12 March 2012

IMO ship recycling chief positive on progress:

No state has yet ratified the Hong Kong Convention but Dr Nikos Mikelis says plenty is being done.

Two-and-a-half years after an International Maritime Organisation (IMO) diplomatic conference adopted a new convention, designed to haul the ship-recycling industry into the 21st Century and challenge often appalling health and safety standards, no state has
yet ratified it.

It is likely to take several more years before the convention enters into force and in the meantime shipowners continue to send most of their end-of-life vessels to beaches in the Indian subcontinent with scant regard to how they will be broken up and the waste disposed of.

On the face of it the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) has been a damp squib, not least the apparent apathy among owners to implement voluntarily on any scale provisions contained in the convention.

All this is grist to the mill for the convention’s critics such as the NGO Shipbreaking Platform, which will be satisfied with nothing less than an end to the beaching method used to recycle around two-thirds of all ships.

India has around 30% of world recycling capacity, Bangladesh 25% and Pakistan 9%, according to the IMO. China, where “green” recycling is said to be practised (but where standards also vary), has 30% and Turkey 2% of capacity.

But no one expected the convention to have an easy ride, especially given the fact that as well as ratification requiring 15 states whose fleets must comprise at least 40% of world gross tonnage, a threshold of ship-recycling capacity is also required. The latter sets it apart from other conventions and makes entry into force that much harder.

So what progress is being made?

Plenty, according to the indefatigable Dr Nikos Mikelis, the IMO’s ship-recycling head whose determination to see the convention succeed has seen him shuttle regularly in the past year between London and Asia.

At TradeWinds’s Ship Recycling Forum in Singapore next week he is expected to tackle some of the issues that have surrounded the convention from day one, not least whether the financial burden is being divided equally between stakeholders, including shipowners and recyclers.

He reckons that in the final analysis the load is spread equitably and in an interview with TradeWinds argued that recyclers are already “putting their hands in their pockets” to raise yard standards.

Mikelis uses as evidence a sequence of photographs taken on visits to Bangladesh in recent years that show increasing evidence of the use of hard hats, proper footwear and the construction of sludge tanks and asbestos facilities, as well as the use of cranes. There is less evidence of workers in flip-flops, although Mikelis concedes improvements are patchy and certainly not universal across yards.

The Bangladesh Ship Breakers’ Association (BSBA) is also building a medical centre for which Mikelis says he has been talking to the Norwegian Ministry of Foreign Affairs in the hope it can help in locating donated beds and other equipment such as X-ray machines.

“Recyclers are making money and some are investing,” said Mikelis. “The hospital is a brilliant example.”

He added: “I believe that if morality and realism drive the regulatory issue then all the rest will fall into place. This is what I have seen happening.”

Mikelis also rounds on some of the convention’s critics who remain scathing in their condemnation of it allowing the beaching method to continue using cheap labour.

Reports of workers being paid just $3 or $4 per day sounds like exploitation but it has to be put into context, says Mikelis. He cites World Bank figures showing 2010 gross domestic product (GDP) per capita in Bangladesh of just $675, Pakistan $1,019 and India $1,475 — as compared with $10,094 in Turkey, $36,144 in the UK and $42,831 in Japan.

He does not expect cash buyers to pay for yard improvements, categorising them as deal facilitators like brokers, but he urges them to voluntarily “jump in and help”.

He applaudes owners who, for example, select the best yards in India but he accepts they remain very much in the minority.

“It drives other yards to pay attention and rewards those who have put their faith in higher standards,” said Mikelis.

“Placing a moral obligation on everyone I don’t think works.”

He says he has been focussing especially on Bangladesh because ship recycling is such a useful industry for the country. Steel plates, as in India and Pakistan, are sold for rerolling and used especially in the construction industry.

The problem facing Pakistan, says Mikelis, is not so much eventually being able to comply with the HKC but disposing of the waste and here Gaddani, as well as Chittagong in Bangladesh, is receiving help from the Basel Convention.

The IMO convention focusses on the control and authorisation of procedures inside the yards and only refers broadly to waste having to be treated in an environmentally sound manner, using authorised facilities, once outside the gates. That is where the Basel Convention becomes relevant.

Mikelis claimed: “The 2 conventions will sit beautifully next to each other. They both have a role to play.”

The IMO section head’s comments will no doubt trigger a further response in a few days’ time at TradeWinds’s Singapore forum from the convention’s detractors, who insist that ships are covered by the Basel Convention and that owners are in daily breach of it by exporting them to countries in South Asia.

At the Tenth Meeting of the Conference of the Parties to the Basel Convention (Cop10) in Cartagena last October, states were divided over whether the new IMO convention provides equivalency of control, although Mikelis is quick to point out that it won backing from parties, including within the European Union (EU), that have been involved in its development.

“Supporters of the convention, as a result of Cop10, have become more galvanised,” claimed Mikelis.

Source: TradeWinds Business Report. By Geoff Garfield. 9 March 2012

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