The threat of prosecution or financial sanction for selling ships to South Asia for demolition is increasing — despite improvements in the quality of beaching yards.

Pressure on shipowners is coming from a number of angles.

Norway, Belgium, the UK and the Netherlands have all recently investigated and prosecuted owners over vessels operated in Europe and sold for demolition at South Asian yards for breach of waste export laws.

A civil compensation case is about to be heard by the High Court in London against Maran Tankers over the death of a shiprecycling worker who died in Bangladesh while demolishing its vessel.

And Norway’s largest private pension fund, KLP, is threatening to pull out of companies selling ships for demolition at beaching yards.

One key driver for state action has been the Basel Ban Amendment of 1995, which came into force in December last year.

Where the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships and the European Union's Ship Recycling Regulation (SRR) seek to ensure recycling facilities, wherever they are located, meet certain standards, the Basel Ban simply aims to prevent the hazardous waste in the West being dumped on developing economies.

Promoting the new regulations and state action, non-governmental organisation Basel Action Network believes the shipping industry to be a serial offender that has sought to confound regulators.

The story of the North Sea Producer is typical of hundreds of demolition sales that are now coming under greater scrutiny. Photo: NGO Shipbreaking Platform

Founder and executive director Jim Puckett said: “The shipping industry has run screaming from their Basel responsibilities for old obsolete ships to create their own Hong Kong Convention, designed specifically to perpetuate the dumping of these toxic ships to South Asian beaches.”

The Netherlands has already upheld two successful prosecutions involving shipowners Seatrade and Holland Maas based on illegal export of waste from Europe under the Basel ban.

Norway has issued a fine against cash buyer Wirana for its role in facilitating the export of the 38,282-dwt barge carrier Harrier (built 1989) from Norway under the same law, although it denies any wrongdoing.

Environmental crimes

Only last month, one of Teekay Offshore Partners' subsidiaries, Teekay Shipping Norway, was raided by Norway’s National Authority for Investigation and Prosecution of Economic and Environmental Crime over the sale of the 124,000-dwt shuttle tanker Navion Britannia (built 1998) to RL Kalthia Ship Breaking in Alang, India.

Currently under investigation in Belgium is the sale of CMB’s 170,000-dwt capesize Mineral Water (built 1999) to Bangladesh in 2016, while the UK’s department for the environment is investigating the sale of the floating production storage and offloading vessel North Sea Producer to Bangladesh.

The story of the North Sea Producer is typical of hundreds of demolition sales. It left the North Sea in 2016, apparently for further trading, but instead it sailed straight for a Bangladesh breaker, Janata Steel, in contravention of European waste export laws.

In November last year, the supreme court in Bangladesh ruled the deal was illegal and said it was facing "incessant" cases for such breaches.

But the application of the Basel ban rankles with owners and shipbreakers alike.

Shipowners believe that by selecting the best demolition yards in South Asia they are acting responsibly.

Consultancy outfits such as Grieg Green and GSR Services are offering assistance to yards and owners to make sure ships are dismantled to high environmental and safety standards.

Many Indian and Bangladesh yards have spent a fortune on upgrading facilities to a safe standard with consideration to the environment and have been recognised as operating to a standard required by the SRR, under which European-flagged ships can only be broken up at approved yards.

And KLP is also holding considerable sway in the decisions that blue-chip quoted shipowners are taking on recycling.

One broker said: “KLP has a huge influence on shipping, especially in Norway, where every owner is scared of them.”

KLP chief executive Havard Gulbrandsen said: “KLP’s goal is that no ship ends up on a beach where irresponsible practices take place.”

However, as Asian shipbreakers are quick to point out, the cold processing of recycled ship steel used by beaching yards has a much lower carbon footprint than the method of melting and reprocessing of steel used at breaking yards in China and Turkey, which are regarded as acceptable by KLP.