Business

The X-Press Pearl Disaster: From Flames to Prevention

Published

3 years ago

2023/05/6

By Ruwan Samaraweera

Sri Lanka’s ecological disaster related to the MV X-Press Pearl, a container ship carrying hazardous chemicals that caught fire off its coast on 20th May 2021, is back in the news as the country attempts to claim damages. The ecological disaster washed up tons of plastic pellets and other pollutants on the country’s beaches and harmed its marine ecosystem.

It is a stark reminder of the risks associated with transporting hazardous materials and the urgent need for governments and companies to take proactive measures to prevent such disasters in the future. This blog revisits the environmental impact of the X-Press Pearl disaster and discusses how Sri Lanka can use the Sendai Framework for Disaster Risk Reduction (SFDRR) to develop strategies and policies to prevent similar disasters from happening near its shores again.

The Environmental and Economic Impacts of X-Press Pearl

The X-Press Pearl disaster has had a devastating impact on Sri Lanka’s environment and its citizens. The Marine Environment Protection Authority (MEPA) reported an oil slick of an approximate area of 0.51 km2 with a length of 4.3 km around the wreck. According to the International Pollutants Elimination Network, the ship’s cargo included billions of plastic pellets (microplastics used to produce plastic) which have washed up on the shore, causing damage to the country’s marine ecosystem, tourism industry and its reputation as an eco-tourism destination. According to the International Maritime Hazardous Goods Regulation (IMDG regulation), an analysis of the cargo manifest revealed that at least 81 of the 1,486 containers aboard the MV X-Press were transporting 15 distinct categories of hazardous materials, including 25 tons of nitric acid. While the full extent of the damage is yet to be determined by the MEPA, the insurance company for the ship has already compensated the Sri Lankan government to the tune of USD 7.85 million.

Beyond the monetary valuation, the disaster has severely impacted Sri Lanka’s fishing industry, with over 20,000 fishing families and approximately 16,000 fishermen affected. Additionally, the spillage of hazardous chemicals into the sea has killed over 300 marine animals, including turtles, dolphins, and whales.

The disaster has also raised concerns about the impact of hazardous material transportation on the environment and public safety, highlighting the need for more stringent regulations, especially in densely populated areas. It also revealed institutional and capacity constraints and a lack of training in handling such emergencies, which should be addressed to prevent such disasters. This is where the SFDRR comes into play, providing a comprehensive framework to address these issues and build resilience in the face of such catastrophes.

The Way Forward: Preventing Future Maritime Disasters

The X-Press Pearl disaster is a wake-up call for governments and companies worldwide to take proactive measures to prevent similar disasters in the future. Since its inception in 2015, the SFDRR has become widely recognised for managing diverse disasters worldwide.

The Sendai Framework

Even though there are various frameworks and policies related to disaster risk reduction at the national level in Sri Lanka, including the National Disaster Management Plan, they were inadequate to address the X-Press Pearl disaster timely and effectively. Other countries use numerous measures like response and containment techniques, preparedness and planning, regulation and enforcement, international cooperation and collaboration. The SDFRR combines these individual efforts and brings them under an umbrella framework.

Hence, it offers a comprehensive framework that countries like Sri Lanka can adopt to address the challenges associated with hazardous material transportation and other maritime disaster risks. Moreover, while the adoption of the SFDRR is novel for preventing maritime disasters, it has been widely adopted by many countries, including but not limited to Japan (climate change, Tsunami, Fukushima nuclear disaster, etc.), Australia (wildfires), and Nepal (earthquakes). Therefore, the X-Press Pearl maritime disaster emphasises the potential for harnessing the SFDRR’s wide range of applicability to prevent future similar disasters in Sri Lanka.

Understanding the risks

The first step in preventing such disasters is understanding the risks of shipping hazardous materials through Sri Lanka’s waters. Sri Lanka did not have a proper contingency plan in place to deal with a disaster of this scale. Furthermore, the risk assessment conducted prior to granting permission for the vessel to enter Sri Lankan waters did not adequately consider the potential impact of a disaster. Thus, as mentioned in the SFDRR, Sri Lanka should conduct a risk assessment concerning the potential impact of such disasters on the environment, the economy, and public health.

Strengthening regulations

The SFDRR emphasises the need to strengthen regulations and laws to prevent disasters. For instance, the Draft National Transport Policy of 2009 highlights the safer transportation of hazardous material in all modes, yet the cabinet has not approved this.

