12 August 2020

Hong Kong: Ship Recycling In India – Hong Kong Convention


India commands the largest share of the world's shipbreaking industry but has justifiably been criticised for environmental degradation and lax compliance towards worker safety and health issues. This is meant to change with the introduction of legislation to give effect to the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009, (Convention). The Convention is aimed at ensuring that ship recycling does not pose unnecessary risk to the environment or to human health and safety.

Hong Kong Convention

The Convention mandates the procedure to be followed for survey and certification of ships to be recycled as well as for the authorisation of ship-recycling facilities. It requires member states to prohibit and/or restrict the installation and use of certain hazardous materials on ships flying their flags or whilst in their ports, shipyards, ship repair yards or offshore terminals. It contemplates inspection of ships for the purpose of verifying that there is on board either an International Certificate on Inventory of Hazardous Materials or an International Ready for Recycling Certificate. It obliges states to frame laws imposing sanctions on ships and ship-recycling facilities contravening the Convention. The regulations appended to the Convention also list the various requirements which need to be met such as preparation of a ship-recycling facility plan and presence of an inventory of hazardous materials on board the ships.

India formerly acceded to the Convention in November 2019. The Convention has now been ratified by 15 IMO member states but is yet to formally come into force. This is because ratifying member states must represent 40% of world merchant shipping by gross tonnage, and must have a combined maximum annual ship recycling volume of not less than 3% of their combined gross tonnage for the past 10 years.

That means further tonnage and recycling volumes are needed before the convention can enter into force, which would require ratification by other major ship recycling nations like Bangladesh, China, Pakistan and Turkey.


Indian Background

In the Indian context, environmental concerns against shipbreaking were publicly raised for the first time when two heavily toxic French vessels were sent to India for dismantling. The Supreme Court recognised that precautionary and polluter-pay principles were part of Indian law but permitted the Blue Lady to be dismantled in Alang. However, the Supreme Court directed the authorities to frame legislation for environmentally safe dismantling of ships. A ship breaking code was accordingly formulated in 2013.


Shipbreaking Code (Code)

The Code divides the shipbreaking process into three broad stages- anchoring, beaching and ship recycling. The Code provides comprehensive regulations specific to each of these stages. There is a requirement of a Ship Recycling Facility Management Plan (SRFMP) and the Ship Specific Recycling Plan (SSRP) to be provided by the recycler to get permission for beaching. Along with the SSRP, there is also the requirement of producing a disposal plan as well as gas-free and fit-for-work certification.

The Code permits the authorities to deny permission of entry or beaching to vessels not fulfilling the requirements of the Code which can be traced back to the Basel Convention.


Worker Safety: Recognising that most workers employed in shipbreaking yards are illiterate, the Code requires the use of signs and symbols for warning workers against hazards. The Code also regulates the terms of employment of labourers by importing provisions from various labour welfare legislations. For example, it requires workers engaged in breaking/cutting ships to be registered either under Employees State Insurance Corporation or Workmen Compensation Act. Similarly, it imports the Factories Act to provide maximum weekly and daily hours of work, holidays and wages for overtime work. The Code also requires the Labour Department to ensure compliance with legislation stipulating minimum wages for workers.

The handling of hazardous material like asbestos waste and asbestos containing material has been separately regulated by the Code.

Prescribes stringent procedures at each stage of the demolition process, requiring multiple certificates (Certificate of Registry, non-encumbrance certificate, NOC's from various authorities) to be obtained and other compliances. Permission from different authorities like the State Maritime Board/Port Authority, the State Pollution Control Board, Petroleum and Explosives Safety Organisation, Atomic Energy Regulatory Board, Customs Department, are required depending on the type of ship. Verification of documents, physical inspection of the vessel and certification from different authorities is contemplated before permission to beach is granted.


Recycling of Ships Bill, 2019 (Bill)

A new Bill has been approved by the Union Cabinet in November 2019 and is now awaiting legislative approval by the Lok Sabha (Lower House of Parliament). It is unclear whether the Bill repeals the Code, given that the Code has more stringent provisions for beaching than the Bill.

The Bill substantially incorporates the provisions of the Convention and covers within its ambit:

i)                    new and existing ships registered in India

ii)                   ships entering a port or terminal in India or the territorial waters of India

iii)                 any warship or other ship owned and operated by an administration used for governmental non-commercial service and

iv)                 ship recycling facilities operating in India.

