THE CONTINUOUS EVASION OF THE“POLLUTER PAYS PRINCIPLE”

A breakdown of financial profits and environmental and healthcosts in relation to the shipbreaking industry

September 2002

Introduction

Every year around 600-700 seavessels are taken out of service. Old ships contain a wide range of toxic materials and oilywaste. The ships are broken down on beaches in Asia, polluting the environment severely, and threatening the health ofworkers and surrounding communities. This document will go into the aspects of financial profits andenvironmental/health costs associated with the breaking of ships.

Financial profits

Shipping companies receive more than 1 billion dollars by exporting old ships to India, Bangladesh, Pakistan and China forscrapping in one year’s time.

Above information is based on Fairplay weekly sales data. Fairplay reports that 469 ships have been sold for scrap from1st of May 2001 till 1st of May 2002. They have been sold for a total amount of 936 million dollars. Shipping companiesreceived an average price of 2 million dollars for each ship sold for scrap. The lowest price paid for a ship-for-scrap reportedby Fairplay is 0.15 million dollars, the highest price 10.99 million dollars.

Fairplay does not cover all scrap deals. Sales to Turkey are hardly reported. Besides the 80 vessels that were sold toBangladesh (according to Fairplay) another 49 vessels have found their way to the beaches of Bangladesh (according todata from the Bangladesh Shipbreakers Association.) Therefore it can be assumed that the actual figure is probably muchhigher than 936 million dollars and is far above 1 billion dollars.

Shipbreaking country Number of ships sold Sales price in million Average sales pricefor scrap from 1.5.01 US$ in million US$till 1.5.02

India 264 347 1.3Bangladesh 80 271 3.4China 75 167 2.2Pakistan 22 100 4.6Other 6 7 1.1

TOTAL 447 892 2

Ships with no mentioning of sales price 22 22 x 2 = 44

GRAN TOTAL 469 936 2

“Ship scrapping is a convenient means by which ship owners can divest themselves of any responsibility of theenvironmental hazards that their ships contain” “Breakers claim that their industry provides companies with aninexpensive means of disposing of a vessel. Once a ship has been sold for breaking, its former owner is free of liabilities that might arise from any accident or pollution that it causes”. Report on Ship Scrapping, MEPC 48/INF.2 22.05.02,)

Environmental and health costs

Several reports by Greenpeace, Det Norkske Veritas and the ILO over the last years have reported on the unacceptablesituation in the Asian shipbreaking countries. These reports confirm that shipbreaking workers are exposed to a deadlycocktail of toxic substances released during the course of shipbreaking. Heavy metals, asbestos, dangerous levels oforganotins, and cancer-causing poly-aromatic hydrocarbons (PAHs), contaminate the workspace. The levels of some of thepollutants such as organotins and PAHs in the soil and sediment in and around the yards are high enough to warrant theclassification of these soils as hazardous wastes. Many of the poisons found will end up in the bodies of the workers andwill remain present in the local environment for long periods of time.

Greenpeace investigators have observed a consistent pattern of hazardous practices relating to asbestos or insulationmaterial, torchcutting and waste management in the Asian yards. In human terms, these unsafe practises affect, at aconservative estimate, more than 100,00 workers in the shipbreaking countries who are directly exposed to workplaceand environmental poisons released during the breaking of contaminated ships-for-scrap.

Because many of the poisons released in the course of shipbreaking are persistent and bioaccumulative in nature, themagnitude of environmental and human impact should be assumed to be far greater than merely on the directly-affected workers.

The extent of damage caused by the breaking of ships to the environment, to the livelihoods of the fisherfolk andpeasants that share the environment, and to the lives and health of the workers in India, Bangladesh, China, Pakistan andTurkey is not exactly known to this day. Absence of data however does not mean the absence of a problem. It just meansthat neither these communities, nor the workers, nor the environment are serious enough priorities to feature in the economic scheme of things. We can therefore only give a description of the environmental and health costs associatedwith the breaking of ships.They include:- costs for the loss of livelihood - clean-up costs for polluted sediments- costs for asbestos liabilities- medical and compensation costs for losing the ability to work- medical and compensation costs for deaths and diseases caused by exposure to toxic substances

