Since the 80's, the ship breaking industry almost entirely changed its main operational regions from strong economy highly industrialized countries, like Britain, USA and Germany, to some of the most impoverished regions in Asia. The relocation process started in the late 50's, and while in the not so distant past ships for scrap were processed in major port cities of countries worldwide, today main factors in making business decisions in the ships breaking industry are the cheap labor, the lax of regulations and little environmental constraints in all developing countries in the Far East.
The largest shipbreaking yards in the world are located in several regions in India, Pakistan, Bangladesh and China, and in the last decade Turkey is gradually entering the industry. The statistics below show the percentages of scrapped vessels by country. Clearly, the Asian yards dominate the industry of ship breaking and scrapping, India, China and Bangladesh being the world undisputed leaders in this field:
- India – 48%
- China – 21%
- Bangladesh – 19%
- Pakistan – 10%
- Others – 2%.
- Some statistics.
- The industry of breaking ships employs over 100,000 workers worldwide, 41% of them are between 18-23 years old, 11% are children (under the age of 18), 46% of all workers are illiterate. Of all the world's 45,000+ ocean ships about 1,6% are scrapped every year. About 95% of the mass of a ship can be reused.
- The ship recycling industry supplies more than 40% of the world's raw material needs - appr 1,6 million people are engaged in this business, generating 600+ million tons of recyclables every year with an annual revenue of US$200+ billion.
Shipbreaking is a term symbolizing huge profits by cheap buying of ships for scrap metal, selling scrap and used ship machinery, equipment and electronics, hard manual labor, some of the worst work conditions in the world with some of the highest rates of work accidents and mortality, numerous health and environmental risks.
Why all major shipbreakers are operational in Third World countries?
- Older ships contain many hazardous substances banned as dangerous in developed countries. Typical examples - asbestos (used on old ships as a heat insulator), PCBs (polychlorinated biphenyls) and lethal POPs (persistent organic pollutants). Currently, the cost of removing asbestos and the expensive insurance and health risks are the main reasons ship breaking to be economically not viable in most developed countries.
- In developed countries removing the metal for scrap costs more than the value of the scrap metal itself. This is not the case in the developing world - no risk of personal injury lawsuits and health claims by workers, inadequate or no protective equipment at all. And many pollutants can cause serious health problems - from cancers and pulmonary problems (like asthma and asbestosis) to hormonal system disruption. Heavy metals are found in paints, coatings, electrical equipment.
- Serious environmental issues like the coastal soil and sea water contamination. Wastes of the scrapped ships (especially oil and oil substances) are drained and dumped directly into the sea, and the lax or no environmental laws enables large quantities of toxic materials to escape into the environment. Ship scrapping activities also generate oil pollution, and include discharge of ammonia, metal rust, which damages the bird population and numerous marine organisms (especially plankton and fishes).
Why the ship breaking is a lucrative and powerful business?
- Ship breaking on the beach (prohibited in most countries) is operated in coast areas inhabited by thousands of poor families in countries with millions of uneducated people looking for any job, thus providing the cheapest man power for the ship breaking industry. Under such economic conditions, no major investments are required to start and operate a ship breaking firm. Ships for scrap are not properly cleaned before beaching.
- The ships recycling industry supplies great quantities of iron materials in the country (including high quality steel), which also means that yards owners have substantial control over the amount of steel and its local price.
- Almost everything on ships is recycled, reused, resold. The ships scrapping means providing raw materials to steel mills, steel plate remanufacturing, second hand furniture, electrical and electronic equipment, oil and lubricants.
- The ship breaking industry in Bangladesh, for example, generates huge amounts of Government revenues through taxes reaching almost US $130 million (import duty, yards and other taxes).
- This is an industry that employs directly many thousands of the most poor uneducated people.
Our "ship breaking industry in India" choice - an YouTube video about a dry-dock ship breaking ("Magnate Steel"). The drydock ship demolishing process is faster by 50%, safer for workers and environment friendly - no oil spillage into the sea.
The ship breaking industry regulations and controlling bodies include 3 UN organizations with responsibilities for the breaking of ships, who also provide guidelines for shipbreaking:
- Basel Convention (1992) with its 2002 "Technical Guidelines for the Environmentally Sound Management of the Full and Partial Dismantling of Ships". Info and recommendations on procedures, processes and practices, on disposal and identification of potential contaminants, design and construction of ship breaking facilities.
- International Maritime Organization (2003) with its "Guidelines on Ship Recycling" concerning administrators of shipbuilding and vessel equipment, supplying countries, flag and recycling states, ship-owners, repair and recycling yards. About new ship and equipment designs (to minimize waste generation and the use of hazardous materials), producing Green Passports for ships, ship recycling preparations. According to this document, the responsibility for worker and environment protection in ship recycling yards must rest with the breaking yard itself, the country's regulatory authorities, ship owners and stakeholders.
- International Labour Organization (2003) with its "Safety and Health in Shipbreaking" (endorsed 2004) - a set of criteria for ships disposal and recycling concerning ship breaking authorities and shipbreakers (both employers and workers). The Guidelines contribute to workers protection from workplace dangers, elimination of work-related accidents (injuries, diseases, deaths) and improving the management of occupational safety-health issues in shipbreaking yards. The document is especially intended as guidance to countries where such regulations are limited or nonexistent. It also includes recommendations on the management of hazardous substances, workers protection and training programs. As to the beach shipbreaking, it suggests the following steps in the ships dismantling process - assessing hazardous materials on board, decontamination (including gas-freeing), safe demolition planning, recycling, safe waste management.
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