Maersk believes several problems in Alang are now solved

Improvements at three yards in Alang have been so big, that they now represent a real alternative to China and Turkey, says Maersk CEO Søren Skou. However, the group acknowledges that there is still uncertainty with regard to the marine environment and problems with access to medical aid.

Maersk Group CEO is "very impressed" with the progress at yards in Alang. | Photo: Søren Bidstrup/Scanpix

So much progress has now been made at a handful of yards in Alang, that they are either of equal quality or even better than their more well-reputed competitors in China and Turkey, says Maersk CEO Søren Skou in the group's new sustainability report.

The report details how Maersk believes that many of the problems have been solved at the three yards where six vessels have been scrapped in the last two and half years since the company decided to start using them.

"We're very aware that companies can no longer stay on the sidelines when it comes to global issues, and I'm very satisfied with the level of our sustainability ambitions," Skou says in the report, highlighting ship recycling as an example.

"More specifically, I'm impressed with what has been achieved over such a relatively short period of time in the ship recycling project," says the CEO.

Maersk has received severe criticism on numerous fronts for using the beaching facilities in India where vessels are sailed directly onto the beach and dismantled in the tidewater zone.

According to some critics, the method is so dangerous for workers and the environment that it should be completely forbidden. But in the group's sustainability report, Maersk describes an industry in the midst of change and describes Alang as a viable alternative to China and Turkey.

However, the report also notes that there are still uncertainties concerning water pollution and unresolved issues with access to acute medical assistance.

Six ships scrapped

The first two Maersk vessels arrived at the Shree Ram yard in Alang in June 2016 and have since been followed by another four vessels at two neighboring yards.

The decision to use the severely criticized yards was made on the grounds that improvements can better be achieved by making demands, rather than by avoidance all together. But it is not just a matter of creating better conditions for the environment and the workers.

Indian yards typically pay USD 1-2 million per ship more than what they pay in China and Turkey, where experts say standards are higher. As such, there is also an economic reward for carriers when selling vessels for shipbreaking in India.

Maersk has been open about this aspect. In February 2016, the group wrote in a sustainability report that it expected to make additional amount of up to USD 150 million over five years by scrapping vessels in India.

Maersk Georgia and Maersk Wyoming were the first two ships to arrive in Alang. They have now been completely scrapped. In this photo, they are being cut up in the tidewater zone. | Photo: Louise Vogdrup Schmidt
Maersk Georgia and Maersk Wyoming were the first two ships to arrive in Alang. They have now been completely scrapped. In this photo, they are being cut up in the tidewater zone. | Photo: Louise Vogdrup Schmidt

However, the group has since distanced itself from this number. In the new report, Maersk writes that it actually would have been more profitable to continue as before with a few ships sent to be scrapped every year in China and other old vessels sold on to new owners.

Instead, Maersk stresses that the group wanted to use its position as the world's largest container carrier to create better conditions at the yards in Alang, which have historically been massive polluters and experienced several fatal accidents.

Oils, metals and ship coating

And according to Maersk, many of the problems have already been solved at the three yards which have been used so far.

During the breaking of the six vessels, external consultants have continuously monitored whether the process has lived up to the group's standards. According to the report, the only remaining problem at the three yards, is that there is too much overtime work.

External consultants have determined that the three yards meet Maersk's standards for responsible shipbreaking. | Photo: Maersk Sustainability Report 2017
External consultants have determined that the three yards meet Maersk's standards for responsible shipbreaking. | Photo: Maersk Sustainability Report 2017

Maersk has also commissioned an environmental report which tested for 18 hazardous substances in the waters around the beaching yards. The report was finished in November 2017 and shows that 15 of 18 substances were at a level, which is deemed not dangerous for the environment.

However, oil, metals and remains from anti-fouling coating were all above the limit. According to Maersk, the oil does not stem from the actual cutting of the vessels, but from ship parts and engines which have been dragged across the sand. However, there have been no leaks in 2017.The group further highlights that it does not use toxic ship coating and that tests show that the remains came from other sources.

The picture is less clear when it comes to high levels of metals in the water. Maersk writes that the study's method does not make it possible to decide how much of the pollution happened as a consequence of the activities at the yards. It is further assessed that the level is the same as in China and Turkey.

The release of toxic substances in the ocean typically happens when the vessel is cut up and the parts are allowed to fall into the tidewater zone. This method is still used in the primary cutting at one of the yards used by Maersk, while the two others now have a crane which can lift the parts directly onto an impermeable floor, Maersk notes.

One hospital with 20 beds

While Maersk believes progress has been made, there are still problems in Alang that extend beyond the individual yards.

In April 2016, the European Community Shipowners' Association (ECSA) developed a report after an unannounced visit to the Indian coastal area where two representatives from Maersk Group also participated.

The report shows that despite the hazardous work, there was only one hospital in Alang with room for around 20 people. Furthermore, there were two ambulances to drive injured workers to the hospital in the city Bhavnagar, which is around one hour's drive from the area.

The number of employees in Alang fluctuates, but during peak periods there can be 30,000 to 40,000 workers.

Maersk stresses in the report that all workers at the three yards which the company uses have been trained in safety and live under approved conditions. But the group further notes that lack of access to acute medical care is the biggest problem in Alang which has not been resolved.

The carrier is therefore working to establish a mobile health care station and will further investigate other possibilities along with the Red Cross.

Getting others on board

Despite the lack of access to medical care and the dangerous concentration of oils, metals and coating remains in the water, Maersk still finds that the development is proof that standards can be lifted in Alang.

"After 20 months, three yards in Alang, India, are performing at the same level or better than yards in China and Turkey, which used to be the only options for economically viable and responsible ship recycling," says CEO Skou in the new sustainability report.

He thus thinks that other carriers should follow the example set by Maersk.

"The door to changing an otherwise gridlocked situation has been opened, and we now need to accelerate this development," he says.

This Thursday, ShippingWatch requested access to the environmental and safety reports which Maersk had commissioned, but had not received a response by the deadline for this article.

Around 85 percent of the world's merchant fleet is scrapped in India, Bangladesh or Pakistan. The IMO's rules for responsible ship recycling in the Hong Kong Convention have not yet been ratified but are used as a standard by both yards and carriers.

At the end of 2018, the EU's regulations in the area will take effect. Depending on who you ask, the EU rules do not allow beaching in practice.

English Edit: Gretchen Deverell Pedersen

Maersk shipbreaking in Alang makes slow progress 

Alang is still the world's preferred ship graveyard 

Major Nordic banks scrutinize hazardous scrapping practices 

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