with Commander Tsietsi Mokhele, Chief Executive Officer, South African Maritime Safety Authority (SAMSA)
2008 was a big year for yourself, as you took over as CEO of SAMSA. Back then, you stated that the maritime industry in South Africa received “inadequate attention” from the government. Already 2 years later however, we see speeches from the Minister of Transport Mr. Ndebele for example, stating how “seafarers are, in effect, the lubricant without which the engine of trade would simply grind to a halt.” It seems that there is some recognition today. Would you agree, and –from a broader perspective- what is your overall assessment of the situation today?
In 2008, the state of awareness at citizen, investor and public policy level was very low, which affected the private sector and the growth opportunities of our economy. In the following years, we have therefore spent significant efforts in 3 specific areas of interest. First, we worked toward raising the awareness of South Africans about the opportunities that the maritime sector has to offer. A second area of focus was to continue developing the excellence of the country. We had to enhance the capability and capacity of the country and have completed several studies in this regard, including the Maritime Skills Study. We looked into what would be needed to create a center of excellence from a capability point of view. A third and last focus area consisted of our efforts to influence both public policy and the different investment options available to national and international investors.
Before these analyses, South Africa never had a construct of what the maritime sector in the country constitutes. We therefore needed to develop a framework to identify the industries and streams that form the maritime sector, and sketch the profiles of each of these sectors. Our plan to enhance our capabilities has now penetrated the different subsectors, which includes clusters such as inland connectivity, the offshore oil and gas industry across the value chain, and so on. These are subsectors rather than industrial clusters. Out of these subsectors, the industry players can then form different clusters to drive any priority programs they have chosen to implement.
We also looked into the fishing sector, which is very important for the survival of many of South Africa’s different communities. We needed to look at turning this subsector more sustainable, capitalize its fleet, providing schooling, enhancing safety, and so on. Another area for enrichment has been marine tourism, for which we have looked at the cruise industry in particular. The Department of Tourism has conducted studies in this regard, which also looked into sports and recreation elements.
Having identified these different subsectors, we were able to identify the potential of each, seek common issues with policy and identify the levers to promote the maritime sector in South Africa. This initial framework has triggered parallel streams of work.
We have also created a second framework which cuts across all these different sectors. We looked at aspects such as manufacturing, logistics support, sustainability and so forth. This has brought us to a point where I can now be pleased to say that the maritime sector today is being discussed in the Presidency. We have presented our findings to the President and the Parliament and are busy drafting and redrafting our national legislation on issues such as incentives to make it easier for business to invest and make profits. We also looked at how we can create business models that would increase the impact of these investments.
South Africa today still faces issues of inequality, poverty and unemployment. We try to unlock different sector initiatives to find answers to these issues that the country needs to cope with. We then realized that the investments we were making into the upskilling of South African labor in these sectors were not optimal. The Maritime Skills Program has now been adopted by our Human Resource Development Council, which is chaired by the Deputy President of South Africa. This is now a priority skills program, for which we will soon be meeting with the different vice-chancellors of the universities. If you compare today to 2008, I think that –from an awareness point of view- we have moved to a readiness to attract and convert investment into real developments.
The South African skills shortage is surely an issue that you need to keep working on daily. What makes this an attractive sector for young people to join in the first place?
The maritime sector is a world on its own, is one of those sectors that has global appeal and is able to sustain jobs for a very long time. Maritime companies are generally highly diversified, which makes it possible for people to be active in the sector for a lifetime without constantly doing the same thing. What you learn in one area will be very useful in the other, which increases the transferability of capabilities across the sector.
To young South Africans in particular, I would say that “through participation in the maritime sector, you get to see the world.” Young people can find good jobs that are mostly dollar-denominated, sustainable, exciting and carrying a bright future. In September 2012, we will be having a maritime careers and jobs expo wherein we are exactly going to address this question.
A key aspect for the sector remains the number of ships that can be registered in the country. You already made the comparison 4 years back… in 1990 we had 50 vessels and 3000 fishing vessels registered in the country. By 2008, there was hardly 1 vessel in the register and only around 500 fishing vessels. What went wrong?
