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Saturday, December 16, 2017

Ship Recycling Convention may put stakeholders in a fix

Posted to Ship Recycling Convention may put stakeholders in a fix (by on September 9, 2013

Ship Recycling Conference focuses on issues that could find ship breakers and others in a predicament

Will the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (the Hong Kong Convention) ever get ratified? What’s the difference between the Hong Kong Convention and the EU convention as far as beaching method of recycling is concerned? Is the beaching method banned by both conventions? These and several other issues raised at the 2 Annual Conference of Ship Recycling on the Indian Sub-Continent in Mumbai organized by Hinode held last week, ended up in lengthy discussions.  

But the main issue that commanded lengthy deliberations was the beaching method of ship recycling. A possible fact that surprised most delegates was that most vessels in the world are recycled through the beaching process. If this method were to be banned it would lead to a massive number of abandoned ships drifting around in the oceans posing a grave threat to shipping - like the existence of tons of space junk floating in space revolving around the earth threatening billions of dollars of relatively newer satellites. The beaching method responsible for the lion share of ship recycling in the world is practiced in India, Bangladesh and Pakistan - and all three have so far refrained from ratifying the Hong Kong Convention.    

The reason for the popularity of beaching method according to A. V. Pradhan, Regional Manager of Class NK, India, is that it is far less capital intensive and far more cost effective compared to the dry dock method and hence is a preferred ship dismantling system. This way ship scrapping generates 40 million tons of steel per annum. Both HKC and EU Regulation do not ban beaching but require proper management including control of any leakage, in particular in intertidal zones. IHM broadly used in India is not the one which is stipulated in HKC and relevant IMO Guidelines. SRFMP (Ship Recycling Facility Management Plan) broadly used in SRFs in India is not the SRFP stipulated in HKC and relevant IMO Guidelines.  etc.

But according to Ajoy Chatterjee the former Chief Surveyor to the government of India and who represented the country at the IMO meetings on Ship recycling informed that beaching method was not banned. He appealed to the industry to go ahead and ratify the convention immediately as this would prove beneficial to them on the long run.

“The India’s Supreme Court had given a verdict which is a mirror image of Hong Kong Convention that was adopted in Hong Kong, from 11 to 15 May 2009 and attended by delegates from 63 countries,” stated ”Nitin Kanakiya, Honorary Secretary of the Ship Recycling Industries Association (India). He pointed out that Improvement is a continuous practice. But the Convention was a crisis of confidence and trust when the number of recommendations that were put forth by our industry was brushed aside. “There has been a hue and cry about the beaching method which turns out to be only confusion in the minds of a few. Our recycling industry basically generates steel and our industry has to be competitive to survive. There are just a few issues that need to be sorted out and we are ready to discuss as a responsible industry committed to integrating continuous improvement and the advancement for the betterment of the human beings. If volatility is a factor we can consider it and find a solution.    

Henning Gramann, Managing Director of GSR Services Germany contended that there was a lot of misunderstanding amongst the stakeholders of the industry. One cannot identify the hazardous material and its quantity in a ship just by looking at it. Another problem is the task of maintaining this inventory. “Once the convention comes into force the development of Inventory of Hazardous Material (IHM) will be a significant task for shipowners of both existing ships and new buildings,” he said. “To develop and maintain this Inventory will require a massive demand for experts. Hence there is a need to join forces for IHM preparation right away before the convention comes into force.”

In the panel discussion many voiced their opinion on the burden that will be cast on the ship owners for maintaining the IHM especially during the current downturn which could put many in the red. “The cost to the ship owner to maintain IHM will be around $ 30,000 per annum per vessel,” informed Rakesh Bhargava, Head, IHM, Green Recycling and Lay-up Services, Wilhelmsen Ship Management Sdn Bhd, Malaysia. However, Henning felt it should not be so exorbitant but may be on the higher side of $ 10,000. “Rajeev Nayyer, Head S & P New Building, Essar Shipping Ltd. clarified that IHM is not a one-time document. It is a live document and has to be continuously updated.”

A.V. Shah, Regional Officer, Bhavnagar, Gujarat Pollution Control Board drew attention to the several inconsistency. “There is lack of clarity particularly with respect to the work zone standard, safety standard and environmental standard. Who will be the authority concerned? Who will inspect the IHM and verify the material? He also wondered why asbestos should be considered hazardous since even today it is being extensively used for roofing, asphalt-asbestos floor tile, linoleum backing, ceiling tile, duct insulation for heating, ventilation and air conditioning (HVAC) systems and several other applications.

Pravin Nagarsheth, Advisor to the ship recycling associations of India, was wary about the EU convention and how it was to be implemented. Would it require ship recyclers from India to get their facilities registered with their ship owners or with the EU states? What would be the extent of the facility required?

He said, “The assumption that due to dry docking facility, India will get cheaper ships is not going to be true in a scenario where ship owners want maximum price for ship and they are going to market the ships through cash buyer intermediaries where no laws can be implemented.

“It is seen that the dry dock project is being designed for 30 ships a year i.e. about 3 ships a month, as against about 350 ships which are being recycled at present at Alang,” he said. “Basically India is against expensive dry dock method and would like to continue with economical, viable and cheap method of beaching only, for recycling the ships. Who will want to invest 40 per cent of the equity? What will be the return on that equity capital? Ultimately the exhorbitant burden of that equity will be passed on to the shipbreaker.” 


 


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