Copyright 2013 Sustainalytics - All rights reserved • While historically under the radar, shipbreaking, the process of dismantling end-of-life vessels for scrapping or disposal has become a target of stakeholder scrutiny. Its adverse environmental and social impacts include poor working conditions, child labour and environmental damage. Beaching, the most controversial form of shipbreaking, remains the most commonly used method in South Asia. • Controversial shipbreaking not only implicates the shipping and dredging industries, but a range of other industries from consumer services to utilities. Among the most exposed stock-listed companies are marine transportation companies such as Odfjell SE and Mitsui OSK Lines Ltd, and consumer services company, TUI AG. With few exceptions, overall preparedness across these industries is limited. • Various conventions have explicitly addressed the issue of shipbreaking, further amendments and ratifications to which pose regulatory implications for companies. Meanwhile, the European Parliament may begin imposing penalties on EU ship owners who send their vessels for dismantling in the developing world, reflecting its toughening stance on controversial shipbreaking. • Pressure from stakeholders is increasing, resulting in reputational risks for companies. Banks that have financed controversial shipbreaking activities have also been explicitly targeted. Some companies have already committed to ending beaching and adopting best practices, yet the vast majority continue to send their end-of-life vessels to South Asia to be dismantled using controversial methods. Understanding Shipbreaking Shipbreaking is the process of dismantling vessels for scrap recycling or disposal. While some other alternatives for ship disposal exist (e.g., deep water sinking and floating storage), the dismantling of a vessel is more attractive from an economic point of view because it allows materials such as steel to be recycled. The shipbreaking process, which includes the removal of equipment, deconstruction of a vessel, and recycling-related activities, involves a number of different players, including ship owners, ship brokers and the companies that finance their activities. When a vessel ages and maintenance costs become too Controversial Shipbreaking Dismantles Stakeholder Trust Jean-Florent Helfre April 2013
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•Whilehistoricallyundertheradar,shipbreaking,theprocessofdismantlingend-of-lifevesselsforscrappingordisposalhasbecomeatargetofstakeholderscrutiny. Itsadverseenvironmentalandsocialimpactsincludepoorworkingconditions,childlabourandenvironmentaldamage.Beaching,themost controversial formof shipbreaking, remains themost commonlyusedmethod in SouthAsia.
•Controversial shipbreakingnotonly implicates the shippinganddredging industries,buta rangeof other industries from consumer services to utilities. Among the most exposed stock-listedcompanies are marine transportation companies such as Odfjell SE and Mitsui OSK Lines Ltd,andconsumerservicescompany,TUIAG.Withfewexceptions,overallpreparednessacrosstheseindustriesislimited.
•Various conventions have explicitly addressed the issue of shipbreaking, further amendmentsandratificationstowhichposeregulatory implicationsforcompanies.Meanwhile, theEuropeanParliamentmaybeginimposingpenaltiesonEUshipownerswhosendtheirvesselsfordismantlinginthedevelopingworld,reflectingitstougheningstanceoncontroversialshipbreaking.
•Pressure from stakeholders is increasing, resulting in reputational risks for companies. Banksthat have financed controversial shipbreaking activities have also been explicitly targeted.Some companies have already committed to ending beaching and adopting best practices, yetthevastmajority continue to send theirend-of-life vessels toSouthAsia tobedismantledusingcontroversialmethods.
Understanding ShipbreakingShipbreaking is the process of dismantling vessels for scrap recycling or disposal. While some otheralternatives for ship disposal exist (e.g., deepwater sinking and floating storage), the dismantling of avessel ismoreattractivefromaneconomicpointofviewbecause itallowsmaterialssuchassteeltoberecycled.Theshipbreakingprocess,whichincludestheremovalofequipment,deconstructionofavessel,andrecycling-relatedactivities,involvesanumberofdifferentplayers,includingshipowners,shipbrokersand thecompanies that finance theiractivities.Whenavesselagesandmaintenancecostsbecometoo
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highfortheowner(typicallyafter20years) itmaybesoldtoashipbreaker,eitherdirectlyor indirectlythrough a broker or cash buyer. The sale price of a vessel is closely linked to factors such as the ship’semptyweight,definedasits lightdisplacementtonnage(LDT)andpricesinthescrapmetalmarket. It isestimatedthata25-year-oldcontainervesselwithanemptyweightof10,000LDTisworthapproximatelyUSDfivemillion.1
•Withthetop-down approach(alsocalledthequayside or buoy approach),thevesselissecuredalongaquaysideandpiecesareremovedbycrane,startingwiththeuppersection.Becausedismantlingofallpiecesisdonefromabove,theriskthatpieceswillcomeincontactwithseawaterandpollutetheenvironmentislimited.
