7 May 2012 - The Supreme Court on Monday refused permission to US toxic ship Oriental Nicety, which is involved in the worst oil spill disaster in Alaska in 1989, for beaching in Indian ports till it is properly decontaminated. Oriental Nicety, also known as Exxon Valdez, entered Indian waters over a month ago and has been awaiting permission for entry into an Indian port. The ship is destined for breaking at the world’s biggest ship breaking yard in Alang, Gujarat, where a local agent bought it last week.

Sanjay Parekh of Research Foundation for Science had moved an application in the apex court, saying the ship should not be allowed to enter an Indian port as it has not been decontaminated.

Under the international treaty on trans-boundary movement of ships, the Basel Convention, the vessels, which have not been de-contaminated at the port of export, cannot be allowed entry to the waters of the developing countries.

Parekh claimed that the US ship had not been decontaminated in the port of export and it amounted to violation of the Basel convention.

The US had refused to sign the convention that prevents rich nations from dumping hazardous waste in ships in the developing countries. Many toxic ships from the US reach ports of the developing countries for breaking.

The court asked the central government to ensure that the ship is not allowed entry to any Indian port until it meets the Basel Convention guidelines and is decontaminated properly.

Gopal Krishna of NGO ToxicWatch said the ship could not be allowed entry as it violated Basel Convention and CBCB norms.

ABSTRACT

“Rich societies use large amounts of resources. Conflicts of resource extraction and waste disposal, such as the conflict over the excessive production of carbon dioxide, arise as a consequence of this. Rich societies generate large quantities of all kinds of waste, facing rising management costs and awakening opposition to waste treatment and disposal sites, such as incinerators and landfills. This is also the background of a rapidly changing and lucrative trade, global in nature, in which waste flows towards developing countries or poorer areas of developed countries.

This report, through in-depth case studies from India and Bulgaria, aims to link the increased social metabolism (energy and material flows) of the economy to waste disposal conflicts. The first case study is about shipbreaking (the dismantling of obsolete ocean-going ships) in Alang-Sosiya (India), an example of how the North dumps toxic waste in the South.”

20 April 2012 - Chittagong-based ship-breakers imported 42 large-sized recyclable ships in February and March this year at a cost of US$ 45 million.

Industry sources said the ships will be able to supply about one million tonnes of MS rod — a major construction material — against the annual national demand for four million tonnes.

The government earlier suspended import of recyclable ships for about a year to reduce related accidental and environmental hazards. Later on, it introduced new rules for ship breaking, and formed a Ship Breaking Cell at the Ministry of Industries to implement the rules.

Both the industry people and ministry officials said they are now working together, with their limited workforce, to ensure cent per cent compliance with the new ship-breaking rules.

“We have denied import permissions to 12 companies for their inadequate preparations in terms of training of workers and available facilities for yard during the period of suspension of import, so that accidents could be avoided and environmental issues are were complied,” said Khorshed Alam, additional secretary of shipping ministry and the chief of the Cell.

He said as the manpower and capacity of the cell is poor, they hired engineers from Chittagong Dry Dock to inspect the imported ships and ship-breaking yards of the companies.

Bangladesh Ship Breakers Association President Hefazatur Rahman told the FE that suspension on importing ships had led to reduction of supplies of MS Rod in the market and thus created uncertainty in local real estate sector by pushing up the cost of this essential item.

He welcomed the ongoing monitoring of the Ship Breaking Cell, saying that it would help create awareness among the yard-owners and reduce the number of accidents as well as dumping of poisonous waste.

The government last year introduced “The Ship Breaking and Recycling Rules 2011″ and issued a circular in this regard on December 14, 2011.

Bangladesh established itself as a leading ship-breaking country in the international market within a short period of time. Over 50,000 people are directly involved in this industry and more than 100,000 people are indirectly dependent on operational activities in the sector.

The ship-breaking industry that has developed in Chittagong, is the main source of raw materials of some 500 private sector re-rolling mills and 50 steel mills to produce mild steel rods, bars, and angles at affordable prices.

The industry is currently supplying about 60 per cent of the raw materials for local steel production. On the other hand, the country’s growing demand for steel products has encouraged a good number of private sector entrepreneurs to invest in the steel sector that has been proved quite rewarding, in terms of profitability and new employment generation.

