19 March 2018

Seatrade faces criminal charges for illegal scrapping of ship:

The Netherlands-based shipowner Seatrade has faced criminal charges from a local public prosecutor as part of a case alleging that the company has been engaging in illegal scrapping practices.

Seatrade has allegedly sold vessels to scrap yards in countries that undertake ship breaking practices that endanger the lives and health of workers, as well as pollute the environment.

After hearing the case, a Rotterdam Court has imposed a fine of €2.35m and ordered the confiscation of profits made by Seatrade on the illegal sale of four ships, including Spring Bear, Spring Bob, Spring Panda and Spring Deli.

Three of Seatrade’s top executives could also face a six-month prison sentence.

According to NGO Shipbreaking Platform, Spring Bear and Spring Bob were sold to Indian and Bangladeshi breakers respectively.

Seatrade also sold the Spring Panda and Spring Deli vessels in Turkey without following the international laws governing the export of hazardous waste or the European Union (EU) Waste Shipment Regulation, among other regulations, the Shipbreaking Platform alleges.

All four vessels made their last voyage to the breaking yards from the ports of Rotterdam in the Netherlands and Germany’s Hamburg in 2012.

NGO Shipbreaking Platform founder and director Ingvild Jenssen said: “Despite ongoing criminal investigations, Seatrade sold two more ships, the Sina and Ellan, for dirty and dangerous breaking on the beach in Alang, India, in August 2017.

“This case adds itself to the growing demand, including from investors and major shipping banks, for better ship-recycling practices.”

In addition, authorities in Norway, Belgium, and the UK are investigating similar cases of illegal ship breaking practices involving companies such as Maersk and CMB, as well as GMS and Wirana.

Source: ship-technology. 15 February 2018

New law for ship-breaking industry:

The piece of legislation that the Jatiya Sangsad late last week adopted to discipline the country's ship-breaking industry has been long overdue. Notwithstanding its importance in the economy and the risks that it poses, when unregulated, to the environment, the governmental efforts were too scanty for streamlining the ship recycling industry that has flourished along the coastline of Chittagong since early 1980s. The industry that now employs hundreds of workers and makes available more than half of the basic raw materials to the re-rolling mills, is one of the largest in the world.

However, the industry did not originate locally and grow spontaneously. When the cost of ship-breaking had gone abnormally high in the developed countries, ship owners chose the developing countries like China, Vietnam, the Philippines and Bangladesh to scrap their vessels because of low cost of labour and lack of concern about environment and safety issues in these countries. In Bangladesh, the local entrepreneurs took the advantage of the situation. They started importing increasing number of old vessels for dismantling along the coastline. However, the relevant agencies, from time to time, issued a few rules to help contain environmental damage and ensure safety requirements. But the enforcement of such rules, whatever these were, was very lax.

Almost everything recovered from the scrapping of a ship, including hull, engine, machinery, generators, furniture, etc., is recycled and reused in Bangladesh. But the very method used in scrapping of ships, lack of concern among the ship-breakers about the safety of poor workers and disposal of environmentally hazardous goods and chemicals turned out to be serious problems. Questions started pouring in from different directions about environmental and safety issues. But such concerns had largely fallen on deaf ears of the relevant authorities. Thus, all the pleadings for taking appropriate measures to control the harmful activities were virtually ignored. Under such circumstances, the industry continued to expand and the steel manufacturing units, dependent on scrapped metal, witnessed an unabated growth.

But environmental degradation apart, what emerged as the most serious concern, is the physical safety of workers engaged in dismantling of scrapped vessels. Hundreds of workers have died so far and a few thousand more received serious injuries in accidents in ship-breaking yards. The law passed by the parliament on ship-breaking contains certain provisions to mete out punishment to individuals/organizations that violate its provisions. The issue of workers' safety has also been taken care of. The operators in the industry will now have to extend life insurance coverage to each and every worker. More importantly, the law provides for establishment of a separate zone for the ship-breaking industry that has been growing haphazardly along the coastline in different shipyards.

The ship-breaking industry has been fetching a handsome amount of revenues for the government. So, the industry deserves fair treatment in all matters. But what should get top-most priority is the country's environmental interests and workers' safety and security. The industries ministry has fulfilled the first requirement by adopting the law in question. But equally important will be its proper enforcement. Hopefully, the government will not fail on this account.

Source: the financial express. 29 January 2017

20 February 2018

Recycling - Volatility reigns

Another flat week concluded in the recycling markets, due to a steady reluctance from recyclers to pay some of cash buyers asking prices.

