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03 05/2016

Spike in the number of decommissioned vessels related to the oil and gas industry

Brussels, 3 May 2016 – In the last few months, the NGO Shipbreaking Platform has documented more and more oil platforms, drill ships and other vessels related to the oil industry arriving for demolition on the beaches of South Asia as well as in Turkey and China. The Platform calls on the large oil and gas companies – such as BP, Shell, ExxonMobil, Petrobras, Total, and Chevron – to ensure that their business partners, that is, companies specialized in drill ships, companies leasing oil platforms, as well as tanker companies, commit to clean and safe recycling off the beach.

There are a variety of platforms and vessels that function in the offshore oil industry, but the ones that the Platform most concerned with are those that can move on their own. Fixed platforms and compliant towers are attached to the ocean floor with giant submerged steel or concrete towers and are not transported around the world for demolition. However, semi-submersible platforms, drill ships, and floating production systems (FPSO – Floating Production, Storage and Offloading System) move on their own and are likely to end up on the shipbreaking beaches of South Asia.

Last year, the Platform documented the decommissioning of a total of 24 vessels related to the oil and gas industry (13 drill platforms, 1 drill ship, 8 FPSOs and 2 semi-submersibles). Out of the 24, the majority were sold to yards in Aliaga, Turkey (13 out of 24), the rest being divided between Bangladesh with 6, India with 3 and Pakistan with 2. So far in 2016, 4 such vessels have been documented for breaking: two drill ships to India, an FPSO to Pakistan and a drill-platform to Turkey.

In 2015 the main contractors, that is, drilling companies that contract out to oil companies, which sold end-of-life vessels were Noble Drilling Corporation, Diamond Offshore Limited, Global Santa Fe International Drilling Incorporated, and Transocean Offshore Deepwater Drilling Incorporated. For now, in 2016, Noble Drilling Corporation, Transocean and Diamond make appearances along with The National Shipping Company of Saudi Arabia.

Beached semi-submersible in Alang, India, 2016

Of particular interest are the stories of the drilling rig Noble Discoverer and the drill ship Ocean Clipper. The Noble Discoverer, a drilling rig owned by Noble Drilling Corporation, yet contracted by Shell, ended up in Alang, India in 2016. Artic Watch, a focus group that belong to Greenpeace which focuses on conducting investigations, intelligence, news and insights on the oil dynamics in the arctic, initially reported on the case. The Ocean Clipper, a drill ship that was owner by Diamond Offshore Limited and contracted to Petrobras, the Brazilian oil giant, ended up in Alang in 2016. The story of the Ocean Clipper is unfortunately a familiar one, resembling that of the oil rig Noble Paul Wolff, also contracted by Petrobras for operations off the Brazilian coast up until November 2014. In Spring 2015, Noble Corporation, sold the structure to Bangladeshi yard Siri Zubedar, aided by a cash buyer. Siri Zudebar holds a particularly bad reputation after the Platform and National Geographic documented severe and fatal accidents that took place in the yard over recent years. Noble Corporation did not respond to the Platform’s outreach for dialogue, showing no improvement in responsible behavior.

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27 01/2016

German ship fund Norddeutsche Vermögen continues to exploit substandard shipbreaking to maximise profits – clear contradiction to company’s values

Brussels, 27 January 2016 – German ship owner Norddeutsche Vermögen Holding GmbH & Co, a company offering shares in ship funds, and its subsidiary Norddeutsche Reederei Schuldt, have seen another three of its vessels arriving at the beaches of South Asia in 2015: the “Northern Glance” (registered under the name “APL Malaysia”, IMO 9196917) hit the beach of Chittagong, Bangladesh, the “Northern Diversity” (IMO 9147112) and the infamous “Northern Vitality” (IMO 9122423) were rammed up the beach in Alang, India. The “Northern Vitality” has been under the Platform’s spotlight for the last three years: the vessel’s story is a prime example for the ship owners’ circumvention of the law and the company’s lack of responsibility for end-of-life management. Ship funds, while referring to values such as ‘tradition’ and ‘honesty’, are meant to maximise profits for its private investors – at whatever price it takes.

In September 2012, the Platform found that the owners of the “Northern Vitality” intended to sell the 1997-built ship for breaking in India with the help of a cash buyer. At the time, the vessel was moored in the German port of Wilhelmshaven – and the sale for scrap to India would have constituted a breach of the EU Waste Shipment Regulation that prohibits any export of hazardous waste to developing countries. Hazardous materials such as asbestos, refrigerants, oil residues, sludge and heavy metals were bound to be on board the vessel, either in its structure or in electronic equipment, in paints and the ship’s stores. The Platform informed the port authorities, the responsible Environment Minister in the state of Lower Saxony and the European Commission in order to prevent an imminent illegal export to India. As a consequence, the vessel was arrested in Wilhelmshaven and was only allowed to leave once Norddeutsche Vermögen produced proof that the “Northern Vitality” would be repaired in Varna, Bulgaria, for further operational use, and would not be sold to the breaking beaches of Alang.

