29 April 2014

GMS weekly report on Indian ship breaking industry for WEEK 17 of 2014:

Another bumper week of sales masked an overall concern locally that the market has peaked ahead of the impending monsoon season, in addition to the announcement of the election outcome (polling for which has already started in several states this week).

As the Indian Rupee spent much of the week trading into the INR 61s against the US Dollar cc finally settling back down to the Rs. 60s (to the relief of many), local steel plate prices also experienced an alarming depreciation this week and witnessed as much as USD 10-15/LT LDT wiped off in the last month alone.

However, that has not distilled the local optimism and the buying continues at some fantastic (albeit unbelievable) levels. One such case in point saw the Polish controlled 1991 built Danish panamax bulker ARMIA KRAJOWA (13,575 LDT) sold at region USD 480 per LT LDT (although with 280 T bunkers included upon delivery).

Italian owners also committed both their RoRo sisterships JOLLY VERDE and JOLLY ROSSO (both 13,696 LDT) as is Jebel Ali, for a very firm USD 500 per LT LDT enbloc (with extra payment for bunkers).

PIL of Singapore continued their clear out of older tonnage, with the sale of the container KOTA WIRAWAN (6,811 LDT) at a speculative USD 513 per LT LDT. The decent age, ownership and size (attracting many end buyers) was responsible for the huge price on show.

Source: Steel Guru. 29 April 2014

24 April 2014

Garment industry in Bangladesh - ILO: Rana Plaza is an opportunity to change how global supply chains operate

ILO Deputy Director-General for Field Operations and Partnerships Gilbert Houngbo says that the Rana Plaza tragedy in Bangladesh which killed over 1,100 garment workers in April 2013 can be a catalyst for change

DHAKA (ILO News) – Bangladesh can change the way global supply chains operate, said ILO Deputy Director-General for Field Operations and Partnerships Gilbert Houngbo at a Rana Plaza commemoration event in Dhaka.

Speaking on the one-year anniversary of the Rana Plaza building collapse, Gilbert Houngbo said that: “Rana Plaza was a tragedy for Bangladesh. It was also a global tragedy, shining a light on issues concerning millions of workers, employers, brands and consumers – the entire supply chain.”

Houngbo said it was a call for change that suddenly closed the gap between consumers in developed economies and the workers who make their clothes.

“I am pleased to be able to say that change is happening. There has been significant progress to improve working conditions and secure workers’ rights during the last 12 months in Bangladesh,” he said.

He also pointed to international initiatives launched by buyers and retailers.

“The Accord and the Alliance are unprecedented commitments to make the factories they source from safer,” he said.

The ILO serves as the neutral chair of the Accord, which brings together more than 150 international brands and retailers who have suppliers in Bangladesh, and two global unions (IndustriALL, UNI Global). In total, the Accord covers 1,639 of the 3,498 Bangladesh factories making garments for export. The Alliance is a group of 26 North American retailers and brands. It covers a further estimated 770 factories.

Challenges ahead
While compensation payments have started for the survivors and families of those who died at Rana Plaza, Houngbo said that it would be unacceptable if all legitimate claims were not fully honoured.

“I am calling on all stakeholders to step up to the plate and ensure the Trust Fund target is reached,” he said.

The ILO Deputy Director-General also called for better preparedness in the event of future accidents through an effective workplace injury insurance scheme in Bangladesh.

“Sustainable systems need to be in place to ensure that compensation can be resolved efficiently and fairly,” he said.

Drawing attention to the challenges that lie ahead, Houngbo said: “We all know that change does not come easy but these difficulties should not discourage us from driving through what is required to make sure the Bangladesh garment sector is a catalyst for sustainable change in Bangladesh and around the world.”

“All stakeholders have to come together to work in a harmonized way, none of us can do it alone,” he added.

Source: ILO. 24 April 2014

16 April 2014

GMS weekly report on China ship breaking industry for WEEK 15 of 2014:

With Chinese levels slipping to even below those of Turkey, there was little hope for open buyers to secure international tonnage.

Pricing stands at around USD 300/LT LDT for dry vessels (and below even for smaller LDT units) and about USD 15-20/LT LDT higher for decent LDT units, container vessels and tankers.

Non state owners ineligible for the subsidies were of course seeking to bring their vessels over to the Indian sub continent range to enjoy the USD 150/LT LDT premium available for same.

Source: Steel Guru. 15 April 2014

GMS weekly report on Pakistan ship breaking industry for WEEK 15 of 2014:

After some success in securing competitive market vessels and cash buyer ‘as is’ units, Pakistan buyers continued their (recent) good run with the acquisition of another aframax tanker, likely gas free for man entry only.

The Greek controlled KAPPA (15,301 LDT) fetched an impressive USD 490/LT LDT ‘as is’ Fujairah with sufficient fuel for the voyage over to Pakistan.

The sale follows those of several decent sized aframax units from US owners such as the OVERSEAS BERYL and EAGLE OTOME in recent weeks and shows that Pakistan is very much there to compete on large LDT units, seemingly even container units now (despite previous concerns surrounding beaching draft issues).

Source: Steel Guru. 15 April 2014

GMS weekly report on Turkey ship breaking industry for WEEK 15 of 2014:

Local steel prices came off (marginally) the past week, with the Turkish Lira remaining at the same levels against the U.S. Dollar. The TRY opened against the U.S. Dollar at TRY 2.11 on Monday and closed at the same rate on Friday, despite some fluctuations through the week ranging.

Recycling activity remains depressed with only a couple of Vessels on the smaller side hitting the shores of Aliaga. Demand for vessels persists with many local recycling yards growing increasingly hungry for some new tonnage.

As such, prices are expected to remain steady despite a small drop in local steel plate prices.

Source: Steel Guru. 15 April 2014

GMS weekly report on Indian ship breaking industry for WEEK 15 of 2014:

The soaring sentiment that has seen market levels push on to unexpected and extraordinary highs, was sustained for yet another week with another large panamax container vessel concluded at exceedingly firm levels.

