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Singe entreprenuer, the difficult years and the Russian trade

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New Dilmah factory built at 111, Negombo Road, Peliyagoda, Colombo

(Excerpted from the Merrill J. Fernando autobiography)

The early 1970s were difficult years for all businessmen in the country. The changes on the political front and the progressive policy of Ceylonisation resulted in forcing the foreign company owner out, but, simultaneously, created doubt in the minds of the potential local investor/entrepreneur. The Marxist doctrine which underpinned State economic policy and attitude did little to encourage the spirit of private entrepreneurship, unless it was for a few individuals who, for various reasons, found favour with the Government.

The exit of expatriate business families such as the Joneses did enable politically-unaffiliated locals such as me, to get a toehold in the tea export business. Given my strongly-held views on the tea export trade, particularly the British domination of the industry, which was highly detrimental to the interests of the producer with its sublimation of the real value potential of the authenticity of Pure Ceylon Tea, I would certainly have eventually set out on my own. The opportunity may not have come so early though, if not for the decidedly ‘foreigner unfriendly’ stance of the first Bandaranaike Government.

In 1974 I launched Merrill J. Fernando Exports Ltd., of which I was the sole owner. I believe this was a turning point in my business career as a tea exporter, for I was able to build on and consolidate on the back of the contacts I had made and the connections that I had established, in most countries of the tea-drinking world. The fact that the company bore my name was later a huge advantage that I did not foresee when I started marketing ‘Dilmah’ as a highly-personalized family brand.

The latter eventually became its unique selling point. Whilst unhesitatingly conceding the element of good fortune divine intervention, in my view that is inherent in every success story, there was always my readiness to grasp opportunities as they presented themselves, in spite of the ever-present risk element.

I became the fourth largest exporter in the country when, in 1974, Merrill J. Fernando Co. Ltd. exported 24 million pounds of tea. It gave me business satisfaction as I was competing with the giants in the country, but exporting bulk tea to blenders and packers abroad never gave me the sense of achievement I was looking for. It was not a challenge as such an enterprise does not require vison or real skill. One had only to be competitive. The entire process was concerned only with generating volume, which had nothing to do with creating real value. But my long involvement in the bulk tea trade gave me knowledge and experience of the trade, and the trading disciplines, which served me well later when I started marketing my own brand.

My contacts in the USSR began playing a very significant role in my business and the subsequent development of the ‘Dilmah’ brand. Before the dissolution of the USSR, I would visit Moscow at least four or five times a year, mainly in connection with the supply of bulk tea. Grigory Pipinov, who became my friend when he was Deputy Russian Trade Commissioner in Sri Lanka, was of great help to me.

During his stint in Sri Lanka, he and his wife Lilian were frequent visitors to my home. He was also a great cook and would spend much time and effort organizing his frequent barbecue parties, for which he bought the beef from a particular butcher in Borella, and marinated for hours in my kitchen! The level of culinary perfection he required, in his view, could be achieved only by himself.

On all my visits to the USSR, I would be met at the airport by two or three officials and conducted to the National Hotel, the only equivalent then to a five-star hotel in Moscow. It had been built in 1903, during Czarist times, and was located close to both the Red Square and the Kremlin. My meetings were mostly with Grigori Pipinov and Bathov, Chairman of Sojuzplodoimport (Sojuz). The latter was also an extremely nice man and I developed very good relationships with the two, and all of the others that I dealt with. I gained their confidence as, in all my dealings with them, I was absolutely straightforward and they soon they realised that my agenda was what was on the table.

The tea trade in Russia was controlled by the State-owned Sojuz, a Moscow-based entity established in 1966 for the import of various food items in to Russia, including coffee and cocoa. It also owned a couple of premium vodka brands, such as Stolichnaya and Moskovskaya. Despite the subsequent breakup of the Soviet Union and the privatization of many previously State-controlled trade arms, control of Sojuz was retained by the State.

Whilst it was operating under State control, Sojuz imports of tea amounted to about USD 1.5 billion in value, annually. India accounted for about 60% of it, in volume. The balance was made up by China, Indonesia, Vietnam, Sri Lanka, and Bangladesh, collectively. Up to about 1988, average annual imports by the bloc amounted to about 135 million kilos. In the years 1989-1991, the volume reached 200 million kilos and in 1992, increased further to 260 million kilos.

