Clean Seas
Winter 2000-2001

SHIP RECYCLING AT ALANG

Just before this issue went to press news came in of the devastating earthquake in Gujarat, India. At the time of printing the scale of the disaster in the state’s shipbreaking area of Alang was not clear though industry sources said ships were still being accepted for breaking at Alang just days after the disaster. The following personal assessment of environmental developments at Alang by Dr. Anil F. Sharma, President & CEO of Global Marketing Systems before the earthquake struck, must now be seen in the light of the recent tragedy and the immense challenge of rebuilding now facing Gujarat.

The larges ship recycling yard in the world, Alang, is making impressive progress in two critical aspects of ship recycling. The improvements, which have followed years of criticism, been achieved under the stewardship of PN Roy Chowdhury, US-educated Vice Chairman and Chief Executive Officer of Gujarat Maritime Board (GMB), the state government agency that supervises ship recycling at Alang.

The two areas of development are working conditions and environmental impact. New regulations were introduced by GMB in September of last year which call for significant improvements in the above two areas. What is perhaps even more laudable is that these changes were introduced after substantial input both from the western world and the local recyclers.

In addition to laying specific criteria affecting working conditions, the new regulations also highlight conditions for the disposal of recycling materials and operating procedures at the ship recycling facilities. Some of the other areas covered by the new standards are: requirements to be fulfilled before permission is granted for delivery (beaching) of the vessels; "cutting" processes; and safety, supervision, environmental and operational issues that govern the actual cutting operations. Explicit and strong penalties ranging from suspension of recycling activities for a specific number of days to the forfeiture of the yard itself, are proposed against recyclers who fail to comply with GMB regulations.

Subsequent to the introduction of the above policy guidelines, GMB is now proposing the introduction of landfills and incinerators to the recycling process – believed to be a FIRST in the recycling industry.

While the proposed actions may not meet the expectations of the highly aggressive agenda set up by certain militant environmental and worker’s rights groups, the international community must recognize and applaud the efforts of GMB and the Alang recyclers.

When these actions are compared to the actions or lack of action of other ship-recycling countries within the Indian subcontinent, but China and also to other primary industrial activities within India, the new GMB measures certainly appear cutting-edge. More importantly, they demonstrate the willingness of the Indian ship recycling industry and the government to tackle sensitive issues head-on.

There is no doubt that ship recycling activities in a developed country would be more technologically oriented, partly due to the fact that labour costs are very high.

In heavily populated countries like India with an abundance of unskilled labour, it seems recycling will remain a labour-intensive industry. Bearing in mind the "outdoors" nature of this industry it can be argues that the ship recycling industry in India had a better record of worker and environmental conditions, than comparable industries such as mining or chemicals.

The importance of this industry to shipping and to the safety of seafarers and the environment is unarguable. Recycling today is providing ship owners with a strong economic incentive to dispose of their old vessels, hopefully prior to any disastrous results.

It is imperative, therefore, for the industry at large to support and encourage the growth of this industry in a planned, strategic and gradual manner rather than the hard line posture taken by certain radical groups who may be aggressively pushing their subjective agenda forward without giving prudent consideration to all of the issues involved.

Much can be learned from the actions of the US Maritime Administration (MARAD) several years ago when, due to strong pressures from political lobbyists and environmental groups, MARAD was instructed to stop the sale of surplus vessels overseas – specifically to the main ship recycling countries in the Indian subcontinent and China. Has this policy resulted in some real tangible gains for the industry? This author believes the results so far prove that they have not.

Alang’s infamy began when two reporters from the Baltimore Sun (a Maryland, US newspaper), Will Englund and Gary Cohn first came to India in February 1997 and published their report on Alang in the Baltimore Sun in December 1997. In April of 1998 their article won them the coveted Pulitzer Prize for investigative reporting. Such acclaim and publicity began to draw more western reporters to Alang – most of who continued to berate Alang.

Soon after the Baltimore Sun article, Maryland Senator Barbara Mikulshi initiated a storm of protests against the export of US vessels overseas. It is quite obvious that in addition to political and moral reasons, the objections also had to do with creating jobs in Maryland. At that time, the U.S. Maritime Administration (MARAD) had a backlog of about 180 vessels awaiting destruction; and there were some facilities in Maryland which could recycle some of these vessels. Subsequently, MARAD stopped selling obsolete and surplus vessels overseas.

However, MARAD soon found out that recycling activities within the US were limited and not necessarily environmentally friendly. The US Environmental Protection Agency (EPA) found itself in an awkward position and a new debate ensued on what constitutes eco-friendly recycling activities. In spite of any meaningful opposition of the MARAD and EPA plans, years of deliberations ensued with marginal success in the proper disposal of the vessels. Several years of historical evidence has now clearly demonstrated that the hasty steps taken by MARAD have been a failure. An ABC World News TV report late last year, portrayed MARAD in a state of crisis!

MARAD’s fleet is rotting and the economic and environmental consequences are arguably far greater than had MARAD continued or supported the recycling efforts overseas. Today, even a lump sum price of US $10, there are no buyers and in the event these vessels are not disposed of quickly, MARAD is expected to spend up to US $15 million annual in the maintenance of these vessels!!

Keeping in mind the MARAD experience and recent events, it is critical that the shipping industry looks at Alang and the ship recycling industry in a more supportive rather than an antagonistic manner. Real progress can only come with gradual and managed bottom-up rather than top-down change and change driven by political and confrontational agendas.

Extreme caution should be exercised in order not to fall victim to knee jerk reactions. Under aggressive media pressure, bureaucrats can be left with no other choice by to develop a set of guidelines expeditiously and without an extended dialogue with the affected constituents e.g. ship recyclers. There is also a danger of jumping onto the "environmental" bandwagon without exercising due diligence.

The discussions on the environmental impact of ship recycling today are by no means complete and conclusive. Just last year, volunteers from Greenpeace took samples from the beaches of Alang for testing. The results of this analysis are still unknown and largely debatable.

When MARAD requirements were first introduced, there were no precedents to follow. The EPA—a US government agency—had great difficulty in setting up guidelines and a set of requirements on meaningful ship recycling activities. These guidelines have evolved over time but are still by no means conclusive!!

Finally, the MARAD experience has clearly demonstrated that in order to develop the ship recycling industry at par with applicable western codes and laws, huge subsidies will have to be provided to the ship recyclers.

Unlike the US government, which has the financial and political muscle to introduce such measures, countries in the Indian subcontinent simply do not have the ability to finance ship-recycling efforts.

This raises two important questions. Do private ship owners or any other shipping organisation have the ability and the will to provide grants of millions of dollars to the recycling industry? Are radical changes needed to an industry that possibly has an annual economic impact of about US $1bn?

The ship recycling industry should make continual, constructive and managed improvements but, it is important to recognise the fallacies of some of the biased articles and ideas being floated regularly in the western press.

What would happen if individual owners were asked to pay the recyclers? Have MARAD actions resulted into new and more effective ways of ship recycling or shown significant progress in the development of ship recycling activities?

The MARAD experience shows that the only constructive way to develop this industry is by working with groups and businesses within the industry from a bottom-up, rather than a top-down approach which MARAD decided to take. So GMB’s actions should be commended by the industry at large.

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