Business

The X-Press Pearl Disaster: From Flames to Prevention

Published

4 weeks 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

Hela Apparel Holdings completes FY 2022/23 with resilience, amidst a challenging operating environment

Published

4 hours ago

2023/06/3

Thilina Walpola

The fourth quarter of FY 2022/23 marked the close of a challenging year for Hela Apparel Holdings PLC. While revenue of Rs. 20.5 Bn in Q4 represented a 40.6% increase in the same period of the previous year, this was primarily driven by the impact of the rupee depreciation. In US Dollar terms, quarterly revenue declined by 9.6% year-on-year. The drop in US Dollar revenue, however, is smaller than the 19.7% year-on-year decline recorded during Q3, as consumer demand in the Group’s key export markets remained relatively resilient.

The tentative stabilisation in demand conditions during the fourth quarter, alongside the proactive cost control measures taken by the organization contributed to an improvement in profit margins. The Group’s gross profit margin increased to 13.5% in Q4, compared to 10.0% in Q3, as capacity utilisation rates improved across the Group’s manufacturing facilities. Operating profit margins also improved, supported by greater optimisation of distribution and administration expenses. That said, elevated finance costs driven by the ongoing rise in global US Dollar interest rates were a significant drag on profitability. As a result, the Group recorded a post-tax loss of Rs. 257 Mn in the fourth quarter.

For the full year ended 31st March 2023, the Group’s revenue increased by 69.3% to Rs. 95.1 Bn. Nonetheless, the significant deterioration in market conditions during H2 eroded accumulated profits, and the Group closed the year with a post-tax loss of Rs. 1,038 Mn. Despite this, Hela’s balance sheet remained in a robust position with the Net-Debt-to-Equity ratio closing FY 2022/23 at 1.6, compared to 1.8 at the same point of the previous year, supported by improvements in the working capital cycle.

In a statement accompanying the financial results, the Company noted that it expects the challenging operating environment to continue into the first half of FY 2023/24 as consumers in its key export markets remain under pressure from high inflation. In this context, it will continue to focus on proactively strengthening its strategic customer partnerships based on its long-term value proposition as a leading global apparel supply chain solutions provider.

The organization also intends to remain agile in the evolving operating environment and consider additional proactive steps to manage costs and ensure a return to profitability. Several of the strategic initiatives taken during FY 2022/23, with a precise focus on process improvements, digital systems, and supply chain management are also expected to support the improvements in profit margins in the coming quarters.

Hela Apparel Holdings PLC is a social capital-focused company built on the principles of inclusivity, equity, and climate stability. With over three decades of industry experience, Hela focuses on building strategic partnerships with global brands to provide apparel supply chain solutions with distinctive advantages. The organisation has a global presence with 10 manufacturing facilities across Sri Lanka, Kenya, Ethiopia, and Egypt, as well as design centres in Sri Lanka, the US, the UK, and France, providing direct employment to over 20,000 people. Innovative, ethical, and sustainable apparel manufacturing is at the centre of Hela’s operations. With numerous accolades for sustainability, the organization was recently endorsed as a signatory to the UN Global Compact and was awarded the ISO 14064-1:2018 certification for quantification and reporting of greenhouse gas emissions across the Group for the second consecutive year.

Business

Calais Dentelles announces the sale of ‘NOYON’ – Noyon Lanka acquires 100 years of lace heritage

Published

4 hours ago

2023/06/3

Thilina Walpola

From left to right: Sébastien Bento Soares (Directeur Général - CEO of Calais Dentelles), Pascal Cochez (Chairman of Cochez group and Calais dentelles), Olivier Noyon (Shareholder - Noyon Lanka) and Ashiq Lafir (CEO - Noyon Lanka Pvt. Ltd.).

In groundbreaking industry news, Noyon Lanka (Pvt) Ltd., a subsidiary of MAS Holdings, and DESSEILLES CALAIS, a subsidiary of the CALAIS DENTELLES holding company, announced the sale of NOYON CALAIS’ IP rights and other intangible assets to Noyon Lanka.

