21 September 2017

Alang: Looking at a healthier future

Alang, the world's largest graveyard for ships, has been notorious for its human and environmental safety standards. But it could now be looking at a healthier future

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Chetan Patel of the Shree Ram Group, which owns two ship recycling yards at Alang

There is always something morbid about a place where things are taken apart, piece by piece, after the end of their useful lives, and sold off as scrap. A once grand, or at least useful, creation is systematically stripped and wrenched apart, and reduced to a pile of junk; its utility down to the cost of scrap metal.

Alang, the world’s largest graveyard for ships, would score high on such morbidity. No wonder then that it found a place in Max Brooks’s 2006 novel World War Z: An Oral History of the Zombie War. But what Brooks did not include in his depiction of humans turning into zombies, because of a global pandemic, were the real life horror stories of Alang’s ship breaking yards that have been notorious for endangering human lives as well as the environment for decades.

But as global calls for sustainable business practices across industries gather volume, a few ship owners and recyclers are determined to mend Alang’s notorious image and position it as a global hub for responsible ship recycling.

Alang, situated 50 km from the city of Bhavnagar in Gujarat, is a 10 km sandy stretch, facing the Gulf of Khambhat; it is dotted with battered ships of all shapes and sizes, anchored perpendicular to the shore. Oil and gas tankers, container vessels and even cruise liners wait to be reduced to scrap. The yard became operational in 1983, when the state government conceived it to create mass employment for low-skilled workers. Alang’s yards have a capacity to break 450 ships annually, and the industry is now worth around ₹6,000 crore.

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A partially dismantled ship at Alang. The Gujarat town accounts for half of all ships recycled globally

The barren landscape on either side of the well-laid road that leads from the highway to the Alang-Sosiya Ship Recycling Yard is lined with shops selling every imaginable item that has been ripped from the ships—engines, pumps, crockery, dishwashers, lifebuoys and wooden furniture, for instance.

Deeper within Alang, the road that runs adjacent to the 170-odd shipbreaking plots (of which around 130 are operational) developed by the Gujarat Maritime Board (GMB), gets bumpier and dustier. The GMB gives out yards on long-term leases to private companies to operate them.

Most of the 17,000 men working at the yards leave their shanties early in the morning, and head to work wearing yellow or white hard hats, dark blue jumpsuits, and industrial boots. But despite the safety standards that their attire suggests, most of the yards function like haphazard junkyards: Harmful substances, such as asbestos and oil, often spill into the water, contaminating the marine ecology; workers who use gas cutters are exposed to hazardous fumes; there have also been reports of workers dying due to gas explosions. A 2014 study commissioned by the National Human Rights Commission and conducted by the Tata Institute of Social Sciences confirmed the poor working conditions at Alang and pointed to lax implementation of safety regulations. It found that, according to official records, 470 deaths were reported between 1983 and 2013, with a possibility of the number being higher.

This is the price Alang pays to keep its shipbreaking industry competitive. Similar substandard working conditions are also rampant in the shipbreaking industries of Gadani in Pakistan and Chittagong in Bangladesh. It is not surprising then that these three locations account for close to 90 percent of all ships recycled in the world; Alang alone accounts for about half.

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Both yards of the Shree Ram Group have been certified by the Hong Kong Convention

The other large global ship breaking centres are in China (Zhejiang and Jiangsu, among others) and Aliaga in Turkey, where safety standards for workers and the environment are higher than at Alang.

The continuing slowdown in global trade, and the consequent excess capacity in the shipping industry, means shipping companies are scrapping more of their vessels than before. Shipping yards in China and Turkey pay less to shipping companies for their retired ships owing to their higher operating standards, compared to yards in Pakistan, India and Bangladesh. But as global regulations governing ship recycling become more stringent, shipping companies are under pressure to send their old vessels to yards that follow safety and environmental norms, where they fetch a lesser price.

In order to get a better price for retired ships from yards that operate with high safety standards, a few shipping companies are now trying to develop Alang as a yard adhering to global benchmarks. One of the shipping lines implementing this strategy is Denmark-based publicly listed company AP Moller-Maersk, which has $35 billion (around ₹2.24 lakh crore) in revenue. In 2015, it tied up with Chetan Patel, owner and director of the Shree Ram Group, and the Masani family, which owns YS Investments, to create a benchmark for others to hopefully replicate. In 2015, China Navigation Company (CNCo) also committed itself to the development of Alang.

