PRESS RELEASE – BROAD NGO COALITION DENOUNCES EU BLUE GROWTH STRATEGY AT FAIR OCEANS CONFERENCE

Bremen/Brussels, 19 May 2014 – The NGO Shipbreaking Platform has joined a broad coalition of leading environmental and labour rights organisations such as Greenpeace, WWF, German-based BUND and NABU, and the International Transport Workers Federation (ITF) calling on the EU to address the shortcomings of its Blue Growth Strategy. Adopted in 2012 to create a sustainable marine and maritime economy, the NGOs denounce the Strategy for encouraging large-scale industrial development without protecting marine ecosystems or seafarers’ rights [1].

According to the NGOs, the EU’s Blue Growth Strategy does not tackle the real threats to the world’s ocean and seas, such as the rise of water acidification, marine pollution caused by ships and by land-based waste, plundering of fishing grounds, the dangers of aquaculture, deep-sea mining, oil drilling and exploration, and the disregard for labour rights on ships using flags of convenience. The NGOs invited the public to discuss these critical issues at the Fair Oceans Conference organised in Bremen, Germany in the run-up to the European Maritime Day conference, which is held today and tomorrow. The NGOs are also staging several protests in Bremen and elsewhere.

Every year on 20 May, the European Commission invites thousands of stakeholders to the EU Maritime Day, which has become Europe’s largest conference on maritime policy issues. The NGO Shipbreaking Platform held a workshop at the Fair Oceans Conference to raise awareness of the human cost and the environmental pollution caused by substandard shipbreaking. The Platform also took the opportunity to call upon the European Union to set up a financial incentive based upon the polluter pays principle. Such a system should not discriminate between the flags used by ships and thereby make it less attractive for European ship owners to opt for flags of convenience for the last voyage of their ships.

“It is shameful that most ship owners continue to reject responsibility for their end-of-life vessels,” said Patrizia Heidegger, Executive Director of the Brussels-based NGO Shipbreaking Platform. “Still too many ship owners prioritise getting the best price for the ship, and ignore the harm done to workers, local communities and the environment. However, we see more and more progressive ship owners refusing to sell their end-of-life ships to substandard beach breaking yards and the EU Ship Recycling Regulation has set a clear standard for safer practices. Sooner or later, safe and clean ship recycling will be unavoidable for all.”

The Platform called on the international community, in particular the IMO and UNEP/Basel Secretariat and ILO, to work together on phasing out the current beaching method in South Asia and help develop modern ship recycling facilities off the beach that guarantee a clean and safe dismantling of all end-of-life vessels. The IMO must also advance on green ship design so that the use of hazardous materials to build ships is stopped and so that they are constructed in a way that allows for clean and safe recycling.

NOTES

[1] Read the press release of the NGO coalition with the position paper: http://bit.ly/1ncU9Bt

CONTACT

Patrizia Heidegger, Executive Director, NGO Shipbreaking Platform

patrizia@shipbreakingplatform.org

+32 2 609 44 19

Source: shipbreaking platform. 19 May 2014

http://www.shipbreakingplatform.org/press-release-broad-ngo-coalition-denounces-eu-blue-growth-strategy-at-fair-oceans-conference/

PRESS RELEASE – SHIPPING COMPANIES’ DUMPING OF END-OF-LIFE SHIPS CLAIMS AT LEAST 15 LIVES IN SOUTH ASIA IN 2014

At least 15 workers have died so far this year in the shipbreaking yards of Bangladesh and India, where the majority of shipping companies sell their end-of-life ships to be dismantled. The NGO Shipbreaking Platform, a Brussels-based global coalition of environmental, human rights and labour rights organisations working for safer and cleaner ship recycling worldwide, is urging the shipping industry to stop selling their end-of-life ships to the shipbreaking beaches of South Asia and instead demand sustainable and safe ship recycling in modern facilities.

