Saving face v saving money
Reports this week that Maersk has been somewhat two-faced in its attitude towards end of life ships having quietly sold one vessel for scrapping in Bangladesh when it was publicly decrying the practice and apparently persuading other owners to follow suit is really no more than the latest in a series of corporate cover-ups. As the world is today almost every corporation believes there is a need to present a ‘green’ image to the world although in reality most of the world does not necessarily share the same opinion and is willing to accept a lower standard in return for affordability. What Maersk did may have been outside of its declared ethical scrapping policy but it was certainly not illegal and indeed may have been the right decision under the law which in most countries requires corporate bodies to act in the best interest of shareholders whenever it is legal to do so. It certainly was not on a par with the activities at certain car and engine manufacturers where illegal activities were used to help promote the companies’ green image. As to the charge of pushing German owner MPC to follow suit, that is never one that would stick. Back in early 2014 when Maersk Line agreed with MPC to terminate early the time charters of a number of ageing boxships, it was always possible for the owner to make their own decision as to the fate of the vessels involved. In truth it was quite likely that the early termination was in the best interests of all parties. At the time, a spokesman for MPC confirmed that by Maersk returning the ships early it was able to achieve a solid return for its investors by selling the vessels for scrap at a higher price than might have been expected later. Had they not been returned in 2014, the ships would have ended their charter periods this year with no prospect of future employment and with scrap prices at low levels. It is debatable if the investors in the MPC fund would have preferred a cleaner end to the vessels they had invested in but if they were so concerned about environmental matters it could be argued that they were knowingly investing in an industry which was already under attack (some might say undeservedly) for its environmental record. What this episode does highlight is the fact that almost all economic activity has an environmental cost but the benefits have to be weighed against the downside. Maersk and indeed any shipowner has the possibility to dispose of end of life ships away from the beaches of the subcontinent but what proposals are there from the protestors to replace the loss of livelihood of those involved in dismantling the vessels if that was done? Some would say that a penniless and probably starving population of tens of thousands is a high price to pay for a clean beach.