Cutting up rough over Maersk’s scrapping plan

Malcolm Latarche
Malcolm Latarche

15 February 2016


When Maersk announced last week that it had made a decision to send some ships for breaking in Alang, India and that the decision would result in a cost saving for the shipping company and allow it to help the breakers upgrade their facilities, it might have been expected that there could be some criticism. The practice of beaching end of life ships is an emotional one but it is not illegal and while the governments of countries that permit it continue to do so there will be those that take advantage of it. However, Maersk has not taken the usual route of selling the ships on to an intermediate owner to be reflagged and allowing them to wash their hands of it. Instead the Danish owner has selected facilities that have been inspected by the Danish Shipowners’ Association but which more importantly have been approved and certified by a leading classification society, as meeting the requirements of the Hong Kong Convention. Leading the criticism of Maersk has been the NGO Shipbreaking Platform and Transport and Environment. In a statement from Shipbreaking Platform, Patrizia Heidegger, Executive Director said, “Maersk estimates they can realise an additional $1-2 million per ship by onselling to dismantling companies in India. It is hypocritical to see Maersk’s engagement in India presented proudly in the company’s CSR Report as one that aims at promoting higher standards. The fact is that they are already selling ships now to facilities that operate under conditions that would not be allowed in Europe – they admit themselves that the decision to go to India is primarily taken to make their financial report look better”. The statement also said “The Platform had welcomed Maersk’s initial idea to set up a long-term cooperation with stakeholders in India provided that the objective was to set up a modern ship recycling facility in line with the safety and environmental requirements set out by the European Ship Recycling Regulation. However, the hasty decision to sell off end-of-life vessels to Alang shows that the decision is merely driven by profits. In times of low freight rates, Maersk intends to boost its profits by selling to yards that do not comply with European standards”. Maersk is of course a public company answerable to its shareholders and its decision is perfectly understandable especially as the facilities inspected and approved by the DSA and ClassNK do apparently meet the Hong Kong Convention requirements. The EU Ship Recycling Regulation made in 2013 and now in the process of being rolled out is described by the European Commission as bringing into force an early implementation of the requirements of the 2009 Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships, therefore contributing to its global entry into force. The Convention is not well supported globally or within the EU since only France, Norway and Congo have bothered to sign it. As for Shipbreaking Platform’s claim that the yards Maersk intends to use do not comply with European standards, that is hard to prove since the European Commision does not yet list one yard that does. A search on the EC website for yards results only in a statement that one should be available by the end of this year. Perhaps if the EU spent its funds on speeding up the approval of facilities rather than funding NGOs – Shipbreaking Platform relies on funding to the tune of about €160,000 annually from the EU to cover most of its budget – then perhaps the list could be compiled earlier. Or maybe the lack of listed facilities is because none within Europe can in which case criticism of owners continuing to use what is available is unjustified. An alternative would be to do what the US did with its reserve fleet of so-called ‘ghost ships’ and leave them tied up in a forgotten EU port to gradually rot and decay. When EU-based facilities such as Able wanted to dispose of them responsibly at a time before the Hong Kong Convention was even adopted they got little support from any EU state.