08 December 2008

Shipbreaking is production not recycling – Supreme Court of India

BS cited the Supreme Court said that shipbreaking amounts to production and not a recycling process. The industry can thus claim heavy deductions from their taxable income under Sections 80-I and 80-HH of the Indian Income Tax Act 1961.

Under these sections, an assessee can claim deduction from the gross total income up to 20% of profits and gains if these products and gains are derived from an industrial undertaking or a ship or repairs to ocean going vessels.

An industry expert said that “With this order, the shipbreaking industry could get rid of the past liabilities of around INR 50 crore that includes tax, interest on tax and penalty.”

Source: Steel Guru. 8 December 2008

19 November 2008

Commission presents EU strategy for safer ship dismantling:


The European Commission today presented an EU strategy to make the dismantling of old ships safer for workers and the environment. Every year between 200 and 600 large merchant ships are taken apart for their valuable scrap metal. Many ships taken out of service in Europe end up being dismantled on beaches in South Asia. A lack of environmental protection and safety measures results in high accident rates, health risks and extensive pollution of wide stretches of the coast. The proposed strategy on better ship dismantling includes actions to help implement key elements of an international Convention on safe ship recycling, due to be concluded in May 2009. It also proposes measures to encourage voluntary action by the shipping industry and better enforcement of current EU waste shipment law.

European Environment Commissioner Stavros Dimas said: “While there have been improvements in industry practices in recent years, the problem of ship dismantling remains acute. Workers in South Asia are being exploited and their lives put at risk working in deplorable conditions, while coastal areas are being polluted and ecosystems threatened. The best way to resolve the ship dismantling crisis is to work together at EU and international level. As we look forward to a globally binding convention next year, the EU is already working to support the new rules. The strategy presented today should ensure that ships with strong links to the EU are only ever dismantled in safe and environmentally sound facilities."

The issue of ship dismantling:

The number of dismantling sites in the European Union has fallen over the last 20 years and there is no longer sufficient capacity to process the large merchant fleets operating under EU flags or owned by companies in the EU.

Today ship dismantling takes place largely in South Asia – mainly in India, Bangladesh and Pakistan. The industry provides thousands of jobs, but health and safety conditions are poor. Older ships contain many hazardous materials, including asbestos, polychlorinated biphenyls (PCBs) and large quantities of oil.

The problem of ship dismantling is expected to get worse: the dismantling of single-hull oil tankers is predicted to peak in the next few years as they are phased out in favour of safer double-hulled vessels. Around 800 such tankers are expected to be taken out of service.

The Commission initiated work to develop an EU-wide strategy on ship dismantling in April 2006. In 2007 it presented a Green Paper[1] setting out a range of possible measures and this was followed by a public consultation process. More recently, the European Parliament adopted a resolution calling on the Commission and Member States to take urgent action on ship dismantling.

International rules:

The International Maritime Organisation (IMO) is preparing an international convention on safe ship recycling, which will be globally binding. The Convention aims to provide a comprehensive system of control and enforcement “from cradle to grave” and relies in particular on the survey and certification of ships and the authorisation of ship recycling facilities. Although final negotiations are due to be completed in May 2009, the IMO Convention is not expected to enter into force before 2015.

Main elements of the proposed EU strategy:

The EU strategy proposes a number of measures to improve ship dismantling conditions as soon as possible, including in the interim period before the entry into force of the IMO Convention. These include:

  • starting preparations for establishing measures on key elements of the convention, such as those on surveys, certification and inventory of hazardous materials on board, as soon as possible after its adoption;
  • encouraging voluntary industry action through measures such as awards for exemplary green recycling; publication of guidance, such as a list of 'clean' ship dismantling facilities;
  • technical assistance and support to developing countries for safety training programmes and basic infrastructure for environmental and health protection;
  • better enforcement of current waste shipment rules such as more checks at European ports; more cooperation and information exchange between EU authorities; and establishing a list of ships that are ready for scrapping.
The strategy also proposes that the Commission look at the feasibility of the following:

  • developing a certification and audit scheme for ship recycling facilities worldwide and evaluating how EU ships can be encouraged to use such a scheme;
  • making warships and other government vessels not covered by the Convention, subject to EU rules for clean dismantling;
  • establishing a mandatory international funding system for clean ship dismantling
Developing an EU strategy for environmentally sound ship dismantling is one element of the Commission Action Plan for an integrated maritime policy for the European Union.

Source: Transport Weekly. 19 November 2008 

03 November 2008

Proper shipbreaking: a test for globalization and decent work


The last voyage of the ship 'Otapan' to a Turkish shipbreaking yard last July was a victory for 'pre-cleaning' advocates of reducing the human and environmental dangers inherent in ship dismantling and recycling. But does it also lead to decent working practices? Last week, experts from the ILO, the International Maritime Organization (IMO), and the Basel Convention met to discuss measures to promote guidelines that would make shipbreaking not only clean but 'green'. Questions and answers with a shipbreaking expert from the ILO Sectoral Activities Branch.

