Indian Ship Recycling 'Extremely Regulated'

Companies like Wirana in the ship recycling industry are known as cash buyers since they purchase the vessel from the original owners and then sell it to a ship recycler in any one of the ship recycling countries. For vessels purchased “as is,” the cash buyer takes over the vessel at the delivery port and then boards his own crew for the sailing of the vessel. In the meantime, the vessel is reflagged, given a new name and a fresh set of insurance cover for the voyage to the recycling yard.

In India, ship recycling activities are carried out at Alang West Coast. Alang has 175 active and licensed yards, which are leased by the government of Gujarat for a period of 10 years. The strength of Alang is that it relies upon the beaching tides in order to take maximum advantage of the force of the water in pushing the vessel up onto the beach. Both Alang and neighboring Jamnagar are under the aegis of the Gujarat Maritime Board.

In India there are approximately 25 licensing bodies, and the industry is extremely regulated. Ship recyclers spend their own funds to meet the standards of ISO without any financial or other support from any party. Currently at least 120 yards are certified with ISO 14001/9001 and OHSAS 18001 and at least 55 yards have ISO 30000 certification.

Beaching vs. Drydocking

The beaching method of ships has been successfully practiced for several years along the 10-kilometer beach at Alang, which has a very high tidal gradient, leaving vessels out of the water during low tide. A comparative life cycle assessment has been initiated of beachings compared to drydocking in India and involves estimating the environmental footprint of each for both facilities’ construction and subsequent operation.

In the preliminary analysis it can clearly be seen that the benefits of the beaching method practiced at Alang for recycling are far superior to the drydock method. At Alang the following agencies are involved in clearances upon the arrival of a vessel:

1.    Gujarat Maritime Board

2.    Gujarat Pollution Control Board

3.    Explosives Department (for tankers only)

4.    Customs

5.    Atomic Energy and Research Board.

In the unlikely event that the beaching method of ship recycling is banned, a far greater socio-economic harm will befall the more than 50,000 workers who are directly employed and about 500,000 workers who are indirectly employed in the recycling yards on the Indian subcontinent than any adverse impact on the environment.

Ship Recycling Versus Shipbreaking

Often we see publications switching between the terms “ship recycling” and “shipbreaking,” and perhaps the confusion stems from a lack of knowledge about the eventual end use of the vessel and its contents by the yards. During the process of ship recycling the following items are recovered for reuse and recirculation:

•    ship’s steel - this is the primary recycling material and is sold to steel re-rolling mills to convert into rods and bars, which are used in infrastructure projects

•    ropes and chains - these are generally re-exported or reused by the ship recyclers themselves

•    generators - used in garment manufacturing factories or in the agricultural sector

•    boilers - used in rice and jute mills

•    furniture, beds, cots, bunks, cabin materials, utensils - used by mid-tier households or public hospitals, emergency camps, hotels, motels, hostels, Red Cross and YMCA

•    electrical items, appliances, irons, heaters, insulators - reused by industrial and agricultural units

•    refrigerators - purchased by mid-tier households, small hotels and factories

•    pipes and fittings, wires, coils, rubber - agricultural and domestic use

•    oil and other products removed - depending on the quality, they are resold to licensed factories for their use

•    sludges, paints, etc. – are disposed under the guidelines framed by the Gujarat Maritime Board into specific incinerators

•    asbestos and hazardous materials – sent to pre-determined, government-approved landfill sites after being appropriately bagged, itemized and sealed.

This is only a partial listing. Everything on a vessel is either recycled or disposed of in accord with government regulations and ISO standards.

More than 8,000 vessels have been scrapped at Alang since 1983, generating steel output in excess of 100 million tons. In an average year Alang recycles about 350-400 vessels with annual sales from this activity of roughly $1.8 billion. Certainly “breaking” would not generate this kind of income! – MarEx

The author is an Indian-qualified Advocate and Vice President (Legal) at Wirana Shipping, the oldest and one of the largest cash buyers of vessels for recycling.