A ship in India can only be broken at an authorised ship recycling facility after being certified as ready for recycling.  The Bill, like the Convention, stipulates the procedure to be followed for survey and certification of ships as well as for the authorisation of ship-recycling facilities. The Bill restricts the use or installation of hazardous material on the ship, prohibited by the Central Government. The owner of every new ship is required to procure a 'certificate on inventory of hazardous materials' for each ship- existing ships not in possession of such certificate must obtain one within five years. Furthermore, the Bill provides for inspection of a ship recycling facility by the competent authority and mandates preparation of a ship-specific recycling plan by the recycling facility, an inventory of hazardous materials and requirement to report to the competent authority. Similar to the Convention, the Bill stipulates safe and environmentally sound management of hazardous waste and worker safety and training. Contravention of the provisions of the Bill, entail penalties upon both the ship owner and the recycling facility.


Lacunae in the Bill

The Convention leaves it to member states to employ a safe and sound method of shipbreaking. In India the method used, viz, beaching, is not environment and worker friendly. A major flaw in the Bill is that it neither specifies a method of ship recycling nor bans the beaching process. In contrast, the Code classifies the demolition process into stages and regulates beaching.

The requirement of 'prior informed consent' for the export of hazardous substances, which is a requirement of the Basel Convention and of the Code, finds no mention in the Bill.

The Bill, like the Convention, exempts from its ambit war ships or ships owned or operated by the Government and used for Government non-commercial purposes and ships that are less than five hundred gross tonnage. This omission is significant, given that warships and naval vessels have a large source of hazardous materials like asbestos and chemicals like mercury, which should have been regulated. Interestingly, the Code does not grant such an exemption to these vessels and instead categorises them as ships of 'special concern'.

The Convention, as well as the Bill, make clear that the responsibility of a ship owner is limited to getting clean certificates from the flag state. No responsibility for clean-up, is cast on the ship owner.

 Another drawback of the Bill is that instead of comprehensively providing for environment and worker safety, it delegates the making of such regulations and guidelines to other authorities, and leaves it to the ship recycling facility to comply with applicable regulations. This delegation makes the successful outcome of the objectives of the Bill uncertain and dependent on executive action. This is in marked contrast to the Convention and the Code both of which exhaustively provide for environment protection and worker safety.

 Although the Bill provides for compliance with the Factories Act, 1948, it is silent on the applicability of other labour welfare legislation, such as the Inter-State Migrant Workmen Act and the Trade Unions Act. The rights conferred on workman under these statutes should have been imported in the Bill. Significantly, there is no prohibition on the employment of minors and adolescents, considering that ship breaking is recognized as a hazardous industry and their employment in hazardous places of work is prohibited.



The Bill is a missed opportunity to address problems specific to the Indian ship breaking industry. The legislation should have drawn on the experience and difficulties faced in the implementation of the Code and devised a more robust legal framework for ship demolition. The Bill instead eases the more stringent regulatory framework prescribed by the Code. The ultimate objective, of ensuring that the Indian ship recycling industry embraces truly green recycling practices, remains for the time being an unfulfilled aspiration.

Source: mondaq. 11 August 2020


16 July 2020

Platform publishes South Asia Quarterly Update #22

There were a total of 98 ships broken in the second quarter of 2020. Of these, 60 ships were sold to the beaches of South Asia, where, despite the majority of yards being closed due to the Covid-19 pandemic, shipbreaking kept putting workers’ lives at risk. Between April and June, at least 3 workers were severely injured in Bangladesh.

On April 24, Jalal (35) suffered an accident at Habib Steel shipbreaking yard. He got injured while carrying oxygen bottles from inside the ship. 

According to local sources and media, worker Md. Khalil (45) got injured on April 28 at an unauthorised shipbreaking yard recently opened by lawmaker Didarul Alam. Khalil’s leg broke after a hatch cover fell on him while dismantling the vessel BERGE EIGER, owned by shipping company Berge Bulk. The worker was transferred to the Dhaka Hospital due to the severity of the injury.

On June 22, an accident took place during an illegal night shift at Jumuna Ship Breakers yard. Abdul Halim (24) was hit by an iron piece in the stomach while cutting the vessel STELLAR KNIGHT, owned by South Korean Polaris Shipping. It took a couple of hours for the worker to be transported to the nearest hospital.

In the second quarter of 2020, Greek ship owners sold the most ships to South Asian yards, closely followed by Singaporean and South Korean owners. South Korean company Polaris Shipping sold three vessels to Bangladesh for dirty and dangerous breaking. The ship owner hit the headlines in June for the scuttling of the ore carrier STELLAR BANNER off the coast of Brazil.