Around the same time in September 2012, two other ships owned by Norddeutsche Vermögen and its subsidiary Norddeutsche Reederei Schuldt were beached in Alang: the “Northern Felicity” was renamed “Felicity” and reflagged under the typical end-of-life flag St. Kitts and Nevis just before beaching. The “Northern Dignity” hit the beach of Alang renamed as “C Wind” and flagged out to St. Kitts and Nevis as well. These end-of-life flags are typically a sign that the ship owner has used a ‘cash buyer’, an intermediate scrap dealer, who very conveniently takes over all financial and legal responsibilities from the last beneficial owner of a vessel and thus assists the ship owner in maximising profits.

Three years after the case was highlighted by the Platform and various media reports, the “Northern Vitality” has now hit the beaches of Alang in December 2015. The shipbreaking yard that received the vessel, Priya Blue, has received a statement of compliance with the Hong Kong Convention (HKC), an international convention on ship recycling which is not in force.

The compliance with the Hong Kong Convention does not mean that these yards comply with European standards – for instance regarding downstream management of hazardous waste – and serious concerns regarding the dismantling of vessels in the intertidal zone of beach have not yet been addressed”, says Patrizia Heidegger, Executive Director of the NGO Shipbreaking Platform. “Maybe it is just a coincidence, or the ship owner sold to a HKC-compliant yard knowing that the vessel is under surveillance. Left aside the inadequacy of the requirements under the Hong Kong Convention, Norddeutsche Vermögen does not seem to care at all about the end-of-life management of its vessels: or why would they otherwise have a ship scrapped on a beach in Bangladesh where conditions are known to be worst?”.

Since at least the 2012 case, the company was fully aware of the serious concerns surrounding substandard shipbreaking in South Asia. This did not make the company reflect on its practices. In 2015, aslso the “Northern Diversity” was sold for scrap to Alang, India, and – even worse – the “Northern Glance” ended up on the beach of Chittagong, the worst shipbreaking zone globally, where child workers are used illegally to scrap the vessels on an intertidal mudflat and the government is not capable of setting up a treatment facility for hazardous wastes. Since 2012, Norddeutsche Vermögen and its subsidiaries Norddeutsche Reederei Schuldt and Reederei Karl Schluter have sold at least 16 vessels for beaching.

Maritime databases indicated that Norddeutsche Vermögen was the last beneficial owner of the “Northern Vitality” and remained so after its repair in 2012. It is possible that the German owner sold the containership to another anonymous company before it ended up on the beaches of Alang – in any case, the “Northern Vitality” saga represents a prime example of how ship owners escape the law by selling either to cash-buyers – as in most cases of the Norddeutsche Vermögen ships – or to anonymous, dodgy shipping companies with the intention to profit from substandard scrapping on South Asian beaches.

It is shameful that Norddeutsche Vermögen, certainly aware of the controversial dismantling practices taking place in South Asia, has deliberately chosen to close its eyes to the realities on the ground. On its website, the company claims to base its business on “Hanseatic values”, “responsibility for the present and the future”, and “acting in a fair manner”. The website is illustrated by the picture of the “APL Malaysia” / “Northern Glance”, now stranded in Bangladesh and taking its toll on people and the environment.

Northern Glance
(Pictured: The “APL Malaysia” / “Northern Glance” during its glory days – now stranded on the beaches of Bangladesh)

The NGO Shipbreaking Platform calls upon Norddeutsche Vermögen and the private investors trusting in the value of the company, to ensure the clean and safe recycling in line with the EU Ship Recycling Regulation in case any of the more than 40 vessels owned by Norddeutsche Vermögen currently has to be sold for demolition in the future.

The German press reported about the “Northern Vitality” in 2012:
Die Tageszeitung
Recycling Magazin

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12 01/2016

Danish ship owner Clipper Group has adopted a ship recycling policy which refers to requirements under the EU Ship Recycling Regulation

Brussels, 12 January 2016 – Since December 2014, the NGO Shipbreaking Platform has been exchanging with the Clipper Group, inviting the company’s management to embrace sustainable solutions for its end-of-life fleet. The company had been in the spotlight of media attention in Denmark for the controversial scrapping operation of the vessel Clipper Concord in India. The beaching yard chosen by Clipper operates under standards which are unacceptable in the European Union including the primary cutting in the intertidal zone where broken blocks fall into the sea and onto the beach. The Indian law also allows for the re-sale of asbestos-containing materials on the local market and the proper destruction of PCB-containing material is impossible. Moreover, the yard chosen does not offer proper accommodation to the migrant workers coming to the shipbreaking zone Alang. The NGO Shipbreaking Platform has shared this concerns with Clipper at the time.

Clipper Concord (2000-2015)

Clipper has now adopted a new ship recycling policy for clean and safe dismantling. The policy does not outrule the use of beaching yards in India if certain conditions are met and Clipper is convinced that the demolition of the vessel Clipper Concord in 2014 was in line with this policy. Still, Clipper committed to close inspection of all yards to be used for the recycling of its fully owned vessels, since, so their argumentation, the beaching method calls for special attention to safeguard the environment and the safety of the workers.

