Platform publishes South Asia Quarterly Update #18

There were a total of 181 ships broken in the first quarter of 2019. Of these, 142 ships were sold to the beaches of South Asia where they were broken under conditions that cause irreversible damage to both human health and the environment [1]. Between January and March, three workers have lost their lives and four were severely injured when breaking ships in Bangladesh. 

 

 

On 28 January, according to local sources, Md Motiur Rahman lost his life while working at S. S. Green Ship Breaking yard, located on the beach of Chittagong, Bangladesh. Twenty days later, a fire broke out in the engine room on board the Greek-owned Polembros’ tanker S WARRIOR at Shagorika Ship Breaking Yard, killing workers Md Jamil and Bipul. 

 

No severe accidents were reported in India and Pakistan. Whilst information on accidents in Alang remain difficult to obtain due to lack of access and transparency, a significant decrease in scrapping activities has no doubt contributed to a quarter with no recorded accidents in Gadani. In the last six months, 70% of the workers are said to have lost their job. 

 

In the first quarter of 2019, US, Saudi Arabian and Singaporean ship owners sold the most ships to South Asian yards, followed by Greek and South Korean owners. 

 

Data keep showing significant activity in the decommissioning of oil and gas units. At least 12 offshore assets reached the end of their lives in the first three months of this year. Transocean Ltd., based in Switzerland and listed on the New York Stock Exchange, is the offshore drilling contractor that scrapped most units in the last decade. Despite being under the spotlight for a series of accidents involving some of its drilling units [2], the company always distinguished itself for having adopted a good end-of-life fleet management policy that required the use of recycling yards that do not operate on tidal beaches. Regrettably, Transocean, however, recently took the decision to scrap its semi-submersible platform JACK BATES (IMO 8755780) on the beach of Alang, India. The platform was beached in February at R.K. Industries (Unit-II), one of the yards that are part of the Shree Ram Group. Shree Ram claims its yards are amongst the best facilities operating on the Alang beach. Ship owners, such as Danish Maersk, praise the company’s practices. However, past media reports and a recent inspection visit to one of its plots by the European Commission have flagged serious concerns related to e.g. pollution of the intertidal area, absence of medical facilities, breaches of labour rights and lack of capacity to manage certain hazardous wastes downstream. Indeed, the facility did not meet the safety and environmental requirements for EU approval and was thus not added to the EU list.

 

Norwegian Grieg Green, ship recycling consultancy fully owned by Grieg Star, facilitated the sale of the JACK BATES and will monitor the scrapping operations on the ground. This is the first time Grieg Green offers its expertise on a demolition project taking place on a South Asian beach. Whilst its parent company has recently hit the news for being one of the first ship owners to scrap a vessel responsibly under the new EU Ship Recycling Regulation at Leyal ship recycling yard in Turkey, Grieg Green seems to have abandoned the Grieg Group’s off the beach stance. 

 

More than half of the ships sold to South Asia this quarter changed flag to the registries of Comoros, Niue, Palau and St. Kitts and Nevis just weeks before hitting the beach. All ships sold to the Chittagong, Alang and Gadani yards pass via the hands of scrap-dealers, also known as cash buyers, that often re-register and re-flag the vessel on its final voyage. Grey- and black-listed flags of convenience are particularly popular with cash buyers. These flags are not typically used during the operational life of ships and offer ‘last voyage registration’ discounts. They are grey- and black-listed due to their poor implementation of international maritime law. The high number of flag changes should alert authorities towards the ineffectiveness of legislation, including the EU Ship Recycling Regulation, which is based on flag state enforcement only.

 

The EU Ship Recycling Regulation became applicable on 1 January 2019. According to the Regulation, EU-flagged vessels have to be recycled in approved facilities included in the EU list. At least five ships were scrapped in accordance with the new requirements. However, the Platform recorded at least seven ships that swapped their European flag to that of a non-EU registry prior the last voyage to the shipbreaking yard in order to circumvent the legislation. Beaching yards do not feature on the EU list as they do not comply with the Regulation's requirements.

 

The case of the container ship BOXY LADY (IMO 9108386), owned by Greek Aims Shipping Corporation, illustrates how ship owners circumvent the law. In November 2018, the Platform alerted Spanish authorities about the imminent illegal export under the EU Waste Shipment Regulation of the Malta-flagged ship from the port of Vigo. Despite authorities having been informed, the vessel started its voyage towards Bangladesh. Aims Shipping Corporation then also managed to circumvent the EU Ship Recycling Regulation by changing the flag of the vessel to Bahamas in December 2018, just prior to its beaching in Chittagong in March.  