The Danaos controlled COMMODORE (22,148 LDT) achieved a fantastic USD 510/LT LDT for delivery India with the size (fitting the demand for one specific yard), good ownership and whopping 85 T bronze propeller responsible for the exceptional price on show.

It was also another fraught week of competition with cash buyers battling it out amongst themselves to secure market tonnage and invariably paying well over the odds a dangerous strategy if the market takes a turn and less scrupulous buyers are asked (expected) to perform on their obligations.

There is the feeling however, that as summer approaches and monsoon season begins, the market has essentially peaked. The supply of vessels remains steady and many of the larger buyers (in terms of LC limits and yard capacity) able to take panamax sized containers have been booked with units and demand is expected to dampen as a result.

The currency spent another steady week trading in and around Rs. 60 against the US Dollar and steel prices paired recent gains with a couple of days of consecutive losses. Notwithstanding, sentiment remains healthy and prices are expected to stay steady (at least for the next week or so) as long as the fundamentals remain stable.

Source: Steel Guru. 15 April 2014

GMS weekly report on Bangladesh ship breaking industry for WEEK 15 of 2014:

Having taken a number of vessels last week – handysize bulkers discharging clinker in Chittagong it was a quieter week for local buyers who seemed unable (perhaps unwilling) to compete with the rampant showings in both Pakistan and India.

Despite steady fundamentals in both scrap steel prices and the currency, Bangladesh buyers were simply not able to compete on large LDT container and tanker units at levels of close to USD 500/LT LDT (and excess) and subsequently missed a number of juicy units, some even proceeding from the Far East.

Demand is yet to fully reload, with many end buyers having taken units in the early part of the year (capesize bulkers, tankers and containers) and yet to completely clear their yards before emerging at the bidding tables once again.

Moreover, with monsoon season and budgets all approaching, it may be that the Bangladeshi market may not fully fire once again until after the summer months.

Source: Steel Guru. 15 April 2014

The Ship-Breakers:

In Bangladesh men desperate for work perform one of the world’s most dangerous jobs.

I had been warned that it would be difficult to get into Bangladesh’s shipbreaking yards. “It used to be a tourist attraction,” a local man told me. “People would come watch men tear apart ships with their bare hands. But they don’t let in outsiders anymore.” I walked a few miles along the road that parallels the Bay of Bengal, just north of the city of Chittagong, where 80 active shipbreaking yards line an eight-mile stretch of the coast. Each yard was secured behind high fences topped with razor wire. Guards were posted, and signs warned against photography. Outsiders had become especially unwelcome in recent years after an explosion killed several workers, prompting critics to say the owners put profits above safety. “But they can’t block the sea,” the local said.

So late one afternoon I hired a fisherman to take me on a water tour of the yards. At high tide the sea engulfed the rows of beached oil tankers and containerships, and we slipped in and out of the deep shadows cast by their towering smokestacks and superstructures. Some vessels remained intact, as if they had just arrived. Others had been reduced to skeletons, the steel skin cut away to reveal their cavernous black holds.

We drifted alongside barnacle-encrusted hulls and beneath the blades of massive propellers. I read off names and flags painted on the sterns: Front Breaker (Comoros), V Europe (Marshall Islands), Glory B (Panama). I wondered about cargoes they had carried, ports where they had called, and crews that had sailed them.

The life span of such ships is roughly 25 to 30 years, so most of these likely had been launched during the 1980s. But the rising cost to insure and maintain aging vessels makes them unprofitable to operate. Now their value was contained mostly in their steel bodies.

Nearly all the demolition crews had left work for the day, and the ships stood silent, except for the gurgling in their bowels and the occasional echo of metal clanking. The air hung heavy with the odor of brine and diesel fuel. Making our way around one hull, we heard laughter and came upon a group of naked boys who had swum out to a half-submerged piece of wreckage and were using it as a diving platform. Just beyond the line of ships, fishermen were casting their nets for schools of tiny ricefish, a local delicacy.

Suddenly a shower of sparks rained down from the stern several stories above us. A head appeared over the side, then arms waving vigorously. “Move away! We’re cutting this section,” a man yelled down at us. “Do you want to die?”

Over the past decade India recycled more ships, but Bangladesh led in deadweight tonnage, meaning the biggest vessels generally ended up on its beaches. China and Turkey enforce more safety measures than the others and take steps to reduce the environmental impact.

Oceangoing vessels are not meant to be taken apart. They’re designed to withstand extreme forces in some of the planet’s most difficult environments, and they’re often constructed with toxic materials, such as asbestos and lead. When ships are scrapped in the developed world, the process is more strictly regulated and expensive, so the bulk of the world’s shipbreaking is done in Bangladesh, India, and Pakistan, where labor is cheap and oversight is minimal.

Industry reforms have come in fits and starts. India now requires more protections for workers and the environment. But in Bangladesh, where 194 ships were dismantled in 2013, the industry remains extremely dirty and dangerous.

It also remains highly lucrative. Activists in Chittagong told me that in three to four months the average ship in Bangladeshi yards returns roughly a one-million-dollar profit on an investment of five million, compared with less than $200,000 profit in Pakistan. I called Jafar Alam, former head of the Bangladesh Ship Breakers Association. He denied that profit margins were that high. “It varies by ship and depends on many factors, such as the current price of steel,” he said.

Whatever the actual profits, they are realized by doggedly recycling more than 90 percent of each ship. The process begins after a ship-breaker acquires a vessel from an international broker who deals in outdated ships. A captain who specializes in beaching large craft is hired to deliver it to the breaker’s yard, generally a sliver of beach barely a hundred yards wide.

Once the ship is mired in the mud, its liquids are siphoned out, including any remaining diesel fuel, engine oil, and firefighting chemicals, which are resold. Then the machinery and fittings are stripped. Everything is removed and sold to salvage dealers—from enormous engines, batteries, generators, and miles of copper wiring to the crew bunks, portholes, lifeboats, and electronic dials on the bridge.