Till then, all the tea imported to the CIS bloc (Confederation of Independent States comprising 11 countries initially, increasing to 12 with the addition of Georgia in 1993), was processed in 16 tea packaging factories spread out across the bloc, and distributed to retail shops at fixed prices, under an agreement with the Ministry of Food and Industry and the Ministry of Internal Trade. The entire process, from importation of bulk to the cup of the consumer, was controlled by the State.

Tea and Perestroika

In 1988, when the Soviet Union collapsed, Russia wanted to import 20,000 MT per month. I agreed to give my buyers 500 MT and then gradually increase it to 1,000 MT. For me, it was a golden opportunity. Pipinov indicated to me that they were considering purchasing Dilmah tea exclusively, in 250 gm and 500 gm packs. I was invited by him to travel to Russia, to meet his Chairman, Bathov, and within a week I was in Moscow.

They accepted whatever price I quoted to them and, in order to maintain the trust in the relationship, I always ensured that my prices stayed reasonable in the context of the prevailing market. I believe that they were fully aware of this. Between 1988 and 2002, I used to ship an average of 100 x 40 ft. containers per month of bulk tea to Russia. Initially, whilst the dealings were directly with the Russian Government, trading conditions and commercial interactions were stable and reliable.

I shipped tea to various ports in the USSR. However, with the dissolution of the Soviet Republic and the consequent muscling in of the Russian Mafia in to the trade, the business became fraught with difficulties and physically dangerous to other participants.

When I first started supplying large volumes against the Sojuz orders, as a result of my heavy buying, the Colombo Auction prices shot up by about Rs. 15 per kilo and I had to absorb substantial losses on my first order. I had indicated to Bathov and Pipinov that I would be quoting a very moderate price on the first order, but that I would have to adjust it thereafter, as I knew for a certainty that the auction price would increase sharply. That is exactly what happened.

On my next trip to Moscow, when Bathov asked me about my losses resulting from the tea market upturn, I told him that irrespective of the bottom line, I would maintain the agreed quality of service. He asked me for my new price for the second order adjusted by me to cover my previous loss and actually insisted that I increase it. I made a further small adjustment, but still kept it at a reasonable level. The fact that I did not try to exploit their urgent need for tea to my advantage established trust between us.

The new contracts enabled me to recover the losses I made on the earlier orders and start on the road to profit. I made certain that, irrespective of Colombo Tea Auction price fluctuations, I delivered consistent quality and freshness. This was the business which, for a considerable period of time, made ‘Dilmah’ a household name in Russia and also paved the way for its subsequent successes in other countries.

This importance of establishing one’s credentials with the buyer with the very first order is an invaluable first principle, which I learned for myself when, during my time as a trainee tea taster, I did a little extra business by supplying shops in Negombo with tea. I used to impress on my people in the company, from the very inception, that the tea export trade is a business of frequently-fluctuating fortunes. The latter is directly tied to auction price movement and the first principle is, irrespective of the auction price, to maintain consistent quality. If you supply lower quality to maintain profit, the loss of the buyer is a guaranteed consequence. If you stay the course with integrity, you will eventually prosper.

I entered the Russian trade when the socialist bloc was one nation and, over the years, watched its fragmentation even as I continued to ply my trade with them. One immediate result of the break-up was the sudden increase in tea import volumes, surging from around 135 million kg in 1988 to 260 million kg by 1992. At the time of the dissolution, only the Republic of Russia had the infrastructure for the import and export trade. Therefore, the release of tight state controls and the sudden exposure to a free market environment, presented opportunities to aspiring private sector entrepreneurs to move into an area which, previously, had no direct dealings with local traders.

Our marketing blunders and a lost opportunity

Our traders foolishly misinterpreted Russian market preferences, assuming that it would be an ideal destination for cheap tea, which could be sold with large margins. In fact, this misjudgment of the CIS market as it later came to be called even led to requests by our traders for a revision of minimum product standards in exports to Russia. What the newcomers to the Russian trade failed to realize was that even under the previous State monopoly, Russia had been purchasing largely quality tea and that despite the liberalization, the market’s expectations of Ceylon Tea did not change. As a result, eventually, the fly-by-night operators were forced to drop out, whilst the reputed, established brands stayed the course.

