Sri Lanka grapples with compensation claims for tanker disasters.

• Parliament votes in favour of IMF conditions for the Extended Fund Facility.

• Easter Sunday attack report to the Catholic Bishops Conference

The saga of two cargo vessels unfolded last week when the minister of justice Wijeyadasa Rajapakshe referred to both of these matters during a lengthy statement in parliament last week.

Due to negligence and deliberate attempts, Sri Lanka has already lost the compensation package it should have received for the MT New Diamond oil tanker disaster in September 2020. The tanker which was carrying more than a quarter of a million tons of crude oil caught fire after an engine room explosion when it was 38 nautical miles off Sangaman Kanda Point on the eastern coast of Sri Lanka. One crew member was killed and another who sustained severe burns was airlifted to a hospital while Sri Lankan and Indian forces fought the fire for nearly one week to bring it under control. The tanker’s 22 other crew members were evacuated to a stand-by vessel.

Minister Rajapakshe elaborated on the matter and named former state minister Nalaka Godahewa as the person behind this act, which he called immoral. He said Sri Lanka stands to lose millions of dollars owing to the state minister’s obnoxious act.

On the pretext of a directive from then-President Gotabaya Rajapaksa, the Foreign Secretary at the time, Jayanath Colombage, ordered the oil tanker out of Sri Lankan waters.

‘I have the email sent by Secretary Colombage’, said Rakapakshe. ‘According to the letter, the president ordered the oil tanker’s release.Jayanath Colombage is only the Secretary of the Ministry of Foreign Affairs. If the president gives an order, if it is not through his secretary, it must at least be through the defence secretary.”

Rajapakshe told parliament that since there was a doubt about the truth behind the saga, he double-checked with ex-President Gotabaya Rajapaksa. The former president steered clear of controversies and said his directive had been not to move the ship out of territorial waters until the country received adequate compensation for the environmental damage that was caused, and that too only with the Attorney General’s prior approval.

The ex-president had clarified and said he had never given an order to move the ship out of Sri Lankan waters in the manner in which it was released.

“This confirms that this matter is not something that happened with the former president’sknowledge.”

The Attorney General’s opinion was not to move the ship out of Sri Lanka’s territorial waters for obvious reasons. However, following the Attorney General’s directive, the half-burned oil tanker was moved out of Sri Lankan territorial waters.

The minister said that Nalaka Godaheva had requested the former president to release this ship, but the president did not allow it to happen.

‘We have filed three lawsuits in this regard’, Rajapakshe went on to tell parliament. ‘One is for 22 million dollars for marine environmental damage, another for $75,640 as expenses incurred by the National Aquatic Resources Research and Development Agency (NARA)and another for $2,73,014 in losses caused to the fishing community’.

“The cases were instituted in the High Court of Sri Lanka, and summonses were issued to the defendants. But this defendant company has yet to respond. Now there is a big problem with these cases because the ship was allowed to leave. The three cases have been pending in the courts since then. We are unable to find the defendants and serve the summons. Hence, wewill not receive compensation for any loss or damage.”

“These occurrences should be prevented now. Someone needs to take responsibility for this. Let’s set up a parliamentary select committee and come together to learn more about these things.”

The other saga relates to the X-Press Pearl vessel, which caught fire off the coast of Colombo on May 20, 2021, causing massive environmental destruction. At the time it caught fire the X-Press Pearl, which was registered in Singapore, was carrying 1,488 containers, including 81 with dangerous goods, 25 tons of nitric acid, 348 tons of oil, and up to 75 billion small plastic pellets or nurdles that are used to make plastic products. Described as one of the most devastating disasters in Sri Lanka’s maritime history, it affected the fragile coastal eco system and the livelihoods of communities living in coastal areas.

The authorities dragged their feet without taking appropriate action against the errant shipping line for nearly two years. This was until pressure built up against relevant departments for inaction. Eventually, the Cabinet of Ministers gave the green light to the Attorney General to file an action in the Commercial High Court in Singapore to claim compensation.

Since the owners and the defendants have a business presence in Singapore, it has been named the most appropriate forum for litigation and the jurisdiction of a claim for compensation.

However, this decision has been taken against the opinion expressed by maritime legal experts, who frequently say Sri Lanka’s jurisdiction is well equipped to handle the claim.” The opposition in parliament alleged that it was because the government too did not have ample confidence in the Sri Lankan judiciary. They argued that the government’s decision to take the claim to the Singapore Commercial High Court was an indication that they did not trust the Sri Lankan judiciary to adequately address the case, despite the expertise of legal professionals. Wijedasa Rajapakshe, as the Minister of Justice, swiftly rose to his feet to defend the judiciary and dismiss the opposition’s claim. The reason appears to be that the shipping line originated in Singapore, and most of the defendants are domiciled there.

“The Marine Environmental Protection Authority has provided the Attorney General’s Department with the required information to take legal action against the owners of the X-Press Pearl vessel and its operators or local agents.”

The snails-pace approach to filing the compensation claim has baffled many.  Recently, a popular YouTuber Darshana Handungoda came out with a scathing attack on the officers of the Attorney General’s Department who were supervising the X-Press Pearl matter. It irked them to the point of resorting to redress for defamation in the Colombo District Court.

Accordingly, the Court last week issued an enjoining order against Handungoda preventinghim from further circulating defamatory videos against two Attorney General’s Department officials.