After the ship has been reduced to a steel hulk, swarms of laborers from the poorest parts of Bangladesh use acetylene torches to slice the carcass into pieces. These are hauled off the beach by teams of loaders, then melted down and rolled into rebar for use in construction.

“It sounds like a good business until you consider the poison that is soaking into our land,” says Muhammed Ali Shahin, an activist with the NGO Shipbreaking Platform. “Until you’ve met the widows of young men who were crushed by falling pieces of steel or suffocated inside a ship.” At 37 Shahin has been working for more than 11 years to raise awareness about the plight of the men who toil in these yards. The industry, he says, is controlled by a few powerful Chittagong families who also hold stakes in the ancillary businesses, including the steel rerolling mills.

Shahin insists he’s not blind to his country’s desperate need for the jobs shipbreaking creates. “I do not say shipbreaking must stop entirely,” he says. “But it must be done cleaner and safer with better treatment for the workers.”

His criticism isn’t reserved just for Bangladeshi ship-breakers. “In the West you don’t let people pollute your countries by breaking up ships on your beaches. Why is it OK for poor workers to risk their lives to dispose of your unwanted ships here?”

In the sprawling shantytowns that have grown up around the yards, I met dozens of the workers about whom Shahin is most concerned: the men who cut the steel and haul it off the beaches. Many had deep, jagged scars. “Chittagong tattoos,” one man called them. Some men were missing fingers. A few were blind in one eye.

In one home I meet a family whose four sons worked in the yards. The oldest, Mahabub, 40, spent two weeks as a cutter’s helper before witnessing a man burn to death when his torch sparked a pocket of gas belowdecks. “I didn’t even collect my pay for fear they wouldn’t let me leave,” he says, explaining that bosses often intimidate workers to keep silent about accidents.

He points to a photo in a small glass cabinet. “This is Jahangir, my second oldest brother,” Mahabub says. Jahangir went to work at 15, after their father died. “He was a cutter in the Ziri Subedar yard and was fatally injured there in 2008.” He and his fellow workers had been cutting a large section for three days, but it wouldn’t fall. During a rainstorm they took shelter beneath the piece, and it suddenly gave way.

The third brother, Alamgir, 22, is not home. He had been assisting a cutter when he fell through a hatch on a tanker, plunging about 90 feet into the hold. Miraculously, enough water had seeped into the bottom to break his fall. One of his friends risked his own life to shinny down a rope and pull him out. Alamgir quit the next day. Now he serves tea to the managers in the yard’s office.

The youngest brother, Amir, 18, still works as a cutter’s helper. He is a wiry boy with smooth, unscarred skin and a nervous smile. I ask if he’s scared by his brothers’ experiences. “Yes,” he says, smiling shyly as if unsure what to say next. As we talk, a thunderclap shakes the tin roof. Another boom follows. I look outside, expecting to see the onset of one of Bangladesh’s famously violent monsoons, but the sun is shining. “It’s a large piece falling from a ship,” says the boy. “We hear this every day.”

Source: national geographic. April 2014

Making Sure the New EU Ship Recycling Regulation Works:

By Ingvild Jenssen, Policy Advisor and Founder of the NGO Shipbreaking Platform

The NGO Shipbreaking Platform has actively contributed to the legislative process which in June 2013 ended with an agreed text for a new EU Regulation on Ship Recycling. The Regulation entered-into-force on 30 December last year and will be applicable within five years. However, unless an economic incentive is added to it, the registration of European ships under flags of convenience (FOC) will allow ship owners to easily circumvent the new rules and continue dumping their toxic ships in substandard facilities. Reflagging has always been a convenient way for ship owners to circumvent laws enforced by flag states and a regulation based only on the voluntary registration under a European flag will not have the promised impact.

Each year, the NGO Shipbreaking Platform publishes a list of ships dismantled globally.  In 2013, we recorded 1,213 scrapped vessels. More than half of these were sold to substandard beaching facilities in India, Pakistan and Bangladesh. South Asia has become a preferred dumping ground for end-of-life ships as environmental, safety and labour rights standards are poorly enforced there. In South Asia, ships full of toxics such as asbestos, lead, PCBs and heavy metals are broken down on tidal mudflats by unskilled migrant workers, many of them children. The number of fatal accidents due to explosions or falling iron plates prompted the ILO to label shipbreaking in South Asia one of the most dangerous jobs in the world. Many more workers die of cancer related diseases due to the lack of adequate protective equipment. The hazardous wastes also ravage coastal ecosystems and have killed or devastated dozens of aquatic species, destroying with this the livelihoods of surrounding fishing communities.

Cheap labour and serious infrastructural deficiencies are what drives the toxic ships to developing countries. Ship owners sell their vessels to South Asian breakers for considerably greater profit than if they were to sell to clean and safe recycling facilities. Last year, approximately 40 percent of the ships scrapped on beaches in South Asia were EU-owned.  Greece remains the worst European toxic ship dumper, closely followed by Germany. Owners in these countries disposed a record-high 80 percent of their end-of-life ships in India, Bangladesh and Pakistan. Comparatively, Japanese owners sent 43 percent of their ships to South Asia, whilst Chinese owners in vast majority opted for nationally available ship recycling capacity.

Once applicable, the EU Ship Recycling Regulation will only allow ships registered under the flag of an EU Member State to be dismantled in facilities that meet the requirements set out in the Regulation. It will be the responsibility of the European Commission to list these facilities. The Regulation disqualifies the beaching method and will only allow for downstream waste management that effectively meets European standards. Shipbreaking yards in South Asia will clearly not appear on the EU list of approved facilities. Still, selling a vessel or changing its flag prior to dismantling is not outlawed by the Regulation and will allow easy circumvention of the new rules. Only ships sailing under the flag of an EU Member State when heading for a dismantling yard will be covered by the new Regulation.