In April, we urged Bangladesh to halt the import of a highly toxic offshore unit that had illegally departed from Indonesia. The Floating Storage and Offloading (FSO) tanker J. NAT left Indonesian waters even though local activists warned Indonesian authorities about the toxicity of the vessel. Following our actions and local media reports, the government of Bangladesh directed all departments concerned not to allow the ship to enter Bangladeshi territory. Maritime databases seem to indicate that the vessel reversed course and changed name to RADIANT. However, its current whereabouts are unknown.

Almost one third of the ships sold to South Asia this quarter changed flag to the registries of Comoros, Palau and St. Kitts and Nevis just weeks before hitting the beach. These flags are not typically used during the operational life of ships and offer ‘last voyage registration’ discounts. They are particularly popular with the middlemen that purchase vessels cash from ship owners, and are grey- and black-listed due to their poor implementation of international maritime law. The high number of flag changes at end-of-life seriously compromises the effectiveness of legislation based on flag state jurisdiction only, such as the European Union (EU) Ship Recycling Regulation.

How Covid-19 is affecting vulnerable shipbreaking workers

The pandemic is still affecting workers globally, including those employed in the shipbreaking sector in South Asia.


According to local sources, all shipbreaking yards resumed their activities on June 1. One third of them never shut down despite the lockdown, exposing the workers to the risk of contracting the virus and spreading it in the vulnerable local communities.

Having been deprived of accessing government support, which is offered only to local workers, migrant workers have been unable to return to their home villages due to the absence of public transport services. Forced to continue to pay rent for the unsanitary and improper accommodation near the shipbreaking yards, migrant workers, mainly from the Northwest of Bangladesh, have been left to starve. This unprecedented emergency situation led us to raise financial support to distribute, in partnership with our member organisation OSHE, food and personal protective equipment items to 130 of the most deprived shipbreaking workers’ families in Sitakunda.


After a month since the start of the national lockdown in India, the government announced the reopening of several industries in Gujarat. At the end of June, around 30% of the workforce was working at the shipbreaking yards in Alang. The fact that around 75% the migrant workers returned to their home villages in Bihar, Odisha, Uttar Pradesh and Maharashtra has led the yard owners to look at the diamond sector’s unemployed workers from Saurashtra.

Source: NGO Shipbreaking Platform

21 May 2019

Major explosion at Bangladesh shipbreaking yard kills two shipbreaking workers and severely injures five

A loud blast in the early morning shook the Chittagong shipbreaking area. At around 8:30 AM, a fire broke out on board the vessel BUNGA KELANA 4 (IMO 9178343), beached at Mahinur Ship Breaking yard. The flames spread from abandoned waste oil located close to the engine room where workers were torch-cutting steel parts.

 Mohammod Rubel, 25 years old cutter man, lost his life in the accident. He died on his way to the hospital. Hamidul Islam’s dead body was instead found on the ship several hours after the explosion. Five other workers, aged 19-30, suffered severe burn injuries and are now being treated at the Chattogram Medical College Hospital. The condition of one of them is extremely critical. Local sources report that several workers might still be missing.

Video footage from the accident shows that there was no emergency response equipment available at the yard. Barefoot workers without protective gear are seen carrying the injured. Bangladeshi organisation OSHE, member of the NGO Shipbreaking Platform, reports that the death of a worker, Tara Miya, was covered up in the same yard just a few days ago.

“The conditions at Mahinur Ship Breaking are shocking and unfortunately telling of the overall appalling working conditions at the Bangladeshi shipbreaking yards. Workers are exposed to enormous risks because there is no infrastructure available on the beach to ensure safe working conditions and rapid emergency response,” says Muhammed Ali Shahin from NGO Shipbreaking Platform member organisation YPSA.

 The BUNGA KELANA 4 was beached at Mahinur Ship Breaking six months ago. It was owned by Malaysian shipping company AET Tankers, a wholly owned subsidiary of MISC, the leading Malaysian energy logistics company listed on the Malaysia stock exchange. In 2018, AET Tankers sold four vessels for scrapping on the beaches of South Asia. Three ended up in Bangladesh; one was beached in India.

 Before its final voyage the vessel changed its name to KELANA 4, and its Malaysian flag was swapped to that of Comoros. These are clear indicators that the vessel was brought to the beaching yard with the help of a scrap-dealer known as cash buyer. The use of black- and grey-listed flags, such as Comoros, Palau and St Kitts and Nevis, as well as anonymous post-box companies to register the ships, renders it very difficult for authorities to trace and hold ship owners liable for illicit business practices that cause the loss of life, injuries and irreparable damage to the environment.

