Keynote Address by Minister for Trade and Industry Mr Chan Chun Sing at the 6th International Maritime Security Conference Opening Dinner

Distinguished guests,
Ladies and gentlemen

Introduction

A very good evening to all of you. First and foremost, some of you might be wondering why you are here, as in not why you are here in Singapore, but why are you in this particular place. There is a special place in the history of the Singapore Armed Forces for this place. This used to be the old NCO club, the non-commissioned officer club. So just in case you think that our non-commissioned officers, or for that matter the officers, live in this place every day; no, this has been greatly refurbished. And thanks to all of you, otherwise Singaporeans like myself and Chuen Hong, we do not come here for dinner every day. So very good evening to all of you, welcome to Singapore, and the 6th International Maritime Security Conference (IMSC). The IMSC is a valuable platform for all of us – members of the international maritime community – to gather, to engage in purposeful discussions and together chart the way forward on the maritime security landscape. I was very fascinated by the backdrop. I do not know what you saw on the backdrop. Most people will see the sea as dividing up the land, but for all of you here, you should have the DNA to see the sea as connecting up the land rather than dividing up the land. 

In Singapore, we recognise the importance of maritime security. Our openness and connectivity is our lifeline – we depend on the security and sustainability of trade for our survival and this can never be underestimated. 

This year, as Keng Yong mentioned, we commemorate our Bicentennial, which marks an important point in Singapore's history when the British arrived, turning Singapore into a major trading port. 

The Economic Significance of Maritime to Our Region

Now in the past few decades alone, the world has enjoyed tremendous progress, brought about by the growth in global trade. Billions have been lifted out of poverty and Asia today has become the world's economic centre of gravity.

By 2030, Asia is projected to represent two-thirds of the global middle-class population, and have six of the world's ten largest economies. By then, ASEAN would also be the world's fourth largest economy. This growth has been fueled by maritime trade; regions linked to leverage on our respective comparative advantages, and ships utilised for cost-efficient transport of goods.

Today, much of the world's global trading system comprises of supply chains based on 'just-in-time' logistics. And Asia is at the heart of this, loading and unloading more than double the amount of goods by tonnage compared to other regions of the world. This system is sensitive – sensitive to delays in shipments, especially to intermediate parts that have downstream implications for the rest of the global supply chains, causing supply shortages and manufacturing seizures if it is not done well. Maritime security threats will impact this system significantly, disrupting trade flows, driving up costs and reducing economies of scale. 

Now this is especially critical in areas where trade flows converge, such as the Straits of Malacca and Singapore (SOMS) and the South China Sea. In these areas, disruptions will affect the region as well as connecting regions beyond. The international community is interconnected and invested – and has a collective interest in keeping our maritime trade flows open. 

Strengthening Today's Rules-Based Order to Realise Tomorrow's Globalization

Globalisation in the last half-century has brought significant progress. However, the world now finds itself at an inflexion point, both geopolitically and economically.

The international geopolitical environment has come under stress. Great power rivalry and nativist politics have added isolationist pressure, threatening to reverse globalisation and the idea of cooperation and shared benefits. Southeast Asia has been and continues to be a contested ground, with clashes at sea between multiple parties, regional and extra-regional players alike. The US-China trade tension has hurt the global economy. In fields such as telecommunications, adoption of new technology is counterweighted by national security concerns. Brexit is an example of fragmentation come true: people unhappy with unequal distribution of wealth and progress feel that globalisation has allowed others to take advantage of them, and they therefore seek to protect themselves through isolation.

In contrast, however, the world economy needs to integrate more than ever before – so that we can power the next wave. New forms of connectivity in regulation, data, talent, technology, finance, have all arisen to complement the conventional dimensions of connectivity. For example, in ASEAN, we have established the ASEAN Single Window, an architecture and framework to enable electronic exchange of customs data – to enhance trade efficiency by reducing customs wait times and processing costs. Here in Singapore, we have the Networked Trade Platform (NTP) – our national one-stop trade information management system, and PSA's CALISTA – which helps to streamline processes, documents and data in the flow of goods within and across countries and regions. These are open, regional, and global platforms that improve trade and operational efficiencies.  The Chongqing Connectivity Initiative-New International Land-Sea Trade Corridor (ILSTC) that connects Southeast Asia to Western China and through western China to the central Asian Republic and onwards to Europe via multi-modal links is another example. We can expect more such connectivity going forward.

Hence there is great potential in all these new forms of connectivity to catalyse the new world economy. We want to connect in the new domains – to embrace integration and write and re-write the rules to ensure that all parties can benefit. At the same time, we must safeguard the free movement and openness in today's trade networks – because the new forms of connectivity will need to ride on the existing networks. Balkanisation and formation of isolated blocs will make it difficult for us to achieve both. But certainly, even as we build collaborative capabilities and digitally integrate our platforms, we also need to jointly build new networks that are resilient, but most importantly, trusted.