Already, of all the European owned ships that were scrapped last year more than two thirds were not registered under an EU flag. Flags of convenience (FOCs) such as Comoros, Tuvalu, Saint Kitts and Nevis, Togo and Sierra Leone, that are less favoured during operational use, were excessively popular flags for the end-of-life ships broken in South Asia. Unscrupulous ship owners have long used FOCs to evade tax rules, license regulations, safety and environmental standards and social requirements for the treatment of crew. Similarly, end-of-life vessels can re-flag several times before reaching the dismantling yard, a practice known as “flag hopping”, with the aim of avoiding stricter rules on ship recycling.

Backed by shell companies, joint-ventures and hidden owners, FOCs are considerable constraints to combating illegal toxic waste dumping as they make it extremely difficult to locate and penalise the real owners of the vessels. With the new Regulation being a further incentive to flag out, vessels still registered under a flag of an EU Member State at end-of-life is likely to decline to a disillusioning number of ships, rendering the impact of the Ship Recycling Regulation non-existent for the purpose of improving ship recycling practices and even negative with regards to EU policies aimed at strengthening the EU fleet. Without a strong incentive to ensure proper enforcement the new EU Regulation will in effect rid the EU with its responsibility – and opportunity – to provide solutions to the ship breaking crisis.

Taking stock of lessons learnt on waste policies related to other products, such as end-of-life vehicles and electronic equipment, the success of the new Ship Recycling Regulation will depend on the introduction of a financial incentive which holds the beneficiaries of shipping accountable for the costs and liabilities of their vessels at end-of-life. Several studies, also those issued by the European institutions, have stressed that a financial mechanism would be legally and economically practicable, and, more importantly, necessary for the effective implementation of the law.

Proposals for an economic incentive have included the obligation for all ships calling at European ports to either provide input to a ship recycling fund or bond; give evidence of a dedicated recycling savings account; or hold a compulsory insurance. Redistribution of the collected funds would then be made conditional to safe and environmentally sound recycling and would close the financial gap between substandard and safe and green recycling facilities. By involving all ships that use EU ports or enter EU waters – regardless of flag – in a mandatory financial scheme, the playing field will be levelled globally as most large commercial vessels – regardless of flag – travel to the EU during their operational lives.

Whilst the European Parliament Rapporteur MEP Carl Schlyter received strong support for his proposal to introduce a port fee for ship recycling by members of the European Parliament Environment Committee, the scheme was rejected in plenary by only seven votes. Prior to the plenary vote the European Sea Ports Organisation (ESPO) surprisingly strongly lobbied against MEP Schlyter’s proposal, basing their arguments on misinformed calculations of the costs involved. Ship owners categorically oppose themselves to any regional regulation on ship recycling, as they do for all shipping matters, and strongly reject any financial instrument that would hold them liable for their end-of-life vessels as they still do not consider ship recycling to be an issue of hazardous waste management.

A mandatory financial mechanism that ensures the internalisation of costs based on an individual ship owner scheme; discourages reflagging prior to dismantling; and promotes green design and pre-cleaning during the operational life of a ship will significantly increase the chances for successful implementation of the new Regulation. It will also reward those ship recycling facilities that have already invested in better practices. The European Commission is to report on the possibilities for a financial incentive by 2015, accompanied if appropriate by a legislative proposal.

We urge the European Commission and MemberStates to support the implementation of the polluter pays principle. We also urge ESPO to provide input that will help develop a workable scheme similar to existing port dues related to reduction of emissions from ships. Without an economic incentive, circumvention of European law covering end-of-life vessels will persist and the European shipping industry will continue to be at the heart of scandals involving severe pollution of coastal zones and exploitation of vulnerable workers in developing countries.

The NGO Shipbreaking Platform is a global coalition of environmental, human rights and labour organisations that works for the safe and environmentally sound recycling and disposal of end-of-life vessels. www.shipbreakingplatform.org

Source: government gazette. 15 April 2014

Platform News – National Geographic Magazine reveals child labour, toxic waste dumping in Bangladesh shipbreaking yards

16 April 2014 – The upcoming May edition of National Geographic Magazine features a harrowing account of the shipbreaking crisis in the yards of Chittagong, Bangladesh. The pictures and the video posted on the magazine’s website clearly show that children still work in the yards despite the fact that hazardous child labour is illegal in Bangladesh. According to the country’s Labour Act 2006, it is prohibited to employ any person under the age of 18 in hazardous industries. The National Geographic article also shows that hazardous substances are released and dumped every day regardless of the 2009 High Court ruling prohibiting the import of end-of-life vessels containing hazardous wastes. Moreover, the working conditions are still dangerous and deadly: the pictures show workers walking barefoot with no protection equipment.

The NGO Shipbreaking Platform reported that at least 20 shipbreaking workers died in the yards in 2013, with countless others going unreported as there is no official documentation of accidents in the yards. Thousands of workers have been injured in the yards or poisoned by exposure to toxic materials retrieved from the end-of-life ships, such as asbestos. Representatives of the industry deny the number of fatal accidents and claim that child labour has been banned from the yards – it has, but only on sign boards outside the yards which read “Safety first” and “No child labour”.

The National Geographic article, written by Peter Gwin is available online [1] and features pictures taken by Mike Hettwer [2]. The reporters interviewed Muhammed Ali Shahin, the NGO Shipbreaking Platform’s project coordinator in Bangladesh [3].

Patrizia Heidegger
Executive Director
NGO Shipbreaking Platform
+32 (0) 2 6094 419

Source: NGO Shipbreaking Platform. 16 April 2014

12 April 2014

Bangladesh Agrees to Upgrade Ship Recycling Standards:

LONDON, UK, April 11, 2014 (ENS) – The International Maritime Organization and the Government of Bangladesh today agreed to improve safety and environmental standards in the country’s ship-recycling industry through cooperative efforts over the next 18 months.

