ClassNK has thrown its weight behind Bangladesh’s PHP Ship Breaking and Recycling Industries (PHP), verifying that the company is in line with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships.

Junichi Hirata, general manager of the Japanese classification society’s innovation and sustainability department, said on Wednesday that the society issued an Hong Kong Convention statement of compliance to the facility.

That followed completion of technical verifications and a review of PHP's Ship Recycling Facility Plan (SRFP), along with on-site inspections to confirm that its process follows the plan.

“I hope this step further will encourage safer and greener ship recycling practices following the HKC [Hong Kong Convention] standard," Hirata said.

The official said that CLassNK will continue to monitor PHP through periodical audits, as it will do with other ship recycling facilities with our statements of compliance.

PHP began the process of upgrading its facilities in 2015, spending in the region of $5m to bring it to the point where it meets Hong Kong Convention standards.

The recycler received its first statement of compliance with the convention from Italian classification society Rina in October 2017.

Since then the yard has recycled six ships in compliance with Hong Kong Convention standards. It is currently recycling its third capesize bulker from Brazilian miner Vale.

PHP managing director Mohammed Zahirul Islam told TradeWinds that getting approval from ClassNK is its crowning achievement as the Japanese society is the most stringent when it comes to ensuring standards are being met.

“It took us a while to get ClassNK onboard. We approached them in 2017, but they were busy with yards in India," he said.

"They came to us in 2018 with a two-step process, which first required an external auditor that the appointed monitoring the full process of a ship being recycled. Only after that auditor reported that we were capable of recycling a ship in an HKC-compliant manner did ClassNK come and conduct its own audits.”

PHP Shipbreaking & Recycling managing director Mohammed Zahirul Islam Photo: Jonathan Boonzaier

Zahirul admited that PHP, which has the capacity to recycle 150,000 ldt per year, initially struggled to attract the attention of shipowners looking to recycle their ships in an Hong Kong Convention-compliant manner, but this situation has been easing.

“Before, owners looking for green recycling did not even look at Bangladesh. Getting certification from Rina helped, and we were able to get the owners to come and look at our facility and gain their confidence,” he explained.

“ClassNK certification will help build that confidence even further.”

Zahirul said that shipowner interest in green recycling has improved substantially over the past year.

“We have seen with the past two to three ships we have bid on that they are willing to give a discount. It shows that there is a shift with shipowners towards HKC-compliant recycling,” said Zahirul

When shipbreakers in South Asia first started upgrading their yards to offer HKC-compliant recycling, the take-up was very low as shipbreakers were asking for discounts of between $20 and $50 per ldt.

The shipbreakers maintained that they had no choice as to pay more would cause them to suffer losses.

Over the past year the green recycling discount has dropped significantly, and today stands at around $5 to $10 per ldt, a figure that scrap industry sources said is far more acceptable to a wider circle of shipowners.

Zahirul believes that the growing move towards Hong Kong Convention-compliant recycling, in part helped by pressure from industry partners such as financiers, bodes well for the improvement of all ship recycling facilities in Bangladesh.

He estimates that six other Bangladeshi yards have begun upgrading their facilities to meet the convention's standards and will soon be calling in the class societies so that they can get certified.