12 June 2017

Law paves way for Danish ratification of ‘green’ ship scrapping convention

Ships due for scrapping contain many different kinds of dangerous materials and have to be taken care of responsibly, both for the sake of the environment but also for workers in the breaker yards

A unanimous Parliament has just passed a law that enables Denmark to ratify the UN’s Hong Kong Convention on ship scrapping.

“It is a good day for the environment as well as those who work in the ship breaking industry every time a country ratifies the convention. Shipping is a global industry for which we need international rules,” said the environment minister, Esben Lunde Larsen.

The convention is now a step closer to coming into force. In order to do so, it needs to be ratified by at least 15 countries and, up until now, only six other countries have done so.

Sending a strong signal
“With Denmark’s ratification, we are sending a strong signal to other countries that it is important to prioritise responsible ship scrapping,” said Larsen.

He added that “the more countries that sign, the quicker the convention can enter into force. For example, India [one of the leading scrapping nations] has indicated they are ready to ratify once the EU countries have done so.”

Now that the law has been passed, it will take about a month for the formal ratification process to be completed.

A valuable resource
Worldwide, approximately 1,000 merchant ships are broken up annually and valuable materials such as steel can be reused.

Most of the ships end up in Asia, although Danish-operated ships are typically broken up in yards in India, China and Turkey.

Source: Copenhagen Post. 11th May

11 June 2017

Banks Join Ship Recycling Debate

The Dutch banks ABN AMRO, ING Bank and NIBC, together with the Scandinavian SEB and DNB, have announced that they are introducing responsible ship recycling standards (RSRS) for their ship financing.

The Norwegian fund, KLP, which commissioned a report by the International Law and Policy Institute on shipbreaking in 2016, has already taken a stance to reject beaching practices.

A collective move to include ship recycling conditions on loans by leading banks and financial institutions with large shipping portfolios is a positive step to imposing responsible practices on shipowners, says NGO Shipbreaking Platform. Shipowners, rather than finding crafty loopholes in the law, will feel the bite if they do not choose to recycle responsibly off the beach, says the Platform.

Dr Nikos Mikelis, Non-executive Director of cash buyer GMS, says the announcement by the three banks to enforce responsible ship recycling standards should be, or should have been, a welcomed development. In the last two years 28 yards in India have achieved Statements of Compliance with Hong Kong Convention by IACS class societies and 24 more yards are currently in the process of gaining Statements of Compliance. Furthermore, there are promising signs that yards in Bangladesh are preparing to meet the new IMO standards.

To keep this momentum, an increasing numbers of shipowners will have to demand responsible recycling for their ships, says Mikelis, this way leading more and more yards to invest in improvements. It therefore follows that support for responsible recycling by the banking sector will be invaluable in bringing forward the day that all ship recycling is done in a safer and cleaner manner, according to the new international standard.

The initiative of the banks is detailed in the RSRS where the three banks commit themselves to implementing this standard and to promoting it within the financial sector. Section 4 of RSRS contains eight requirements that participating banks should make their best efforts [to satisfy].

“Here I see one specific requirement, namely that the bank will require that any ship it (re)finances should be provided with an Inventory of Hazardous Materials (IHM) by the shipowner,” says Mikelis. “The remaining requirements of the standard appear to be 'nice' but not specific.”

In its last section RSRS details its “Guidance for Loan Agreements” where it provides “language that can be included in loan agreements” and which “should not be viewed as a required legal framework but as suggested wording to assist banks in incorporating the ship recycling standards in their loan agreements.”

“Here in addition to the requirement to provide and maintain the IHM (the document mistakenly refers to a “Green Passport” which was the precursor to the IHM, until 2005), the Borrower is required to ensure that the vessel shall be recycled in accordance with the E.U. Ship Recycling Regulation,” says Mikelis.

“Shipowners should be very careful in understanding the implications of contractually agreeing with their lender to recycle a ship in accordance with the E.U. Ship Recycling Regulation. The European Commission, who will implement the new regulation (on European flagged ships), has still not published the list of approved yards outside E.U.

