New Transparency Initiative Launched to Accelerate Responsible Ship Recycling Practices

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Industry leaders and non-profits Forum for the Future and the Sustainable Shipping Initiative today announced the launch of the Ship Recycling Transparency Initiative with the goal of increasing responsible ship recycling practices.

This call to the industry comes at a time when existing legislation, enforcement mechanisms and internationally-agreed standards are not applied consistently or can be circumvented. Transparency across ship recycling policies and practices is insufficient. This information gap leads to bad practices not being scrutinised, good practices not being rewarded and stakeholders not being able to make well-informed business decisions.

Out of a world fleet of 50,000 ships, 835 were recycled in 2017. Shipbreaking is a difficult process which is often carried out in the informal sector with few safety controls. It generates many health and safety and environmental hazards, and more responsibility needs to be taken for preventable deaths, injuries and pollution.

At the same time, investors seeking to mitigate their risk exposure and make improvements are increasing pressure on the industry to demonstrate responsible recycling practices when using ships as collateral for loans or when seeking financing for shipbuilding. Awareness is also growing among the customers to the shipping industry, increasingly concerned to ensure the environmental and social integrity of their supply chains.

The Ship Recycling Transparency Initiative (SRTI), facilitated by the global sustainability non-profit Forum for the Future and independent charity the Sustainable Shipping Initiative, brings together leading ship owners, banks and other key stakeholders from across the industry.

It aims to improve transparency in the global ship recycling value chain by facilitating voluntary disclosure of recycling practices and related data by ship owners, and to support use of this information by cargo owners, investors and financial stakeholders to make better decisions.

Stephanie Draper, Chief Change Officer, Forum for the Future said, “We see increasing levels of transparency as a key lever for change in ship recycling. If ship owners share their practices then it raises awareness of what’s happening, puts pressure on under-performers and allows customers and owners to reward good performance. Ultimately this will lead to better social and environmental outcomes which are so critical for ship recycling.”

The SRTI’s initial signatories are ship owners A.P. MollerMaersk, Hapag-Lloyd, Wallenius Wilhelmsen, The China Navigation Company and NORDEN; financial stakeholdersStandard Chartered Bank, Nykredit and GES; and classification society Lloyd’s Register. The group is working with stakeholders to develop a common set of disclosure criteria and an independent, user friendly online platform where ship owners will be able to share critical information that will be accessible to investors, customers and the wider public.

John Kornerup Bang, Head, Sustainability Strategy, Maersk, said, “Ship recycling is a dangerous undertaking. The industry is characterised by widespread use of sub-standard practices and lack of access to information on ship owners’ policies and practices. Therefore, it’s difficult for cargo owners, investors and civil society actors to know what ship recycling practices are in place. The Ship Recycling Transparency Initiative is an excellent response to overcome this information gap. We hope all ship owners will agree and support this initiative.”

Anthony Firmin, COO, Hapag-Lloyd, said, “Hapag-Lloyd strongly encourages all players and competitors to support full transparency and contribute to a level playing field when it comes to ship recycling. Seeking sustainable solutions for green ship recycling will not only have a major positive impact for the wellbeing and sanity of workers affected, but also for our environment.”

The aim is to bring other leading organisations from across the industry into the Initiative, including ship owners, cargo owners, cash buyers and financiers, to support the development of the disclosure criteria and share their practices on the platform.

“We have been working on ship recycling for over three yearswith our members and are delighted to be part of this Initiative”, said Tom Holmer, General Manager, Sustainable Shipping Initiative. “Responsible ship recycling not only has a positive impact on workers’ lives and the environment but can also contribute positively to the circular economy and holds great value for both the shipping industry and global society.”

The SRTI will be launched at the TradeWinds Ship Recycling Forum in Hamburg on 7th March, with a stakeholder roundtable to help develop the disclosure criteria on 9th March.

Sea News, March 7