Source: maritime-executive. 7 August 2014

http://www.maritime-executive.com/article/Indian-Ship-Recycling-Extremely-Regulated-2014-08-07

New names: Ministries of Ganga, shipbreaking:

Sending out a clear indication of new challenges and priorities, the Narendra Modi government has decided to change the names of several key ministries.

The ministry of environment & forests will be known as the ministry of environment, forests, and climate change. Prime Minister Modi is already the author of a book on climate change called Convenient Action: Gujarat’s Response to Challenges of Climate Change.

Underlining the importance of the salvaging and ship-breaking industry in India, the ministry of shipping will become the ministry of shipping and shipbreaking. Incidentally, Alang in Gujarat, which recycles about half of all ships salvaged around the world, is considered the world’s largest shipbreaking yard.

The ministry of water resources has been renamed the ministry of water resources, Ganga rejuvenation and river development, a clear indication that cleaning the Ganga is high on the government’s list of priorities.

The government has decided to hand over the skill development department to the sports and youth affairs ministry, which will now be known as the ministry of skill development, entrepreneurship, youth affairs and sports.

“Skill development is a dream project of the Prime Minister and we are all set to take up the new challenge,” a top ministry official told HT.

Source: Hindustan times. 7 August 2014

http://www.hindustantimes.com/india-news/new-names-ministries-of-ganga-ship-breaking/article1-1249088.aspx

Is There Child Labor in Shipbreaking Yards?

Today, 25 years after the United Nations Convention on the Rights of the Child, there are an estimated 168 million child laborers worldwide. Many, particularly boys, are engaged in dangerous work.

Bangladesh has again come under attack for the use of child labor in its shipbreaking yards. The industry was shut down for almost a year in 2010, and during this time the government instituted new regulations including the prohibition of children under the age of 18 working in the industry.

Are children still being employed? “Yes,” says Patrizia Heidegger, executive director of NGO Shipbreaking Platform, a coalition of environmental, human rights and labor organizations. The organization’s local partner YPSA conducted a short follow up study this year on one they did prior to the government’s changes in 2009. This time, they used a simple method to estimate the number of child laborers at three yards. “During lunch break, the workers leave the yards. They counted all workers leaving the yards through the main gate (which is usually the only access point as the yards are fenced in) and also counted the number of children (workers that looked clearly younger than 18). Thereby, they could estimate the percentage of child workers. Unfortunately, the number has not really changed since 2009 when we estimated that 20-25 percent of the work force are children,” says Heidegger.

One of the examples cited by the NGO is 16 year old Khurshed. He is reported to have justified working in shipbreaking to his mother by saying: “the Ramadan is ahead and we need additional income to meet the cost of buying food for IFTAR (special food after day long fasting in the month of Ramadan, the holy month) and new clothes for celebrating EID (the biggest Muslim festival occurred after the month of Ramadan). This year we all will be very happy on EID.”  Alam was smashed to death on July 17, 2012, when a huge iron plate fell on him.

Another example cited is under-aged worker Shumon. “Me and my brother still struggle to meet the needs of the family. We cannot save a single penny from our income. I dream of leading a happy life in the village. I want to go back to my home. I miss my village a lot.”

“Or course, poverty is the reason behind child labor in shipbreaking yards,” says Mohamed Ali Shahin, the Platform’s coordinator in Bangladesh. “Young laborers are driven to hazardous work for instance when they and their families cannot find work in agriculture during certain seasons, when fathers die or lose their job, or when the family’s home is lost through river erosion, a very common problem in Northern Bangladesh. Shipbreaking offers temporary jobs for children, and because it is better paid compared to other work children do, their families send them there. It is very easy to exploit poor families and their children.”

Children are not formally employed by the yards, says Shahin. They are brought in by so called contractors who get paid by the yard owners for providing day laborers. The children are not registered as workers and are often used as “free floaters” between different yards wherever their work force is needed. “Children do all different kind of work in the yards”, says Shahin. “They are employed in cutting down the large steel plates, clean scrap parts from mud, remove the fittings from inside the ships, carry around heavy gas cylinders or have to climb into tanks to clean them out”.