Colombo Chief District Court Judge Purnima Paranagama made this order pursuant to two lawsuits filed by Additional Solicitor General Vikum de Abrew and Senior State Counsel Nayomi Kahavita. This enjoining order will last until May 10.

The plaintiffs, two officers attached to the Attorney General’s Department, claim is that Handungoda defamed them by commenting on their professional conduct in relation to the institution of an action in Singapore to recover damages relating to the X-Press Pearl incident. In the said video, the defendant allegedly portrayed the plaintiffs’ conduct relating to the X-Press Pearl incident as that of corrupt and dishonest officers who had allegedly defrauded the state.

The plaintiffs were represented by President’s Counsel Kuvera De Zoysa. Having considered the submissions made by counsel, the court issued an enjoining order against the defendant, preventing him from further circulating the said defamatory video.

Simultaneously, legal experts believe that filing compensation claims in Singapore could reduce the chances of success or effectiveness since the latest maritime law will be applicable there as a regional maritime hub.

Meanwhile, Justice Minister Wijeyadasa Rajapakshe dropped yet another bombshell. He announced that allegations had been made about a possible bribe designed to obstruct the legal process in the X-Press Pearl affair. He mentioned the name of Chamara Gunasekara as the $250 million US–based recipient to obstruct legal proceedings against the X-Press Pearl shipping line in Singapore.

Rajapakshe, who ordered the police chief to investigate the matter, said he was informed that “a certain party solicited a bribe of US$250 million and that the money had been directed to a bank account in the UK.”

Rajapakshe later told parliament that what he received is information, not evidence, and it is up to the police to investigate. ‘The compensation due to Sri Lanka from the X-Press Pearl disaster exceeds US$6 billion and interested parties are trying to nullify Sri Lanka’s entitlement’, he claimed.

For Sri Lankans, April is an eventful month with the Sinhalese and Tamils celebrating the New Year according to the lunar calendar. This year it has taken on a deeper meaning for its cash strapped citizens following President Ranil Wickremesinghe’s decision to submit the International Monetary Fund’s conditions for the USD 2.9 billion Extended Fund Facility it loaned Sri Lanka last month. The President expressed confidence that debt restructuring would reduce Sri Lanka’s debt portfolio by US$17 billion. This is a significant amount for Sri Lanka’s economy, which comparatively, issmall.

Speaking in parliament on Wednesday last week, the President urged parliamentarians to approve a four-year IMF program to reduce the country’s debt by $17 billion through restructuring. Parliament began a three-day debate the same day on the president’s proposal to accept the IMF program. It will be followed by a vote.

If approved, the plan would dictate how Sri Lanka’s crisis-stricken economy will be managed in the coming few years. However, many opposition parties are skeptical about the IMF proposal, which wants domestic restructuring before foreign debt restructuring. There were all sorts of warnings issued, but Eran Wickramaratne came out with the most prudent analysis: a local restructuring would harm the Employees’ Provident Fund, the biggest retirement benefits fund in Sri Lanka, and would also affect the banking system since the local currency has undergone a lot of stress due to the depreciation of the currency against the US dollar. He argued that if the local restructuring was not done properly, it could lead to a large-scale default, which could cause a ripple effect across the banking sector and have a severe negative impact on the Employees’ Provident Fund. This could lead to a situation where retirees and other stakeholders would not be able to get the benefits they are expecting. However, the President said necessary precautions would be taken to safeguard the Employees’ Provident Fund.

At the end of the three-day debate, the proposal proceeded through the portals of Parliament, which will add certain sections of the proposal to the country’s statute book. A noteworthy development was that the breakaway group from the SLPP headed by Anura Priyadarshana Yapa voted in favour of the IMF proposal, along with former Minister and SJB Parliamentarian A.H.M. Fowzie, who joined the SJB ranks recently to fill the vacancy created by the resignation of Mujibar Rahaman. The SJB, TNA, and many Tamil parties were absent, while the SLPP section headed by Dullas Allahapperuma, the JVP, and Gajan Ponnambalam voted against the IMF deal. Eventually, Parliament approved the implementation of the IMF Extended Fund Facility with 120 votes in favour and 25 against.

The government also moved forward with its commitment to devising a comprehensive anti-corruption law by presenting the proposed bill to parliament on Thursday. This is in accordance with the IMF agreement.

The other significant development is the government’s decision to hand over the full report of the Presidential Commission of Inquiry into the Easter Sunday attack. This is for the Catholic Bishop’s Conference to study the contents since there has been controversy over whether certain sections of the inquiry have been concealed. The suggestion is that those sections give an insight into what really happened on the day of the fateful Easter Sunday attack. The report has been handed over to the Chairman of the Bishops Conference and Kurunegala Bishop, Rt. Rev. Dr. Harold Anthony Perera. The Catholic Church is now studying the contents with its team of lawyers, who are likely to make recommendations to the Bishops’ Conference.

Besides, J. Sri Ranga’s name has surfaced during the investigations into the arson case where President Ranil Wickremesinghe’s house was set ablaze on the 9th of July last year during the protests against the government. The Criminal Investigations Department has reported the matter to the Fort Magistrat, and the magistrate has directed the CID to produce him before court on May 3. Ranga is presently in remand over another matter relating to a traffic offence.