One of the injured worker at Chattogram Medical College Hospital, Chattogram

 The explosion on the BUNGA KELANA 4 follows another recent tragic event that took place in February, when two workers were killed by a fire on board a tanker owned by Greek Polembros Shipping. In the last ten years, hundreds of workers have lost their lives and suffered severe injuries due to dirty and dangerous shipbreaking practices in Bangladesh. Many more suffer from exposure to toxic fumes and materials that are embedded within the ships’ structures. Breaking apart ships on tidal beaches also causes irreparable damage to the environment. Only yesterday it was revealed that another shipbreaking company, BBC Ship Breaking, had been given the permission by local authorities to wipe out a protected mangrove forest in order to establish a new yard. Following the filing of a complaint by Platform member organisation BELA, the High Court imposed a six months’ stay on the lease contract and have asked the local authorities to explain why they blatantly ignore national forest protection laws. In 2009, 14.000 mangrove trees were illegally cut to expand the shipbreaking activities in Chittagong.

“It is high time for the Bangladesh government to regulate their shipbreaking industry and put a halt to the systematic violations of national labour and environmental protection laws”, says Ingvild Jenssen, Director of the NGO Shipbreaking Platform. “This latest tragic explosion adds to the shipping industry’s appalling toll on human lives and should act as a wake-up call for the financiers and customers of shipping to demand recycling practices off the beach and in line with the standards set by international waste laws and labour conventions”, she adds.

Source: Hellenic Shipping News. 16 May 2019

25 March 2019

Norwegian pension funds turn their attention towards Indian shipbreaking practices

Brussels, 20 March 2019 - Last week the Council on Ethics of the Norwegian oil pension fund (Government Pension Fund Global) announced that it will turn its attention towards Indian shipbreaking practices. This may well result in further divestments from shipping companies with poor shipbreaking records.

In 2018, the Council on Ethics had already advised the fund to divest from companies, including container line Evergreen, selling their end-of-life vessels to shipbreaking yards located in Pakistan and Bangladesh “due to an unacceptable risk that the companies are contributing to serious environmental damage and gross violations of human rights”.

KLP, Norway’s largest private pension fund, followed suit and blacklisted the same companies. In January, KLP also blacklisted Nordic American Tankers (NAT) following the sale of ten oil tankers for dirty and dangerous scrapping on beaching yards in South Asia. The Bermuda-registered company, controlled from Norway by Herbjørn Hanson, was firstly confronted by KLP and criticised by Norwegian press for having sold eight ships for scrapping to South Asia in 2018, ensuring NAT a 80 million dollar scrapping revenue. Five vessels ended up in Chittagong, Bangladesh; three ended up in Alang, India. The sale of two additional vessels to Bangladeshi yards with terrible accident records prompted KLP to blacklist NAT earlier this year.

“KLP’s goal is that no ship ends up on a beach where irresponsible scrapping practices take place. It is the ship owners’ responsibility to identify which standards, routines and processes they need to comply with to ensure safe and responsible ship recycling”, said Håvard Gulbrandsen, CEO of KLP.

The European Commission recently announced that two Indian yards (i.e. Priya Blue Industries Pvt. Ltd, Shree Ram Vessel Scrap Pvt. Ltd) that applied for inclusion in the European List of ship recycling facilities do not comply with the EU Ship Recycling Regulation. The site inspections and technical assessments, done by the classification society DNV GL, identified several areas where the yards do not meet the requirements for clean and safe ship recycling.

Source: NGO Shipbreaking Platform

24 February 2019

Markets- Recycling- vessels head for Bangladesh

The week before the Chinese New Yea finally brought some semblance of stability to a ship recycling market that seemed to be in freefall during the previous month.

Indeed, most cash buyers have struggled to offload their existing overpriced inventories at anywhere near sensible/breakeven levels, resulting in something of a panic, GMS said in its weekly report.

The majority of these vessels are now heading to the only bullish market (Bangladesh), in the hopes of salvaging whatever little could be financially scraped out of a deal.

Pakistan remained subdued on the sidelines, despite the announcement of the mini budget recently that brought with it, little material change to the domestic steel and ship recycling sectors.

India also remained mostly absent from buying, as local steel plate prices continued their weekly volatile dance, leaving most end buyers in a conservative mood, intent on securing bargain green or offshore units below the $400 per ldt mark.

The focus remained on Bangladesh, where local the port report showed a multitude of vessels arriving by the week and the number of capable (in terms of ready and available LCs) and keen end buyers remain few and far between.

As local capacity continued to gradually dwindle, those cash buyers with expensive inventories will be left holding a rather heavy bag.

Moreover, once the appetite in Bangladesh starts to shrink, we can certainly expect prices to fall in line with the much reduced Indian and Pakistani markets,  ie somewhere in the low $400s per ldt and perhaps lower for certain sized/types of vessels.

Source: tanker operator. 11 February 2019