Exposure to Controversial ShipbreakingCountries ImplicatedToday, three countries monopolize global shipbreaking activities: Pakistan, India, and most notably,Bangladesh. InBangladesh, the shipbreaking industry is highly competitivewithprofitmarginsofup to16per cent.3 The lackof enforcementof environmental and safety legislations in these three countriestogetherwithlowlabourcostsandfavourablegeographicalsettingshavecontributedtothesuccessoftheindustry.TurkeyandChina,withsomewhatmorestringentenvironmentalandsafetyregulations,accountforapproximately25percentofshipbreakingactivities.WhereasbeachingismostwidelyusedinSouthAsia, Turkish shipyards usually adopt the slipway method, while China typically employs the quaysideapproach.
Shipbreaking yards in the European Union and North America follow the most stringent social andenvironmentalregulationsandusethemostsustainablemethods(i.e.thedrydockorquaysidemethods),but their capacity is underutilized since profit margins for ship owners tend to be higher if the vesselis sold to anon-OECD country. InNovember2012,US-basedNGOBaselActionNetwork (BAN) releaseda report on industrial shipbreaking capabilities in North America, concluding that the North Americanmarkethadthecapacitytodismantle803,000LDTperyear,withanestimated389,000LDTofunderutilizedcapacity.4 Meanwhile the European/Turkish shipbreakingmarket, whose capacity is 1,007,000 LDT peryear,cannotcopewiththeflowofEU-flaggedend-of-lifeships,whichisprojectedtoreach1,640,000LDT
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insubsequentyearsaccordingtotheEuropeanUnion. North America’s underutilizedcapacity could accommodate 61 percent of the current annual excess ofEU-flaggedtonnage,butthereisstilluncertainty onwhether companiescouldbe incentivized to send theirshipstoNorthAmerica.
In March 2013, the Europeanparliament accepted a proposal tocreate a ship recycling fund to financegreener and safer shipbreaking yardsworldwide. Although not yet approved, thisproposalwillputanadditional financialburdenonEUshipownersastheywillhavetopayanextra feeto dismantle their vessels in South Asia. Though next steps and timelines remain unclear at this time,it is evident that, ashome to someof theworld’s largest shipowners, theEUhas a key role toplay inpromotingamoresustainableshipbreakingindustry.
Ship Owners ImplicatedWhilespanningawiderangeofindustries,theshipownersmosthighlyimplicatedinshipbreakingallownanextensivefleetofvessels.Thesecompaniescantypicallybefoundinsevenindustries:transportation(mainly marine transportation and integrated logistics companies), construction and engineering(especially dredging companies), energy equipment and services, oil and gas consumables, utilities(especially liquefied natural gas or liquefied petroleum gas tanker operators), aerospace and defence(mainlysupplierstothenavy),andconsumerservices(mainlycruiselineoperators).
Whereas the shipbreaking methods adopted in each region vary, the most controversial methods aredeployed in Bangladesh, India and Pakistan. The table below identifies stock-listed ship owners whichstand out among their peers for the high number of vessels sent to these three countries by theirEuropeansubsidiariesintheperiodbetween2010and2012.AmoredetailedlistofcompaniestrackedinSustainalytics’platformexposedtoshipbreakinginSouthAsiaisincludedinAppendix1.
