Developed countries have had to face pressure from the public as well as environmental groups to discourage ship breaking, considered dirty and dangerous work.
The draft policy stressed that the Sri Lankan government will not encourage ship breaking.
"Ship breaking is known to create environmental pollution, including oil pollution," the draft policy said.
"The lack of significant tidal differences on the coasts of Sri Lanka does not facilitate ease of handling of ship breaking activities."
The policy also said the island's coast have to be protected for the development of the tourism industry. The policy, the draft of which was released this week, cited environmental concerns and lack of tidal differences for the decision.
Previous shipping policies have mentioned ship breaking as one of the maritime sector industries that could be promoted to take advantage of the island's geographical position close to international shipping routes.
However, no ship breaking activity eme