A Memorandum of Understanding formalizing the cooperation between the two parties was signed by Nicolaos Charalambous, director, Technical Cooperation Division, IMO and Ashadul Islam, additional secretary, Economic Relations Division of the Ministry of Finance of the Government of Bangladesh.

IMO and Bangladesh will jointly implement a project entitled Safe and Environmentally Sound Ship Recycling in Bangladesh – Phase I.

With an annual gross tonnage capacity of more than 8.8 million, the Bangladesh ship recycling industry is one of the world’s most important, second only to neighboring India in terms of volume.

The agreement signed today demonstrates a major commitment from the Government of Bangladesh to improve safety and environmental standards within the shipbreaking industry, where deaths and injuries to workers have raised concerns about safety standards for years.

The most recent deaths occured on April 3, when four shipbreaking workers were killed and another three were critically injured when a gas cylinder exploded in a shipbreaking yard in Chittagong, Bangladesh.

“This sad accident shows the clear lack of safety measures in the industry,” Muhammad Ali Shahin, Bangladesh coordinator of the NGO Shipbreaking Platform said then. “Shipbreaking workers are not well trained, their work is not supervised and they are either not provided with safety gear or no checks are made to ensure that they are actually able to properly use protective equipment. It is very obvious that nobody feels responsible for these men’s lives.”

Yet, the IMO, the Government of Bangladesh, the Norwegian Agency for Development Cooperation, and the Secretariat of the Basel, Rotterdam and Stockholm Conventions have been working towards the establishment of the Safe and Environmentally Sound Ship Recycling in Bangladesh project for years.

The project, aimed at improving standards and sustainability within the industry, will consist of five work packages.
  • Studies on economic and environmental impacts and on the management of hazardous materials and wastes will be conducted under the new agreement.
  • There will be a review and upgrade of existing training courses.
  • Recommendations will be developed on strengthening the government’s One-Stop Service, in which all the ministries with a responsibility for ship recycling – Industries, Environment, Labour and Shipping – offer a single point of contact for all ship recycling issues.
  • And finally, Bangladesh and the IMO will develop a detailed project document for “a possible follow-up project to implement the recommendations of phase I.”

Today’s agreement will be executed by the Marine Environment Division of IMO in partnership with the Ministry of Industries of Bangladesh.

The Bangladeshi ministry will coordinate input from the different stakeholder ministries within the country, while IMO will also collaborate with other relevant UN agencies including the International Labour Organization and the United Nations Industrial Development Organization to ensure successful delivery of the project.

The principal funding for the project will come from the Norwegian Agency for Development Cooperation.

In addition, the Secretariat of the Basel, Rotterdam and Stockholm Conventions will also support the project by mobilizing some EU funding towards the work package related to the management of hazardous materials, which will partly be implemented by BRS.

These three international treaties are:

the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, 1989;

the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, 1998;

the Stockholm Convention on Persistent Organic Pollutants, 2001.

The International Maritime Organization is the United Nations specialized agency with responsibility for the safety and security of shipping and the prevention of marine pollution by ships.

11 April 2014

IMO, Bangladesh to Improve Ship-Recycling Standards:

The International Maritime Organization (IMO) and the Government of the People’s Republic of Bangladesh have signed a landmark agreement to work together to improve safety and environmental standards in the country’s ship-recycling industry.

A Memorandum of Understanding formalizing the cooperation between the two was signed by Mr Nicolaos Charalambous, Director, Technical Cooperation Division, IMO and Mr Md. Ashadul Islam, Additional Secretary, Economic Relations Division of the Ministry of Finance of the Government of Bangladesh, on 10 April 2014.

IMO and Bangladesh will jointly implement a project entitled “Safe and Environmentally Sound Ship Recycling in Bangladesh – Phase I”. With an annual gross tonnage capacity of more than 8.8 million, the Bangladesh ship recycling industry is one of the world’s most important, second only to neighboring India in terms of volume.

The project, aimed at improving standards and sustainability within the industry, will consist of five work packages, covering studies on economic and environmental impacts and on the management of hazardous materials and wastes, recommendations on strengthening the Government’s One-Stop Service (in which all the various ministries with a responsibility for ship recycling – e.g. Industries, Environment, Labor, Shipping – offer a single point of contact for related matters), a review and upgrade of existing training courses and the development of a detailed project document for a possible follow-up project to implement the recommendations of phase I.

It will be executed by the Marine Environment Division of IMO, in partnership with the Ministry of Industries of Bangladesh, over the next 18 months. The Bangladeshi ministry will coordinate input from the different stakeholder ministries within the country, while IMO will also collaborate with other relevant UN agencies including the International Labour Organization (ILO) and the United Nations Industrial Development Organization (UNIDO) to ensure successful delivery of the project.

The principal funding for the project will come from the Norwegian Agency for Development Cooperation (Norad), while the Secretariat of the Basel, Rotterdam and Stockholm Conventions (BRS)* will also support the project by mobilizing some EU funding towards the work package related to the management of hazardous materials, which will partly be implemented by BRS.

IMO, the Government of Bangladesh, Norad, and BRS have been working towards the establishment of this project for a number of years. It demonstrates a major commitment from the Government of Bangladesh to improve safety and environmental standards within this vital industry.

*Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, 1989; Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, 1998; Stockholm Convention on Persistent Organic Pollutants, 2001.  

Source: maritime executive. 10 April 2014

09 April 2014

India's shipbreaking market on fire:

India's junk ship market is on fire, with the bulk of demolition sales being concluded from the country. The main reason was optimism in the industry over the strengthening of the rupee, which dipped briefly below the INR60 per US dollar mark for the first time this year.

Local levels, however, still did not reflect prices being offered up by cash buyers for international tonnage. These operators, who bought junk container ships at huge levels over the last month, are set to lose money on these speculative purchases as the local market is unable to support such high prices.

