31 July 2015

Cleaning Up Graveyards of Steel:

For decades, the dangerous and polluting ship-breaking yards that stretch for six miles along the beaches of Alang, India, successfully resisted the efforts of activists and foreign governments to shut them down. But in recent months, they may have finally met their match in a different adversary. Desperate steel mills in China, whose domestic markets have diminished in a slowing economy, are dumping their surplus on India.

Suddenly, the thousands of tons of steel generated by Alang's ship recyclers cost more than much of what China is sending to Indian shores. The impact has been profound. The number of Alang ship breakers has declined to 50 from 100 last year, according to the Ship Recycling Industries Association of India.

Cheap Chinese steel, however, is just the immediate problem for Alang's ship breakers. A bigger threat from China is that the country's ship breakers have been cleaning up their act with the government's help and are poised to offer the world's shipowners sustainable, low-cost ship-breaking services, at least compared with those in Europe and the U.S. Though China won't extinguish Alang completely, its Chinese-induced travails mean that it's in far worse shape to upgrade and compete with China's more environmentally advanced ship breakers.

That's not how things were supposed to work out for Alang. Its ship-breaking industry dates back to the early 1980s and an early boom in India's construction sector. The area's recyclers saw an opportunity to provide cheap steel to mills and contractors, and they started importing used ships to demolish.

Alang's access to tens of thousands of low-cost laborers gave it a large advantage over ship breaking in the developed world, where labor costs in particular made the dangerous and dirty work far less profitable. Similarly, environmental regulations in the developed world -- and especially the expectation that ships would be dismantled in concrete dry docks to prevent contamination -- posed a prohibitively expensive barrier to entry for recyclers. In Alang, however, there is no need for a large investment -- the ships are just driven on to the beach and disassembled there. In good years, the beach and its more than 60,000 directly employed workers can recycle hundreds of the world's largest ships into rebar and other basic construction materials.

Operations have improved recently in Alang, but they're nothing compared with the quiet transformation of China's ship-breaking industry. It began in the early 1990s and gathered momentum in the 2000s, when Danish shipping giant Maersk teamed up with a recycling company near Shanghai to create a ship-breaking operation that combined its high European standards with China's relatively cheaper labor and capital-investment rates. Since then, the Maersk operation has been spun off while still upholding the same standards. It and a government-supported Chinese yard in south China are now seeking recognition from European regulators to handle their ships.

Nonetheless, even during bad times, the cost of recycling in China is still higher than it is in Alang. Consequently, India's ship breakers have long been able to pay more for a ship than their Chinese rivals have, so the old ships continued to steam past China to Alang and other South Asian ports.

Then the Chinese government stepped in.

In 2013, in search of a means to bolster ship recycling and spur an already sputtering economy, the government adopted a massive ship-recycling subsidy that was recently extended to 2017. Chinese shipowners receive $120 a ton for a recycled ship and an extra $120 a ton applied to the purchase of a new one. There was no longer any economic incentive to send old Chinese ships anywhere but China, and Alang -- and other South Asian destinations -- began to lose out. The consequence for the industry has been substantial. From January to April, before the most recent tumult hit full force, China recycled 65 ships, 24.8 percent of the 262 scrapped worldwide during the period, according to the NGO Shipbreaking Platform, behind India's 69 and Bangladesh's 66. In all likelihood, it will be No. 1 in the next quarter.

That momentum is unlikely to fade. Alang, hobbled by a collapse in steel prices, is in little position to make capital investments, much less compete against a Chinese state-subsidized industry. Even worse, from Alang's standpoint, is that the ship-breaking industry appears to be tilting away from Alang and its old methods to China and its new ones. (Turkey, notably, is also making a play to become a sustainable ship recycler). A new European Commission regulation expected to come into effect later this year requires that European-Union-flagged ships be recycled only in approved, sustainable facilities. Though there are ways to circumvent the regulation, the EU seems particularly determined to punish those who try.

China's ascendancy as a ship breaker won't spell the complete demise of Alang. Countries and shipowners will still send ships to its beaches. But thanks to government investment and a collapsing steel price, China now has a big head start on becoming the destination of the future. Alang, unexpectedly, will have to play catch-up.

Source: Bloomberg view. 31 July 2015
http://www.bloombergview.com/articles/2015-07-31/steel-glut-and-china-subsidy-clean-up-graveyards-of-ships

Bangladesh: No shipyard outside designated zones

The cabinet approved a draft of ‘Bangladesh Ship Recycling Act, 2015′ with some provisions that include imposition of Tk 3.0 million fine if anyone imports ships for recycling purposes without government permission and establishes shipyard beyond the designated zones, officials said.

