The Human Factor

First published in Lloyd’s List, 2009

The European Union's policy on shipping quality is supporting the scrapping industry but unintentionally making conditions in South Asian yards worse.

SHIPBREAKING has presented the European Union with a moral dilemma.

On the one hand, European ships are feeding an industry which is maiming and in some cases killing yard workers, some as young as 12, on the Indian subcontinent.

On the other, unwanted European ships provide thousands of (admittedly poor) jobs in areas of India, Pakistan and Bangladesh which are ravaged by poverty and unemployment. The industry’s by-product, steel plates, is propping up the entire construction industry in Bangladesh.

Charged with a sense of guilt, Brussels would like to prevent European owners from sending ships to scary breakers’ yards, where safety and the prevention of pollution are often afterthoughts. EU lawmakers want the trade cleaned up, even if in some cases this means sending ships elsewhere, or even breaking them up in Europe.

This is essentially an issue of morality and has its parallels in shanty towns or prisons elsewhere in the world where bonded labourers sew together the clothes worn by many Lloyd’s List readers. Should we feel responsible for their conditions simply because we buy the clothes? Is a shipowner to blame when a gas cutter is asphyxiated in the bowels of a vessel the owner has sold for scrap?

The European Commission, or at least its Directorate-General for the environment, thinks we are all morally obliged to do something. Momentum has been gradually building over the past two years and there is now the real possibility of EU laws preventing EU shipowners from using the more unseemly yards. It is certain to prove difficult to enforce.

Shipbreaking guilt is particularly acute in Brussels because EU lawmakers have unwittingly made the problem worse.Brussels helped bring about a decision to phase out single-hull tankers on safety grounds without realising the knock-on effect on the scrapping market.

The accelerated phase-out was one of several measures designed to prevent another major oil spill and was decided by unilaterally by EU leaders in the wake of the Prestige disaster. Several years later there was a sudden realisation that these outlawed ships would all need to be dismantled.

In theory this is no problem: shipowners have been sending rust-buckets to breakers’ beaches in south Asia for many years. The phase-out of a couple of hundred more vessels would simply give them more welcome work.

But lobby groups pointed out to the European commission that Brussels was supposed to be fighting the export of waste to the developing world, not encouraging it. This is not just a principle; in the EU it is law. A contradiction soon emerged: one EU policy was working against another.

Armed with evidence that many breakers’ yards are both highly dangerous and highly polluting, lobbyists have been putting pressure on the European commission to repair the damage. They have painstakingly gathered data on the number of children employed in the industry — allegedly up to 8,000 in Bangladesh alone — and the rate of industrial accidents.Their public relations has been top-notch. At seminars in Brussels they hand out fragments of ships which exploded while being broken up. They also have documentary evidence: a film, ‘Iron Eaters’, made over four months and showing the precarious lives of workers from northern Bangladesh who migrate south every year to trudge through the mud on the beaches of the appropriately named Peace, Hope and Prosperity yard in Chittagong, receiving perhaps a couple of dollars a day for working barefoot and without gloves.

It makes sobering viewing. One worker is filmed quitting after claiming he had received no pay in four months. The yard owner is caught on camera making the bizarre boast that his workers need no contract because everyone at the yard “trusted in God”. His workers meanwhile complain ships were delivered with pipes full of excrement. A sub-contractor admits that he had to pay workers’ debts with neighbouring shops directly, because if he gave them cash they would simply down tools and leave. By European standards, the conditions are atrocious.

Brussels environment commissioner Stavros Dimas saw the film when it was shown last month during a European parliament seminar. In Mr Dimas, the NGOs have a sympathiser.Given the expected surge in scrapping over the next two years, the commissioner says something needs to be done now. He hopes to publish his shopping list of legislative measures later this year. “We have to ensure that ships with a strong link to the EU are dismantled in safe facilities,” he told the seminar.

