26 July 2018

Platform publishes South Asia Quarterly Update #16

Brussels, 25 July 2018 - There were a total of 220 ships broken in the second quarter of 2018. Of these, 169 ships were sold to the beaches of South Asia for dirty and dangerous breaking [1]. Between April and June, 6 workers have lost their lives and 7 workers have been severely injured when breaking ships in Chittagong, Bangladesh. Another worker was reported dead after an accident at a shipbreaking yard in Alang, India. So far this year, Platform sources have recorded 18 deaths and 9 injuries in South Asia.

As reported in our previous update, worker Shahidul Islam died at Zuma Enterprise in April while breaking the Greek tanker EKTA, owned by Anangel Group. Belal Hossain, Md Musa and Md Najmuddin Alazy were all mortally struck by falling iron pieces during the cutting operations at Asadi Steel, KR Steel and S Trading yards respectively. On 22 May, three workers got severely injured at SN Corporation, where two other workers were killed last year. Farid Ahmed, a cutter man from the Gaibanda region, was hit by an iron piece and killed at Janata Steel on 31 May. One month later, 22 years old Nayon, an employee of Kabir Steel’s Khawja shipbreaking yard, lost his life. Local sources claim that the death of Nayon has been treated as a road accident by the yard management, although there are no police records of such a type of accident having taken place. In 2018, there have already been three deaths linked to Kabir Steel.

According to local sources, three yards in which fatalities occurred this quarter - Kabir Steel, SN Corporation and Janata Steel - are clients of Standard Chartered Bank (SCB), although the bank neither confirmed nor denied this when asked. SN Corporation and Kabir Steel are recurring names on the list of companies involved in the death of shipbreaking workers. Janata Steel is the company that bought the infamous FPSO North Sea Producer for which the Bangladesh Supreme Court is expected to pronounce itself shortly with regards to its illegal import. A responsible financer is expected to divest from companies that have an extremely bad track record and continue to ignore basic health and safety precautions for the purpose of cutting costs.

In India, one accident in Alang, which cost the life of a worker, was reported: on 13 April, Ravindra Chaudhari, who was working in Plot 2, was hit by a falling steel plate and died. Plot 2, which has applied to be on the EU List of approved ship recycling facilities, and was one of the first yards in Alang to receive a so-called Statement of Compliance with the Hong Kong Convention by ClassNK, is the main yard of Leela Ship Recycling Pvt. Ltd. Apart from this incident, little is known about accident records in Alang as no information is made publically available by the authorities, and access to the yards by civil society organisations and journalists is not allowed.

In the second quarter of 2018, American ship owners sold the most ships to the South Asian yards with 26 vessels beached, followed by Greek and UAE owners. American company Tidewater was the worst corporate dumper with fifteen vessels beached. In the end of April, Pakistan re-opened the market to the import of tankers. In two months alone, twenty-two tankers reached the shores of Gadani to be scrapped. Industry sources report that devaluing freight rates have contributed to the demolition of over 100 tankers in the first half of 2018.

Only three ships had a European flag – Greece, Malta and Norway – when they were beached last quarter. All ships sold to the Chittagong, Alang and Gadani yards pass via the hands of scrap-dealers, also known as cash-buyers, that often re-register and re-flag the vessel on its final voyage. Grey- and black-listed flags of convenience are particularly popular with cash-buyers, and more than half of the ships sold to South Asia this quarter changed flag to the registries of Comoros, Niue, Palau and St. Kitts and Nevis just weeks before hitting the beach. This is the highest number of flag changes recorded by the NGO Shipbreaking Platform and raises serious concerns with regards to the effectiveness of legislation based on flag state jurisdiction. These flags are not typically used during the operational life of ships and offer ‘last voyage registration’ discounts. They are grey- and black-listed due to their poor implementation of international maritime law.

[1] During the second quarter of 2018, the following number of vessels were broken in other locations: 33 in Turkey, 5 in China, 4 in Europe and 9 in the rest of the world.

NGO Shipbreaking Platform
Tel.: +32 (0) 26094419

24 July 2018

The European Commission has updated the European List of ship recycling facilities

On 7 May 2018, the Commission Implementing Decision (EU) 2018/684of 4 May 2018 amending Implementing Decision (EU) 2016/2323 to update the European List of ship recycling facilities pursuant to Regulation (EU) No 1257/2013has been published on the Official Journal of the European Union.

The European List of ship recycling facilities was established by the Commission Implementing Decision (EU) 2016/2323pursuant to Regulation (EU) No 1257/2013on ship recycling. The purpose of the Regulation is to prevent, reduce, minimise and, to the extent practicable, eliminate accidents, injuries and other adverse effects on human health and the environment caused by ship recycling, ensuring that hazardous waste from ship recycling is subject to environmentally sound management. Ship recycling facilities may be located both in a Member State of the European Union and in a third country.