“Just one poor day of reversals on the rupee or significantly depreciating steel plate prices could see local sentiments and prices reverse very quickly,” the Dubai-based cash buyers GMS warned. “Thus, it is a risky strategy being employed by many, just to get their hands on available tonnage, and owners need to be aware of simply taking top dollar.”

The Bangladeshi market is already displaying signs of exhaustion, and the demand for usually favoured larger units is virtually non-existent locally, with the focus having shifted to the acquisition of smaller to mid-range vessels.

As many of the bigger buyers currently have their plots full, the aggression to buy was largely absent from the Bangladeshi market. Market operators found it distinctly galling to see large-ldt vessels, which normally have Chittagong as their final halt, go past Bangladesh to more lucrative markets.

Improving demand and levels in Pakistan saw local buyers pick up a number of their favoured larger-ldt units from existing cash buyer inventories. Remarkably, these included several of those hard-to-sell panamax-sized container vessels.

Bids from China and Turkey remained marooned a substantial way behind their Indian sub-continental competitors – by as much as $150/ldt in some categories. However, supply to these markets continued from lower-ldt vessels positioned in the area, green vessels; or, in the case of China, from state owners enjoying the generous scrapping subsidies on offer.

Nevertheless, the China National Ship Recycling Association feared that China’s shipbreaking industry would repeat last year’s financial losses in 2014 amid government plans to cap steel output in the face of limited ferrous scrap demand, high purchase prices for obsolete vessels and a steady decline in domestic scrap prices.

Pick of the recent sales was the 6,815 ldt PIL-owned 6,815 ldt container vessel Kota Wijaya, which went to India at an almost unreal $525 per ldt, with 350 tonnes of bunkers on board. The small size, bunkers and decent ownership secured the high price.

Another container ship to attract a strong price was the Lomar controlled 10,317 ldt Athens Trader, which was sold to Alang on “as is Jebel Ali” basis for $495 per ldt, with 120 tonnes of bunkers on board.

Alang also picked up the Egyptian owned 5,853 ldt bulk carrier Amira Mariam at $465 per ldt, while the 4,950 ldt multi-purpose vessel (converted from containership) Aqua Luna attracted an impressive rate of $480 per ldt.

While no market sales were reported from Bangladesh, Pakistani buyers picked up the 15,646 ldt Aframax tanker Eagle Otome from American owners Icon Capital at a firm $474 per ldt on “as is Malaysia” basis, for man entry only.

Source: Sea Trade Global.  9 April 2014

Punish errant shipbreaking yard owners: NGOs

The Coalition of Local NGOs, Bangladesh (CLNB) and Bangladesh Environment Lawyers Association (Bela) yesterday demanded that the government take action against ship-breaking yards which are violating laws.

CLNB demanded that the government investigate all incidents of workers' deaths at ship-breaking yards.

“As the shipyard owners are deliberately leading untrained workers to deaths by engaging them in risky jobs without adequate safety measures, they cannot avoid their liabilities for the accidents,” said Harunur Rashid, chairperson of CLNB.

The government must identify the owners who are engaging workers flouting “The Ship Breaking and Ship Recycling Rules-2011,” effective since 2012, he added.

He also demanded that the responsible owners be identified and punished.

Referring to the government-authorised training centres' data, he said only 4,908 workers out of 200,000 have the mandatory job training.

In 2010, following a High Court order, which came after 43 workers had died, the government put up a ban on the industry.

It lifted the ban in 2012 on condition that the owners follow the law.

Over 45 deaths occurred in the last 28 months at ship-breaking yards, the CLNB chairperson said.

Meanwhile, Bela sent a legal notice to the government asking it to cancel environment clearance certificate and license of ship-breaking yards that have been violating laws.

Bela made the move following an incident of a gas cylinder explosion that killed four workers and injured two others who were dismantling a 5,400 tonnes ship at Arafin Enterprise at Kadam Rasul area in Sitakunda last Thursday.

In the legal notice, Bela asked for a neutral probe committee to investigate the incident and publish its report, said a press release of the organisation.  

Bela sent the legal notice to several government agencies as per the High Court's direction that ordered compensation for all workers who die or are injured in accidents at ship-breaking yards.

Source: the daily star. 9 April 2014

Ship Recycling: SOUTH ASIA – QUARTERLY UPDATE (2014) by NGO Platform

NUMBER 1 / 7 APRIL 2014

In this quarterly publication, the NGO Shipbreaking Platform informs about the shipbreaking industry in Bangladesh, India and Pakistan. Providing an overview of vessels broken on the beaches of South Asia, accidents, recent on-the-ground, legislative and political developments including our activities in South Asia we aim to inform the public about the negative impacts of substandard shipbreaking practices as well as positive steps aimed at the realisation of environmental justice and the protection of workers’ rights.

In this first edition of the update we inform about -
  • the forced eviction of two shipbreaking yards in Chittagong,
  • the results of a public hearing and environmental impact assessment for a proposed new shipbreaking yard in India, and
  • warn ship owners not to fall for the green-washing of the Alang shipbreaking yards.

So far this year 195 ships have ended up on the beaches of South Asia and four major accidents have been reported killing seven workers.


“My organisation BELA (Bangladesh Environmental Lawyers Association) is part of the global coalition which forms the NGO Shipbreaking Platform. In Bangladesh, shipbreakers break the law every day by importing and beaching ships containing hazardous waste. BELA has brought both the human rights abuses and environmental damage caused by shipbreaking activities in Chittagong to the attention of the judiciary. With the South Asia Quarterly Update the Platform will bring these issues to the attention of policy makers, journalists and researchers, civil society and industry stakeholders. Just last week at least four workers died in an explosion in Chittagong and the data collected by the Platform on ships broken so far this year shows that South Asia remains the favourite dumping ground for hazardous end-of life vessels.