The Russian market could be roughly segmented in to four. At the bottom there was space for cheap blends. Then there were the slightly superior blends which came largely from the UK and, above that, Dilmah, noted for its consistent quality. At the top level were a few specialty products from well-known UK brands. A matter of interest was that a few of the multinational and European brands of tea, whilst being expensive, were also of consistent good quality. Those brands were a serious threat to Ceylon Tea, on account of their quicker delivery capability from destinations close to Russian ports, and, also because of their reliable quality.



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Challenges to addressing allegations during Sri Lanka’s armed conflict

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A handout picture of President Mahinda Rajapaksa browsing through the LLRC report. (File photo)

A political commentator has attributed the UK sanctions against four individuals, three of whom were top ranking Army and Navy Officers associated with Sri Lanka’s armed conflict, to the failure of successive governments to address human rights allegations, which he describes as a self-inflicted crisis. The reason for such international action is the consistent failure of governments to conduct independent and credible inquiries into allegations of war crimes; no ‘effective investigative mechanism’ has been established to examine the conduct of either the Sri Lankan military or the LTTE.

He has not elaborated on what constitutes an “effective investigative mechanism. He has an obligation and responsibility to present the framework of such a mechanism. The hard reality however is that no country, not even South Africa, has crafted an effective investigative mechanism to address post conflict issues.

INVESTIGATIVE MECHANISMS

The hallmark of a credible investigative mechanism should be unravelling the TRUTH. No country has ventured to propose how such a Mechanism should be structured and what its mandate should be. Furthermore, despite the fact that no country has succeeded in setting up a credible truth-seeking mechanism, the incumbent government continues to be committed to explore “the contours of a strong truth and reconciliation framework” undaunted by the failed experiences of others, the most prominent being South Africa’s Truth and Reconciliation Commission.

South Africa’s Truth and Reconciliation Commission is often cited as the gold standard for post conflict Mechanisms. Consequently, most titles incorporate the word “Truth” notwithstanding the fact that establishing the “Truth” was a failure not only in South Africa but also in most countries that attempted such exercises.

Citing the South African experience, Prof. G. L. Peiris states: “pride of place was given to sincere truth-telling which would overcome hatred and the primordial instinct for revenge. The vehicle for this was amnesty…… Despite the personal intervention of Mandela, former State President P. W. Botha was adamant in his refusal to appear before the Commission, which he deemed as ‘a fierce unforgiving assault’ on Afrikaaners” (The Island, 01 April, 2025). In the case of Sri Lanka too, disclosures to find the “Truth” would be all about the other party to the conflict, thus making Truth seeking an accusatory process, instead of a commitment to finding the Truth. The reluctance to engage in frank disclosure is compounded by the fear of recrimination by those affected by the Truth.

Continuing Prof. Peiris cites experiences in other countries. “Argentina, the power to grant amnesty was withheld from the Commission. In Columbia, disclosure resulted not in total exoneration, but in mitigating sentences. In Chile, prosecutions were feasible only after a prolonged interval since the dismantling of Augusta Pinochet’s dictatorship ….” (Ibid).

The mechanisms adopted by the countries cited above reflect their own social and cultural values. Therefore, Sri Lanka too has to craft mechanisms in keeping with its own civilisational values of restorative and not retributive justice for true reconciliation, as declared by President J. R, Jayewardene in San Francisco as to what the global attitude should be towards Japan at the conclusion of World War II. Since the several Presidential Commissions appointed under governments already embody records of alleged violations committed, the information in these commission reports should be the foundation of the archival records on which the edifice of reconciliation should be built.

ESTABLISHING DUE CONTEXT

The suggestion that an independent and credible inquiry be conducted into allegations of war crimes reflects a skewed understanding of the actual context in which the armed conflict in Sri Lanka occurred. Even the UNHRC has acknowledged that the provisions of “Article 3 common to the four Geneva Conventions relating to conflicts not of an international character is applicable to the situation in Sri Lanka, as stated in para. 182 of the OISL Report by the UNHRC Office. Therefore, the correct context is International Humanitarian Law with appropriate derogations of Human Rights law during an officially declared Emergency as per the ICCPR.; a fact acknowledged in the OISL report.

Consequently, the armed conflict has to conform to provisions of Additional Protocol II of 1977, because “This Protocol, which develops and supplements Article 3 common to the Geneva Conventions is the due context. There is no provision for “alleged war crimes” in the Additional Protocol. Although Sri Lanka has not formally ratified Additional Protocol II, the Protocol is today accepted by the Community of Nations as Customary Law. On the other hand, “war crimes” are listed in the Rome Statute; a Statute that Sri Lanka has NOT ratified and not recognized as part of Customary Law.

