The IMO convention is not opposed to the continuance of the beaching method of breaking up old ships—followed by recyclers in India—which has been targeted by green lobbies for its lax environment, health and safety standards. Under the beaching method, ships are first grounded and then dismantled, posing hazards to human beings and environment.
But what is more worrying for Indian ship-breakers, particularly those operating from Gujarat’s Alang-Sosiya yards, the world’s biggest, is a separate ship recycling regulation published by the European Union (EU), which seeks to ban the beaching method and shift the ship dismantling activity to dry docks.
The new EU rules require EU-registered ships to be recycled only at sustainable facilities, and a list of these is expected to be published next year. The fallout of this is that the ship-breaking market will be split into a safe market and a substandard market, a labelling which Indian breakers fear will hurt their prospects unless they invest in constructing dry docks and erect huge cranes and lifting devices.
Indian ship-breakers say that survival would be difficult if huge, additional investments are to be imposed on the recycling industry to comply with the EU rules, and have urged the Indian government not to support the EU regulation.
That Alang requires a further upgrade beyond the ship recycling code notified by the Indian government in March 2013 is quite evident. In 2014, 13 workers died at Alang ship-breaking plots despite the strict safety and precautionary measures mandated by the code. This makes it obvious that the code, introduced at the directions of the Supreme Court, has not achieved the desired results and more action was necessary.
That the Indian ship recyclers were loathe to spending money on further upgrades, including investing in dry docks to dismantle ships, when it is passing through hard times brought on by weak demand and rising local steel production, is clearly visible in their demands for continuing with the beaching method. This, according to recyclers, is the cheapest option to break up ships as it needs minimum investments to produce steel, making the breaking industry economically viable.
Of the 1,026 ocean-going ships recycled in 2014, 641 were broken apart on beaches in India, Bangladesh and Pakistan, according to non-governmental organization Ship-breaking Platform, which has been lobbying for an end to the hazardous practice. Alang alone broke up 286 ships in 2014.
Out of the 262 vessels sold for breaking in the first quarter in 2015, more than half (151) ended up on the beaches of South Asia, according to Shipbreaking Platform. Thirty nine of these were owned by European shipowners, most of whom were Greek (30 were beached in this quarter).
This underscores the point that European shipowners prefer to send their old ships for scrapping to facilities in South Asia that follow the beaching method to maximize profits. To circumvent rules, European fleet owners are seen changing their flags from a EU to a non-EU flag just weeks before they are beached. Some of these non-EU flags are hardly used during the operational life of a vessel because of their weak enforcement of global maritime laws. It also explains why only three countries have so far ratified the Hong Kong Convention—Congo Republic, France and Norway. The convention requires ratification by at least 15 nations to take effect globally.
Indian recyclers say the country went way ahead of the rest of the world in terms of safe and environment-friendly ship dismantling by adopting a ship-recycling code in 2013, which was more stringent than the IMO’s Hong Kong Convention. For instance, oil tankers are required to obtain “fit for work" certificates issued by the Petroleum and Explosives Safety Organisation (PESO) or any competent agency authorized by the directorate of industrial safety and health, under the Factories Act, before beaching for the purposes of breaking. The vessels are required to complete gas freeing operation and obtain certificates, failing which the vessels will be sent off. Besides, the ship-breaking code also provides for elaborate provisions for safety compliance such as space for safe passage, fire-fighting equipment, appointing qualified safety officers for supervision, distance to be maintained during cutting operations, providing personal protection equipment, displaying of “dos and don’ts", inspection by state government officials and training of workers, according to the ship recycling code notified by the Indian government in March 2013.
The Indian ship-breaking industry says the IMO Convention favoured shipowners, shipbuilding yards, repair yards and dry docks by palming off key responsibilities to recyclers.
There is no doubt that Alang needs to move to more safer and environmentally sustainable ship-breaking practices to quell criticism that it has become a sort of killing field. Some 470 workers have died in accidents in Alang-Sosiya since it started demolition in 1983, according to The Tata Institute of Social Sciences in Mumbai.
But the real number could be far higher because deaths are under-reported. Since 1983, over 400 fires have broken out and since 2001, 141 fatal accidents and 301 non-fatal ones have taken place. The Alang Sosiya ship-breaking yards dismantled 6,604 vessels till 2014 and produce 3 million tonnes of scrap metal annually.
And, countries such as Japan are extending a helping hand, pushing India to ratify the Hong Kong Convention and the Alang yards to become Hong Kong-compliant. Japan has pledged to give a $180 million loan to the ship-breaking industry in Alang to upgrade 70 yards. The funds would be provided by the Japan International Cooperation Agency and the loan has to be paid back over 40 years.
The planned upgrades that will be undertaken through the loan include the construction of a pre-treatment facility for the removal and treatment of hazardous materials from vessels and the expansion of the facility’s current treatment storage disposal facility (incinerators and oil treatment) to enable 25 tonnes of waste to be incinerated daily.
Lastly, more nations with a strong merchant fleet need to sign up for the convention to show that they are serious about safety and environment while dismantling their old ships without putting the onus on the recyclers alone.
P. Manoj looks at trends in the shipping industry.