Indian Express – Alang-bound ships change flags to dodge anti-dumping norms

(Written by Adam Halliday)

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9 February 2013 - More than 90 per cent of the 218 ships owned by European companies that were dismantled at Bhavnagar’s Alang-Sosiya ship-recycling yard in 2012 flew flags of non-European countries, a list released this week by a Brussels-based agency shows.

Known as “flags of convenience” in maritime circles, this technique helps companies exploit a loophole in the international anti-dumping Basel Convention, which classifies end-of-life vessels as waste material and thus prohibits developed countries from sending them to developing countries for dismantling.

On the other hand, developing countries gain immense economic benefits from ship-recycling, which produces lakhs of tonnes of steel scraps annually, valuable furniture and work for tens of thousands, although safety and environment concerns have continuously been raised.

For example, Alang-Sosiya last year produced 3.8 million tonnes of steel scrap by dismantling 415 vessels. In the same period, however, 13 workers lost their lives, seven of them due to a single blast inside a ship that was being broken apart, reportedly because they used blowtorches in a compartment where they should have used wrenches.

The list of European ships dismantled in South Asian beaches, drawn up by a consortium of rights and labour groups across the world called NGO Shipbreaking Platform, shows 380 European vessels were dismantled at four South Asian ship-recycling yards — Alang, Mumbai, Chittagong (Bangladesh) and Gadani (Pakistan). Of these, 240 were dismantled in India.

Of the 218 ships dismantled at Alang, 199 flew non-European flags such as those of Panama, Comoros, Solomon Islands, Malta, Liberia, Tuvalu, Bahamas, Marshall Islands, Egypt, Cyprus, St Kitts-Nevis, Antigua & Barbuda and St Vincent & Grenadines. All 22 ships dismantled at Mumbai flew non-European flags.

Official sources at Alang and in Gandhinagar confirmed the list appears accurate since European ships annually make up at least half of all vessels that beach in India, and that a majority fly non-European flags. Any ship’s history can easily be traced using its International Maritime Organization registration number.

“They change flags to save their skin in their own countries,” said a senior official from one of the agencies overseeing work at the yard, who declined to be identified.

Just last year, the infamous US vessel Exxon Valdez, which caused one of the world’s worst oil-spills off Alaska in 1989, beached for dismantling at Alang under the name MV Oriental N. It flew a Panama flag. It’s IMO number, 8414520, remained unchanged.

Although India is a signatory to Basel, recycling yards follow guidelines issued by the Supreme Court in 2007. Under this, all end-of-life ships designated for dismantling are checked by a host of agencies from customs to pollution control, explosives department to industrial safety. The Gujarat Maritime Board, which runs the yard at Alang, allows ships in only after these agencies issue no-objection certificates.

Recent criticisms over workers’ safety has also pushed the GMB towards constructing dormitories for workers and sanction the stationing of ambulances in the yard premises. Waste embedded in the ships’ parts are disposed of at specific treatment sites, two of which stand near the yard, and a private company is employed to decontaminate asbestos and other harmful materials embedded in ships’ parts.

Meanwhile, this “flag-of-convenience” technique is neither new nor a secret even in the EU. The European Parliament is currently discussing a new legislation on ship-recycling to try and curb the practice. If passed, the law would prohibit shipping companies from sending end-of-life ships to any yard that is not certified safe by the EU.

In the course of the discussions, the EU in fact noted that an existing overcapacity in the world’s fleet (which may last a full decade) and the phasing out of all single-hull tankers by 2015 is expected to drive thousands of end-of-life or de-commissioned ships to these South-Asian yards, admitting that more than nine in every 10 European-flagged ships headed to South Asia for dismantling in 2009.