12 June 2017

Law paves way for Danish ratification of ‘green’ ship scrapping convention

Ships due for scrapping contain many different kinds of dangerous materials and have to be taken care of responsibly, both for the sake of the environment but also for workers in the breaker yards

A unanimous Parliament has just passed a law that enables Denmark to ratify the UN’s Hong Kong Convention on ship scrapping.

“It is a good day for the environment as well as those who work in the ship breaking industry every time a country ratifies the convention. Shipping is a global industry for which we need international rules,” said the environment minister, Esben Lunde Larsen.

The convention is now a step closer to coming into force. In order to do so, it needs to be ratified by at least 15 countries and, up until now, only six other countries have done so.

Sending a strong signal
“With Denmark’s ratification, we are sending a strong signal to other countries that it is important to prioritise responsible ship scrapping,” said Larsen.

He added that “the more countries that sign, the quicker the convention can enter into force. For example, India [one of the leading scrapping nations] has indicated they are ready to ratify once the EU countries have done so.”

Now that the law has been passed, it will take about a month for the formal ratification process to be completed.

A valuable resource
Worldwide, approximately 1,000 merchant ships are broken up annually and valuable materials such as steel can be reused.

Most of the ships end up in Asia, although Danish-operated ships are typically broken up in yards in India, China and Turkey.

Source: Copenhagen Post. 11th May

11 June 2017

Banks Join Ship Recycling Debate

The Dutch banks ABN AMRO, ING Bank and NIBC, together with the Scandinavian SEB and DNB, have announced that they are introducing responsible ship recycling standards (RSRS) for their ship financing.

The Norwegian fund, KLP, which commissioned a report by the International Law and Policy Institute on shipbreaking in 2016, has already taken a stance to reject beaching practices.

A collective move to include ship recycling conditions on loans by leading banks and financial institutions with large shipping portfolios is a positive step to imposing responsible practices on shipowners, says NGO Shipbreaking Platform. Shipowners, rather than finding crafty loopholes in the law, will feel the bite if they do not choose to recycle responsibly off the beach, says the Platform.

Dr Nikos Mikelis, Non-executive Director of cash buyer GMS, says the announcement by the three banks to enforce responsible ship recycling standards should be, or should have been, a welcomed development. In the last two years 28 yards in India have achieved Statements of Compliance with Hong Kong Convention by IACS class societies and 24 more yards are currently in the process of gaining Statements of Compliance. Furthermore, there are promising signs that yards in Bangladesh are preparing to meet the new IMO standards.

To keep this momentum, an increasing numbers of shipowners will have to demand responsible recycling for their ships, says Mikelis, this way leading more and more yards to invest in improvements. It therefore follows that support for responsible recycling by the banking sector will be invaluable in bringing forward the day that all ship recycling is done in a safer and cleaner manner, according to the new international standard.

The initiative of the banks is detailed in the RSRS where the three banks commit themselves to implementing this standard and to promoting it within the financial sector. Section 4 of RSRS contains eight requirements that participating banks should make their best efforts [to satisfy].

“Here I see one specific requirement, namely that the bank will require that any ship it (re)finances should be provided with an Inventory of Hazardous Materials (IHM) by the shipowner,” says Mikelis. “The remaining requirements of the standard appear to be 'nice' but not specific.”

In its last section RSRS details its “Guidance for Loan Agreements” where it provides “language that can be included in loan agreements” and which “should not be viewed as a required legal framework but as suggested wording to assist banks in incorporating the ship recycling standards in their loan agreements.”

“Here in addition to the requirement to provide and maintain the IHM (the document mistakenly refers to a “Green Passport” which was the precursor to the IHM, until 2005), the Borrower is required to ensure that the vessel shall be recycled in accordance with the E.U. Ship Recycling Regulation,” says Mikelis.

“Shipowners should be very careful in understanding the implications of contractually agreeing with their lender to recycle a ship in accordance with the E.U. Ship Recycling Regulation. The European Commission, who will implement the new regulation (on European flagged ships), has still not published the list of approved yards outside E.U.