In May, three shipbreaking workers died in Chittagong, Bangladesh, including 40-year-old ship breaker Mohsin who slipped and fell to his death on 17 May while he was working on the “Magdalene”, a ship that used to be owned by the Hamburg-based shipping company Johann M. K. Blumenthal. In another Bangladeshi shipbreaking yard, Amjad Hossen was crushed by a falling steel plate while he was dismantling the “Barbaros G”, a ship that used to be owned by the Turkish company Negmar Denizcilik Yatirim AS. Saidur Rahman died on his way to the hospital after a gas cylinder exploded on the “Kima”, a ship owned by South Korean Sunwoo Merchant Marine Company.

In addition to the fatal accidents, nine workers have been critically injured in Bangladesh,  including serious burns to hands and face. Shaju, Rakib and Babu were severely injured on 6 May in an explosion inside a tank, which took place on the “Shanghai”, a vessel sold to the Bangladesh breakers by the leading shipping company Sammy Ofer (now Zodiac Maritime) based in Monaco.

In the shipbreaking yards of Alang, India, two workers were killed in March while working in Plot 20, owned by Amit Sheth, as reported by the Times of India [2]. In April, four workers were crushed under steel plates that fell from beached end-of-life ships, according to local sources [3].

“The owners of shipbreaking yards in South Asia need to ensure the health and safety of workers, but ship owners  such as Blumenthal, who sell their vessels to substandard facilities and refuse to take responsibility for the safe and clean recycling of their ships, become complicit in these accidents,” says Patrizia Heidegger, Executive Director of the NGO Shipbreaking Platform. “These deaths and injuries are the consequences of these companies wanting to make the biggest profit on the sale of their old ships.”

The Platform has already reported on other major accidents such as the one in April where four shipbreaking workers were killed and another three were critically injured after inhaling carbon dioxide when a gas cylinder exploded in a Chittagong yard [1]. Local people and the workers’ families gathered in protest in front of the yard after the manager locked the gates and prevented them from helping the injured workers. The ship was owned by the Russian containership operator FESCO.

In January, a shipbreaking worker, who used to be a fisherman, was killed by a falling steel plate at Siko Steel, a Bangladeshi shipbreaking yard, whilst dismantling a ship belonging to American President Lines (APL), a company owned by Neptune Orient Lines (NOL), one the world’s major containership owners.

“This long and sad list of fatal accidents and severe injuries shows a clear lack of safety measures in the industry,” says Muhammad Ali Shahin, Bangladesh coordinator of the NGO Shipbreaking Platform. “It shows that the workers are not well trained, their activities are not supervised and they are either not provided with safety gear or no checks are made to ensure that they are actually able to properly use protective equipment. It is very obvious that nobody feels responsible for these men’s lives.”

Sometimes no information is available about these tragic deaths: in April, a shipbreaking worker named Sultan died in the BBC Shipbreaking Yard but nothing is known about the circumstances surrounding his death.

“We only learned about the accident when we found out that the dead worker’s body was to be transported back to his village,” says Muhammad Ali Shahin. “Obviously, the yard owner tried to hide the fatal accident. We could not retrieve any further information – this shows the lack of transparency and accountability of the shipbreaking industry”.

Because of the hazardous substances within the ships’ structure, many more workers contract diseases like asbestosis and cancer and die years later. These occupational diseases remain undocumented.

“Most accidents are avoidable. They happen because no precautions are taken, and no proper infrastructure exists on the beaches”, explains Patrizia Heidegger. “Workers are crushed under falling steel plates as the yard cannot safely operate heavy lifting equipment on the beach. They are burnt or killed in explosions and fires as safety standards for hot work are not enforced and workers do not wear protective gear such as fireproof clothes.”

The NGO Shipbreaking Platform has informed all the ship owners mentioned here about the accidents that occurred on their vessels and has called upon these companies to adopt a sustainable ship recycling policy that will ensure clean and safe ship recycling off the beach. The Platform is waiting for their response.

On the other hand, some ship owners fortunately recognise the dangers of beaching end-of-life ships in South Asian yards. In January, two workers were severely burned in an explosion that occurred in the Bangladeshi yard Kabir Steel on board a beached oil tanker sold for breaking by  the Norwegian company Teekay. The Platform informed Teekay  and the public about the accident. As a result, Teekay’s  director, Ingvild Saether, announced in the newspaper Dagens Naeringsliv that the company will change its recycling practices.