If you look at a country that lacks awareness about the importance of certain sectors, this is exactly what happens. South Africa had lost sight of the fact that 58% of our GDP comes from trade. If we would have realized in the 1990s that trade is the future of our country, we would have created an open and export-oriented economy. Instead, we kept on focusing on commodities. If we would have done things differently, the maritime sector would have done much better, because 98% of our trade is being carried on ships. The policy became uncompetitive and the instruments that served to implement the shipping policy became very blunt. We also stuck to a normal taxation regime on profits for example.
Secondly, our investment into skills went down. We closed some of the facilities that had to nurture the maritime skills of the country. Shipping as a sector of investment was generally not being promoted in South Africa. The logical consequence was that legislation was not being amended on time, there were no tax incentives, no competitive upskilling programs, and so on. We have now reversed this entire cycle. At present, we are investing heavily in taking young people to sea. SAMSA for example launched a national cadetship program last year, of which hundreds have already gone to sea. We are increasing the number of intakes at our maritime universities and will soon launch the National Maritime University of South Africa. On the policy side, we are also finalizing our shipping policy and are adjusting the taxation policy accordingly. We are recreating South Africa as a center of excellence when it comes to shipping.
Apart from tax-related changes, what room for other incentives do you see to attract more investment to the South African maritime sector?
Crewing and gaining access to skilled people is currently an expensive side of the maritime business in South Africa. As the State will now increasingly carry the burden of skills development, the pressure on the private owners has been lightened. Furthermore, we are trying to build a concentration of shipping services companies. You will not get many of the services that you require -such as financiers, insurers and so on- in the South African market. At the same time, we also work towards legislation that makes labor more competitive and flexible. Our industrial policy is also oriented towards a reduction of input costs which will decrease the cost of shipping services such as repairs. Minister of Trade and Industry Rob Davies can allude to the fact that we are growing bigger on the manufacturing and fabrication side. For the maritime sector, this mainly relates to ship repair services, rather than the shipbuilding sector itself. This sector is set to benefit from the Industrial Development Zone (IDZ) approach for example, which supports and enhances the availability of such service clusters. With all these aspects in place, we are enabling those shipping lines that are registered in South Africa to be competitive.
When Focus Reports met David Chin of the Singapore Maritime Foundation in 2010, he was proud that Singapore had managed to become a service and repair hub to the industry. Here in South Africa, Premier Helen Zille told us that the Western Cape would eventually be able to compete with hubs such as Singapore. Would you agree?
I would. When I started in 2008, the first thing I put forward in the mission statement as a commitment to the country and the industry, was to develop South Africa as an international maritime sector. The intention of this was to position South Africa as an international shipping services center. Taking tankers as an example, the potential is quite clear. Tankers leaving the Arabian seas have a very long voyage to do and pass around the Cape on their way to South America for example. One of points that our international maritime services centers will focus on, is turning South Africa into a major bunker point.
Another strength is South Africa’s connectivity by air. We have several flights coming in from Asia and Europe directly. Becoming an international maritime shipping services center requires a great sense of speed and efficiency of business. A key advantage in this sense is for example the fact that we have one of the most advanced banking sectors in the world. This is of great support to the companies that our IDZs aim to attract. The reason Singapore has become so competitive lies in special planning, more than the quality of the services alone. They have created spaces that provided them with centers of excellence within the country.
Here in South Africa, I am currently pushing for a reconceptualization of the Special Economic Zones. I have raised the question on why we have not included Cape Town and Durban. Richards Bay, Port Elisabeth, East London, etc. are all included, yet we leave out these two locations that are still major repair centers today. I truly believe that in the next 5 to 8 years, South Africa will be well positioned as an international maritime services center, because we have the traffic, the human capital and the systems. We are yet to implement better policies to increase the overall attractiveness of the sector, which is an area we are continuously working on.
Another area SAMSA has been progressing on within its extended mandate is to promote the use of technology. You have for example been working on long-range identification and tracking of ships (LRIT). How important was it to bring in this technology?
