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WHAT IS SHIP RECYCLING? Ship recycling is the activity of dismantling ships in order to recover components for reprocessing and re-use, including on-site storage and treatment. A highly mechanized process using a small labor force, which is found solely in Western countries in EU, UK and US. An intermediate process using some equipment but still maintaining a significant labor force, which can be found in Turkey, and China A non-mechanized process using a strong labor Force, which is found in India, Bangladesh and Pakistan. (Low Productivity, High rate of Fatalities and Environmentally Polluting) SAFE RECYCLING FACILITY ? SAFE RECYCLING FACILITY ? GREEN AND SAFE RECYCLING FACILITY ? GREEN RECYCLING FACILITY ?


INDUSTRY HISTORY The ship scrapping industry gradually shifted from industrialized western countries to Asia because of increased labor costs and stricter environmental regulations. Reduced demand for scrap steel in Europe and Far East Asia pushed major chunks of the markets to the Indian subcontinent which Employs low cost beaching Method and manual labor for ship breaking. Apart from India and Bangladesh, Pakistan, China and Turkey are the other major players in the scrap trade.


SHIP BREAKING MARKET (Bio intelligence service, 2010)

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MARKET HISTORY Collapse of ship and scrap steel prices Local banks withdrew credit lines halt in local Letters of Credit (LCs) Western banks unable to negotiate LCs Relentless supply of ships More renegotiations than ever before. More lawsuits, auctions, arrests Supply about 300 ships/year expected to be record years… 900-1,000 ships USD 2 billion annual turnover Indian Subcontinent do 75% of the business China and Turkey gain market share More than 5-fold increase in demo prices Demo ship values exceeded old trading prices ships destined for scrap went for tradingCargoes available for scrap vessels Demo buyers became ship owners Ship recycling capacity shrank (Bio intelligence service, 2010)

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IMO’S regulation (13G of MARPOL or new regulation 20) has accelerated scrapping of single hull tankers. This means a super scrap tonnage supply to Recycling yards all over the world. Given the lack of Safe and Green Recycling Capacity ; Inadvertently, it means more fatalities and more pollution than ever before. OBJECTIVE- How do the facilities in India accommodate this super scrap tonnage without any further deterioration of the existing safety, health and environmental problems? Specifically, how do we enhance the Safe and Green Recycling Capacity in India? HYPOTHESES: Recycle more ships per beaching plot or yard Create more capacity by increasing the number of beaching plots or yards Capacity Building by Constructing new Green Recycling Docking Facilities METHODOLOGY Test the proposed Hypotheses with: Existing Literature Review A Multi Criteria Socio-Economic and Environmental Analysis Case Study CONCLUSIONS RECOMMENDATIONS

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INTERNATIONAL CONTEXT LEGAL FRAMEWORK LITERATURE REVIEW REGIME SHIPS FACILITY OBJECTIVE All End-of-Life Ships > 500 GT, no coverage of War ships and State Owned ships The first dismantling- and recycling site, but not any interim facilities or installations for subsequent processing and disposal of waste Control of ships from design, through construction, operation and at the recycling stage. However, specific requirements for authorization and Environmentally sound management of hazardous waste not clear until the IMO guidelines, that are currently been developed, are adopted. All end-of-life ships All waste management facilities, including collection, transport, interim- and final recovery and disposal. Prior informed consent procedure (PIC). The principle of environmentally sound management (ESM) of waste applies to all facilities that recover or dispose of waste and is defined by guidelines, also specifically covering ship dismantling. The Basel guideline on ESM for ship dismantling does not accept 'beaching' (impermeable floors are prescribed for full ship containment) The ILO has set criteria to govern the disposal and recycling of private ships. ILO Guidelines are not legally binding, nor are they intended to replace national laws, regulations or accepted standards The ILO approach is to facilitate step-by-step improvements to the practice of dismantling ships on beaches. The Guidelines suggest that this can be achieved by: Ensuring there is an inventory of hazardous materials on board; Decontamination and gas-freeing; Planning for safe demolition; Recycling and; Safe waste management IMO CONVENTION (not in force, expected in 2020) BASEL CONVENTION ILO CONVENTION

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COUNTRY CONTEXT: THE SUBCONTINENT INDUSTRY FEATURES: High profit margins / High volatility Cost and (potentially) environmental effective source for steel production Significant legacy pollution costs Mixed socioeconomic record ENVIRONMENTAL ISSUES: Direct discharge on land and at sea of oil residues containing significant levels of hydrocarbons and heavy metals Widespread asbestos abuse Significant concentrations of heavy metals, Organic Compounds, PCB and TBT in the soil SOCIAL ISSUES: Sub-standard working conditions Significant source of unskilled employment casualty rates and major occupational Health problems LITERATURE REVIEW

