INDIAN shipbreakers are still holding their own against social justice NGO efforts to close them or have them institute costly safety measures, reports the American Journal of Transportation.
Ninety per cent of 630 units broken up worldwide are recycled at locations in the Indian subcontinent, according to figures from the NGO shipbreaking Platform.
Subcontinental shipbreaking yards offer higher prices for tonnage than competitors in other major scrapping locations such as Turkey and European countries.
One major shipping company said it can earn an extra US$1-2 million per ship by using beaching yards in Alang, India.
Shipbreaking has been unregulated and much criticised for poor working conditions. But the UN's International Maritime Organisation (IMO) has adopted the restrictive Hong Kong Convention.
Also, the European Union has also added its EU Ship Recycling Regulation (EUSRR) that requires EU-flagged vessels to be recycled at one of 41 approved yards on an official list.
'However, enforcement is still a major challenge and cash is king when selecting a yard,' said Rakesh Bhargava, CEO of Singapore-based consultancy Sea Sentinels.
But Mr Bhargava believes the tide is turning against unregulated shipbreaking as environment, social and governance principles increasingly dictate the shipping business agenda.
Said Mr Bhargava: 'The regulations are clear and there is a legal risk for non-compliance aside from reputational risk for shipowners as well as charterers, shippers, financial institutions, lenders, investors and shareholders.'
Recent court rulings in Europe, he said, have upheld complaints against shipping companies engaged in unregulated shipbreaking and Mr Bhargava believes this, along with the latest EU regulations, is changing shipowner perceptions.
SeaNews Turkey
Ninety per cent of 630 units broken up worldwide are recycled at locations in the Indian subcontinent, according to figures from the NGO shipbreaking Platform.
Subcontinental shipbreaking yards offer higher prices for tonnage than competitors in other major scrapping locations such as Turkey and European countries.
One major shipping company said it can earn an extra US$1-2 million per ship by using beaching yards in Alang, India.
Shipbreaking has been unregulated and much criticised for poor working conditions. But the UN's International Maritime Organisation (IMO) has adopted the restrictive Hong Kong Convention.
Also, the European Union has also added its EU Ship Recycling Regulation (EUSRR) that requires EU-flagged vessels to be recycled at one of 41 approved yards on an official list.
'However, enforcement is still a major challenge and cash is king when selecting a yard,' said Rakesh Bhargava, CEO of Singapore-based consultancy Sea Sentinels.
But Mr Bhargava believes the tide is turning against unregulated shipbreaking as environment, social and governance principles increasingly dictate the shipping business agenda.
Said Mr Bhargava: 'The regulations are clear and there is a legal risk for non-compliance aside from reputational risk for shipowners as well as charterers, shippers, financial institutions, lenders, investors and shareholders.'
Recent court rulings in Europe, he said, have upheld complaints against shipping companies engaged in unregulated shipbreaking and Mr Bhargava believes this, along with the latest EU regulations, is changing shipowner perceptions.
SeaNews Turkey
