The government has already received several inquiries about new free trade zones and is planning to create a framework which would regulate, manage and monitor them.
Marc Muscat, an adviser to the Parliamentary Secretary for Competitiveness and Economic Growth José Herrera, explained that free zones would create a new value- added sector.
“Free zones could be used for distribution, ‘break bulk’, repackaging, warehousing and light assembly, for example. And they could handle imports coming into the EU from third countries, or en route to other countries outside the EU.
“This has long been a dream but what we are now trying to do is to create an enabling law – as part of a long overdue review of the Freeport Act – to make space for the private sector.
“Free zones are covered by strict regulations, within enclosed and secured areas, with controlled entry and exit. It is certainly not a case of having free zones mushrooming all over the country – or in a warehouse!” he said.
He said the government has not identified particular areas, although the stretch between the Freeport and the airport, a mixture of government and private land, had great potential because of its accessibility for transport.
There is clearly scope to grow, as long as we build a reputation for being professional and fair
The review of the Freeport legislation is just one of 50 proposals laid out in the Integrated Maritime Policy approved by Cabinet some weeks ago – which will be assessed for viability and priority by a steering committee.
“They might not all go ahead…The last thing we want to do is to create ‘white elephants’,” Mr Muscat said.
Another area identified as a priority by Dr Herrera is bunkering, which is beset by problems that threaten to derail this sector’s momentum.
“We hear too many remarks about problems giving this activity a bad name. It is often down to incidents – rather than to structural problems – but we all know that those who get bad service tend to complain to many other operators.
“We are not looking for abuse or corruption – we are not there to carry out a witch hunt. But want to see whether the ways things are done at present could create opportunities for such eventualities,” he said ominously, declining to comment further.
“Bunkering is regulated by different authorities – the Malta Resources Authority, Transport Malta and the Customs Department. Even with the best intentions, this could create loopholes as there is a problem with ownership.
“We are sitting on the busiest routes in the Mediterranean and yet only handle around 10 per cent of bunkering in the Mediterranean. There is clearly scope to grow, as long as we build a reputation for being professional and fair. It is not enough to rely on our geographic location alone,” he warned.
The third priority is setting up a maritime arbitration centre in Malta, and a call for expressions of interest has already been issued.
“This is a very competitive environment but we could certainly find our niche and attract international players. We could adopt the London Maritime ArbitratorsAssociation’s rules, the mostly widely used internationally,” he explained.
“The fact that we have the sixth largest flag in the world is an advantage and should be seen as such. We need to understand the potential value added of this sector – otherwise, we are not going beyond the initial set-up of ship registration!”
The steering committee will be assessing the rest of the proposals in the policy as well as coming up with their own – which is why the involvement of the private sector is so crucial.
The government has already appointed five members to the committee – the Fisheries and Aquaculture Department, Malta Enterprise, Transport Malta, Malta Freeport Corporation and Malta Resources Authority.
The parliamentary secretary is currently working hard to bring on board five representatives from umbrella organisations like the Malta Chamber of Commerce, Enterprise and Industry and the GRTU. The target is to have it set up by year end – although the first quarter is probably more realistic.
The committee will be part of what the secretariat is calling Malta Marittima, a public/private initiative that would evolve from the model created by Finance Malta for the financial services industry.
The government will give it a boost by providing ‘horizontal policy coordinators’ from the civil service, who will coordinate maritime clusters, with specific areas of competency like research, innovation and education, spatial planning and environment, surveillance and security, and skills needs. Each cluster identified would also have a manager.
“It is hard for small companies to dedicate private resources to the general good of the sector. All too often, they join sectoral organisations and start off with a bang but then taper off as they realise all the time it takes from their business.”
Mr Muscat is determined to drive the policy from paper to action: “The integrated maritime policy for the EU was launched in 2007 by Maltese Commissioner Joe Borg and the ‘blue economy’ still features high on the EU agenda. Malta needs to seek its rightful place!”