“The cabinet has approved the draft ‘Bangladesh Ship Recycling Act, 2015′ to safeguard environment and health issues of the labourers in the ship-breaking industry,” cabinet secretary Muhammad Musharraf Hossain Bhuiyan told journalists after the weekly cabinet meeting at Bangladesh Secretariat.
He said if anyone imports ship for recycling purposes without government permission or build shipyard beyond the designated zone, he/ she will be fined between Tk 1.0 million and Tk 3.0 million or one-year jail or both.

He said the draft law also proposed formation of a regulatory authority to be called ‘Bangladesh Ship Recycling Board’ aiming to limit the fast-growing industry to a designated area considering environmental hazards. Besides, it will regulate the sector’s activities.

Prime Minister Sheikh Hasina presided over the meeting at the Cabinet Division of the Secretariat.
The cabinet secretary said to protect the environment, the draft law suggests to establish shipyard zone in separate places (designated zones).

None will be allowed to build shipyard outside the places earmarked by the authority. If anyone builds shipyard outside the designated zone then he/she will have to pay between Tk 1.0 million and Tk 3.0 million fine or face one-year imprisonment or both, the draft law suggested.

If anyone involved in the sector gives false statement to the government for getting no objection certificate (NOC), then he/she will have to pay fine between Tk 0.5 million and Tk 2.0 million or six months jail or both.

Mr Bhuiyan said there were rules for the industry following the High Court observation in 2011.
Previously, it was called ship-breaking but now it will be termed ship-recycling, a sector that enormously plays a vital role in supplying raw materials to steel mills. The proposed law will ensure coastal areas’ environment and waste management.

The Ministry of Industries (MoI) placed the draft law to the council of ministers. The ship- breaking matter was dealt with separately by the ministries of environment, commerce and industries.
The cabinet secretary said the draft law proposed formation of a board to monitor the overall activities of the sector. An additional secretary of the Ministry of Industries will be chairman of the board. Besides, there will be members and experts from different ministries and departments concerned.
Mr Bhuiyan said the approved draft law will now be sent to the Ministry of Law for vetting. After that, it will come again to the cabinet for final approval. And then it will go to the parliament for passage.
The proposed draft, once coming into effect after completing all necessary formalities, will guide all ministries concerned to work concertedly on ship-recycling issue.

The ship-breaking industry, a flourishing and promising sector in the country, plays a significant role in alleviating poverty and contributing to growth of the national economy. The sector is mainly concentrated at Sitakundu in Chittagong helping many people earn their livelihood.

A strong workforce numbering between 2,00,000 to 2,50,000 is now directly and one to two million people are indirectly involved in the sector. The government gets revenue between Tk 6.0 billion and Tk 7.0 billion annually, according the insiders of the sector.

The council of ministers also approved the draft “Petroleum Act, 2015″.
It will now go the Ministry of Law for vetting to regulate import, storage and transportation of petroleum more efficiently through making the existing law a time-befitting one.

Mr Bhuiyan said the energy and mineral resources division placed the draft Act in Bangla in line with the earlier cabinet decision after necessary review and updating the Petroleum Act, 1934 and the Petroleum Amendment Ordinance, 1986.

He said the proposed law kept a provision of raising punishment for violating the rules under the law, including petroleum production, refining, mixing, recycling or reusing.

The cabinet secretary said in case of denial in providing information by the authorities concerned about any accident under the Section 24 (1. Cha) of the draft law, punishment has been raised to six months’ jail or Tk 10,000 fine or both.

He said the authorised officers will also be able to conduct search or seize dubious things during petroleum production, distribution and transportation.

“The draft law also categorised petroleum in three classes — class one, class two and class three — considering their heating value,” he said.

He said a provision has been made under the rules of the proposed law to regulate the issues relating to petroleum import, storage and movement.

He said rules would also have to be followed under the law on petroleum production, mixing, refining, recycling and reuse.

“Caution sign or note will have to be displayed on petroleum containers, while the authorised officers have been empowered to collect petroleum specimen and issue monitoring certificates,” Mr Bhuiyan said.

The council of ministers also reviewed the implementation progress of its decisions for the 2nd quarter (April-June) period of 2015. The rate of success was 64.71 per cent compared to 55.93 per cent of the corresponding period of the previous year.