 

The shipping industry claims that it is forced to re-flag as there is not enough capacity on the EU List. A report published in September last year by the NGO Shipbreaking Platform and Transport & Environment, however, showed that there was more than enough capacity, both in terms of tonnage and size, to cater for the EU flagged end-of-life fleet. Since then, two Turkish yards, a yard in the US and more European yards have been added to the list. This week the European Commission also announced that it intends to add a further eight yards operating in Denmark, Norway and Turkey to the List. Clearly, however, more efforts to detect violations of European waste law and stronger incentives, such as a return scheme for all vessels trading in the EU, are needed to ensure use of the EU list and proper enforcement of current legislation on ship recycling. 

 

 

NOTES

 

[1] During the first quarter of 2019, the following number of vessels were broken in other locations: 20 in Turkey, 1 in China, 8 in Europe and 10 in the rest of the world.

 

[2] The explosion of the Deepwater Horizon, the leak off the Brazilian coast caused by the Sedco 706 and the grounding of the Transocean Winner hurt the offshore giant’s reputation. 

 

Platform publishes South Asia Quarterly Update #17

There were a total of 113 ships broken in the third quarter of 2018. Of these, 79 ships were sold to the beaches of South Asia for dirty and dangerous breaking [1]. Between July and September, three workers have lost their lives when breaking ships in Alang, India. So far this year, Platform sources have recorded 24 deaths and 9 injuries in South Asia.

 

 

On 27 August, according to trade unions, Naago Singh lost his life while working at Shri Gaitam Ship Breaking yard, located on the beach of Alang, India. Four days later, workers Budhabhai and Ali Ahmed died at Alang yard Honey Ship Breaking, owned by RKB Group. While cutting the cruise ship OCEAN GALA (formerly known as MS Scandinavia and MS Island Escape), they both fell and died on the spot. The OCEAN GALA was an iconic vessel, having featured in TV documentaries and been previously owned and/or operated by well-known companies such as DFDS, Royal Caribbean Cruises and Thomson Cruises during its 36 years of operational life. In 2018, after spending several months laid up in Dubai Khalifa, the OCEAN GALA sailed to Alang, where it was beached on 4 April.

 

No severe accidents were reported in Bangladesh and Pakistan. In Chittagong, a significant decrease in scrapping activities due to the monsoon season and increased pressure for safe working conditions from the Platform’s member organisations on local authorities, following the disastrous accident record of the first half of 2018, have no doubt contributed to a quarter with no recorded accidents. In Gadani, however, a fire broke out in July on the German-owned tanker ADA beached at plot 116. Luckily, the rescue team successfully evacuated all the workers from the ship. Activities at Gadani continue to take place in breach of decent working and environmental standards. This type of incident could have been avoided if the ban on dismantling oil tankers, which was placed following a series of accidents in 2016 and 2017, had not been lifted in April 2018.

 

In the third quarter of 2018, US, Greek and Indian ship owners sold the most ships to South Asian yards with 10 vessels beached each, followed by German and Singaporean owners. Industry sources report that the South Asian market received fewer vessels in the third quarter due to, inter alia, the monsoon season, Eid holidays and a decline in both steel prices and currencies.

 

Norwegian ship owners continue to sell ships for scrapping in South Asia. In June, Nordic American Tankers (NAT), incorporated in Bermuda and stock-listed in New York, reported the sale of eight ships for 80 million dollars. Three of these vessels ended up on the beach of Alang for breaking – five reached the beach of Chittagong, Bangladesh. According to local sources in Bangladesh, the cutting operations of most of these ships have started without the required permission of the Department of Explosives and other relevant authorities. The NORDIC SATURN was delivered to Bangladeshi SNT Shipbreaking Yard, where one worker died last December. The NORDIC JUPITER and the NORDIC FIGHTER were also bought by yards with a particularly poor track record.

 

NAT’s vessel ‘Nordic Saturn’ beached in Chittagong, Bangladesh – © NGO Shipbreaking Platform

 

The Platform continues to closely follow the police investigations on the HARRIER, a Norwegian-owned ship that was arrested as the owners were attempting to illegally export the ship to Pakistan. After being held at a Norwegian port, the vessel finally got permission to be scrapped in Turkey and reached Aliaga in late August. Before arriving Aliaga, the Turkish authorities blamed the HARRIER for a 2,5 km range oil spill in the Izmir province’s coast line. Julia Shipping, the shell company established by cash buyer Wirana and responsible for the transportation of the ship, has allegedly been fined.