Company Name Industry Country # Vessels SentChina COSCO Holdings Company(SEHK:1919) MarineTransportation HongKong 5
Mitsui OSK Lines Ltd.(TSE:9104) MarineTransportation Japan 7
Nippon Yusen Kabushiki Kaisha(TSE:9101) MarineTransportation Japan 5
Odfjell SE(OB:ODF) MarineTransportation Norway 13
Royal Boskalis Westminster(ENXTAM:BOKA) Construction&Engineering Netherlands 4
STX Pan Ocean Co., Ltd.(KOSE:A028670) MarineTransportation SouthKorea 5
TUI AG(DB:TUI1) ConsumerServices Germany 7
Examples of privately held ship owners include MSC, CMA CGM, Precious Shipping, PT Berlian Laju Tanker, Crowley Maritime Corporation and Varsha Marine. Switzerland-based MSC is particularly exposed as 23 of its vessels were sent to South Asia in 2012 alone.
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Environmental & Social ImpactsEnvironmental ImpactsLike other industrial activities, shipbreaking activities result in significant environmental impacts. Notonlydothevesselsthemselvescontainhazardousmaterialsandothertoxicsubstances,suchasmercury,arsenicandcadmium,buttheprocessofdismantlingcreatesnewtoxicsubstancestriggeredbychemicalreactions. Ifnotcontained,thesesubstancescancontaminatewaterresources(includinggroundwater),theatmosphereandthesoil.Beachingposesthemostsevereenvironmentalconsequencessincevesselsare exposed to thenatural environmentwithout containment. Beaching alsoposesproblems to coastalandoceanbiodiversityaswellaslocalcommunities.FishingcommunitiesincloseproximitytoSouthAsianshipbreakingyardsareparticularlyatrisk.Astudypublishedin2010showedthatatAlangbeach,India’smainshipbreakingyard,species,suchasthecoliaandhilsacatfish,havedisappearedandthefishsizehasdecreased.5
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Social ImpactsHealth & SafetyShipbreaking operations expose workers to a wide range of hazardous substances including asbestos,chlorofluorocarbons(CFCs),leadandpolychlorinatedbiphenyls(PCBs).Thefigurebelowliststhepotentiallocationsofhazardousmaterialsinavessel.In2006,anIndianmedicalstudyshowedthat16percentoftheshipbreakersworkingonAlangbeachsufferedfromasbestosis,alungdiseasecausedbytheinhalationofasbestoswhichcanleadtodeath.
Labour RightsShipbreakingisalabourintensiveindustry;inBangladeshapproximately30,000peopleworkintheyardsand another 50,000 are involved in the trade ofmaterials.Working at shipbreaking yards in the Indiansub-continentoftenpaysmorethanworkingonafarmorothertypesofinformalemployment.However,basiclabourrightssuchastherighttofreedomofassociationandsoundworkingconditionsareregularlyviolated.Workersareoftenhiredlocallybyforemenwhovisitpoorvillagesandmisleadthelocalsabouttheworkingconditionsatshipbreakingyards.
The industry is also implicated in the rampant use of child labour. In 2008, an investigation by theInternationalFederationforHumanRightsrevealedthat20percentoftheworkers inChittagong(akeyshipbreakinglocationinBangladesh)wereyoungerthan15yearsold.7Drivenbytheneedtosupporttheirfamilies,youngboysorgirlsseekunskilledworkatshipbreakingyards,oftencuttingandcarryingpiecesofsteel.
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The Legislative ContextThe adverse social and environmental impacts associated with shipbreaking have prompted legislativeaction. Whereas social impacts are largely addressed via the International Labour Organization (ILO)conventionsonchildlabour,healthandsafetyandotherbasiclabourrights,twoconventionsaddresstheenvironmentalrisksassociatedwithcontroversialshipbreaking:theBaselConventionandtheHongKongConvention.Thetablebelowsummarizesthefocusoftheseconventions.
