01 February 2015

EU regulations may hit Gadani shipbreaking

Workers climb aboard the chain in Gaddani shipbreaking facility. — Reuters/File

ISLAMABAD: Pakistan received 111 vessels in 2014 for dismantling as against 105 vessels in 2013 and 124 in 2012, according to data compiled by the Shipbreaking Platform, a global coalition of environmental and human rights organisation.

Globally 1,026 ships were dismantled in 2014 compared to 1,213 ships in 2013.

In South Asia, the figure stood at 641 in 2014 as against 645 in 2013. India received 304 vessels for dismantling in 2014 as against 347 in 2013, and 496 in 2012. Bangladesh dismantled 225 ships in 2014 as against 193 in 2013 and 230 in 2012.

An official in the ministry of environment told Dawn on condition of anonymity that Pakistan’s shipbreaking yard at Gadani can be hit by the new European Union ship recycling regulations. It is also facing tough competition from China and Turkey which receive maximum number of ships for recycling because of their advanced setups for dismantling.

At present, 68 plots are operational at the Gadani Shipbreaking Yard, which are run by 38 operators and employ more than 12,000 workers.

“South Asia is still preferred dumping ground for most ship owners as environmental, safety and labour rights standards are poorly enforced there,” said Patrizia Heidegger, Exe­cutive Director of the NGO Shipbreaking Platform.

“Ship-owners sell their ships to the beaching yards for considerably greater profit than the price they could obtain by cooperating with modern ship recycling facilities.”

According to Pakistani officials, thousands of tonnes of hazardous waste is piling up at Gadani. There is an urgent need to put in place facilities to take care of this waste, which endangers environment and threatens health of workers.

In this context, Pakistan has ratified the Basel Convention. However, a compliance instrument has yet to be established. Further­more, the enforcement of laws like the Pakistan Environment Protection Act 1997, the Factories Act 1934 and the Pakistan Penal Code, which are already in place, is very weak.

Pakistan will need to focus on the implementation of rules to comply with the EU standards to save the shipbreaking industry from a complete collapse. The industry pays around Rs5 billion in taxes annually.

As per report of the Shipbreaking platform, out of a total of 1,026 ships dismantled globally in 2014, 641 — representing 74pc of the total gross tonnage (GT) scrapped — were sold to substandard facilities where ships are dismantled directly on tidal beaches.

“None of the South Asian yards comply with international standards for safe and environmentally sound ship recycling,” said the report.

After the 18th amendment, the government needs to remove the overlapping responsibilities between the national and provincial governments, and ensure implementation of regulations.

Source: dawn. 3o January 2015


Shipbreaking: 34% of the gross tonnage broken in South Asia in 2014 was European


Brussels — The NGO Shipbreaking Platform has releases a complete list of all ship owners and their ships sold for breaking last year. Out of a total of 1026 ships dismantled globally in 2014, 641 – representing 74 percent of the total gross tonnage scrapped – were sold to substandard facilities in India, Pakistan and Bangladesh where ships are dismantled directly on tidal beaches. None of the South Asian yards comply with international standards for safe and environmentally sound ship recycling: In 2014 the Platform reported 23 deaths and 66 severe injuries due to demolition accidents.

“South Asia is still the preferred dumping ground for most ship owners as environmental, safety and labour rights standards are poorly enforced there,” said Patrizia Heidegger, Executive Director of the NGO Shipbreaking Platform. “Ship owners sell their ships to the beaching yards for considerably greater profit than the price they could obtain by cooperating with modern ship recycling facilities. It is shameful for the shipping industry that so many ship owners choose to close their eyes to the realities on-the-ground in South Asia and do not to face up to their responsibility and demand clean, safe and just ship recycling.”

285 owned or flagged by an EU Member State

The European Union has a particular responsibility to act – 34 percent of the gross tonnage broken in South Asia last year was European. Amongst the ships dismantled in 2014, 285 were either owned by a European company or flying the flag of an EU Member State. Two thirds of these European ships – 182 ships, including many having primarily operated in European waters – were beached. Whilst large European shipping nations such as Greece and Germany unsurprisingly top the list of 2014 worst dumping countries, selling respectively 70 and 41 large oceangoing vessels to South Asian breakers, they also top the list of ship-owning countries which sell almost exclusively to South Asian breakers, rather than to modern recyclers.

Cyprus owners sold a record high 92 percent of their old ships to substandard yards in South Asia, German owners as much as 87 percent and Greek owners 76 percent. Comparatively, Chinese owners, including those based in Hong Kong, only sold 39 percent of their end-of-life vessels to beaching facilities in South Asia. China is the only major shipping nation in the world building up domestic capacity and working towards self-sufficiency in the management of its end-of-life fleet.

Extensive use of non-compliant flags

Despite the new EU Ship Recycling Regulation, which entered into force on 30 December 2013 and which out-rules the use of the beaching method to dismantle EU-flagged vessels, 41 ships registered under the flags of EU Member states Malta, Italy, Cyprus, UK and Greece hit the beaches in 2014. 15 additional ships changed their flag from an EU to a non-EU flag just weeks before reaching South Asia. As in previous years, particular flags of convenience such as Saint Kitts and Nevis (64 ships), Comoros (39 ships), Tuvalu (24 ships), Tanzania (20 ships) and Togo (20 ships) that are less favoured during operational use, were excessively popular flags for the end-of-life ships broken in South Asia. Any attempt to regulate ship recycling based only on flag state responsibility will have little impact due to the extensive use of non-compliant flags.