ILO Online: Environmentalists claimed a major victory when the ‘Otapan’ sails cleaned and decontaminated from Amsterdam to the Turkish shipbreaking yards of Aliaga near Izmir. Can you tell us more about the ship’s odyssey?

David Seligson: The old chemical tanker had spent most of its nine last years in the Netherlands and was the subject of intense negotiations between the Dutch and Turkish governments and NGOs on pre-cleaning the vessel of all toxic substances before being dismantled. Following one aborted first attempt to dock in Turkey in 2006, the tanker’s ‘last voyage’ finally came to a happy ending last July as it sailed pre-cleaned to the shipbreaking yards of Aliaga. ‘Pre-cleaned’ means that large quantities of hazardous substances such as asbestos and polychlorinated biphenyls (PCBs) had – as far as possible at this stage – already been removed in the Netherlands before the ship left for the shipbreaking yards in Turkey.

ILO Online: What is the situation in these shipbreaking yards?

David Seligson: While breaking ships and selling of the scrap and hardware from retired vessels provides work and income for tens of thousands of persons in countries like Bangladesh, China, India, Pakistan and Turkey, the work is dangerous and deaths occur quite often as well as serious acute and chronic health problems. Titanic-sized vessels are floated ashore and cut up by workers who are often exposed to deadly toxins, exploding gases, falling steel plates and other dangers.

ILO Online: But isn’t shipbreaking also a “green” industry?

David Seligson: Surely, if you look at the recycling aspect. To obtain 200,000 tons of iron ore from a mine, 1 million tons of soils have to be treated. Besides the impact of excavation activities on nature, three times more energy and water have to be used to obtain the iron. And the national economy profits from ship dismantling and recycling activities as it does not have to import steel scrap. What’s more, the reusable parts of the dismantled ships, including machinery and equipments can be sold.

This does not mean that recycling jobs are always green. The recent ILO-UNEP-IOE-ITUC report finds that green jobs do not automatically constitute decent work. Many current recycling jobs, for instance, recover raw material and thus help to alleviate pressure on natural resources, but apply a process which is often dirty, dangerous and difficult, causing significant damage to the environment and to human health.

ILO Online: Shipbreaking activities have almost entirely moved to South and Southeast Asia. What are the reasons?

David Seligson: Turkey is the only OECD member with significant shipbreaking capacities, although its recycling activities represent only 2 per cent of the worldwide ship breaking market. Bangladesh, China, India, and Pakistan, the world's leading ship breakers, together hold a market share of 80 per cent. The shipyard owners estimate around 200,000 Bangladeshis benefit indirectly from this business conducted on their shores. In India, the biggest shipbreaking nation, the figure is half a million. Before, vessels were taken apart where they were built: in industrialized countries. But high costs and environmental restrictions have driven ship owners to look elsewhere for a way of disposing these vessels. Countries in South Asia also have geographic conditions enabling the beaching of ships.

ILO Online: And the industry is likely to grow...

David Seligson: According to a study by BIMCO, the world’s largest private shipping organization, recycling capacities have been raised in the last years but will not cope with near future demand. Moreover, the price for recycled material is expected to go down. Along with these less attractive consequences for ship owners, health and safety efforts will have to be increased.

ILO Online: What can be done to make shipbreaking decent work?

David Seligson: By decent work we mean that the workers in the shipbreaking yards receive a fair income, enjoy security in the workplace and social protection for their families; furthermore, they should have the freedom to express their concerns and to organize. There are a number of practical measures that can be taken, including providing training for the workers, safety equipment and hygienic living quarters. We need a global partnership of ship owners, shipbreakers, employers, trade unions and, of course, government inspectors who will see that these standards are enforced. This is yet again a test for globalization and decent work.

ILO Online: What is the role of the ILO?

David Seligson: Representatives of government, employers' and workers' organizations from heavyweight ship breaking nations Bangladesh, China, India, Pakistan and Turkey adopted ILO Guidelines on Safety and health in shipbreaking: Guidelines for Asian countries and Turkey (Note 1) for the industry in 2004. As far as asbestos and other toxins present on the ships are concerned, the ILO provides various solutions based on its international standards, including ILO Conventions 139, 148, 162 and 170 on occupational cancer, working environment, safety in the use of asbestos.

The Basel Convention has also adopted Technical Guidelines for the environmentally sound management of the full and partial dismantling of ships, as well as other guidelines on the environmentally sound management of hazardous and other wastes.

What’s more, the International Maritime Organization (IMO) is preparing a convention on ship recycling to be adopted in 2009: the ILO has been contributing to the drafting process of this new instrument.

ILO Online: What are the next steps?

David Seligson: Being mindful of the “One UN” approach, and following the recommendations of the Joint Working Group, the Secretariats of the Basel Convention, IMO and ILO, drafted a concept for a “Global Programme for Sustainable Ship Recycling” to promote a coordinated approach in addressing the issues faced by the ship recycling industry.