Therefore, any “investigative mechanism” has to be conducted within the context cited above, which is Additional Protocol II of 1977.

SRI LANKAN EXPERIENCE

On the other hand, why would there be a need for Sri Lanka to engage in an independent and credible inquiry into allegations, considering the following comment in Paragraph 9.4 and other Paragraphs of the Lessons Learnt and Reconciliation Commission (LLRC)?

“In evaluating the Sri Lankan experience in the context of allegations of violations of IHL (International Humanitarian Law), the Commission is satisfied that the military strategy that was adopted to secure the LTTE held areas was one that was carefully conceived in which the protection of the civilian population was given the highest priority”

9.7 “Having reached the above conclusion, it is also incumbent on the Commission to consider the question, while there is no deliberate targeting of civilians by the Security Forces, whether the action of the Security Forces of returning fire into the NFZs was excessive in the context of the Principle of Proportionality…” (Ibid)

The single most significant factor that contributed to violations was the taking of Civilians in the N Fire Zone hostage (NFZ) by the LTTE. This deliberate act where distinction between civilian and combatant was deliberately abandoned, exposed and compromised the security of the Civilians. The consequences of this single act prevent addressing whether military responses were proportionate or excessive, or whether the impact of firing at make-shift hospitals were deliberate or not, and whether limiting humanitarian aid was intentional or not. These issues are recorded and addressed in the Presidential Commission Reports such as LLRC and Paranagama. This material should be treated as archival material on which to build an effective framework to foster reconciliation.

UK SANCTIONS

Sanctions imposed by the UK government as part of an election pledge for Human Rights violations during the armed conflict is a direct act of intervention according to Article 3 of the Additional Protocol of 1977 that is the acknowledged context in which actions should be judged.

Article 3 Non-intervention states:

1 “Nothing in the Protocol shall be invoked for the purpose of affecting the sovereignty of a State or the responsibility of the government by all legislative means, to maintain or re-establish law and order in the State or to defend the national unity and territorial integrity of the State”.

2 “Nothing in the Protocol shall be invoked as a justification for intervening directly or indirectly, for any reason whatsoever, in the armed conflict or in the internal or external affairs of the High Contracting Party in the territory on which the conflict occurs”.

Targeting specific individuals associated with the armed conflict in Sri Lanka is a direct assault of intervention in the internal affairs of Sri Lanka. The UK government should be ashamed for resorting to violating International Law for the sake of fulfilling an election pledge. If Sri Lanka had issued strictures on the UK government for not taking action against any military officers responsible for the Bloody Sunday massacre where 26 unarmed civilians participating in a protest march were shot in broad daylight, Sri Lanka would, in fact be intervening in UK’s internal affairs.

CONCLUSION

The UK’s action reflects the common practice of making election pledges to garner targeted votes of ethnic diasporas. The influence of ethnic diasporas affecting the conduct of mainstream politics is becoming increasingly visible, the most recent being the Tamil Genocide Education Week Act of Ontario that was dismissed by the Supreme Court of Canada on grounds the Provincial Legislations have no jurisdiction over Federal and International Laws.

However, what should not be overlooked is that the armed conflict occurred under provisions of common Article 3 of the Geneva Conventions. This Article is developed and supplemented by Additional Protocol II of 1977. Therefore, since all Geneva Conventions are recognised as Customary Law, so should the Additional Protocol II be, because it is a development of common Article 3.

Imposing sanctions under provisions of Additional Protocol II amounts to Intervention in internal affairs of a State as stated in Article 3 of the Protocol; II cited above. Such interventions are prohibited under provisions of international law.

The need to revive independent and credible inquiries after the lapse of 16 years is unrealistic because those who were perpetrators and victims alike cannot be identified and/or located. Furthermore, the cost of disclosure because of the possibility of retribution would compromise their security. A realistic approach is to use the material recorded in the Presidential Commission Reports and treat them as archival records and use the lessons learnt from them to forge a workable framework that would foster unity and reconciliation with the survivors in all communities This is not to live in the past but to live in the here and now – the present, which incidentally, is the bedrock of Sri Lanka’s civilisational values.

by Neville Ladduwahetty

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The Silent Invasion: Unchecked spread of oil palm in Sri Lanka

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Invasive fast growing palm trees in the Kalu Ganga basin. Pictures courtesy Rajika Gamage

Sri Lanka’s agricultural landscape is witnessing a silent yet profound transformation with the rapid expansion of oil palm plantations. Once introduced as a commercial crop, the oil palm (Elaeis guineensis) is now at the center of a heated debate, with environmentalists and scientists warning of its devastating ecological consequences.

