Bangladesh Shipbreaking: No shipyard outside designated zones

The cabinet approved on Monday a draft of 'Bangladesh Ship Recycling Act, 2015' with some  provisions that include imposition of Tk 3.0 million fine if anyone imports ships for recycling purposes without government permission and establishes shipyard beyond the designated zones, officials said. 

 "The cabinet has approved the draft 'Bangladesh Ship Recycling Act, 2015' to safeguard environment and health issues of the labourers in the ship-breaking industry," cabinet secretary Muhammad Musharraf Hossain Bhuiyan told journalists after the weekly cabinet meeting at Bangladesh Secretariat.

He said if anyone imports ship for recycling purposes without government permission or build shipyard beyond the designated zone, he/ she will be fined between Tk 1.0 million and Tk 3.0 million or one-year jail or both.

He said the draft law also proposed formation of a regulatory authority to be called 'Bangladesh Ship Recycling Board' aiming to limit the fast-growing industry to a designated area considering environmental hazards. Besides, it will regulate the sector's activities.

Prime Minister Sheikh Hasina presided over the meeting at the Cabinet Division of the Secretariat.

The cabinet secretary said to protect the environment, the draft law suggests to establish shipyard zone in separate places (designated zones).

None will be allowed to build shipyard outside the places earmarked by the authority. If anyone builds shipyard outside the designated zone then he/she will have to pay between Tk 1.0 million and Tk 3.0 million fine or face one-year imprisonment or both, the draft law suggested.  

If anyone involved in the sector gives false statement to the government for getting no objection certificate (NOC), then he/she will have to pay fine between Tk 0.5 million and Tk 2.0 million or six months jail or both.

Mr Bhuiyan said there were rules for the industry following the High Court observation in 2011.

Previously, it was called ship-breaking but now it will be termed ship-recycling, a sector that enormously plays a vital role in supplying raw materials to steel mills. The proposed law will ensure coastal areas' environment and waste management.   

The Ministry of Industries (MoI) placed the draft law to the council of ministers. The ship- breaking matter was dealt with separately by the ministries of environment, commerce and industries.

The cabinet secretary said the draft law proposed formation of a board to monitor the overall activities of the sector. An additional secretary of the Ministry of Industries will be chairman of the board. Besides, there will be members and experts from different ministries and departments concerned.

Mr Bhuiyan said the approved draft law will now be sent to the Ministry of Law for vetting. After that, it will come again to the cabinet for final approval. And then it will go to the parliament for passage.

The proposed draft, once coming into effect after completing all necessary formalities, will guide all ministries concerned to work concertedly on ship-recycling issue. 

The ship-breaking industry, a flourishing and promising sector in the country, plays a significant role in alleviating poverty and contributing to growth of the national economy. The sector is mainly concentrated at Sitakundu in Chittagong helping many people earn their livelihood.

A strong workforce numbering between 2,00,000 to 2,50,000 is now directly and one to two million people are indirectly involved in the sector. The government gets revenue between Tk 6.0 billion and Tk 7.0 billion annually, according the insiders of the sector. 

The council of ministers also approved the draft "Petroleum Act, 2015".

It will now go the Ministry of Law for vetting to regulate import, storage and transportation of petroleum more efficiently through making the existing law a time-befitting one.

Mr Bhuiyan said the energy and mineral resources division placed the draft Act in Bangla in line with the earlier cabinet decision after necessary review and updating the Petroleum Act, 1934 and the Petroleum Amendment Ordinance, 1986.

He said the proposed law kept a provision of raising punishment for violating the rules under the law, including petroleum production, refining, mixing, recycling or reusing.

The cabinet secretary said in case of denial in providing information by the authorities concerned about any accident under the Section 24 (1. Cha) of the draft law, punishment has been raised to six months' jail or Tk 10,000 fine or both.

He said the authorised officers will also be able to conduct search or seize dubious things during petroleum production, distribution and transportation.

"The draft law also categorised petroleum in three classes -- class one, class two and class three -- considering their heating value," he said.

He said a provision has been made under the rules of the proposed law to regulate the issues relating to petroleum import, storage and movement.

He said rules would also have to be followed under the law on petroleum production, mixing, refining, recycling and reuse.

"Caution sign or note will have to be displayed on petroleum containers, while the authorised officers have been empowered to collect petroleum specimen and issue monitoring certificates," Mr Bhuiyan said.

The council of ministers also reviewed the implementation progress of its decisions for the 2nd quarter (April-June) period of 2015. The rate of success was 64.71 per cent compared to 55.93 per cent of the corresponding period of the previous year.

From April 01 to June 30, 2015 there were 13 cabinet meetings that took 68 decisions. Of these, 44 were implemented while 24 are now being implemented. It also approved two action plans/ strategies and nine memoranda of understanding and enacted three laws in the parliament. 