From April 01 to June 30, 2015 there were 13 cabinet meetings that took 68 decisions. Of these, 44 were implemented while 24 are now being implemented. It also approved two action plans/ strategies and nine memoranda of understanding and enacted three laws in the parliament.

It was also apprised about the finance minister’s participation in the international conference for earthquake rehabilitation efforts in Nepal in Kathmandu on June 25 last, participation of Bangladesh delegations to UN ESCAP May 25-29 last in Bangkok, Thailand and 104th International Labour Conference in Geneva, Switzerland and Fourth Vienna Energy Forum (VEF) 2015 in Vienna, Switzerland.
Source: Financial Express

Source: Hellenic shipping news. 29 July 2015

Where Ships Go To Die


The tuk-tuk (motorised rickshaw) buzzed down the main street of Chittagong, Bangladesh, with the animated ship’s agent tucked in beside me, hands in the air and talking like a used car salesmen keen for me to buy.

I had dreamed about this trip, and here I was, on a special mission for the company who had employed me to go to this most famous place where ships go to die and I was to pick through some of the specialist parts for our fleet.

Anything we could want was going to be here. As a marine engineer, I was like a kid in a candy store yet confused as to where to start to devour what was on offer.

Chittagong is a mammoth wrecking yard for ship spare parts.

This is the biggest vessel graveyard in the world and yet, just like a hospital that carries out organ donations, it is one of the biggest spare parts centres that keeps the rest of the world’s fleet sailing.

This was no simple jaunt out to the bay to watch the hundreds of ship recyclers at work on the aged and purposely beached ships, manually pulling the vessels apart with the aid of an onshore winch (with the scene putting the picture of honey-soaked bread slowly being demolished into parts by ants carried away).

This journey was like driving down a giant supermarket aisle that went on for kilometres, as every spare piece of road was solidly packed with ship’s toilets, anchors, auxiliary engines, pipes and steel, cables and cupboards.

A small creek of water, dribbling from the Karnaphuli River, carried the weight of hundreds of tenders (small service boats) that spilled onto the banks like a pod of orange beached whales.

The nearby township of PaarTuri was a hive of shipping part shops with locals crouched over a recently recycled ship part, polishing it up and getting it ready for sale.

I was fortunate enough to visit Chittagong a few more times in the following years and each time, I was amazed at how every part of a ship can be utilised, re-engineered and sent back to sea.

Alternatively, it is turned into a new vessel in a bay, right next to the area where the ships are destroyed. However, it’s not only amazing memories and photographs that are left behind from such a journey.

Ship scrapping activities pollute the seawater environment in the coastal area, with Bangladesh particularly affected.

It leaves behind an enormous amount of discharge into the marine environment including asbestos, heavy metals, oils, metal fragments and chemicals.

Shipbreaking activities contaminate the coastal soil and sea water environment through the discharge of ammonia, burned oil spillage, floatable grease balls, metal rust (iron) and various other disposable refuse materials together with high turbidity of sea water.

It’s a killer soup. In 2009, to improve ship recycling conditions, the Hong Kong Convention was adopted by the International Maritime Organization and corresponding guidelines followed. However, the convention has been ratified by only three countries.

In 2014, the ship recycling debate was reinvigorated by the European Union drafting new requirements for ship recycling facilities.

These will enter into force in the coming years.

Last year, out of a total of 1026 ships dismantled globally in 2014, 74 per cent of the gross tonnage – or some 641 vessels – were sold to ‘sub-standard facilities’ in India, Pakistan and Bangladesh.

WHAT DOES IT MEAN FOR US IN FIJI AND OUR PRISTINE WATERS?

Next week, a team of visiting Korean students will undergo a course through Fiji Maritime Academy (FMA) to take home a better understanding of Marine Environment Awareness.

The course is designed to introduce awareness of the maritime environment and examine the present day to threats to the oceans and marine life.

The focus is to discuss the human element that contributes to pollution especially in world shipping and look at the measures taken to safeguard the precious marine environment.

What of places like Chittagong, Bangladesh?  While the industry is concerned about Green Peace and other environmentalist groups forcing change it hasn’t happened yet and hundreds of thousands of people are reliant on that industry for their livelihood.

It’s a tough ethical situation and one that our young seafarers will be forced to confront as they continue to travel the oceans, faced with the harsh realities of how fragile our seas and oceans are yet needing to balance the human element and its need economic needs.

Source: Fiji Sun. 29 July 2015

Cash buyer believes ship recycling market bottoming out

Ship recycling activity, Gujarat, India

The CEO of Singapore-based cash buyer Wirana Shipping Corporation told IHS Maritime that he believes scrap prices of ships cannot fall any further and that the market should stabilise in August.

