The decision by Norges Bank and the Council of Ethics of the Norwegian Government Pension Fund Global to blacklist a number of shipping companies whose vessels are beached at recycling facilities in Bangladesh and Pakistan raises a couple of related questions.
First, is this a warning sign for tanker owners? And second, does the recycling industry need to do a better job of promoting recent advances?
The answer, in this regard, is a resounding yes according to recycling expert Dr Nikos Mikelis, a non-executive director with GMS, the world’s largest certified cash buyer of ships for recycling.
He told me the fact that the bank and the Council of Ethics has not blacklisted ship recycling by beaching in India, a common final destination for tankers, which is a welcome sign. It would appear to denote an awareness of improvements that have taken place in India and half of the yards have already obtained a statement of compliance (SOC) with the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) from IACS class societies.
An admission that the bank’s executive board “had not carried an independent assessment of all aspects” in reaching its conclusions and suggests that it may not be aware of the improvements that are taking place in Bangladesh, which are funded with by continuing support of the Norwegian government (ie the SENSREC project with IMO).
“How a sovereign fund of this magnitude can make decisions based on allegations, without the conduct of an independent assessment, is an extraordinary action that ought to raise questions in the public mind,” asserted Dr Mikelis. “Furthermore, the bank and the Council of Ethics claim that working conditions in Bangladesh and Pakistan are extremely poor and that t?he ship recycling process causes severe environmental damage. In saying this they fail to recognise the change that is taking place and the substantial improvements that have taken place, starting with the first yard in Bangladesh to have gained a statement of compliance with HKC.”
“In ignoring the investments and improvements of yards such as PHP, the Council of Ethics is failing its name because it is discouraging improvements and investments by other yards in these countries, self-fulfilling in this way their accusations of poor working and environmental conditions in the whole of these countries.”
“What would make sense instead, would be for the Norwegian Fund and its Council of Ethics to recognise and accept all yards that have attained compliance with HKC, regardless of where they are located. This will motivate improvements to the whole of the ship recycling sector, and that is the right and only way to move forward.”
So, what are the options for the tanker owner?
Of course, stringent due diligence is key. For its part GMS has sought to contribute to the process by developing the industry’s first guidelines for cleaning tankers for hot works, prior delivery to recycling yards.
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Source: Tanker Shipping