(pictured: workers lying in the Chittagong hospital after an accident in the shipbreaking yards in May 2014 - source: NGO Shipbreaking Platform)

CONTACT

Patrizia Heidegger

Executive Director

NGO Shipbreaking Platform

patrizia@shipbreakingplatform.org

+32 2 6094 419

Muhammad Ali Shahin

Platform coordinator

shahinhelpsgreen@gmail.com

+88 018 1953 5319

Source: shipbreaking platform.

http://www.shipbreakingplatform.org/press-release-shipping-companies-dumping-of-end-of-life-ships-claims-at-least-15-lives-in-south-asia-in-2014/

Ship Scrapping Increases, but in Wrong Trades:

Although the number of vessels being scrapped this year has increased dramatically, and looks set to continue rising, it is having little impact on the current excess of supply over demand where it matters most – in the East-West trades, according to the latest edition of Drewry's 'Container Insight Weekly'.

All of the vessels scrapped so far remain below 6,000 teu, whereas the worst excess is in the sector over 10,000 teu, where most vessels are deployed between Asia and Europe. This means that unwanted ULCVs will continue to be cascaded into other routes, thereby maintaining pressure on freight rates.

Out of the 73 vessels scrapped up to the end of April, only seven were post-Panamax ships between 5,000-5,999 teu, with the rest being below 4,999 teu, which position has changed little since   The average size of vessel demolished over the four month period only reached 2,855 teu, compared to 2,288 teu over the whole of 2013, 1,868 teu in 2012 and 1,293 teu in 2011. In other words, only vessels deployed in fast growing North-South and intra-regional trades are being scrapped, which is not immediately relevant to East-West services.

Moreover, the amount of vessel capacity being scrapped still remains small compared to the total fleet capacity in service. Even if the current rate of scrapping were to be continued over the rest of the year, less than 4% of the world cellular fleet would be scrapped in 2014.

When analysing the subject, the temptation is to simply compare global cargo growth, which is not expected to exceed 5% this year, with global fleet growth, which will probably be somewhere between 5-6%, making this demolition rate look meaningful. For example, a hefty 40% of vessel capacity growth so far this year has been offset by demolitions.

But the comparison overlooks the uneven way that excess vessel capacity is being delivered. just over 50% of all newbuild capacity brought into service since the beginning of 2011 has been provided by vessels over 10,000 teu deployed on East-West routes.  The average provided by vessels below 5,000 teu, where most scrapping has been taking place, is just 17%. Moreover, the capacity of all vessels scrapped last year (i.e. less than 6,000 teu) only more-or-less equated to the newbuild capacity injected by vessels less than 6,000 teu.

The position is not expected to get any better soon, as 55% of all newbuild capacity on order up to the end of 2016 consists of vessels over 10,000 teu, and the world cellular fleet is expected to grow by 20% during the period, ignoring further demolitions and delivery postponements. Although some of the vessels between 6,000 -9,000 teu that they will displace will quickly fit into North-South routes, the majority won’t due to draught restrictions in such places as Africa, India, and South America. Dredging takes time due to environmental considerations alone.

Drewry's View

Current scrapping alone will not be enough to meaningfully address the current imbalance between supply and demand in East-West trades. As long as only ships below 6,000 teu continue to be demolished, North-South trades will be the sole beneficiaries.

Source: marine link. 19 May 2014

http://www.marinelink.com/news/scrapping-trades-moves369403.aspx

GMS weekly report on Turkey ship breaking industry for WEEK 20 of 2014:

The market condition in Turkey remains steady as the demand for tonnage from end buyers continues to persist, driven by a dearth of supply. Additionally, the increasing prices offered from the India sub continent markets are making things increasingly competitive for Turkish buyers, who now have to compete with a price differential of more than USD 120 per tonne for similar units.

Consequently, for owners of vessels 4-5000 LDT (and larger), it is more feasible to ballast their units and divert them towards the sub continent. Presently, it is estimated that only about 10% to 20% of the local yards in Aliaga remain busy while the rest remain relatively inactive due to the diminished supply over the last couple of months.

While steel prices have remained stable, the TRY has depreciated slightly as the week ended, trading at TRL 2.09 against the US Dollar. Thus, it remains to be seen how prices for ships will perform going forward.