Several Member States have communicated to the Commission lists of facilities they have authorised in accordance with Article 14 of Regulation (EU) No 1257/2013 to be included in the European List of ship recycling facilities. Member States have also communicated to the Commission updated data pertaining to facilities already included in that list. Therefore, the Commission has decided to amend Implementing Decision (EU) 2016/2323.

With regard to ship recycling facilities located in a third country for which an application for inclusion in the European List has been submitted to the Commission in accordance with Article 15 of Regulation (EU) No 1257/2013, the assessment of the relevant information and supporting evidence provided or gathered is still ongoing. The Commission will adopt implementing acts pertaining to those ship recycling facilities located outside the Union once the assessment is finalised.

Ship recycling facilities located in a Member State of the Union

Source: lexology. 21 May 2018

Managing HSE at Alang Ship Recycling Yards


Fundamentally, the ship recycling activity is environmentally conscious and supports sustainability as it reduces the need to mine virgin metal ore. However, the ship recycling industry is under constant scanner of international environmental groups for causing harm to the environment and human health and safety. In this article, we shed light on the health, safety and environment (HSE) procedures followed at ship recycling yards in Alang which hold statements of compliance (SoC) with the Hong Kong Convention (HKC) issued by IACS-member classification societies such as ClassNK, RINA and IR Class.


Within the past few years, we have seen tremendous changes in the HSE standards at the ship recycling yards in India as currently 61 yards (almost half of the active yards) in Alang hold valid HKC SoC. This has resulted in improved infrastructure as well as in the implementation of standard operating procedures at ship recycling yards.

The compliant yards in Alang use impervious flooring to undertake cutting operations of blocks obtained from ships into smaller pieces as well as to keep machinery and electrical equipment. At the same time, hazardous waste obtained from dismantling ships is kept at dedicated storage rooms also fitted with impervious floors. The use of impervious flooring for secondary cutting and storage prevents the seepage of oil, chemicals, heavy metals and other hazardous materials into the soil.

For yards holding HKC SoC, it is compulsory to inspect blocks dismantled from ships since only clean blocks are allowed to fall in the inter-tidal zone during low tide. Such blocks must be immediately lifted and placed on impervious floor for further cutting. In most cases, almost all blocks are made to fall within the vessel to prevent polluting the soil and sea water. In a few yards, heavy cranes are fixed close to the inter-tidal zone that can reach from forepeak to aft of the vessel, and every block is lifted by cranes and placed on impervious floor meeting the EUSRR requirements.

Waste Management

All recycling yards in Alang are obliged to use government approved sub-contractors to manage waste generated during the ship recycling process. Various government agencies have approved sub-contractors to undertake activities such as asbestos decontamination, disposal of special hazardous wastes including garbage, batteries, bilge water, electronic waste, cables, bio-medical waste, ozone-depleting substances, etc., and dismantling activities related to smoke detectors, removal of oil and oily waste such as rags, sand, sludge, etc.

There are also specialized approved agencies to issue naked light certificates (hot work permits) and permits for confined space entry. Moreover, cutting work can only be started on a ship once a decontamination certificate is issued by the Gujarat Pollution Control Board and cutting permission is granted by the Gujarat Maritime Board after a thorough inspection by the officials.

Training and Welfare

Yards in Alang holding HKC SoC have an education and training plan for workers in place. This plan consists of training courses related to general safety, handling and management of hazardous materials, fire protection and prevention, first aid, oil spill on sea and plot, gas cutting operation, working at height, confined space entry, removal of asbestos-containing material, crane and forklift operation, batteries handling operation, and mock drills on fire-fighting, first-aid, evacuation, oil/chemical spill on ground or in sea.

We, at GMS, in collaboration with the classification society IR Class provide frequent training to safety officers and workers of ship recycling yards located in Alang. Safety training is also provided by government bodies such as the Gujarat Maritime Board and other stakeholders including yard owners in collaboration with well-known classification societies.

In fact, a 12-day training program organized by the Gujarat Maritime Board is compulsory for all workers working on ship recycling yards in Alang. Every worker is issued with an identity card by the Board before they are allowed to work on the yards. Child labor is strictly prohibited, and every worker is insured with Employees’ State Insurance Corporation, a scheme run by the government of India. Some yard owners provide an accommodation facility designed as per ILO standards for workers.

Standard Operating Procedures

In order to streamline yard operations, all yards in Alang holding HKC SoC are required to have standard operating procedures (SOPs) for various tasks that are required to be undertaken during recycling of ships. This includes SOPs for safe-for-entry; safe-for-hot work; welding, cutting, grinding and heating; prevention of falling from heights and accidents caused by falling objects; housekeeping and illumination; maintenance and decontamination of tools and equipment; health and sanitation; personal protective equipment; worker exposure and medical monitoring; emergency preparedness and response plan (EPRP); fire and explosion prevention, detection and response; environmental monitoring.

