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Danish shipping giant Maersk recently caused some controversy by announcing to no longer scrap its vessels in China and Turkey but in India, due to the lower prices. Anette Stube, Head of Group Sustainability,

spoke to HANSA about Maersk’s motives
Some experts criticized, Maersk would sacrifice environmental and labour right issues to financial purposes. What was the reason for[ds_preview] Maersk to change its scrapping policy?

Annette Stube: We have been working with responsible shiprecycling standards for many years. There is an additional cost to recycling at yards in China and Turkey of 1–2mill. $ per vessel compared with substandard facilities. We have had relatively few vessels to recycle, so this was not a big problem. But we see that in the coming years the number of vessels for recycling will increase, so we are interested in finding more financially attractive options for responsible ship recycling. The important thing for us is that our standard remains the same. This is now possible because four yards in Alang have decided to invest in upgrading their facilities. They were certified by ClassNK to fulfill the Hong Kong Convention for safe and environmentally sound recycling of ships.

Are you going to work with these four yards from now on?

Stube: Yes, at least with some of them. Our standard goes beyond the Hong Kong Convention including labour standards, housing and so on. And even though the yards have not finished their work, and they are still sub-standard, we believe that it is now the right time to start responsible ship recycling there. As ship owners we need to show interest in and act on responsible recycling, so we motivate the yards to establish higher standards.

So although you leave locations with higher standards, your motivation is to keep the global standards as high as possible?

Stube: Exactly. It is also to motivate other yards to start upgrading. If nobody is willing to pay responsible recycling, it is not going to happen. It is an opportunity for the industry.

You mentioned the yards in Alang are not up to your standards yet. What is still missing and when will they be ready?

Stube: That varies from yard to yard. Our standards are higher in respect of workers rights and housing. Housing remains a problem in Alang that needs to be addressed. Another issue is breaking vessels in the tidal zone. These yards now have a concrete floor and they have developed a strategy that helps to mitigate the environmental impact on the beach. But more can be done.

One of the problems for shipowners is the very low price at scrap yards. Do you expect any major changes in the price level in the near future?

Stube: The prices will remain quite low for a while because we see some tough years ahead of us with tonnage overcapacity.

Will you at least start scrapping even at these very low prices?

Stube: We have not yet decided on the number of vessels we will send to Alang, but there is a substantial number of extra vessels that need to be scrapped compared to previous years. That’s why we are interested in developing this segment as well.

How many vessels did you sent for scrap in the last three years?

Stube: Around one to two vessels per year.

Would you go back to China and Turkey if Alang won’t be working as responsible as you demand?

Stube: Eventually, if it turns out that it is not working in Alang in line with our standards and our policy we would need to find a place where it is possible to recycle responsibly. It doesn’t matter where it is happening as long as it is done responsibly. But European shipyards will still be too expensive after the entry-into-force of the Hong Kong Convention. However, I do believe it can and will be done in Alang.
Michael Meyer