This was very important. Part of becoming a center of excellence implies that you have to play with the best at the cutting edge. Technology is a friend of development and we have invested heavily in the so-called Center for Seawatch and Response. This is our high-tech center that operates with satellites, radars, unmanned airborne vehicles, the LRIT, etc. We also have the Automatic Identification Systems, both satellite- and radar-based. We have basically weaved everything into one center of excellence in technology. The center has helped SAMSA to monitor shipping activity, traffic, environmental pollution, etc.
Last December, we have also just completed the creation of a marine highway in the Indian Ocean on the Eastern side of our country, largely aimed at carrying the oil traffic from the Arabian seas around the Mozambican channel. Just 2 weeks ago, I have been invited by the Mediterranean Basin government, both on the European and African side. They want to create a marine highway similar to ours, and wanted to pick up from the model we deployed. We are a role model as far as this is concerned. Our marine highway is already operational and will be handed over by the World Bank in December 2012. Because of the technological advancements at the Center for Seawatch and Response, South Africa will provide the regional coordination center to respond to any incident.
Another very important part of your efforts goes to combating pollution at sea. What makes SAMSA a champion in this area?
Looking at the history of pollution incidents, around 3 of the 10 main ones happened along the South African coast line. Our coast line carries 30% of the total world production of crude oil. This is over 5,000 tanker voyages per annum, in excess of 20 million tonnes. We know that if we do not become a center of excellence in oil pollution management, we would expose our country to a very serious risk. We do not only engage in policing and monitoring, as South Africa was the first country in the world to have a stand-by salvage tug positioned permanently along the coast line for preventative purposes.
Our efforts come at 3 levels. The first level is having the ability to manage the traffic and having orderly movement of traffic along the coast line. This heavily cuts out the chances of having any accidents at sea. Our coastline is highly visible and vessels can make contact with authorities at any time. If there is any problem, we are able to send our salvage tugs to bring the vessels and their crews to safety.
In a second instance, we see that the Central Energy Fund (CEF) has also created a center of oil pollution combating –the OPC SA. Third and last is another facility that the National Ports Authority have created, called the Emergency Response. With a fleet of almost 30 big tugs, they can get to any ship as fast as they can. These different levels of capabilities has turned us into one of the countries that have the capability to manage oil pollution. Marine environmental promotion is key, particularly as we have significant biodiversity that needs to be protected, for example for future pharmaceutical research.
If we combine all of these aspects, I would say that the state of our marine environment –for the kind of traffic we have- is in a very good condition. One of the big mandates of SAMSA remains to protect the marine environment.
It is a sector where cross-border activity seems inevitable. Through the Maritime Rescue Coordination Centre (MRCC), you already have certain agreements with countries such as Madagascar and Mozambique. How do you see this regional cooperation playing out, and do you still see particular challenges in this regard?
If you are part of a region with less wealthy neighbors, you will always have challenges. UNCLOS, the Universal Law of the Sea, is a beautiful instrument that not only gave obligations to coastal states, but also gave rights of development of exploitation and commercial benefits to these states. In developing countries however, it is easy to pick up on the obligations, but there is no one to remind you that you need to develop your maritime sector. This side is yours to act upon. What we do with our neighbors is enhancing the capabilities of the region to be able to respond to their obligations, using our infrastructure and financial resources.
For example, there is no country in our region that is compliant with LRIT legislation. Through the International Maritime Organization (IMO), we have offered our LRIT to be freely used by all countries in Africa. Ghana and Ethiopia have already joined in on this front, while Mozambique is making similar efforts. While we bring them into the LRIT, we do not use their data. Because of this, they do not see us as the big boys that come in to control their waters.
With regards to the aforementioned maritime highway, South Africa has also already been nominated to act as the regional coordination center. This is because we are the only ones with combating capability in terms of salvage tugs that can be sent out to sea to move ships to safety, and are the only ones to have significant ship building and repair facilities to serve as a refuge for ships that are in distress.
