Sri Lanka to investigate ‘corruption’ in handling of 2021 cargo ship disaster | Environmental Affairs

Colombo, Sri Lanka – Sri Lanka’s new government, led by left-leaning President Anura Kumara Dissanayake, will launch a new inquiry into the handling of the MV X-Press Pearl cargo ship disaster that devastated marine life off the island’s coast three years ago, the chief minister told Al Jazeera .

The announcement came amid allegations of corruption, delaying tactics and mismanagement to deal with the aftermath of the disaster, and a lack of compensation for affected fishermen.

In May 2021, a Singapore-registered cargo ship caught fire near Negombo, a popular tourist destination along the Sri Lankan west coast, spilling tons of hazardous materials, including nitric acid and small pieces of plastic, into the Indian Ocean.

The fire that broke out on the ship, bound for the Sri Lankan capital Colombo from the Indian state of Gujarat, is believed to have been caused by a leak of nitric acid. A toxic leak from the ship killed scores of fish, turtles and other marine mammals, and destroyed the livelihoods of more than 20,000 fishing families.

Three years after the fire and oil leak on the ship, people are still waiting for justice in the form of compensation and accountability.

Dissanayake’s government is now planning to investigate the incident after the country’s parliamentary elections are concluded on November 14. The National People’s Power (NPP)-led coalition is expected to win the vote.

“There are many suspicions about the X-Press Pearl disaster,” Vijitha Herath, the country’s public security minister told Al Jazeera and Watershed Investigations, a United Kingdom-based non-profit investigative organization focused on water issues.

“I am committed to finding the truth. We will not let you down.

‘Danger of money laundering’

Based on the estimate of a 40-member expert committee appointed by the Marine Environmental Protection Authority (MEPA) immediately after the disaster, Sri Lanka is seeking $6.4bn from the London P&I Club, the UK-based insurer of X-Press Pearl. , as compensation for the damage caused by the disaster. The case was filed in Singapore in April 2023 under the then government, led by President Ranil Wickremesinghe.

In September this year, a report by the country’s Parliamentary Select Committee (PSC), which was set up to investigate the management of the cargo ship crisis and reduce future risks, said that Sri Lanka has so far received about $12.5m from the London P&I Club.

In addition, in the last three years, MEPA received 3.5m rupees ($11,945), while the Department of Fisheries and Aquatic Resources received almost 3bn rupees ($10.4m) from the London P&I Club – all in local currency, of course that. He raised allegations of corruption and now he will be investigated by the new government.

Darshani Lahandapura, the former head of MEPA, had led beach clean-up efforts following the disaster. He told Al Jazeera that he had come under pressure from the government to accept compensation payments in local currency at a time when the country was facing severe economic problems as inflation rose and the Sri Lankan rupee weakened.

“Government officials [from Wickremesinghe’s administration] He pressured me many times to accept payment in Sri Lankan rupees,” said Lahandapura.

By asking to pay compensation in local currency, “I believe that the ship owners were trying to take unfair advantage of the economic crisis and some government officials were supporting their demand,” he added. The value of the Sri Lankan rupee fell by almost 50 percent against the US dollar in 2022 when the economic crisis began.

Lahandapura told the PSC that he “absolutely refused” to accept payments in rupees. But insurers still pay twice in local currency.

“In his view, accepting payments in rupees could be a risk of money laundering,” the PSC said in its report, referring to Lahandapura’s statement.

Al Jazeera contacted the London P&I Club for comment on the allegations, but did not receive a response.

Alleged delay in seeking compensation

The PSC report concluded that the disaster “revealed significant gaps in the country’s ability to prevent and control marine pollution incidents”.

“The Committee found that the delay in legal action and insufficient communication between government agencies has exacerbated the damage caused to the environment and the economy,” said the newspaper.

