NGO: Beaching Yards Held 90 Percent of Scrapping Market in 2018

Shipbreaking under way at Chittagong (file image)

Published Jan 30, 2019 10:52 AM by The Maritime Executive

South Asian shipbreaking yards have purchased the majority of the world's obsolete tonnage for demolition for years, but 2018 was an outlier, according to NGO Shipbreaking Platform. The group  releases an annual report on the world's ship recycling activity, and this year, it found that fully 90 percent of the world's scrapping (by tonnage) occurred on beaches in South Asia - a record-breaking proportion. 

Yards in Bangladesh, Pakistan and India offer shipowners favorable prices for their tonnage. At current market rates, these yards pay between $400-440 per light displacement ton (LDT), depending upon location and vessel type. Shipbreakers in Turkey offer roughly $240 per LDT, and in the EU, the limited number of ship recycling yards offer at most $100-125, according to recent industry estimates. Selling a ship to a yard in South Asia (rather than a yard elsewhere) can provide the shipowner with millions of dollars in additional revenue. 

However, clean shipbreaking advocates assert that the favorable prices in South Asia come at a cost to the environment and to workers. NGO Shipbreaking Platform tallied at least 34 deaths and nearly 40 severe injuries at these yards last year, including 14 dead in Alang, 20 in Bangladesh and 1 in Pakistan. 

"No ship owner can claim to be unaware of the dire conditions at the beaching yards, still they massively continue to sell their vessels to the worst yards to get the highest price for their ships," asserted Ingvild Jenssen, the executive director of NGO Shipbreaking Platform. "Ship owners have a responsibility to sell to recycling yards that invest in their workers and environment."

The advocacy group noted that beaching is under increasing scrutiny from European courts and institutional investors. Last year, a Dutch court found shipowner Seatrade criminally liable for selling vessels to a yard that uses recycling methods that "endanger the lives and health of workers and pollute the environment." It imposed a $925,000 fine, plus a one-year ban on employment in the shipping industry for two Seatrade executives. Another Dutch shipowner, Holland Maas Scheepvaart Beheer II BV, recently paid prosecutors a combined fine and settlement amount of about $3.5 million for beaching one vessel in India - about $1 million more than the total amount the firm received from the sale.