Ship demolition cash buyer GMS has questioned a decision by Norges Bank to exclude four leading shipping companies from investing in the Norwegian Government Pension Fund Global (GPFG), alleging a “systematic violation of human rights” for demolishing their ships in Pakistan and Bangladesh.

The companies subjected to the ban are Evergreen Marine Corp, Korea Line, Precious Shipping and Thoresen Thai Agencies.

GMS pointed out that by not applying the ban to companies that scrapped ships in India, Norges Bank’ ethics board had at least recognised improvements made in that country and that the beaching process itself was not an issue.

As TradeWinds reported last week, the sovereign wealth fund excluded investments in the shipowning companies after “an assessment of the risk of severe environmental damage and serious or systematic violations of human rights”, said Norges Bank, which manages the GPFG.

“The executive board’s decisions on exclusion were made on the basis of recommendations from the Council on Ethics [for the GPFG],” it said.

But GMS criticised Norges Bank for not recognising improvements made in Bangladesh, where Norwegian foreign aid has also been directed at attempting to improve recycling standards under an IMO scheme.

GMS non-executive director Nikos Mikelis said: “In ignoring the investments and improvements of yards such as PHP [Family], the Council of Ethics is failing its name because it is discouraging improvements and investments by other yards in these countries, self-fulfilling in this way their accusations of poor working and environmental conditions in the whole of these countries."

Focus on compliance

He argued that, instead, the board should focus on whether a yard had complied with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC), regardless of where they are located.

"This will motivate improvements to the whole of the shiprecycling sector, and that is the right and only way to move forward if we really wish to see progress in the shiprecycling industry," Mikelis said.

However, clean recycling lobby group NGO Shipbreaking Platform had earlier criticised the award of HKC certification to Bangladesh breaker PHP Family by Italian classification society Rina. NGO Shipbreaking Platform accused the IMO’s HKC of low standards and said the certification was given despite the yard violating labour rights and a deficient infrastructure for the containment of toxins and general waste.

Rina declined to comment on the criticism by NGO Shipbreaking Platform.