Business
The X-Press Pearl disaster and the imperative for regional maritime cooperation
Righting the Ship:
By Githmi Rabel
On 20 May 2021, Sri Lanka’s worst-ever marine disaster occurred when a fire erupted on the Singapore-registered MV X-Press Pearl container ship just 18 km Northwest of Colombo. While the long-term cost is yet to be determined, the negative impact on industries such as fisheries and tourism, and people who rely on the coastal resources of Sri Lanka is already apparent. This article examines the key consequences of this disaster on Sri Lanka’s coastal economy and highlights the need to enhance regional maritime cooperation to prevent the recurrence of such disasters.
Impact on Fisheries and
Fishing Activities
The fisheries industry is an important sub-sector of the Sri Lankan economy; it accounts for 1.3% of GDP at current prices, exhibited a growth rate of 9.9% and accounted for 1.5% of export earnings in 2019. It is also a source of many direct and indirect employment opportunities from fishing to processing, distributing and trade and boat-building and maintenance. Approximately 583,000 individuals are employed in this industry and there is a supporting workforce of 2.7 million. It is also crucial to note that fish contributes more than 60% of all animal protein consumed in Sri Lanka and is the main source of protein for low-income groups.
However, following the fire and the consequent spill of nitric acid and plastic pellets into the sea and nearby coast, fishing was temporarily banned along an 80 km stretch of the coast. The effect on the local community has been stark, with some estimates claiming that around 16,000 fishers were affected. The X-Press Pearl fire, which disrupted the fisheries supply chain, from fishers to processors to wholesale and retail traders, made the fishing community more susceptible to the structural economic and social inequality they already faced. The coastal fishing community, one of the three sub-sectors of the fisheries sector of Sri Lanka, is the most vulnerable as they are daily income earners. The loss of even a single day’s income severely affects the ability of a fisher’s family to meet their basic needs. Furthermore, for most involved in this industry, there are no alternative means of income.
Of the LKR 720 million compensation received by the government, LKR 420 million has been set aside for the fishing community affected by the fire and fixed prices have been set for fishing gear and equipment in consultation with relevant businessmen. But it is important to understand the context in which this marine disaster occurred: the fisheries industry was already severely impacted by the pandemic. Islandwide curfews, cross-border mobility restrictions and trade regulations led to various constraints on access to necessary equipment and markets.
Ecological Impact and Tourism
Sri Lanka’s coastal tourism is heavily dependent on its rich marine biodiversity. The plastic waste and potential oil spills from the ship threaten not only the beaches and seas which are home to sensitive ecosystems such as lagoons and coral reefs but also its marine life.
The Marine Environment Protection Authority (MEPA), the main government body responsible for marine pollution, has stated that the plastic waste from the ship has probably caused the “worst beach pollution in our history,” and will lead to years of ecological damage. For example, the marine pollution caused by the fire is responsible for the death of 200 marine animals —including 176 sea turtles, 20 dolphins and four whales— as of now. Plastic pellets, which are easily carried by the tide, attract toxins from the water and can cause death if ingested by marine life, have washed ashore from Puttalam to Matara. Despite various efforts such as beach cleanups, the attempt to restore the coast is ongoing.
The coast has lost much of its former beauty and attraction, and out of 15 tourist zones, eight have been affected by the fire. Furthermore, the damage caused to fish breeding areas will result in lesser yields of crabs and jumbo prawns, which are especially consumed by foreign tourists. The fear of contamination and reduced supply of these items will have an immediate financial impact on the coastal economy. There is also the fear that toxic chemicals will damage the coral reef which takes years to regenerate. This depletion and ruin of coastal resources will have a spillover effect on both the fishing community and tourism leading to a mid-to-long-term economic impact.
This is not the first ship fire or oil spill that has occurred in Sri Lankan waters, with the MT New Diamond ship fire in 2020 being one of the most significant. Sri Lanka’s position in the middle of many sea and trade routes in the Indian Ocean, where around 200 to 300 ships —mainly oil tankers from the Persian Gulf to East Asia—pass daily, makes the country especially vulnerable to marine accidents.
Moving Forward
The X-Press Pearl fire was controlled only after Sri Lanka received emergency support from India, and this clearly highlights the inadequacies of current institutions to handle a crisis of this scale. While Sri Lanka does have a domestic structure in place to prevent and manage marine pollution, it is crucial that the country works closely with others in the region to achieve the same. Currently, the MEPA has the authority to implement the National Oil Spill Contingency Plan (NOSCOP) which allows the mobilisation of support from the navy, coastguard and the Sri Lanka Ports Authority. However, the emergency response system is too reliant on reactive responses as opposed to more proactive approaches, which aim to not minimise the damage caused by marine pollution but to prevent it from occurring. This requires continuous monitoring of waters and heightened scrutiny, especially given that Sri Lanka is on a trajectory to become a maritime hub and expand its port capacity.