SOPs are also in place for management of hazardous materials including asbestos, PCBs, ODSs, TBTs, paints, oil, bilge and ballast water and heavy metals; spill prevention, control and countermeasures; storm-water pollution prevention; debris prevention and control; and incident and spills reporting. Also, each HKC-compliant yard has a dedicated fire-fighting, first aid, oil spill control and emergency response team.

The SOPs aim to achieve worker safety and health compliance as well as environmental compliance. Such procedures would be useful to prevent adverse effects to human health and safety. At the same time, these procedures will facilitate environmental monitoring, environmentally sound management of hazardous materials and prevention of adverse effects to environment.

The SOPs are further supported by the plethora of records that are required to be maintained by the yards. These records are audited from time to time by the classification society that certifies the yard. Moreover, Gujarat Maritime Board is strict with respect to the implementation of domestic regulations, in particular, the Ship Breaking Code 2013. Therefore, 11 dedicated safety officers are allotted zone-wise to ensure safety measures are implemented at yards. There is a provision to impose fines in case any deviation from the Code is observed.

The improvements related to infrastructure, waste management, workers’ training and operating procedures have changed the face of the ship recycling industry in Alang as the process employed to recycle end-of-life ships now takes care of implications to environment and workers’ health and safety. The use of technical documents such as the Ship Recycling Facility Plan (SRFP) for every yard, the Ship Recycling Plan (SRP) and the Inventory of Hazardous Materials (IHM) for every ship within the purview of the HKC has also improved the overall recycling process on yards holding HKC SoC. Some yards in Alang operate with the principle of “one ship two safety officers” – one safety officer on board and the other on ground – to ensure the safe and environmentally sound operations.

Shipowners are increasingly recognizing India as a preferred destination for ‘green’ recycling services. This is likely to be increased further in the coming years with Chinese market closing for foreign flagged ships after December 2018. However, it is still not clear what stance will be taken by the European Commission on the inclusion of Indian yards in its long-awaited list of approved recycling facilities.

Dr. Kanu Priya Jain and Dr. Anand Hiremath are part of the Responsible Ship Recycling Dept. at GMS (Dubai).

Source: maritime-executive. 27 May 2018

HKSOA urges ratification of Hong Kong Convention on ship recycling “as soon as possible”

The Hong Kong Shipowners Association (HKSOA) highlighted the fact that Hong Kong and China should ratify the Hong Kong Convention on ship recycling as soon as possible.

Citing a joint industry press release after the recent Asian Shipowners Association (ASA) meeting in Hong Kong, it reaffirmed the commitment to the Hong Kong Convention for the Safe and Environmentally Recycling of Ships and highlighted the urgently needed steps to bring this into force. The meeting was also attended by BIMCO, ECSA, ICS and tanker owners’ group Intertanko,

“Hong Kong and China as major ship registries, and China with many ship recycling facilities, are especially encouraged to ratify the Hong Kong Convention (HKC) as soon as possible as this will significantly speed up ratification,” the release said.

It noted that the demand for ship recycling in 2018, particularly in the tanker sector, is expected to increase.

“After reviewing the increasing need to expand the number of HKC-compliant ship recycling facilities around the world, the joint industry meeting agreed that the entry into force of the HKC was critical. To be able to bring the HKC into force however, it is essential that the ship recycling states commit to improving the standards of ship recycling and ratify the HKC,” the release noted.

All participating associations were urged to approach their respective governments to hasten the process of ratification of HKC while also requesting their respective governments to include ratification of the HKC as an agenda item when having an opportunity to talk with officials of the ship recycling states.

All ship recycling states were also encouraged to ratify the HKC and the International Maritime Organisation (IMO) and its member states was encouraged to establish a team for early enactment of the HKC under IMO which would act as a focal point for activities of the concerned stakeholders including governments, recyclers, workers, shipowners and observer organisations.

The call however would seem to sound a bit hollow in the light of China’s decision in April to ban the import of scrapped ships by the end of 2018.

Separately, the International Ship Recycling Association (ISRA) said in a statement that this recent development “is challenging for the ship recycling industry as a whole”.

ISRA added: “The announcement to stop importing recycle ships in China could close some of the best recycling facilities in the world that match the Hong Kong Convention and the EU ship recycling regulation requirements. Since the IMO started to discuss Ship Recycling regulations, a number of Chinese ship recycling facilities have upgraded and invested in their facilities enormously. This made these yards the first in the world to recycle ships at the highest standards available on Health, Safety and Environment.”

ISRA noted that if the ban is really implemented, well over 2.5m tons of high standard capacity will be taken out of the global market and “can be seen as a major step back in the global development towards environmental and human safe ship recycling”.

ISRA secretary-general Bernard Veldhoven said: “ISRA is concerned about this recent development and is available to regulators around the world to discuss and assist in keeping this important capacity for the maritime industry. We would welcome the Chinese government to review its announcement and maintain this important ship recycling capacity for the future.”

Source: seatrade-maritime. 31 May 2018

Sydport business continues to dismantle vessels

Federal government contracts worth more than $18 million
EDWARDSVILLE, N.S. — A ship breaking company based in the Sydport Business Park has completely dismantled one military vessel and now has two more in its sights.

