Danish Regulators Examine Maersk's Shipbreaking History

Denmark's environment ministry is scrutinizing the demolition sales of four former Maersk-operated vessels and their subsequent recycling at Alang, Denmark environment minister Lea Wermelin told ShippingWatch. 

The vessels concerned were the boxships Cecilie Maersk, Clara Maersk, Claes Maersk and Thomas Maersk.

As an example, the Hong Kong-flagged Cecilie Maersk was transferred to cash buyer NKD Maritime in February 2019, and the vessel was reflagged in Palau. AIS tracking provided by Pole Star shows that Cecilie Maersk traded back and forth between Oman and Somalia in March 2019, after the recorded sale date; she made a final voyage to Alang several months later, arriving on the beach on May 16. She was categorized as broken up in May 2019, according to her Equasis record. 

The other three vessels encountered similar ends, with different cash buyers and end-of-life flag service providers. 

Since January 1, 2019, all EU-flagged ships over 500 GT have had to be scrapped at EU-approved recycling facilities under the terms of the EU Ship Recycling Regulation (SRR). The EU has yet to approve any facilities in South Asia. 

While none of the four vessels in question were EU-flagged after the EU SRR took full effect, they were EU-flagged until 2018. Wermelin's ministry is investigating whether the vessels' reflagging from Denmark to Hong Kong in 2018 (and subsequent demolition in 2019) may constitute grounds for an enforcement action. 

"It's unacceptable when ships end up on beaches, pollute the environment and pose risks for workers' safety. Ships must be handled on facilities that are made for the purpose and which protect the tidal zone from leakages and spills," said Wermelin in a statement to ShippingWatch. "This is also why the EU adopted the shipbreaking regulation [SRR]."

Maersk was an early and outspoken proponent of the Hong Kong Convention (HKC) certification process for South Asian shipyards, which all utilize the beaching method of demolition. In 2016, with the support of the European Community Shipowners Associations, Maersk publicly announced that it would engage in business with Alang-based yards, beginning with recycler Shree Ram. Maersk assigned on-site staff at the yard to work on compliance and best practices for safety and environmental protection. Two vessels, the ex-U.S. flagged Maersk Georgia and Maersk Wyoming, went onto the beach at Shree Ram later that year. At the time, Indian scrap prices per LDT were approximately 25 percent higher than prices in China, the country with the next-highest-paying scrap market. (China has since discontinued the scrapping of foreign ships.)

These transactions marked a change in perspective for Maersk. In 2013, Maersk's head of environment and CSR Jacob Stirling argued against beaching in general. "NGOs argue that beaching must end now. We agree," he wrote. "Taking ships to proper recycling yards like the ones in China will enable a far better recycling of the steel." 

The EU has yet to add Shree Ram or any other HKC-certified South Asian yard to its list of approved recycling facilities.