The South Asia Quarterly Update will also provide us with an opportunity to share positive developments and achievements of the Platform in Bangladesh, India and Pakistan. It was a stage victory for our cause when the Forest Department in February evicted two shipbreaking yards that had been set up in protected forest land after illegally chopping thousands of mangrove trees planted to shield the coast from annual cyclones. The Government is finally facing up to its responsibilities and enforcing our environmental law and the Court’s decisions! This move gives a clear signal to the industry that it has to operate in accordance with the law – or will be shut down. Sadly, however, the trees which have been replanted will hardly be able to grow on the contaminated soil. We still have a long way to go”.

- Syeda Rizwana Hasan, winner of
the Goldman Environmental Prize (2009)
and the Ramon Magsaysay Award (2012)


Out of 301 vessels broken so far this year almost two thirds ended up on the beaches of South Asia. 51 of these ships were owned by European ship owners – German owners alone sold 20 ships, Greek owners 17 ships. German ship owner, Ernst Komrowski, topped the list of worst dumper having sold most ships to South Asia this first quarter with a total of 14 container ships – all third party operated by Maersk. Komrowski was closely followed by South Korean Hanjin Shipping Company that sold 13 of its container ships to India and Pakistan.

Though the new EU Regulation on Ship Recycling is not yet applicable, its entry-into-force on 30 December last year should have sent a clear signal that substandard shipbreaking is not an acceptable option for ships sailing under the flag of an EU Member State. Still, vessels sailing under the flags of the UK, Malta, Greece and Cyprus were recorded on the beaches this first quarter – more ships also changed their flag from an EU to a non-EU flag just weeks before hitting the beaches. Flags of convenience (FOCs) such as Comoros, Saint Kitts and Nevis and Tuvalu, that are less favoured during operational use, were excessively popular flags for the end-of-life ships broken in South Asia.


Four major accidents – three in Chittagong and one in Alang - have been reported this year. A major explosion in Chittagong occurred most likely due to the lack of procedures to ensure proper safe-for-hot-work conditions – two workers got severely burnt. Three workers, one in Chittagong and two in Alang, were crushed to death by falling metal plates – a continuous risk workers are exposed to when breaking ships on a beach, and associated to the reliance on gravity to remove cut-off pieces from the ship. Last week, at least four workers died in Chittagong poisoned by toxic gases.

- On 19 January, a tank explosion onbaord Teekay owned ASPIRE severely injured two workers. Tapan Jaladas, aged 28, and Md Lalu, aged 19, both received major burns on their face and hands and had to be rushed to Chittagong Medical Hospital. The accident was reported in Norwegian press, DN, which pushed the Teekay director, Ingvild Sæther, to announce that her company will change its ship recycling policy.

- On 25 January, Babul Das, aged 25, died in Chittagong Medical Hospital after having been crushed by a falling metal plate at Siko Steel shipbreaking yard. Originally a local fisherman, he was temporarily hired to dismantle the Singapore-based NOL containership PRESIDENT 1.

- Also crushed by a falling steel plate, workers Bensu Pradhan Odiya, aged 20, and Vishwanath Gaud, aged 25, succumbed to their injuries on 11 March. The accident occurred on plot no 20 at Alang shipbreaking yards.

- Last week, on 03 April, an explosion killed at least four workers - Jasmin, Faruk, Arif and Gias Uddin – in Chittagong. The workers died after a gas cylinder shattered and they inhaled the toxic gas. Another three workers were rushed to hospital for further treatment. The contractors have been accused of accidental death due to negligence and are currently on the run.

Deadly explosion: The Platform issued a press release following the fatal accident on 3 April. Bangladeshi newspaper The Daily Star also reported on the accident.



In February, the Forest Department and the District Administration in Bangladesh evicted two shipbreaking yards that had been operating illegally for years on the beach in the district of Chittagong. Several shipbreakers, including SK Steel and SK Ship Breaking and Recycling, had been able to lease the land illegally and in 2009 they chopped down more than 15,000 mangrove trees that were part of the coastal green belt planted with the support of the United Nations.

The companies then started to import end-of-life ships for breaking on the beach. Amongst the operators of the illegal yards and those that ordered the cutting of the trees was a Bangladeshi Parliamentarian. Most of the tree-cutting took place during night time, and local communities only found out about it when it was too late. The cutting of the trees raised a public outcry in Bangladesh and was also strongly condemned at the time by the country’s Prime Minister who visited the area. The presence of trees along the coastal belt, including mangroves, helps to prevent erosion and to mitigate flooding. Environmental plundering and illegal land grabbing by shipbreaking yards has destroyed the coastal green belt, leaving local villages vulnerable to cyclones, coastal and river erosion as well as floods.

In 2010, the High Court stated that shipbreaking should not take place on beaches nor on forest land, and on 6 October 2013, the Supreme Court of Bangladesh declared the two yards, SK Steel and SK Ship Breaking and Recycling, to be illegal and ordered them to be evicted and to replant the illegally cut trees. In February this year the authorities finally pulled down the buildings and other structures on the yards and thousands of saplings have reappeared where ships had been broken until recently. The NGO Shipbreaking Platform has been closely following the case and welcomes the eviction drive.


In 2013, a first public hearing was held in Tunda village, Gujarat, on the proposal to establish a new ship recycling facility in the adjacent Mundra Port following the provisions of the Indian Environment Impact Assessment Notification of 2006. The project proponent is Adani Ports and Special Economic Zone Ltd, a company of the Adani Group, an Indian business conglomerate. Platform board member Ritwick Dutta, environmental lawyer from LIFE (Legal Initiative for Forest and Environment, New Delhi) followed the hearings and advised the local communities. The issues raised at the public hearing were the possible blockage of a creek, the destruction of vegetation including mangroves, the impact on fisheries and water pollution. In particular, local fishermen strongly voiced concerns that the setup of an industrial site in Mundra Port would pollute the ecologically sensitive coastal area and thus threaten their livelihood.

