Sharma has journeyed
from an unlikely start two decades ago in the world of ship recycling to the
very top of the industry. Born in India, educated in the U.S. and now living in
the U.A.E., he spends much of his time challenging people’s perceptions about
the business.
What
inspired you to start GMS?
The start would have to
be the period when U.S. Navy ships were being sold via tender by the U.S.
Maritime Administration (MARAD) in the early 1990s. At the time, I was in the
midst of a successful professorial career in global business and marketing.
Being from Bhavnagar in Gujarat, India, where much of the Indian recycling
occurs, I had family and extensive ties with friends and business associates
involved in the ship recycling and steel industries.
When the MARAD vessels
were tendered, the Indian market was very interested. However, due to
requirements that restricted international participation in such tenders,
Indian recyclers struggled to bid for and secure these vessels. It was then I
realized that a business opportunity existed. I decided to purchase these
vessels on behalf of the Indian recyclers and then resell to them. Eventually,
GMS became one of the biggest buyers of MARAD vessels in the 1990s.
You
also assisted the Russian government in disposing of surplus naval tonnage.
Yes, perestroika! In
1993 we were invited by the Russian government to assist them in the safe
disposal of vessels from their Northern and Far Eastern fleets. It’s an amazing
fact that, from its earliest days, GMS has been involved in finding the best solutions
to the most challenging recycling issues faced by governments and business
alike.
Does
your Indian heritage drive you to try and improve standards there?
Being from India is not
what drives me. I have a genuine passion for my work and the far-reaching
consequences that are a byproduct of it. I believe that we should always do the
right thing and do things right. Being the largest cash buyer of vessels for
recycling in the world carries with it an obligation to better an industry that
is so vital not only to the shipping industry but also to the lives of those
who directly and indirectly depend on it.
I do feel, though, a
sort of responsibility to give back to the country I was born in because there
is a lot of potential there. Recycling in India is not a new or unique concept.
My grandmother used to recycle clothes, newspapers, bags, shoes, utensils and
so on. Business people recycled everything from industrial equipment to office
equipment and supplies. Reusing, repairing and recycling are habits I grew up
with in everyday life. Consequently, I would love to see India set the standard
in green recycling for the rest of the world.
Have
you changed the public perception of ship recycling?
What I am trying to do,
above all, is raise international awareness of the true state of the industry
and show that there are good and bad yards in every country. A country should
not be stigmatized by the misconceptions of a few misinformed individuals. For
this reason, I have from the beginning spent a lot of time and effort in
providing the market with the information required to allow informed decisions
to be made. I arranged the first industry delegations to visit the yards and
continue to do so regularly.
When
did “ship breaking” become “ship recycling”?
I was invited to speak
at one of the earliest conferences on “ship breaking,” as it was referred to at
the time. I explained to the audience that what was being done in these yards
was in fact clearly “recycling” and not “breaking” since almost 98 percent of a
vessel was completely recycled or reused. Following my presentation, there was
a vote among the audience on which was the appropriate term to be used for the
process, and “recycling” was preferred by a clear majority. The organizers
proceeded to change the official banners of the event.
Terminology is
important. Regrettably, when it comes to the Indian subcontinent negative terms
are used, whereas the same task is described with positive words in the
developed world. For example, “ship breaking,” “demolition” and “scrapping”
versus “ship recycling” and “beaching” versus “landing.” In fact, the beaching
process is also used in Turkey, Indonesia and the U.S. However, referring to it
as “landing” does not have the same negative connotations.
How
are you working to improve safety at the yards?
The ship recycling
industry on the Indian subcontinent has steadily matured over time, and an
increasing number of yards are adopting international standards such as ISO
9001, ISO 14001, OHSAS 18000 and ISO 30000. They are being certified by
accreditation bodies that confirm their operational and recycling procedures.
While GMS cannot dictate the inner workings of yards in India and Bangladesh,
we can influence some of them – those with whom we have forged long-lasting alliances
over the years – to help ensure that certain standards are met.