The industry is also contributing to the local ship-building sector through supplying used machineries and materials.

Besides, construction industry, oxygen plants, cable, ceramic, and furniture factories are benefited from recycling of ships.

18 April 2012 - Alang beach in India’s Gujarat province is one of the world’s biggest shipping graveyards, an access-restricted, mafia-controlled funerary ground for hulking steel-container vessels marooned for demolition.

Eighty percent of the world’s international trade crosses the globe by ship, and each year hundreds of these massive retired freighters are physically dismantled in ocean-shoreline breaking yards.

Two reports released in New Delhi this week are renewing focus on the industry’s near total lack of environmental or labor oversight, and its connection to organized crime.

According Federico Demaria, an Italian economist affiliated with New Delhi’s Jawaharlal Nehru University, even gaining permission to watch shipbreaking in progress can prove extremely difficult.

“Access to Alang is not permitted for foreigners, for journalists, for researchers, for anyone who can actually find out what is going on on the ground,” he says, explaining that he got a glimpse of Alang in 2009, only after posing as a scrap trader.

“You are supposed to ask permission, [and] I have been waiting for it for three years now, and I’ve [still] not got it.”

What he did get, however, was first-hand exposure to an aspect of trade and international commerce that few ever hear about.

A surreal scene

At Alang, he says, defunct trans-oceanic vessels stand like decrepit, abandoned city skyscrapers that have washed ashore, awaiting the arrival of laborers who, armed with torches, enter the structures to manually deconstruct them.

On any given day, he says, one might see a two- or three-ton slab of steel fall to the beach below, or sometimes onto workers.

While advocates of Indian shipbreaking say the industry recycles cheap steel into the economy, fueling development and providing jobs, critics object, citing lack of health care, adequate housing or compensation for debilitating accidents that frequently befall its labor force.

“How much do you count for a worker’s life?” Demaria asks. “For example, I was not allowed to enter one ship in the Alang beach explicitly because the shipbreaker told me, ‘If an accident happens, you’ll be too expensive. I can’t pay you.’”

Yet compensation for Indian workers, he says, is cheap. “If they [compensate their own employees for work-related injuries], they would give something like $1,000 to $2,000, which is insignificant.”

A formerly regulated trade

Shipbreaking used to take place mainly in Europe, under more controlled conditions, but globalization has opened the market for unregulated operations like those in Alang, where shipping companies sell older vessels to intermediary companies that exist only on paper, who then sell the steel structures to shipbreakers.

Gopal Krishna, an Indian environmental activist, says the industry is hazardous not only to laborers, but to the entire ecosystem and people whose livelihoods depend on it.

“Most of the ships, which are 25-30 years old, are asbestos-laden. They are laden with persistent organic pollutants like PCBs, polychlorinated biphenyls; with waste oil; with ballast water,” he says, none of which is managed in an environmentally sound manner.

Prying eyes of industry observers, he adds, are shielded by local mafias driving the enterprise.

“It is a source of black money in the country, one of the least acknowledged sources of black money,” says Krishna. “There is collusion between the ruling party and the opposition party. Business interest, the profit motive alone, guides the political parties, which provide patronage to shipbreakers. There is no rule of law in Alang.”

Demaria and Krishna warn that the industry’s lack of oversight could impact the West in the form of contaminated and radioactive imports wrought of improperly treated steel.

New Delhi’s failure to regulate and modernize shipbreaking, they say, will probably cause India’s share of the industry to be subsumed by China’s shipbreaking market within a decade.

Ship breaking yard at Alang, Asia’s largest, has recorded highest number of 415 ships coming for breaking during fiscal ended March 31, 2012 with the 38.60 million tonnes of light ton displacement or LDT against 28.20 million tonnes LDT recorded in 2010-11, GMB informed in an official statement.

Giving details about the Alang Ship Recycling Yard, which is located on the coast of Bhavnagar district in Gujarat, GMB stated that the Yard also has some key infrastructure for Toxic Storage and Disposal Facilities (TSDF) for treatment of hazardous and non hazardous waste.

According to an industry estimate, over 100 ship breaking companies are active in Alang and turnover of the industry is about Rs 10,000 crore per year.

