Bangladesh's shipbreaking industry faces challenges amid push towards greener yards
SN Corporation becomes Bangladesh's 2nd green shipbreaking yard
Amid the alarming news of 80% of Bangladesh's shipbreaking yards shutting down in the last three years, there is a glimmer of hope – SN Corporation has become the second "green yard" in the country.
A "green yard" refers to a yard that is compliant with the International Maritime Organisation (IMO) Guidelines for Safe and Environmentally Sound Ship Recycling under the Hong Kong Convention (HKC).
Established in 1990 on 13 acres of land in Sitakunda, Chattogram, SN Corporation currently employs over 300 people and produces an average of 90,000-100,000 tonnes of scrap materials per year through dismantling vessels.
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"We have achieved this by following rigorous processes and adhering to environment-friendly standards. It is great news not only for us but also for the country that another shipbreaking yard has become green," Barkat Ullah, CEO of SN Corporation, told The Business Standard.
SN Corporation underwent a demanding certification procedure by a Japanese ship classification society called Nippon Kaiji Kyokai (ClassNK) to ensure that it met the strict procedural and performance standards required by the HKC.
GMS, the world's largest buyer of ships and offshore vessels, assisted ClassNK throughout the certification process under their award-winning Sustainable Ship and Offshore Recycling Programme (SSORP).
In 2017, PHP Ship Breaking and Recycling Industries Limited became the first yard to comply with the HKC convention and dismantled the first green non-hazardous ship, Victoria, in April 2018.
Abu Taher, President of the Bangladesh Ship Breakers' Association (BSBA), said, "More yards becoming green is paving the way for this industry."
However, both Barkat Ullah and Taher emphasised that the shipbreaking industry is facing significant challenges. They have called for urgent government support in importing scrap vessels and sustaining the sector.
Benefits of a green shipyard
By complying with strict environmental standards, green shipyards ensure that the shipbreaking process does not harm the environment or the health of workers.
Green shipyards prioritise workers' safety and health by implementing strict safety protocols, providing personal protective equipment, and offering training programmes for workers.
They also have a positive reputation in the industry and among stakeholders, which can lead to increased business opportunities and partnerships.
By adhering to the Hong Kong Convention's guidelines, green shipyards demonstrate their commitment to international regulations and sustainability practices.
The environment-friendly shipyards can attract more customers and generate higher profits by differentiating themselves from non-compliant competitors and by accessing premium markets that prioritise sustainability.
Cost involved in making a green yard
The cost involved in modernising a shipbreaking yard to become green is significant, with the Bangladesh Ship Breakers Association stating that it takes over Tk30 crore.
The Hong Kong Convention provides a technical standard to aid in the early implementation of safe and environmentally sound ship recycling. Responsible ship recycling yard operators have begun voluntary certification to ensure stringent safety standards and to support ongoing calls for Environment, Social, and Governance (ESG) reporting across the maritime industry.
SN Corporation CEO Barkat Ullah said the authorities of the corporation began modernising their yard in 2019 following the guidelines of ClassNK, and completed it by June 2022. While the total cost of modernisation has not yet been determined, he confirmed that it involved significant expenses.
PHP Family spent Tk55 crore to modernise its shipbreaking yard, with companies from Norway and India working on the modernisation process.
Status of shipbreaking yard industry
Countries such as India, China and Turkey have already adopted green ship recycling facilities as prescribed by the Hong Kong International Convention adopted back in 2009.
Bangladesh had set a target to turn all shipbreaking yards into green facilities by 2023, but due to the twin shocks of the Covid-19 pandemic and the Ukraine war, which made the import of raw materials scarce and costly, the target seems challenging.
The impact of these challenges has been felt by the shipbreaking industry in Bangladesh. According to data from the Bangladesh Ship Breakers Association (BSBA), from 2012 to 2019, 80 of the 150 shipyards in Sitakunda were closed down, while another 40 shipbreaking yards stopped production during the post-Covid-19 pandemic period due to the price hike of raw materials in the international market. Currently, only around 20 shipbreaking yards are active in Sitakunda.
The closure of shipbreaking yards has led to massive unemployment and catastrophic consequences for the steel and oxygen factories established in the port city developed and centred on the shipbreaking sector.
People involved in the industry noted that to overcome these challenges and revive the industry, the government's support is essential. The shipbreaking yards need a one-stop service that the government should provide in Chattogram.
At the same time, the yards require a central hazardous waste management system, similar to that in India, to handle the hazardous waste generated during the shipbreaking process.
