Maersk to Help Ship Breakers

Maersk ship

By MarEx 2016-02-11 18:28:25

The Maersk Group has released a statement saying that it is determined to use its leverage to create more responsible ship recycling options.

With more vessels to recycle in the future, the current cost of sustainable ship recycling is not feasible, the statement says, so the group is committing to help selected ship recycling yards in Alang, India, to upgrade facilities and practices to comply with the company’s standards.

The market for ship recycling is dominated by practices unchanged for decades, says Maersk. Out of the total 768 ships recycled globally in 2015, 469, representing 74 percent of the total gross tonnage scrapped, were sold to facilities on beaches in India, Pakistan and Bangladesh with challenges to workers and the environment.

Ship recycling is a heavily debated issue known to attract great stakeholder attention. Media coverage of beaching facilities has pointed to issues with child labour, frequent fatalities and little control over spills of oil and chemicals. To many, ship recycling has become synonymous with negative human rights impacts and environmental degradation.

“The Maersk Group’s policy is to only recycle ships responsibly. There has, however, been no change in practices in this area, and today, responsible recycling is only feasible in a limited number of yards in China and Turkey,” says the Head of Sustainability in Maersk Group, Annette Stube.

Maersk policy does not consider the fact that the majority of its vessels are sold off before they reach end of life, states the group’s 2015 Sustainability Report. “These vessels are not necessarily recycled responsibly, and some stakeholders have claimed that we employ double standards by accepting these actions.”

The number of vessels up for recycling by Maersk Group companies has been limited for the past decade, but in the next five years a larger number of assets owned by the group will reach end of life. Currently, the estimated extra cost for Maersk Group of responsible recycling at existing yards is $1-2 million for each vessel.

Steady improvements in conditions have been witnessed in ship recycling yards in Alang in the last couple of years, and today four yards in Alang are certified to the standards of the IMO and the Hong Kong Convention. 

The group conducted two visits at upgraded beaching facilities in Alang in 2015. Conditions at these yards were compared to criteria in the Hong Kong Convention and the proposed E.U. Ship Recycling Regulations, combined with the group’s third party code of conduct criteria for anti-corruption, labour and human rights as well as subcontractor matters. 

The main conclusion reached was that an upgrade to meet the necessary criteria would be possible depending on the commitment of the facilities themselves and the local governments. Maersk concluded that responsible recycling can be accelerated in the area, if the engagement is made now.

“We want to play a role in ensuring that responsible recycling becomes a reality in Alang, India. To find sustainable solutions, we are working on building a broader coalition with other shipowners and have initiated engagement with a number of carefully selected yards in Alang. This includes improving local waste facilities and hospitals - and upgrading the housing conditions for the migrant workers in Alang,” says Stube.

The Maersk Group is engaging in the development of sustainable ship recycling on the long term and will in the coming years work directly with selected certified yards in Alang to further upgrade their facilities and practices to comply with the company’s standards.

Maersk’s sustainability report is available here.