“We are working with the more far-sighted ship recycling facilities in Alang, who committed significant quantities of their own money to raise standards with zero guaranteed return, to move the safety, environmental, social and operational standards from the previous, often very poor, practices to those of a responsible industry,” writes Simon Bennett, the Singapore-based general manager of sustainable development at CNCo, in an email.

Annette Stube, head of sustainability at AP Moller-Maersk’s transport and logistics division, says her company has been sending its end-of-life ships to only responsible ship recyclers in Turkey and China since 2009. But occasionally, if there is more life left in the ships, the vessels are resold. “Sometimes, people reused the ships that we sold and sent them for recycling to Pakistan or Bangladesh eventually,” says Stube.

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Naeem Masani, MD of YS Investments, whose facility at Alang rakes in ₹100 crore annually

To clamp down on this practice, and to increase the number of responsible ship recyclers to choose from, in 2015, Maersk decided to work with some progressive recycling yards at Alang and bring them up to global standards. “Any business would like to have many options. It is a strategic business consideration where our position is stronger or weaker depending on the bargaining power of the procurers,” says John Kornerup Bang, head of sustainability strategy and shared value initiatives at AP Moller-Maersk.

CNCo’s Bennett also mentions that the recycling capacity in Turkey and other European Union countries is “woefully inadequate” to handle the number of ships getting scrapped. “Additionally, it would be prohibitively expensive for CNCo to send ships trading in the Asia Pacific region to Turkey for recycling. The market price for ships to be recycled in China is currently skewed because of government subsidies that keep shipyards competitive,” he adds.

While CNCo’s and AP Moller-Maersk’s rationale for upgrading Alang is clear, what is in it for Alang’s shipbreaking companies?

Patel (42), whose business group’s interests range from ship recycling to real estate, owns two yards at Alang that have been certified by the International Maritime Organization’s (IMO) 2009 Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships. The certification was awarded by ClassNK, a Japanese ship classification society in 2015. Patel’s and Masani’s yards are among at least 17 yards in Alang that have been certified by the Hong Kong Convention, which sets out standards that cover the handling of hazardous materials, recycling facilities, the design and construction of ships, and the preparation of ships sent for scrap. However, it won’t come into force until it is ratified by 15 countries, representing no less than 40 percent of the world fleet’s tonnage.

So far the Convention has been ratified by only six countries around the world—Norway, Congo, France, Belgium, Panama and Denmark. It is expected that by 2018-19, many more countries will ratify the Convention, which would make it difficult for the non-certified yards at places like Alang to get new business.

The breaking and recycling of ships in India is supposed to follow the Shipbreaking Code 2013, issued by the Union ministry of shipping.However, the ministry itself had come under flak from environmental groups for not factoring in pollution. Consequently, the ministry issued amendments in 2016 that covered issues such as treatment of radioactive and hazardous waste material.

Patel’s father Mukesh started the Shree Ram Group in 1994. It has recycled close to 280 ships since then, and brings in ₹300 crore in revenues each year. He has spent ₹2.5 crore for one yard, and a little more for the other (which is bigger in size), to instal impermeable flooring in the front yard (where metal blocks from the ship first land) and backyard (where the blocks are cut into smaller pieces) to prevent soil and water contamination; a mechanism to use the hull of the ship as a safety net to prevent metal blocks falling into the sea; a high-tonnage crane to lift the blocks and bring them to shore; pipelines for transferring used ship oil; and high-quality safety gear and emergency response systems.

YS Investments has spent close to ₹13 crore on similar upgrades at one of their facilities, which has an annual turnover of ₹100 crore. “We are thinking about how our business will evolve over the next 10 years,” says Naeem Masani, 28, managing director of YS Investments. For the Masanis, their Alang yard is also a source of scrap steel for their steel rolling mills in Bhavnagar, and the used ship oil is utilised in the lubricants they manufacture.

