MARAD: Following Maersk's Lead on Ship Recycling

The Coast Guard light icebreaker Storis (file image courtesy USCG)

Published Feb 23, 2016 6:31 PM by Denise Krepp

Last week, Maersk announced that it will be working with shipyards in Alang, India, to create responsible recycling programs. I'm disappointed that Maersk vessels will be dismantled in India instead of the United States. At that same time, however, I'm impressed with Maersk's clear ship recycling policy and its plan to implement it. This clarity is something that is sorely lacking in the United States and it's my hope that the U.S. Maritime Administration takes a page from Maersk's playbook.

Ship recycling in the United States is a mess. The Federal Property and Administrative Service Act of 1949 states that the Maritime Administration serves as the government's disposal agent for obsolete government vessels over 1500 gross tons. The law is even referenced on MARAD and the General Services Administration websites. Sadly, GSA ignores it.

Instead, GSA auctions off vessels haphazardly without including MARAD. Last fall, Jon Ottman, a maritime historian who had been working to preserve the former Coast Guard Cutter Storis as a museum ship, questioned GSA about MARAD's role in the sale of the vessel. His question was based on FOIA documents he had received showing that MARAD employees had requested information about the sale but GSA had never responded to them. GSA informed Mr. Ottman last week that it is the agency's practice "to only discuss contracts with the parties of the contract. The contract for the Storis did not include MARAD, so details like the number of offers received, sales price, purchaser, delivery date, etc. would not be discussed with MARAD." Huh?

Mr. Ottman also had the audacity to ask GSA about where the money came from to pay for the STORIS. Per the FOIA documents Mr. Ottman received last fall, the buyer told GSA in 2013 that he was waiting for an international wire to complete the purchase. So of course, Mr. Ottman asked for more information. GSA's February 2016 response is astounding "(a)fter a thorough review of our records, GSA affirms that no additional records exist related to the source of the buyer's money. The payment was made by wire transfer to the Department of Treasury. To make a FOIA request to Treasury please send your request to . . ."

So just to clarify, GSA is auctioning off obsolete government vessels even though that is MARAD's responsibility to perform this task. GSA officials are doing so without checking where the money is coming from. And, there is no indication that GSA feels any remorse for breaking the law.

In December 2015, the U.S. Department of Transportation Inspector General issued a report exposing GSA and MARAD's dysfunctional relationship. It's so bad that that IG actually states that MARAD lacks the statutory authority to make GSA recognize its responsibilities and the February 2016 letter to Mr. Ottman merely reiterates this fact.

The IG report also found that MARAD lacks the policies and procedures for identifying the universe of government-owned vessels for which it has responsibility for disposal. No kidding. GSA has this list and it's not sharing it with MARAD.

The worst part of this story is that it is not GSA who gets penalized. Rather, it's the U.S. Merchant Marine Academy, the state maritime schools, and the thousands of maritime historical organizations throughout the country. When MARAD disposes of the vessels, these entities receive a portion of the proceeds. When GSA usurps the process, none of these educational entities receives the funding for which they are eligible under federal law.

That's why I recommend that MARAD take a page from Maersk's playbook and take concise action. MARAD should tell GSA to stand down and let MARAD do its job. This doesn't require statutory authority. Rather, it requires political will, which the agency has. The museums, maritime schools and STORIS vets will support MARAD telling GSA to retire from the field.

MARAD should also comply with the IG's recommendation and identify all of the government vessels that will be declared obsolete in the coming years. The sooner MARAD identifies the Coast Guard; Army Corps of Engineers; National Oceanic and Atmospheric Administration; Fish and Wildlife Service; and other agency vessels, the sooner it will be able to develop policies and procedures to dispose of these vessels and disburse the money accumulated from their sale.

K. Denise Rucker Krepp is a domestic ship recycling advocate and former Chief Counsel, U.S. Maritime Administration  

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.