Basic labour rights Child Labour
Hazardous Waste and Material
Health and safety
Water contamination
ILOConventionsBaselConvention
HongKongConvention*
The Basel ConventionThe Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (theBaselConvention)cameintoforcein1992andhasbeenratifiedbyallcountriesexceptAfghanistan,HaitiandtheUnitedStates.Theconventionaimstoprotecthumanhealthandtheenvironmentagainsttheadverseeffects resulting from the generation,management, transboundarymovements anddisposal ofhazardousandotherwastes.AccordingtotheBaselConvention,ashipmaybedefinedaswastebecauseof thehazardousmaterials it contains. This landmark international lawmarked the first time in historythat shipswere treatedashazardouswaste.However, noenforcementprovisionswere set in theBaselConventionandnobanwassetonwasteexports.
India and the Basel Convention India is a major shipbreaking country, with yards in Mumbai and Alang representing the most active shipbreaking yards in the world. The country ratified the Basel Convention in 1992 and translated the rules into its own legislation. However, given the overall lack of enforcement by Indian authorities, ships containing hazardous waste are still sent to India to be dismantled. In June 2012, responding to a lawsuit filed by the Research Foundation for Science, Technology and Natural Resource, an Indian Supreme Court ruled that vessels arriving for recycling in Indian waters and containing hazardous materials, such as asbestos or PCBs, must follow the United Nations Basel Convention treaty on hazardous waste movement. Consequently, owners of ships coming from Europe or the United States must notify the Indian authorities about the presence of hazardous waste and receive approval from Indian authorities before entering into India’s waters.
The “Basel Ban”Followingcriticismsbynon-governmentalorganizations(NGO)andsomeNordiccountries,anamendmentto the Basel Conventionwas drafted in 1995 to address its loopholes. This amendment,which is oftencalled the “ban amendment” or “Basel Ban,” declared the shipping of waste from an OECD country toa non-OECD country to be illegal. Several countries, including all EU countries, China and Turkey haveratifiedthisbanamendment.However,thebanhasnotyetenteredintoforcesinceitrequiresratificationbythree-quartersoftheBaselConvention’smemberstates.Todate,only44ofthe82BaselConventionpartieshaveratifiedthebanamendment. IntheEuropeanUnion,theBaselBan is fully implementedbyRegulation(EC)No1013/2006oftheEuropeanParliamentandoftheCouncilonShipmentsofWaste(the
The Hong Kong ConventionAnother key regulatory development is the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (the Hong Kong Convention), which was initiated by theInternationalMaritimeOrganization (IMO),aUnitedNationsagencyresponsible for improvingmaritimesafety and preventing pollution from ships.More stringent than the Basel Convention, the Hong KongConventionaddressesallaspectsofshipbreaking,fromtheconstructionphaseandselectionofmaterialsto theestablishmentofanappropriateenforcementmechanism for ship recyclingandcertification. Forexample,theconventionobligesshipownerstoadoptashiprecyclingplan(alreadyarecommendationoftheIMOinitsguidelinesonshiprecycling),andrecognizesbrokersasshipowners.Itshouldbenotedthat,unlike other United Nations conventions, IMO conventions aremore stringent by nature. Indeed, onceanIMOconventioncomesintoforceanyvessel intheworldtrading internationallymustcomplywith it.Adoptedin2009,theHongKongconventionhasnotyetcomeintoforce.Twoconditionsmustbemet:first,at least15states(representing40percentofworldmerchantshippingbygrosstonnage)mustsigntheconvention; thesecondcondition imposesmaximumship recycling thresholds for signatories.TheHongKongConventionhasbeensignedbyfivecountriestodate:France,Italy,theNetherlands,SaintKittsandNevis,andTurkey.
Shipbreaking: Also an opportunity?Shipbreaking also constitutes a market opportunity for companies across several sectors, as suggested by the two examples below. Although shipbreaking yards are traditionally owned by small, privately owned companies, some large stock-listed companies with waste management capacities are entering the shipbreaking market.
In September 2006, two subsidiaries of French company Suez (now part of utilities company GDF Suez) won a EUR 3.3 million contract with the French navy to dismantle the warfare frigate Lucifer.8 Endel, which specializes in the dismantling of nuclear and chemical facilities, and SITA, which focuses on waste management and aircraft dismantling, joined forces on the project. The ship dismantling took place near Cherbourg, France and employed the drydock method. A watertight retention basin was constructed to eliminate any risk of leaks and protect the environment. The fact that Endel specializes in “green” dismantling activities and has expertise in the drydock method helped the company gain the mandate.
