A Significant Human Rights, Safety and Environmental Issue on Southeast Asian Beaches
If you look at the rules regarding the Ship Breaking, a company doing ESG / Sustainability risk assessments could easily assume, that on face value, this is not a risk area they need to invest time in.
The reality is, that every year around 1000 ships are scrapped with 65 to 75 % of them ending up on one of the three ship breaking beaches located in India, Pakistan and Bangladesh. The majority of these ship breaking yards have a mixture of appalling human rights, labour, safety and environmental standards.
Unfortunately, an importer or exporter can’t even rely on the fact that a vessel owner is an EU company covered by strict EU laws. Some of Europe’s largest most respected shipping companies knowingly ‘re-flag’ their vessels and dispose of them via ‘one ship’ shell companies to ‘Cash Buyers’, knowing their vessels end up on South Asia’s beaches.
Our research shows that, in both 2019 and 2020, one large ‘respected’ EU ship owner disposed of at least 4 ships each year in this manner. It also shows that a well known Asian shipping company who hit the headlines in 2021, disposed of at least 11 ships on these South Asia beaches in 2019 and another 7 ships in 2020. Even Chinese ship owners who have access to cleaner and safer ship breaking yards in China, dispose of their ships on these South Asian beaches to maximise profit.
This is just the tip of the iceberg.
Until now, there has been no truly independent shipping vetting service that offers importers, exporters and financial institutes conducting ESG / Sustainability risk assessments, specialist advice that helps you understand your risk of using individual services by:
- examining the evidence of your proposed shipper’s recent ship breaking practices,
- helping you understand the validity of their answers when you conduct due diligence during your procurement processes.