Ten years after a global treaty was ratified in Hong Kong for new rules to lift the standards for ship scrapping, there should be reason to celebrate.
But with only eight nations signing up to comply with the convention over the past decade, hopes now ring hollow that itwould spark a rapid clean-up of a dangerous and dirty business.
Regardless of the convention’s weaknesses, however, signs are emerging that ship demolition may be starting to make real progress towards becoming a safer and more environmentally sound activity.
Strides to improvement
Recycling yards in India and Bangladesh are making strides to improve their facilities and train and equip their staff to work safely.
Driving this change has been a combination of factors that are reinventing the business model of shiprecycling and creating an environment that rewards investment in improved facilities and operations
Driving this change has been a combination of factors that are reinventing the business model of shiprecycling and creating an environment that rewards investment in improved facilities and operations.
Sadly, the ship demolition business remains “the world’s most dangerous job”, Kan Matsuzaki told the TradeWinds Ship Recycling Forum recently.
And he is in a legitimate position to judge, being the director of shipbuilding and shipbreaking for IndustriALL, the international trade union that represents more than 50 million workers in 140 countries.
Yet despite the risks that workers in the industry still face, he acknowledged the improvements seen at those yards where investment is being made.
In India, there are now more than 72 yards that have been certified as being in compliance with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships. And yards in Bangladesh are also beginning to improve. Pakistan is widely thought to remain behind, although its security and safety problems make it difficult to obtain an objective view.
Shift in attitude
Key to driving the change has been a shift in the attitude of major shipowners and their financiers who have become sensitised to the reputational risks of having their retired vessels involved in accidents or causing pollution while being scrapped.
Among the major companies that have signed up to the Ship Recycling Transparency Initiative to improve the industry's collective understanding are AP Moller-Maersk, Hapag-Lloyd, Wallenius Wilhelmsen, Stolt Tankers, Norden and, recently, Teekay Corp.
Their position is eloquently summed up by James Woodrow, managing director of another member of the group, Swire group subsidiary China Navigation.
He describes as “anomalous” that shipowners supervise shipbuilding for quality and control, and ensure safe practices during the operational life of a ship, “but subsequently, at the point of sale, most owners wash their hands of all responsibility for these issues and externalise the necessary costs for these”.
We believe that ‘extended product responsibility’ applies equally to our industry, requiring us to minimise whole of life-cycle environmental impacts
James Woodrow
“We believe that ‘extended product responsibility’ applies equally to our industry, requiring us to minimise whole of life-cycle environmental impacts,” Woodrow says.
'Polluter pays' principle
Such values are standard behaviour for industrial concerns in the developed world, and increasingly the developing world. Society demands that the "polluter pays" principle is applied across most businesses.
The fact that such an outlook is so rare in shipping reflects the historic habit for shipowners and operators to turn a blind eye to how their redundant assets were scrapped.
However, it should not be ducked that an enlightened approach to safe and environmental ship demolition comes at a price. Green scrapping delivers a smaller payout to the end-of-life owner than using the cheapest alternatives.
Shiprecycling facilities need to repay the finance to build beachfront hardstandings and floating cranes, and even a modicum of training and safety equipment for workers costs money.
A drop in the ocean
But the reality is that this is often less than $1m per ship, which taken across the 20-year or 25-year trading life of a vessel is a drop in the ocean.
It is the equivalent of less than a couple hundred dollars a day to ensure the process is handled to basic standards. If owners cannot afford that, they should not be in business themselves.
While the shiprecycling industry is making progress towards cleaning itself up, it is clear there is a long way to go. Even supporters of the Hong Kong Convention suggest it is unlikely to come into force for at least five years. And raising standards across the rest of the industry will take years after that.
It is positive, however, that an increasing number of shipowners and their financiers understand they can no longer shirk their responsibilities. Those who continue to pocket the cash from dirty scrapping deserve to be named, shamed and pursued until they deliver on their obligations.