There were also some reverberating volatile fundamentals (in tandem with the recently rocky international stock markets) started to influence a nervous sub-continent recycling market, GMS said in its weekly report.

Local steel plate prices suffered another set of worrying reversals in midweek (just as global stock markets started to plunge), only to find their feet again in the final few days of the week, subsequently bringing some needed relief to the anxious ship-recycling sector.

Several cash buyers were still hoping that the markets hold going into the traditionally quieter Chinese New Year holiday period, as there remain several expensive and unsold vessels in a variety of hands.

Meanwhile, the VLCC market continues to shed tonnage at pace as news of yet another unit being committed, surfaced last week. This has taken the total to almost 10 units sold/beached for the year already, GMS said.

In the light of accusations that the company was behind the sale of four reefers for recycling, led by NGO Shipbreaking Platform, GMS said that it categorically denied being the buyer of, or associated in anyway with the purchase of the vessels mentioned by NGO.

GMS said it condemned the circulation of such false and inaccurate information. This reckless and reprehensible action by the NGO Shipbreaking Platform is intended to advance its own agenda and to manipulate public opinion by deliberately circulating ‘Fake News’ disguised as fact.

“It is regrettable that the NGO Shipbreaking Platform continues to abuse the power of their ‘megaphone’ by wildly spreading misinformation and ignoring the need to present fair and accurate information to the public,” GMS said.

GMS also said it was proud to have developed a responsible ship recycling programme (RSRP) through which, it has supervised the recycling of more than 30 vessels a year and has also motivated the interest of recycling yards in both India and Bangladesh to upgrade their standards of recycling in line with the Hong Kong International Convention.

Brokers reported that the 1999-built VLCC ‘Plata Pioneer’ to India or Bangladesh breakers for about $440 per ldt in a gas free condition.

In addition, the 1992-built Aframax ‘Basilia’ was said to have been committed to Indian sub-continent recyclers for $458 per ldt also in a gas free condition.

Source: tanker operator. 16 February 2018

Maersk believes several problems in Alang are now solved

Improvements at three yards in Alang have been so big, that they now represent a real alternative to China and Turkey, says Maersk CEO Søren Skou. However, the group acknowledges that there is still uncertainty with regard to the marine environment and problems with access to medical aid.

So much progress has now been made at a handful of yards in Alang, that they are either of equal quality or even better than their more well-reputed competitors in China and Turkey, says Maersk CEO Søren Skou in the group's new sustainability report. The report details how Maersk believes that many of the problems have been solved at the three yards where six vessels have been scrapped in the last two and half years since the company decided to start using 

"We're very aware that companies can no longer stay on the sidelines when it comes to global issues, and I'm very satisfied with the level of our sustainability ambitions," Skou says in the report, highlighting ship recycling as an example. 

"More specifically, I'm impressed with what has been achieved over such a relatively short period of time in the ship recycling project," says the CEO.

Maersk has received severe criticism on numerous fronts for using the beaching facilities in India where vessels are sailed directly onto the beach and dismantled in the tidewater zone. 

According to some critics, the method is so dangerous for workers and the environment that it should be completely forbidden. But in the group's sustainability report, Maersk describes an industry in the midst of change and describes Alang as a viable alternative to China and Turkey. 

However, the report also notes that there are still uncertainties concerning water pollution and unresolved issues with access to acute medical assistance. 

Six ships scrapped 

The first two Maersk vessels arrived at the Shree Ram yard in Alang in June 2016 and have since been followed by another four vessels at two neighboring yards. 

The decision to use the severely criticized yards was made on the grounds that improvements can better be achieved by making demands, rather than by avoidance all together. But it is not just a matter of creating better conditions for the environment and the workers. 

Indian yards typically pay USD 1-2 million per ship more than what they pay in China and Turkey, where experts say standards are higher. As such, there is also an economic reward for carriers when selling vessels for shipbreaking in India. 

Maersk has been open about this aspect. In February 2016, the group wrote in a sustainability report that it expected to make additional amount of up to USD 150 million over five years by scrapping vessels in India.

However, the group has since distanced itself from this number. In the new report, Maersk writes that it actually would have been more profitable to continue as before with a few ships sent to be scrapped every year in China and other old vessels sold on to new owners. 

Instead, Maersk stresses that the group wanted to use its position as the world's largest container carrier to create better conditions at the yards in Alang, which have historically been massive polluters and experienced several fatal accidents. 

Oils, metals and ship coating 

And according to Maersk, many of the problems have already been solved at the three yards which have been used so far. 