GMB further informed that in spite of weak global economic condition during 2011-12, non-major ports in Gujarat have achieved a growth of 12.19 per cent in traffic. Traffic handled at these ports was 259 million tonnes during 2011-12, which higher from 231 million tonnes in 2010-11, a GMB statement said.

“With trigger mechanism, many achievements to its name, GMB shall continue striding towards betterment of port scenario of Gujarat continuing to add achievements to its name along the way,” Pankaj Kumar, vice chairman and CEO, GMB. Traffic handling capacity at non-major ports has recorded 13.73 per cent growth rate from 284 million tonnes per annum to 323 million tonnes per annum in 2011-12, GMB informed.

“The traffic has increased in most of the ports like Bhavnagar, Okha, Bedi, Navlakhi, Magdalla/Hazira, Mundra, Pipavav, Dahej, Porbandar and Sikka by 179 per cent, 41.28 per cent, 28.42 per cent, 27.15 per cent, 16.51 per cent, 24.87 per cent, 18.46 per cent, 23.46 per cent, 26.83 per cent and 2.29 per cent respectively,” the statement said.

GMB estimated that by the year 2015-16, GMB ports will have traffic handling capacity of more than 500 million tonnes per annum and of more than 1000 million tonnes by 2020.

Developmental work like Coal terminal for UMPP at Mundra, Second SPM and crude oil terminal at Mundra, Solid Cargo Terminal (II phase)at Dahej, SBM for export of crude at Bhogat created new capacities, is stated.

GMB is also in process to develop various port sub-sectors including new specialised greenfield ports, port mechanization, port services, shipbuilding and repairing, coastal shipping rail-road connectivity, port-based special economic zones, logistic parks and industrial parks, ferry services and bunkering maritime institutes.

“If the ship is allowed to come to India, not only will it be environmentally hazardous given the generally poor level of environmental compliance and monitoring, but will reinforce the fact that countries in the South continue to serve as dumping ground for hazardous waste of the North. Following the ‘precautionary principle’ it is important that no permission be granted for entry of the ship to India,” Ritwick Dutta, environmental lawyer and platform member, said.

Twenty-three years ago, the oil tanker Exxon Valdez belonged to the American oil company Exxon Mobil. On 24 March 1989, the Exxon Valdez struck a reef in the Prince William Sound in waters off Alaska, spilling approximately 34,000 tonnes of oil into the Pacific Ocean. The pollution was so great that the clean-up costs alone amounted to USD 2.5 billion. By the end of 2009, Exxon Mobil had paid nearly USD 1 billion in damages.

“It is outrageous that this ship, that has already created one environmental catastrophe is being allowed to kill and pollute yet again,” said Jim Puckett, Executive Director of the Basel Action Network. “The ship’s owner must be held accountable for simply selling this toxic time bomb and then walking away.”

Exxon sold the ship in August 2008 to China Ocean Shipping (Group) Company (COSCO), owner of the second largest shipping fleet in the world. COSCO claims to be a leading participant in the United Nations Global Compact, committing to business operations that uphold fundamental human rights, labour and environment protection laws. However, this move by COSCO to sell the former Exxon Valdez for beaching and breaking in India starkly violates this Compact. COSCO sold the vessel to a shipbroker for USD 13.4 million according to data from Intermodal (1). Global Marketing Systems (GMS), a US company specialised in the brokering of vessels for demolition recently bought the ship.

Shipbreaking as is done on the beaches of South Asia is one of the world’s most dangerous and polluting enterprises (2). Toxic ships should be dismantled in green recycling facilities that forbid beaching and where workers and the environment are protected from exposure to toxic waste.

Notes
(1) http://www.intermodal.gr/site/market/market.php
(2) For more information see our website www.shipbreakingplatform.org

Since 2006, the NGO Shipbreaking Platform has actively called on European policy makers to find solutions that will improve enforcement of the current European Waste Shipment Regulation – a law that forbids the export of toxic ships to developing contries. Last week during a ship recycling conference in Singapore, the European Commission announced its intention to propose a new regulation on ship recycling, which will transpose the International Maritime Organisation’s Hong Kong Convention on Safe and Environmentally Sound Ship Recycling – and, at the same time, remove ships from the current European Waste Shipment Regulation. Today, Commissioner Potočnik informed the Platform that the new regulation will seek to regulate only ships sailing under a European flag. The Platform is concerned that the proposal, which will be published tomorrow, will do little to reverse the current trend of unsafe beach breaking with no care for waste management in developing countries.

