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Feature: Shipping News

They may take a few years to come into effect, but binding international rules now under discussion to cover ship recycling will ‘green’ the dirty and unacceptable face of an unregulated industry notorious for environmental damage and appalling working conditions.

The reforms, proposed by the International Marine Organisation (IMO), the International Labour Organis-ation (ILO) and the parties to the Basel Convention, which controls transboundary movements of hazardous waste, will certainly have a short-term effect on material flows and prices.

Their planned rules would insist on prior informed consent from governments for deliveries of ships for recycling between states and a reporting system for
vessels destined for scrapping. Ships would have to be pre-cleaned and prepared for recycling, and the recycling work itself would have to meet occupational health and safety and environmental standards.

Also proposed is an International Ship Recycling Fund, which would charge ship owners a premium so that standards at shipbreaking operations could be
improved. But if this meets with opposition from ship owners, then recycling operations would have to pay more to meet the new standards. This may drive the companies that rely on offering a cheap service and cheaper recycled materials out of business. Indian recyclers, in particular, will be vulnerable.

Paul Bailey, the ILO’s shipbreaking expert, sees the price paid for over-cheap recycling. “Labourers seldom have access to basic personal protective equipment
such as hard hats, gloves and goggles for steel cutting,” he says. “Many are killed and thousand injured. Huge vessels are floated ashore and cut up by workers who are often exposed to deadly toxins, exploding gases, falling steel plates and other dangers.”

Regulation is vital for a market that continues to grow, as standards rise and other environmental reg-ulations grow tighter. Now that the EU has decided to ban single-hulled tankers from its waters and the IMO has a phase-out programme in place for these ships, owners that decide to scrap these vessels are likely to flood the recycling market during the next few years.

A ship’s useful trading life is 25-30 years. That means every year between 3.5% and 4% of the world’s fleet reaches its scrapping date — roughly 3,000 vessels. With the present growth of the world’s fleet, that may rise to 4,000 by 2010.

Hunger for scrap steel is growing in Asia and the Far East. Clarksons, a leading shipbroker that contributes to the Baltic Exchange’s weekly assessment of ship demolition values, produced figures recently showing Bangladesh overtaking India in the shipbreaking field because of its increasing demand for steel. Ships dismantled in Bangladesh can fetch between $340-$360 (£191-£203) per light displacement tonnage, the actual weight of the ship, compared with $310-$320 in India.

“Before shipbreaking, Bangladesh, for example,
imported all of its scrap steel,” says Bailey.

“Today, wrecked ships satisfy 80% of its needs.”

Ships produce other saleable materials besides steel, and environmental compliance rules are also bound to affect the flow and price of these. Under the rules, ship recyclers would have to explain how they intend to manage potentially hazardous or contaminated

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