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Maersk CEO: Alang Yards Catching Up with Chinese, Turkish Rivals

Shipbreaking yards in Alang, India seem to be on the track of transformation toward becoming compliant with high safety and environmental standards, according to the Chief Executive Officer of  A.P. Møller – Mærsk A/S, Søren Skou.

“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. The door to changing an otherwise gridlocked situation has been opened, and we now need to accelerate this development,” Skou said in the group’s Sustainability Report for 2017.

In 2016 the company launched an initiative to help upgrade ship-recycling facilities and practices in Alang yards in order to make them compliant with the company’s standards and it sent two container vessels the Maersk Wyoming and the Maersk Georgia, to India’s Shree Ram yard in Alang for recycling in late May 2016.

Though the company was severely criticized for its choice of Alang by the environmental organizations, the company stood its ground saying this was “an opportunity to change the industry for the better.”

And the industry has begun to change for the better.

To the charge that the company’s move was merely for cost-cutting, Maersk answered the accusation saying that it would have been less costly to continue to recycle a few vessels in China every year, and sell off other ships before the end of life, or chartering tonnage rather than owning vessels.

 “We believe that being on the ground could help solve this industry-wide problem,” the company said.

Over the past 20 months, the company has sent six vessels to three yards in Alang.

 Maersk cited audit results that show that all the yards it works with are operating in full compliance with its standard, and are even exceeding it by fully eliminating contact with the intertidal zone during primary cutting. According to Maersk, this means that they are operating to at least the same level as when the company recycles vessels in China and Turkey.

“Finally, we are seeing increased investments in upgrades in many other yards, and when we sold our second batch of vessels, we saw yards competing on higher standards and not just on price. We believe these results indicate that with this approach, all the ship recycling operations in the entire Alang area could become responsible,” the company said.

The situation is far from perfect, especially with relation to the prevailing health hazards in the ship breaking yards.

“Access to health care – in general, and in emergencies– was confirmed as the most urgent unmet need. As a first intervention in this area, we began a project to establish a mobile health van, which will be able to provide emergency care in case of accidents. Following on from this initiative, we will be engaging more deeply in the area of health promotion and the handling of accidents in wider Alang, in partnership with the Indian Red Cross,” the company added.

Maersk plans to continue to invest and work on the ground with selected yards in Alang. However, for a more sustainable progress to be made more shipowners need to become involved.

“We hope other shipowners will join us in transforming the entire Alang shipbreaking industry by demanding high standards for safety, human rights and the environment, and by supervising implementation on the ground on a daily basis. It is about businesses and other partners working together to solve a complex problem,” Skou pointed out.


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