 

No ship had a European flag when it was beached last quarter. All ships sold to the Chittagong, Alang and Gadani yards pass via the hands of scrap-dealers, also known as cash-buyers, that often re-register and re-flag the vessel on its final voyage. Grey- and black-listed flags of convenience are particularly popular with cash-buyers, and more than half of the ships sold to South Asia this quarter changed flag to the registries of Comoros, Niue, Palau and St. Kitts and Nevis just weeks before hitting the beach. The high number of flag changes should induce serious concerns with regards to the effectiveness of legislation based on flag state jurisdiction only. These flags are not typically used during the operational life of ships and offer ‘last voyage registration’ discounts. They are grey- and black-listed due to their poor implementation of international maritime law.

 

 

NOTE

 

[1] During the third quarter of 2018, the following number of vessels were broken in other locations: 22 in Turkey, 1 in China, 2 in Europe and 9 in the rest of the world.

 

Press Release – Investigations on the Harrier tighten as it reaches Turkey for recycling

Norwegian press DN revealed this summer that Aqualis Offshore and insurance company Skuld Maritime Agency are under investigation for their involvement in the attempt to illegally export the Harrier to Pakistan for scrapping. Aqualis Offshore issued two certificates for the ship – one for a break-up voyage to Pakistan, another for a voyage to Dubai – and it is suspected that the latter was issued to dupe Norwegian authorities in order to circumvent the European waste export ban. Skuld Maritime Agency was involved in issuing the last-voyage insurance for the vessel and is therefore being investigated for having aided the illegal export.

 

The former and current owners of the ship, Georg Eide and cash buyer Wirana, are also targeted in the ongoing investigations, and risk being held criminally liable for their attempt to illegally export the Harrier.

"It is encouraging to see authorities enforce the law on ships destined for recycling. Following also the Seatrade judgement in the Netherlands, the Harrier case is yet another warning to ship owners that selling a vessel for the highest price to a cash buyer is dirty business."
Ingvild Jenssen - Executive Director and Founder - NGO Shipbreaking Platform

Another owner, Herbjorn Hansson of Nordic American Tankers, is under the spotlight in Norway for having sold eight vessels for beaching. Reactions to these revelations have been strong with the Norwegian Oil Pension Fund as well as the banks DNB and Nordea condemning beaching as a method for breaking ships.

 

The Norwegian Environment Agency urges ship owners to use facilities that have been approved by the EU for the recycling of their vessels, regardless of the flag of their ship. Its director, Ellen Hambro, states that it is unacceptable to endanger workers’ health and pollute the environment in developing countries for the sake of higher profits.

"We support the statements made by the Norwegian authorities and call also upon other stakeholders in shipping, such as insurers and financers, to play their part in putting an end to the dirty and dangerous practice of beaching. Safer and cleaner alternatives exist and ship owners must be pushed towards using these facilities."
Ingvild Jenssen - Executive Director and Founder - NGO Shipbreaking Platform

Yesterday the Harrier arrived in Aliaga, Turkey, where it will be recycled in line with the European waste laws. Waste Management company Norsk Gjennvinning will be supervising the process.

 

 

The controversial case of the Harrier: holding business to account

The controversial case of the Harrier

It all started with an anonymous letter informing us that the EIDE CARRIER was sold for scrap. Having been laid up for many years on the Norwegian west coast the Platform immediately contacted the owners, Eide Group, to make them aware that exporting the vessel to a South Asian beaching yard would be in breach of European waste laws. Eide Group categorically refuted at the time that the vessel sold for scrap. Little did they – or we – know what would then happen.

 

Almost a year and a half later, in February 2017, the vessel attempted to leave Norway under a new name, new flag and new registered owner. After a simple stroke of paint to alter the first letter, the vessel was now called TIDE CARRIER. The ship had swapped its flag to that of Comoros and was registered under an anonymous St. Kitts and Nevis post-box company called Julia Shipping Inc. All solid indications that a cash buyer - a scrap dealer specialised in the trading of end-of-life ships to the South Asian beaching yards - was involved.

 

Only hours after its departure, the engine stopped. Despite the ship’s deteriorating condition and bad weather conditions, the vessel’s new captain, from Nabeel Ship Management, did not call for help. The ship was drifting towards one of Norway’s most renowned beaches and the Norwegian coastguards were forced to trigger a salvage operation to avoid the risk of oil spill and grounding. The rescue operation included the emergency evacuation of 5 crew members – one of which suffered from a broken shoulder – and the deployment of two tugboats to bring the ship to safety. 

