August 11, 2017
As ship recycling standards have increased across the sub continent, tanker owners need to adapt to the stricter requirements for cleaning vessels for hot works prior recycling. As we have seen earlier this year, tragic accidents aboard vessels that were not cleaned thoroughly led to a tragic loss of life and closure of the Pakistani market for over 8 months now. This should serve as a serious wake up call to tanker owners that their vessels must be totally cleaned of all cargo residues, slops and sludges in all cargo and slop tanks in order to mitigate risks of an accident at recycling yards.
Regrettably, we have noticed a few ship-owners are shying away from such an important and fundamental responsibility. This is a dangerous precedent that must stop immediately. All in the shipping community need to sleep sound at night knowing that they have acted responsibly. Every effort should be made to prevent a repeat of the awful accidents witnessed in Pakistan that led to loss of life, enforced closure of recycling markets, created negative publicity, reduced (financially beneficial) resale options, which ultimately resulted in lowering prices for all wet units across the board.
After working closely with recycling yards, ship managers, gas freeing professionals and ship owners, GMS has developed the industry's first guidelines for cleaning tankers for hot works prior delivery to recycling yards. These guidelines go above and beyond the routine requirements of gas freeing. We request owners to go the extra mile so that lives can be saved and safety standards further enhanced across a rapidly developing ship recycling sector. GMS has adopted a policy that ALL tankers purchased by our principals on "as is where is" basis will be cleaned according to these guidelines.
Should you wish to obtain a copy of these guidelines, kindly send a request to: email@example.com
Blog of the Week
Entry#2 by Jamie Dalzell
Topic: The importance of Hot Works
As standards have increased across the subcontinent, so shipowners themselves also need to adapt to the stricter requirements now faced, particularly when it comes to tankers and cleaning vessels thoroughly to reach the updated more stringent hot works recycling standards.
As we have seen earlier this year, tragic accidents aboard an FSU and LPG that were not cleaned thoroughly by the concerned cash buyer (possibly seeking to cut corners and do a 'cheap' cleaning job) led to an unnecessary loss of life and closure of the Pakistan market for over 8 months now. This wake-up call should serve as a dire notice to tanker owners that their vessels must now be completely cleaned of all cargo residues, slops and sludges in all cargo and slop tanks to avoid a repeat. With blowtorches cutting vessels, lives are at risk and this should not simply be a burden for shipowners (who know their vessel better than anybody else) to shift onto cash buyers.
All in the shipping community need to sleep sound at night knowing that they have acted responsibly, and particularly with an increasing flow of tankers now coming for recycling, this responsibility must extend to the shipowners and the nature of the cleaning job they should now take on before delivering to cash buyers / local markets.
A repeat of the accidents witnessed in Pakistan will only lead to enforced closure of recycling markets, more negative publicity and headline risks, reduced resale options and therefore much lower pricing for all wet units across the board. By simply spending a little extra to clean their vessels in line with the GMS guidelines for hot works, lives can be saved and infrastructure / standards further enhanced across a rapidly developing ship recycling sector.
GMS Dubai, the world’s largest buyer of ships and offshore assets, was shortlisted for the ‘Shipping Company of the Year’ award at yesterday’s 14th Seatrade Maritime Awards Middle East, Indian Subcontinent & Africa ceremony, held at Atlantis, The Palm Dubai.
The award honours companies that have undertaken a major transformation or had a significant impact on the region’s marine market. GMS was recognised for its transformative leadership of the ship recycling industry, its ongoing efforts to lead a global change in perceptions of ship recycling and its direct investment in both the expansion of its Dubai headquarters and the improvement of ship recycling facilities in India and Bangladesh.
GMS has driven forward the concept of responsible ship recycling, which has now gained acceptance from key stakeholders around the world. It is the only buyer of ships committed to safe and environmentally sound ship recycling, with a dedicated “Green Team” working with industry associations, government bodies and unions to support improvements in worker health, safety and environmental standards. Moreover, it is the only buyer of vintage tonnage that has actually invested in the last ten years over $1million USD in the education of shipowners, yard facility owners and media about the significance of responsible recycling.
Most significantly, GMS championed approximately 200 deals last year, finishing on top of its competition once again. Since its establishment in 1992, the company has concluded about 3,000 vessels and offshore structures. Notably, the company is on a rapid growth rate with the addition of two new offices and further expansion plans for next year.
Dr. Anil Sharma, President and CEO, GMS commented: ”Being a finalist in the ‘Shipping Company of the Year’ category at the Seatrade Middle East Awards is a fantastic achievement for GMS. Ship recycling plays a fundamental role in the sustainable lifecycle of a vessel and under the current market conditions, responsible recycling is the only way to address the vessel oversupply. As a company, our leadership and commitment in developing a more sustainable future for the ship recycling industry has made a real, tangible difference to attitudes and practices within the shipping industry and we look forward to seeing this trend growing further in the coming years.”
On Monday 20th of April 2015, Michael Grey of Lloyds List published the article "Name-calling bullies" where he outlined his opposition to the idea of banning beaching and gave reasons why such a decision would be impractical and unethical for the ship recycling industry.
In fact, throughout his article he stressed the improvements of safety and environmental standards which have taken place in facilities in the Indian subcontinent and highlighted the fact that these improvements had been witnessed during a fact-finding visit to Alang, India, by a delegation of Japanese industry and government officials organised by GMS. To quote the article directly:
"The visit, which was organised by the cash buyer Global Marketing Systems, was able to see the improvements that were being made and which could be more widely spread around the whole subcontinental recycling sector.”