Therefore, it is imperative that Sri Lanka reviews its existing laws and regulations, such as the National Environmental Act No. 47 of 1980, the Marine Pollution Prevention Act No. 35 of 2008, and the Dangerous Goods (Transportation) Regulations governing the transportation of hazardous materials and makes necessary amendments to ensure compliance with international standards.

Building capacity

The SFDRR encourages increasing preparedness at all echelons of society. During the X-Press Pearl disaster, emergency responders lacked the necessary equipment and training to respond to the disaster effectively. Additionally, poor coordination between different agencies hampered the response effort. To address these issues, training programmes in collaboration with the Sri Lanka Navy and MEPA could be conducted for essential stakeholders such as shipping companies, port authorities, and emergency responders. These programmes could provide them with the necessary knowledge and skills to prevent and effectively respond to such catastrophes.

Promoting public awareness

The framework stresses the need to educate the public and raise awareness to prevent disasters. However, in the recent disaster, the lack of public awareness about the risks associated with transporting hazardous materials made it difficult to generate support for preventive measures. Therefore, the government, private sector, non-governmental organisations and other relevant stakeholders are responsible for informing the public about the risks of transporting hazardous commodities and the importance of adopting safe shipping practices.

Collaboration and partnerships

The framework encourages cooperation and partnership amongst all parties involved in disaster management. However, Sri Lanka did not collaborate effectively with other countries or international organisations to prevent the disaster. For example, there was no information sharing about the vessel’s previous safety record, which could have alerted Sri Lanka to potential risks. To avoid similar events in the future, Sri Lanka could collaborate with other nations (India and other South Asian countries), international organisations (such as the International Maritime Organisation), and shipping companies.

The disaster has also brought attention to the need for sustainable shipping practices, such as using alternative fuels and more eco-friendly packing materials.Hence, by adopting the Sendai Framework, Sri Lanka can develop an effective approach to prevent similar disasters in the future through proactive measures to protect the environment, public health, and the economy.

Link to blog: https://www.ips.lk/talkingeconomics/2023/05/03/the-x-press-pearl-disaster-from-flames-to-prevention/

Ruwan Samaraweera is a Research Officer at IPS with a background in entrepreneurial agriculture. He holds a Bachelor’s in Export Agriculture from Uva Wellassa University of Sri Lanka. His research interests are environmental economics, agricultural economics, macroeconomic policy and planning, labour and migration, and poverty and development policy. (Talk to Ruwan – ruwan@ips.lk)

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Business

Trade and investment facilitation upgrade seen as needed for SL

Published

3 hours ago

2026/05/12

Sahan Weerasooriya

South Korean Ambassador Miyon Lee (centre) addresses the forum. On her left is Pathfinder Foundation Chairman Ambassador (Retd) Bernard Goonetilleke.

Sri Lanka should mainly focus on upgrading its trade and investment facilitation system while identifying the paramount importance of the issue, South Korean Ambassador to Sri Lanka Miyon Lee said.

The bureaucratic matters—from Customs clearance to tariff lines, licensing, and registration—should be streamlined, she said at a round table forum recently held at the Colombo Club of the Taj Samudra, Colombo. The forum was organized and conducted by the Pathfinder Foundation Sri Lanka and was presided over by its Chairman, Ambassador (Retd) Bernard Goonetilleke.

Ambassador Lee said that the Sri Lankan government and companies must focus on tourism sector development and also find businesses opportunities with Korea.

She also said that if Sri Lanka wants to attract Korean investment into Sri Lanka, Sri Lanka should highly develop its digital sector.

‘On top of that, If Sri Lankan is to sign a FTA or trade agreements, she should focus on niche markets to supply to Korean companies, she explained.

Ambassador Lee added: ‘Korea is highly digital and AI enabled and Sri Lanka needs to concentrate on that as well.

‘Further, it is going to be very important if you will be able to implement all the obligations that are laid out under a WTO agreement.

‘A single window is part of the overall trade architecture that Sri Lanka has to follow.

‘ I think that also follows with the FTA (Free Trade Agreement) negotiations. From Korea’s experience, when we had the financial crisis in 1997, we only pursued WTO negotiations. FTA negotiations came after the financial crisis.

‘The Asia-Pacific Trade Agreement (APTA) is important in this regard.

‘The APTA arrangement includes China, India, Korea, Nepal and Mongolia and 50 percent of Sri Lankan exports to South Korea benefit from the APTA.

‘But other than that, there is not much trade between the two countries. That’s why I think it is going to be very important for Sri Lanka to pursue the RCEP (Regional Comprehensive Economic Partnership) arrangement.