I am optimistic that we will see progress and not be stuck in an impasse. The fact that the maritime rules-based order exists today demonstrates that we can come together to cooperate instead of competing solely. We need to strengthen the existing rules-based order to provide a strong foundation for the global economy of tomorrow. 

Seas as a Global Commons

All of us here will understand the principle that the seas are a global commons. It is that which unites us, rather than that which divides us. The free flow of maritime trade rests on the understanding that the seas are freely shared. In contrast, on land, geography is almost wholly dictated by territorial boundaries.

Sharing is only effective if we abide by the rules. UNCLOS – the rules of the sea – ensures free and equitable usage of the maritime commons. UNCLOS should not be misconstrued as a division of sea territory: if we start to disregard international law, pursue self-interests and curtail the freedom of the seas, we threaten the very space shared by all maritime users. 

In Asia today, there are still claims by regional states that do not abide by the terms of UNCLOS. These include territorial baselines drawn or claimed incorrectly, delimitations of the EEZs from uninhabitable rocks, and enforcement of EEZ for reasons other than protection of economic rights. Such claims go against the spirit of how UNCLOS was formed. 

UNCLOS was formed as a balance between preserving the freedom of the seas against the interests of the coastal states. It was a remarkable endeavour, successfully achieving consensus amongst the more than 160 nations involved. This was possible only because all parties understood the necessity of accepting trade-offs to achieve the greater good. These trade-offs were made as a package – ignoring even a single one of them risks undermining the whole. 

As signatories, our adherence to the entirety of UNCLOS is crucial. It signals our commitment to uphold international law and promote a rules-based order. Today, UNCLOS encapsulates the many years of negotiation and trade-offs, and we cannot treat the underlying consensus lightly. 

Trust Needed to Promote Integration

What else do we need to ensure a strong foundation for tomorrow's economy? Beyond strengthening the maritime rules-based order, we must also overcome maritime security challenges that threaten our trade networks.

Today, I will focus on three conventional challenges – maritime contestation, piracy, and terrorism; and a fourth emerging challenge arising from the increasing role of digitalisation of the global maritime trade.

Maritime contestation both reflects as well as incites strategic rivalry. Between the US and China, Singapore and the international community hope that the current turbulence can give way to cooperation, and that both powers can build upon the cooperative efforts achieved in previous years. Incidents at sea also persist between regional navies looking to enforce their waters and safeguard their rights. We must continue to emphasise the norms established by UNCLOS and to abide by the rules-based order, to settle disputes amicably. 

We need to make progress in this, especially to find means to prevent miscalculation and defuse tensions when ships and aircraft encounter at sea. As navies modernise and grow larger, more navy ships will ply the waters in the region and the potential for miscalculation will increase. It would be disastrous for maritime trade and the global economy for a clash to escalate and to trigger a territorial conflict over the seas. Therefore we need to build trust to enable peaceful dialogue and to encourage compromise.  

Piracy continues to threaten shipping in areas such as the Gulf of Guinea and Gulf of Aden. We have seen how piracy has resulted in increased shipping costs and loss of cargo, disrupting supply chains. We have had good success containing piracy in the SOMS since the Malacca Straits Patrol was launched. At the same time, the root of piracy lies on land, and dealing with piracy also requires addressing domestic reasons that drive people to crime. In developing a solution that addresses domestic causes of piracy, we must be sensitive – we need trust and coordination to effect a response that does not impinge on the classic principles of sovereignty and international law.

At the same time, terrorism remains a serious threat. It has struck most recently in Sri Lanka and New Zealand, and just last month, Singapore courts charged a Singaporean for funding ISIS propaganda. The effects of an attack at chokepoints such as the SOMS, Panama or Suez Canals cannot be underestimated. It will be catastrophic, potentially cutting off trade connections between major regions of the world. Again, at chokepoints, where territorial boundaries are contiguous, dealing with maritime terrorism requires close coordination to respond to attacks, and also the confidence to share intelligence to pre-empt attacks.

I will now scan the horizon and urge us to prepare for a new area of vulnerability. The digital realm is one such area. Maritime cyber-security has become a pressing concern – cyber-attacks targeting port or shipping operations have already occurred. In 2017, A.P Moller-Maersk was hit by NotPetya ransomware, which disrupted 76 port terminals across four countries, incurring reportedly more than US$200 million in lost revenue. Undersea cables – the physical infrastructure for digital technology – carry the world's data. An attack or incident at the seabed could cut off vital data supporting entire nations. As the global economy pushes towards greater data connectivity, the impact of cyber-attacks will grow. We need to secure the cyber-space that maritime trade runs on, and its physical infrastructure as well.  

