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Ship breaking Industry
Bangladesh Ship breaking Industry Overview
January 18, 2013
Until the 1960s, shipbreaking was considered a highly mechanized operation, concentrated in industrialized countries - mainly in the United States, United Kingdom, Germany and Italy.
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| Ship Yard Map |
From early 1980s to maximize profits ship owners sent their vessels to the scrap yards of India, China, Pakistan, Bangladesh, the Philippines and Vietnam where pay, health and safety standards are minimal and workers are desperate for work. It is estimated that over 100,000 workers are employed at ship breaking yards worldwide. Of the approximate 45,000 ocean-going ships in the world about 700 are taken out of service every year. At the end of their sailing life, ships are sold so that the valuable steel - about 95% of a ships mass can be reused.
Shipbreaking activities in Bangladesh is concentrated in Sitakund (Bhatiary to Barwalia), just north of Chittagong city on the Bay of Bengal. It is of paramount importance to the macro and micro economies of poverty stricken Bangladesh. Shipbreaking activities present both challenges and opportunities for our coastal zone management. Meeting the increasing demand for raw materials such as steel needs to be balanced with the negative impact this activity is having on our coastal environment and the conditions of the workers.
Some of the world’s largest decommissioned ships are today scraped at the shores north of Chittagong, which is the second largest city and major sea port in the country. Environmental policies and laws were not enforced, labour salaries were among the lowest in the world and there were no standards for occupational health and labour safety. Obviously there were plenty of opportunities to exploit people and the environment when moving forward with the ship breaking business.
Ship breaking on the beach, which already at that time was prohibited in most countries, could be done in Bangladesh without any concern. Poverty and millions of people without education were looking for livelihood opportunities. They provided cheap and exploitable human man power needed for the ship breaking industry. No major investments were required for engaging in ship breaking. The present type of ship breaking in Bangladesh just require a large winch, some blowtorches and maybe a bulldozer. Rest of the operation is just raw human man power. Labour is extremely cheap, environmental and labour standards are loosely applied and no pre-cleaning of the ships are required for entering the ship breaking beach in Chittagong.
Ship breaking is therefore a lucrative business with few risks for the yard owners, investors and money lenders. The ship breaking industry in Bangladesh is estimated worth an annual turnover of around 1.5 billion dollars. Globally some 700 ocean-going vessels are scrapped each year, and more than 100 of them are scrapped in Bangladesh. Some of the ships are 350 meter long with a weight up to 10-15.000 tons. It is estimated that app. 30 percent of the world’s Light Displacement Tonnes (LDT) were scrapped in Bangladesh during the period 2000-2010.
Bangladesh was the top ship recycling nation from 2004-2009. A total of 150 ships dismantled in 2011. 143 ships have already been broken in the first six months of 2012.
History
The shipbreaking industry started its operations in the 1960s when a Greek ship ‘MD Alpine’ was stranded on the shores of Sitakund, Chittagong after a severe cyclone. The ship remained there for a long time before the Chittagong Steel House brought the vessel and scrapped it. During the Liberation War in 1971, a Pakistani ship ‘Al Abbas’ was damaged by bombing. It was later salvaged and brought to the Fauzdarhat seashore. In 1974, Karnafully Metal Works Ltd bought it as scrap, introducing commercial shipbreaking in Bangladesh. The industry flourished during the 1980s. Today it has become large and profitable industry for Bangladesh.
Socio-economic profile of ship breaking activities
Most of the ship breaking workers come from the poverty stricken northern region of Bangladesh where there are limited employment opportunities. Usually, the workers are not given an appointment letter and there is no formal contract between the employer and the employee. Workers have been unable to enforce their right to permanent and secure employment as they are unable to demonstrate an employment relationship exist between the yard owners and themselves. Their wages depend on the number of hours worked as well as the type of work and skill level. They have no entitlement to overtime, sick or annual leave. Their wages range from 85-180 taka.