“With no economic incentive to change current shipping and shipbreaking practices, and faced with the reality that there are few, and probably will be even less, European flagged ships at end-of-life, the Commission’s proposal effectively rids Europe of its responsibility – and opportunity – to provide a sustainable solution to stop toxic ships from poisoning workers and the environment in some of the world’s most vulnerable countries,” said Ingvild Jenssen, Director of the NGO Shipbreaking Platform.

The Platform believes that the Hong Kong Convention provides for weak grounds on which to settle a solid regulatory framework and therefore applauds the introduction of stricker requirements at the European level both with regards to clean ship building and environmentally sound ship dismantling. But, while the Commission claims that the upcoming European proposal goes beyond the Hong Kong Convention in taking a clear stance against the beach breaking method [2]and only allowing EU flagged vessels to be sold to recycling facilities approved by the EU, in reality these requirements will only affect a small number of ships. Whereas 40 percent of the world fleet is owned by European-based companies, only a small percentage is sailing under a European flag at end-of-life [3]. In 2011 almost two-thirds of all European-owned vessels sold for breaking in South Asia were registered under non-European flags. The majority of these flags, such as St Kitts and Nevis; the Bahamas; Comoros; and St Vincent and Grenadines, are well-known for sustaining substandard practices,their lack of transparency and weak enforcement of international maritime legislation.

The Platform and international trade union organisations have repeatedly stated that the flag state system – and its so-called flags of convenience (FOC) – provides for legal loopholes and cheap disposal routes for the dumping of hazardous wastes. To counter concerns with lack of enforcement only relying on flag state implementation, proposals to introduce economic mechanisms such as port taxes or insurance schemes were initially supported by Commission expert reports [4]. In today’s meeting with the NGOs the Commission was unable to justify why these proposals have not been included in the final regulatory proposal.

In the coming weeks, the Platform will produce a deeper analysis of the Commission proposal and will continue its advocacy work during the co-decision procedure in the European Council and the European Parliament.

Contact

Ingvild Jenssen
Director
NGO Shipbreaking Platform
ingvild@shipbreakingplatform.org
+32 (0) 485 190 920
www.shipbreakingplatform.org

Notes

[1] 80 percent of the global end-of-life ships are broken in Bangladesh, Pakistan and India on tidal beaches whose soft sands cannot support crucial safety measures such as heavy lifting or emergency response equipment and which allow pollution to seep directly into the delicate coastal zone environment. No country in the developed world allows ships to be broken on their beaches. While shipbreaking can be done in a safe and clean way with proper technologies and infrastructure, and enforced regulations, most ship-owners choose to sell their ships for significantly greater profit to substandard yards operating in countries without adequate resources to provide safeguards and infrastructure to manage the dangerous business. On the South Asian shipbreaking beaches, vulnerable migrant workers, many of them children, break apart massive and toxic ships by hand, often without shoes, gloves, hard hats or masks to protect their lungs from asbestos, and poison fumes. The International Labour Organization (ILO) considers shipbreaking on beaches to be among the world’s most dangerous jobs.

[2]For more information on the four fatal flaws of the beaching method, see www.offthebeach.org

[3] Using data from shipping database IHS Fairplay DG Environment calculated that in 2009, 1.299 ships were sent for dismantling, out of which 349 (or 27 percent) were owned by European companies. The majority of these 27 percent were however registered under non- European flags: 252 out of 349 (72 percent). The proposed EU Regulation on ship recycling would only concern the remaining 28 percent of EU-flagged and EU-owned ships, adding also a smaller number of ships owned by non-European companies, but registered under an EU flag. Out of the 1.299 ships sent for breaking in 2009, 197 ships were sailing under a European flag (about 15 percent). It must also be taken into account that many of these vessels were dismantled under already acceptable conditions in the OECD.

[4] See Milieu/COWI for DG Environment ” Study in relation to options for new initiatives regarding dismantling of ships ” (October 2009) – Ship Dismantling Fund:

http://ec.europa.eu/environment/waste/ships/pdf/fund_note.pdf

22 March 2012 - Dismantling would only be allowed at safe facilities.

Shipowners will have to comply with tighter restrictions on how and where their vessels can be dismantled under new rules to be proposed by the European Commission tomorrow (23 March).