Work to dismantle the former HMCS Preserver, an auxiliary oiler replacement ship decommissioned by the Royal Canadian Navy in 2017, began earlier this spring at the Marine Recycling Corp. dockyard in Sydport Business Park. The Port Colbourne, Ont.-based company was awarded a $12.6-million federal tender last summer to dismantle the Preserver and CFAV Quest. A third vessel, the former HMCS Athabaskan, will be broken up by May 2019.

Marine Recycling Corp. completed the work on CFAV Quest, a former Canadian Forces auxiliary vessel, earlier this spring and crews are now breaking up the former HMCS Preserver, an auxiliary oiler replacement ship decommissioned by the Royal Canadian Navy in 2017.

The Port Colbourne, Ont.-based company was awarded a $12.6-million federal tender to dismantle both ships last summer. In January, Ottawa announced a $5.7-million contract to break up the former HMCS Athabaskan at its dock in Sydport.

Related: Sydport to host shipbreaking of former navy ships
Contaminated material including PCBs (polychlorinated biphenyl), oils, corrosive chemicals and florescent light tubes containing mercury phosphor powder have been removed from all three vessels and taken to facilities able to handle the hazardous waste, said Wayne Elliott, founder and director of business development for Marine Recycling Corp.

“Our company handles a lot of that material, of course, back here in Ontario as well. We’ve been handling these kinds of wastes for many, many years,” he said.

“All of the wastes go on hazardous waste manifests and permanent waste carriers and vacuum trucks in the case of liquids.”

The PCB waste is transported to the Swan Hills Treatment Centre in Alberta and to another facility in Ontario.

The scrap metal from the Quest had been reduced to “charging box size” material that’s melted down and recycled for any number of uses — typically converted into rods and bars, which are used in the construction industry.

There are about 25 employees working on the dismantling of the ships, according to Elliott.

Eight of those employed are members of the Eskasoni First Nation.

Steve Parsons, general manager of Eskasoni corporate services, said the indigenous community struck a relationship with the ship breaking company last year.

“When they identified that they would need welders and fabricators, I had recently got individuals from the band trained over the last three or four years — they had been in and out of different companies based on the work available — I approached Wayne and his company hoping to create a relationship with him as he was a new company in town,” he said.

“They were willing to give some of our band members an opportunity and a chance because they had a need for skilled workers. Everything is working fine … and when they need somebody, they continue to come back to us.”

Parsons said the band hands over résumés to Marine Recycling Corp., which then does the hiring.

Elliott said he does expect the number of hires to increase over the coming months to as many as 35 and indicated there could be new contracts signed by the end of 2018.

“There are some opportunities coming up and I think by the end of the year we expect the first one and go from there,” he said.

“We see a good long-term business (in Sydport) of recycling all types of vessels, really.”


Marine Recycling Corp.:

• Awarded federal government contract in August 2017 to dismantle the former CFAV Quest and HMCS Preserver for $12.6 million.

• In January, Ottawa tendered a $5.7-million contract to break up former HMCS Athabaskan.

• Work on Athabaskan to continue to May 2019.

Twitter: @cbpost_chris

Source: cape breton post. 28 May 2018

Ship dismantling underway in Turkish waters

Abandoned ships in Turkish waters, or “ghost ships” as they have been called by fishermen, will soon be dismantled.

Ship dismantling underway in Turkish waters

There are 114 abandoned ships in Turkey’s territorial areas in the Marmara, Aegean and Black Seas. Experts have warned these ships pose a great environmental and public health risk, which have led authorities to remove them from waters.

Following a recent amendment to the Turkish Harbors Law, giving authority to the Turkish Transport, Maritime Affairs and Communications Ministry to save these ships, it has initially been determined that 25 ships are priority to be dismantled.

One of these ships is the “Tallas,” a freighter that used to sail under the Cambodian flag. The ship was seized in 2015 due to his owner’s debts and waited in front of Istanbul’s Ahırkapı anchor point for two years without crews. In February 2017, it washed ashore to the Zeytinburnu coast due to severe storms. The ship went on sale in an auction on May 10 to be dismantled and scrapped. The ship manufacturing company Marsis, which won the tender bid, began dismantling the 65-meter-long and nine-meter-wide ship on May 24.

Ali Tamer Sukes, a representative of the firm, told daily Hürriyet on May 31 that the transportation of the ship to a shipyard was “risky,” which was why they had begun dismantling the ship where it had run ashore.

“Ships that have run ashore, such as the ‘Tallas’ or ones found submerged [in water] are damaged to the point that they cannot be transported. Such ships can sink when attempting to transfer them to the shipyard. This is why we are dismantling the ship on the shore,” said Sukes.

The firm representative said dismantling the “Tallas” would be completed in 45 days. “We have taken environmental safety measures for the dismantling of the ship. Later, we cleaned the inside of the ship and separated the materials used in the ship. Now, we are dismantling it to pieces in a way that will be accepted by recycling factories,” he said.