1. Loss of livelihood

“I was born in 1940 in this village that now is hometo about 500 families. Around 3000 fisherfolks livehere and around my village. Our village is located 5km south of the shipbreaking yards of Sitakunda.As a traditional fisherman, the life of my family andthe lives of 500 families I represent, depend on fishing

activities. Fishing has declined in the last couple ofyears due to water pollution caused mostly by theshipbreaking operations in the nearby area. Wasteoils and hazardous substances, which are directlyreleased from the ships into the sea, affect the fishstocks and the quality of the fish catch and affectthe livelihood of fisherfolks, like my family and theother families, who live close to the shipbreakingyards. The amount of fish has also declined drasti-cally in last few years. Many species like the chand-ana illish (a species of the famous Hilsa fish of Bayof Bengal) have disappeared. In our nets we find alot of wastes originating from ships that are brokenin the nearby area. In the period before 1971 the fishing community could make a good living andwe were able to buy land and build our houses.Nowadays we are losing our properties and we getpoorer and poorer every day. To catch enough fishwe have to go further and further at sea. Last nightwhen I went to the sea for emptying the nets Ifound fishes in oily sludge and I had to throw themall away. Very often we have to throw away thefish.” (Baba Nikunga Das, President of the coordina-tion committee of the Latifpur village inChittagong, Bangladesh, May 2002).

2. Polluted environment

collecting oil residues at intertidal zone, Bangladesh

“Many of the families of our village are dependenton fishing. In last few years, oil pollution caused bythe shipbreaking industry has reduced the fishcatch dramatically. We remember that they used tobe a catch of between 2 and 4 trucks of fish everydayand nowadays it is not even one. The fish is alsoheavily polluted with waste oils which is harmfulfor health.” (women of one of the villages ofSitakunda, situated along the shipbreaking yards,May 2002)

“We have breathing problems due to the dangerouschemical wastes that are burnt in the shipbreakingyards. We have to cover our noses all the time, eveninside our homes” (women of one of the villages ofSitakunda, situated along the shipbreaking yards,May 2002)

3. Asbestos liabilities: a heavy price to pay

asbestos removal in India

Millions of workers have been exposed to asbestosdust since the early 1920’s worldwide. Among shipy-ard workers, asbestos miners and millers, asbestosproduct manufacturers construction and demolitionworkers, asbestos related ailments are not just routine,but increasingly acknowledged as an occupationaldisease warranting compensation from the employer.It is generally accepted that the risk to workersincreases with heavier and long-term exposure.However, investigators have also found asbestos-related diseases in some shipyard workers exposedto high levels of asbestos fibres for only briefperiods (as short as 1 or 2 months). Even workers whomay not have worked directly with asbestos butwhose jobs were located near contaminated areasare known to have developed asbestosis, mesothe-lioma, and other asbestos-related cancers.

“Epidemiologists predict that there will be 500,000asbestos deaths in Western Europe over the nextthirty years.”(R.F. Ruers: senator in House of Com-mons in the Netherlands and a lawyer specializedin compensation claims for victims of asbestosis, ina speech over “The asbestos experience in the

European Union” in Buenos Aires, Argentina, 1stOkctober 2001).The financial liabilities associated with asbestos-related compensation and phase-out are mindboggling.A 1999 Greenpeace study on asbestos-related liabi-lities put the figure at approximately 30 billion USdollars for the Netherlands. Of this, approximately 3billion dollars is expected to serve as compensationfor victims and families. Although these figures arean estimate of land-based asbestos liabilities, it isindicative of the magnitude of the problem.

Asbestos related illnesses pose a serious and con-stantly increasing risk to the health of workers andpeople frequenting the shipbreaking yards. Severalstudies have found asbestos strewn casually around,in the shipbreaking yards and open dumps or beingrecycled by people unaware of the health risks.“This poses a serious health risk not only to the fit-ters, but also the ship and yard cutters, loaders,roadside vendors and transport workers, not tomention neighbouring communities and peasants.”

extracting zinc from asbestos contaminated steelbars originating from ships steel, Chittagong Road,Bangladesh

4. Loss of life and the ability to work

Fires and explosions happen regularly due to oxy-acetylene torchcutting of improperly cleaned oiltanks of ships, Aliaga, Turkey

