The Supreme Court of Sri Lanka has found the owner, operator, and local agent of the container ship X-Press Pearl liable for environmental and economic damage caused by the 2021 fire and sinking of the vessel.
The ship's registered owner, EOS Ro Pte. Limited, along with others, has been fined $1 billion under the polluter pays principle.
The Singapore-flagged vessel had 1,486 containers on board at the time, 81 of which were identified as containing hazardous. It arrived in Sri Lankan territorial waters of Sri Lanka with a container already leaking nitric acid and caught fire on May 20, 2021. It sank on June 2 approximately 9.5 nautical miles from the Port of Colombo.
The court ruling said it caused “unprecedented devastation to the marine environment of Sri Lanka resulting in loss, damage, harm and injury to the marine environment - the unparalleled treasure trove of marine ecosystems, to marine life of flora and fauna and to the coral reefs. The harm caused to the nation’s economy, more specifically to the socio-economic lifestyles of the fishing communities of the Western Province was tremendous.”
The environmental disaster was the largest recorded marine plastic spill in the world. An estimated 75 billion micro-plastics (nurdles) were released along with a mixture of chemicals.
The lead-up to the disaster saw the vessel rejected from entering other ports once a nitric acid leak was detected from one of the containers. The voyage commenced from Port Jebel Ali, and the vessel made requests to the ports of Hamad and Hazira, seeking permission to discharge the leaking container.
These requests were turned down, and the vessel continued its voyage through a cyclone to reach Colombo, where another request to discharge the container was made.
The court decision details the communication amongst stakeholders, giving the perspectives of the different decision-makers throughout the saga.
For example, an exchange with the master:
Late into the night of 16.05.2021, the Master, upon being directed “to control the situation” by the Company, replied the same in an unusual manner by using harsh language (at 2350 hrs/ ship’s time) and said “what f… control. We need to discharge … already three ports tell cannot discharge [but] you order me to control”.
It cites the Colombo Harbour Master’s reasoning to cancel the berthing permission it had granted to the vessel:
There was no written process or procedure in place for how situations of this nature should be managed. Instead, I relied on my experience and expertise as Harbour Master and acted in accordance with my statutory responsibilities and powers.
I did not have a complete picture of what was happening onboard, with XPP at anchorage. The P&I appointed surveyor had not attended on board and I did not want to allow a ship that was a fire risk to enter the Port without knowing all the details of the situation. Further, the boarding team had returned approximately 1830 hrs on 20.05.2021 and also informed me that the situation was uncertain. The situation on board XPP had to be brought under control before I could allow it to berth. It was not safe to bring the XPP into a berth when it is on fire as this would have jeopardised the safety of the crew, port personnel, as well as property and infrastructure.
An analysis of the court ruling by Reed Smith states: “The Court focused on the conduct of the owners, operators, and local agents of the MV X-Press Pearl (the X-Press Pearl Group). It found that they had intentionally suppressed and withheld critical information from Sri Lankan authorities, preventing an effective and timely response to the crisis. The Court concluded that the mismanagement and lack of transparency by the X-Press Pearl Group were the primary causes of the environmental catastrophe.”
In the words of the court finding: “The mismanagement by the Operators of the whole issue became more apparent since Hazira too rejected their request for discharge of the leaking container at its port, citing that it might damage port assets and suggested to try with the next port. Not only they mismanaged the issue of handling the leaking container, but they totally shut themselves from recognising the more acute danger that lied within the Cargo Hold No. 2, where a large consignment of other dangerous cargo was stowed, and ignored the early signs of flooding bilges and its connection to the leaking Nitric acid penetrating through the hatch covers. The total mismanagement of the leak onboard the vessel is the determinant factor that accrues liability on the part of the Operators, for the resultant environmental disaster of gigantic proportions.”
X-Press Feeders has released a statement saying:
X-Press Feeders, the former operator of the container ship X-Press Pearl, is deeply concerned with the recent decision of the Supreme Court of Sri Lanka, which orders an initial payment of $1 billion within a year, in relation to the vessel’s casualty.
Our foremost concern is the human cost that this judgment threatens to impose. The Court has effectively pronounced the vessel’s Master and local Agents guilty of criminal charges before their trials have concluded, and in the case of the Agents, even before formal charges have been filed on some of the allegations. The judgment directs the Attorney General to mandate that police investigate the Agents further and prosecute them, despite them having no decision-making role in the vessel’s operations.
The Master has already languished in Sri Lanka for four and a half years due to a court-ordered travel ban. Despite offers to deposit the maximum fine possible for the charges he faces, he remains in limbo, separated from his family and unable to resume his life or career. When the actions of the Master were addressed in court, he was neither present in court nor personally represented legally, and he was given no opportunity to answer the charges levelled against him. The judgment effectively holds him and the Agents as human collateral to ensure the compliance of the owners and operators.
The court's intent to lay all blame and liability on the vessel's owners and operators is blatantly apparent in their judgment on the Sri Lankan authorities' role in the incident. It exonerates the actions of the Harbour Master and Director General of Merchant Shipping, despite their own experts boarding and inspecting the vessel and raising no alarm or immediate reason for concern, more than a week before the X-Press Pearl sank. It also ignores the vessel's pleas for help and the refusal by three ports (in Qatar, India, and Sri Lanka) to offload the container before the fire started.
Although the court acknowledges failings by the former Director of MEPA in not issuing decisive and clear orders to take the vessel offshore, an action that would have minimised the damage to the environment and economy, it assigns no accountability or liability despite numerous and urgent requests by the owners to do so. The court termed this transgression on the part of the Chairperson “a clear departure from the collective decision-making process”.
From the very start, X-Press Feeders has expressed deep regret to the people of Sri Lanka for the impact of the X-Press Pearl’s sinking and remained committed to fully assist the government of Sri Lanka in all clean-up operations. Whilst we recognise the need for compensation for any environmental damage, we believe that it must be done in an equitable and fair manner that identifies the failings in the response and clean-up operations of the Sri Lankan government and is based on expert, scientifically based assessment of damages, without having a severe human impact. Indeed, to limit the environmental impact, the Owners have, to date, paid over $150 million to remove the wreck, remove nurdles from the beaches, and compensate the affected fishermen.
For more than 40 years, X-Press Feeders have been pivotal players in Sri Lankan trade. However, this judgment, which ignores accepted international maritime law, establishes an unprecedented level of risk that we, along with most shipping companies, will struggle to meet. We fear the inevitable rise in import-export costs and the broader impact on the people of Sri Lanka.
We urge all parties involved to consider the implications and ramifications of these interim findings and appeal for rational decision-making and judgments regarding liability and compensation that address the needs for environmental rehabilitation and compensation whilst ensuring the ongoing viability of trade for Sri Lankan people.