Rakesh Khetan said, "It is a blood bath right now and prices are unlikely to drop further.

"Many yards are empty. Early in the year, we saw many bulkers being sold for scrap after the Baltic Dry Index fell to a historic low. But that has slowed down after scrap prices fell."

Bulker prices have been languishing at USD300-310/ldt while tankers are valued at USD330-340/ldt.

Hardly any tankers are being sold for scrap as the freight market is good. Container ship sales have also slowed considerably after hitting a high about a year ago.

"The imports of cheap Chinese steel have hurt the market, but steel makers in the Indian subcontinent have been lobbying their respective governments to do something to alleviate the situation," said Khetan.

There has also been talk that some recycling yards are facing bankruptcy, though this has yet to happen.

Khetan said, "We have not seen any official bankruptcies among recycling yards but yards are under financial pressure. They're in dialogue with their bankers and banks are cognizant of the fall in the market."

His view was echoed by Indian cash buyer Star Matrix.

In a report issued on 27 July, Star Matrix noted that prices of local scrap steel have gone up slightly by INR200/tonne (USD3/tonne) to settle at INR17,800/tonne.

Star Matrix added, "Having said that, inventory in the yards is at an all-time high, steady constant consumption for three to four months can only bring back the equilibrium between demand and supply. July has seen only about 12 vessels beached, with only one waiting. No substantial increase in demand will be seen, but it seems the price may not correct any more. This is a good time for owners to scrap their tonnage in expectation of smooth and efficient deliveries."

Source: ihs maritime 360. 30 July 2015

Wirana Shipping Corporation: Ship recycling depression will continue for the coming year:

Singapore: Ship recyclers continue to struggle to break even amid very depressed prices, warns the boss of one of the world’s leading cash buyers for scrapped ships.

Rakesh Khetan (Billu) is the CEO of Singapore’s Wirana Shipping Corporation, which typically negotiates between 100 to 150 vessels annually.

“The market for ship recycling is quite dull as prices are quite low. This is a result of commodities slump and oil prices dragging it down further,” Khetan says.

Khetan expects that prices have at least bottomed out and should range between $350 to 400 per ldt in the next six to12 months.

The biggest challenge facing the industry at the moment, Khetan reckons, is the dumping of Chinese steel into the subcontinent markets where ship steel is sold.

“It is very difficult for the ship recyclers to compete when imported steel is cheaper than the ship steel,” Khetan explains. While local governments have tried to stop this dumping, they have failed as Chinese sellers drop their prices and have absorbed the increase in duty on imported steel.

Source: splash 24/7. 29 July 2015

29 July 2015

Bangladesh to clamp down on shipbreakers:

Bangladesh to clamp down on shipbreakers

Dhaka is taking steps to regulate its sprawling shipbreaking industry, including dishing out fines and prison sentences for companies found to not be following the correct procedures.

The Bangladesh Ship Recycling Bill, 2015 is being discussed at the moment in the capital. It will see the setting up of a Bangladesh Ship Recycling Biard to monitor the sector. The prime minister has approved the bill in principle. It will soon go before parliament.

Cabinet secretary Musharraf Hossain Bhuiyan said the law’s aim was to address occupational health hazards of the industry’s huge workforce, ensure safe working conditions, better waste management, and protect the coastal environment.

Bangladesh is the world’s second largest ship breaking nation – the industry employs tens of thousands of people along its southern coast, often working in appalling conditions

Source: splash 247. 28 July 2015

28 July 2015

Legislation seeks answers to government’s use of payments:

Legislation seeks answers to government’s use of payments
The decommissioned USS Ranger makes its final journey as it arrives at South Padre Island July 12 on its way to the Port of Brownsville, where the aircraft carrier is being scrapped.

The former chief counsel to the U.S. Maritime Administration (MARAD) says the agency is misspending money paid by ship breakers into a maritime heritage grant fund intended to support museums and education.

MARAD says it’s not. In any case, federal legislation dubbed the STORIS Act and introduced by a pair of Louisiana senators — and co-sponsored by U.S. Rep. Filemon Vela, D-Brownsville — would require the Government Accountability Office to look into how MARAD is spending the grant money, which comes from MARAD’s sale of surplus government vessels.

