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Interview

Sobantu Tilayi – Acting CEO, South African Maritime Safety Authority (SAMSA)

15.03.2018 / Energyboardroom

Sobantu Tilayi, acting CEO of the South African Maritime Safety Authority (SAMSA), shares his insights into the mandate of SAMSA to safeguard lives at sea, the maritime environment and also promote the country’s maritime interests, the key achievements they have made in increasing SAMSA’s competitiveness and profile as a global maritime hub, and the importance of the maritime sector to South Africa’s national development.

Sobantu, with the nomination of new President Cyril Ramaphosa and the talk of a new dawn for South Africa, what role will SAMSA play within this new dawn?

“We are very pleased to have built significant international partnerships with key industry players, who are beginning to give us an undertaking as to how many people they can take per year, which drives our skills development programs.”

As an organization, we cannot extricate ourselves from our country’s fortunes or misfortunes. We are an integral part of South Africa’s maritime sector – and therefore its national development because the maritime sector has to carry the country’s aspirations, through the simple fact that we are far removed from our international trading partners.

South Africa is blessed with 3000 kilometers of coastline, eight ports and 250 miles of Exclusive Economic Zone (EEZ). It begs the question of what we can do with our blessings. But first and foremost, being a coastal state carries international obligations that must be fulfilled, namely the protection of lives at sea and also the environment. As a result of the costs associated with those obligations, coastal states are also allowed to derive economic benefit from their maritime assets.

This link between our maritime assets and the new dawn that is emerging needs to be explained to the 56 million South Africans. We see employment opportunities, economic activity and ultimately sources of sustainability for our country, whether in renewable energies, oil and gas, transportation, services or fishing. Our Maritime Industry Development Strategy was the initiative established around eight years ago to make sense of all of this. At that time, we had run our maritime industry so down that it was fully foreign-controlled, we had a declining Seafarer registry, depleted Ship Register and no domestic ships transporting our cargo.

To reposition South Africa as an international maritime center, we designed a long-term strategy while also identifying a few short-term goals to fulfil in the meantime. In doing so, we segmented the maritime industry into five sub-sectors: fishing, oil and gas, transport, manufacturing and tourism. This new dawn provides another milestone on this long journey for us to stop and assess how else we can add value to the country.

What would you highlight as the key achievements of this strategy to reposition South Africa as an international maritime center?

Taking a long-term perspective, for our maritime sector to grow, we need a ready supply of skills. This is why we participated in the Human Resource Development Council, which was headed ultimately by the current President in his previous capacity as Deputy President. We commissioned a report on Maritime Sector Skills, whose taskforce I chaired, to understand where the blockages were. A huge shortage of seafarers was identified so we decided to convert a research vessel into a training vessel called Agulhas. Through our efforts, we have produced in excess of 1,000 seafarers since the inception of this program in 2011. We are proud that the growth in our seafarers’ registry is now on an upward trajectory once again.

This is even more important when you consider the high level of unemployment in South Africa. We also identified cruise tourism as a niche with great growth potential because it can employ more people and the training requirements are less stringent than for seafarers. In 2017, we trained and placed in employment 99 people in this area and we expect to grow this to over 500 per year. The jobs are well-paid and this sector also brings in foreign earnings to the country, so we are happy with the progress here. Our intention is to market this resource further and we have a representative currently in the US right now at the Seatrade Cruise Global conference in Miami.

In the transportation sector, 300 million tonnes of imports and exports pass through our ports every year. More than half – 170 million tonnes – is dry bulk cargo: iron ore out of Saldanha Bay, manganese out of Port Elizabeth, coal out of Richards Bay and Durban, and so on. As it is the government who issues mining licenses to mining companies, we saw the opportunity to influence the terms of trade by encouraging these mining companies to use South African ships for transport. To do this, however, we realized that we needed to reform our legislative environment because our tax regimes were not competitive enough. We managed to advocate a complete tax exemption for South African Registered ships operating internationally. This allows us to push cargo owners – who are mining companies – to allocate more cargo towards South African ships without making the South African flagged ships uncompetitive, which is critical. During this process, we had compared ourselves to Singapore – as one of the best flags to benchmark against – and I am very proud to say that our taxation is no less efficient than Singapore’s now.