NOYON CALAIS is a French lace manufacturer known for a 100+ years of heritage in the industry. This Intellectual Property (IP) acquisition now positions Noyon Lanka as an industry leader in lace manufacturing, combining the legacy and heritage of NOYON CALAIS SAS and MAS Holdings’ technical competency and manufacturing excellence. This sale gives the opportunity for the French business DESSEILLES CALAIS to focus on their main luxury core market.

The IP and other assets acquired enable Noyon Lanka to draw inspiration, create and commercialize lace products and manufacture lace products under the trademark ‘Noyon’. Additionally, Noyon Lanka will now be the owner of all ‘Noyon’ trademarks belonging to Noyon Calais and will own all their archives of sketches, drafts, and samples of lace and embroidery fabrics from the 19th and 20th centuries.

With the acquisition, Noyon Lanka enhances its ability to provide high-quality lace products to customers worldwide, drawing upon and preserving the rich history and heritage of lace manufacturing in France.

Noyon Lanka’s CEO, Ashiq Lafir, commenting on the acquisition, said, “This acquisition will enable us to expand our product design offerings and strengthen our leadership position in lace manufacturing globally. We are humbled and proud to take ownership of NOYON CALAIS’ remarkable legacy and combine it with our technical expertise to create beautiful, innovative lace products for our customers”.

Sébastien Bento Soares, the Directeur Général – CEO of CALAIS DENTELLES, the parent company of NOYON CALAIS, added that “This asset sale enables DESSEILLES CALAIS to focus on our core luxury market and ensures that the rich history and legacy of Noyon’s lace continues to effectively serve its long-time customers, who have come to rely on Noyon’s heritage in lace to provide some of the world foremost brands with the finest lace designs that their customers have adorned over many generations”.

Noyon Lanka was established in 2004 when Noyon Calais France, an industry expert in knitted and leavers lace, partnered with MAS Holdings. Today, Noyon’s lace creators and designers launch over 450 designs each year, with collections ranging from multi-way stretch, high tenacity lace to engineered lace for fabric.

In addition to its production facilities in Sri Lanka, the company has a global footprint with a manufacturing presence in Indonesia and China.

In the image from left to right: Sébastien Bento Soares (Directeur Général – CEO of Calais Dentelles), Pascal Cochez (Chairman of Cochez group and Calais dentelles), Olivier Noyon (Shareholder – Noyon Lanka) and Ashiq Lafir (CEO – Noyon Lanka Pvt. Ltd.).

Business

Nippon Paint Lanka sponsors painting of Sri Lanka’s tallest Buddha statue

Published

4 hours ago

2023/06/3

Thilina Walpola

Nippon Paint has donated the paint required to paint the tallest Buddha statue in Sri Lanka. Built by the Methsaviya Sansadaya, it is located at the Mahiyangana Purana Rajamaha Viharaya.

“History records Mahiyanganaya as the first place visited by the Lord Buddha nine months after receiving enlightenment,” said Vidyakeerthi Prof. Chandana Jayaratne, President of the Meth Saviya Sansadaya. “It is also recorded that the Lord Buddha donated a lock of hair to the leader of those who heard his preaching and embraced the noble path. This leader who was known as King Saman (Known today as Saman Deviyo), enshrined the relics and built the first Dagoba in Mahiyanganaya. This has been gradually increased in height during later years. On completion, this will be the tallest Buddha statue in Sri Lanka at 84-feet. The statue was unveiled on Sunday May, 28, 2023.”

Nemantha Abeysinghe, General Manager, Nippon Paint Lanka, said they were very happy to be associated in such a noble venture. “It is an honour for us to be able join the Meth Saviya Sansadaya to have the statue painted with high-quality, weather-resistant, and long-lasting Nippon Paint. Buddhism is the religion of the majority in Sri Lanka and we consider this as a contribution from Nippon Paint to the propagation of religion and culture in Sri Lanka.”

“We are deeply grateful to Nippon Paint Lanka for their noble gesture in donating not one but five coats of paint to withstand the heavy rains, winds and sunshine at this location,” Prof. Jayaratne said.