Speaking to The Island research scientist Rajika Gamage, said: “The spread of oil palm in Sri Lanka is not just a concern for biodiversity, but also for water resources, soil stability, and even local economies that rely on traditional crops.”

A Brief History of Oil Palm Cultivation

Oil palm, originally from West and Central Africa, was first cultivated for commercial purposes in Java in 1948 by Dutch colonists. It reached Malaysia and Indonesia by 1910, where its lucrative potential drove large-scale plantations.

According to Gamage, in Sri Lanka, the first significant oil palm plantation was established in 1968 at Nakiyadeniya Estate by European planters, initially covering a mere 0.5 hectares. Today, oil palm cultivation is predominantly concentrated in Galle, Matara, and Kalutara districts, with smaller plantations in Colombo, Rathnapura, and Kegalle.

Over the decades, he says the commercial viability of oil palm has prompted its expansion, often at the cost of native forests and traditional agricultural lands. Government incentives and private investments have further accelerated the spread of plantations, despite growing concerns over their environmental and social impacts.

Economic Boon or Environmental Curse?

Supporters of oil palm industry argue that it is the most efficient crop for vegetable oil production, yielding more oil per hectare than any other alternative. Sri Lanka currently imports a significant amount of palm oil, and expanding local production is seen as a way to reduce dependence on imports and boost local industries. However, Gamage highlights the hidden costs: “Oil palm plantations deplete water sources, contribute to soil erosion, and threaten native flora and fauna. These are long-term damages that far outweigh the short-term economic benefits.”

One of the primary environmental concerns is the aggressive water consumption of oil palm, which leads to the depletion of underground aquifers. This is particularly evident in areas such as Kalu River and Kelani River wetlands, where native ecosystems are being severely affected. Additionally, soil degradation caused by extensive monoculture farming results in loss of fertility and increased vulnerability to landslides in hilly regions.

Furthermore, studies show that oil palm plantations disrupt the natural habitats of endemic species. “Unlike rubber and coconut, oil palm does not support Sri Lanka’s rich biodiversity. It alters the soil composition and prevents the regeneration of native plant species,” Gamage explains. The loss of forest cover also exacerbates human-wildlife conflicts, as displaced animals venture into human settlements in search of food and shelter.

Rajika Gamage

A Threat to Indigenous Agriculture and Culture

Beyond environmental concerns, oil palm is also threatening traditional crops like kitul (Caryota urens) and palmyrah (Borassus flabellifer), both of which hold economic and cultural significance. “These native palms have sustained rural livelihoods for centuries,” says Gamage. “Their gradual replacement by oil palm could lead to economic instability for small-scale farmers.”

Kitul tapping, an age-old tradition in Sri Lanka, provides a source of income for thousands of families, particularly in rural areas. The syrup extracted from kitul is used in local cuisine and traditional medicine. Similarly, palmyrah has deep roots in Sri Lankan culture, particularly in the Northern and Eastern provinces, where its products contribute to food security and local industries.

The rise of oil palm plantations has led to the clearing of lands that once supported the traditional crops. With large-scale commercial investments driving oil palm expansion, small-scale farmers are finding it increasingly difficult to sustain their livelihoods. Gamage warns, “If we allow oil palm to replace our native palms, we risk losing not just biodiversity, but also a vital part of our cultural heritage.”

The Global Perspective: Lessons from Other Nations

Sri Lanka is not the first country to grapple with the consequences of oil palm expansion. Malaysia and Indonesia, the world’s leading producers of palm oil, have faced severe deforestation, biodiversity loss, and socio-economic conflicts due to unchecked plantation growth.

In Indonesia, for example, vast tracts of rainforest have been cleared for palm oil production, leading to habitat destruction for endangered species such as orangutans and Sumatran tigers. Additionally, indigenous communities have been displaced, sparking legal battles over land rights.

Malaysia has attempted to address some of these issues by introducing sustainability certifications, such as the Malaysian Sustainable Palm Oil (MSPO) standard. However, implementation challenges remain, and deforestation continues at an alarming rate.