 

At the request of the owners, Julia Shipping Inc., the ship was laid up in Gismarvik. Its name was re-painted and changed this time to HARRIER. The flag also changed again, from Comoros to another popular end-of-life flag, Palau. According to the Comoros registry, which was contacted by the Norwegian authorities, the vessel had in fact never been registered under the Comoros flag.

 

The Platform alerted the authorities that the vessel in all likelihood had been sold to a beaching yard in South Asia to be scrapped, and that the post box company Julia Shipping Inc. in all likelihood was concealing a cash buyer. We also alerted that there were suspicions that the ship had been used to store hazardous sludge.

 

When the Norwegian Environment Agency boarded the laid-up vessel they found evidence that the HARRIER was indeed under a “break up voyage” insurance from Norway to Gadani, Pakistan. They also found unidentified and excessive amounts of sludge and fuel oils. The sales contract that dated from summer 2015 – when we had first received the anonymous tip-off – revealed that the contact person for Julia Shipping Inc. was Keyur Dave, Chief Financial Officer at cash buyer Wirana. It thus became clear that the repair contract from the Middle-East which had been provided to the Norwegian authorities as a way to escape checks for the illegal export of the vessel for breaking was false. The HARRIER was now under arrest and not allowed to leave Norway unless it was to sail to a ship recycling destination in line with international and European hazardous waste laws. 

 

Norwegian authorities pressed charges against the owners for having attempted to illegally export hazardous waste and rejected the complaint of Julia Shipping Inc., represented by law firm Wikborg Rein, for the arrest order.

 

Without having paid the fees for lay-up in Gismarvik, the HARRIER was moved to be anchored off the coast of Farsund. There, two crew members remained confined onboard the ship for more than one year. With the help of Norsk Gjennvinning, Wirana finally obtained the approval from both Norwegian and Turkish authorities to scrap the ship in Aliaga, Turkey, where it arrived in August 2018 – three years after its initial sale for breaking. Before leaving Norway, Wirana was forced to pay GMC in Gismarvik EUR 700.000 for lay-up costs that had still not been settled. 

 

Bad omen, or rather just another sign of how reckless cash buyers are: on its way to Aliaga, the HARRIER caused an oil spill in the Izmir region. Turkish authorities have given the owners a fine of USD 300.000 for the spill and also requested them to pay for the clean-up operation, estimated at 4,5 mill USD. Until the fine and clean-up costs are paid, the recycling of the ship is at halt. In the meantime, the recycling yard in Aliaga, SOK, is stuck with a vessel it has already paid Wirana for and cannot start recycling – and Julia Shipping Inc. has disappeared…

 

In Norway, police investigations, now headed by the financial crimes division, are targeting the former and current owners of the ship, Georg Eide and cash buyer Wirana. On the one hand, Mr Eide was sentenced in November 2020 to six months unconditional imprisonment for having assisted scrap dealer Wirana in the attempt to illegally export the ship. The Court also ordered the confiscation of criminal dividends of NOK 2 million from Eide Marine Eidendom AS. On the other hand, cash buyer Wirana has been fined NOK 7 million for having falsified papers to deceive Norwegian authorities about the ship's true destination and its seaworthiness to allow the vessel to leave Norway. The cash buyer agreed to pay the fine, but without acknowledging wrongdoing. Also marine warranty surveyor Aqualis Offshore and insurance company Skuld Maritime Agency have been under investigation for their involvement in the attempt to illegally export the Harrier to Pakistan. Aqualis Offshore issued two certificates for the ship on the same day – one for a break-up voyage to Pakistan, another for a voyage to Dubai. Skuld Maritime Agency was involved in issuing the last-voyage insurance for the vessel. For undisclosed reasons, the public prosecutors’ office recently dismissed the charge and withdrew the penalty charge notice issued to Aqualis Offshore.

 

The HARRIER case reveals the business practices of ship owners and cash buyers, and adds to several other cases where authorities have been lied to and provided false information as a way to escape checks for the illegal export of end-of-life ships. It is also a case that illustrates the many risks of entering into business relationships with unreliable companies that have a bad track record putting profit above people and the environment. 

 

Press Release – Platform publishes list of ships dismantled worldwide in 2017

European ship owners top the list of global dumpers: the EU must do more to reverse this scandal

 

According to new data released today by the NGO Shipbreaking Platform, 835 large ocean-going commercial vessels were sold to the scrap yards in 2017. 543 were broken down – by hand – on the tidal beaches of Bangladesh, India and Pakistan: amounting to 80,3% of all tonnage dismantled globally.

