Company officials acknowledged the CSL Manitoulin contained small amounts of asbestos, which was commonly used in the 1960s as a fire retardant.

But vice-president Pierre Prefontaine washed his hands of the vessel's sale to a controversial ship graveyard in Turkey, saying CSL sold the boat to a U.S. scrap company first.

"The resale (of the Manitoulin to Turkey) was completely beyond our control," Prefontaine said. He refused to disclose the name of the American scrap company that bought the Manitoulin, citing a confidentiality covenant.

Prefontaine acknowledged CSL knew the Manitoulin had wound up in the Aliaga shipyard for dismantling.

"We heard it from third parties, but it's not because we were instrumental in any dealings involving the resale of the vessel."

Despite a new ethical code of conduct adopted by CSL when Martin turned the business over to his sons last August, the company might not have been able to do any better had it sold the ship to a scrap yard itself, Prefontaine said.

"We would certainly pay very close attention to the issue, but again, we have to dispose of an old vessel, a scrap vessel.

"There's no easy answer (on how to dispose of ships)," he said, adding most ship scrap yards are in the developing world.

Greenpeace representatives rejected that explanation, and called on Canada's next prime minister to disclose the contents of the Manitoulin and indicate where he stands on ship dismantling practices.

"(CSL) knew what selling it to a broker meant - it's like selling a gun to a kid," said Andrew Male. "It doesn't get you off the hook, especially when you're talking about a future head of state."

Martin brushed off the issue when queried by reporters.

"I'm not aware of that - I don't know what happened," he said. ``You ought to put your questions either to the ethics counsellor (Howard Wilson) or the company."

Under international rules adopted by Canada and other OECD countries, the company needed the permission of Turkey and Canada before sending the ship to the Aliaga yard, Male said.

Turkey recently rejected two retired contaminated navy ships from Britain, which were then renamed and sold to India, creating an international controversy.

But the Turkish government has told Greenpeace it received no request and no documentation from Canada about the Manitoulin.

A 2002 Greenpeace report on the Aliaga yard, located on the Aegean Sea, says the site has substandard working and environmental conditions, where PCBs and asbestos are deposited in the ocean and where about 1,200 workers live in cramped beach dwellings.

"They just put the ship on the beach," said Greenpeace expert Marietta Harjono. "It's not a well-contained area - all the hazardous substances are being released to the environment."

The report states workers in the shipyards rarely use protective equipment such as helmets or masks, and many lose body parts because of accidents. In 1992, seven workers lost their lives in an explosion.

"They are not trained for the job. They are constantly exposed to a deadly cocktail of hazardous substances."

A spokesman said Martin had no involvement in the decision to send the ship to Turkey, noting that CSL was held in a blind trust while he was in government.

"Mr. Martin has no ties to the company whatsoever now," said Scott Reid. "For the past decade he had no role in operational decisions such as this."

Reid added that environmental standards are important to Martin.

"The company he built was one that has always sought to follow the highest of environmental standards, and his expectation is that CSL . . . would be following the highest environmental standards."

The shipping company has become a political hot potato for the former finance minister and prime-minister-in-waiting, after allegations of poor labour and environmental practices.

Critics have accused Martin's company of reflagging ships in foreign countries to avoid paying Canadian taxes, and to benefit from lower labour costs and weaker labour and environmental standards.

CSL has said the practice is necessary to remain competitive.

Accusations surfaced last year that the company took advantage of offshore tax loopholes left open in Barbados by the Finance Department while Martin was minister.

Martin announced in March he would transfer ownership of the company to his three sons. In August, he completed the transfer, appointed two "public interest" board members and announced the company had adopted a code of conduct to ensure high ethical standards in its business.