Campaigners argue, however, that the new rules would amount to a step backward, and would not prevent the export of ships for dismantling by hand in south Asia.

Currently, an estimated 80% of ships are run ashore on the beaches of India, Bangladesh and Pakistan. When done improperly, ship recycling harms workers and pollutes the environment.

Hong Kong Convention

The regulation would implement global standards agreed by the International Maritime Organization (IMO) in 2009 in the Hong Kong Convention. No country has yet ratified the convention, and there is no deadline for implementation, though the rules are expected to be in place within eight to ten years.

The Commission wants to oblige member states to ratify the convention now. For EU carriers, owners of 40% of the world’s ships, the rules would take effect in 2014.

Speaking at a ship recycling conference last week, a Commission official said that the regulation would require EU ships to be designed sustainably, require owners to keep an inventory of hazardous materials, and only allow dismantling at safe and environmentally sound facilities.

But a campaign group, the Shipbreaking Platform, said the approval of the proposal would be a step backward, because the proposal would remove ships from the waste-shipment regulation, which forbids the export of ships for dismantling. While the proposal would require ships to be recycled at safe facilities, it would allow them to be exported.

“We were expecting them [the Commission] to propose ways to reinforce implementation of the waste-shipment regulation,” said Ingvild Jenssen, the group’s director. “But they’ve simply not had the courage to stand up to the shipping industry. They’ve made a tailored legislation for them, instead of defending the principles and rules that exist.”

Jenssen is also disappointed that, according to the latest draft, the Commission is backing the convention’s language that says ships dismantled on a beach can be defined as safe and environmentally sound. She says she expects the Parliament and several member states to oppose any definition that would allow dismantling on beaches.

A spokesperson for the European Community Shipowners Association (ECSA) said shipowners are “quite pleased with the proposal, which will be in line with the Hong Kong Convention”. But they have concerns that it goes beyond the convention, by including a longer list of hazardous materials.

Possible tax

The Shipbreaking Platform is concerned that shipowners will continue to switch flags from EU states to non-EU states at the end of a ship’s life, a ploy often used to circumvent the waste-shipment regulation.

“We have to admit that [current legislation] is not adapted to the technical, legal and economic realities of shipping and ship recycling,” the Commission official said.

The draft says that if the new rules are found to be ineffective, the Commission can introduce a market mechanism that would hold shipowners responsible for dismantling from the beginning of the life of a ship.

This could take the form of port taxes or insurance premiums that would go toward a fund used to pay for ship recycling. The Shipbreaking Platform believes there is already enough evidence that this market mechanism is needed now. But the ECSA said it has concerns that such a fund would hurt the industry in Europe.

18 March 2012 – The absence of adequate safety measures at the Gadani Ship-breaking Yard has resulted in five deaths and 13 injuries since January 1, 2012. These accidents are primarily because the workers are not being provided with medical facilities or safety gear such as helmets and boots which could possibly prevent such accidents.

The Gadani Ship-breaking Yard is currently experiencing high levels of activity, with scores of ships being dismantled at the yard every day. However, because of the lack of medical facilities and safety equipment, there have been numerous cases of deaths and injuries.

On March 9, a labourer named Muhammad Akmal, 42, who used to work as a foreman for dismantling ship cabins, died due to a leakage of toxic gas. He was attempting to open one of the ship’s cylinders when he was poisoned by the toxic gas.

On March 8, Khalil Ahmad, a 35-year-old scrap salesman, died when he was struck by the arm of a heavy lifting machine.

Furthermore, on March 14 two brothers, who were passing through the yard, were also hit by a heavy lifting machine. The elder brother, Muhammad Ali, aged 24, was killed on the spot. The younger brother, Gulzar, suffered serious injuries and had to be shifted to Karachi for treatment.

According to the labourer’s representatives, the driver of the heavy machine lifter has limited vision when moving on roads due because of the size of the forklift. The representatives explained that a second person is needed to assist the driver when he is moving the machine.

Another case that place on January 27, involved a labourer, Nasir Baloch, who was working at plot No 125. Baloch received serious head injuries when he was hit by a falling steel plate. He was shifted to a private hospital in Karachi for treatment; however, he breathed his last on February 2.