"The figures of 2017 are a sad testimony of the shipping industry’s unwillingness to act responsibly. The reality is that yards with infrastructure fit for the heavy and hazardous industry that ship recycling is, and that can ensure safe working conditions and containment of pollutants, are not being used by ship owners. It is particularly shameful that so many European shipping companies scrap their vessels on beaches. Their obvious lack of interest to ensure that shipbreaking workers around the world enjoy best available technologies, and that the environment is equally protected everywhere, clearly calls for additional pressure from authorities, shipping clients and financers."
Ingvild Jenssen - Executive Director and Founder - NGO Shipbreaking Platform

The negative consequences of shipbreaking are real and felt by many. On the one hand, workers – often exploited migrants and some of them children – lose their life, suffer from injuries caused by fires, falling steel plates and the general unsafe working conditions, as well as from occupational diseases due to exposure to toxic fumes and materials. On the other hand, coastal ecosystems, and the local communities depending on them, are devastated by toxic spills and various pollutants leaking into the environment as a result of breaking vessels on beaches.

 

Despite the terrible accident that shook the international shipbreaking community in 2016, no lesson has been learned in Pakistan. In 2017, at least 10 workers lost their lives at the shipbreaking yards on the beach of Gadani. The Platform documented 15 deaths in the Bangladeshi yards last year, where also at least another 22 workers were seriously injured. Whilst international and local NGOs were repeatedly denied access to the Indian shipbreaking yards, the Platform was informed of at least eight fatal accidents in Alang in 2017.

 


DUMPERS 2017 - Worst practices

 

As in 2016, GERMANY and GREECE top the list of country dumpers in 2017. German owners, including banks and ship funds, beached 50 vessels out of a total of 53 sold for demolition. Greek owners were responsible for the highest absolute number of ships sold to South Asian shipbreaking yards in 2017: 51 ships in total. Since the Platform’s first compilation of data in 2009, Greek shipping companies have unceasingly topped the list of owners that opt for dirty and dangerous shipbreaking.

 

Despite increased pressure for safe and clean ship recycling from Norwegian investors and authorities, in 2017, the number of Norwegian-owned ships scrapped on the beach was on the rise: 16 ended up in Alang, Gadani and Chittagong. The attempted illegal export of the TIDE CARRIER to Pakistan was stopped by Norwegian authorities following an alert by the Platform.

 

In light of increased pressure from Scandinavian banks and investors, including Norwegian pension funds KLP and NBIM, and ongoing criminal investigations against the owners of TIDE CARRIER, Norwegian ship owners will have to ask themselves whether dirty profits are worth the reputational and financial risk that using beaching facilities now entails. Also, Danish container-giant Maersk will have an increasingly hard time justifying its U-turn back to the beach in Alang, as the yards there will not make it on the EU list of approved ship recycling facilities [1]”, comments Ingvild Jenssen.

 

The worst corporate dumper prize goes to Continental Investment Holdings (CIH), the Singapore-headquartered shipowning arm of Myanmar shipowner Captain U Ko Ko Htoo and parent company of Continental Shipping Line. The company, which is currently changing the composition of its fleet, sold 9 ships for breaking on the beaches in 2017. Four vessels ended up in Bangladesh, where in late December, during the demolition of CIH’s TAUNG GYI STAR, a worker died hit by a falling iron plate.

 

Ranked at second place, the container shipping giant Mediterranean Shipping Company (MSC) sold 7 vessels to Indian breakers. In the last nine years, MSC has profited from the sale of more than seventy ships for dirty and dangerous scrapping in Alang.

 

The Japanese owner Mitsui OSK Lines and the UK-based Zodiac Group follow closely with respectively 6 and 5 ships sold to South Asian yards. Zodiac received the worst dumper award in 2016 and sold 4 vessels to the yards in Chittagong despite being under scrutiny after a Bangladeshi worker sought compensation from the company for injuries incurred when breaking the EURUS LONDON.

 

Other known companies that in 2017 opted for substandard yards, rather than recycling their ships in a safe and clean manner, include: Hanjin Shipping, Hansa Mare Reederei, Peter Dohle Schiffahrts, Rickmers Reederei, Hansa Treuhand, Berge Bulk, Costamare, Quantum Pacific Group and Teekay. Teekay had promised to never sell to beaching yards again after a worker died breaking the ASPIRE in 2014 in Chittagong. That Berge Bulk was under the spotlight in December 2016, when it was feared that the Berge Stahl would end up on a beach, did not prevent the company from selling another 5 ships for dirty and dangerous breaking in 2017.