In addition, the lawsuit seeking compensation from the London P&I Club was handed to the Sri Lankan authorities 23 months after the disaster, a few days before the deadline, stipulated under international law, expired. The law mandates that a claim for compensation in the event of an accident at sea must be made within two years of the incident. The case was filed under then Attorney General Sanjay Rajaratnam.

“It seems that there is laziness or deliberate delay on the part of the Attorney General’s Department (AGD) in handling the case of the X-Press Pearl ship disaster,” Lahandapura, former head of MEPA, told the parliamentary committee.

However, the then justice minister, Wijeyadasa Rajapakshe, blamed MEPA for the delay in filing the case, saying the marine agency submitted its environmental impact report late.

According to an anonymous official source in the Sri Lankan government, the Attorney General’s Department responded quickly to the ship owners’ requests, but took a long time to respond to MEPA’s questions.

“I have no evidence to suggest that anyone in the AGD received any financial benefit, but if the country’s AGD was tired in handling such an important case, it certainly raises suspicions,” the source told Al Jazeera.

Al Jazeera reached out to the Attorney General’s Department for a response to the allegations, but has yet to receive a response. Al Jazeera also sought a response from Rajaratnam, who has been charged, but he declined to comment.

Why Singapore?

Another issue that may be investigated is the decision to have the compensation case heard in Singapore where the ship was registered instead of Sri Lanka where the accident occurred.

“What we recommended was to file a case in Sri Lanka,” Dan Malika Gunasekara, a legal expert appointed by MEPA, told Al Jazeera. “However, the Attorney General’s decision to send it to Singapore raises serious questions about how he reached such a decision taking into account all the surrounding circumstances, especially with regard to the consequences.”

Gunasekara was referring to the problem, which was also highlighted in the PSC report, that because Singapore has signed the Convention of Limitation of Liability for Maritime Claims (LLMC Convention), compensation can be limited to about GBP 19 million ($24.7m). As the government had estimated the cost of the law to be up to $10m, that would leave about $14m for cleanup and compensation.

Critics say the decision to take the case to Singapore has cost the Sri Lankan government dearly.

“The cabinet initially estimated $4.2m as legal costs in Singapore but it was amended and now $10m has been allocated to the Attorney General’s Department,” said Asela Rekawa, Lahandapura’s successor as MEPA chairman.

“We were told to end up using precious foreign currencies when Sri Lanka was facing a crisis due to the lack of foreign currency,” said Professor Ajith de Alwis, co-chairman of the scientific committee appointed by MEPA. “Furthermore, precious little support was available to study this issue in many ways.”

However, according to the PSC report, the London P&I Club expressed concerns about coming to Sri Lanka “due to public nuisance and security fears” and chose to join the talks on compensation in Singapore.

Sri Lanka’s then justice minister, Wijeyadasa Rajapakshe, also defended the choice of Singapore to prosecute the case.

“Singapore is home to thousands of shipping companies and no company can risk damaging its business by ignoring the Singapore court’s decision,” he told Al Jazeera, adding that the decision was taken following the advice of an Australian law firm.

“In any case, it would have been difficult to enforce the decision of the UK company by the Sri Lankan court,” he said.

According to the Ministry of Fisheries in the country, about 20,000 fishermen have been paid a sum of approximately $10m, but the leader of the fishermen’s union said it was not enough.

“Fishermen received different amounts of money depending on the area, between 10,000 rupees ($66) and 20,000 rupees ($900) but some had to file appeals and nearly 2,000 ‘indirect’ fishermen are still hoping to get compensation,” Roger Peiris, the leader of the fishermen’s association, told Al Jazeera, referring to people who sell fish, own boats, or those involved in the dry fish industry.

“But I don’t see this as compensation, it’s because of the lack of quick money. Fishermen’s compensation is something that needs to be discussed separately. The fishermen would get proper compensation only when the legal issues are over.”

The report is part of a year-long investigation supported by the Pulitzer Center’s Ocean Reporting Network in partnership with Watershed Investigations.