22 December 2015

Two Indian ship recycling yards certified as Hong Kong-compliant:

Two ship recycling yards in India have been certified by Class NK as being technically compliant with the IMO’s Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC).

Although the convention has not yet entered into force, statements of compliance were issued by the class society to Shree Ram Vessel Scrap and Leela Ship Recycling, both of which are based in Gujarat, India.

Class NK said both yards have made “substantial improvements” to their facilities to enable “safer and greener ship recycling”, and have developed ship recycling facility plans (SRFPs) needed to certify their compliance with the HKC.

The class society said it verified the SRFPs were being followed by conducting on-site technical inspections.

The HKC itself aims to address concerns about working and environmental conditions at shipbreaking yards, and the management of hazardous substances contained within ships being scrapped.

The convention was adopted in 2009 and will enter into force 24 months after being ratified by 15 IMO member states representing 40% of global merchant shipping by gross tonnage. So far, only three states representing 1.86% of the global fleet’s gross tonnage have ratified the HKC.

Source:splash247. 15 December 2015

http://splash247.com/two-indian-ship-recycling-yards-certified-as-hong-kong-compliant/ 

Not Younger Than 18 Yrs, Unless…

International dry bulk shipowners seem only to scrap ships aged 18 years or older. While a couple of Chinese owners have scrapped ships that were even younger than that. 19 ships out of 28 ships built in 1998 to 1999 and demolished between 2013 and 2015 highlights the effect of the Chinese-flag scrapping cash subsidy provided to the Chinese owners.

China launched a two-year scrapping subsidy program in 2013, a program that was extended for two more years earlier in 2015. The program may in nature be distortive and put in place to inspire an increase in newbuilding orders, nevertheless the increased scrapping volumes is good for the fundamental market balance.

Chief Shipping Analyst at BIMCO, Peter Sand, Says: “all ship owners have dug into the pool of 1995 to 1997-built bulk carriers in recent years, when choosing ships for scrapping.

Chinese ship owners in particular have scrapped even younger ships, built in 1998-2000. They were encouraged to do so by a subsidy program. With the extension of the program it’s likely more of the same will show in 2016 and 2017”.

Fleet Age Profile Courtesy BIMCO, Clarksons

Uneven distribution

During 1995 to 1997, new ships with a combined capacity of 51.5 million DWT were delivered. In the past three years, 11.8 million DWT of those ships have now been scrapped. This is equal to a share of 23%. Marking a significant cut in fleets built in those years.

But, when compared to the breaking of ships built in the 80’s the cut has been much deeper. Two-thirds of the fleet built in those years that were still on the water in 2012 have now been removed. The next two years are likely to wipe out most of the remaining 80’s built ships, as the freight market will hardly deliver significant returns.

Average age of 25.3 years

Ships from 1969 to 2003 have been broken up in the last three years and together brought the average age to 27 years by the time of scrapping. The negative development of the market in the past couple of years becomes clearer when looking at the average age of the individual years.

In 2013 is was 28.2 years, in 2014 it was 27.3 years and in 2015 the average scrapping age has hit 25.3 years.

“The recent development in the scrapping age, is set to continue in 2016.

Even though all older ships are not scrapping candidates by default, they do ‘sit far out on the bench’ in most cases when the owner decides which ship doesn’t make the cut anymore.

In a heavily oversupplied market as we see in these years, scrapping remains the only permanent way to better the fundamental balance. Idling and slow steaming, as effective as they may seem, are only temporary measures not a part of a sustainable solution”, adds Peter Sand.

Source: maritime professional.
http://www.maritimeprofessional.com/news/younger-than-unless-282436 

Platform News – NGO encourages ship recyclers to now apply for EU List

Brussels, 21 December 2015 – The European Commission has opened the application procedure for the European List of ship recycling facilities last Friday, 18 December. Facilities located outside EU Member States are now invited to submit their applications before 1 July 2016. The European Commission will review the applications and then publish a first version of the European List before 31 December 2016 in accordance with the EU Ship Recycling Regulation. Early in January 2016, the EC will also issue guidelines on the requirements for ship recyclers and independent verifiers certifying the yards.