In 2000, transportation company Maersk established a special shipbreaking business unit called Green Shipping Recycling Unit.9 In setting up this entity, the company states it is making “a business out of corporate social responsibility.” Services offered include: pre-inspection of ships, itemization of hazardous materials, and development of recycling plans; coordination/negotiation of sale, and control of all documents and payments; supervision of pre-cleaning, waste handling, and dismantling at the yard; and assistance with training yard workers to improve their safety and occupational health. In the decade between 2000 and 2010 this unit has dismantled 50 vessels. In addition to dealing with the ships owned by Maersk and its subsidiaries, the Green Shipping Recycling unit (now an entity called Sea2Cradle) is also taking outside clients. This Maersk entity works together with the Jiangyin yard in China, which has received ISO 14001 and OHSMS 28001 certifications.
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Preparedness and Best PracticesWhilethelevelofpreparednessisconsideredweakforallexposedindustries,inrecentyearscompanies(primarily shipowners)havemade somenoteworthyefforts tomitigate theadverseenvironmental andsocialimpactsoftheirshipbreakingactivities.
Ship OwnersAshipowner’slevelofpreparednesscanbeassessedaccordingtothefollowingfivecriteria:policy,yardcertification,monitoringsystem,programsandtargets,andreporting.Themajorityofcompaniesexposedtoshipbreakingfromtheenergy,utilities,consumerservices,andconstructionsectorsdonotdiscloseapolicyonshipbreaking.Somemajoroilandgascompaniesreleaseapolicystatementonshiprecycling,butsuchstatementsoftenlackrelevantdetails.10Thoughthelevelofpreparednessisconsideredweakforallsectors,inthepastthreeyearscompaniesinthetransportationindustryhavemadeeffortstogreentheirshipbreakingprocesses.Maerskisaheadofthecurveintermsofpreparednessrelativetoit’speers,havingadopted best practices on all the above-mentioned aspects, including policy development.11 The table belowsummarizesbestpracticesassociatedwitheachcriterion,focusingexclusivelyonthetransportationsector.
Shipbreaking beach in Chittagong, BangladeshSource: Jan Møller Hansen
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Ship BrokersToday, ship brokers play an important role as intermediaries between ship owners and ship breakers.BrokersaretaskedwithselectingonebuyeramongagroupofpotentialbuyerstosignaMemorandumofUnderstanding(MoU)thatdescribeshowtheshipwillbetransferredtotheshipbreakingyardandunderwhichcircumstances.Greenrecyclingmayconstituteakeypointofdistinctionamongstcompetitors.
The world’s largest cash buyer is GMS Leadership, a privately owned company based in Dubai.22 The companybuysvesselsfromshipowners(usuallyEuropeanandNorthAmerican)andresellsthemtoshiprecycling yards (usually in SouthAsia).According to the company,oneoutof three shipsdelivered intoIndiaandoneoutof twodelivered intoBangladeshareGMSdeals.Thecompanydelivers300shipsperyear in total.23GMSclaimstobecommittedtogreenshiprecyclingandprovidestechnicalassistancetoshipbreakersinordertosecurerelevantISOcertifications.ExamplesofothershipbrokersthatspecializeinthesaleofshipsforscrappingincludeClarksons,ACMShipping,HoweRobinsonandAlliedShipbroking.Noneoftheseshipbrokersdiscloseapolicyonresponsibleshipbreaking.
FinancialsBanks that finance controversial shipbreaking through credits and loans to the ship owners, brokers orbreakers are also exposed to risk to a certain degree. A few banks, such as State Bank of India, IndianOverseasBankandStandardChartered,haveestablisheddepartmentsthatfocusspecificallyonfinancingshipbreaking and/or shipbuilding. Opportunities exist to engagewith these lenders and develop sectorpoliciesinlinewiththeIMOguidelinesonshiprecycling.