It was found that majority of the labour (40.75%) are between the ages of 18-22 years old. Only 1.13% of labour is between 46-60 years old. One of the most disturbing findings was that child labour (under the age of 18) made up 10.94% of the workforce. 46.42% of yard workers are illiterate while 43.02% attained primary school education. There are no arrangements for pure drinking water, healthy food, hygienic toilets and living conditions for the workers. It was observed that 86.44% of the labour force stated that they received no medical facilities from the ship yard owners, 5.93% said they received medical facilities, 4.15% said they got medical facilities but in a nominal way or by way of first aid treatment and 1.69% stated sometimes they got medical facilities and sometimes not. As the government has not recognised it as an industry, the industry based labour laws (for example the Factory Act 1965) do not apply. Though the workers have been working in the scrap yards for years they are not allowed to form or join a trade union to bargain and enforce their rights. The workers are deprived of proper compensation due to the lack of a valid contract. In order to maximize profits little is done to minimalize the risk of accidents (Source: YPSA's baseline survey).
Ship breaking accidents happens every now and then while dismantling, due to mishandling of processes and not knowing if any flammable chemicals are stocked inside or the flaming materials or conditions that ill trained welding mechanics never know, as a result many explosions have killed so many workers in the history of ship breaking. This is so, as proprietors are looking for cheaper ways to accomplish the job, by the way, families, rather than public companies run the majority of firms. Again the victims of accidents in most of the time are not reported to police (or polices have illicit link ups with the industry- cynic comment!) for record, so actual number of victims would be never known, nor the right compensations are paid to the workers family. So, in the one hand environment or macro level negative impacts we are getting on the other hand, micro level or individual level workers are not getting any good return out of it nor their rights are protected by the industry owners. Should government avoid its role in it? Obviously not, that morality presses the government to oblige to the workers’ rights and environmental impacts. Shipbreaking pollutes the sea, oceanic ecology, fisheries as planktons are destroyed and poisonous substances pollute water, beaches and bio-diversity affected badly.
Time has come to assess the cost benefit of the industry. Md Rezaul Karim Since then the business has been slightly declining due to the global recession and more strict enforcement of national laws and regulations. But the business is now picking up again, and the number of ship yards increases year by year. Ship breaking generates a lot of jobs, and it is estimated that some 50000 people are directly employed in the ship breaking industry in Bangladesh. Additionally, another 100000 are indirectly involved in the business. Most of the labourers are hired by the ship yards through local contractors on a ship by ship basis.
A labourer earns around 1-3 dollars per day depending on the type of work. Some 300-500 people are typically employed on a temporary basis for dismantling a ship, and many more are employed in downstream activities for recycling of all kind of materials from the ships. Some of the recycled materials are exported, and the rest is sold of and reused in Bangladesh. A lot of the materials are of high value to the local economy. In particular, recycling of steel for producing iron rods for construction, plates for new ships or for many other purposes is a lucrative business.
Up to 60 percent of the steel used in Bangladesh is believed to originate from the ship breaking yards in Chittagong. It is estimated that there are around 100 ship breaking yards along the coast north of Chittagong, and every year new yards are being constructed. The ship yards are owned by politicians and business people.
A ship breaker typically buy a ship to be scrapped for around 4-10 million dollars depending on the size and quality of the ship. The purchase of a ship is often done through a middleman, who links the local buyers with the international sellers. The ship breaker takes a loan in a local bank often with a high interest rate, and the full loan is repaid in six months time when the ship is completely ripped apart and all the scrap is sold to international and national buyers. Outdated and scrapped ships, which previously where a liability, is now a great asset.
Working in the ship breaking yards is a very dangerous job, which involves many human health risks. Sometimes gases explode killing workers. It also happens that workers are crushed by tumbling or falling steel parts. Sometimes workers fall from the high sides of ships on which they are working without safety harnesses. Many of the oxyacetylene cutters work without goggles. Few wear shoes, let alone protective clothing. Local organisations in Bangladesh estimate that some 1000-2000 workers have died in the last 30 years, and many more have suffered serious injuries. General health statistics show that the percentage of people with disabilities in the Chittagong area is above average for the country as a whole, because many workers have lost limbs or got other disabilities from working in the ship breaking yards.