In his article there are few other arguments worth highlighting, including that if the decision is taken to ban beaching, there would be a limited capacity of yards to carry out recycling; IMO's efforts through the Hong Kong Convention to promote the safe and environmentally sound recycling of ships; and the 40,000 jobs associated with the industry of ship recycling in the Indian subcontinent.
On the 1st of May 2015, Adam Corbett wrote in TradeWinds (Volume 26 / Number 17) that "Belgium opposes the Brussels ban on beach scrapping.” Throughout his article similar opinions as the aforementioned one were expressed.
It is evident that the industry has already taken notice not only of the developments which have taken place in ship recycling facilities which practice environmentally sound beaching methods, but also of the necessity of such facilities to not be excluded from the EU regulation around ship recycling.
The Rising Standards of the Indian Subcontinent
With the raising of ship recycling standards in the Indian subcontinent spreading, and key players in the industry becoming aware of these improvements in the region, the resistance to the European Commission’s (EC’s) possible ban on beaching is steadily increasing.
Consequently, Corbett states that "In a letter to Karmenu Vella, European Commissioner for Maritime Affairs and Fisheries, Belgian Environment Minister, Celine Fremault, said she was keen to see that bad practices in beaching are stopped, but explained that it would be outside the scope of the SSR (Ship Recycling Regulation) to implicitly ban one method of demolition."
The tide seems to be turning against those who are opposed to beaching without being willing to witness the facts for themselves. It is evident that there are facilities capable of complying with internationally acceptable standards and regulations in the Indian subcontinent, and this seems to be increasingly recognised as highlighted by Celine Fremault’s statement quoted by Corbett as follows:
"We would like to formally request that all ship recycling facilities in third countries will be assessed individually, based on the requirements of the regulation and guidance in line with the regulation, taking into account the specifics of the recycling state and recycling method used."
“Alang is not just Alang”
GMS, in coordination with a Danish Shipowner arranged for a study visit by vetting of ship recycling facilities in Alang. The visit which took place in April 2015, included representatives from the Danish Shipowners' Association (DSA) who witnessed the ship recycling practices which are actually taking place locally.
Following up to this study visit, the Director of the DSA, Mrs Maria Bruun Skipper, wrote that "Alang is not just Alang" from which it was acknowledged that some of the yards have "undergone a positive development in order to comply with the requirements that will be set by the forthcoming Hong Kong Convention". Going into more detail, Skipper highlighted in her article that:
"We consequently saw, among other things, workers wearing safety equipment and undergoing six-monthly routine medical check-ups. We also noted that the shipyards were engaged in operations such as asbestos handling, and regularly compiled reports from water and soil pollution tests etc. Finally, we were able to personally observe that three of the shipyards had laid a concrete base beneath the beach to stop seepage of harmful substances."
Having witnessed the facts in Alang, it appears that the DSA has recognized the need for ratification of the Hong Kong Convention, and the necessity for the European Union to be cautious from excluding a place such as Alang because of the bad reputation historically.
Finally, it was worth highlighting that those who have visited Alang, have immediately changed their (negative) views, and this is also evident in the DSA statement, “Our visit was just one visit, but also an eye-opener that ’Alang is not just Alang”.
For more information about the DSA visit and rest of the comments please visit https://www.shipowners.dk/en/presse/nyheder/alang-is-not-just-alang/
European Commission Officials Need To Visit Improved Alang Yards
GMS would like to draw your attention to Corbett's statement that "The EC is yet to visit breaking yards that have made significant improvements". With that in mind, it would be encouraging to see the EU and India coordinating a direct dialogue for a fact finding mission aiming to promote cooperation and awareness, as was recently conducted between India and Japan. Of course, GMS would be willing to facilitate such a delegation at any time.
GMS and Responsible Recycling
GMS has the expertise and resources to guide owners regarding the quality of various yards in different countries, including Turkey, China and India. GMS has been actively trying to promote responsible ship recycling practices for a long time. It is therefore to our satisfaction to see that the industry is taking notice of the need to work jointly, towards encouraging continuous developments, especially when it comes to environmentally sound and friendly recycling practices. One of the best ways to achieve this is by rewarding facilities which are setting high Corporate Social Responsibility standards.
The brief spurt in raw material and steel prices witnessed over the last 3 days in India's secondary sector steel market, up on sentiments rather by increased demand, sputtered on weekend removing hopes of recovery in last leg of financial year
Price level of input material as well as finished had made rally over the last 3 days unexpectedly. The rally was primarily seen as firming up of domestic sentiments on the back bottoming out of iron ore and scrap levels in the international market.
Sponge iron price declined at all major locations by INR 100 to INR 200 per tonne due to oversupply and weakening sentiment in finished market.
Scrap price levels remained firm though since IF's indulged in stock replenishment in anticipation of further price increase. However the price levels at Alang for ship breaking and plate cutting scrap dipped.
Pencil ingot price levels corrected at most important locations since there was no significant buying of finished. The rally witnessed in the last couple of days was purely speculative trying to give the market break but not supported by demand.
Rebar market remained quiet with corrections at select locations. Structural steel price though lost at Ahmedabad, Indore and Kolkata.
Established in 1992 in historic Cumberland, MD. (U.S.A), GMS is the world's LARGEST and FIRST ISO 9001 certified Cash Buyer of ships for recycling. With exclusive representatives in all of the major ship recycling markets in the world, GMS has negotiated about 3,500 ships for recycling since inception. In addition to its original office in the United States of America, the company continues to expand its operations with offices in Hamburg (Germany), Athens (Greece), Dubai (UAE), India (Bhavnagar), Singapore, Seoul (Korea), Shanghai (China) and Tokyo (Japan).
P.O. Box 346041, Suite 101,
Saba 1 Jumeirah Lake Towers, Dubai, UAE