Denise Krepp left her job as MARAD chief counsel in 2012 and now lobbies for the ship-breaking industry in Washington D.C. Brownsville-based International Shipbreaking LLC is among her clients.
Although ISL and other domestic scrappers have paid more than $75 million into the fund since 2005, the legally mandated recipients — maritime heritage and preservation groups — still haven’t received all the money, she said.

“We want to know where the money went to,” Krepp said.

The 1994 National Maritime Heritage Act stipulates that 25 percent of the money from ship sales go to the Interior Department each year for the grant program. Further, the money has to be used to “foster in the American public a greater awareness and appreciation of the role of the maritime endeavors in our nation’s history and culture,” according to the NMHA.

The USS Lexington in Corpus Christi and Battleship Texas in LaPorte are two examples of floating maritime museums.

MARAD said in its 2013 annual report that it had used heritage grant money to record oral histories of agency employees and to repair model ships on display at Department of Transportation headquarters in Washington, said Krepp, who doesn’t think this fits the definition of preserving maritime heritage.
MARAD spokeswoman Kim Strong said the law allows the funding to be used to “maintain the more than 7,000 pieces in the agency’s heritage asset collection.”

About half that collection is on display at the AmericanMerchantMarineMuseum at the U.S. Merchant Marine Academy in Kings Point, N.Y., she said. Other MARAD artifacts are on loan to museums around the country, including the Smithsonian’s National Museum of American History and the MaritimeIndustryMuseum in Fort Schuyler, N.Y., Strong said.

Another 25 percent of the proceeds from MARAD vessel sales is supposed to go to maintain the U.S. Merchant Marine Academy and the country’s six state maritime academies, including the TexasA&MMaritimeAcademy in Galveston. Fifty percent of the money is designated for maintenance and repair of the National Defense Reserve Fleet.

Of the roughly $19 million that Strong said MARAD has made available for maritime preservation, $1.3 million funded “a myriad” of federal maritime heritage asset-preservation projects, $2.8 million was transferred to the National Park Service last year to administer a round of National Maritime Heritage grant awards, and $2 million was transferred to the NPS this year for a subsequent round of heritage grants, she said.

Strong said the rest of the $19 million would be divided between the future preservation of maritime heritage assets and annual transfers of at least $2 million to NPS for more grants over the next four years.

Krepp said MARAD has not been making annual disbursements as required by law. A 1998 congressional hearing into MARAD’s ship-recycling program triggered an initial disbursement of grant fund in the amount of $652,616, then nothing until last April, when another $2.6 million was released — still less than the annual 25 percent stipulated by Congress, she said.
Two releases of grant money in 21 years falls far short of the law’s “annual grant” requirement, Krepp said.

“We know how much money we’ve given the federal government, we just want to know how they spend it,” she said.

Source: Brownsville Herald. 25 July 2015

Gujarat HC constituted panel to ensure amenities to labourers at Alang ship-breaking yard:

Quick Digest:
Who: Gujarat High Court
What: Formulated four-member panel
When: 25 July 2015
Why: To ensure amenities to labourers at Alang ship-breaking yard

Gujarat High court on 25 July 2015 constituted a four-member panel to ensure basic amenities like housing and hospital for labourers at Alang ship-breaking yard in Bhavnagar district following a public interest Litigation.

The panel will comprise of Secretary of State Health department as chairman, District Collector of Bhavnagar, Deputy General Manager of Gujarat Maritime Board and a representative of Ship Recycling Industries Association of India.

The panel will be directed to examine the aspect of starting of the hospital at the earliest by Maritime Board itself or through Employee’s State Insurance Corporation.

The court also asked for a report from the panel with regard to construction and allotment of 1000 housing units for labourers. The committee can take help of any government agency. The panel was asked to submit the report by 5 August 2015.

The PIL was filed by a resident of Bhavnagar city stating that the laborers at Alang ship breaking yard lack facilities like proper residential accommodation, hospitals for emergency medical treatment and sanitation which are guaranteed under the labour laws. The PIL also sought proper coastal security and control of pollution.

Source: jagran josh. 27 July 2015

Bangladesh Shipbreaking: No shipyard outside designated zones

The cabinet approved on Monday a draft of 'Bangladesh Ship Recycling Act, 2015' with some  provisions that include imposition of Tk 3.0 million fine if anyone imports ships for recycling purposes without government permission and establishes shipyard beyond the designated zones, officials said. 

 "The cabinet has approved the draft 'Bangladesh Ship Recycling Act, 2015' to safeguard environment and health issues of the labourers in the ship-breaking industry," cabinet secretary Muhammad Musharraf Hossain Bhuiyan told journalists after the weekly cabinet meeting at Bangladesh Secretariat.

