Chinese investments total $12B – LKI

By Paneetha Ameresekere | Published: 2:00 AM Jun 16 2020

By Paneetha Ameresekere

Chinese entities invested almost US$ 12 billion in Sri Lanka between 2006 to 2019 (last year), stated Lakshman Kadirgamar Institute (LKI), a Government think tank, in a recent publication (dated 22 May) released on Saturday (13 June).

However, according to a recent report released by Chatham House, a London-based think tank, there are significant environmental and labour implications of Chinese investment in Sri Lanka, and more broadly of China’s Belt and Road Initiative (BRI) in the country, it said. 

These reveal a mixed bag of benefits and costs for the local environment and labour force, said LKI. They should be addressed to ensure that Sri Lanka maximises the benefits and minimises the risks of the BRI.  According to environmental advocates, early Chinese-funded infrastructure projects, including the construction of the Hambantota Port and Norochcholai Power Plant, did not meet international environmental standards with respect to feasibility studies and domestic legislation processes. 

Similarly, some sources reported that the construction of Colombo Port City, a commercial and residential project on reclaimed land near the Colombo Port, resulted in a decrease of fish stocks, with implications to local fishermen, said LKI.  Though Sri Lanka has comprehensive domestic environmental legislation, encompassing a wide range of regulations and standards, the detail and implementation of such legislation, however, is wanting, it added.  Some commentators argue that although Environmental Impact Assessments (EIAs) are legally required for development projects, the Colombo Port City (CPC) appears to have been initiated without sufficient study, including EIAs. The project is being criticised for lacking specificity, transparency and due consideration of project alternatives, said LKI. 

Nevertheless, there have been positive environmental outcomes of Chinese investment in Sri Lanka which indicate that it can improve its environmental standards using ‘external resources’, it further said.  The Colombo International Container Terminal (CICT), a Chinese built and operated terminal of the Colombo Port, has prioritised green technology. It was the first terminal of the Colombo Port to convert its regular cranes to zero-emission electric cranes, thereby minimising air pollution and carbon emissions.

The CICT terminal is also the most profitable of the four terminals of the Colombo Port, demonstrating that Chinese investments can simultaneously pursue commercial success and environmental responsibility, the LKI study said.

Environmental issues around Chinese investment have also shown the agility of Chinese investors in adapting and responding to public concerns. In particular, CHEC Port City Colombo (CPCC), a local subsidiary of China Communications Construction Company, which is developing the Colombo Port City, spent about US$ 3 million from 2016-2019 to support around 9,000 fisher families who were potentially affected by the Project. 

In addition, CPCC has engaged in broader public diplomacy by inviting officials, journalists, students, and others to visit the onsite sales gallery to visualise and learn about the project. These corporate social responsibility and public relations measures have helped to negate concerns about environmental harm and build public support for the project, LKI said.  The post-construction plans for the CPC appear positive, including the adoption of an ecological plan to enhance biodiversity and a Sustainability Master Plan to ensure the overall design for construction and operations are in line with international best practices and concepts like ‘smart cities’, it further said.

By Paneetha Ameresekere | Published: 2:00 AM Jun 16 2020

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