In addition to the Hong Kong Convention, AP Moller-Maersk has made Shree Ram Group and YS Investments adhere to its own Responsible Ship Recycling Standards (RSRS), which prescribe additional safety measures under which its own experts stationed at the yards have the authority to stop work if they observe any lapses. AP Moller-Maersk has decided to sell two ships to Shree Ram Group and one to YS Invesments at a discount, and has committed a steady supply of ships to these facilities as long as they maintain their standards.

While the Hong Kong Convention doesn’t specifically address the working conditions for yard workers, AP Moller-Maersk and CNCo are trying to ensure that Masani and Patel construct International Labour Organization-compliant dormitories for workers as part of the overall facelift of their facilities.
The next goal for Patel is to get his yards certified according to EU’s standards, so that he can then buy retired ships from European shipping lines (the EU Ship Recycling Regulation of 2013 require EU-flag ships to be recycled only at facilities they recognise).

But even as Patel aims to further improve his yard, a canister of chemical falls into the ocean from a ship at a yard next to his. The chemical fumes rising from the water serve as a grim reminder that while a beginning has been made to redeem Alang, more needs to be done to break old mindsets and not just ships.

Source: forbes india. 20 September 2017

20 September 2017

Ship breaking zoning in CBRM (Cape Breton Regional Municipality) questioned

Northside councillor wants facilities ‘listed in black and white’

SYDNEY, N.S. - There will be no ship breaking in North Sydney

That was the word from CBRM planning director Malcolm Gillis after Dist. 2 Coun. Earlene MacMullin questioned whether municipal zoning permitted such activity at the Canadian Marine Engineering ship repair yard located on the Northside waterfront.


MacMullin said her confusion on the issue stemmed from a 2016 Transport Canada report that listed CME’s North Sydney location as a site where ship breaking could be carried out on steel-hulled vessels up to 2,500 tonnes.

“That’s what prompted me to ask what was going on, so when I asked the question Malcolm Gillis of the planning department responded in an email that CBRM zoning doesn’t allow it, but unfortunately later that same day I got another call from someone inside saying that they can (break ships in North Sydney),” said MacMullin, who added she felt compelled to get clarification on the matter during this week’s council meeting.

Gillis reiterated his initial response stating again that Cape Breton Regional Municipality zoning does not allow ship breaking at CME’s North Sydney facility.

Although the question was answered, MacMullin still insisted on a staff report on the issue.

“Originally, I was seeking clarification for the North Sydney CME facility … I figured I would ask for it all as it would clear up any issues for fellow councillors further down the road. As a result of this staff paper we will have it listed in black and white what facilities can and cannot (handle ship breaking),” she said.

Earlier this month it was announced that Marine Recycling Corp. had won a $12.6-million federal contract to dismantle two former Canadian Navy ships. The work on the HMCS Preserver and the former research vessel CFAV Quest is to be carried out at Sydport Industrial Park in Edwardsville. The former is docked at Sydport, while the latter has yet to arrive.

Source: cape breton post. 16 August 2017

European Commission reports on feasibility of a financial instrument-NGOs urge that it is necessary to hold the shipping industry accountable

The European Commission released its report on the viability of a financial incentive for sustainable ship recycling under the EU Ship Recycling Regulation this week. Whilst it acknowledges the benefits for clean and safe ship recycling such an incentive would bring, the European Commission has decided to wait with its introduction. NGOs urge the EU to take action now as it is well documented that ship owners will with ease be able to circumvent the EU Ship Recycling Regulation by simply swapping the flag of their vessel to that of a non-EU State.

The report of the European Commission is based on the study which was conducted by Ecorys, DNV-GL and the University of Rotterdam/Erasmus, and published at the end of 2016. The proposed instrument in the study is in the form of a licence which each ship, regardless of its flag, needs to acquire in order to enter EU ports. This licence can be bought monthly, yearly, or every 5 years, depending on the trading requirements, and will be ship-specific. At the end of the ship’s life, the money spent on buying the licences will have been put aside and can be paid back to the last owner of that ship once it is recycled at a facility which is approved according to the EU Ship Recycling Regulation. Such an incentive will offset the higher profits made when selling to substandard shipbreaking yards and ensure the proper recycling of EU-trading ships regardless of their flags.