On February 11 another worker, Muhammad Ismail, while attempting to open the cover of an oil tank, fell down stairs due a leak of toxic gas. Another worker, Kamran, lost conscious because of a gas leak. Fortunately, he wasn’t poisoned by the gas and regained consciousness shortly after.

On March 13 eight workers received serious injuries at Plot No 99 because of another untoward accident. The workers, who were identified as Saif-ul-Islam, Abdul Rahman, Abdul Wahid Baloch, Shabi, Faisal, Akram, Mazar Baloch and Lal Bukhsh, were working on the deck of a ship, when a cylinder filled with carbon dioxide gas exploded. The men received serious injuries from the blast’s shrapnel.

Finally, Muhammad Khan, a labourer who was working at Plot No 54, suffered head-injuries on March 15th when a string ladder that he using broke. Khan received serious head-injuries because of the fall.

The President of the Ship Breaking Democratic Workers Union, Bashir Mehmoodani, informed The News that such incidents were a routine, and that the authorities didn’t seem at all interested in taking these serious matters into consideration.

He said that even though there was a government hospital at Gaddani, it did not have the equipment to treat the workers, and did not have even a single bed.

He said that though the ship breaking yard spans over 13 square kilometers, it only had a single ambulance, which had
been donated by the Government of Balochistan. He said there are 130 plots at the yard, and that ideally, each and every plot should have at least one ambulance, so that in the case of an accident the worker could be shifted to a hospital immediately.

He said ships from 5,000 tons to 50,000 tons are dismantled at the yard and that the Balochistan Development Authority (BDA) charged Rs20 per ton as tax from the ship owners. He said the BDA collects around Rs5 million from dismantling of a single ship that weighs 10,000 tons, and thus makes several millions of rupees every year. However, Mehmoodani said that the authorities, regardless of these high profit margins, were doing nothing to take the welfare of the workers into account.

The Gadani Ship-breaking Yard is located around 40km away from Karachi and just 20km away from Hub Chowki. Mehmoodani said that his union had been demanding safety gear and other social security benefits for the workers, but that nothing had been done as yet in this regard.

He said that the workers had, in February 2009, gone on strike in protest of the safety conditions. The strike was called off once their employers had been give assurances that their demands would be fulfilled. Mehmoodani claimed, however, that the only change made by the owners was a 40 % increase in the worker’s daily wages, and that there had been no changes in the safety regulations or equipment.

Simultaneous raids and search/survey operations were carried out on various offices of Leela Ship Breaking, Shree Ram Group of Industries and Bansal Group in Ahmedabad, Bhavnagar in Gujarat, Mumbai and Pune.
Leela Ship Breaking is controlled by Komal Kant Sharma, the brother of Anil Sharma, founder and president of the largest cash buyer Global Marketing Systems (GMS), based in the US.

A senior official from Ship Recycling Industries Association (SRIA) told Fairplay, “The people raided are big players in the industry, so definitely there has been an impact. All the people involved in the business are interlinked. Although demolition work has resumed, it has not come back to its full potential.”

During the raid, officials seized Rs21M ($0.4M) cash and gold and silver jewelery worth Rs39M. Officials have also sealed 16 bank lockers owned by the breakers.

During the operation, they also recovered documents suggesting that a few associated with the companies have routed their unaccounted income into real estate projects in Gujarat.

According to Income Tax Department (IT) officials, the companies are suspected of under billing and unaccounted sales. A shipbreaker from Bhavnagar said there was a raid on the Bansal group about two months before this major raid.

He said: “This is not the first time the IT raid was conducted on shipbreaking firms. A few months back, more than two dozen shipbreakers, all based in Alang, where the world’s largest shipbreaking yard is located, were scrutinized by the IT department. This fresh raid is a follow-up action. There is large scale evasion of central and excise duty.”

Another industry player told Fairplay: “Certain practices have to be adapted to remain in trade to maintain good economies of trade. We have to reasonable to remain in business.”

In 2010, the Directorate General of Central Excise Intelligence (DGCEI) had searched 18 premises of 11 shipbreaking companies in Alang. Investigations found that several companies were involved in large-scale under-valuation of excise duty and issuing of fake central value-added tax (Cenvat) invoices