Most Ships Still Scrapped in South Asia, NGO Says

Nearly two thirds of the 770 ships scrapped last year were beached at shipbreaking yards in India, Pakistan and Bangladesh, said watchdog NGO Shipbreaking Platform in its annual report, released February 4.

The nonprofit advocacy group objects to the practice of shipbreaking at South Asian yards on the grounds that the yards allegedly “do not provide fundamental labour rights, ignore international waste trade law, and fail to respect international environmental protection standards.”

In illustrating the objection, Shipbreaking Platform cites a recent gas cylinder explosion at Shitol Enterprise, a Bangladeshi yard, in which four were killed and four injured. The vessel under demolition at the time of the incident was previously owned by Greek firm Universal Ship Management Corporation.

“Greek owners by far outstripped ship owners of other nationalities by having sold the most end-of-life vessels to dirty and dangerous shipbreaking sites in South Asia,” with about 90 beached in 2015. Additionally, “for the first time in many years, Bangladesh was the world’s number one destination for scrap ships,” the group said.

The NGO also highlighted what it described as contradictory shipbreaking practices at firms with sustainability initiatives, including Hyundai, Hanjin, Evergreen, MOL and K-Line, which reportedly sell to unregulated South Asian shipbreakers.

To facilitate the transactions, owners typically sell the ships to “cash buyer” intermediaries, who take on all risks associated with the recycling of the vessels abroad. Through the cash buyer, the owner completes an end-of-life sale to a Bangladeshi or Indian scrapper, eliminating expenses related to environmental and labor regulations in developed nations, Shipbreaking Platform says.

“Despite a lot of international attention on the problems of shipbreaking on the beaches of South Asia, the statistics for 2015 show that the vast majority of shipowners have not changed their practice for the better,” said Patrizia Heidegger, the group's director.

On a positive note, the group says that the E.U. will publish a list of approved, vetted shipyards in 2016, which E.U.-flagged vessels will be required to use; and it maintains a registry of firms which have pledged to follow its end-of-life management guidelines even where not required by law. The member companies include Boskalis, DFDS, Hapag Lloyd, Höegh, Maersk and Wallenius Wilhelmsen.

The E.U. approval process is controversial, with public disagreements over whether shipyards reliant on beaching vessels should be permitted on the list. The firms above, plus entities like the Norwegian Shipowners’ Association and U.S. operator Matson Lines, have explicitly committed to an “off-the-beach” end-of-life policy. 

Cash buyer GMS said in December that a ban on beaching would eliminate the use of South Asian facilities for E.U. vessels, restricting shipowners to the use of Turkish and Chinese yards, which may not have the capacity to handle all of the volume; and that it would reduce the push for improvement at South Asian shipbreakers, which would still be free to break Liberian- or Cambodian-flagged vessels in a manner of their choosing, without the pressure of E.U. certification oversight.