Sri Lanka can learn valuable lessons from these experiences. Implementing strict land-use policies, promoting agroforestry practices, and ensuring transparency in plantation expansion are crucial steps in mitigating environmental damage while supporting economic development.

The Urgent Need for Action

Despite these concerns, Sri Lanka has yet to enforce strict regulations on oil palm expansion. Gamage urges authorities to intervene: “It is imperative that we implement policies to control its spread before it is too late. The unchecked expansion of oil palm will lead to irreversible environmental damage.”

To address this issue, experts suggest a multi-pronged approach:

Stronger Land-Use Policies

– The government must enforce restrictions on oil palm cultivation in ecologically sensitive areas, such as wetlands and forest reserves.

Reforestation and Rehabilitation

– Efforts should be made to restore degraded lands by reintroducing native tree species and promoting sustainable agroforestry.

Supporting Traditional Agriculture

– Incentives should be provided to farmers growing traditional crops like kitul and palmyrah, ensuring that these industries remain viable.

Public Awareness and Education

– Raising awareness among local communities about the environmental and social impacts of oil palm can empower them to make informed decisions about land use.

Sustainable Alternatives

– Encouraging research into alternative vegetable oil sources, such as coconut oil, which has long been a staple in Sri Lankan agriculture, could reduce reliance on palm oil.

As Sri Lanka stands at a crossroads, the decisions made today will determine the country’s ecological and agricultural future. While the economic benefits of oil palm are undeniable, its long-term environmental and social costs cannot be ignored. The challenge now is to strike a balance between economic growth and environmental sustainability before the damage becomes irreversible.

In conclusion Gamage said, “We must act now. If we allow oil palm to spread unchecked, future generations will bear the cost of our inaction.”

Sri Lanka has the opportunity to take a different path—one that prioritises biodiversity conservation, sustainable agriculture, and the well-being of local communities. The time for decisive action is now.

By Ifham Nizam

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A plea for establishing a transboundary Blue-Green Biosphere Reserve in Gulf of Mannar and Palk Bay

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Blue-green land and waterscapes act as ecological corridors across land and water in creating an ecological continuity in order to protect and restore the habitats of native and naturalised species.

In addition, these ecological corridors also help to conserve and improve the habitats of migratory species, as well. One of the main objectives of establishing blue-green land-waterscapes is to reconcile increasing local/regional development and human livelihood challenges in a sustainable manner while, at the same time, safeguard biodiversity and their habitats/ecosystems, as far as possible.

While green landscapes are natural and semi-natural terrestrial vegetation types like natural forests and grasslands, blue waterscapes are aquatic or semi-aquatic vegetation types such as seagrass meadows, mangroves and coastal and other wetlands. These vegetated coastal ecosystems known as ‘blue carbon’ ecosystems are some of the most productive on Earth and located at the interfaces among terrestrial, freshwater and marine environments. They provide us with essential ecosystem services, such as serving as a buffer in coastal protection from storms and erosion, spawning grounds for fish, filtering pollutants and contaminants from coastal waters thus improving coastal water quality and contributing to all important food security.

In addition, they capture and store “blue” carbon from the atmosphere and oceans at significantly higher rates per unit area than tropical forests (Figure 1) and hence act as effective carbon sinks. By storing carbon, these ecosystems help to reduce the amount of greenhouse gas in the atmosphere, thus contributing significantly to mitigate the effects of climate change.

Figure 1: Carbon storage in different vegetation types (Source – What Is Blue Carbon and Why Does It Matter? – Sustainable Travel International)

.Blue-green Carbon Markets

The recognition of blue carbon (BC) ecosystems (primarily mangroves, seagrasses and tidal marshes) as an effective natural climate solution paved the way for their inclusion within carbon markets. Blue carbon is the marine analog of green carbon, which refers to carbon captured by terrestrial (i.e., land-based) plants. The blue-green carbon market involves buying and selling carbon credits from projects that protect and restore coastal and marine ecosystems (blue carbon) and terrestrial ecosystems (green carbon). Since Blue Carbon ecosystems have higher carbon sequestration (capture and store) potential compared to their terrestrial counterparts, blue Carbon credits are worth over two times more than green carbon credits. They offer opportunities for commercial enterprises to offset carbon emissions and in turn support climate action.