“Furthermore, for the last three years the Commission has shown inordinate support for the extreme views of the NGO Platform (banning of beaching and therefore of recycling in South Asia) and characteristically keeps funding more than half of the NGO’s budget. We can hope that the Commission will recognize the tremendous improvements that have been taking place in India and also will be cognizant of the tremendous push Europe will give to responsible recycling by approving deserving yards in South Asia.

“Nevertheless, I guess that it is not safe to assume that sense will prevail over Brussels’ politics, in which case the E.U. Ship Recycling Regulation may ignore South Asia, the improvement in many of its yards and the fact that in 2016 the three South Asian countries recycled 84.1 percent of the tonnage recycled worldwide (World Casualty Statistics 2016 by IHS Global).

“Whereas the RSRS document by the banks does not address banning of beaching or recycling in South Asia, the banks’ press release quotes the NGO Platform who welcomes the leading role taken by the banks to ensure a departure from the unnecessarily dirty and dangerous practice of beaching. Shipowners should start getting very worried in case these three, and possibly more banks, as well as the European Commission, end up sharing the same dangerous lack of vision as the NGO Platform.” 

Source: maritime-executive. 31 May 2017

HC wants assessment reports on radioactive material of Chittagong scrap vessel, MT Producer

The High Court today sought assessment reports from three agencies on the presence of naturally occurring radioactive material of MT Producer, an imported toxic scrap vessel now at a ship breaking yard in Chittagong.

Bangladesh Atomic Energy Commission, Bangladesh Atomic Energy Regulatory Authority and Marine Port Initiative of Bangladesh Customs have been asked to submit the assessment reports on the radiation contamination of MT Producer (North Sea Producer) before it in 10 weeks.

The court also issued a rule asking the respondents to explain in three weeks why giving clearance certificate in favour of MT Producer, the Maersk owned 52,000-tonne huge Floating Production Storage and Offloading (FPSO) purchased by Janata Steel Mill (Ship Breaking Yard) at a record price of Tk 51.82 crore from Danish Shipping Company Marks, should not be declared illegal.

In the rule, the court also asked the respondents to reply why action should not be taken against the seller of the vessel for giving a false announcement about it and why foreign experts should not be appointed to ensure safe scrap of the vessel at the cost of the importer.

The HC bench of Justice Syed Refaat Ahmed and Justice Md Salim came up with the order and rule following a writ petition filed by Bangladesh Environmental Lawyers Association (BELA) challenging the legality of authorities’ decision to import MT Producer, its beaching and scrapping.

Bela chief Advocate Syeda Rizawana Hasan told The Daily Star that Janata Steel Mill has imported MT Producer in August last year in violation of the existing laws and court orders and made a false announcement saying that there was no toxic material in the vessels. 

Janata Steel Mill has collected a clearance certificate from an unknown agency and the ministry of industries most arbitrarily permitted the breaking of the vessel on September 8, 2016 although the department of environment never issued environmental clearance in favour of breaking of the vessel, she said.

After a news report titled “Maersk and the hazardous waste in Bangladesh” was published in a leading Danish newspaper DANWATCH on October 15, 2016, it first came to public attention that the said vessel has been sold to Bangladesh, Advocate Rizwana added.

Secretaries to the ministries of industries, environment and forest, commerce and labour and employment; chairmen of Bangladesh Atomic Energy Commission and Bangladesh Atomic Energy Regulatory Authority; deputy commissioner of Chittagong; director general of the coast guard; collector of customs, Bangladesh customs; chairman of Chittagong port authority; chief inspector of department of explosives; director general of the directorate of Inspection for factories and establishments; director of department of environment; principal officer of mercantile marine department; president of Bangladesh ship breakers association; proprietor of Janata steel corporation (ship breaking yard) and managing director of M/S HR ship management ltd (safety agency) have been made respondents.

