transparency and was supposed to have commenced in 2004 after the present director left the GSMB. It is not known whether the accounts of DECOM were subject to audit as any other government entity and whether these accounts are available for public scrutiny. Since the project is to terminate in 2007 it is suggested that a complete audit be carried out and COPE may be requested to initiate action to determine whether there were any financial irregularities.

It is strange that the Director of the DECOM Project when holding the post of Director GSMB had designated the GSMB as the implementing agency and now switches to NARA. Was this project personal to one individual or was the Cabinet of Ministers taken for a good ride by some unscrupulous officials who masqueraded as so called experts in areas where they were least competent? Why is the Foreign Ministry now silent on this project, as only the Ministry of Fisheries and Aquatic Resources has submitted the recent Cabinet paper? Who is to bear the cost escalations?

In conclusion I would like to point out to the government that there is a provision under clause 4 of Annex 1 of the Rules of Procedure of the Commission on the Limits of the Continental Shelf (CLCS) for joint submissions from adjacent coastal states by joint surveys and bilateral discussions.

Sri Lanka should initiate such action with India in the continental boundary delimitation in the southern Bay of Bengal. An example of such bilateral and multilateral cooperation is indicated in the recent joint submissions made to CLCS by France, Ireland, Spain and the United Kingdom covering the Celtic Sea and the Bay of Biscay.

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