Bangladesh shipbreakers survive headwinds

Bangladesh's shipbreaking industry, which claims to supply 80% of the country's iron demand, is fighting renewed legal moves against its environmentally hazardous, and often fatal,

business in the runup to growth that may be even greater than it has enjoyed since its last round of court battles.
On February 27, in response to a High Court order a week earlier, the Bangladesh Ship Breakers Association (BSBA) was due to submit an affidavit on whether the country has sufficient human and logistical capacity to clean ships, before breaking them up, without risking human health. The court in January banned until further notice any further scrapping of vessels.
Prime Minister Sheikh Hasina, in apparent backing of an important tax earner that also helps fuel an economy growing at around 6% a year, told ministers on February 13 that the sector "has been identified as a separate industry considering its huge potentials and economic involvement". She also urged industry stakeholders to "abide by conventions and laws about environmental impacts of the shipbreaking".
The number of shipbreakers in Bangladesh has doubled in the 21 months since the High Court in March 29, 2009, imposed restrictions on their activity. About 2.4 million tonnes of iron were obtained from ships scrapped in Bangladesh in 2009, compared with 650,000 tonnes from 2007 to 2008 and 1.22 million tonnes in 2006, industry and government data show. Opportunities are set to increase further as the European Union next year completes a phase-out of single-hull tankers operating in its waters.
"More ships are likely to find their way to Bangladesh in the next two to three years, as around 2,000 single hull tankers will be phased out from the EU waters by 2012," Rizwana Hasan, an advocate of the Supreme Court of Bangladesh and chief executive of Bangladesh Environmental Lawyer’s Association, told Asia Times Online.
Vessels destined for scrap frequently carry remnants of fuel or toxic material that are liable to explode or cause health or environmental damage as the ships are broken up, creating pressure to have them "cleaned up" outside the territorial waters of the receiving country.
On January 19, a day after an explosion reportedly killed four workers and injured at least eight others at the Mak Corp shipbreaking yard in Chittagong, the High Court issued a suo moto rule (ie of its own accord) directing the government to stop ships being scrapped in Bangladesh until further order. The court also issued a contempt of court order against shipyard owner Abul Kashem, vice-president of the BSBA.
Nevertheless, the same bench also ordered the government to explain within two weeks why it should not be directed to allow four imported ships, now in outer anchor at Chittagong, to enter into the inner anchor for breakage. Three shipbreakers have filed four separate writ petitions on the issue this year.
BELA opposed the shipbreakers' petitions, claiming the four ships were not safe as they had no pre-cleaning and environmental certificates.
The latest court action comes almost two years after the High Court in March 17, 2009, directed the government to close 36 shipbreaking yards if they were running without environmental clearance within two weeks of the judgement. The ruling came after BELA, the lawyers' association, had filed to prevent in September 2008 the entry into Bangladeshi waters of MT Enterprise, which environmental group Greenpeace listed as "hazardous". The 36 shipbreaking yards were categorized at the time as "Red" (extremely dangerous).
The High Court also ordered that ships be pre-cleaned before import, that shipbreakers guarantee safe working conditions, not dismantle ships on beaches and not break ships without environmental certificates from the Department of Environment. The court, which expressed dismay at the indifference of the related ministries to the sector's failure to comply with environmental laws, told the environment ministry to frame within three months regulations in line with the country's international obligations and domestic legislation.
By May last year, when the BELA told the High Court that shipbreakers were violating its orders, the BSBA conceded that the number of shipbreaking yards had risen to 108 and that, despite the court orders, around 2.4 million tonnes of iron in the form of end-of-life ships had been imported in 2009. Around 128 of the total of 181 vessels concerned were imported right after the High Court's March 2009 ruling that operations of many yards be shut down.
At least 36 shipbreaking workers have been killed since the March 2009 ruling, or about one in four of the total 122 killed since 1998, according to data from various sources, including the International Federation of Human Rights and BELA.
"Clearly there has been a violation of the High Court orders," BELA chief executive Hasan told Asia Times Online. Shipbreakers were able to "influence" the most senior officials at the ministries and other government bodies, he said.
Shipbreakers employ 150,000 to 250,000 workers, according to BSBA president Hefazatur Rahman, and supply "over 500 re-rolling and 50 private steel mills" and "raw materials to cottage industries like the welding shops and automobile workshops," and supporting the furniture business, steel plate re-manufacturing, and the paint and lubricants industries.
Some of BSBA's 137 or so members, which included Mak Corp, Chittagong Ispat, Peninsula Traders, and Mamun Steel, also own ship-building yards, or steel and re-rolling mills.
Loss of shipbreaking trade, worth 9 billion takas (US$127 million) to the government in import duties and various taxes according to Young Power in Social Action, a non-government organization seeking to improve shipyard working conditions, would undermine government revenues.
Rahman said the sector will be seeing brighter days now that it has been recognized by the government. "At least now the industry will have a structure which it lacked for the past three decades," he said.
Government revenues from shipbreakers are also likely to increase as they outbid rivals in India and Pakistan by "at least 20-25% ... making Bangladesh the preferred choice for the 'burial ground' of a large and medium-sized ships," the Financial Express recently reported. Bangladesh "cuts" ships that generate 12,000-20,000 tonnes of scrap per vessel, compared with the 4,000-5,000 tonnes per vessel targeted by Indians and Pakistanis, the report said.
Syed Sultan Uddin Ahmmed, assistant executive director at the Bangladesh Institute of Labour Studies told Asia Times Online there was still concern whether shipbuilders would be more responsible toward the environment and the workforce," pointing out that while toxic contents in most end-of-life ships are hazardous to the environment, the flammable materials present in most ships are leading to the deaths of untrained shipbreaking workers.
Hasan of the BELA, citing the number of deaths and injuries in the the sector, said, "We want such incidents to stop and are therefore trying to press home the idea that the ships be pre-cleaned at the source country and not be cleaned when it reaches the destination or even at the outer anchor, as has been implied through the Hong Kong Agreement."
The Hong Kong Agreement, signed on May 15, 2009, at an International Maritime Organization conference and to come into effect by 2015, will ease an earlier rule that ships be cleaned at the source country, as enforced by the Basel Convention, and allow ships to be cleaned "immediately before reaching the destination [shipbreaking yards]".
As the workers in Bangladesh clean and cut ships with outdated equipment, "this will increase the risk of explosions and deaths of workers along with environmental degradation at the outer anchor if the ships contain highly toxic materials," Hasan said.
Rahman, of the shipbuilders' association, said the number of accidents "has come down and all this negativity around the industry is possibly part of an international conspiracy to weaken this fast-growing sector. We are already training our workers and most association members are ensuring better working conditions."