Platform News – SAVE THE DATE: Ship Recycling Lab on 20-21 September in Rotterdam

Recognising the need for visionary solutions for ship recycling, we are hosting our first Ship Recycling Lab: Transformation through Innovation on 20-21 September 2022 in Rotterdam, Netherlands.

 

The event will bring together forward-thinking stakeholders from the maritime, recycling and steel sectors, financial institutions and policy makers to showcase and exchange ideas for best practices and strategies for ship demolition, design, waste management and material recovery in line with ethical circular policy goals.

 

Providing visibility to companies that have developed solutions, including innovative cutting techniques, new state-of-the-art waste handling procedures, cradle to cradle concept design, and clean steel breakthrough technologies aimed at achieving a zero-carbon steel making process, the Lab intends to set the bar for tomorrow’s ship recycling. 

 

Come join us and 200+ progressive stakeholders for networking opportunities, inspiring keynote speaker sessions, thought-provoking presentations, interactive panel discussions, a photo exhibition from Bangladesh and a live performance at the iconic Kunsthal museum in the shipping hub of Rotterdam in September!

 

Register and buy your tickets now at www.shiprecyclinglab.org to get a €200 Early Bird Discount. 

Any questions? Contact us at events@shipbreakingplatform.org.
 

We encourage you to join the discussions on Twitter using the hashtag #SRLab. You can also follow the event organisers @ShipRecLab and @NGOShipbreaking.

 

Platform News – Norwegian pension funds turn their attention towards Indian shipbreaking practices

Last week the Council on Ethics of the Norwegian oil pension fund (Government Pension Fund Global) announced that it will turn its attention towards Indian shipbreaking practices. This may well result in further divestments from shipping companies with poor shipbreaking records. 

 

ivest from companies, including container line Evergreen, selling their end-of-life vessels to shipbreaking yards located in Pakistan and Bangladesh due to an unacceptable risk that the companies are contributing to serious environmental damage and gross violations of human rights”. 

 

KLP, Norway’s largest private pension fund, followed suit and blacklisted the same companies. In January, KLP also blacklisted Nordic American Tankers (NAT) following the sale of ten oil tankers for dirty and dangerous scrapping on beaching yards in South Asia. The Bermuda-registered company, controlled from Norway by Herbjørn Hanson, was firstly confronted by KLP and criticised by Norwegian press for having sold eight ships for scrapping to South Asia in 2018, ensuring NAT a 80 million dollar scrapping revenue. Five vessels ended up in Chittagong, Bangladesh; three ended up in Alang, India. The sale of two additional vessels to Bangladeshi yards with terrible accident records prompted KLP to blacklist NAT earlier this year.

"KLP’s goal is that no ship ends up on a beach where irresponsible scrapping practices take place. It is the ship owners’ responsibility to identify which standards, routines and processes they need to comply with to ensure safe and responsible ship recycling."
Håvard Gulbrandsen - CEO - KLP

The European Commission recently announced that two Indian yards (i.e. Priya Blue Industries Pvt. Ltd, Shree Ram Vessel Scrap Pvt. Ltd) that applied for inclusion in the European List of ship recycling facilities do not comply with the EU Ship Recycling Regulation. The site inspections and technical assessments, done by the classification society DNV GL, identified several areas where the yards do not meet the requirements for clean and safe ship recycling.  

 

 

Financers pressure shipping industry to clean up its recycling practices

Financers pressure shipping industry to clean up its recycling practices

Banks, pension funds and other financial institutions are increasingly asked to take into account social, environmental and governance criteria when selecting asset values or clients. Investing with an eye to environmental or social issues, not just financial returns, is in demand, and the credit providers and investors of shipping are now actively taking a closer look at how they might contribute to a shift towards better ship recycling practices off the beach.  

 

Through what is known as “negative screening”, investors are using the annual lists that the Platform publishes on global dumpers to screen their portfolio. In 2018, Scandinavian pension funds the Norwegian Government Pension Fund Global and KLP divested from four shipping companies due to their beaching practices. The exclusions were made public and with written explanations. Both the breach of international human rights and the severe environmental damage caused by beaching were highlighted as reasons for the divestments.