InNovember2012,DutcheconomicresearchconsultancyProfundoreleasedareportontheinvolvementof 11 major Dutch banks in shipbreaking.24 Profundo looked at the loans/credits granted to shippingcompaniesaswellasthestakesheldbytheassetmanagementdivisionsofthesebanks.Dutchbankswerereportedtohavefinancedatotalof46shippingcompanieswhichsentapproximately343vesselstoSouthAsianbeachesinthefive-yearperiodbetweenJuly2007andJune2012.Otherfinancialinstitutions,suchasTriodosBankandASNBank,donotfinanceorhaveastakeinshippingcompanies inaccordancewiththeirinvestmentpolicies.
Whereasthefinancialsectorshowsalowlevelofpreparednesswithregardtotheissueofshipbreaking,UK-based Standard Chartered Bank has uniquely positioned itself on the issue. In 2007, the companypublished a policy statement on shipbreaking in an effort to reinforce its commitment to the Equator Principles.Itwasthefirsttimeamajorfinancialinstitutionpubliclydisclosedapolicyonshipbreaking.
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Implications for InvestorsTodate,controversialshipbreakingactivitieshavenotbeenontheinvestmentradarduetoweakregulatoryincentivesandlowlevelsofpublicawarenessonthis issue;however,thesituation ischanging.WhereaslegislativeactionsuchastheBaselConventionandHongKongConventionalreadyposesreputationalriskstosomecompanies,pendingamendmentsandratificationsmayhavesubsequentregulatoryimplicationsfor companies. The coming years may also see more fines or penalties for companies implicated incontroversialshipbreaking,asevidencedbytherecentEuropeanparliamentdecision.
Furthermore,reputationalriskisincreasingduetonewcampaignsbyNGOssuchasGreenpeace,theBaselAction Network and the Shipbreaking Platform. The Belgium-based Shipbreaking Platform, a coalitionof 18 environmental, human and labour rights organizations across the world, is exclusively dedicatedto eliminating beaching in developing countries. In 2011, the coalition released a list of Europe-basedcompaniesthatsenttheirvesselstoSouthAsianbeachesin2010.Thisannuallistexposesthenumberofvesselssentbyeachcompanycomparedtoitspeers.25
In this context, responsible investors canplay a key role in engaging ship owners, ship brokers and thefinancialcompaniesthatsupportthembyraisingthefollowingquestions:
ShipbreakingPolicy:StandardCharteredBankScope: All lending, debt capital markets, project finance, principal finance, and advisory activities.
Activities covered: Transfer of end-of-life ships and development/operation of recycling facilities.
Shipping activities systematically excluded:Violation of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal;
• Ships with prevalent asbestos use and without documentation of its utilization;• Ships which are not certified gas free for hot work, or not in possession of a “Green Passport” (a document
listing potentially hazardous materials present on the ship); • Ships located in or significantly affecting sites featured on the UNESCO World Heritage List, unless the activities
pre-date the UNESCO designation; • Ships located in or significantly affecting wetlands of international importance, featured on the Ramsar List;• Ships which significantly convert or degrade critical natural habitats.
Standard Chartered also encourages its clients to adopt international standards of best practices such ISO 14001-certified environmental management systems, OHSAS 18001 safety management systems, the International Labour Organisation (ILO) guidelines on health and safety for Asian countries and Turkey, and the United Nations Global Compact.