He said if anyone imports ship for recycling purposes without government permission or build shipyard beyond the designated zone, he/ she will be fined between Tk 1.0 million and Tk 3.0 million or one-year jail or both.

He said the draft law also proposed formation of a regulatory authority to be called 'Bangladesh Ship Recycling Board' aiming to limit the fast-growing industry to a designated area considering environmental hazards. Besides, it will regulate the sector's activities.

Prime Minister Sheikh Hasina presided over the meeting at the Cabinet Division of the Secretariat.

The cabinet secretary said to protect the environment, the draft law suggests to establish shipyard zone in separate places (designated zones).

None will be allowed to build shipyard outside the places earmarked by the authority. If anyone builds shipyard outside the designated zone then he/she will have to pay between Tk 1.0 million and Tk 3.0 million fine or face one-year imprisonment or both, the draft law suggested.  

If anyone involved in the sector gives false statement to the government for getting no objection certificate (NOC), then he/she will have to pay fine between Tk 0.5 million and Tk 2.0 million or six months jail or both.

Mr Bhuiyan said there were rules for the industry following the High Court observation in 2011.

Previously, it was called ship-breaking but now it will be termed ship-recycling, a sector that enormously plays a vital role in supplying raw materials to steel mills. The proposed law will ensure coastal areas' environment and waste management.   

The Ministry of Industries (MoI) placed the draft law to the council of ministers. The ship- breaking matter was dealt with separately by the ministries of environment, commerce and industries.

The cabinet secretary said the draft law proposed formation of a board to monitor the overall activities of the sector. An additional secretary of the Ministry of Industries will be chairman of the board. Besides, there will be members and experts from different ministries and departments concerned.

Mr Bhuiyan said the approved draft law will now be sent to the Ministry of Law for vetting. After that, it will come again to the cabinet for final approval. And then it will go to the parliament for passage.

The proposed draft, once coming into effect after completing all necessary formalities, will guide all ministries concerned to work concertedly on ship-recycling issue. 

The ship-breaking industry, a flourishing and promising sector in the country, plays a significant role in alleviating poverty and contributing to growth of the national economy. The sector is mainly concentrated at Sitakundu in Chittagong helping many people earn their livelihood.

A strong workforce numbering between 2,00,000 to 2,50,000 is now directly and one to two million people are indirectly involved in the sector. The government gets revenue between Tk 6.0 billion and Tk 7.0 billion annually, according the insiders of the sector. 

The council of ministers also approved the draft "Petroleum Act, 2015".

It will now go the Ministry of Law for vetting to regulate import, storage and transportation of petroleum more efficiently through making the existing law a time-befitting one.

Mr Bhuiyan said the energy and mineral resources division placed the draft Act in Bangla in line with the earlier cabinet decision after necessary review and updating the Petroleum Act, 1934 and the Petroleum Amendment Ordinance, 1986.

He said the proposed law kept a provision of raising punishment for violating the rules under the law, including petroleum production, refining, mixing, recycling or reusing.

The cabinet secretary said in case of denial in providing information by the authorities concerned about any accident under the Section 24 (1. Cha) of the draft law, punishment has been raised to six months' jail or Tk 10,000 fine or both.

He said the authorised officers will also be able to conduct search or seize dubious things during petroleum production, distribution and transportation.

"The draft law also categorised petroleum in three classes -- class one, class two and class three -- considering their heating value," he said.

He said a provision has been made under the rules of the proposed law to regulate the issues relating to petroleum import, storage and movement.

He said rules would also have to be followed under the law on petroleum production, mixing, refining, recycling and reuse.

"Caution sign or note will have to be displayed on petroleum containers, while the authorised officers have been empowered to collect petroleum specimen and issue monitoring certificates," Mr Bhuiyan said.

The council of ministers also reviewed the implementation progress of its decisions for the 2nd quarter (April-June) period of 2015. The rate of success was 64.71 per cent compared to 55.93 per cent of the corresponding period of the previous year.

From April 01 to June 30, 2015 there were 13 cabinet meetings that took 68 decisions. Of these, 44 were implemented while 24 are now being implemented. It also approved two action plans/ strategies and nine memoranda of understanding and enacted three laws in the parliament. 

It was also apprised about the finance minister's participation in the international conference for earthquake rehabilitation efforts in Nepal in Kathmandu on June 25 last, participation of Bangladesh delegations to UN ESCAP May 25-29 last in Bangkok, Thailand and 104th International Labour Conference in Geneva, Switzerland and Fourth Vienna Energy Forum (VEF) 2015 in Vienna, Switzerland. 