 

“We encourage all ship recycling facilities globally that think they are ready to comply with the European requirements to submit their applications”, says Patrizia Heidegger, Executive Director of the NGO Shipbreaking Platform, “the European List will for the first time provide all stakeholders – in particular the ship owners, but also the shipping industry’s business partners demanding clean logistics and sustainable shipping such as banks, pension funds and the cargo owners – with a clear reference from where to choose high-quality ship recycling facilities in line with international and European environmental and labour standards.”

Apart from holding a licence in their respective country, facilities intending to become EU-listed have to provide a certificate from an independent verifier with expertise in the ship recycling sector and have to accept additional audits if deemed necessary by the European Commission. In order to be approved, ship recycling facilities need to show that they meet both the strict requirements of the EU Ship Recycling Regulation regarding infrastructure and procedures, for instance those meant to guarantee the containment of all hazardous substances and their safe removal as well as safe conditions for the workers. Beyond the structures necessary within the yard, the approval of a facilities also depends on proper downstream waste management as well as the guarantee of all core labour rights – both broadly equivalent to European standards.


Source: NGO Shipbreaking Platform

European list of certified ship recycling facilities: EC opens application procedure:

Brussels – The European Commission has opened the application procedure for the European List of ship recycling facilities last Friday, 18 December. Facilities located outside EU Member States are now invited to submit their applications before 1 July 2016. The European Commission will review the applications and then publish a first version of the European List before 31 December 2016 in accordance with the EU Ship Recycling Regulation. Early in January 2016, the EC will also issue guidelines on the requirements for ship recyclers and independent verifiers certifying the yards.

“We encourage all ship recycling facilities globally that think they are ready to comply with the European requirements to submit their applications”, says Patrizia Heidegger, Executive Director of the NGO Shipbreaking Platform, “the European List will for the first time provide all stakeholders – in particular the ship owners, but also the shipping industry’s business partners demanding clean logistics and sustainable shipping such as banks, pension funds and the cargo owners – with a clear reference from where to choose high-quality ship recycling facilities in line with international and European environmental and labour standards.”

Apart from holding a licence in their respective country, facilities intending to become EU-listed have to provide a certificate from an independent verifier with expertise in the ship recycling sector and have to accept additional audits if deemed necessary by the European Commission. In order to be approved, ship recycling facilities need to show that they meet both the strict requirements of the EU Ship Recycling Regulation regarding infrastructure and procedures, for instance those meant to guarantee the containment of all hazardous substances and their safe removal as well as safe conditions for the workers. Beyond the structures necessary within the yard, the approval of a facilities also depends on proper downstream waste management as well as the guarantee of all core labour rights – both broadly equivalent to European standards.

Source: recycling portal. 21 December2015

http://recyclingportal.eu/Archive/19856

10 December 2015

Platform News - OSHE releases video on the struggle for decent work at the Bangladeshi shipbreaking yards

Brussels, 17 November 2015 – The Occupational Safety, Health and Environment Foundation (OSHE) released yesterday a Bengali-language short documentary aimed at raising awareness about the labour rights and environmental problems of shipbreaking in Chittagong, Bangladesh. The realization of the video, which is part of a national campaign launched by the Platform’s Bangladesh members OSHE, BELA, BILS and YPSA, was supported by the Platform.

The documentary shows that in the last ten years more than 200 accidents occurred at the shipbreaking yards, leading to over 140 deaths. In 2015 alone, 16 deaths and 17 serious injuries caused by the industry based in Chittagong have been recorded. Common accidents include explosions, falls from heights and crushing from falling steel plates. Statistically, accidents at the Bangladeshi ship breaking yards takes at least 20 lives per year. Many more workers die unrecorded due to diseases caused by exposure to toxic fumes and asbestos. Despite strong international criticism of shipbreaking conditions in Bangladesh and also condemnation by the national courts, safety standards for workers, as well as pollution controls, have not undergone necessary improvement.