Source:the daily star. 08 June 2017

27 May 2017

EU Leads the Way for Ship Recycling:

Ask someone in the United States what happens to ocean-going ships at the end of their service life and they’ll likely describe National Geographic pictures of ships on beaches in some foreign country, with sandal-clad workers using hammers and cutting torches to take them apart. However, these recycling methods are destined to become a relic of the past. The future will be one where workers wear appropriate safety equipment. It will also be one where ships are not simply driven onto a beach. And it will be one largely driven by changes mandated by the European Union.

The future began in 2009 when the International Maritime Organization adopted the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships. The goal of the convention is to ensure that ships are dismantled in conditions that do not pose “unnecessary risk to human health and safety or to the environment.” Surprisingly, the convention does not ban beaching. It will only enter into force twenty-four months after ratification by fifteen states, representing forty percent of world merchant shipping by gross tonnage, and combined maximum annual ship recycling volume not less than three per cent of their combined tonnage.

Norway was the first country to ratify the convention. Congo, France, Belgium, Panama, and Turkey followed suit, and on May 9, the Danish Parliament passed a law enabling Denmark to ratify it. Unfortunately, these seven countries aren’t enough, and more countries must act to bring the Hong Kong Convention into force.

The slow pace of the convention’s ratification has allowed the European Union to become the new standard-bearer for change. In 2013, the EU passed a regulation wherein all EU flagged ships are required to be dismantled in EU-approved facilities. The first list of approved facilities was released in December 2016, and all were within the EU.

When the list was released, the European Community Shipowners’ Associations immediately questioned why non-EU facilities were left off. “Approximately 150 container vessels were sent for recycling in 2016, the current EU list would cater for only 16 smaller container vessels . . . We thus strongly encourage the Commission to enlarge the list to non-EU facilities as soon as possible,” the association said in a statement.

There is a strong likelihood the EU will certify some non-EU facilities but not all of them, especially those that employ beaching methods.  And that’s why India, Bangladesh, China, Pakistan, and Turkey are paying attention.  These countries dismantle the majority of the world’s ships and many of their facilities still employ the beaching method.

The French environmental advocacy group Robin Des Bois estimates that in the first quarter of 2017, “225 ships out 240 were being demolished in India, in Bangladesh, in Pakistan, in China and in Turkey . . . [and only] 5 ships are being broken up in European facilities.”

In the United States, President Donald J. Trump has issued several executive orders that benefit the US ship recycling industry. Specifically, President Trump directed that pipelines be built with US steel. There is a lot of steel in obsolete U.S. commercial and military ships, and it can be re-used to make pipes. The Steel Manufacturers Association and the Specialty Steel Industry of North America estimate that the U.S. steel industry recycled 70 millions tons of scrap last year, conserving energy and reducing the burden on landfills.

So what will the remainder of 2017 look like for ship recyclers? First, the EU will continue to set the standards for world-wide dismantlement. China, India, Pakistan, Bangladesh and Turkey will seek EU certification of their ship recycling facilities highlighting their new environmental and safety measures. And the United States will implement the President’s “America First” strategy and the steel from dismantled commercial and military ships will be used in infrastructure projects. All of these efforts will produce a worldwide ship recycling industry that is safer for workers, the environment and the world.

Source: maritime executive. 24 May 2017

Injustice of compensation

Families of workers killed in Ctg shipbreaking yards allege that they are not getting such proper benefit.

Al-Amin came to Chittagong all the way from Khulna in search of work so that he could support a seven-member family back home. But little did he know what awaited him.

While on duty, the 27-year-old worker of a shipbreaking yard in Chittagong got killed in an accident on September 5, 2015 -- an end to his struggle for bringing smile to his family members. However, the sufferings of his dear ones began as his untimely death put his entire family into poverty.