“MİNA-I” is another ship that will soon share the same destiny as “Tallas.” The 78-meter-long ship, carrying a Turkish flag, ran ashore at Maltepe port in Istanbul in November 2016. “MİNA-I” will be sold in an action on June 4 through a tender, after which a process will be launched to dismantle the ship.

Source: hurriyet daily news. 01 June 2018

835 Ships Scrapped in 2017: The Global Shipbreaking Facts & Figures

Each year the NGO Shipbreaking Platform collects data and publishes an annual list of ships dismantled worldwide.

In 2017, 835 vessels were dismantled.

543 of these ships were sold for dirty and dangerous breaking on the beaches of South Asia. Whilst ship owners are increasingly portraying themselves as conscious of the problems caused by shipbreaking, the Bangladeshi beach in Chittagong – where environmental protection and worker safety are particularly scant– remained the preferred scrapping destination worldwide in terms of tonnage dismantled.

Most vessels scrapped in 2017 were general cargo ships, followed by bulk carriers and container ships, oil and gas tankers, roll-on roll-offs, passenger vessels and oil platforms. Looking at the size of vessels scrapped on the beaches of South Asia, Pakistan received the largest vessels followed by Bangladesh, while Indian yards scrapped more medium-sized ships. China and Turkey tend to recycle smaller vessels on average. Thus, the larger the vessel the more likely it is that it will end up on a beach in Pakistan or Bangladesh – where the conditions are known to be the worst. In 2017 the Pakistani government introduced a ban on the import of tankers after a sequence of disastrous explosions between the end of 2016 and beginning of 2017, resulting in about 30 workers losing their lives. As a result, there was an increase in the flux of tankers going for breaking in India.

As in 2016, Germany and Greece top the list of country dumpers in 2017.

German owners, including banks and ship funds, beached 50 vessels out of a total of 53 sold for demolition.

Greek owners were responsible for the highest absolute number of ships sold to South Asian shipbreaking yards in 2017: 51 ships in total. Since the Platform’s first compilation of data in 2009, Greek shipping companies have unceasingly topped the list of owners that opt for dirty and dangerous shipbreaking.

European ship owners, from the EU and EFTA states, are responsible for more than one third of all ships sold for breaking. The number of European-owned and/or European-flagged vessels dismantled in 2017 worldwide amounted to 260 ships: 181 of these ships, representing 70% of all European end-of-life ships, ended up on the beaches in either India, Pakistan or Bangladesh. In terms of volume, European owners were responsible for around 40% of the total tonnage scrapped on South Asian beaches. It is clear that the European fleet follows the trends of previous years and continues to be predominantly broken using the most unsustainable recycling method.

Out of the 181 European vessels that were beached, only 18 were still sailing under a European flag during the last voyage. 24 vessels that had otherwise been operating under a European flag, swapped flag to a non-EU flag of convenience just weeks before hitting the beach. The most popular end-oflife flags for vessels scrapped on the beaches in 2017 were Panama, Comoros, St Kitts and Nevis, Palau, Liberia and Togo. Palau, St Kitts and Nevis and Comoros are flags that are almost exclusively used by cash buyers at end-of-life, and in 2017 Comoros hit a new record as it held first position as a beaching flag together with the more widely used flag of Panama.

Annual Report 2017

Source: Hellenic Shipping News. 8 June 2018

Abandon Ship - Oil tanker scrappage to hit multi-year high as earnings sink

Reuters reported that the shipping industry will this year scrap the largest number of oil tankers in over half-a-decade, driven by weak earnings, firm prices for scrap steel and the need to prepare fleets for strict new environmental regulations. The surge in scrapping underscores how the sector is grappling with one of its worst-ever crises, hit hard after rates for transporting oil plunged to multi-year lows in the wake of excess tanker supply and tepid demand as OPEC production cuts bite.

Ralph Leszczynski, head of research at ship broker Banchero Costa in Singapore, said that “The tanker markets are definitely in a trough at the moment, with one of the worst years in a decade in terms of freight rates and returns.”

Analysts and industry sources said that the tough operating conditions are expected to persist until at least the second-half of 2019.

Estimates on the number of tanker demolitions vary between the four shipping analysts that Reuters spoke to, with the most conservative standing at a seven-year high in 2018.

Mr Erik Broekhuizen, head of tanker research and consulting at ship broker Poten & Partners Inc, said that About 10.3 million deadweight tonnes (DWT) have been sold for demolition from January to April this year, compared with 11.2 million DWT for the whole of 2017 and 2.5 million for 2016. Mr Broekhuizen said that “OPEC production cuts are hurting the market, and as long as they are in place, the tanker market will remain challenged,” adding that scrapping had picked up for large vessels in particular.