The complex nature of these challenges implores us to work closer together. A preoccupation with guarding our own interests will prevent us from mounting effective responses. All this starts with building trust at every level. We share the seas and there is space for us to respond as a community; to protect our global commons together, instead of just our own territorial limits.

Building Trust – Dialogue and Collaboration

Building trust takes time and cannot be done overnight. Platforms and opportunities must be cultivated to build trust instead of being left to chance. I will share three approaches that Singapore has played in promoting this:

a. how we build operational mechanisms to pre-empt miscalculation at sea;
b. practical cooperation to build interoperability; and
c. open and inclusive dialogue.
  
Operational Mechanisms 

First, we need operational mechanisms to ensure and prevent miscalculation at sea. Progress has been made in this area, including the Code for Unplanned Encounters at Sea, or CUES, which was agreed upon in 2014 and has come into practice already. ASEAN and China have agreed on a single negotiating text for the South China Sea Code of Conduct. I would encourage navies to continue to exercise these procedures at every opportunity so as to embed them into our instincts.

There is value to develop these mechanisms more holistically – to move them upstream and downstream, instead of simply deconflicting actions at sea. Upstream, mechanisms should look at the causes of conflict – such as illegal fishing or development of disputed features, and defuse them at source. Downstream, we should develop de-escalation and incident management processes to prevent aggravation of the incident. Above all, these mechanisms should be in accordance with UNCLOS and established international law.  

Practical Cooperation

Second, we need to develop real capabilities and build practical cooperation. This is well established: measures include exercises at sea between navies, information sharing arrangements, and coordinated maritime security operations. All these promote understanding and establish communications channels.

Within ASEAN, a good foundation of cooperative measures has been established, including coordinated patrols and information sharing arrangements such as the IFC (Information Fusion Centre) and ReCAAP (Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia). These have enabled us to deal more effectively with maritime security challenges; and also supported ASEAN in engaging extra-regional players in the region, such as the US and China, and India as well as she looks and Acts East. We had a successful inaugural ASEAN-China maritime exercise, and this year we will conduct a trilateral exercise between the Indian Navy, Royal Thai Navy, and the RSN. These serve as building blocks to pave the way for more substantive forms of cooperation in the future.

Open and Inclusive Dialogue

Last but not least, the third approach is to establish open and inclusive platforms for dialogue such as the IMSC and the Shangri-La Dialogue. These are important avenues to build strategic confidence amongst key policymakers, which the larger community takes the lead from.

Wide participation at this level is important. By involving the wider maritime community, including navies, coast guards, and think-tanks, we promote more holistic perspectives and we arrive at better solutions. It is necessary for all of us to take a long-term perspective in achieving the outcomes that we desire as a united community. Otherwise, without which, UNCLOS would have never passed the first round of negotiations.

It is important nevertheless to seek small and concrete steps; to open doors and set the stage right for future progress. At the Shangri-La Dialogue in 2005, we reached a critical consensus on the balance of responsibilities between littoral states, user states and the international community in ensuring Malacca Strait security. This prepared the ground for the eventual formalisation of the Malacca Straits Patrol a year later. 

These three approaches are not mutually exclusive, but are complementary. Practical cooperation and operational mechanisms build foundational levels of trust, which then promote open dialogue at the strategic level. When this happens, we can unlock more opportunities for further collaboration and eventually put in place real and effective solutions to our maritime security challenges. As a community, the progress in these areas is encouraging and we should continue to enhance and strengthen our efforts in these areas. 

Conclusion – Building New Networks

Let me conclude by once again reminding ourselves why we are here tonight.. Tonight, many of you have travelled from all across the world to join us in this week's activities and seminars. The most valuable thing we hope that all participants get from tonight is not just the content of the conferences. The most important thing that we can take away from this week in Singapore is the trust and relationships that we develop amongst one another. It is only with trust that can we build on concrete cooperation. Nobody ever picks up a phone to discuss things with others across the ocean just because we have a number. All of us pick up a phone to talk to someone else on the other end of the world because we know that person, we have met that person, and we can imagine and know how that person will react and respond to our suggestions. So the greatest value from this week's conference will be the friendship, the camaraderie, that we can achieve together as a united community. That even as we go back to our respective countries, we will always remember the backdrop of tonight's dinner. That the sea is much greater than the sum of all land on this planet. The sea is that which connects us all and the sea is not that which divides us. The sea is our global commons, we all want to share in this global commons, we want this to be that which connects us to allow us to continue to grow and continue to thrive. And for us to achieve that collectively, we need to come together to uphold this very global commons that we so cherish. 

On that note, I wish you all the very best and thank you for joining us in Singapore. We wish you all the very best in your onward journey, we wish that you will always have the chance to come back to Singapore, be part of the Singapore network, be friends, fans or families of Singapore. Thank you very much. 

More Resources

Minister Chan Chun Sing: Trust and Cooperation Vital for Order at Sea