Brussels, 28 October 2016 - A third report by
the investigative journalists of Danwatch, “Maersk and the shadowy deals”,
reveals that the Danish container ship giant has incentivised the sale of 14
ships to substandard shipbreaking yards on the beaches of Bangladesh and India
in 2013/2014. At the same time, Maersk prided itself with a progressive ship
recycling policy and its cooperation with state-of-the-art yards in China. The
report in Danish was released last week and has created a media uproar in
Denmark. The story has been widely featured on TV2, daily newspaper Politiken
and other major outlets. It triggered critical reactions from a wide range of
stakeholders and forced Maersk to admit that such shady deals should never have
been made.
Late in 2013, Maersk sought early termination
of a charter party for 14 ships due to the vessels’ poor rentability and the
general overcapacity in the container ship market. Maersk had previously been
the owner of the vessels before they sold them to a finance construct in
Germany, MPC Flottenfonds III, in 2009. Maersk then continued operating them
based on a long-term charter. In 2014, the Platform investigated that the 14
vessels operated by Maersk had ended up in some of the worst shipbreaking yards
in Bangladesh and India, and contacted Jacob Sterling, then Head of
Sustainability at Maersk. He said: “We encourage other ship owners to recycle
their ships in a responsible way, including those that we charter ships from.”
In an article, Sterling also stated: “NGOs argue that beaching must end now. We
agree”.
Sterling’s response regarding the chartered
ships was a lie: a quick look into Maersk’s addendum to the charter contract is
enough to understand that. First, Maersk explicitly asked the German owner
through a clause in the contract to ensure the immediate demolition of the
vessels in order to get them off the market. Second, Maersk demanded in another
clause that the vessels had to be sold for the highest price available on the
scrap market – without any consideration of environmental or social standards.
With the latter clause, Maersk put pressure on the ship fund to sell the 14
vessels for a minimum price of 447 USD per ton, a price that corresponded at
the time to the prices offered in South Asian beaching yards. No facility
operating under safe and sound conditions would have been able to pay such a
high price. Moreover, the contract between Maersk and MPC states that if MPC
were to sell the vessels for a lower price, Maersk would have to pay the
difference. And, crucially, if MPC managed to sell for a higher price, it was
under an obligation to pay Maersk the difference in profit earned. The MPC case
is likely not an isolated one. The Platform found that Maersk had sold another
three older ships to Greek owner Danaos and immediately chartered them back on
a long-term basis. Also these three vessels ended up in beaching yards.
“In 2014, we believed that Maersk was an
industry leader with regards to sustainable ship recycling practices. In
Maersk’s CSR reports, we could read about their much publicised cooperation
with Chinese ship recycling yards, we were shown futuristic videos on ‘total
vessel recycling’ and the Head of Sustainability made strong ‘off the beach’
statements”, says Patrizia Heidegger, Executive Director of the NGO
Shipbreaking Platform, “getting hold of the charter contract opened our eyes to
the reality: Maersk actively incentivised business partners to sell to the
highest bidder, inevitably offering the lowest standards. Maersk was fully
aware that these ships would be broken in some of the worst yards in Bangladesh
and India and even had a direct financial interest in that by earning an extra
profit.”
After Maersk’s business tactics were revealed
in the Danish press, the shipping line has received strong criticism for its
unsustainable shipbreaking practices from Danish Parliamentarians, leading
Danish environmental organisations, and its own investors. “Maersk had no other
choice but to apologise publicly for both their shady deals and the illegal
export of their floating storage and production tanker, the North Sea Producer,
from the UK to Bangladesh. Maersk admitted to the media that they should not
have made such deals”, says Heidegger, “however, apologies for the worst
practices now seem to be the strategy to make the current breaking practice in
Alang, India, look like a good solution”.
Danwatch’s investigations at Maersk’s Shree
Ram yard in Alang have shown severe shortcomings related to fundamental labour
rights, environmental safeguards and basic health and safety standards.
Maersk’s support of the beaching yards in Alang stalls any development in India
to move ship recycling to modern industrial platforms. Such a transition was
already supported by the Government of Gujarat and investors in the 1990s when
the Pipavav dry dock was built in order to bring the Indian ship recycling
industry to an acceptable level. However, the shipping industry’s profits on
the beaches of Alang have consolidated the beaching yards’ monopoly in India,
while innovative new businesses from India have been stifled.
”We and other key stakeholders maintain: the
future of shipbreaking is not on the beaches of South Asia, but in modern ship
recycling facilities”, says Heidegger, “Maersk should lead the way in
supporting innovative companies, rather than scotching development in India by
supporting a method which is banned in Europe. While India’s space programme is
launching satellites for the US and Canada, the shipping industry wants us to
believe that Indian companies can dismantle ships only on a beach?”
CONTACT
Patrizia Heidegger
Executive Director
NGO Shipbreaking Platform
+32 2 609 44 19
Source: NGO Shipbreaking Platform
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