Child labor is still common practice in Bangladeshi ship dismantling facilities. This is clearly not allowed according to both national and international rules meant to protect particularly vulnerable groups. On the one hand, the legal framework is hardly followed by yard owners, who profit on circumvention of the law; on the other hand, poor enforcement by the authorities is another major issue that has to be tackled as a matter of urgency.

Due to the increased awareness of this situation, more and more shipping companies avoid selling their end-of-life vessels to the muddy beaches of Chittagong. OSHE, BELA, BILS and YPSA will continue to support the empowerment of workers to defend their rights.

Video link:
https://youtu.be/Zn-eo2sfLvg



Source: NGO Shipbreaking platform.

'Model' ship recycling facility close to start-up in Spain:


Spain: It has taken him three years of preparation and negotiating, and now he has all the necessary permits. In June 2016, Antonio Barredo of DDR Vessels will open a ship recycling facility in the northern Spanish port of Gijón, the entrepreneur told Recycling International during the 3rd Ship Recycling Summit this week in Brussels.

'Now that we recently have got the green light, we can move on with the project and final construction', he said. Since 2012 Barredo has been working on the development of the yard which is located on a disused bulk handling facility at the port of Gijón. Once completed, the plant is claimed to comply with 'all EU Ship Recycling Regulations and Hongkong Convention standards and beyond'.

Some Euro 3 million Euro has been invested in the facility. Barredo expects to process some 50 000 tonnes of scrap per year coming from small and midsized (navy) vessels. With the scrap DDR will supply the nearby steel mill of both ArcelorMittal Gijón and steel factories in the industrial heartland around Bilbao.

According to Barredo, the facility is to become 'a model to follow' for full decontamination, separation, treatment and recycling of vessels and vessel’s residues.

A detailed review of the Ship Recycling Summit will be featured in Recycling International's January/February 2016 issue.

Source: recycling international. 4 December 2015
http://www.recyclinginternational.com/recycling-news/9315/business/spain/039-model-039-ship-recycling-facility-close-start-spain

04 December 2015

India’s graveyard for ships dying to get hold of customers:

Gaurav Mehta proudly recalls the day his company was awarded a Guinness World Records title for the largest ship to be scrapped a few years ago.

The task of ripping apart the 1,504-foot-long tanker, Seawise Giant, was completed in nine months by 500 labourers on the west coast of India, in the state of Gujarat, on the shores of Alang, the world’s biggest ship-breaking yard, often described as “a graveyard for ships”.

Today, Mr Mehta’s vast plot on Alang’s beach is empty and idle, however, except for a lone stray dog gambolling about the open stretch of sand and water. Low steel prices amid a glut of cheap Chinese imports, along with the weakness of the Indian rupee, mean money will be lost in the current market from buying and scrapping a ship. That’s why his business has been on hold for the past month, he explains. Just 30 of the 130 once operational ship-breaking plots at Alang are active while the others have shut down, figures from the Ship Recycling Industries Association India reveal.

“We’ve completely stopped, meaning I don’t have a vessel to scrap,” says Mr Mehta, who is a director of Priya Blue Industries, a ship-breaking company owned by his father. “The market has been going down and also the dollar is increasing, so because of that we were losing too much money. The shoreline used to be full of ships. In the good days, there were very good margins.”

Cruise liners that once carried hundreds of tourists to exotic locations and huge container ships that made voyages to far-flung ports are among the vessels from all over world that have ended up on Alang’s shores after they are deemed to have come to the end of their working lives. They are scrapped mainly for their steel because the metal can be sold on for use in construction, for example. Other components of the vessel, including the mechanical parts, lifeboats and furniture, are also sold off to maximise revenues.

Until recently, Alang’s beaches were swarming with activity as ship-breaking firms profited from this labour-intensive, grimy exercise of demolishing these vessels. This dirty work can more easily and cost-effectively be done in countries such as India, Bangladesh and Pakistan, because of lower labour costs and fewer restrictions when it comes to dealing with hazardous materials such as asbestos and lead, as well as environmental pollution, compared to many other parts of the world. Now just a handful of ships are being torn down in Alang.

“We don’t really have any business,” says Pradeep Bansal, who owns Shreeji Marine Agency and acts as an agent for ship breakers in Alang. “We are doing nothing. I’m just spending money, losing money.”

