- NGO Report Highlights Shipbreaking Industry Challenges in South Asia.
- Explosion at Bangladeshi Shipyard Raises Concerns Over Safety Regulations.
- Chattogram Shipbreaking Industry Faces Crisis Amid Regulatory Failures.
This year 2024, the final quarter report of the NGOShipbreaking Platform documents recent developments in the three countries: Bangladesh, India, and Pakistan. From the end of July until September, 96have been dismantled in every corner of the globe worldwide, reports Safety4Sea.
Explosion at S.N. Corporation’s Yard
Human Rights Watch and the NGO Shipbreaking Platform strongly condemned the explosion at the oil tanker SAWRAJYA on 7 September 2024, at Chattogram in the S.N. Corporation Unit-2. In this case, the Department of Environment and Ministry of Industries (MoI) have suspended S.N. Corporation’s Environmental Clearance Certificate along with constituting an eight-member committee that concluded, that technical and management failures have been the main causes of the explosion.
Regulatory Shortcomings and Industry Challenges
The accident occurred just a year after Nippon Kaiji Kyokai declared the yard compliant with the International Maritime Organization’s HKC, which will come into force on June 26, 2025. According to the report, this tragedy is a reflection of persistent failures in regulation and oversight as well as weaknesses in labour rights protection in the shipbreaking industry.
Chattogram’s Ship Breaking Crisis
The Chattogram shipbreaking industry is currently under heavy pressure, with 2023 being the lowest volume of end-of-life imports in a decade. Despite a slight recovery in early 2024, the industry outlook remains unstable. Contributing factors include high dollar costs, market disparities, a decrease in scrapping volume due to high shipping freight rates, and strict central bank regulations limiting Letters of Credit over $3 million.
Other geopolitical issues, such as the Russia-Ukraine war, the Israel-Palestine conflict, and Houthi attacks on merchant ships in the Red Sea, have also heightened the uncertainties of the industry. In the last couple of years, more than 50 yards have closed down. Within the last 18 months, 20 have closed down. Stakeholders are now calling for government intervention to save the remaining yards.
Decline in Alang’s Shipbreaking Industry
In Alang, India, over 80% of the shipbreaking plots are now in decline, and the mainly migrant workforce has shrunk from an estimated 40,000–60,000 workers to just 3,500. Even during the 2024 Vibrant Gujarat summit, where more than ₹1,600 crore (around €174,468.85) in investments were promised, these promises were largely unfulfilled.
Proposed Capacity Expansion
The plan at Alang envisages the doubling of the recycling capacity from 4.5 million Light Displacement Tons (LDT) to 9 million LDT with another addition of 50 plots in place. In any case, it would require big investments and support and such targets are far-fetched.
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Source: Safety4Sea