The labourers lack basic equipment. When a new ship arrives, there are containers, chambers and tanks, which contain oil, petroleum and poisonous gases. One method used for checking the level of danger in these parts of the ship is to lower down chickens in a string to check whether there are dangerous gases. If the chickens survive, the first workers will enter to clean for oil, petroleum and other flammable substances. The flammable substances are often burned off before the cutters enter to rip the ship apart. Gas explosions is a common phenomenon.
It is estimated that half of the workers are under 22 years and nearly half of them are illiterate. Some believe that up to around 20 percent of the total work force consist of children. The workers are poor and they have no other alternatives for supporting themselves and their families than to work in the ship breaking yards. There are often no other job alternatives for them. The workers do not know much about rules and regulations on basic occupational health standards and safety. The labourers or their families are poorly compensated when injured or killed.
The Law exists
Labor Law Act 2006 has provisions on working conditions, health and safety, hours, leave and compensation. However, enforcement and compliance is almost non existent. There is a lack political will and resources on the Government side while the owner's see no reason to comply.
The Government of Bangladesh has recently introduced new national policies and legislation to improve the environmental and occupational health and safety standards in the ship breaking yards. But there is a long way to go. Governance is poor, and enforcement of policies and laws is often non-existent. Politicians and decision makers have vested interests in the industry, and corruption is wide spread making it difficult to enforce rules and regulations.
Research Reports on Bangladesh ship breaking Industry
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| Research Paper: Childbreaking Yards – Child Labour in the Ship Recycling Industry in Bangladesh Published by International Federation of human rights & International platform of ship-breaking Download |
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| Research Paper: Ship breaking Activites and its impact on the coastal zone of Chittagong, Bangladesh Download |
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| Workers in ship-breaking industries Download |
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| Research Paper: End of life Ship-The human cost of breaking ship Download |
Benefit from Ship Breaking
Ship-breaking plays an important role in the national economy for a number of reasons:
1. Production of steel:
The scrapping of ships provides the country’s main source of steel
and in doing so saves substantial amount of money in foreign exchange by
reducing the need to import steel materials. At present Bangladesh has a demand
for 50,0000 tons of metal / steels, but Bangladesh has no iron ore sources or
mines, which make ship scrapping is the inevitable and important source of raw
materials.
More than 350 re-rolling mills have been using ship scraps as
their raw materials. The industry is currently supplying more than 60 per cent
of the raw materials for local steel industry. Besides, local shipbuilding
industry also largely depends on this as raw materials mostly are being used
from scrap steel. A good number of local industries including heavy and light
engineering already been developed depending on ship breaking industry
2. In some ways it can be considered a “green industry”. Almost
everything on the ship and the ship itself is recycled, reused and resold. The
scrapping of ships supplies raw materials to steel mills, steel plate
re-manufacturing, asbestos re-manufacturing as well as providing furniture,
paint, electrical equipment and lubricants, oil to the number of businesses
that have spouted up specifically as a result.
3. It generates large amounts of revenue for various Government
authorities through the payment of taxes. Every year the Government collects
1000,00,00,000 Taka in revenue from the ship breaking industry through import
duty, yards tax and other taxes.
4. Employment. Despite the conditions that the workers are
employed under, this is an industry that employs more than 50,000 people
directly while another 0.1 million people are involved indirectly. It provides
employment for some of the poorest people from the north of Bangladesh who
would otherwise have no employment.
These mainly economic benefits have made ship-breaking a powerful
industry. But these economic benefits should be considered together with the
social and environmental costs. Together, with better regulation ship breaking can also bring social and environmental benefits.
Source: http://www.shipbreakingbd.info/Benefits.html
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