 

With the oil and gas sector seeing a downturn in the last couple of years, the Platform has documented an increase in offshore units that have gone for scrap. Out of the 91 units which have been identified as demolished in the last three years combined, 41 of them ended up on the beaches of South Asia after being towed for thousands of kilometers across the globe. Three floating platforms cold-stacked in Scotland that were sold by Diamond Offshore for scrap in 2017, allegedly to cash buyer GMS, were stopped from leaving following an alert by the Platform on their highly likely illegal export. “Fixed platforms cannot easily escape decommissioning rules, whereas we have seen that nearly half of all floating units slip under the radar and end up on beaches – this double standard has to stop”, states Francesca Carlsson, Corporate Liaison and Policy Officer of the NGO Shipbreaking Platform.

 

All vessels sold to the beaching yards pass through the hands of scrap dealers known as cash buyers. In this way, ship owners attempt to shield themselves from responsibility, and are paid upfront the highest market price in cash for their end-of-life vessels by the dealers. To reduce costs and to exploit the loopholes in international legislation, cash buyers will change a vessel’s flag to one of the typical last-voyage flags of convenience, such as Comoros, Palau and St Kitts and Nevis. Cash buyers will also register the vessel under a new name and a new post box company, rendering it very difficult for authorities to trace and hold cash buyers and ship owners accountable for illicit business practices.

"Ship-owning companies that stand by their corporate social responsibility directly sign contracts with ship recycling facilities they have inspected and found adequate. Choosing to sell a ship to a facility which is on the EU list of approved yards is the easiest way for a ship owner to be assured that there has been a quality check. Fortunately, it is becoming increasingly difficult for ship owners to simply blame the cash buyer: investors and authorities are expecting ship owners to control the choice of the recycling yard, and expect that choice to be a yard that does not endanger workers and the environment [2]."
Francesca Carlsson - Corporate Liaison and Policy Officer - NGO Shipbreaking Platform

For the list of all ships dismantled worldwide in 2017, click here.*/**
For detailed figures and analysis on ships dismantled in 2017, click here.*

 

* The data gathered by the NGO Shipbreaking Platform is sourced from different outlets and stakeholders, and is cross-checked whenever possible. The data upon which this information is based is correct to the best of the Platform’s knowledge, and the Platform takes no responsibility for the accuracy of the information provided. The Platform will correct or complete data if any inaccuracy is signaled. All data which has been provided is publicly available and does not reveal any confidential business information.

 

**[UPDATE 22 February 2018 - Norwegian Tschudi Shipping Company AS informed us that two ships the company owned, the Hurricane I and the Hurricane II, had been sold to a buyer for continued operation in August 2016, one year before they ended up on South Asian beaches. Indeed, the buyer was the Indian registered company Hermes Maritime Services Pvt Ltd, which in 2017 purchased and sold several ships for breaking. Further research revealed that Hermes Maritime Services Pvt Ltd also buys tugboats near the end of their operational lives and manages these to tow vessels to the beaching yards, as was the case for the Hurricane vessels. The Platform has therefore updated the data and changed the ownership of these two vessels to the Indian-based Hermes Maritime Services Pvt]
[UPDATE 23 February 2018 - Italian K-Ships Srl informed us that one ship the company managed, the F1, had been sold to a buyer for continued operation in November 2013, four years before it ended up on a South Asian beach. The documentation provided by K-Ships shows that the Italian company is not linked to the end-of-life sale of the F1. The Platform has therefore rectified the data concerning the beneficial ownership of the vessel]

 

 

NOTES

 

[1] In 2018, the EU will publish a list of ship recycling facilities around the world that comply with high standards for environmental protection and workers’ safety. The list will be the first of its kind and an important reference point for sustainable ship recycling.

 

[2] The many scandals involving European shipping companies are also a driver behind the strong interest that various financial institutions have started to show in ship recycling: to ensure responsible business practices, some are now setting criteria for shipping companies they finance, while looking at the EU Ship Recycling Regulation for guidance.

 

Platform News – Investigations ongoing after Norwegian authorities press charges against owners of Harrier

The HARRIER is still under arrest in Norway after its owners failed to illegally set sail for the dangerous and dirty scrapping yards in Gadani, Pakistan, last February. The owners are now forced to find a safe and environmentally sound recycling destination. In parallel, investigations are still ongoing following the charges pressed by the Norwegian environmental authorities against the owners of the TIDE CARRIER for having attempted to breach existing waste trade laws [1].