According to NGO Shipbreaking Platform, unless an economic incentive is added to the EU’s Ship Recycling Regulation, the registration of EU ships under flags of convenience such as Saint Kitts and Nevis, Tuvalu and Comoros is likely to increase, and will allow ship owners to sail around the law once it enters into force, and to continue dumping their ships in substandard facilities.

German ship owner tops the list

German ship owner Ernst Komrowski tops the list of the worst global dumpers with 14 end-of-life vessels sold to the beaches – all of these were formerly part of the Maersk fleet and had been on a long-term charter with the Danish container ship giant, which oppositely to Komrowski has a strict ship recycling policy for its own vessels. Second ranks South Korea’s largest container ship owner Hanjin Shipping with 11 ships, followede by Swiss-based Mediterranean Shipping Company. Hanjin and MSC’s bad practice stands in sharp contrast to that of their competitors Maersk and Hapag-Lloyd, two leading containership companies that have committed themselves to the recycling of their end-of-life vessels in modern facilities off the beach. Number four amongst the worst dumpers is Brazilian oil giant Petrobras with six end-of-life vessels sold to South Asia.

Komrowski, Hanjin, MSC and Petrobras are followed by a range of companies which have all sold five end-of-life vessels to the beaches, amongst them well-know dumpers such as Conti, one of the largest German ship owners offering private investment in ships, G-Bulk and Danaos from Greece and Ignazio Messina from Italy. Also American TBS International, Singapore-based Pacific International and Taiwanese owner Yang Ming each sold five ships to the beaches in South Asia.

Ship owners have alternative choices

“It is time for the global leaders in shipping to commit to clean and safe ship recycling,” says Patrizia Heidegger. “Every single ship owner can do something: Instead of selling to intermediaries and losing leverage on the fate of their vessel, ship owners can talk to ship recycling experts and negotiate directly with modern ship recycling facilities. Teekay and Hapag-Lloyd’s decision last year to adopt responsible ship recycling policies shows that ship owners can make alternative choices”, comments Heidegger.

The Platform advises ship owners on what they can do to ensure sustainable end-of-life policies for their fleet and currently counts 13 major ships owners which practice clean and safe ship recycling in modern facilities off the beach.

Source: recycling portal. 28 January 2015

New tax a life raft for Pakistan's shipbreakers?


South Asia: Pakistan's shipbreakers have welcomed a new 15% tax on imported steel billet, bar and wire rod which has been introduced to boost stability in the local market and to counter dumping, reports IHS Maritime. However, they are unconvinced that the tax will successfully stem the flood of cheap imports from China.

Although India reduced its basic customs duty on imported scrap ships from 5% to 2.5%, the inflow of cheap products has continued to undercut the ship steel market. 'The regulatory import duty is definitely hailed by the Pakistan Ship Breakers Association, which expects it to reduce imports of Chinese finished steel alloy products,' says its secretary Asif Khan, who is based at shipbreaking giant Gadani.

Meanwhile, Chinese steel producers are said to be 'bracing themselves' to cut prices to 'nullify the impact'. Khan expects the situation to become clearer in the weeks ahead. 'But we understand that China has a large ready inventory for export at cheap prices, which is disturbing the market prices equilibrium,' he adds.

Source: recycling international. 28 January 2015

NGO Shipbreaking highlights ship beachers:

German, Korean and Swiss shipowners top the list of those sending their ships to South Asian beaches for recycling in a study by presure group NGO Shipbreaking in 2014.

According to NGO Shipbreaking Platform's annual list of demolished ships, 1,026 ships are said to have been dismantled in 2014, with 641 ending up in what it says are substandard facilities on the beaches of South Asia.

In 2014, 23 deaths and 66 severe injuries were reported on South Asian beaches as the result of explosions, crushing and falls from height while dismantling ships.

Ernst Komrowski, a German shipowner, sold the most ships to the beaches in 2014. All 14 of the vessels it scrapped were previously in the Maersk fleet or chartered to Maersk.

The second-highest number of ships beached was from South Korea's Hanjin Shipping. The report highlighted South Korea's prominence as a shipbuilder and its strong environmental profile, Hanjin sent 11 ships to meet their end on South Asian beaches.

Third place Mediterranean Shipping Company sent seven ships to the beaches, even though it had suffered the death of six workers in 2009 when a fire broke out on the MSC Jessica as it was being dismantled in India.

European ships accounted for 285 of the total ships scrapped worldwide, with1 82 of those making their way to beaching facilities that lack any compliance with international standards for ship recycling. The New EU Ship Recycling Regulation came into force at the end of 2013, but has either been ignored or ships have re-flagged to non-EU flags ahead of beaching to dodge jurisdiction.

The use of tidal beaches means that pollutants cannot be contained, and the use of heavy lift machinery is impossible, putting both worker's lives and the environment at significant risk. China was identified by NGO Shipbreaking as the only major shipping nation building up capacity to recycle its end-of-life fleet. 163 ships were recycled in China, with 93 of those vessels under the Chinese flag.

Source: seatrade-global. 26 January 2015
http://www.seatrade-global.com/news/asia/ngo-names-and-shames-ship-beachers.html

Directorate General of Foreign Trade wants to treat leftover fuel as part of the ship:

NEW DELHI: To encourage the ship-breaking industry, the Directorate General of Foreign Trade is mulling to relax the penalty on bunker extracted out of the vessels coming for scrapping. The DGFT is considering the proposal moved by the shipping ministry to treat the leftover fuel as part of the ship and not a separate item.

Recyclers on the yards have to pay a duty as well as penalty on the remnant fuel because the ship bringing it is technically "unauthorised to bring oil" into the country. Such ships embarking upon their last voyage have been asked to fill their tanks only up to the journey's requirement level. But, most vessels end up reaching filled with fuel.

Source: economic times. 27 January 2015