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The shipping industry: regulating the freeloaders

By Nick Meynen

The unequal ecological exchange and environmental injustice in this hard to regulate global industry are so big and persistent that the industry keeps producing one damning fact after the other bad-behavior story. Two years ago we already published our first EJOLT report: Industrial Waste conflicts around the world – with the shipping industry as one of two cases. Last year we gave an alternative perspective on trends in the shipping industry. But there’s much more.

A mission on emissions

Fred Pearce, one of the world’s leading environmental specialists, wrote in New Scientist that the 16 biggest ships in the world emit more sulfur that all cars in the world. All 942 million. How? Because ships can use dirty fuels with a sulfur content thousands of times higher than what cars are allowed to use. Pearce estimates that the loss of live in the next ten years due to this ‘oversight’ comes at around 1 million. Others, including the EEB, have calculated that by only implementing the stricter ship fuel sulphur standards agreed by the International Maritime Organisation in 2008 in the EU, the EU could save 26.000 lives by 2020. The implementation of the standard would cost the EU shipping industry in between 2,6 and 11 billion € per year but the health benefits amount to 34 billion € per year. And using cleaner fuel would have other benefits as well. The sulfur problem comes on top of the industry’s increasing share of total global greenhouse gas emissions.

Some have understood that a change is needed. Sweden and Norway have taken steps to attack the problems head on. The emissions of NOx from Viking Line’s MS Cinderalla are cut by 97% after installing scrubbers. It uses low-sulfur fuel and when it’s in the harbor it uses shore-side power. But such exceptions are rare and emissions are only one type of dangerous waste that ships create.

Breaking ships or breaking bad habits?

The NGO Shipbreaking Platform, a global coalition of organisations seeking to prevent dirty and dangerous shipbreaking practices worldwide, recently published the complete list of ships that were dismantled around in the world in 2013. More than half of all large ocean-going vessels that were scrapped in 2013, were sold to substandard beaching facilities in India, Pakistan and Bangladesh – where workers die at a rate of around 1 per ship. Approximately 40% of these ships were EU-owned. So around every day, an EU owned ship is being rammed into a tropical beach as if it’s an empty coke can thrown on the street. Except that these cans are huge and full of dangerous toxic materials like asbestos and PBCs. All this dumping happens while decent recycling facilities do exist, in and out of Europe, providing safe jobs to thousands. In some EU countries you could be fined for throwing that coke can on the street, but the same governments look the other way when a mammoth tanker full of toxics is dumped on a beach in India.

Well, that was the case until the new EU regulation on ship recycling entered into force on 30 December 2013. It was written with the official aim to end these practices. However, unless an economic incentive is added to it, registering European ships under flags of convenience remains way too easy. The loophole in the legislation is so big that even the largest and most toxic tankers can sail through it – and they do. “More ship owners have opted for cleaner and safer solutions in 2013 compared to previous years – this is good news for the environment and the workers, and also for those ship recycling yards globally that have invested in better practices”, says Patrizia Heidegger, Executive Director of the NGO Shipbreaking Platform. “Still, the majority of ship owners uphold their dirty practices and European owners are amongst the worst.

Here are the names:

According to the research by the NGO Shipbreaking Platform, Greece remains the worst European toxic ship dumper, closely followed by Germany. Owners in these countries disposed a record-high 80 percent of their end-of-life ships in India, Bangladesh and Pakistan, and included well-known companies such as Danaos and Euroseas (Greece), and Conti, Hapag-Lloyd and Leonhardt & Blumberg (Germany). Other European companies that have recurrently topped the lists of worst dumpers include Switzerland-based Mediterranean Shipping Company (MSC), with 9 ships dumped in India in 2013, and the Monaco-based Sammy Ofer Group, with 13 ships dumped in Bangladesh, Pakistan and India.

Once applicable, the new EU ship recycling regulation will ban the breaking of ships registered under the flag of an EU Member State in beaching yards and demand proper recycling in facilities that meet the requirements set out in the Regulation. But the Regulation is a paper tiger: more than two thirds of the European ships dismantled in 2013 did not sail under the flag of an EU Member State when heading for a dismantling yard and would therefore not have been covered by the new Regulation. In addition to the ships already sailing under non-European flags during operational use, another 55 ships were flagged out from European registries just before scrapping outside the EU. Flags of convenience such as Comoros, Tuvalu, Saint Kitts and Nevis, Togo and Sierra Leone, that are less favoured during operational use, were excessively popular flags for the end-of-life vessels broken on beaches in 2013. “Reflagging has always been a convenient way for ship owners to circumvent rules enforced by the flag states. The Platform and its members have been calling upon the EU to introduce an economic incentive to promote clean and safe ship recycling, because a Regulation based only on the voluntary registration under a European flag will not have the promised impact”, says Patrizia Heidegger.

One could also argue that an economic incentive is a soft approach. Following the corporate accountability line instead of the weaker corporate social responsibility approach, the EU could also play ball and make clean and safe ship recycling mandatory for any ship owned by a company registered in the EU, while closing loopholes such as leasing. That would probably not relocate the whole European shipping industry – but create room for growth for the green innovators that already exist and comply.

Business as unusual: the (almost) good guys

Responsible European ship owners have developed ship recycling policies. The Danish Maersk group, the world’s largest container-ship owner, was amongst the first to have an ambitious ship recycling policy and has so far lived up to it for those ships registered under its name. However, Maersk sold off three ships to Greek owner Diana Shipping and chartered the vessels back: all three were beached in 2013. The sale of old ships to a new owner while continuing to be the operator is another common way of avoiding responsibility at end-of-life, and it weakens Maersk’s efforts to be a global leader in green ship recycling. Best practice examples are Norwegian ship owners Grieg and Höegh Autoliners, who have proven to be serious about their environmental policies and have not beached vessels in 2013. Canada Steamship Lines (CSL) and Royal Dutch Boskalis went one step further and had their ships recycled within OECD countries only. Dutch company Van Oord, active in the dredging and offshore industry, has recently stated they will no longer beach any of their ships.

More pressure on the EU will be needed to move the majority of European ship owners into the small list of responsible companies. That is one of the reasons why the EEB is currently working with the NGO Shipbreaking platform on a hearing on environmental justice in general and the issue of industrial waste and shipbreaking in particular.

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