 

At the edge of bankruptcy, Eide Group sold the previously named EIDE CARRIER, which had been laid up for 10 years, to cash buyer Wirana, a scrap dealer specialized in trading toxic ships to dirty and dangerous scrapping yards in South Asia. Wirana registered the vessel under an anonymous Saint Kitts and Nevis post box company called Julia Shipping Inc. The ship was renamed TIDE CARRIER and supposedly changed registry to the Paris MoU black-listed flag of Comoros. Based on fraudulent information that the vessel was heading for repair works in the Middle-East, Norwegian authorities allowed the ship to leave the west coast of Norway on 22 February 2017.

 

Had Wirana disclosed that the true destination was the beach of Gadani in Pakistan the vessel would not have been allowed to depart: exporting ships for dirty and dangerous scrapping is illegal under international waste trade laws. All ships contain many toxic materials within their structure and in their paints and the law requires that these should be managed in a way that protects people and the environment from harm. Extremely low operating standards at the beaching yards enable them to offer higher prices for the ships than facilities that operate in line with safety and environmental norms. Wirana knows this and the law very well, and for the sake of extra profits they therefore presented a fake contract for repairs in Oman.

 

However, the ship’s deteriorating condition caused the engine to stop only hours after its departure. Despite stormy weather, the vessel’s new captain from Nabeel Ship Management did not call for help. The risk of oil spill and grounding close to one of the most known beaches in Norway was high and was only dodged thanks to the Norwegian coastguard’s decision to trigger a salvage operation. An environmental disaster in Norway was avoided, and with the arrest of the ship in April the Norwegian authorities effectively averted another environmental injustice on the Gadani beach, where it was actually destined for scrap. Less than a year ago Gadani saw the worst shipbreaking catastrophe of the industry’s history[2].

 

Already in the summer of 2015, the Platform was informed that the vessel had been sold for breaking. Confronted with the illegality of exporting the ship to South Asia, Eide Group denied that the vessel would be scrapped at the time. One and a half years later, after the ship had been salvaged and was laid up in Gismarvik, the Environment Agency and the police found evidence that the vessel was under a “break up voyage” insurance from Norway to Gadani, Pakistan. That, and the fact that the contact person for Julia Shipping Inc in the sales contract that dated from summer 2015 is Keyur J. Dave, Chief Financial Officer at Wirana, are clear indicators that the vessel was headed to a scrap yard in Pakistan when it left Norway. All vessels broken in South Asia pass via the hands of a cash buyer. Singapore-based Wirana and US-based GMS are the two largest cash buyers, both of which are inherently entangled with the South Asian breakers.

 

Consequently, it became clear that the repair contract in Oman which had been provided to the Norwegian authorities as a way to escape checks for the illegal export of the vessel was false. The Norwegian Environment Ministry therefore rejected the complaint of Julia Shipping Inc, represented by law firm Wikborg Rein, for the arrest order. The post-box company Julia Shipping Inc refuses to reveal its ownership structure. To further point to the lack of accountability, the Norwegian newspaper, Bergens Tidende, revealed in a longer article, published in August, that when the Norwegian authorities had contacted the Comoros registry regarding the TIDE CARRIER, the Comoros registry answered that they did not have any information about the ship being registered under their flag. Only days later the vessel changed name again to HARRIER and swapped flags again to that of another Paris MoU black-listed flag: Palau. Both Comoros and Palau are popular end-of-life flags. In 2016, out of 668 ships that were beached, 42 had the flag of Palau and 47 were beached under the flag of Comoros. The now-called HARRIER is not allowed to leave Norway unless it is to sail to a ship recycling destination in line with international and European hazardous waste laws.

 

In the meantime the owners of the HARRIER owe the private port of Gismarvik and GMC Maritime several million NOK as port fees. The vessel left Gismarvik in June and is now anchored off the coast of Farsund where two crew members remain confined onboard the ship and the continuous use of the ship’s engine is creating unneglectable nuisance to local inhabitants.

 

© Jon Ingemundsen

This is not the first time that cash buyers seek to circumvent environmental protection laws by providing fake sales or repair contracts. The Norwegian owned CITY OF TOKYO was allowed to leave the port of Antwerp under the pretense of repair work in Dubai – instead it sailed directly to the infamous beaching yards in Bangladesh. The FPSO NORTH SEA PRODUCER was also illegally exported from the UK to Bangladesh under the pretense of further operational use in Nigeria. Cash buyer GMS used grey- and black listed Paris MoU flags and established anonymous post box companies in both cases.