During the breaking of the six vessels, external consultants have continuously monitored whether the process has lived up to the group's standards. According to the report, the only remaining problem at the three yards, is that there is too much overtime work.


Maersk has also commissioned an environmental report which tested for 18 hazardous substances in the waters around the beaching yards. The report was finished in November 2017 and shows that 15 of 18 substances were at a level, which is deemed not dangerous for the environment. 

However, oil, metals and remains from anti-fouling coating were all above the limit. According to Maersk, the oil does not stem from the actual cutting of the vessels, but from ship parts and engines which have been dragged across the sand. However, there have been no leaks in 2017.The group further highlights that it does not use toxic ship coating and that tests show that the remains came from other sources. 

The picture is less clear when it comes to high levels of metals in the water. Maersk writes that the study's method does not make it possible to decide how much of the pollution happened as a consequence of the activities at the yards. It is further assessed that the level is the same as in China and Turkey. 

The release of toxic substances in the ocean typically happens when the vessel is cut up and the parts are allowed to fall into the tidewater zone. This method is still used in the primary cutting at one of the yards used by Maersk, while the two others now have a crane which can lift the parts directly onto an impermeable floor, Maersk notes. 

One hospital with 20 beds 

While Maersk believes progress has been made, there are still problems in Alang that extend beyond the individual yards. 

In April 2016, the European Community Shipowners' Association (ECSA) developed a report after an unannounced visit to the Indian coastal area where two representatives from Maersk Group also participated. 

The report shows that despite the hazardous work, there was only one hospital in Alang with room for around 20 people. Furthermore, there were two ambulances to drive injured workers to the hospital in the city Bhavnagar, which is around one hour's drive from the area. 

The number of employees in Alang fluctuates, but during peak periods there can be 30,000 to 40,000 workers. 

Maersk stresses in the report that all workers at the three yards which the company uses have been trained in safety and live under approved conditions. But the group further notes that lack of access to acute medical care is the biggest problem in Alang which has not been resolved. 

The carrier is therefore working to establish a mobile health care station and will further investigate other possibilities along with the Red Cross. 

Getting others on board 

Despite the lack of access to medical care and the dangerous concentration of oils, metals and coating remains in the water, Maersk still finds that the development is proof that standards can be lifted in Alang. 

"After 20 months, three yards in Alang, India, are performing at the same level or better than yards in China and Turkey, which used to be the only options for economically viable and responsible ship recycling," says CEO Skou in the new sustainability report. 

He thus thinks that other carriers should follow the example set by Maersk. 

"The door to changing an otherwise gridlocked situation has been opened, and we now need to accelerate this development," he says. 

This Thursday, ShippingWatch requested access to the environmental and safety reports which Maersk had commissioned, but had not received a response by the deadline for this article. 

Around 85 percent of the world's merchant fleet is scrapped in India, Bangladesh or Pakistan. The IMO's rules for responsible ship recycling in the Hong Kong Convention have not yet been ratified but are used as a standard by both yards and carriers. 

At the end of 2018, the EU's regulations in the area will take effect. Depending on who you ask, the EU rules do not allow beaching in practice.

Source: shipping watch. 16 February 2018

GMS Market Commentary on Shipbreaking in Week 07 - PAKISTAN POTENTIAL

Last week, on the back of a meeting between the Pakistan Ship Breakers Association (PSBA) and local authorities, ongoing rumors surrounding a potential Pakistan re-opening for tankers within the next month began to further intensify. The news may well be greeted with the usual degree of outlandish Cash Buyer speculation that we have frequently seen through the course of the recent past. However, the reality is that Pakistan is a market that too has softened in recent weeks and an influx of tanker candidates is hardly going to help in boosting levels from Gadani Buyers.

That being said, Sinokor of South Korea continued their clear-out of older tonnage with the sales of a Capesize bulker (a highly sought after and rare breed of vessels these days) in addition to an Aframax tanker, at some unsurprisingly bullish numbers.

Moreover, given the spate of fixtures through 2018, there was of course, another VLCC concluded on private terms this week, to swell the growing ranks of unsold tonnage out there, and perhaps another sign that Cash Buyer confidence on a Pakistan reopening may be well-founded.

Meanwhile, pricing has remained stagnant for several weeks now, with marginal declines witnessed in both India & Pakistan and Bangladesh just about holding onto their levels, through what has been an overall underwhelming start to the year for Chittagong buyers.

Finally, Chinese New Year holidays have certainly interrupted the flow of deals and deliveries (as minimal as they have been) this week and it may be a stilted week ahead as people slowly drift back to work from their various holidays.

Source: steel guru. 20 February 2018