Source: the financial express. 28 July 2015

Tk 30 lakh fine for violation of ship-breaking law

The cabinet has approved the draft of Bangladesh Ship Recycling Law, 2015 keeping provision of maximum Tk30 lakh fine and maximum one year imprisonment or both for the violation of the law.

The law kept provision of taking prior permission of the Ship Recycling Board for importing ships, breaking or anchoring in the coast.

The regular cabinet meeting presided over by the prime minister gave the approval on Monday afternoon, BSS reported.

After the meeting, Cabinet Secretary M Mosharraf Hossain Bhuiyan briefed the reporters at the secretariat.

The cabinet secretary said the law is aimed at setting up the industry in a certain area by considering environmental impacts as well as regulating the activities of the fast growing industry.

Under the proposed law, a regulatory authority named Bangladesh Ship Recycling Board will be formed headed by a chairman and a full-time director general.

An additional secretary of the Industries Ministry will be its chairman.

Source: Dhaka tribune. 27 July 2015

Bill to regulate ship-breaking industry gets cabinet nod

The cabinet has approved the draft of the ‘Bangladesh Ship Recycling Bill, 2015’ in order to limit the ship industry to some designated areas from now on and also given nod to the draft of the ‘Petroleum Bill, 2015’.

The drafts were approved at the 70th cabinet meeting held at the Bangladesh Secretariat with prime minister Sheikh Hasina in the chair on Monday.

According to the draft of the ship recycling bill, the government would fix some designated areas for the fastest grown ship breaking industry and anybody violating this act would be penalised.

Cabinet secretary Muhammad Musharraf Hossain Bhuiyan said a regulatory authority would monitor the areas meant for the ship recycling.  “Anyone importing, stocking or breaking ships without permission would be fined with Tk 10,00,000 to Tk 30,00,000 or be imprisoned for one-year term or face both.”

Anyone who would deny to provide necessary information to the regulatory body would be fined Tk 5,00,00 to Tk 20,00,000 or imprisoned for six months, he added.

He said the ship breaking industry would be under the ministry of industries from now on.

Besides, the draft of the Petrolatum Bill, 2015 has been approved in principal with a provision that anyone violating the act would be fined Tk 10,000 or imprisoned for six months. If anyone violating the act repeatedly, the penalty would be doubled. 

The cabinet secretary said storage and transportation of petroleum would be more efficient through making the existing law a time-befitting one.

Source: prothom-alo. 27 July 2015

Experts warn Indian shipbreaking 'dying'

India: More than half of the shipbreaking yards at the Alang hub in India have shut down over the past two years owing to the combined pressure of cheap Chinese steel and new environmental regulations in Europe. These factors are continuing to 'devastate' local economies, gCaptain has reported.

Shipbreaking operations are being pushed further in the direction of modern yards in China and Turkey, not least because of China's steel pricing strategy. Although the nation's economy is slowing, its steel exports soared 51% to a record 93.78 million tonnes in 2014 while its overseas shipments were up nearly 30% in the first five months of this year.

Zahirul Islam, director of PHP Shipbreaking and Recycling Industries in Chittagong, comments: 'Three years ago, there were about 80 yards; now it's down to 25. I think another 10-15 yards will go.' Shoaib Sultan, owner of Horizon Ship Recycling in Karachi, points out: 'It has always been a cyclical business but people who have been in this industry tell me this is the worst in 30 years.'

And Chintan Kalthia, owner of R.L. Kalthia Ship Breaking, adds: 'People are running this business from their heart, not from their mind.' Despite the fact that his yard is breaking the 'biggest ship' now being recycled at Alang, his view of the future is bleak. 'This is my last ship,' he states. 'This business is dying.'

Source: recycling international.

23 July 2015

Bleak Outlook for Asian Shipbreaking:

shipbreaking

In the world's biggest ship recycling center of Alang on India's Arabian Sea coast, workers with blow torches cut segments of steel stripped from the rusting hull of a towering cargo ship, sold for scrap by its Japanese owner.

But in this town - located in Prime Minister Narendra Modi's home state of Gujarat - more than half of the ship-breaking yards have shut in the past two years and the future of the trade in India and neighbors Bangladesh and Pakistan is bleak.

The industry has been hit by a flood of cheap Chinese steel and new European Union environmental rules due later this year threaten to push business to more modern yards in places like China and Turkey - in turn devastating local economies.

