Local ship-breaking industry sinking while BD’s emerging

Till 1985 Taiwan, Korea were leading countries in ship breaking industry while many other nations were actively involved in this business Later, the industry had undergone

considerable consolidation as rising labour costs and environmental regulations forced the closure of most ship breaking yards in developed countries. Resultantly, the industry shifted towards Asia on the back of environmental issues that gave a chance to Pakistan, India and China to emerge as leading ship countries. However, Bangladesh also set up this maritime recycling industry at its Chittagong yard.
Recently Bangladesh Supreme Court issued a verdict that lifted ban on the industry spurring its ship breaking sector to progress leaps and bounds. It is stated that maritime firms of Bangladesh are expecting to scrap more than 30 million deadweight tonnes this year, surpassing last year’s 26.6 million and the figure of 28.3 million in 2009. The experts are of the view that if Bangladesh quickly ramps up its capacity, ship owners could scrap near the world’s capacity of 38 million deadweight tonnes, a level not seen for decades before. It is to be noted that before the ban, Bangladesh’s ship breaking industry was worth $1.5 billion and considered to be a key contributor to the overall economy, providing steel mills with half of their supplies and employing as many as 150,000 workers.
With the boom in industry in Bangldesh, the average salary for a 12-hour day of labour intensive work has risen up to around $5.50, a decent wage compared to the nearly 40 percent of Bangladeshis that live on less than $1.25 a day. Conversely, rights activists in Bangladesh claimed that the cost of health of employees has been too high because of environment issues while more than 1,000 workers killed on the job since 1996. A 2003 government study found nearly 90 percent of workers suffered some form of accidental injury — from foot injuries to serious accidents — while working in Chittagong yards. The World Bank in December reported widespread contamination of lead, mercury and oil in the soil and water of Chittagong’s beaches.
It is not out of place to mention here that currently four nations including Pakistan, India, China and Bangladesh, with an abundance of cheap labour, control more than 90 percent of the ship breaking market. However, after the lifting of ban on ship breaking industry, Bangladesh’s investors have already purchased over 110 ships while dozens of vessels are in pipeline whereas at least 35 waiting for environmental clearance to come on shore for making them break into pieces. Bangladesh is becoming top ship recycling nation, hopes to bring in around 300 ships by the end of next year, up from 220 in 2009 before the ban.