Since early 2017, members of the Organization of the Petroleum Exporting Countries (OPEC), Russia and other non-OPEC crude producers have curbed exports to fight a global oil glut. The imposition of new US sanctions against Iran looks set to further reduce oil flows later in 2018, although Saudi Arabia and Russia have discussed potentially raising output to fill the subsequent void.

Source: steel guru. 05 June 2018

Shipping industry to scrap highest number of oil tankers in over 5 years

The shipping industry will this year scrap the largest number of oil tankers in over half-a-decade, driven by weak earnings, firm prices for scrap steel.

The shipping industry will this year scrap the largest number of oil tankers in over half-a-decade, driven by weak earnings, firm prices for scrap steel and the need to prepare fleets for strict new environmental regulations.

The surge in scrapping underscores how the sector is grappling with one of its worst-ever crises, hit hard after rates for transporting oil plunged to multi-year lows in the wake of excess tanker supply and tepid demand as OPEC production cuts bite.

"The tanker markets are definitely in a trough at the moment, with one of the worst years in a decade in terms of freight rates and returns," said Ralph Leszczynski, head of research at ship broker Banchero Costa in Singapore.

The tough operating conditions are expected to persist until at least the second-half of 2019, analysts and industry sources said.

Estimates on the number of tanker demolitions vary between the four shipping analysts that Reuters spoke to, with the most conservative standing at a seven-year high in 2018.

About 10.3 million deadweight tonnes (DWT) have been sold for demolition from January to April this year, compared with 11.2 million DWT for the whole of 2017 and 2.5 million for 2016, said Erik Broekhuizen, head of tanker research and consulting at ship broker Poten & Partners Inc.

"OPEC production cuts are hurting the market, and as long as they are in place, the tanker market will remain challenged," he said, adding that scrapping had picked up for large vessels in particular.

Since early 2017, members of the Organization of the Petroleum Exporting Countries (OPEC), Russia and other non-OPEC crude producers have curbed exports to fight a global oil glut.

The imposition of new U.S. sanctions against Iran looks set to further reduce oil flows later in 2018, although Saudi Arabia and Russia have discussed potentially raising output to fill the subsequent void.

Source: dev discourse. 03 June 2018

22 July 2018

Monitoring The Problems Of Shipbreaking In India

Abysmal working conditions and pollution in Alang were first documented by Greenpeace in 1998. Following actions by local NGOs, the Supreme Court issued several rulings demanding the improvement of the industry in order to bring it in line with national and international requirements for safe working conditions, environmental protection and waste trade law.

The Government responded with the adoption of the Ship Recycling Code in 2013, and the Gujarat Maritime Board (GMB) set up a waste reception facility.

Workers now also receive a very basic training.

Still, the working and living conditions for shipbreaking workers, as well as the environmental protection standards in Alang, remain alarmingly poor. According to local sources, at least 8 workers died at the yards in 2017. Yet absolute numbers of fatalities are not easily attainable, and serious injuries are rarely recorded. Occupational diseases are furthermore not documented at all.

Impunity for yard owners remains a serious concern: no yard owner has ever been held responsible for the death of a worker as they manage to put pressure on the law enforcers to quickly drop the charges.

From four yards in Alang receiving Statements of Compliance (SoC) with the Hong Kong Convention in 2015, there are now reportedly 66 yards that have one, out of a total of 154 yards. The industry push to make Indian beaching seem “green” has been promoted through the proliferated hand-outs of these certificates. However, the standard set by the HKC is weak and ignores crucial issues such as labour rights and downstream waste management. Disregard of the negative environmental impact of the beaching method, including hazardous operations in the intertidal zone and the use of the gravity method – which the Hong Kong Convention does not prohibit – remain serious concerns, as does the lack of proper accommodation and medical facilities for workers. Asbestos contaminated materials can be resold in India and there is no proper disposal site for PCBs. In October 2017, NGOs were refused access to the Alang shipbreaking area by the Gujarat Maritime Board to open up the site.

In light of the many yards that rapidly obtained Hong Kong Convention Statements of Compliance in Alang in the past year, the Platform requested the Gujarat Maritime Board (GMB) to visit the area. Despite some first exchanges with the GMB through our member organisation Toxics Link, the GMB interrupted the communication once the participants’ list to the visit was shared with them. Consequently, the Platform was not given the permission to visit the Alang shipbreaking area, nor was the Platform given the opportunity to contest the GMB decision to refuse access, as there was no formal rejection to the request.

Although not entirely unsurprising, this was a missed opportunity for the yards and the GMB to show the claimed improvements, and to demonstrate that they are open to listen to the concerns of civil society. The unwillingness to receive NGOs in the shipbreaking yards illustrates that there is still a serious lack of transparency in the industry in India, both from the yard owners and the authorities.

The failed attempt to visit Alang did not deter the Platform from going to India in October 2017, as the different members and board members met for the Annual General Meeting in Delhi.

The occasion was used to also have a larger conference with other Indian NGOs on the issue of shipbreaking in India. During this event, the NGOs could identify specific needs of improvements in the industry and learn from each other’s experiences. Since that meeting, the Platform has established stronger relationships with local NGOs and activists.