It was also apprised about the finance minister's participation in the international conference for earthquake rehabilitation efforts in Nepal in Kathmandu on June 25 last, participation of Bangladesh delegations to UN ESCAP May 25-29 last in Bangkok, Thailand and 104th International Labour Conference in Geneva, Switzerland and Fourth Vienna Energy Forum (VEF) 2015 in Vienna, Switzerland. 

Source: the financial express. 28 July 2015

http://www.thefinancialexpress-bd.com/2015/07/28/101828

Tk 30 lakh fine for violation of ship-breaking law

The cabinet has approved the draft of Bangladesh Ship Recycling Law, 2015 keeping provision of maximum Tk30 lakh fine and maximum one year imprisonment or both for the violation of the law.

The law kept provision of taking prior permission of the Ship Recycling Board for importing ships, breaking or anchoring in the coast.

The regular cabinet meeting presided over by the prime minister gave the approval on Monday afternoon, BSS reported.

After the meeting, Cabinet Secretary M Mosharraf Hossain Bhuiyan briefed the reporters at the secretariat.

The cabinet secretary said the law is aimed at setting up the industry in a certain area by considering environmental impacts as well as regulating the activities of the fast growing industry.

Under the proposed law, a regulatory authority named Bangladesh Ship Recycling Board will be formed headed by a chairman and a full-time director general.

An additional secretary of the Industries Ministry will be its chairman.

Source: Dhaka tribune. 27 July 2015

http://www.dhakatribune.com/bangladesh/2015/jul/27/tk30-lakh-fine-violation-ship-breaking-law

Bill to regulate ship-breaking industry gets cabinet nod

The cabinet has approved the draft of the ‘Bangladesh Ship Recycling Bill, 2015’ in order to limit the ship industry to some designated areas from now on and also given nod to the draft of the ‘Petroleum Bill, 2015’.

The drafts were approved at the 70th cabinet meeting held at the Bangladesh Secretariat with prime minister Sheikh Hasina in the chair on Monday.

According to the draft of the ship recycling bill, the government would fix some designated areas for the fastest grown ship breaking industry and anybody violating this act would be penalised.

Cabinet secretary Muhammad Musharraf Hossain Bhuiyan said a regulatory authority would monitor the areas meant for the ship recycling.  “Anyone importing, stocking or breaking ships without permission would be fined with Tk 10,00,000 to Tk 30,00,000 or be imprisoned for one-year term or face both.”

Anyone who would deny to provide necessary information to the regulatory body would be fined Tk 5,00,00 to Tk 20,00,000 or imprisoned for six months, he added.

He said the ship breaking industry would be under the ministry of industries from now on.

Besides, the draft of the Petrolatum Bill, 2015 has been approved in principal with a provision that anyone violating the act would be fined Tk 10,000 or imprisoned for six months. If anyone violating the act repeatedly, the penalty would be doubled. 

The cabinet secretary said storage and transportation of petroleum would be more efficient through making the existing law a time-befitting one.

Source: prothom-alo. 27 July 2015

http://en.prothom-alo.com/bangladesh/news/73371/Bill-to-regulate-ship-breaking-industry-gets

Experts warn Indian shipbreaking 'dying'

India: More than half of the shipbreaking yards at the Alang hub in India have shut down over the past two years owing to the combined pressure of cheap Chinese steel and new environmental regulations in Europe. These factors are continuing to 'devastate' local economies, gCaptain has reported.

Shipbreaking operations are being pushed further in the direction of modern yards in China and Turkey, not least because of China's steel pricing strategy. Although the nation's economy is slowing, its steel exports soared 51% to a record 93.78 million tonnes in 2014 while its overseas shipments were up nearly 30% in the first five months of this year.

Zahirul Islam, director of PHP Shipbreaking and Recycling Industries in Chittagong, comments: 'Three years ago, there were about 80 yards; now it's down to 25. I think another 10-15 yards will go.' Shoaib Sultan, owner of Horizon Ship Recycling in Karachi, points out: 'It has always been a cyclical business but people who have been in this industry tell me this is the worst in 30 years.'

And Chintan Kalthia, owner of R.L. Kalthia Ship Breaking, adds: 'People are running this business from their heart, not from their mind.' Despite the fact that his yard is breaking the 'biggest ship' now being recycled at Alang, his view of the future is bleak. 'This is my last ship,' he states. 'This business is dying.'

Source: recycling international.

http://www.recyclinginternational.com/recycling-news/8919/ferrous-metals/india/experts-warn-indian-shipbreaking-039-dying-039

Bleak Outlook for Asian Shipbreaking:

In the world's biggest ship recycling center of Alang on India's Arabian Sea coast, workers with blow torches cut segments of steel stripped from the rusting hull of a towering cargo ship, sold for scrap by its Japanese owner.

