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By Henry J. Holcomb, Philadelphia Inquirer Staff Writer

The number of retired ships has grown beyond the capacity of scrap yards. Many are mysteriously unaccounted for, and feared sunk or left to decay in isolated areas.

"Only a fraction of the world fleet is being recycled properly," Niko Wijnolst, chairman of the Dutch Maritime Network, said.

He addressed a conference of shipping industry officials and environmentalists here last week that explored ways to address what is regarded as a growing scandal, possibly, by turning it into legitimate business opportunities.

Big numbers are involved. About 4,000 civilian and military vessels will soon be going out of service each year. Recycling ships and offshore oil rigs could become a $50-billion-a-year industry, Robert J. Brand, president of Philadelphia's Solutions for Progress Inc., said.

The scandal is fueled by strong competition for scrap metal and countries that are reluctant to impose higher safety standards for ship recycling. In India and Bangladesh, hundreds of ships, their engines still rumbling, are run up each year on beaches. There, illiterate laborers - working without helmets, protective glasses or even shoes - dismantle ships laden with explosive gases, asbestos, PCBs and other toxins.

The hazards of ship scrapping came under intense news media scrutiny four years ago, prompting ship owners to draft ship recycling guidelines.

But still unresolved is how to enforce an international standard.

Ship design and operation are, indeed, regulated "but a vessel ceases to be a ship when it hits the beach and the finished-with-engines signal is transmitted from the bridge for the last time," said Brian Parkinson, trade and operations adviser at the International Chamber of Shipping trade association in London.

Once a ship is beached, Parkinson said, it is subject to local laws, "and few countries like to be dictated to by the priorities of others."

The growing problem drew more than 160 maritime and environmental-protection experts from North America, Europe and Asia to the conference at Center City's Crowne Plaza Hotel last week.

For three days they exchanged ideas on the realities of training and organizing largely migrant workforces that dismantle ships in Asia, and talked about ways new technology might help.

U.S. Rep. Curt Weldon (R., Pa.) told the conferees that the best way to solve the problem was to turn it into a huge business opportunity - for this region and the nation.

Brand agreed with Weldon. "We have an opportunity to make a modest investment . . . about $100 million annually for several years. This would empower industry to develop innovations that could be used all over the world."

Weldon proposed that the United States gain the upper hand in this new industry by dramatically increasing spending on recycling its old, unused warships and military supply vessels.

That commitment, he said, would "create and develop technology that could become a profitable export industry."

The problem is most severe in Russia, where harbors are filled with contaminated and decaying warships of the former Soviet Union, Weldon said. In the United States, funding for recycling warships competes in Pentagon budget battles with needs of the active fleet, said Glen Clark, assistant program manager of the Navy's inactive fleet.

So U.S. military vessels are allowed to decay until they start to sink or develop other problems that constitute an expensive emergency, Brand said.

Meanwhile, companies such as Norfolk, Va.-based Metro Machine Corp., which recycles warships at the old Philadelphia Naval Shipyard, have no dependable revenue source.

"These companies set up and train an organization, then the military's disposal budget gets cut and their talent goes out the door," Brand said.

John Strem, a Metro Machine vice president, agreed. "The hardest thing with ship repair and recycling is maintaining a stable workforce," he told conferees, standing alongside a ship his company is recycling

. Recycling warships could sustain several hundred skilled jobs in Philadelphia, he said.

Work at yards such as Metro is watched closely by government agencies that enforce environmental and worker safety laws. Similar enforcement on a worldwide scale is difficult.

The old-ship problem has been growing for years, but it was virtually ignored until articles published in the Baltimore Sun, by Gary Cohn and Will Englund, won a Pulitzer Prize in 1998.

Until then, ship owners quietly sold their old ships, avoiding responsibility for their disposal.

But the Sun articles aroused worldwide concern, several speakers said. The international ship owners trade group formed a task force and has developed a 12-page industry code on ship recycling.

The situation is improving, some speakers said. "But a small number of unethical brokers still subvert the consensus of everyone on what needs to be done," Brand argued.

Marietta Harjono of Amsterdam, a leader in the Greenpeace International campaign "for a toxic-free world," said industry guidelines that could be ignored or set aside were not enough.

She described how unscrupulous companies refuel and change crews at sea to avoid ports where regulations might be enforced.

Showing the conferees pictures from ship-scrapping beaches of India and Bangladesh, Harjono said, "We have seen people picking asbestos . . . from ships with their bare hands. We have seen workers torch-cutting ship steel into small pieces, inhaling the toxic fumes of lead paints with no protection at all."

These are often migrant workers. So the harm that is done to them is difficult to track, she said.

"But the absence of data does not mean the absence of a problem. It just means that neither these communities, nor these workers, nor the environment are serious enough to be featured in the economic scheme of things," she said. The Dutch Maritime Network's Wijnolst said the stakeholders in the world's shipping industry should invest $100 million a year for a decade to develop a ship-recycling industry.

He and others suggested taxing ship owners for a large portion of these funds. Parkinson, the ship owner trade association official, questioned the need for that. "There is $3 million in scrap value in each ship. There are funds associated with the recycling of each vessel from which such investments can be made," Parkinson said in an interview. Brand was skeptical, warning that as long as the United States and Europe "can throw toxins in a neighbor's backyard, there will be no basis for investing to solve the problem."

Weldon, who represents Delaware County, was more blunt: "This situation is an absolute disgrace" and an opportunity for this nation to be helpful to others by developing technology and regulations.

Such talk prompted Wijnolst and others to gently suggest that Americans be a bit less rigid, less tied to their "comply or die" view of things.

"You see solutions through American eyes. That's one way," Wijnolst said, "but we need for you to be more sensitive to others. We need for you to work more with others."