‘Unfortunately, there is not much appetite for upgrading the APTA because we already have separate FTAs with India and China.

‘ We have huge investments in India and in ASEAN countries. I think it would be very important that Sri Lanka uses that kind of opportunity to see if there is any initiative for Sri Lankan companies to provide supplies to Korean companies working in other countries.’

By Hiran H Senewiratne

Business

SL in damage-control mode in wake of financial security crisis

Published

3 hours ago

2026/05/12

Sahan Weerasooriya

Deputy Finance Minister Dr. Anil Jayantha Fernando

USD 2.5 million Treasury cyber heist has escalated into a full-blown financial security crisis, with the government scrambling to contain international fallout amid growing fears that multiple foreign debt repayment channels may have been compromised.

In the strongest indication yet of the gravity of the breach, Deputy Finance Minister Dr. Anil Jayantha Fernando told Parliament that investigators had uncovered suspicious irregularities linked to other external payment transactions, including one involving India, suggesting that the cyber intrusion may have extended far beyond the original fraudulent transfer.

The revelation has sent shockwaves through financial and political circles at a time when Sri Lanka is struggling to restore credibility after its historic sovereign default and painful debt restructuring process.

The controversial transfer involved funds earmarked for a debt repayment to Australia Export Finance. However, the money was allegedly diverted into a fraudulent account after what authorities now believe was a sophisticated cyber infiltration targeting Treasury communication and payment authentication systems within the External Resources Department (ERD).

With international confidence hanging in the balance, the Government has moved swiftly to reassure creditors that the incident would not be treated as a sovereign debt default.

Fernando informed Parliament that international debt restructuring advisors had assessed the situation and concluded that the theft constituted a criminal financial breach rather than a deliberate failure by Sri Lanka to honour debt obligations.

Behind the scenes, however, the crisis has triggered an unprecedented multi-agency investigation involving the Criminal Investigation Department (CID), Sri Lanka Computer Emergency Readiness Team (SLCERT), Financial Intelligence Unit (FIU) and foreign law enforcement authorities, including Australian agencies.

Investigators are now carrying out forensic examinations of official email systems, payment authorisation trails, digital devices and Treasury transaction records amid mounting concerns that critical State financial infrastructure may have been exposed to external manipulation.

The scandal has also intensified political tensions, with opposition parties accusing the Government of attempting to downplay the seriousness of the breach while demanding an immediate parliamentary debate and an independent inquiry into Treasury security failures.

Pressure mounted further following the sudden death of an interdicted Finance Ministry official reportedly connected to the ongoing investigation.

Although authorities have not officially linked the death to the fraud probe, the incident has fuelled widespread speculation and heightened public suspicion surrounding the case.

The latest disclosures have raised troubling questions about the vulnerability of Sri Lanka’s public financial systems, particularly as billions of dollars in foreign debt repayments, aid flows and restructuring transactions continue to pass through Government channels under intense international scrutiny.

Financial analysts warn that while creditors may refrain from categorising the incident as a formal default, the cyber heist could still damage Sri Lanka’s credibility unless authorities demonstrate swift accountability, institutional transparency and robust corrective measures.

The Treasury breach is now being viewed not merely as an isolated fraud, but as a major national financial security threat with potentially far-reaching implications for Sri Lanka’s economic recovery and global standing.

By Ifham Nizam

Business

JKCG Auto partners with BOC and SLIC to support EV adoption

Published

3 hours ago

2026/05/12

Sahan Weerasooriya

John Keells CG Auto (JKCG Auto), the authorised distributor of BYD and DENZA in Sri Lanka, has launched a campaign in partnership with Bank of Ceylon (BOC) and Sri Lanka Insurance Corporation General Ltd. (SLIC) to accelerate New Energy Vehicles (NEV) adoption among government sector employees.

The initiative, which will run from 4 May to 31 July 2026, is designed to improve accessibility and affordability of NEVs for public servants through a structured set of financing, insurance and ownership support mechanisms.

Open to employees across the government sector, the programme reflects a coordinated effort between industry and national institutions to enable a gradual and practical transition towards cleaner transport options.

As part of the collaboration, JKCG Auto will extend a set of ownership support measures across its BYD and DENZA portfolio, including introductory price considerations, access to home charging infrastructure, and aftersales service support. These are complemented by preferential leasing arrangements facilitated by the Bank of Ceylon, alongside tailored insurance solutions and customer support services from Sri Lanka Insurance Corporation.