Data from the Ship Recycling Industries Association India shows that the number of ships being scrapped at Alang has fallen sharply over the past three years. In 2012, the industry reached a peak, with a total of 432 ships recycled at Alang. That reduced to 306 in 2013, then to 286 in 2014. In the first 10 months of this year, only 164 ships scrapped, compared to 251 in the same period last year. Last month, only four ships were recycled in Alang, while there were 16 in the same month last year and 40 in October 2012.

“It’s pertinent to note that forex and inventory losses would have been staggering had ship-breaking activity continued at the [same] pace,” according to Crisil Ratings, a unit of Standard & Poor’s rating agency.

Those owners of ship-breaking businesses “with deep pockets have so far managed to sail in these choppy waters”, according to Crisil. “The worry is, if steel prices don’t rise and the rupee remains volatile, the world’s largest graveyard for ships could turn into one for shipbreakers, too.”

The rupee has depreciated to more than 66 against the dollar compared to about 62 a year ago, making it more costly for breakers of ships to buy vessels.

This has “added to the woes of an industry already reeling under 12 billion rupees [Dh659.8 million] of cumulative forex losses in the last three fiscals”, Crisil says.

“The 12-month period [to September this year] saw domestic steel demand muted, resulting in a 23 per cent decline in average realisation on scrap steel from 26,504 rupees per tonne in October 2014 to 20,398 rupees per tonne in September 2015. The price of scrap steel, which was declining between 2 per cent and 4 per cent on a monthly basis, plunged nearly 20 per cent after China moved to de facto devalue the yuan in August 2015.”

The ship-breaking plot of VMS Industries in Alang offers a glimpse into the heydays of the industry and just what a huge undertaking it is to demolish a ship. In the heat of the afternoon sun, 200 labourers are at work dismantling a bulk carrier, which used to be owned by a German company. A team of men rushes by carrying a steel plate, anxious to offload it on to a lorry as they buckle under its tremendous weight. Others are on the beach using blowtorches to cuts sheets of metal into smaller pieces. Many more are on the ship itself, gradually tearing it apart.

Ajit Kumar Jain, whose family owns the company, says he remains optimistic about the industry, although other shipbreakers in Alang say he will definitely make a loss on the ship currently being scrapped.

“We will buy another ship after we finish this one,” says Mr Jain. “I don’t think the market will go down further. In this business, or any business, it may be up or it may be down. One year you gain and one year you lose. It’s not confirmed that we will lose money on this ship. We’ve only scrapped 10 per cent of it so far, so perhaps tomorrow the market may be up.”

Weary labourers from various sites congregate at a chai stall in Alang on a midday break.

“Many of the labourers have left Alang because there isn’t enough work for everyone,” says Balram Bahra, 20, from the eastern Indian state of Odisha. He has worked in Alang for the past three years, loading steel plates on to lorries, earning 240 rupees a day. He says he is worried about his livelihood, and may have to return to Odisha to become a farm labourer.

Workers in Alang typically come from poor states including Bihar, Odisha, and Uttar Pradesh.

Labourers explain that they would earn less than half of what they can make in Alang if they remained in their home states. Mr Bahra says that he would earn 100 rupees a day labouring on a farm in Odisha.

Another Alang labourer, Rohit Pradhan, 38, also from Odisha, says he likes the work, despite the fact that it is tough and he has scars to show from various injuries he has suffered from his 20 years at the ship-breaking yard.

“I’m worried there will be fewer and fewer jobs,” says Mr Pradhan, who supports his wife and two sons with the 300 rupees he earns a day.
And Mr Mehta is also concerned that the industry will not pick up any time soon.
“You can buy a new plate at the same price as a scrap steel plate because of China, so no one is going to buy scrap steel,” he says, adding that ships are going to Pakistan and Bangladesh now instead of India, where labour is even cheaper.

“We try to remain hopeful that things will improve,” says Mr Mehta. “This business has always been a cycle. But this time we are not very hopeful because it has never been so bad.”

Source: Hellenic shipping news. 30 November 2015