Blue Carbon projects are expected to grow twofold in the near future. With the recent surge in international partnerships and funding, there is immense growth potential for the blue carbon market. However, it is critically important to look beyond the value of the carbon sequestered to ensure the rights and needs of local communities that are central to any attempt to mitigate climate change using a blue and green carbon project.

Blue Carbon projects can serve as grassroot hubs for sustainable development by developing nature-based solutions in these ecosystems thus contributing to both climate change mitigation and adaptation. Globally, numerous policies, coastal management strategies, and tools designed for conserving and restoring coastal ecosystems have been developed and implemented. Policies and finance mechanisms being developed for climate change mitigation may offer an additional route for effective coastal management. The International Blue Carbon Initiative, for example, is a coordinated, global program focused on conserving and restoring coastal ecosystems for the climate, biodiversity and human wellbeing.

Until recently, most of these opportunities focus on carbon found in the above ground vegetative biomass and do not account for the carbon in the soil. On the other hand, blue carbon, in particular has the potential for immense growth in carbon capture economics in the near future and can provide significant socioeconomic and environmental benefits. Consequently, blue -green carbon habitats in the Gulf of Mannar – Palk Bay region represent invaluable assets in climate change mitigation and coastal ecosystem conservation and sustainable development.

Gulf of Mannar and Palk Bay  Trans-boundary Region

The Gulf of Mannar and Palk Bay region form a transboundary area within the waters of southeastern India and northwestern Sri Lanka. This region supports dense seagrass meadows having a high level of marine biodiversity including marine mammals such as dugong. Sea turtles are frequent visitors to the gulf while sharks, dolphins, sperm and baleen whales too, have been reported from this area. The Mannar region is recognized as an Important Marine Mammal Area (IMMA) of the world by IUCN (Figure 2) and also an Important Bird Area by Birdlife International. This region as a whole is a store house of unique biological wealth of global significance and as such is considered as one of the world’s richest regions from a marine biodiversity perspective.

Figure 2. Gulf of Mannar and Palk Bay IMMA (Source – IUCN Joint SSC/WCPA Marine Mammal Protected Areas Task Force, 2022 IUCN-MMPATF (2022)

Gulf of Mannar Biosphere Reserve – India

India has already declared a part of this region as the UNESCO Gulf of Mannar Biosphere Reserve covering an area of 10,500 km2 of ocean with 21 islands and the adjoining coastline. The islets and coastal buffer zone include beaches, estuaries, and tropical dry broadleaf forests, while the surrounding seascape of the Marine National Park (established in 1986) and a 10 km strip of the coastal landscape that include seaweed communities, seagrass communities, coral reefs, salt marshes and mangrove forests form the coastal and marine component of the biosphere reserve on the Indian side of the Gulf of Mannar.

Sri Lankan ‘Proposed’ Biosphere Reserve

On the Sri Lankan side of the Palk Bay there is a semi-enclosed shallow water body between the southeast coast of India and Sri Lanka, with a water depth maximum of 13 m. To the south, a chain of low islands and reefs known as Adam’s Bridge or Rama Setu (Rama’s Bridge), separates Palk Bay from the Gulf of Mannar. The Palk Bay leads to Palk Strait (Figure 3). Palk Bay is one of the major sinks for sediments along with the Gulf of Mannar. Sediments discharged by rivers and transported by the surf currents as littoral drift settle in this sink.

Figure 3: Gulf of Mannar and Palk Straits Source: Drishti IAS & Google Images

On the Sri Lankan side of the Palk Bay, studies are being conducted by the Dugong and Seagrass Conservation Project to establish an additional 10,000 hectares of Marine Protected Area to support the conservation of dugongs and their seagrass habitat in the Gulf of Mannar and Palk Bay. This project will involve the preparation of a multiple-community-based management plan in conjunction with government, fishing communities and the tourism industry.

With this valuable information emerging from projects of this nature, Sri Lanka has real opportunities to create a large marine protected area in the Gulf of Mannar and Palk Bay region and eventually merging them together with the Gulf of Mannar Biosphere Reserve of India to form a trans-boundary biosphere Reserve.

Terrestrial cum Marine Spatial Plan for the Gulf of Mannar and Palk Bay Region

Therefore, an excellent opportunity awaits both the Governments of Sri Lanka and India to collaborate in preparing of a terrestrial and marine spatial plan for this region, a prerequisite before going further on designing and implementing large scale development plans in establishing wind energy farms, mineral sand extraction, fishing industry, oil exploration and tourism development.