Workers in a Pakistan yardSource: NGO Shipbreaking Platform
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Company Name Industry Country 2010 2011 2012 TOTALA.P.Moller-MaerskA/S(CPSE:MAERSKB)
MarineTransportation
Denmark 3 0 0 3
BWOffshoreLimited(OB:BWO)
EnergyEquipment&Services
Norway 2 2 0 4
ChinaCOSCOHoldingsCompany(SEHK:1919)
MarineTransportation
HongKong 0 5 0 5
FredOlsenEnergyASA(OB:FOE)
EnergyEquipment&Services
Norway 2 0 0 2
HyundaiMerchantMarine(KOSE:A011200)
MarineTransportation
SouthKorea 0 1 0 1
MitsuiOSKLinesLtd.(TSE:9104)
MarineTransportation
Japan 1 2 4 7
NipponYusenKabushikiKaisha(TSE:9101)
MarineTransportation
Japan 3 2 0 5
OdfjellSE**(OB:ODF)
MarineTransportation
Norway 4 2 7 13
RoyalBoskalisWestminster(ENXTAM:BOKA)
Construction&Engineering
Netherlands 0 2 2 4
STXPanOceanCo.,Ltd.(KOSE:A028670)
MarineTransportation
SouthKorea 0 4 1 5
Technip(ENXTPA:TEC)
EnergyEquipment&Services
France 1 0 0 1
TUIAG***(DB:TUI1)
ConsumerServices Germany 2 1 4 7
WanHaiLinesLtd.(TSEC:2615)
MarineTransportation
Taiwan 1 0 0 1
Sources: NGO Shipbreaking Platform* South Asia includes India, Bangladesh and Pakistan ** Mainly through subsidiary Deep Sea Drilling *** Through subsidiary Hapag Lloyd
Appendix 1
Major stock-listed European-based entities that sent their vessels to South Asia* in 2010-2012
Note: Information on the number of vessels sent to South Asian beaches per company is based on a list compiled by the NGO Shipbreaking Platform and is based on third-party data (e.g. IHS Fairplay, Robin des Bois, etc).
This list looks at European companies that either use a European flag for their ships or are registered as the last ship owner before the ship was sold to ship breakers. Note that non-European-based group entities are listed here because some of their subsidiaries located in Europe were considered the last ship owners.
Although significant efforts have been made to establish a comprehensive list, there is a lack of disclosure on ship ownership. Some unscrupulous ship owners may circumvent inconvenient flag regulations by hiding their identities and changing flags.
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Endnotes1FrankStuerLauridsenetal. , Shipbreaking in OECD , (DanishEnvironmentalProtectionAgency,2003),http://www.shipbreakingplatform.org/
2Lloyd’sRegister,Shipbreaking: Practice and regulation today , (June2011),http://www.shipbreakingbd.info/report/ShipRecycling_Lloyds%20Register.pdf.
3MariaSarrafetal. , Shipbreaking and Recycling Industry in Bangladesh and Pakistan , (WorldBank,December2010),http://siteresources.worldbank.org/INTPOPS/Publications/22816687/ShipBreakingReportDec2010.pdf.
4BaselActionNetwork, Industrial Capabil it ies of North America: A Report on ‘Green’ Ship Recycling Capacity in the United States, Canada and Mexico , (November2012),http://www.shipbreakingplatform.org/shipbrea_wp2011/wp-content/uploads/2012/11/North-American-Capacity_BAN_Final.pdf.
5FedericoDemaria,Shipbreaking at Alang–Sosiya (India): An ecological distribution conflict , (September2010).
6EuropeanCommission,Green Paper on better ship dismantling , (May2007),http://eur-lex.europa.eu/LexUriServ/site/en/com/2007/com2007_0269en01.pdf.
7RubenDao,Childbreaking Yards - Child Labour in the Ship Recycling Industry in Bangladesh (FIDH/YPSA,2008),http://www.fidh.org/IMG/pdf/bgukreport.pdf.
20 Reporting-ReportingonthenumberofvesselssenttoSouthAsiaisconsideredbestpractice.Reportingshouldincluderelevantdetailsaboutthevesselbeingdismantled(e.g.name,IMOnumber), thenameoftheshipbreakingyardselectedandthemethodused.If thecompanyconductsinternalauditsatshipbreakingfacil it ies, it shouldalsoreportonauditf indingsandpossiblecorrectiveactionsundertaken.
24Profundo,Study on the involvement of Dutch major banks in shipbreaking ( inDutch), (November2012),http://www.eerlijkebankwijzer.nl/media/19193/praktijkonderzoek_scheepsslopen_eb_rapport_121115_aanp.pdf.
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