Source: Hellenic shipping news. 11 June 2018

Tanker Recycling on Record-Breaking Year

The decommissioning of a significant part of the tanker fleet is about to alleviate the current oversupply issues, as evidenced by the record-breaking pace of demolition activity this year. In its latest weekly report, Clarkson Platou Hellas commented that “with the end of an eventful week in Athens for the bi-annual Posidonia, Owners, Cash Buyers and other industry players were able to come together and discuss what has been an active first half of the year in the recycling market. With the main topic of discussion still being tanker units, it currently looks to be a record year for tanker recycling and many questions and discussions were being raised for this sector which should ensure the supply for these types of units to continue and interestingly, the topic of ‘green recycling’ was evident.

The market has remained stable again this week and some positive prices have even been witnessed with some potential rising sentiment returning. These prices can be further attributed to the increase in bunker prices and may entice more owners to consider leaving further bunkers on board for Buyers, knowing it could become more beneficial in the price received. Although there remains some uncertainty with another week of Ramadan (and Eid thereafter) still to commence, end of June will provide a better understanding of where the market actually lies and how the recyclers view the domestic markets. At present, the market appears to be simmering but the question is which way will we turn?”, wondered the shipbroker.

Meanwhile, in a separate note, Allied Shipbroking said that “the balance on the ship recycling side continues to show a relatively bullish face, with activity keeping fairly firm while quoted prices from cash buyers are still holding at relatively strong levels. We are still seeing a fair amount of volume being fed from the tanker side, while again this week we noted yet another VLCC being picked up. The Indian Sub-Continent has managed to upkeep its levels, while we have even managed to see some high spec units achieve relatively aggressive prices. It looks as though appetite is still there, despite being at the start of the monsoon season. At the same time, downward pressure has been felt from the negative track being seen on the foreign exchange front, with the US$ having gained considerable strength these past weeks. At the same time, there has been a fair amount of speculative buying that has taken place, largely in part due to the budget announcements that were taking place this past week. There is a fair amount of indication now that buying appetite will gradually start to subside over the coming days, though given the current market momentum being seen, it is likely that prices will continue to hold a fair amount of support for now”.

Similarly, the world’s leading cash buyer, GMS added that “with much of the shipping fraternity engaged in Posidonia festivities in Athens last week, in addition to the ongoing month of Ramadan and upcoming Eid celebrations in Turkey and the Indian sub-continent, activity and levels were expectedly more subdued this week. Despite that, at least two FSU sales did manage to register at firmer numbers, perhaps the result of some over exuberant celebrations during Posidonia. Meanwhile, after filling up their plots with over 10 VLCCs from various Cash Buyer hands, Pakistan has slumped alarmingly of late. A worrying currency depreciation to the tune of about 6% coupled with the imminent imposition of the 5% sales taxes announced during the recent budget, hint at a certain panic that seems destined to set into a previously bullish Gadani ship recycling sector and any further sales (especially those at numbers similar to the recently bullish levels) seem highly unlikely, at least in the near future.

Nevertheless, the Bangladeshi and Indian markets continue to impress with Chittagong buyers having awoken from their mid-summer lull and increasingly keen to acquire units once again, as the Indian market continues to dominate the market rankings with the firmest levels on offer. The overall rise in local steel plate prices in India has also seen Alang regain its position as the top placed sub-continent market – particularly for mid-sized specialist units such as reefers, LPGs and offshore untis, of which, there have been a number of fixtures of late. With the number of available candidates starting to dwindle, we anticipate it will likely be a quieter summer / monsoon period ahead for sub-continent yards, as the plethora of units sold so far this year starts to gradually be absorbed by the markets, ahead of an anticipated busier fourth quarter of the year”, GMS concluded.

Source: Hellenic shipping news. 14 June 2018

UK has the skills to deliver rig decommissioning work

Concerns voiced by a trade union over the state of the North Sea decommissioning industry are well-founded, says John Chillingworth, senior marine principal at Lucion Marine, who believes the UK can meet the specialist requirements of owners looking for cost effective and safe disposal of oil rigs.

Earlier this year, the RMT highlighted that work destined for Asia to scrap three semi-submersible drilling rigs, could have been undertaken safely in Britain, where there is ample capacity, skills and experience to bring in these often complex and potentially hazardous decommissioning projects. In addition, the owners would save £4 million on each rig in towing costs to Asia.

Towing vessels more than 8000 miles from the North Sea oil and gas fields to Asia also presents considerable risk. Tow lines can snap in heavy seas, leading to rigs, often unmanned and weighing more than 15 000 t, drifting uncontrollably to shore with all the associated costs, dangers and engineering problems involved in attempting to re-float the structure. Not to mention the environmental impact on wildlife and coast lines – a situation which occurred in 2017 in Scotland with a rig under tow to Malta.

