Shipbreaking: It’s Complicated

Shipbreaking: It’s Complicated

Photo: Ship Breaking by Gas Cutting in Bhatiary Yard 01, Chittagong Bangladesh
https://www.flickr.com/photos/naq/411472397, Naquib Hossain, confirmed to be licensed under the terms of the cc-by-sa-2.0

Ships have an average life of around 25 to 30 years. When a ship ages out of service it is usually influenced by increasing costs to insure the ship, deterioration and that replacement parts for failing equipment become more expensive and hard to find. The next step is to recycle the vessel. This process is called shipbreaking and it is not without controversy.

Ship breaking is a complicated environmental, human rights and economic issue that reaches from one corner of the earth to the other. When a ship comes to the end of its life and can no longer safely remain on the water or when it is deemed beyond repair it is sold to brokers from around the world who then transport these ships to ports where they are dismantled. There are times that the ships are not stable enough to be moved and they are dealt with at the scene of the wreck. Just as in many industries there are reputable companies that follow existing regulations and then there are those who don’t. The abuses of the system designed to control shipbreaking can be of varying degrees.

The shipbreaking industry has garnered a lot of attention the past several years by environmentalists, human rights activists and others that want more regulation and accountability within the industry. More than 800 of these large ships are broken up each year. It’s a big business that involves millions and millions of dollars. In 2016, ship owners from Greece and Germany topped the list of countries that sent the most ships to shipbreaking yards known for ignoring environmental and safety standards, as well as abusing worker rights. 70 percent of the world’s ships that are sent to shipbreakers end up in India.

 

Environmental Impact

The impact on the environment from an improper disposal of a ship can last years. A common ship carries 1000s of gallons of oil, diesel fuel and a wide array of other contaminants that can have an adverse and often long-term effect on sea life, water and shoreline health. Many organizations work diligently to measure and report these impacts and recently the shipping industry is listening closely to what they have to say. Decades of unregulated abuses of the environment in Asian countries have begun to take its toll.

While there is no doubt that there are negative impacts when ships are dismantled improperly shipbreaking is an act of recycling. Once the ship is completely taken apart bolt by bolt these parts and scrap are repurposed.  Over 60 percent of Bangladesh’s steel originates from one of the largest and most notorious shipbreaking yards in the world, Chittagong.

 

Humanitarian Concerns

In 2016, 86 percent of the end-of-life ships were dismantled on Asian shores. Many of these shipbreaking yards are responsible for the worst violations of workers rights. They ignore international standards and regulations that are in place to protect their workers who fill these dangerous jobs. Workers are offered very little protective gear and safety practices are limited. Ventilation is a problem and unprotected workers inhale unacceptable levels of toxins and exposure to asbestos and other carcinogens and toxic heavy metals are common. In many of these yards accidents often occur, some leading to death and it is not unusual for worker’s families to be paid off to keep them quiet about the incident.

In Bangladesh, it’s estimated that in the past 3 decades over 700 deaths have occurred and more than 10,000 accidents. According to activists that have visited the area many of the workers carry scars from work-related injuries and burns.

These same shipbreaking yards count on a workforce that includes a child labor force of approximately 11 percent and just over 40 percent are between the ages of 18-24 years old. Young children are used for reaching difficult to access areas of ships. Due to their youth and agility, they are often used to reach the highest points of the ship. Training is almost non-existent and it is not unusual for these young workers to use blow torches and other dangerous equipment in their daily duties.

 

Economic Impact

Shipbreaking is a multi-million dollar business. According to the International Salvage Union (ISU), in 2015, members made a gross revenue of over 700 million dollars. The removal of wrecks was worth almost 400 million dollars. It can be expensive for shipping companies to properly dispose of ships and that cost affects their profit margins. Often shipping companies dodge these costs by selling the defunct ship to a broker. This allows them to avoid direct participation in the decision of how and where the shipbreaking takes place. Brokers make their money once they purchase the ship by disposing of it in the least expensive way possible and they can do this by dropping the ship off at one of Asia’s shipbreaking beaches.

The issue of shipbreaking is further complicated by its entanglement in the economics of Asian countries. Using Bangladesh as an example, as mentioned earlier, 60 percent of their steel comes from dismantled ships. Better regulations, accountability and practices would dramatically increase the expense of obtaining that steel which would have a direct impact on the cost of the steel for their country.

Changes would also impact the workers in the industry. Currently, the workers consist of the poorest of the poor. Most come from families where members are illiterate and unskilled. The workers make between one dollar and three dollars a day, and the work is sporadic. If regulations were adhered to then it would mean that the shipbreaking, for the most part, would be taken over by skilled labor. Keep in mind that often all the men from a household are shipbreakers and this would leave thousands of people without work. Increased costs of operation would most likely lead to the closing of many of these shipbreaking sites, which could have a devastating impact on that local economy.

 

What Now?

In January of 2018, the Norwegian Central Bank, which is directed by the Norwegian Council on Ethics which, in turn, manages the Government Pension Fund Global announced that they would no longer include 4 shipping companies form the Government Pension Fund Global. The ship owners Evergreen Marine Corporation, Precious Shipping, Korea Line Corporation and Thorensen Thai Agencies were denied because of their poor handling of ships at their end of life which includes a history of sending their ships to be scrapped to some of the worst shipbreaking sites in the world.

The Norwegian Central Banks’ decision against the abovementioned shipping companies is just one of the ways that the shipping industry is trying to address the problems with shipbreaking.  In the past several years as word has spread concerning the abuses within the shipbreaking industry, it has become the goal of many to improve common practices. This is not without its difficulties. While the equipment and technologies that allow for proper shipbreaking techniques are available, their cost can be prohibitive to some ship owners. As with any industry, conforming to regulations can be costly and is absorbed by owners as part of their cost of doing business. That being said many ship owners believe that it is worthwhile to take the necessary steps to eliminate or improve shipbreaking sites globally.

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