A last thing worth mentioning is that border issues generally involve the military. There is a forum of the chiefs of the navy in the Southern African community which has approached South Africa to do 2 things mainly: one is to deploy the anti-piracy capability on behalf of the SADC and the second is the request for South Africa to set up a Maritime Domain Awareness center. In this way, there is only one center that serves as the eyes and ears at sea on behalf of these different countries. This single mandate for deployment and common center for awareness has lowered the level of border disputes.
Speaking about the Navy, you obviously have a past there yourself before joining the NPA as well. How do you see these past experiences benefitting you in your current role at SAMSA?
My daughter is currently in grade 11 and was telling me yesterday about how she is wondering what to do later in life. She is passionate about several different paths, but thinks she should only have one. I told her that life is not about what course you take up at university, but rather about what you want to do with your life.
At some point, these things that look unconnected now are just dots, but one day, they form a constellation. You need to follow the pattern of your heart in your life. Maybe certain moves seem bad now, in hindsight they will make you a complete person.
Personally, I have not moved consciously to cover the different maritime subsectors in my career. There was a call by the country for me to be involved in the Navy back in the days. Somebody needed to create the new leadership in the Navy in 1993-1994, which was an assignment given to me as the joint chairperson for the establishment of the new navy. By 1996-1997, we came back from a long voyage which was even the first time that a naval vessel was allowed into the USA since 1976. Once back, I felt my job was done and I was once again ready for a new challenge.
The National Ports Authority at that time was in a state of near-collapse, losing 80% of its senior staff within 18 months while there was no skills development plan in place. The technology was all outdated, there were no women in the sector, etc. I was recruited by the CEO to come and deal with those matters and once they had been addressed, I was once again felt that my job was done.
When the challenge at SAMSA came up, I saw a strategic asset of the South African people that was highly underutilized. Our failure to position ourselves as a maritime economy –whereas we are a maritime country by location- was not something that would solve itself automatically. Instead, a link had to be built. While I would have never known the scope of this challenge beforehand, it has been a very interesting journey. It is my passion to work on the development that my country requires.
Doing so, you were even elected Business Man of the Year! What prevents you from becoming “bored” with the job though?
There is a trajectory that any country that wants to reposition itself needs to complete. During the struggle of liberation, leadership has been one thing that came to a fall. After having been spoilt to have a leader like President Nelson Mandela, we have sort of drifted into a state of thinking where we can sit on a course while the ship will sail itself. I think we have underinvested or underleveraged the asset of leadership in the country. The chaos that we sometimes see is the result of this lacking. When we look at investors that need to come into the sector, we see that they mainly seek credibility, integrity and sustained leadership. They do not have the time to analyze your sector and it is up to you to sell the sector to them.
This makes me believe that, despite my own personal achievements that may tempt me to move on and do other things, we have not yet positioned the sector well enough for one to call it a day. While one will never be done 100%, it is first and foremost important to ensure that the ship has turned. At the moment, I do not think we have reached this point yet. If I believe that by the time my mandate ends at the end of 2012, nothing needs to be moved or reshaped, I will say the job is done here. However, if there is still work to be done, jumping into a second term at SAMSA is a course that should be considered.
Would you like to add any final message on behalf of SAMSA?
Next year, SAMSA will celebrate its 15th birthday. One gift to South Africa would be that we can share the message that South Africa is good for business. South African maritime is open for business. It is cheap to do business here and the country can be used to obtain access to the African region by setting up regional offices here, using South Africa as a gateway to the continent. The entire African market is open to shipping because we do not yet have the infrastructure to trade via road and rail. If the world wants to obtain access to the roughly 1 billion people in this part of the world, it needs to be aware that South Africa will be a very good platform to do business from. As Premier Helen Zille said, I think we will succeed in repositioning very particular services in a very concrete manner. I am very passionate about the oil and gas sector in particular, as we have all the elements to become a major oil and gas services center. Once the investors worldwide become aware of at least thinking about or considering this opportunity in the coming year, we can use the subsequent period to deal with exact business cases of actual investments into the economy. What needs to happen in the coming year is to have a concerted campaign saying “Invest in South Africa!”