Sri Lanka can achieve this only through regional cooperation —with countries such as India, Pakistan and Bangladesh— that is based on the facilitation of knowledge, resource sharing, constant communication channels and the formulation of standardised security measures for responders. However, this must occur through a formal, binding mechanism for otherwise, any assistance provided will be purely voluntary and context dependent. For example, requests made to offload the cargo at the Hazira port in India were denied which ultimately led to the X-Press Pearl fire on Sri Lankan waters. Given that the increase in maritime traffic has not led to a proportional increase in response capacities in countries such as Sri Lanka, official regional cooperation is key in preventing marine accidents and protecting shared waters.
Link to Original Talking Economics Blog:
Righting the Ship: The X-Press Pearl Disaster and the Imperative for Regional Maritime Cooperation
Githmi Rabel is a project intern at the Institute of Policy Studies of Sri Lanka (IPS). She is an undergraduate at New York University – Abu Dhabi, majoring in Economics with a minor in Social Research and Public Policy. (Talk with Githmi – githmi@ips.lk)
As Asia continues to account for a growing share of global economic activity, Sri Lanka faces an important opportunity to strengthen its links with regional trade networks, supply chains and economic corridors. How the country can make better use of these connections to attract investment, expand trade and strengthen its position in regional value chains will be among the key questions at the Sri Lanka Economic & Investment Summit 2026, organised by The Ceylon Chamber of Commerce on 12-13 October 2026.
Titled “Linking Sri Lanka to Asia’s Growth Networks: Trade, Corridors, and Value Chains,” the session will examine the opportunities for Sri Lanka to deepen its integration with the wider Asian economy and build stronger connections with regional and global markets.
The session keynote will be delivered by P.D Singh – Chief Executive Officer, India and South Asia, Standard Chartered Bank. He will be joined for a panel discussion by Chathuranga Abeysinghe – Deputy Minister of Industry and Entrepreneurship Development, Akio Isomata – Ambassador of Japan to Sri Lanka, Masaaki Kawabata – Chairman – Toyota Lanka (Private) Limited, and Ravi Jayawardena – Group Chief Executive Officer-Maliban Biscuits (Private) Limited. The session will be moderated by Subhashini Abeysinghe – Research Director- Verité Research.
For Sri Lanka, stronger regional integration can open opportunities beyond traditional export markets. Greater participation in regional supply chains, improved trade connectivity and closer links to economic corridors can support investment in areas such as logistics, manufacturing, export services and other sectors connected to international production networks.
The discussion will consider what Sri Lanka needs to do to strengthen its position within these networks, including improving trade connectivity, attracting investment and creating a business environment that enables companies to participate more effectively in regional and global value chains.
It will also look at the experience of businesses and international institutions operating across the region, providing perspectives on how companies assess markets, build supply chains and identify locations for investment. With supply chains and investment flows increasingly shaped by regional connectivity, the session will also consider the partnerships and strategies needed to position Sri Lanka as a more competitive participant in Asia’s growth networks, while creating opportunities for trade, investment, innovation and economic growth.
The session will form part of the second day of SLEIS 2026, held under the theme “Positioning Sri Lanka in a Changing Global Economy: Resilience, Reform, and the Future of Economic Policy.”
The Sri Lanka Economic & Investment Summit 2026 is supported by its valued sponsors and partners. Platinum Sponsor – Standard Chartered Bank Sri Lanka, Gold Sponsor – VISA Worldwide (Pvt) Ltd., Bronze Sponsor – South Asia Gateway Terminals (Pvt) Ltd., Strategic Development Partner – Asian Development Bank, Telecommunication Partner – Dialog Telecommunication, Television Partner – Dialog Television, Session Sponsors – David Pieris Motor Company (Pvt) Ltd., Hemas Holdings PLC, Sunshine Holdings PLC, International Construction Consortium (Pvt) Ltd., Official Logistics Partner – Hayleys Advantis Limited, Official Airline – SriLankan Airlines Ltd., Official Hospitality Partner – Shangri-La Colombo, Airline Partner – China Eastern Air Holding Co. Ltd.
The government gave Colombo beach restaurant Wadiya 10 days to pack up and leave — or face demolition
by Amal Jayasinghe
Pix by Ishara Kodikara
(AFP)Sri Lanka’s famed seafood shack Beach Wadiya has hosted royalty including Britain’s Princess Anne and sporting legends such as cricketer Sachin Tendulkar, but now faces demolition under a government-ordered coastal clean-up.
The simple Colombo beach restaurant has welcomed a string of celebrities, featured in Madhur Jaffrey’s culinary travels and received rave reviews in international publications, including London’s Financial Times.
“Beach Wadiya comes with a lot of history,” said Suhara Chandrasekera, the founder’s granddaughter, now a director of the restaurant.