But in this town - located in Prime Minister Narendra Modi's home state of Gujarat - more than half of the ship-breaking yards have shut in the past two years and the future of the trade in India and neighbors Bangladesh and Pakistan is bleak.

The industry has been hit by a flood of cheap Chinese steel and new European Union environmental rules due later this year threaten to push business to more modern yards in places like China and Turkey - in turn devastating local economies.

"People are running this business from their heart, not from their mind," said Chintan Kalthia, whose company R.L. Kalthia Ship Breaking Pvt Ltd runs one of Alang's more modern yards.

Still, he takes pride in the fact that after months of negotiations with a Japanese owner, his yard secured the biggest ship currently being recycled in Alang.

"But this is my last ship. This business is dying," he added, suddenly sounding weary, as workers outside his beach-side glass office sized slabs of steel peeled from the ship.

Ships sold to South Asian breakers, which control about 70 percent of the market, are winched at high tide onto a beach, where they are taken apart by mostly migrant laborers.

Equipment, such as radars, engines - and even tables and chairs - is taken off and sold, while the steel from the hull is removed for scrap.

The trade in Alang used to employ about 60,000 directly, with thousands more in spin-off businesses, said yard owners.

But roads on the 11 km (seven mile) beach front that locals say used to buzz with people and trucks now appear deserted and dozens of shops displaying everything from crockery to computers ripped out of ships are struggling to get supplies.

"I used to make five, six, seven trips a day," said Munna, sitting atop his tractor with extra wheels able to carry heavy scrap from the yards. "Now I hardly get one or two calls."

BLAME CHINA

With a plunge in steel prices, ship owners are getting about $3.6 million less for the 25,000 tons of recoverable metal from a typical iron ore or coal carrying ship than just eight months ago.

The finger of blame is being pointed at China.

"China is selling below the price of recycled steel," said Amit B. Padia, owner of Sagar Laxmi Ship Breakers, as an orange crane lifted a bathroom removed from a ship onto a trailer.

With China's economy slowing, its steel exports soared 51 percent to a record 93.78 million tons last year and are up nearly 30 percent in the first five months of 2015.

The impact has been felt in Alang where the number of active yards fell to 50 this year from more than 100 in 2014, according to the Ship Recycling Industries Association India.

The number of vessels beached also dropped to a six-year low of 275 last year and was only 54 in the last three months, it said.

"WORST IN 30 YEARS"

The situation in Pakistan appears equally bad.

"It has always been a cyclical business but people who have been in this industry tell me this is the worst in 30 years," said Shoaib Sultan, the owner of Horizon Ship Recycling in Karachi.

The story in Bangladesh is similar.

"Three years ago there were about 80 yards, now it's down to 25. I think another 10-15 yards will go," said Zahirul Islam, director of PHP Shipbreaking and Recycling Industries Ltd in Chittagong.

Ship breakers globally bought 25.2 million deadweight tons (dwt) of vessels up to early July, against 33.8 million dwt all of last year, with Bangladesh the largest buyer, according to shipping services firm Clarkson.

"Everyone thought prices will improve and bought a lot, but now they are sitting on huge inventories," said Islam.

"It will be a disaster in the coming months."

It takes up to nine months for a typical bulk carrier in India to be broken up and its steel processed, said Rakesh Khetan, chief executive of Singapore-based Wirana Shipping Corp, a major buyer of ships for scrap.

ENVIRONMENTAL CONTROLS

As well as facing pressure from cheap Chinese steel, there are also calls to stop beach scrapping because of the danger and environmental damage from pollutants left to drain into the sea.

Highlighting the risks, five people were killed and at least 10 injured after an explosion in a chemical tanker being dismantled in Alang last year, local media said.

Workers can also face health hazards such as lead paint and asbestos when working on ships.

The European Commission will introduce tougher environmental controls some time after December. While not specifically banning beach scrapping, owners of ships registered in E.U. countries will have to scrap them at approved facilities, a move that could favor countries such as China and Turkey where ships are taken apart in docks.

"The European Commission's intention is not to discourage vessel owners from using facilities outside of the EU but to discourage ship owners from using facilities which have proven to present very real danger to life and the general environment," said Mark Clintworth, head of shipping at the European Investment Bank.

In a bid to allay environmental concerns, some yards in South Asia have cemented their work area to try to prevent seepage of oil or chemicals, but many lack the money to do this.

"It takes about $5 million to improve a yard. How can somebody do that when they are bleeding?" said Islam of PHP Shipbreaking in Bangladesh.

Clintworth said his bank and the European Commission could provide investment for South Asian ship scrappers to improve existing operations, as well as for safer and more environmentally friendly new facilities.

But for many that could come too late and some, including Alang's Sagar Laxmi Ship Breakers, are simply targeting other industries such as construction.

Source: maritime executive.  17 July 2015

http://maritime-executive.com/article/bleak-outlook-for-asian-shipbreaking