In the report published on 8 August, the European Commission sees this system of the Ship Recycling Licence as a workable solution if it is demonstrated that there are many ships that will flag out to circumvent the EU Ship Recycling Regulation, thereby weakening its effectiveness. All EU-flagged vessels will have to be recycled in an EU-approved facility starting from the end of 2018 at the latest. Only once it is clear what the effects of the EU List are on the recycling choices of shipowners, will the Commission consider whether to go ahead with introducing the Ship Recycling Licence. Therefore, if shipowners choose to recycle their vessels responsibly in a facility on the EU List and do not flag out in order to circumvent the Ship Recycling Regulation, the Commission believes that it will not be necessary to introduce a financial mechanism.

However, flagging out at end-of-life is a practice which is already widespread. Most shipowners sell their obsolete vessels to so-called cash buyers. These scrap-dealers become the new owners of the ships and both re-name and re-flag the vessels for their last voyage to the beaching yards in South Asia. Particularly popular registries amongst the cash buyers are the Paris MoU grey- and black-listed flags of Comoros, Palau and St. Kitts and Nevis – flags that are known for their poor implementation of laws governing labour rights and environmental protection at sea. Maersk also already threatened that it would flag out its fleet from the Danish registry if the Alang beaching yards they have recently chosen to use are not approved by the EU. Swapping the flag of a ship is easy and makes it very simple for cash buyers and shipowners to circumvent the law. The motivation for doing so is also simple: dirty and dangerous shipbreaking brings higher profits due to the lack of investments in infrastructure, illicit handling of hazardous wastes and extremely poor working conditions. For these reasons the NGO Shipbreaking Platform urges the EU Commission to not wait for the effects of the EU List, but instead show that it intends to take all measures possible to change the current deplorable shipping practices and commit now to making a legislative proposal to introduce a financial incentive.

“The huge benefit of this licence scheme is that it will also apply to non-EU flagged ships, meaning that the scope of the EU Ship Recycling Regulation will be much wider and will truly be a driving force for change in the shipping industry”, says Ingvild Jenssen, Director of the NGO Shipbreaking Platform. “Those shipowners that are already taking responsibility for their end-of-life fleet should be supportive of the Ship Recycling Licence as it will create a level playing field ensuring that also their competitors pay the price of clean and safe ship recycling,” she adds.

Legislation based on flag state jurisdiction alone is far too easy to circumvent. That is why more policies aimed at improving the social and environmental performance of shipping is being enforced via port state control. The Ship Recycling Licence is as such in line with international trade law. Taking also into account the widespread acknowledgement that financial incentives are key in ensuring the success of environmental policies, it seems obvious that a return scheme for ships is needed to change the behavior of shipowners that currently earn profits at the detriment of workers’ health and lives and the environment.

Source: hellenic shipping news. 12 August 2017

LYNNFIELD SHIP SAILS INTO OBLIVION

Plank by plank, the Ship Restaurant floating along the horizon of Route 1 is expected to be torn apart in the next two weeks.

Ted Regnante, a local attorney representing developers who plan to construct retail space in its place, said asbestos remediation and the crafting of a rodent control plan has delayed the demolition of the iconic building.

“But the plan is going forward,” said Regnante. “They have been working with a contractor and within the next week to two weeks, they will start demolition of the ship.”

The property is owned by Ship Mall LLC, a division of Allston-based Micozzi Management Inc. It was last purchased in 2007 for $16.5 million.

Plans include a 2,500-square-foot freestanding branch building for East Boston Savings Bank, 7,500-square-feet of retail space, and a 2,500-square-foot drive-up restaurant and coffee shop.

Once the demolition commences, Regnante estimates the entire project will take about four to five months.

A bit further down Route 1, the construction of a 68-unit condominium project at 2 Broadway is slated to begin at the start of September, said Regnante. The building will be comprised of mostly two-bedroom units and is expected to take about a year to complete. Regnante believes the combination of the two projects will enhance the area and create a more usable space and foot traffic for businesses.

Last spring, the Lynnfield Historical Commission voiced support of the project, once architectural plans for the plaza including several touches meant to honor the legacy of the nautical-themed building were unveiled.

The mast and other characteristics of the ship, including windows and glass on the second floor, the existing eagle and six stars, and the red and blue color scheme, will be included in the new construction.

