Enhancing Governance in ESG Practices within the Ship Recycling Industry

07 Feb 2024
Author: Mr. Kiran Thorat & Dr. Anand Hiremath

The ship recycling industry plays a pivotal role in global maritime operations, yet its activities pose substantial environmental and social challenges. Effective governance, grounded in Environmental, Social, and Governance (ESG) principles, is essential for advancing sustainable and responsible ship recycling practices. This article offers an in-depth exploration of critical governance aspects in ship recycling, highlighting industry best practices and emphasizing the importance of a holistic approach.

Environmental Compliance

Environmental stewardship is paramount in ship recycling, where the construction of impermeable flooring in HKC-compliant yards stands as a testament to the industry's commitment to exceeding environmental standards. These facilities meticulously employ multiple layers of materials, including advanced geomembranes, to ensure enhanced durability and prevent the seepage of fluids into the soil. In addition to this, heavy lift cranes lift cut blocks directly from the ship ensuring zero contact with intertidal zone. Such practices underscore the yards' commitment to surpassing basic compliance with international environmental standards, showcasing a proactive approach to minimizing ecological footprints.

Social Responsibility

The human aspect of ship recycling is critically addressed through social responsibility initiatives, notably in Alang-Sosiya ship recycling yards. By adhering to ISO 45001 standards, these yards prioritize worker empowerment and safety, fostering environments where active worker participation and representation are the norms. Comprehensive policies that promote equal opportunities, safeguard against child labor, and support collective bargaining rights are instrumental in demonstrating the yards' dedication to social responsibility and worker welfare.

Transparency and Reporting

Transparency in the ship recycling process is reinforced by allowing third-party monitoring like the Sustainable Ship and Offshore Recycling Program (SSORP), ensuring that every phase of recycling is conducted under stringent scrutiny. This approach facilitates the production of periodic reports shared with all stakeholders, maintaining rigorous records of hazardous material management. Moreover, the implementation of a documented permit system for monitoring each work activity enhances safety and environmental protection, reflecting a solid commitment to transparency and accountability.

Ethical Practices

Ethical integrity is a cornerstone of the operations at Alang-Sosiya ship recycling yards, where comprehensive policies including "No Discrimination," "No Child Labour,” “Freedom of Association,” and “Collective Bargaining” are vigorously upheld. These policies reflect the yards' unwavering commitment to ethical practices, ensuring fair treatment for all and safeguarding the rights and well-being of vulnerable groups.

Stakeholder Engagement

Effective stakeholder engagement is achieved through the involvement of classification societies, which issue Statements of Compliance (SOC) to HKC-compliant recycling facilities. Periodic audits conducted by these classification societies ensure ongoing compliance and address any observed nonconformities, fostering a culture of continuous improvement. Moreover, aligning with ISO 45001:2008 requirements, these practices underscore the significance of inclusive dialogue and cooperation among workers, ship owners, local communities, and regulators in enhancing the sustainability of the recycling industry.

Regulatory Compliance

The Indian government has appointed the Directorate General of Shipping as an apex body for monitoring ship recycling activities all over India. The Gujarat Maritime Board (GMB), Gujarat Pollution Control Board (GPCB), Atomic Energy Board, Customs authorities, and Directorate General, Factory Advice Service and Labour Institutes (DG FASLI) are regulating ship recycling activities in Alang at regional levels. This regulatory framework ensures that practices adhere to responsible recycling policies, maintaining high standards of environmental and social governance at both the national and regional levels.

Risk Management

Robust risk management strategies are crucial for addressing potential emergencies in ship recycling yards. Regularly conducted drills, such as those for firefighting, oil spill response, and enclosed space rescue, are vital for preparing workers to effectively manage emergencies. These drills highlight the importance of familiarity with emergency protocols and escape routes, highlighting risk management as a fundamental aspect of responsible recycling operations.


Adopting a holistic approach to governance in ship recycling, which encompasses environmental, social, and governance considerations, is necessary for advancing a sustainable and responsible industry. The practices of leading industry players, demonstrated by the efforts of Alang-Sosiya and HKC-compliant yards, not only align with ESG standards but also elevate ethical excellence, stakeholder engagement, and the pursuit of continuous improvement. As the ship recycling industry continues to evolve, firm dedication to these governance principles is essential for ensuring a more sustainable and ethically responsible future.

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About Author

Kiran Thorat is a Trader at GMS, where he looks after sustainable ship recycling projects. Kiran believes that Sustainable Recycling is an integral part of Sustainable Shipping and a notable example of a circular economy. He holds a Bachelor's Degree from the Marine Engineering and Research Institute (DMET), India, and a Master's Degree in Energy, Trade, and Finance from Cass Business School, London.

Dr. Anand M. Hiremath is a Civil Engineer and holds a Master's Degree in Environmental Engineering from the Indian Institute of Technology Guwahati (IIT Guwahati), India. He was awarded Doctorate Degree in the year 2016 for his research work on Ship Recycling by the Indian Institute of Technology Bombay (IIT Bombay), India. In addition, he has a diploma in Industrial safety, is a qualified lead auditor for ISO 9k, 14k and 18k. Dr. Hiremath published the first practical handbook on ship recycling, entitled: "The Green Handbook: A Practical Checklist to Monitor the Safe and Environmentally Sound Recycling of Ships" which highlights the procedures the GMS RSRP follows to help both Ship and Yard Owners recycle a vessel in an environmentally-friendly manner. He is the Chief Sustainability Officer of GMS.

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Ship Recycling Team