"People are running this business from their heart, not from their mind," said Chintan Kalthia, whose company R.L. Kalthia Ship Breaking Pvt Ltd runs one of Alang's more modern yards.

Still, he takes pride in the fact that after months of negotiations with a Japanese owner, his yard secured the biggest ship currently being recycled in Alang.

"But this is my last ship. This business is dying," he added, suddenly sounding weary, as workers outside his beach-side glass office sized slabs of steel peeled from the ship.

Ships sold to South Asian breakers, which control about 70 percent of the market, are winched at high tide onto a beach, where they are taken apart by mostly migrant laborers.

Equipment, such as radars, engines - and even tables and chairs - is taken off and sold, while the steel from the hull is removed for scrap.

The trade in Alang used to employ about 60,000 directly, with thousands more in spin-off businesses, said yard owners.

But roads on the 11 km (seven mile) beach front that locals say used to buzz with people and trucks now appear deserted and dozens of shops displaying everything from crockery to computers ripped out of ships are struggling to get supplies.

"I used to make five, six, seven trips a day," said Munna, sitting atop his tractor with extra wheels able to carry heavy scrap from the yards. "Now I hardly get one or two calls."

BLAME CHINA

With a plunge in steel prices, ship owners are getting about $3.6 million less for the 25,000 tons of recoverable metal from a typical iron ore or coal carrying ship than just eight months ago.

The finger of blame is being pointed at China.

"China is selling below the price of recycled steel," said Amit B. Padia, owner of Sagar Laxmi Ship Breakers, as an orange crane lifted a bathroom removed from a ship onto a trailer.

With China's economy slowing, its steel exports soared 51 percent to a record 93.78 million tons last year and are up nearly 30 percent in the first five months of 2015.

The impact has been felt in Alang where the number of active yards fell to 50 this year from more than 100 in 2014, according to the Ship Recycling Industries Association India.

The number of vessels beached also dropped to a six-year low of 275 last year and was only 54 in the last three months, it said.

"WORST IN 30 YEARS"

The situation in Pakistan appears equally bad.

"It has always been a cyclical business but people who have been in this industry tell me this is the worst in 30 years," said Shoaib Sultan, the owner of Horizon Ship Recycling in Karachi.

The story in Bangladesh is similar.

"Three years ago there were about 80 yards, now it's down to 25. I think another 10-15 yards will go," said Zahirul Islam, director of PHP Shipbreaking and Recycling Industries Ltd in Chittagong.

Ship breakers globally bought 25.2 million deadweight tons (dwt) of vessels up to early July, against 33.8 million dwt all of last year, with Bangladesh the largest buyer, according to shipping services firm Clarkson.

"Everyone thought prices will improve and bought a lot, but now they are sitting on huge inventories," said Islam.

"It will be a disaster in the coming months."

It takes up to nine months for a typical bulk carrier in India to be broken up and its steel processed, said Rakesh Khetan, chief executive of Singapore-based Wirana Shipping Corp, a major buyer of ships for scrap.

ENVIRONMENTAL CONTROLS

As well as facing pressure from cheap Chinese steel, there are also calls to stop beach scrapping because of the danger and environmental damage from pollutants left to drain into the sea.

Highlighting the risks, five people were killed and at least 10 injured after an explosion in a chemical tanker being dismantled in Alang last year, local media said.

Workers can also face health hazards such as lead paint and asbestos when working on ships.

The European Commission will introduce tougher environmental controls some time after December. While not specifically banning beach scrapping, owners of ships registered in E.U. countries will have to scrap them at approved facilities, a move that could favor countries such as China and Turkey where ships are taken apart in docks.

"The European Commission's intention is not to discourage vessel owners from using facilities outside of the EU but to discourage ship owners from using facilities which have proven to present very real danger to life and the general environment," said Mark Clintworth, head of shipping at the European Investment Bank.

In a bid to allay environmental concerns, some yards in South Asia have cemented their work area to try to prevent seepage of oil or chemicals, but many lack the money to do this.

"It takes about $5 million to improve a yard. How can somebody do that when they are bleeding?" said Islam of PHP Shipbreaking in Bangladesh.

Clintworth said his bank and the European Commission could provide investment for South Asian ship scrappers to improve existing operations, as well as for safer and more environmentally friendly new facilities.

But for many that could come too late and some, including Alang's Sagar Laxmi Ship Breakers, are simply targeting other industries such as construction.

Source: maritime executive.  17 July 2015