“We’re creating some mementos for people to remember and people are excited about it,” said Regnante. “I think it’s going to be very successful.”

Source: item live. 11 August 2017

Ship recycling raised at CBRM council

Nobody wants a shipwrecker in their front yard.


The HMCS Preserver, shown here in drydock at Halifax Shipyards, will soon be broken up at the Sydport Industrial Park. (Staff)
The HMCS Preserver, shown here in drydock at Halifax Shipyards, will soon be broken up at the Sydport Industrial Park. (Staff)

The mere word conjures up images of leaking oil, rusted debris and overseas workers whose lives, in the absence of environmental regulation, are shortened by heavy metals and contaminated fluids. That may have driven Coun. Earlene McMullin’s displeasure during the Cape Breton Regional Municipality council meeting Tuesday.

“I’ve got a little bit of shake in my voice because it’s killing me to sit here and spend council’s time to get clarification on whether ships can be destroyed downtown on Commercial Street,” McMullin said. “I’ll breathe through the enragement, but it just seems so backward that I have to do that.”

McMullin was complaining about differing opinions she received from CBRM staff on whether Canadian Marine Engineering — which bought a waterfront park in downtown North Sydney from the municipality two years ago, bulldozed it and built a marine lift and repair shop — was legally entitled to also cut up ships for scrap metal.

So she asked again in public: “Where CME is located on Commercial Street, does the zoning permit either recycling or breaking of steel-hulled vessels, or any vessel, for that matter?”

“No,” answered planning director Malcolm Gillis.

The rumour that CME wanted to break ships in McMullin’s neighbourhood was sparked by a Transport Canada report that mentioned the company’s capacity for recycling ships of up to 2,500 tonnes.

But as Coun. Kendra Coombs pointed out, CME staff said they don’t intend to break ships in North Sydney, and as Gillis noted, CME owns facilities at other locations, including Dartmouth and Victoria, B.C. where it might be interested in doing that.

The not-in-my-backyard attitude to shipwrecking has not spread to the Sydport Industrial Park, where another company, Marine Recycling, began this week to break up the newly-arrived HMCS Preserver.

The first ship to come to Sydney to “die” in decades, the Preserver is around the 130th for MRC, which was founded by Wayne Elliot in Port Colborn, Ont.

Elliot hoped four years ago to expand to Sydney but after being denied two aged ferries from Marine Atlantic, which has a terminal in downtown North Sydney, he waited, knowing another chance would come along.

“Our federal government decided that Canadian-flagged vessels and government-owned vessels should be recycled in Canada to promote safe recycling as well as provide jobs and raw materials, and not ship those things offshore,” Elliot said.

“There are warships just coming to their end this year, and in a number of years down the road I suppose the frigates will start to be recycled. There are Coast Guard vessels and Department of Fishery vessels, and of course commercial vessels . . the biggest source of our work.”

In Sydney, MRC’s worksite is “not a very large space, really,” Elliot said. “A couple of acres and, of course, the dock. There won’t be materials stored on site. Once the material is processed . . . it will be shipped off site.

“Most of the ship components are metal. . .

“Metal is infinitely recyclable. What today is your vehicle may tomorrow be razor blades or something else. The beauty with metal recycling is the energy saving and of course the savings to the environment.”

When MRC recycles a ship, no part of it ends up in the water, he said. “Before we tow, liquids, oils or any water are removed from the vessel . . . We’ve done a number of successful tows since the new regulations and we’re very much in favour of them.

“When vessels do have accidents, sinkings, it’s those hydrocarbons that just keep on giving the carnage and so we’re fully supportive of that regulation.”

The company has had one major loss, in 2010, when a submarine caught fire as it was being dismantled, Elliot described that as a “freak accident” caused by floating debris.

“If safety is not first and foremost in this business, then one may not be in it too long. We’re very proud of our record. We’re the world’s oldest ISO certified ship recycler, since 2000.”

MRC was an unpaid consultant to Canada’s member of the Basel and Hong Kong Conventions when they were setting the rules and the policies around shipbreaking, Elliot said.

“It has become an environmental business, shipbreaking has. Other parts of the world that are sadly lacking in safety and environmental stewardship have begun to improve their operations. So, it’s all headed in the right direction.”

Source: the chronicle herald. 15 August 2017