“Furthermore, for the last three years the Commission has shown inordinate support for the extreme views of the NGO Platform (banning of beaching and therefore of recycling in South Asia) and characteristically keeps funding more than half of the NGO’s budget. We can hope that the Commission will recognize the tremendous improvements that have been taking place in India and also will be cognizant of the tremendous push Europe will give to responsible recycling by approving deserving yards in South Asia.

“Nevertheless, I guess that it is not safe to assume that sense will prevail over Brussels’ politics, in which case the E.U. Ship Recycling Regulation may ignore South Asia, the improvement in many of its yards and the fact that in 2016 the three South Asian countries recycled 84.1 percent of the tonnage recycled worldwide (World Casualty Statistics 2016 by IHS Global).

“Whereas the RSRS document by the banks does not address banning of beaching or recycling in South Asia, the banks’ press release quotes the NGO Platform who welcomes the leading role taken by the banks to ensure a departure from the unnecessarily dirty and dangerous practice of beaching. Shipowners should start getting very worried in case these three, and possibly more banks, as well as the European Commission, end up sharing the same dangerous lack of vision as the NGO Platform.” 

Source: maritime-executive. 31 May 2017

HC wants assessment reports on radioactive material of Chittagong scrap vessel, MT Producer

The High Court today sought assessment reports from three agencies on the presence of naturally occurring radioactive material of MT Producer, an imported toxic scrap vessel now at a ship breaking yard in Chittagong.

Bangladesh Atomic Energy Commission, Bangladesh Atomic Energy Regulatory Authority and Marine Port Initiative of Bangladesh Customs have been asked to submit the assessment reports on the radiation contamination of MT Producer (North Sea Producer) before it in 10 weeks.

The court also issued a rule asking the respondents to explain in three weeks why giving clearance certificate in favour of MT Producer, the Maersk owned 52,000-tonne huge Floating Production Storage and Offloading (FPSO) purchased by Janata Steel Mill (Ship Breaking Yard) at a record price of Tk 51.82 crore from Danish Shipping Company Marks, should not be declared illegal.

In the rule, the court also asked the respondents to reply why action should not be taken against the seller of the vessel for giving a false announcement about it and why foreign experts should not be appointed to ensure safe scrap of the vessel at the cost of the importer.

The HC bench of Justice Syed Refaat Ahmed and Justice Md Salim came up with the order and rule following a writ petition filed by Bangladesh Environmental Lawyers Association (BELA) challenging the legality of authorities’ decision to import MT Producer, its beaching and scrapping.

Bela chief Advocate Syeda Rizawana Hasan told The Daily Star that Janata Steel Mill has imported MT Producer in August last year in violation of the existing laws and court orders and made a false announcement saying that there was no toxic material in the vessels. 

Janata Steel Mill has collected a clearance certificate from an unknown agency and the ministry of industries most arbitrarily permitted the breaking of the vessel on September 8, 2016 although the department of environment never issued environmental clearance in favour of breaking of the vessel, she said.

After a news report titled “Maersk and the hazardous waste in Bangladesh” was published in a leading Danish newspaper DANWATCH on October 15, 2016, it first came to public attention that the said vessel has been sold to Bangladesh, Advocate Rizwana added.

Secretaries to the ministries of industries, environment and forest, commerce and labour and employment; chairmen of Bangladesh Atomic Energy Commission and Bangladesh Atomic Energy Regulatory Authority; deputy commissioner of Chittagong; director general of the coast guard; collector of customs, Bangladesh customs; chairman of Chittagong port authority; chief inspector of department of explosives; director general of the directorate of Inspection for factories and establishments; director of department of environment; principal officer of mercantile marine department; president of Bangladesh ship breakers association; proprietor of Janata steel corporation (ship breaking yard) and managing director of M/S HR ship management ltd (safety agency) have been made respondents.

Source:the daily star. 08 June 2017