Can
you give us an example?
Yes, I’ll give you a
good one. Via our association with Leela Ship Recycling, one of the leading
yards on the subcontinent, we have ensured that it maintains all the relevant
certifications and has established safe working environments. We have also
mandated the use of safety equipment (cranes, winches, etc.) and safety gear
(hard hats, safety suits, gloves and boots) for their workers.
This sets an example for
neighboring yards. They are indirectly influenced to adopt similar practices
when they witness vessels from blue-chip shipowners being delivered exclusively
to Leela. The temptation and opportunity to do business with such owners are
what motivates them to change. Other yards have approached us for guidance and
technical assistance on upgrading their operations in a manner similar to
Leela’s, and GMS has expended its own resources in assisting them, both in
India and Bangladesh.
Do
you believe “beaching” should be stopped?
Beaching should
certainly not be stopped. Critics of beaching often cite the environmental
hazards posed by the recycling procedures as the reason for its banning.
However, they fail to acknowledge concrete studies performed by prestigious
universities and associations, studies that found no conclusive evidence of
long-term negative effects to the environment at Alang as a result of these
activities. The criticism is based on misinformation and outmoded data. Furthermore,
yards are taking steps, such as cementing the base of the yard to avoid any
interaction of the material with the environment, to ensure that there is as
little interference with nature as possible.
What
would happen if the E.U. banned the use of recycling yards in India and
Bangladesh?
The effects of an E.U.
ban would be far worse than the alleged environmental ramifications of beaching
that have been bandied about for decades. Locations outside the Indian
subcontinent could not digest the volume of vessels that are recycled annually
in the subcontinent. Recycling at locations outside the subcontinent will not
pay as much, and this will force owners to trade their vessels longer, leading
to aging of the international fleet and the consequent harmful side effects.
A ban would also
displace nearly 300,000 people who make a living either directly or indirectly
from the ship recycling industry in India, Bangladesh and Pakistan. It would be
felt in the secondary markets that survive off the recycling industry such as
those that sell used generators and spare parts. Those markets currently
provide shipowners with cost-effective options for repairs.
What
is unique about GMS among cash buyers?
GMS cares. We care about
the business, the environment, standards, stakeholders, workers and employees.
We are not here simply to make money and run. We look at this business from a
strategic perspective.
What
does that mean – “from a strategic perspective”?
Simply put, it means we
have the strategic and long-term interests of the industry in mind when
formulating our business plans. We all know floating objects (ships, rigs,
platforms, etc.) have a finite lifecycle. At the end of that cycle, these
assets should be disposed of in the safest and most environmentally responsible
way that adds value to all stakeholders. Shipping is global, and ship recycling
should also take a global view and be done in countries where a competitive
advantage exists. For example, when it comes to shipbuilding, shipowners
normally think of Far Eastern countries like Japan, Korea and China. Similarly,
when it comes to ship recycling, shipowners realize the best value proposition
today exists in India, Pakistan and Bangladesh.
Secondly, in order to
encourage more owners to recycle their ships in a safe manner, we have kept the
“green recycling process” simple and cost-efficient. We know more owners will
recycle responsibly if they do not have to lose more than 50 percent of the
value of the asset. We have a team of individuals committed specifically to the
green process. This team works with owners, managers, brokers and yards to
ensure commitments are met.
We have invested
hundreds of thousands of dollars to raise global awareness, encourage dialogue
and participate in the development of responsible ship recycling practices,
including the Hong Kong Convention, which addresses the methodologies for
identifying, handling, storing and effectively disposing of the hazardous
materials and waste that are generated during the recycling process. GMS has
also invested and assisted our partner yards in obtaining and maintaining
relevant ISO and OHS certifications, a necessity for owners looking to recycle
their vessels at environmentally responsible yards.
Source:
maritime-executive. 8 January 2016
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