 

The TIDE CARRIER case reveals the typical business practices of ship owners and cash buyers, and adds to several other cases where authorities have been lied to and provided false information as a way to escape checks for the illegal export of end-of-life ships. At least in the TIDE CARRIER case, the Norwegian authorities have so far not been gullible to fall for the well-known tricks of the game.

 

 

NOTES

 

[1] See the Norwegian environmental authorities’ press release.

[2] See also our release on a second accident that took place earlier this year.

 

Press Release – Controversial Tide Carrier under arrest in Norway

Attempt to illegally export the ship to Pakistan revealed

 

After having been informed by the NGO Shipbreaking Platform and its member organisation Bellona that the TIDE CARRIER (now named HARRIER, aka EIDE CARRIER) had been sold for illegal, dirty and dangerous scrapping to a South Asian beaching facility, the Norwegian environmental authorities arrested the ship on Tuesday 5 April [1]. The vessel is not allowed to leave Norway unless it is to sail to a ship recycling destination in line with international and European hazardous waste laws. According to the Norwegian Environment Agency, it is the first arrest of a vessel in Norway for the illegal export of hazardous waste.

 

The Platform had been informed already during the summer of 2015 that the ship was sold for scrap. Having been laid up for many years on the Norwegian west coast the Platform immediately contacted the Norwegian owners Eide Group to make them aware of the laws governing end-of-life ships and that exporting the vessel to a South Asian beaching yard would be in breach of the European Waste Shipment Regulation and the UN Basel Convention. Eide Group denied then that the vessel would be scrapped.

 

On 22 February 2017 the vessel attempted to leave Norway under a new name, flag and registered owner. Now called TIDE CARRIER, the ship had swapped its flag to that of Comoros and was registered under an anonymous St. Kitts and Nevis based post-box company, Julia Shipping - all solid indications that a cash buyer, a scrap dealer specialised in the trading of end-of-life ships to the South Asian beaching yards, was involved.

 

The TIDE CARRIER however ran into difficulties as the engine stopped working outside the Norwegian coast of Jaeren. The coastguards were forced to trigger a salvage operation, complicated by way of the weather conditions, to avoid the risk of oil spill and grounding close to one of the most renowned beaches in Norway. The rescue operation included the emergency evacuation of 5 crew members - one of which suffered from a broken shoulder – and the deployment of two tugboats to bring the ship to safety.

 

Norwegian authorities have since then been trying to trace the owner and insurer of the vessel, given that someone should be held accountable for the costs of the rescue operation incurred by the Norwegian state. While the authorities investigated the ownership and condition of the vessel, it remained docked in Gismarvik, Norway.

"We immediately informed Norwegian authorities that the ship was most likely sold for scrapping in South Asia and also that there were suspicions that the ship had been used to store hazardous sludge."
Ingvild Jenssen - Policy Director - NGO Shipbreaking Platform

On Monday 4 April the Environment Agency and the Police found evidence that the vessel was under a “break up voyage” insurance from Norway to Gadani, Pakistan. They also found unidentified and excessive amounts of sludge and fuel oils. The previous week, while the vessel was still in the dock, the TIDE CARRIER changed name to HARRIER and changed from Comoros to another popular end-of-life flag: Palau. Consequently, it became clear that the repair contract from the Middle-East which had been provided to the Norwegian authorities as a way to escape checks for the illegal export of the vessel was false. Revelations of the attempt of the ship’s illegal export and subsequent breaking on the Gadani beach resulted in the arrest of the ship.

 

This is not the first time cash buyers seek to circumvent environmental protection laws by providing fake contracts of repair or further operational use. Recently the Norwegian owned CITY OF TOKYO was allowed to leave the port of Antwerp under the pretense of repair work in Dubai – instead it sailed directly to the infamous beaching yards in Bangladesh. The FPSO NORTH SEA PRODUCER was also illegally exported from the UK to Bangladesh under the pretense of further operational use in Nigeria [2]. Cash buyer GMS used grey- and black listed Paris MoU flags and established anonymous post box companies in both cases.

"The cash buyers of TIDE CARRIER will not only have to pay back the Norwegian authorities for the rescue operation, but will also have to answer for the fake repair documents which were used to let it sail in the first place. Norwegian owner Eide will have to be held responsible for having sold to a cash buyer as this clearly indicates their complicity in the attempt to illegally export the ship and the potentially toxic excess sludges and fuels found on board."
Ingvild Jenssen - Policy Director - NGO Shipbreaking Platform
© LN Kyv/The NCA