Al-Amin's sister Rabeya said the compensation they had received at the cost of the only earning member of the family was insufficient. They now find it difficult to make ends meet, she said, adding, “We got three lakh taka as compensation -- Tk 1 lakh through a labour court and Tk 2 lakh directly from the owner.”

Though there is a government regulation that shipbreaking yard owners will have to pay Tk 5 lakh for each death in accident at the yards, families of the deceased workers allege that they have not received proper compensation as per the rule.

Take another example of Abdul Karim. The 22-year-old worker was killed in an accident at another shipbreaking yard on May 29 last year, putting his family into severe financial crisis.

Karim's mother Amena Begum said she had received Tk 1 lakh through a labour court and Tk 80,000 from the owner. “Karim was the lone bread earner of the family…the money we got as compensation was very little.”

In the last 12 years, between 2005 and 2016, at least 165 workers like Al-Amin and Karim got killed in accidents at shipbreaking yards in Chittagong, according to NGO Shipbreaking Platform, a coalition of environmental, human and labour rights organisations whose goal is to prevent toxic end-of-life ships from being beached in developing countries.

However, allegation runs rife that the number of actual deaths might be higher than the abovementioned figure, as accidents at yards are not often reported to police. Therefore, exact figure of dead workers are not known, nor are the compensations paid to their families.

Tapan Dutt, convener of Shipbreaking Workers' Trade Union Forum, said owners are not paying the due compensation to the dead workers' families as per Ship Breaking and Recycling Rule 2011.

In the chapter VIII of the Rules published in December 12, 2011, it was said, “If the negligence of yard owner established, board [Ship Building and Ship Recycling Board (SBSRB)] may impose suspension of yard for one year, or a penalty from Taka one lakh to ten lakhs by realizing the magnitude of the negligence of the yard decided by SBSRB and the yard owner will pay to the next of kin up to Taka 5 (Five) lakhs as compensation for each death in accident and up to Taka 2 (Two) lakhs for deceased or seriously injured and with complete treatment and 12 months' salary as compensation or in accordance with the Labour Act 2016.”

Referring to the rules, Tapan said, “The owners must pay Tk 5 lakh as compensation to the family of each worker killed in accident at the yards.”

Echoing Tapan, Abdur Rahim, general secretary of Shipbreaking Workers Trade Union Federation, said owners usually do not want to pay Tk 5 lakh as compensation.

“We have recently realised Tk 5 lakh from an owner for a victim's family. But it is true that we cannot succeed in most of the cases,” he said, adding, “We are trying to implement it for every incident.”

Contacted, Syeda Rizwana Hasan, chief executive of Bangladesh Environment Lawyers' Association (Bela), said the owners pay compensation as per labour law.

But there is a separate rule formulated in December 2011 by the ministry of industries for shipbreaking yards, where it has been clearly said that the owners should pay Tk 5 lakh each for workers killed in accident at yards, said she.

“I don't know why the rule is not being followed,” she said, adding, “There is no scope here for considering labour law as a barrier to implement this rule.”

Bangladesh Coordinator of NGO Shipbreaking Platform Mohammad Ali Shahin also said, “We have been demanding to set the compensation amount minimum at Tk 5 lakh, but it is yet to be implemented.”

Contacted, Abdul Hai Khan, deputy inspector general, department of inspection for factories and establishment, Chittagong, said the shipbreaking and recycling rules were formed following a High Court order but act in this regard has not been formulated yet. “So we cannot enforce it,” he said, adding, “It is very important to formulate an act in this regard.”

“But we are trying to increase the amount of compensation,” he said. “In a meeting of Industrial Crisis Committee, headed by deputy commissioner of Chittagong, on September 1 last year, a decision to pay Tk 5 lakh compensation to each killed worker's family was made and we are trying to implement the decision.”

Contacted, Abu Taher, president of Bangladesh Ship Breakers Association, said no such decision was made in the meeting. “Actually it came as a proposal. We usually pay almost Tk 3 lakh to Tk 4 lakh altogether to a victim's family.”

Source: the daily star. 22 May 2017