The Platform welcomes the fact that the Clipper Group has adopted a policy with clear requirements for the facilities and the commitment to continued involvement of Clipper during the recycling process. Remarkably, the policy reflects requirements under the European Ship Recycling Regulation such as full containment of all pollutants (“control any leakage”) and operations on impermeable floor (“handle any hazardous material on impermeable floors with effective drainage systems”). The Platform expects that Clipper will revise the policy once the European Commission will have published the EU List of approved ship recycling facilities and that Clipper will commit to European standards. The EU List will not only provide ship owners with sustainable recycling destinations, but also alleviate shipping companies from having to monitor the entire dismantling process as this will be under the responsibility of the European Commission. Inter alia, EU listed facilities will need to ensure decent working conditions in line with international standards and treat all wastes downstream in accordance with EU standards.

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17 12/2015

Recycling of marine-based structures: Maersk Drilling opts for China

Brussels, 17 December 2015 – Currently, Maersk Drilling’s oldest oil rig – the “Maersk Endurer” – is being dismantled at Zhoushan Changhong International Ship Recycling, China. The company had announced its decision in July 2015 to sell the jack-up rig, which was built in 1984 and had been working offshore Cameroun, to one of the biggest ship breaking yards in the world.

maersk endurer
(Photo by Maersk Drilling – “Maersk Endurer”)

“It is Maersk Drilling’s ambition to decommission Maersk Endurer in a safe and responsible way with minimal environmental impact. Therefore, Maersk Drilling has chosen Zhoushan Changhong International Ship Recycling to recycle Maersk Endurer. We chose this option because we consider it to be the safest and most cost-effective approach, with the lowest environmental risks. Zhoushan Changhong International Ship Recycling is a state-of-the-art rig recycling facility, and the facility complies with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships and the European Union Ship Recycling Regulation,” Morten Pilnov, Head of Global Sales in Maersk Drilling, explains.

Maersk Drilling, which is part of the Danish Maersk group, has engaged an external company of ship recycling experts to carry out inspections and supervise the entire process with the aim of guaranteeing safe and sound dismantling practices.

Due to the current market situation and the over-supply of drilling rigs in the offshore market, numerous marine-based structures will head to recycling yards in the near future. The NGO Shipbreaking Platform asks shipping and offshore drilling companies to explore clean and safe dismantling options capable of safeguarding both workers’ health and safety and the environment.

The demolition of the oil rig “Nobel Paul Wolff” (IMO: 8756277), operated off the Brazilian coast until November 2014 by Brazilian oil giant Petrobras, represents a worst practice example. In Spring 2015, the rig’s owner Nobel Corporation, a leading offshore drilling company based in the UK and the US, had the structure sold to Siri Zubedar with the help of a cash buyer. This Bangladeshi shipbreaking yard has a particularly bad reputation. The Platform and National Geographic have documented severe and fatal accidents in the yard over the last years. The Platform’s Secretariat invited the Nobel Corporation’s Board to a dialogue; however, the company shows no sign of responsible behavior yet.

(“Nobel Paul Wolff” beached in Chittagong, Bangladesh)

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ABN Amro and Grieg Green team up for sustainable ship recycling OFF THE BEACH

08 12/2015

Brussels, 8 December 2015 – Ship breaking is a hazardous activity, whose negative impacts on workers and the environment have been grossly underestimated and ignored. Non-regulated practices pollute the marine and terrestrial environment and represent a serious threat for workers’ health. Increasingly, global stakeholders are now showing an upturn of awareness by promoting and observing standards that are aimed at sustainability. Important stakeholders are now sensing the interlink between ecology and economy, especially private financial institutions are expressing the need for sustainable ship recycling practices and using their leverage to improve the shipping industry’s practices. Banks not only nourish the sector’s turnover, but are also striving to be at the frontline of combating actual and potential environmental and social risks caused by dangerous dismantling activities.

Standard Chartered, ING, Crédit Agricole, Rabobank, NIBC and ABN Amro are some of the leading financial entities that have uniquely positioned themselves on the issue of ship breaking, via both the adoption of sector-specific internal policies and the development of sector-specific partnerships.

ABN Amro, one of the founding members of the Sustainable Shipping Initiative (SSI), an ambitious global coalition of shipping leaders, is taking practical steps to tackle some of the sector’s greatest opportunities and challenges. The Dutch bank, in partnership with the Norwegian shipping company Grieg Green, has recently published a short video advocating for sustainable ship recycling “off the beach”. Instead of dismantling vessels on beaches causing long term adverse effects to the environment as well as health risks to workers, ABN Amro and Grieg Green aim at spreading advanced sustainable recycling solutions capable of bringing positive change to the shipping industry.

“If you want the shipping industry to be sustainable you need to take your own responsibility. There is pressure from all sorts of stakeholders, from NGOs to cargo owners, to deal with this. The current practices of ship recycling are rapidly becoming unacceptable. It is in all our interest to have an industry that is so important for the global economy to be as sustainable as possible”, states Gust Biesbroeck, Head of Transport Clients at ABN Amro.