A challenge that remains relates to financing. Many banking institutions still do not trust the South African flag so international funders tend to be cautious when it comes to having their investments linked to us. This is despite the fact that we have strong legal, financial and judicial institutions, which should reassure investors that their investments here are more than adequately protected. This is still an issue we are grappling with but it is more a marketing issue than a regulatory one.

In the oil and gas sector, we were convinced that our geographical advantage as the halfway station between East and West could be better leveraged as we are around 21 to 22 days’ sailing from both East and West. By the time ships come around South Africa, they need some sort of resupplying or refuelling. This is why we decided to build an offshore bunkering station in Algoa Bay in Port Elizabeth in the Eastern Cape. We now have an operator already there and will shortly license a second one. Shipping activity in that area has increased and naturally, so has economic activity. We have been told that from April 2016 to April 2017, those operations pumped in no less than ZAR 1 billion into Port Elizabeth’s economy, highlighting the size of the ecosystem we have built there.

With our physical location, coupled with many enablers like transportation links, good infrastructure and robust banking and financial systems, we are able to compete head-to-head with other maritime centers globally. As we continue to interpret our opportunities, we hope to see real investment and derive economic benefit for South Africans. We now need to consolidate on all these gains and continue to drive the country’s maritime development.

With the oil and gas boom on the continent, South Africa has a number of ports and service centers able to service both East and West Africa. How does SAMSA balance the competition and cooperation between the eight ports and various industrial development zones?

We work quite closely with Transnet and in particular, Transnet National Ports Authority (TNPA), who operate on a principle of complementarity. They will, as best as they can, avoid ports competing with one another. We have a duty to ensure the equitable distribution of economic opportunities arising from our maritime potential. Fortunately for us, the various ports have something different to offer every would-be beneficiary or investor.

For instance, the Western Cape is closer to the West African oil and gas market, which is why the Saldanha Bay Industrial Development Zone (SBIDZ) was established to be a service hub for that market. In the south, Port Elizabeth has been targeted to become another oil and gas support center, as well as a shipping hub, because of the extensive base of manufacturing expertise and capabilities there through its various motor and Fast-Moving Consumer Goods (FMCG) manufacturing plants present there. While it is not as close to Johannesburg and the Gauteng region as Durban, the industrial heart of the country, it is less congested so that is also an advantage. On the east coast lie two of the busiest ports in the country, Richards Bay and Durban. Durban is generally fully developed while Transnet is looking for new drydock builders for Richards Bay in order to build another energy hub catering specifically to the East Coast.

It is a balancing act that the country has to manage but all the ports offer a different business case catering to different markets – and together, they help build a formidable value proposition for South Africa in general as a global maritime power. SAMSA participates in those planning discussions.

On that note, how strong is the international perception of South Africa as a maritime country?

I must highlight our uniqueness as a maritime nation. We are at the ‘wrong’ end of the continent and so no less than 15 days from the nearest possible source of help should disaster strike. At the same time, we have a very problematic, unshielded coastline. A slight weather disturbance in Antarctica picks up so much energy over the 4000 kilometers to Cape Town. On top of this, you have the warm Indian ocean coming into contact with the cold Atlantic ocean in the south, and both taken together means that there is a lot of energy hitting into the South African coastline. Our coastline is also very straight so very little energy is killed. This is the reason that we are known as the Cape of Storms.

In light of all this, as a country we have been forced to be very active in our investments into maritime safety and risk management. My job, first and foremost, is to manage maritime risk for the country. We have invested heavily in our early warning systems to always receive updated risk assessments as much as possible. We were the first country in the world to experiment with an emergency towing vessel now known as a salvage tug. All these are quite an expensive initiatives so we have had to be quite creative. We are the only country in this part of the world with a fully satellite surveillance system, which allows us to know exactly what is happening in our maritime domain, allowing us to cut back and rather target our investment on response capacity.

As a result of this expertise, we are able to contribute actively to dealing with some of the world’s most pressing maritime challenges. We participate in the Djibouti Code of Conduct regarding piracy in the Western Indian Ocean, and we are key actors in the International Maritime Organization’s search and rescue efforts. We are the only country in this part of the world able to combine aviation and maritime search and rescue. This is in fact one of our selling points as companies are guaranteed that their insurance premiums will not increase if they travel through South African waters.