Coastal and Marine Spatial Planning (CMSP) is an integrated, place-based approach for allocating coastal and marine resources and space, while protecting the ecosystems that provide these vital resources.

On the Indian side, the Gulf of Mannar Biosphere reserve is well established and functional. On the Sri Lankan side, already there are three DWLC managed protected areas i) Adam’s Bridge Marine National Park (# 29 in the map – 18,990 ha declared in 2015), ii) Vedithalathiv Nature Reserve (# 35 -29,180 ha declared in 2016) and iii) Vankalai Sanctuary ( # 97 -4839 ha declared in 2008) (Figure 4) which can serve as the core zone of the Sri Lankan counterpart of a trans-boundary biosphere reserve. Due to the integrated nature of shallow wetland and terrestrial coastal habitats, Vankalai Sanctuary, in particular is highly productive, supporting high ecosystem and species diversity.

Figure 4: Protected Areas in Norther Sri Lanka Managed by the Department of Wildlife Conservation Source: DWLC

This site provides excellent feeding and living habitats for a large number of water bird species, including annual migrants, which also use this area on arrival and during their exit from Sri Lanka.

Having several coastal and marine protected areas already within the Sri Lankan territory provide an excellent opportunity to establish the Gulf of Mannar – Palk Bay blue-green Biosphere Reserve (Sri Lanka) initially and eventually to join up seamlessly with the already established Gulf of Mannar Biosphere Reserve on the Indian side to create a trans-boundary blue-green biosphere reserve.

This makes perfect sense because unlike sedentary plant species, mobile animal and plant groups (phytoplankton, in particular) do not respect human demarcated territorial boundaries. The provision of a common and unhindered protected coastal and marine passage for their customary movement for food and raising young is therefore of crucial importance in conservation management. Scientific evidence-based selection of additional areas, if necessary and their respective boundaries are best be determined in consultation with expert groups on marine mammals and reptiles, birds, fish, coastal vegetation conservation, sociology and industrial development from both sides of the divide.

Proper spatial planning needs to be done before large-scale development plans are designed and implemented in order to avoid conflicts of interest leading to inordinate delays and teething problems in project initiation. As a priority, the protected blue-green core and buffer regions need to be demarcated for their conservation. This could best be done in this narrow passage of land and water between Sri Lanka and India

( Palk Strait & Gulf of Mannar) by preparing a marine and terrestrial spatial plan along the UNESCO Man and Biosphere conceptual guidelines differentiating core, buffer and transition zones. While the protected areas in the core and buffer zone provide all important ecosystem services that would also serve as breeding ground for fish, crustaceans, marine reptiles, birds and mammals thereby provisioning sustainable industries to be developed in the surrounding transition areas demarcated in the joint spatial plan.

In addition, the Satoyama Global Initiative established by the Japanese at UNESCO as a global effort in 2009 to realise ‘societies in harmony with nature’ in which – Satoumi – specifically referring to the management of socio-ecological production landscapes in marine and coastal regions, is also a good model to be considered for conservation of biodiversity and co-existence between humans and nature.

Final Plea

In order to take this proposal forward from the Sri Lankan side, a number of useful baseline reports are already available including, but not limited to, the following: i. Biodiversity Profile of the Mannar District (CEJ & USAID 2022), ii. The Gulf of Mannar and its surroundings (IUCN 2012), iii) Atlas of Mangroves, Salt Marshes and Sand Dunes of the Coastal Area from Malwathu Oya to Pooneryn in the Northwestern Coastal Region, Sri Lanka (Ecological Association of Sri Lanka, Peradeniya, Sri Lanka, 2020). iv. Integrated Strategic Environment Assessment of the Northern Province of Sri Lanka (CEA 2014).

If this proposal to establish a Trans-boundary Blue-Green Biosphere Reserve in the Gulf of Mannar and Palk Bay is acceptable in principle to the Governments of Sri Lanka and India, it would be ideal if the Man and the Biosphere (MAB) program UNESCO which is an intergovernmental scientific program whose mission is to establish a scientific basis for enhancing the relationship between people and their environments to partner with the relevant Government and non-governmental agencies in both countries in making it a reality. This proposed concept has all the necessary elements for developing a unique sustainable conservation cum industrial development strategy via nature-based solutions while at the same time contributing to both climate change mitigation and adaptation.

by Emeritus Professor Nimal Gunatilleke,
University of Peradeniya

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