Until the 1960s, shipbreaking was considered a highly mechanized operation, concentrated in industrialized countries – mainly in the United States, United Kingdom, Germany and Italy. 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.
Ship breaking activities in Bangladesh is concentrated in Sitakund (Bhatiary to Kumira), 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 turn over of around
1.5 billion dollars.
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.
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).
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.
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.
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.
Benefits from Ship breaking
Shipbreaking plays an important role in the national economy for a number of reasons:
1. Scrapping of ships provides the country’s significant 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.
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 introduced new national policy and legislation in 2011 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.
The Ship Breaking and Ship Recycling Rules, 2011 (PDF 3.36 MB)