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)
In 2005, tax consulting and advisory services provider, DPR, facilitated tax calculations for Sri Lankan individual taxpayers by launching the nation’s first tax website. This initiative, introduced a decade ahead of government measures, set a new standard in online tax computation and e-return filing. DPR backs the advisory services with continued efforts to educate clients on tax related matters, launching an SMS Gateway in 2006 to share real-time tax updates with clients, a D.P.R. press release said.
Extracts from the release: ‘Continuing its legacy of innovation, DPR has relaunched the enhanced tax website with expansion of tax management offerings today, empowering clients with expert guidance and representation in tax-related matters. The new service now accessible through the DPR tax web portal www.taxsrilanka.com, further strengthens the long-standing reputation of DPR as a pioneer in Sri Lanka’s tax management landscape.
‘The web launching ceremony was attended by prominent figures in Sri Lanka’s tax industry. D.R.S. Hapuarachchi, Former Commissioner General of the Inland Revenue Department of Sri Lanka, served as Chief Guest, while P. Guruge, Former Fiscal Adviser to the Ministry of Finance, was the Guest of Honour. Also in attendance were Ms. Dhammika Gunathilake, Former Deputy Commissioner General and Tax Adviser to the Ministry of Finance, Premeratne Banda, Former President of the Chartered Institute of Taxation and Senior Commissioner of Inland Revenue, and Dr. Samantha Rathnayake, Senior Faculty Member at the Postgraduate Institute of Management, University of Sri Jayawardenepura.
‘During his keynote address, Hapuarachchi highlighted the essential role tax consultants like DPR play in ensuring accurate tax calculation for the government while protecting clients’ rights through tax relief and incentives. P.Guruge also conveyed the critical importance of ethical tax management practices, asserting that such responsibilities lie fundamentally with the government. He emphasized DPR’s unwavering commitment to fostering transparency and integrity in tax compliance, reinforcing the notion that responsible tax practices are essential for the overall economic health of the nation
A collaboration between the Commercial Bank of Ceylon and Capital Trust Properties, the leading real estate brokering company in Sri Lanka, has opened up exciting new possibilities for Sri Lankans seeking to buy homes.
A memorandum of understanding (MoU) between the two corporate giants paves the way for Capital Trust to direct prospective customers to Commercial Bank for financing support, and for the Bank to offer bespoke home loans that will facilitate the purchase of homes at multiple property developments, with an emphasis on apartments.
A subsidiary of Capital Trust Holdings, Capital Trust Properties offers a wide spectrum of residences at its own condominium projects like Capital Trust Thimbirigasyaya and Vajira Road, as well as at other high-end condominium developments such as Trizen, Havelock City, Shangri La, Capitol Twinpeaks, Prime Yolo, and Iconic Galaxy, among others.
“We are pleased to offer more opportunities for individuals seeking their dream homes through this partnership,” said Commercial Bank Deputy General Manager – Retail Banking & Marketing, Hasrath Munasinghe. “With a diverse range of home loan products at competitive rates, Commercial Bank provides customers with the flexibility to choose what suits them best. We are confident that the synergy between our two companies will help turn the home ownership aspirations of many into a reality.”
Notably, Commercial Bank became the first private sector bank in Sri Lanka to achieve market leadership in the Home Loans sector earlier this year, with a home loans portfolio of Rs 72.965 billion as at 31st March 2024.
Commercial Bank Home Loans are available for purchase of bare land, a house, apartment, construction of a house, completion of a partially-built house, renovation of or an extension to an existing house, and for settlement of an existing home related loan. Besides its General Home Loans, the Bank has a separate loan scheme for first time home buyers and builders as well as Green Home Loans and Foreign Currency Home Loans.
A first in Sri Lanka, Commercial Bank’s ‘First Time Home Buyers & Builders’ scheme offers a free or discounted Decreasing Term Assurance Policy (DTAP) covering the loan, thereby eliminating or reducing the burden of the cost of the loan protection insurance at a time of escalated construction cost. Commercial Bank’s Green Home Loan is another first-of-its-kind product in the market, which enables financing of both Green Building Council certified projects as well as other green initiatives including residential solar installation at the best interest rates coupled with other concessions.
Commercial Bank also pioneered ‘Flexible Home Loans’ options, which include Residual Home Loans and Step-up Home Loans. These options have been designed for applicants whose repayment capacity is inadequate to service the loans, when the monthly instalment is calculated under traditional methods, such as EMI (Equated Method Instalment) and Reducing Balance Methods.
Under Residual Home Loans, customers can repay part of the capital of the loan and postpone the repayment of the balance. As in the case of Step-up Loans, tailor-made, graduated repayment plans are offered, after evaluating the applicant’s present and projected income.
Additionally, the Bank offers a five-year grace period for professionals and high net worth individuals, where they can pay only the interest during the grace period and thereafter commence the repayment of capital together with interest, under any available method of repayment such as Equated Monthly Instalment, Reducing Balance Method or Step-up Home Loans, whichever best suits each borrower.
Sri Lanka’s first 100% carbon neutral bank, Commercial Bank is the largest private sector bank in Sri Lanka and the first Sri Lankan bank to be listed among the Top 1000 Banks of the World. The Bank is the largest lender to Sri Lanka’s SME sector, and is a leader in digital innovation in the country’s Banking sector. Commercial Bank operates a strategically-located network of branches and 974 automated machines island-wide, and has the widest international footprint among Sri Lankan Banks, with 20 outlets in Bangladesh, a Microfinance company in Nay Pyi Taw, Myanmar, and a fully-fledged Tier I Bank with a majority stake in the Maldives.
By Hiran H.Senewiratne
The stock market bounced back yesterday after witnessing profit- takings over the last few days. A favourable growth forecast of 4.4 percent for 2024 by the World Bank helped the bourse to move up, market analysts said.The All Share Price Index went up by 130.5 points, while S and P SL20 rose by 34.48 points.
Turnover stood at Rs 2.3 billion with five crossings. Those crossings were reported in JKH, which crossed 1.1 million shares to the tune of Rs 616 million; its shares traded at Rs 196, Digital Mobile Solutions Limited 2.3 million shares crossed for Rs 88.5 million; its shares traded at Rs 38.50, Royal Ceramic 805,000 shares crossed for Rs 26.5 million; its shares traded at Rs 33, Chevron Lubricants 185,000 shares crossed for Rs 23.2 million; its shares sold at Rs 125.75 and CIC 300,000 shares crossed to the tune of Rs 22.7 million; it’s shares fetched Rs 75.8.
In the retail market top event companies that mainly contributed to the turnover were; Commercial Bank Rs 150 million (1.4 million shares traded), HNB Rs 123 million (564,000 shares traded), JKH Rs 108 million (559,000 shares traded), LMF Rs 92 million (2.9 million shares traded), Lanka IOC Rs 81.7 million (712,000 shares traded), Commercial Bank (Non- Voting) Rs 67.9 million (802,000 shares traded) and Sampath Bank Rs 66.9 million (809,000 shares traded). During the day 81.3 million share volumes changed hands in 160000 transactions
It is said that High net worth and institutional investor participation was noted in Citizens Development Business Finance, JKH and HNB. Mixed interest was observed in Sampath Bank, Commercial Bank and Dialog Axiata, while retail interest was noted in SMB Leasing, Waskaduwa Beach Resort and Softlogic Capital.
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