But more than half a century after it opened, the glamour is giving way to grief at Wadiya — which means “shack” in the island’s Sinhala language.
The government’s Coast Conservation and Coastal Resource Management Department gave Wadiya 10 days to pack up and leave — or face demolition.
That deadline expired on September 10, but the restaurant is resisting the order to leave.
Seven other beach properties were given extensions of about four days to salvage furniture and fittings.
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- Co-owner Suhara Chandrasekera displaying a photo album of celebrities who visited Beach Wadiya shack in Colombo
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- A busser setting a table at Beach Wadiya shack.
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- This photograph taken on September 10, 2026 shows a busser setting a table at Beach Wadiya shack in Colombo
A few shops near Wadiya were demolished last month as part of a broader government plan to remove businesses within 10 metres (33 feet) of the shoreline.
“There shouldn’t be any buildings within the 10-metre coastal reservation from the shoreline,” Environment Minister Dammika Patabendi told AFP.
“We have identified 82 such premises and we are taking steps to remove them.”
Beach Wadiya is the only establishment resisting the order and has taken the matter to court.
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- People walk along Wellawatte Beach
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- This photograph taken on September 10, 2026 shows co-owner Suhara Chandrasekera displaying the signature of Britain’s Princess Anne in a guest book at Beach Wadiya shack in Colombo.
The family of its late founder, Olwyn Weerasekera, argues that the restaurant existed before the 1981 Coast Conservation Act being used to evict them.
“We built in 1974, which predates the law that they were talking about… We have permits dating all the way back to 1974,” 26-year-old Chandrasekera said.
“In addition to the appeal to the Coast Conservation Department, we also took the decision to file a writ,” she told AFP, referring to a case filed in the Court of Appeal.
The family has won a temporary reprieve, with the court ordering the department not to demolish the restaurant for two weeks pending a hearing.
When Wadiya was established, the beach was wider and cleaner, with rows of coconut trees, most of which have since been lost to sea erosion.
“Right now we have lost two of our huts… We’ve lost parts of our bathroom due to sea erosion,” Chandrasekera said.
She said Wadiya was the only restaurant on the beach before Sri Lanka’s tourism boom in the late 1970s.
Princess Anne had dinner at Wadiya in 1995. Nepali royals have also dined there.
British tycoon Richard Branson visited the restaurant during a family holiday in Sri Lanka in 1992, although the guestbook he signed was washed away in the December 2004 tsunami, according to the family.
Indian singing sensation Asha Bhosle, and cricket stars including India’s Rahul Dravid and former Pakistan skipper Wasim Akram, have also dined there.
One of the restaurant’s walls has a reproduction of a Financial Times cartoon of a guitar-playing lobster that accompanied a March 1994 food review headlined: “Cook me tender.”
The restaurant is best known for offering diners a platter of fresh seafood from which they can choose how it should be cooked.
There is no air conditioning and small tables are set up on the beach. An upper floor was added as the beachfront shrank over the years.
Experts blame worsening erosion on large-scale land reclamation farther north near Colombo port.
If the courts allow the restaurant to survive the government’s coastal clean-up, Chandrasekera says Wadiya will return to its roots.
“The only restaurant on the strip,” she said.
Sampath Bank PLC has been named Sri Lanka’s Best Bank for Corporate Responsibility at the Euromoney Awards for Excellence 2026, marking its third win in the category.
The award was presented at the Asia-Pacific regional awards ceremony in Singapore recently. Euromoney’s Awards for Excellence recognise performance, leadership and innovation in the global banking and financial services sector.
Sampath Bank said its flagship ‘Wewata Jeewayak’ programme was central to its corporate responsibility strategy. In 2025, the programme invested Rs. 63.7 million in 11 tank restoration projects, benefiting 14,780 people and rejuvenating 3,370 acres of paddy land.
The initiative focuses on restoring neglected irrigation tanks while improving water management, agricultural practices and climate resilience through collaboration with farmers, government authorities and farmers’ associations. Water-efficiency measures introduced under the programme can reduce wastage by 20% to 30%.
Sampath Bank Managing Director and Chief Executive Officer Sanjaya Gunawardana said the recognition reflected the bank’s commitment to creating meaningful and lasting value for communities while strengthening national resilience.
The bank’s wider corporate responsibility initiatives include coral reef, turtle and mangrove conservation, ocean plastic reduction, entrepreneurship support, financial literacy, education, healthcare and financial inclusion.
Sampath Bank previously won the Sri Lanka award in 2022 and 2024 and was named Asia’s Best Bank for Corporate Responsibility by Euromoney in 2024.
Showers expected in the Western, Uva, Sabaragamuwa and North-western provinces and in Galle, Matara, Kandy and Nuwara-Eliya Districts.
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