Mr Dimas wants to “enforce waste shipment regulations”, though this is more easily said than done. Shipowners currently get around the EU ban on exporting waste by only sending ships to be scrapped after they have left EU waters. If it is not an EU-flagged ship and it is not trading in EU waters, it will be outside the jurisdiction of the European Commission.

One possible way of closing this loophole, Mr Dimas hinted, was a “pre-waste ships list”, an idea put forward originally by the European parliament. Old ships trading in European waters would be put on some kind of ‘scrapping watch’ to ensure they were disposed of properly. But suppose the ship was re-flagged to, say, the Mongolian register or the Tuvalu register, renamed and then sold for cash in a deal struck in a hotel somewhere in Asia? Would commission officials still be able to keep track of it?“

The list should take into account both the age and the condition of the vessel,” said Ingvild Jenssen of the NGO Platform on Shipbreaking, an umbrella group.

Ms Jenssen has been the loudest voice on ship-breaking and knows today’s legislation better than most. Her harshest criticism is levelled at shipowners. Some owners, she says, still claim they do not know what is going on in yards where their ships get dismantled. “They should take a plane and go and have a look.”

Likewise, any claim that there is simply no alternative to the Indian subcontinent for shipbreaking is “lame” she says: “If owners insisted on higher standards the capacity would become available.

”Mr Dimas is Ms Jenssen’s only real hope given that her group has all but given up on the International Maritime Organization convention on ship recycling. The convention is being watered down so that India, Pakistan and Bangladesh will sign, it is claimed. The key criticism here is that it will be neutral on beaching, a precarious process by which a ship is driven onto a beach at high tide and then cut apart by hand and pulled apart by an army of cable-pullers, rather than broken with the aid of lifting machinery in the much safer environment of a dock.

The commission’s environment ministry supports the convention but wants the EU to go further. “The convention alone will not be enough,” said Mr Dimas He praised convention participants for achieving a complete ban on asbestos, though Mr Jenssen said this ban had in fact been achieved before the current round of talks.

For DG Environment in Brussels, timing is as important as content. Even if agreed, the convention is not expected to enter into force before 2015, after the surge in single-hull tanker scrapping. This is the main justification for EU action.

The maritime industries, as always, would rather see an international solution than a regional solution to the problem, based on the IMO convention, though they too accept the need for “interim” measures. They argue in favour of inventories of good yards and bad yards, of lists of hazardous materials involved in ship construction. Good owners already certify that ships are gas-free before sending them to be scrapped and some, Mr Dimas points out, have helped yards improve working conditions at their own expense.

Owners argue, with some justification, that only a global regime can change the condition on the ground in the Indian subcontinent because EU laws can and will be ignored by shipowners elsewhere. At the same time, owners too are not immune to guilt or to suggestions that by leaving the issue to unwieldy institutions such as the IMO, they are hoping that very little will be done at all.“This is a very sensitive issue, and shipowners don’t have the answer,” says European Community Shipowners’ Association chairman Philippe Louis-Dreyfus. “But at the end of the day, how do you know that the shirt you are wearing is not made by children in India?”

Given the complexity of the problem and its moral quagmire, it may in the end be simpler to resort to the tried and tested EU policy for sensitive situations: throw money at it.

There have already been hints that this is on the table, namely in the form of a ‘ship dismantling fund’ which would accelerate the transfer of the latest technology from Europe to Asia. If this comes about, and it was trailed as early as two years ago, owners will be unlikely to protest when asked to contribute. EU governments could even pour in some direct aid, though there is no guarantee that these funds would end up in the right hands.

If the sense of guilt pervades, there is a chance that EU governments will outlaw the breaking of military vessels in non-OECD yards (this is good news for Turkey, which has been reactivating its own industry). Some member states have moved in this direction already. That way, even if it makes little difference to the boy working for pennies in a yard in Chittagong, politicians can sleep tight in the certainty that they have washed their hands of this unseemly problem.

Gestures such as these are important. Europe is the richest continent on earth, and Brussels is the headquarters of the most civilized form of government ever invented. The European Union must therefore be seen to be doing something, even if in reality very little can be done.

Copyright Justin Stares.