 

"One particular problem with beaching is that shipbreaking takes place when the vessels are standing in mud and sand. As a result, the pollution leaches into the ground and is washed out with the tides. Even if arrangements were put in place at the beaching sites for the treatment of asbestos and PCBs, for example, the fundamental problem of containing and collecting the pollution would be impossible to resolve. There are better ways of dismantling ships that are readily available to the shipowner, but these are more expensive. "
Council on Ethics - Norwegian Government Pension Fund Global

 

Banks play a crucial role in supporting economic activity through their lending. They can also influence better business practices through engaging with their clients on social, environmental and governance matters. Starting off as a Dutch bank initiative with NIBC, ING and ABN AMRO as founding members, large Scandinavian and German shipping banks are now also part of a group of banks that promote responsible ship recycling and negotiate clauses to that aim in the loan agreements they sign with shipping companies. 

 

"The recycling, or scrapping, of a ship at the end of its lifecycle poses potential large social and environmental risks for the shipping industry, especially if so-called beaching practices are used. These practices mean that ships are driven directly upon beaches and dismantled under difficult working conditions and with detrimental environmental consequences as hazardous waste is discharged directly into the sea."
Nordea Bank

 

The financers of shipping have signaled that there are likely further exclusions to come. In light of the announced decommissioning in the oil and gas sector, it is further likely that investments in oil and gas assets will be also scrutinized. 

 

 

 

Council on Ethics - Recommendation to exclude Evergreen Marine Corp (Taiwan) Ltd from the Government Pension Fund Global (GPFG)

KLP - Shipbreaking practices in India, Bangladesh and Pakistan

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Platform News – Norway’s largest Pension Fund highlights human rights and environmental risks related to shipbreaking in South Asia

KLP, Norway’s largest pension fund [1], commissioned the International Law and Policy Institute (ILPI) [2] to write a report on the human rights and environmental risks related to the current practice of dismantling end-of-life ships on intertidal beaches. The report entitled Shipbreaking practices in Bangladesh, India and Pakistan. An investor perspective on the human rights and environmental impacts of beaching was released last week and examines the shipbreaking practices in Bangladesh, India and Pakistan in light of internationally recognised frameworks for responsible business conduct, as well as the practice of the Council on Ethics for the Norwegian Governmental Pension Fund.

 

The report argues that the responsibility of companies operating in the global market place does not stop at its own doorstep, but extends to adverse human rights impacts in the entire value chain. KLP joins a number of other investors and clients of shipping [3] that increasingly raise concerns over the current conditions of the shipbreaking industry in South Asia.

"The dismantling of ships using the ‘beaching’ method as it is practiced on the beaches of South Asia is dangerous for people and the environment."
Jeanett Bergan - Head of responsible investment - KLP

International standards by which corporate responsibility can be measured include the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles for Business and Human Rights (UNGP). Companies are required to carry out a risk-based due diligence with respect to the human rights as well as environmental impact of their business activities, including their value chain.

 

In the report’s foreword, CEO of KLP, Håvard Gulbrandsen, states: “We hope that the report can help raise awareness of the severe human and environmental risks beaching can entail for shipping industry companies, their customers, and also for other investors. […] KLP hopes to encourage investors to work together to engage with companies on improving labour and environmental conditions. The shipping industry is and will be an important part of Norwegian investors' portfolios for the foreseeable future. KLP's goal is to work towards a future where responsible shipbreaking is the industry standard.”

 

 

NOTES

 

[1] KLP is Norway's largest life insurance company. Kommunal Landspensjonskasse (KLP) delivers financial and insurance services to the public sector, enterprises associated with the public sector and their employees.

 

[2] International Law and Policy Institute (ILPI) is an independent institute focusing on good governance, peace and conflict, and international law. Their approach to solving global challenges is based on the integration of law and social sciences and on bridging the gap between academia and politics. They provide research, analysis, policy advice, process support and training to clients ranging from private companies and institutions to governments and international organisations.

 

[3] Major companies such as H&M, Tetra Laval, ABB, Philips, Volvo and Volkswagen do not want to be associated with substandard shipbreaking practices in South Asia and have asked their forwarders – the shipping companies they use to transport their goods – to adopt sustainable ship recycling policies. For more information click here.