An excellent indication of how we are perceived internationally regarding maritime matters is the fact that we have consistently remained as a member of the International Maritime Organization Council since 1999.

With this great track record in investing in maritime safety, what lessons do you believe SAMSA can share with other governmental maritime entities?

We are a very humble organization. We are honored that we do receive many foreign visitors interested in learning from the South African maritime experience.

From a technical perspective, we have seen some of the most intriguing marine casualties in the world. No matter what type of marine disaster you name, I can assure you that I have seen it – and we have managed it successfully. For instance, when the massive storm hit Durban last October, a total of 13 ships were affected, six of which ran aground. We almost had to close the port but we were able to think on our feet and deal with the solution. We really pride ourselves on this problem-solving ability and this originality in coming up with creative solutions to difficult problems. We generally try to share these experiences and lessons with international maritime organizations, but I do think we need to write more about our achievements.

We are also truly a rainbow nation. South Africans have grown up socialized to the same type of diversity you will find inside a ship environment. We have been able to manage these diversity issues quite well and I find that this strength is perhaps not as well-known as it should be, partly because we, as South Africans, also have a tendency to downplay our strengths.

What role do you see for industry in supporting South Africa’s maritime aspirations?

A very big role! I do lament the fact that we have no fewer than 50 operators in the country but only a handful is working with us. As we try to play our part in building the country’s maritime economy to boost growth and jobs, we hope to see industry play its part too, especially given the economic benefit they derive from their operations here.

We have consulted industry significantly in our strategy and we do try to accommodate them as much as possible. The fact is that companies also need to build sustainable operations of their own in the country, and we are extremely willing to help them in this respect as well.

We are very pleased to have built significant international partnerships with key industry players, who are beginning to give us an undertaking as to how many people they can take per year, which drives our skills development programs. In particular, we have a great partner in Mediterranean Shipping Company (MSC), with whom we collaborate on a robust manpower development initiative.

On a more personal level, having worked at SAMSA for a significant period in a number of roles, what do you love about your job?

I think I am a very driven person, and I am completely sold on the stunning potential of the sector. Even if I was not getting paid to do this, I would still be advocating strongly for the same cause.

Before I started working with SAMSA, I was in the maritime industry being regulated by SAMSA and to be honest, I used to have running battles with SAMSA. This is what motivated me to join SAMSA. The objective was to create a regulator that will not regulate the industry to its death. This is incredibly important. It is very easy to tell everyone to comply to this rule or that rule, but my personal belief is that the safest ports are those where no ships come in. The safest coastline is the coastline with no ships. But that is not how life works. For me, what is of paramount importance is striking the right balance between environmental sustainability and economic benefit. This is what drives me.

I am also fortunate to work with a great team of people, who fight for a common cause tireless and without complaint, despite the many challenges we face.

Ultimately, you cannot think about South Africa without thinking about the maritime. While we are strategically located at the halfway point between East and West, the fact remains that it is quicker to go from Singapore and China to Kenya on the East Coast, and from the US to the Gulf of Guinea on the West Coast. South Africa needs to stay relevant and competitive – and the only way to do that is to stay ahead of global developments. Over the next few years, I hope to see SAMSA become a highly specialized maritime authority that is systems-driven, and the go-to entity for government advice on maritime matters.

From a broader perspective, we have an important duty to play in driving growth and development on the continent. We are already consulted to provide extensive maritime advice and assistance to the rest of the continent. For instance, we chair the Association of African Maritime Administrations (AAMA), and we make our long-range identification tracking systems (LRIT) and training vessels available to the continent where needed. In addition, many of the continent’s people come to South Africa in search of economic opportunities. A difficulty we face is that we trade very little with other African countries but we carry an inordinate amount of burden when it comes to supporting them. Supporting the economic growth of the continent will also support South Africa’s economic growth and will improve all our fortunes. I would like to see SAMSA be at the forefront of African thinking in maritime development.

We are already consulted to provide assistance to the rest of the continent. We need to be at the forefront of African thinking in maritime development. This is the role that SAMSA can – and must – play.

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