“Bangladesh as an agrarian society is not used tohazardous work like the breaking of ships. Ourcountry and the people are not ready to deal withthe hazards. The only work hazard our country alwayshad was that you might cut your finger if you weredigging the field. Workers at the shipbreaking yardsthink that it is common that if you cut a ship itmight blast and you die. Sometimes now we observethat if a ship is gas free it is safer to cut the ship.However, it regularly happens that blasts take placeand that bodies are thrown from the ships andpeople lose their legs or their hands. We do not

know how many people die from blasts in the ship-breaking yards. It is heard that almost every day alabourer dies. It is natural, it belongs to the job. It isnot new that a labourer dies. The workers haveadapted it as their normal lifestyle.” (worker of theshipbreaking yards in Chittagong, May 2002)

“Our children drop out of school as they wish toearn money in the shipbreaking yards. But manytimes they come back seriously injured from wor-king in the shipbreaking yards. They do not getcompensated for the loss of hands, toes or fin-gers.”(women of one of the villages of Sitakunda,situated along the shipbreaking yards, May 2002)

Smoke in Bangladesh yard

5. Exposure to toxic substances

China: emission of toxic substance by burning wastematerials

“The lack of safeguards in handling the variouscontaminants means that every fourth worker inAlang must be expected to contract cancer”

(occupational phycisian and occupational healthofficer of German state of Bremen, Dr. FrankHittman, public statement with ARD-TV, 1998)

Turkey: burning of cables from ships leading to therelease of toxic fumes (like dioxins and furans)

Towards a clean shipbreaking industry

Shipping companies receive more than 1 billion dollars by exporting old ships to India, Bangladesh, Pakistan and China forscrapping in one year’s time. This means that the shipping industry actually receives money for being allowed to releasehazardous materials into the environment and the workers bodies and to pollute the coastal zone of Asia with waste oils.This does not reflect a “polluter pays principle” but a “polluter profits principle” and is unacceptable.

The shipbreaking industry should no longer be seen as a lucrative market where shipowners and shipbrokers profit fromexternalizing toxic pollution costs but as a SERVICE carried out by the shipbreaking countries. A service the world needsand which should not be associated with the liabilities linked with the handling and disposal of the toxic and hazardousmaterials These are burdens to be borne by the “purchasers” of the service: the shipowners/operators.

Supported by this new information on environmental/health costs versus financial profits Greenpeace demands for aglobal solution:

1. Shipowners/operators must present a complete inventory of all hazardous material on board the vessel, making aregister of the pollutants and an analysis of the dangers from the ships;

2. The polluter (shipowner/operators) must decontaminate the ships-for-scrap prior to export;3. Shipbreaking should be conducted without risk to workers’ health or to the environment;4. Tankers must be made gas-free for hot works prior to export for breaking;5. Shipowners/operators must operate in a fully transparant way. They should no longer hide behind brokers and mid-

dlemen and disclose the selected shipbreaking facility and the assessment done to ascertain the delivery of cleanships-for-scraps and good working conditions and environmental record on the yards ;

6. Shipowners and shipbreakers must carry out extensive consultations on the breaking plan and put in place expertmonitoring;

7. Shipbreaking facilities should be freely accessible by citizen groups, environmental NGO’s and trade union activists;8. Shipbreaking should be subject to a global regulatory regime, rather than being a matter of unilateral measures.

Looking ahead, Greenpeace demands that:

1. Existing ships should be made progressively cleaner, by systematically removing, and replacing toxic and hazardous substances during maintenance, repair, refitting and rebuilding programmes;

2. The “next generation” of ships should be “clean ships,” i.e. ships that are designed and constructed with a view to eliminating their environmental, health and safety implications upon decommissioning.

3. Shipowners must accept the chain of responsibility for the safe and clean dismantling of ships. They should be heldaccountable for the environmental and health damage caused by sending toxic ships to Asian beaches.

As it is evident from the above demands, Greenpeace is not opposed to either the shipping or the shipbreaking industry.We will, however, actively oppose the export of ships that are not decontaminated, and we will continue to stand up forthe protection of the environment and workers’ health against unsound breaking practices which on top of all generate asubstantial profit for the polluter.

More information:

Greenpeace NetherlandsKeizersgracht 1741016 DW Amsterdam

Greenpeace has put 50 ships under the spotlight. Vessels that are likely to be scrapped in the next five years.Shipspotters and people working in the shipping industry can help to spot these ships and identify other ships that arein danger of sailing towards the beaches of Asia without being decontaminated first. Visit the special website:

www.greenpeaceweb.org/shipbreak