SHIPBREAKING: Oh Dear
By Andrew Craig-Bennett, Lloyd's List
OH dear! The one thing that shipowners and their bankers have been able to count on since the dugout canoe - namely that, if you cannot find anything at all to do with your ship, you can at least sell her for breaking up - now seems to be at risk, thanks to the Basle Convention.
Now, this is a quite admirable little convention, which in essence says that people in rich countries should not dump their hazardous and noxious rubbish on people in poor countries.
It probably is not going to go away any time soon.
It is worrying people from bankers to class societies. The time-honoured reaction of almost everyone in the shipowning business, confronted with this sort of interference in Our Way of Life by do-gooding busybodies, is as follows:-
1. Express outrage.
2. Find a way round it.
This approach was well exemplified by the British shipowner of the last century who, having fought mightily, but unsucessfully, against Mr Plimsoll's line, found a loophole in the law and painted the loadline on the funnel.
Being, like most shipping people, a traditionalist, I will now offer you a suitable expression of outrage, followed by the way round it.
Outrage first. I am sure we are all distressed to learn that P&O Nedlloyd have had the effrontery to sell a ship for breaking up without having their unwanted object throughly decontaminated first, and that they have thereby condemned some hundreds of scrapyard workers to the possibility of badly paid, dirty and dangerous employment, with the contingent risks of asbestosis, lead poisoning, isocyanate toxicity, industrial deafness, vibration white finger and post traumatic stress disorder.
I am deeply shocked, myself, just as I was when this company's predecessor, OCL, sold a ship bearing the immortal name of Jervis Bay for breaking up and did not insist on renaming her as a term of the sale, so that when she broke her tow in the Bay of Biscay and had to be salvaged, the whole of maritime Britain felt embarrassed.
They simply have not got a clue about how to do these things. This is probably because most of their ships are neither old enough nor clapped out enough to require scrapping, so they lack practical experience.
Now, here is some simple, free, advice for Messrs Harris, Woods & Co. In future, please do as others, more experienced in these matters, do;
like this:- 1. Ring your broker and tell him that you want to sell the ship for further trading, on 'simple terms'. If he is up to his job, he will understand you to mean that you want to sell the ship to a scrap speculator.
Curiously, most of these gentlemen live in London anyway, although they seldom like to hog the limelight.
2. The buyer will then ring his lawyers and buy a Liberian shelf company on bearer shares.
3. You sell the ship to the new company. One of the 'simple terms' is that the ship's name and funnel marks are changed. You have now sold a viable, trading, ship, with certificates for at least another week, from your high profile company in the OECD to an obscure company in an African nation outside the OECD. You have not breached the Basle Convention.
4. The speculator then does what he is best at, which is to sell the ship for breaking.
All these functions can be carried out, by experts of high professional standing, within half a mile of your office doors. That is why London is a shipping centre.
The ship will still end up in India, she will still get broken up, and the breakers' workforce will not be out of employment. The Basle Convention, on the other hand, will have been observed precisely.
That disposes, I think, of the legalities of the situation, as everyone in the industry, except the most righteous and PR-sensitive of liner shipowners, knew in the first place.
And there is not much that environment commissioner Bjerregard and environment minister Pronk and the assembled hordes of Greenpeace can do about it.
We still have to deal with the moralities of the matter. Legality and morality in shipping can get a bit mixed up at times, as in the case of the master in the triangular trade who missed Jamaica, got a sight, realised his mistake, threw part of the cargo over the side to save water and beat back to Jamaica, where he declared general average. (Today, ofcourse, no self respecting cargo underwriter would fall for that 'crew negligence' line; he would have to claim on his club). The resulting outburst of morality was rather spectacular, resulting in one of the very few genuine and lasting improvements in the way humans treat each other.
"It is immoral" (I quote Mr Jayaraman of Greenpeace) "that western companies dump their hazardous waste in the form of obsolete ships on Asia..." Well, Asia is a big place. As Greenpeace may not know, 40% of the world fleet, which will no doubt require scrapping in due course, is owned in Asia.
Can I reassure their owners that they are ipso facto more moral than their European counterparts and will be allowed to scrap their ships?
While this may not be quite as satisfying for them as a rise in Biffex, a nice warm glow of righteousness may be the next best thing, certainly if their bankers are worrying over residual values.
Until recently one of the sights of Manila, close to the North Harbour, was a place called Smoky Mountain. It was the municipal rubbish dump, with some thousands of people living off it, and indeed living in it.
Cruiseships used to berth near the Manila Hotel, where the disembarked blue rinses would take afternoon tea with cucumber sandwiches, followed by a short cab ride to aid their digestion within the sight of Third World squalor at its worst.
President Ramos closed it, and rehoused the people who lived there. But not before several thousand people who did not, but who knew a gravy train when they saw one, claimed, with the support of sundry do-gooders, that they lived there too.
Unfortunately for them, the government, not being entirely stupid, had taken a census before announcing the redevelopment.
It was a Filipino friend, neither wealthy nor environmentally unsound, who pointed out to me that people lived in Smoky Mountain because life was better there than where they came from.
It is just possible that Indian shipbreaking workers, who presumably, like Filipino rubbish dwellers, are rational and make rational choices, do the work because that is better than not doing it.
It is possible that they are put at risk, not because of the wickedness of shipowners, but because of the low level of technology available in the Indian breaking industry.
This is unlike the high-tech Taiwanese shipbreakers of a few years ago, whose employers put rather more capital into the process.
And that this in turn is not unconnected with the low level of wages in India, which it is rather hard to blame shipowners for. Dare we suggest that the fault might lie instead with the Hindu rate of growth, which might berather faster if less time were spent on testing nuclear weapons .
My friend also defined 'aid' as "money given by poor people in rich countries to rich people in poor countries."
The more I think about that, the truer it gets.
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