Recycling in Asia is a real concern. NGO reports indicate that Asian workers are regularly killed and injured in highly dangerous and poorly protected conditions in these places. Some of the yards in Alang have made major improvements in safety and environmental conditions but even now the NGO continues to highlight concerns.

While figures for the scrappage of oil rigs appear thin on the ground, as an indicator, more than 800 large ships are broken up each year, the majority on the shores of Asia. Vessel owners can potentially earn millions of dollars more per ship when selling to Asian yards via cash buyers, instead of opting for recycling yards with higher standards. This is driven primarily by the price of scrap steel.

Chittagong is now the world’s largest shipbreaking centre, recycling 230 ships in 2016 and generating 10 million t of steel – up to 60% of all the steel used in the country. Most of the scrappage work is carried out by gangs, working for several months to dismantle a large vessel, wielding only sledgehammers and metal cutters. 

A more structured process in the UK for drilling platforms is being called for by the RMT in a move that could see the government commit to greater regulation of the decommissioning sector. This would contribute to protecting the interests of UK workers and the economy, while also reducing the number of vessels heading to Asia and, in the words of the union’s national secretary Steve Todd, stopping the “unethical exploitation of poor coastal communities in India, Pakistan and Bangladesh, when disposing of retired vessels”.

The North Sea behemoths recently moored in the Cromarty Firth could quite easily have been dismantled and recycled at local facilities in Scotland. Indeed, UK companies have a demonstrable track record working within the ship decommissioning sector, and can bring this expertise and experience to bear for rig owners and operators who work responsibly and to the highest standards.

And this includes the identification, control and (if necessary) safe removal of hazardous materials. The specialist skills and expertise companies such as Lucion possess are significant, enabling operators to cost effectively manage all kinds of unknown materials within their rigs, and ensure that work is completed to a high UK standard.

Inventory of hazardous materials
The types of hazardous materials found on rigs varies and may include asbestos, PCBs (polychlorinated biphenyl), lead and possibly naturally occurring radioactive materials (NORM) from the oil production process itself. These are usually contained in sludge in pipelines and must be blasted with frozen CO2 pellets to remove and collect the contaminated waste for safe disposal (as far as is understood the yards in the Far East and India are not equipped for this work).

Prior to sending the structure for dismantling, it is therefore important that an Inventory of Hazardous Materials (IHM) should be carried out by a certified expert to allow the recycling yard to plan the safe dismantling and associated costs. Depending on what is found along with quantity and location, will determine the cost of and most appropriate course of action for safe removal and disposal.

An accredited surveying company will carry out an inspection to verify the amount of hazardous materials onboard a rig. It is important to engage the services of an ISO17020 accredited company, which has the experience and resources to undertake the work comprehensively. Then, if asbestos and other hazardous materials are discovered, a management plan can be developed by the recycler as with other hazardous materials.

The key word is proactive. Adopting such an approach for a rig at the beginning of its operational life can prevent potential litigation for claimed exposure to hazardous materials, protecting those involved in dismantling and scrapping the rig.

The IMO would be justified in modifying the SOLAS (safety of life at sea) requirement for asbestos in ships to cover rigs, and institute a more manageable procedure that would contribute to securing greater safety. This modification would also spur owners into actioning the IHM inspections sooner rather than later.

Lucion, which has extensive experience undertaking IHM surveys on rigs and ships, is one of only two organisations approved by the EU Commission to verify the capabilities and standards of recycling yards, ensuring that they come up to standard under the EU approved register of recycling yards.

The company has extensive capabilities in producing recycling plans in accordance with the EU regulations and can advise on the management of hazardous materials to both working and end-of-life rigs. The firm’s team of surveyors are experienced and accredited by both Lloyds Register for the completion of Inventory of Hazardous Materials documents and UKAS accredited for the inspection and testing of asbestos.

Case study – SBM Offshore
Lucion’s expertise and services has helped to ensure that SBM Offshore meets its requirements around the safe management and disposal of hazardous materials.

SBM Offshore is a leader in floating production systems, whose operations span the full product lifecycle for Floating/Production, Storage and Offloading (FPSO) vessels. Specifically, Lucion undertook work for SBM on the 278 000 DWT FPSO Marlim Sul, which was operating offshore Brazil before being decommissioned and sent for lay-up in Malaysia.

A team of BOSIET (Basic Offshore Safety Induction and Emergency Training) certified hazardous materials inspectors from Lucion spent several days onboard to undertake visual inspections and survey key sections of the vessel. They also completed a sampling exercise while the FPSO wound down operational activities.

The survey has been a key component in the preparation of an IHM, which is critical in helping to identify hazardous materials left over from the production processes undertaken by offshore vessels.

This work, which also helped to determine removal and disposal charges, allowed recycling yards to plan the safe dismantling and associated costs. It also ensured that IHM Parts I, II and III were comprehensively compiled for reference and maintenance purposes, contributing significantly towards full regulatory compliance.

Source: oil field technology. 15 June 2018