Source: Steel Guru. 20 May 2014

http://www.steelprices-china.com/news/index/2014/05/20/NDg0NTI%3D/GMS_weekly_report_on_Turkey_ship_breaking_industry_for_WEEK_20.html

Ship breaking spurts as NaMo wave sweeps Alang:

At Alang, about 50 km off Bhavnagar in west Gujarat on India's west coast, the world's biggest graveyard for junk ships is awaiting NaMo's coronation.

Just like the stock market where traders went crazy and Sensex lost its sense of gravity, the thriving market for decommissioned ships has reached stratosphere, with most deals, being struck at over $500 per tonne, more than 30% premium over year-on-year rates.

There is uncertainty over long-term viability of the business and steel prices (ships are demolished to make steel plates sold in the secondary market), but a NaMo wave sweeping across the dirty, oily beaches of Alang-Sosiya is giving confidence to ship breakers.

Buoyed by the strengthening of rupee and improving the prospect of steel prices in the secondary market, the multi-billion junk ship market is busy striking deals.

At present, around 80 ships are being demolished at Alang's yards. Ship breakers believe that BJP's government will ensure a steady improvement in infrastructure, which, in turn, would help steel prices.

"We are all excited. We look forward to Modi reshaping the Indian economy. The worst is behind us," says Nitin Kanakia, a ship breaker and joint secretary of Ship Recycling Industries Association India.

According to him, around 60-65 yards, out of the total 138, are working at present.

"Prices have shot up from $380-400 per tonne to over $500 in last 12 months," says Kanakia.

Last week, a container ship Messologi (23,740 tonne), controlled by the Greek shipping giant Danaos, was sold for $515 per tonne, the fourth sale from the group this year, according to a report by GMS, world's largest trader of junk ships.

Another ship from Danaos, Mytilini (23,366 tonne), was sold for $509 per tonne two weeks ago. Another Italian owner has committed both their sister ships (roll-on roll-off) Jolly Verde and Jolly Rosso (both 13,696 tonne) available at Jebel Ali, for $500 per tonne, with extra payment for bunker oil.

Similarly, PIL of Singapore has sold container ship Kota Wirawan (6,811 tonne) at $513 per tonne.

Shashank Agrawal, group legal advisor of Singapore-based trader Wirana Shipping Corporation, told dna that the rupee has already strengthened, and it is expected to gain further, with higher dollar inflow. "Everyone hopes that steel prices would increase too, riding the increasing demand amid an infrastructure push. Demand for old ships will definitely see an increase," says Agrawal.

Over last few years, yards in Alang have seen several disputes and court cases related to ownership and possession of ships, and unpaid wages and dues to suppliers. "Going forward, number of such cases will increase," says Agrawal.

Kanakia says while the rupee has strengthened, there is no corresponding increase in steel prices in the secondary market. "Prices are ruling at Rs 29,500 per tonne, just around Rs 2,000 more year on year," he said, discussing the non-viability of the business in the current scenario.

While ship breakers and cash buyers are eagerly looking for the Modi's magic in New Delhi, not everyone is singing praises of Modi.

"During his days in Gujarat, Modi was also holding the shipping portfolio. Under his tenure, governance at Alang had seen a steady decline. For instance, the process of allotting plots on Alang beach had become ad hoc, leading to corrupt practices. Issues related to safety and pollution are still given a go-by. In April, four workers from Odisha were crushed to death at the yard," says Gopal Krishna, convener of NGO Toxics Watch Alliance.

"Over last one decade, Alang has seen more than 200 deaths, making it the worst among industrial disasters," says Krishna, who is fighting several battles for workers' justice.

He says the global shipping companies have turned Alang into the most polluted beach in the world with the complicity of Gujarat and central governments. "Gautam Adani's group company has proposed to set up a ship recycling yard at Mundra. Now that Modi has come to power, Adani's proposal, which is awaiting a final nod from the environment ministry, will soon get a clearance," he adds.

Source: DNA India. 20 May 2014

http://www.dnaindia.com/money/report-ship-breaking-spurts-as-namo-wave-sweeps-alang-1989894