“To hide child labor from inspections, the young workers are often employed in late and night shifts when no controls take place,” says Heidegger. “Or yard owners just claim that a worker is already 18 – after all, they do not have an ID card with them. Hazardous child labor is illegal in Bangladesh, but it is part of the system in the shipbreaking industry. Apart from putting up signs saying the yards are ‘child labor free’, the yard owners to do control the influx of children. Nor do the authorities.”

Mohammed Zahirul Islam, director of the PHP Family shipbreaking yard in Chittagong, gave a different answer when asked, are children still being employed? “If I hear now that we still employ child labor, I will strictly say it is totally false and baseless. We are open to any people visiting our yard – we recently had a lot of people from embassies. You cannot blame someone without any proof.”

Everyone now has a national ID card that is given out by the government, says Islam. “Before we take anyone, we check the national ID card and their age.” New staff are given four weeks training, and by implementing globally accepted safety practices and pollution free operational capability, the company has been awarded ISO certification, the first ever in the country.

Islam employs about 500 people in the yard, some of them local, many from villages elsewhere. “When we talk about the workplace environment of any Bangladeshi industry, we need to think about it in the context of Bangladesh, how in general the people live. Then you can compare this with our industry and what we are providing.”

He cites the example of toilet facilities. “If you visit the villages of these people, you will see that they don’t have any attached toilets. They need to walk 5-10 minutes to go to their toilet. Now in the yard we are providing attached toilets. If the NGOs come and find some dust in the toilet, they then complain about it… We are a developing nation. There will always be a gap, and there will always be differences. So when we talk about Bangladesh, people need to come and see how these people used to live and how they are living now. Then you can say whether we are doing anything bad to them or not.”

Islam says that most families have 5-7 children in Bangladesh due to a lack of birth control. The 500 he employs directly support around 4,000 other people. “There are 200,000 people directly working and about a million people indirectly working in ship recycling. Do these NGOs have any contingency plans for these workers [if the industry was stopped]?

“If we are facing any problems, don’t you think there are a lot of issues that need to be addressed? Come together, sit with us, show us the problem and let’s work together rather than just blaming and telling us to stop the industry,” says Islam.

Source: maritime executive. 5 August 2014

http://www.maritime-executive.com/article/Is-There-Child-Labor-in-Shipbreaking-Yards-2014-08-05

GMS weekly report on Indian ship breaking industry for WEEK 30 of 2014:

A tumultuous week ensued in India with the currency faltering to add to the concerns over deflated steel prices and a depreciating stock market. The Indian Rupee fell to a 6 month low of INR 61.9 during the worst period of trading, to startle many end buyers, who subsequently withdrew their offers and declined to initiate discussions on any new tonnage.

This has come as a complete shock to all, with many expecting the market to kick on after the Eid holidays and claw back much of the momentum lost to an inspired Pakistan market.

As a result, it was no surprise to see no new sales registered this week, with most new vessels (and those from existing cash buyer inventories) being diverted to Pakistan to exploit the demand and the prices on show there currently.

With Bangladesh set to resume buying once again as well, it may be a bleak few weeks in the Indian market until prices and fundamentals settle once again.

Certainly demand remains healthy (with demand set to slow further over August with many away on holidays), but many end buyers are expecting a correction in ship prices and may hold off at lower levels until asking prices drop.

Source: steel guru. 5 August 2014

http://www.steelguru.com/indian_news/GMS_weekly_report_on_Indian_ship_breaking_industry_for_WEEK_30/345819.html

GMS weekly report on China ship breaking industry for WEEK 30 of 2014:

Another empty week in terms of market sales masked a market that had (at least) been engaging in some negotiations.

Several green and undertow vessels had been negotiating for sale over the course of the week incoming storms in the Far East encouraged those in the area to perhaps take the quicker option of going to China rather than risking the voyage across to the sub continent.

Government tonnage of course continues to be proposed and concluded directly between yards and owner, with time to exploit the generous state subsidies swiftly running out next year.

Source: steel guru. 5 August 2014

http://www.steelguru.com/international_news/GMS_weekly_report_on_China_ship_breaking_industry_for_WEEK_30/345886.html