In January 2014, the Expert Appraisal Committee for Projects related to Infrastructure Development in the Coastal Regulation Zone found that the information given by the project proposer Adani Group regarding measures to prevent the spillage of oil and paint waste on land and sand, as well as the quantity and the method used for the disposal of contaminated soil in case of any accidental spillages was not sufficiently explained.

Moreover, the Committee stated that Adani did not provide satisfactory information regarding hazardous waste disposal, detection of radioactive material, transportation of waste water, bilge and slop water to the treatment plant including the treatment of ballast water. Based on these deficiencies, the Committee deferred the project.

The Platform and its members will continue to follow the developments of the Adani project for several reasons: first and foremost in support of the serious concerns expressed by the local population regarding the operation of a hazardous industry in a very sensitive coastal zone and the lack of clear information regarding the environmental soundness of the methods and procedures proposed. The Platform therefore strongly welcomes that the Indian authorities have imposed an Environmental Impact Assessment in accordance with the law including the possibility for the local communities to voice their opinion - a process the existing shipbreaking yards in Alang have never been obliged to go through.

Eviction of two illegal shipbreaking yards in Chittagong:

There was extensive media coverage in Bangladesh of the removal of two illegal shipbreaking yards,, including Dhaka Tribune, Daily Star, and bdnews24.



One of the main issues discussed during the TradeWinds Ship Recycling Forum held in Singapore on 4 and 5 March was the question of whether Indian shipbreaking yards would be eligible for the European Commission’s list of ship recycling facilities. In the future, this list will specify the facilities that fulfil the requirements of the new EU Regulation on Ship Recycling. In particular, Indian shipbreaking yard operators, who participated in the conference with a sizable delegation, were keen on arguing that Indian facilities will be compliant with the EU Regulation’s requirements and should therefore be listed. They held the position that the beaching method is compliant with the IMO Hong Kong Convention and that the EU Regulation should not set higher standards as this would undermine the ratification of the Hong Kong Convention.

Some Alang yards – with the help of closely connected cash buyers – have started strongly lobbying and marketing their “green” ship recycling services to ship owners and policy makers alike. Moreover, ClassNK, the Tokyo-based classification society, is working on a gap analysis for four shipbreaking yards in Alang in order to assess the improvements that need to be made for the yards to be compliant with the Hong Kong Convention and the EU Ship Recycling Regulation. The gap analysis is being carried out at Shree Ram Group of Industries, Leela Ship Recycling, Priya Blue Industries and RL Kalthia Ship Breaking, and is split in four stages: preassessment, study on relevant legislation, developing the gap analysis and improvement plan, and the development of a Ship Recycling Facility Plan. So far, ClassNK has not issued any “Statement of Compliance” with the Hong Kong Convention to any Indian yard as they have already done for some yards in China.

The European Commission will not list Indian shipbreaking yards as acceptable facilities because the beaching method does not fulfil the requirements under the European Regulation: in particular with regards to containment and pollution control, drainage and impermeable floors and the use of heavy lifting equipment next to the ship from stable grounds. Poor control of downstream waste management further out-rules the EU approval of current shipbreaking practices in India. It is likewise doubtful that ClassNK will conclude that the Indian yards - without having substantially improved their practices - comply with even the less strict requirements of the Hong Kong Convention, such as the “procedures and techniques which do not pose health risks to the workers” in relation to the use of the gravity method, or the requirements to “prevent spills or emissions” and “to remove hazardous wastes including paints to a maximum extent” when the primary cutting area lies in the intertidal zone and cannot be drained, contained, dredged or decontaminated, but is constantly flooded by the tide.

The NGO Shipbreaking Platform warns ship owners not to fall for the green-washing of shipbreaking in India. Some of the yards, which claim to offer “green” services use a so-called “Green Certificate” to promote their activities. Such certificates however focus mainly on CO2 emissions, which is hardly the only, nor major, concern of hazardous shipbreaking. The yard Priya Blue Industries even posts our Platform ‘OFF THE BEACH !’ standard on their website – a standard they are far from meeting – giving the false impression that the NGOs approve of their practices! Also, ISO Certificates, such as ISO 14001 and ISO 30000, refer only to procedures, and there is a broad consensus amongst experts that these certificates do not provide a guarantee that the actual performance of a yard is acceptable. Beaching facilities cannot provide satisfactory containment of pollutants and leakage control, nor sufficient safety measures for workers.

Pictures from Alang shipbreaking yards.
Left: Empty blackboard - in breach of Indian law most yards do not keep track of the amount and type of hazardous waste that leaves the yard 2013. 
Middle: oil spills © googleearth 2009.
Right: illegal burning of waste on the beach 2013.



1213 end-of-life ships were dismantled last year, according to the Platform’s annual list of toxic ship dumpers. Slightly more than half of these ships were beached in South Asia. In terms of tonnage, more than 70 percent were dismantled in beaching yards. Greece remained the worst European toxic ship dumper, closely followed by Germany. Owners in these countries disposed a record-high 80 percent of their end-of-life ships in India, Bangladesh and Pakistan, and included well-known companies such as Danaos and Euroseas (Greece), and Conti, Hapag-Lloyd and Leonhardt & Blumberg (Germany). European media coverage of the Platform listing included amongst many others NRK, euronews, VRT, and DN.


Jim Puckett, Director of the Platform’s member organisation Basel Action Network (BAN), wrote an opinion piece for the shipping weekly newspaper Tradewinds titled “Ship recycling beach holiday is over”. The article focuses on the new European Ship Recycling Regulation and underlines that no beaching yards will be accepted under the new European Regulation. Jim wrote that “Responsible brands will readily understand the four fundamental reasons why a beach can never serve as an intelligent place to manage the world’s largest known units of hazardous waste.”


A study by the University of Chittagong is due to be published in the July 2014 issue of Marine Policy. It will outline how the shipbreaking industry in Bangladesh is expanding at the cost of the environment and why Bangladesh needs to tighten regulation over its booming ship-breaking industry and bring it in line with international laws and environment standards.

Source: NGO shipbreaking platform. 7 April 2014