WHAT IS THE ISSUE?
The
vast majority of ship owners do not take responsible decisions when getting rid
of their old ships. Instead, they sell their vessel to scrap dealers known as
cash buyers. These companies, such as GMS, Wirana and Best Oasis, offer ship
owners the highest price – in cash – for end-of-life vessels. They will manage
the ship on its last voyage, as well as rename and reflag it, often to the
worst performing flags in the world as part of their business model.
Registering also the ships under anonymous post box companies, it becomes
challenging for authorities to hold cash buyers accountable for their illicit
business practices. Ship owners, on the other hand, will claim that their
responsibility ended once the deal was concluded with the cash buyer.
Ship
owners’ evident lack of due diligence when selling to cash buyers is, however,
starting to concern not only law enforcers, but also the clients and the
financers of shipping. Companies are increasingly asked to make sure that their
business, including their supply chain, does not breach international human
rights standards and does not cause harm to the environment.
Faced
with this demand – and often with a much more public profile than most ship
owners – banks, pension funds and consumer brands, upon which international
shipping depends, are taking steps to require responsible ship recycling.
DENOUNCING GREENWASHING AND EXPLORING MARKET-BASED INCENTIVES
The
Platform has continued to name and shame companies that do not have responsible
practices at end-oflife and was invited in 2017 to share its findings and
opinions at a number of industry conferences and meetings.
We
have continued to explore market-based financial incentives and have focused
our efforts on introducing a market-based program to change company behaviour
to a wide range of stakeholders, collecting and processing valuable feedback.
Companies have so far been very receptive to the positive reinforcement
approach, juxtaposed by the Platform’s other campaign work. We also extended
our outreach to other NGO’s, associations, and environmental programs to
explore strategic partnership opportunities with those that are already well
established in the marketplace. By denouncing the double standard and
green-washing of dirty and dangerous shipbreaking practices that would never be
allowed in the major ship owning countries, the Platform has been able to
counter the arguments of the shipping industry and cash buyers that wish to
exploit workers and the environment for the sake of higher profits. The
proliferation of the misleading Statements of Compliance with the Hong Kong
Convention has in that context been raised as a serious concern.
PROMPTED ENGAGEMENT FROM
We
have continued our discussions with the clients of shipping as well as the
financial sector, and were successful in prompting a closed roundtable
discussion between the Dutch banks ING, ABN AMRO and NIBC and progressive
Scandinavian investors, including pension fund KLP, and major shipping banks
DNB and Nordea. The banks now work jointly to promote responsible ship
recycling and negotiate clauses to that aim in the loan agreements they sign
with shipping companies.
KLP
and Norges Bank, which manages the world’s largest sovereign wealth fund, have
divested from four shipping companies, including container-liner
Evergreen,
that have sold ships to the beaching yards. The financial institutions rely on
the Platform’s data to screen the companies/holdings that they invest in or
provide loans to, and use the information we provide on conditions at the yards
in South Asia.
FOCUS ON HUMAN RIGHTS DUE DILIGENCE
In
discussion with lawyers, NGOs and United Nations representatives, the Platform
has contributed to the ongoing debate on Business and Human Rights.
Compensations claims put forward, and investor divestments have clearly
identified the responsibility of shipping companies to ensure the safe and
clean recycling of their assets, and the Platform has raised with ship owners
the necessity of exercising due diligence when choosing business partners
linked to their operations, including at end-of-life. By engaging with ship
recycling facilities directly and promoting best practice, the Platform also
informs the shipping industry of clean and safe options available.
Source: steel
guru. 24 August 2018
No comments:
Post a Comment