The Global Programme is intended to establish a broad framework for activities to be undertaken in Participant countries with a view to facilitating future implementation of the “International Convention for the Safe and Environmentally Sound Recycling of Ships” and, prior to entry-into-force of the Convention, to promote the protection of human and health and the environment in the context of ship recycling activities.

The new IMO convention will be accompanied by a set of guidelines. A correspondence group has been established to prepare guidelines on ship recycling facilities as well as on an inventory of hazardous materials. We want to participate in this, in order to ensure that the new guidelines will be up to the standards and guidelines set by the ILO.

Source: ILO. 3 November 2008

18 September 2008

Bangladesh High Court stands in toxic ship's way:


The High Court yesterday stayed beaching of the Green Peace-listed hazardous ship MT Enterprise in the territory of Bangladesh.

Following a report published in The Daily Star styled "Toxic ship gets scrap nod" on Tuesday, Bangladesh Environmental Lawyers Association (BELA) filed a writ challenging the No Objection Certificate (NoC) given by the Department of Shipping regarding entry of the ship.

MT Enterprise is enlisted as one of the 50 dangerous ships in a chart prepared by the Green Peace.

The HC division bench of Justice Mirza Hossain Haider and Justice Mamnoon Rahman has also directed the government agencies to show cause as to why the issuance of NoC would not be declared arbitrary, discriminatory, unlawful, and against public and national interest.

The government agencies have also been directed to explain why they should not be directed to prevent the entry of any of the remaining hazardous vessels as listed by the Green Peace into the territorial waters of Bangladesh and also to frame necessary rules and regulations on ship breaking.

The BELA petition claims the Department of Shipping had first gave NoC to MT Enterprise and then cancelled it for concealing facts.

Subsequently, when MT Enterprise filed a case against the cancellation, a secretive inspection was carried out by the department that eventually certified the ship contains "waste within permissive limits" and withdrew the cancellation letter what created scope for the importer to beach the vessel.

In last two years, three ships listed as hazardous by the Green Peace -- the SS Norway, MT Alfaship and MT Aspheron -- were either refused entry into Bangladesh territory by the government or were sent back following protests from the environmentalists.

On behalf of BELA, former attorney general Barrister Fida M Kamal moved the petition.

Source: The Daily Star. 18 September 2008

19 June 2008

Asbestos aboard: Owners or pirates?

LNG carrier Edouard LD owned by Gaz de France and Louis Dreyfus Armateurs is ill-fated to demolition. She is beyond limits. The average age of gas carriers when they are scrapped is 30. The Edouard LD is under French flag. In accordance to the French case-law, the Edouard LD has to be demolished in an Organisation for Economic Co-operation and Development (OECD) country or outside OECD under the condition she would be subjected to a preliminary extraction of asbestos and other dangerous wastes.


Edouard LD lightweight is 28.000 t, with a lot of non ferrous metals. She could be sold at 850 $ per ton at least in Bangladesh. She holds between 800 and 1,000 t of asbestos and asbestos-containing materials. To dodge the French rules, the French owners are considering to sell the Edouard LD to a Greek tanker fleet owner, Dynacom, whose other activity consists in speculative trading of ships to be demolished.

The same device has been used by Gaz de France to sell the Descartes (Cf. « Shipbreaking 2007 », pp 22, 28, 42). This gas carrier was at the end of her tether in the opinion of her past crewmen and other authorized sources. She has been sold for a so-called exploitation as a LNG carrier to Taiwanese owner TMT. The sale occured in August 2007 and the Descartes became Prince Charming under Panamean flag.

Three months later, she was renamed Charm Junior and sold to a Singapore broker specialized in ships at the end of their life and in selling them at the best offered price in Asia. The ex-Descartes is going to be demolished in Bangladesh. She has been sold around 14 millions dollars because of the presence of stainless and non-ferrous metals. Gaz de France is said to have sold the Descartes to TMT at 6-8 millions dollars.

It is too late for a convenient demolition of the ex-Descartes with preliminary extraction of asbestos and others. It is not too late for the Edouard LD. Robin des Bois asks Gaz de France and Louis Dreyfus Armateurs, the two French owners to sell her directly, without a go-between, to a European ship-breaking yard, or an Asian one in the frame of a specific technical and financial partnership.

Moreover, the German company KGAL, subsidiary of Allianz and Dresdner Bank, is always attempting to sell at the best price in Asia the container ships Ankara, Maersk Brisbane and Maersk Barcelona built in 1975-1976 of which the engines implement important quantitie of asbestos. (cf. « Oil slick Queen demolished in Bagladesh ? »)

It is urgent that the European owners establish active partnerships with Asian shipbreaking yards and in the most dangerous cases for work force and environment use the available European sites.

Source: Robin Des Bois. Press Release. 19 June 2008