Bloomberg BusinessWeek – Exxon Valdez Barred Entry Into India Shipbreaking Yard

(Written by Siddharth Philip)

10 May 2012 - India barred Oriental Nicety, formerly Exxon Valdez that caused the 1989 Alaska oil spill, from the nation’s biggest ship-breaking yard after an activist filed a petition in the Supreme Court saying the vessel contained toxic material.

The Gujarat Pollution Control Board denied the ship entry into Alang, on India’s western coast, for scrapping, as the“matter is sub-judice,” Hardik Shah, its member secretary, said in a telephone interview last night from the state capital Gandhinagar.

Gopal Krishna, a New Delhi-based activist with ToxicsWatch Alliance, told the Supreme Court last month that the ship had asbestos and heavy metals on board. Concerns that ships with hazardous material are entering India have mounted in recent years as Alang competes with yards in China, Pakistan and Bangladesh.

Priya Blue Industries Pvt. a Gujarat, western India-based company that bought the ship for scrapping, will file a reply in the court next week, its founder Sanjay Mehta said. He denied the vessel, now converted into a bulk-carrier, had any toxic material on board. The ship is currently in international waters off India’s west coast, Mehta said.

The Supreme Court asked the Indian government and Ministry of Shipping to provide information on the steps taken to prevent the ship’s berthing at any of the nation’s ports, according to a May 3 order posted on the court’s website. The next hearing on the case is scheduled for August 13.

Alaska Oil Spill

In 1989, the Exxon Valdez spilt 11 million gallons of oil into Alaska’s Prince William Sound, devastating wildlife and local businesses. Victims of the spill sued Exxon Mobil Corp. (XOM) (XOM)and won a $5 billion punitive damage award in 1994.

The award was cut after a series of appeals by Exxon over the next 14 years, and eventually in 2008 a divided U.S. Supreme Court reduced the punitive damages to $507.5 million.

In the petition filed in India’s Supreme Court, Krishna said the 301 meter-long ship was purchased by Best Oasis Ltd., a unit of Priya Blue, for $16 million. Mehta declined to comment on the price of the vessel, built in 1986.

Alang, which opened in 1982, has the capacity to break ships of about 4 million metric tons a year, according to Gujarat Maritime Board website. The yard gives direct employment to about 25,000 workers, according to the Board.