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COUNTRY CONTEXT: INDIA INDUSTRY FEATURES: A major but not strategic industry: Niche steel market player Commendable in situ efforts to improve environmental and labor conditions and indication of changing industry attitudes counterbalanced by pressure not to loose further market ALANG (Gujarat Maritime Board) high tidal range, Long gentle slope facilitating beaching of ships 173 plots developed on 10 km. long coast. High breaking potential of >3-5 million MT per annum Direct employment to 50,000 people and Indirect: @ 500,000 People) MUMBAI ( Mumbai Port Trust) 19 plots, cap. 0.5 Million MT/Annum Beaching of ships, Direct Employment to 10,000 workers LITERATURE REVIEW

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INDIA CONCERNS AND POSSIBILITIES LITERATURE REVIEW Reflagging and Transfer of Ownership to Cash Buyers End-of-life ships are ‘beached’ in India containing Hazardous materials (PCB’s, Asbestos, lead, mercury, Anti Fouling paints and plastics causing environmental damage Ship breakers ask for ‘pre-cleaned’ ships! jobs are controlled by layers of contractors all of whom exploit the workers resulting in poor labor welfare conditions Misadministration resulting in sub standard ILO, ISO and OHSAS compliance Stricter Regulatory Regime required from IMO Beaching can be banned, but individual parties can only Implement it Basel and EU Waste Shipment Regulations have termed export of HW ‘illegal’. Pre-cleaning to be carried out by Ship Owners. Pre-cleaned ships can then be demolished in India Indian Authorities need to eradicate exploitation with Government intervention and application of existing social welfare benefits and monitoring occupational HSE norms

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WORLD (GREEN+ NON GREEN) CAPACITY ESTIMATION (1) LITERATURE REVIEW Authorization of Ship recycling facility, and Ship Recycling Plan required by SRC (CERTIFICATION) Prevention of adverse effects to human health and environment (ADVERSE EFFECTS PREVENTION) Safe and Environmentally sound management of HW (ESM) Emergency preparedness and response (EMERGENCY PREP.) Worker safety and training (TRAINING) Transparency and reporting of incidents, accidents, occupational diseases and chronic effects (TRANSPARENCY) Exchange and communication of Information (COMMUNICATION) Treatment of HW (DISPOSAL) Pollution prevention from spills (POLLUTION PREV.) Monitoring and publication of progress (MONITORING) External audit/Third Party audit ( EXTERNAL AUDITS) Environmental and/or Occupational health and safety certification and management (OHSAS) Determine Criteria Or Objectives For Evaluating Ship Recycling Facilities As Per Ship Recycling Convention ( SRC 2009) A Three Levelled System With Levels From The Sub Standard, Through Minimum A Level To The Top AAA Level .

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HYPOTHESES CAPACITY ESTIMATION (2) MULTI CRITERIA EVALUATION (MCE) Recycle more ships per beaching plot or yard! Create more capacity by increasing the number of beaching plots or yards! Capacity Building by Constructing new Green Recycling Docking Facilities! HOW TO ENHANCE THE SAFE AND GREEN RECYCLING CAPACITY IN INDIA ? WHICH HYPOTHESIS OR ALTERNATIVE YIELDS THE BEST SOLUTION ? MCE. Select The Best Possible Alternative With The Help Of (MCE) MCE will require clear objectives to be met or achieved with Alternatives Or Options The Criteria To Classify All Recycling Facilities By IMO SRC, 2009 Will Be Our Objectives The Hypotheses Become Our Alternatives or Options Weight Attribution of the Objectives will be carried out to determine importance level Running or Operating Cost Estimations of the three Options will be evaluated Option giving Maximum Socio-Economic-Environmental benefits or Value per Cost will be the Best Possible Alternative and our potential solution

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COST ESTIMATION OF OPTIONS THE MOST PROMISING ALTERNATIVE MULTI CRITERIA EVALUATION (MCE) PARAMETERS World Ship Breaking Demand (7.7-11.2 Million LDT/year) Alang Ship Breaking Capacity 3-5 Million LDT/Year Mumbai Ship Breaking Capacity : no validated info. Alang annual Operatiing Costs for 173 plots (option 1) Alang annual Operatiing Costs with additional beaching plots>173 plots (option2) Cost of 1 Green dock of size 0.5 MLDTA in India with HW cleaning station of 0.25 MLDTA with additional Depreciation costs for a period of 20-30 years (option3) SRC Criteria Hypotheses ASSUMPTIONS Demand 11.2Million LDT/Year Alang Capacity 5.0 Million LDT/Year Mumbai Capacity 0.5 Million LDT/Year 1.0 Million USD/Annum 1.5 Million USD/Annum 115 Million USD ( not including Inflation ) MCE Objectives Alternatives or Options .

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PIPAVAV SHIPYARD LIMITED India’s First Green Ship Dismantling Facility CASE STUDY WHAT WENT WRONG? Shipbuilding Industry and freight market offered better revenues Government Initiatives for the Shipbuilding Sector with Shipbuilding Subsidies at the cost of Ship breaking Implementation of the IMO regulations deferred for phasing out single hulls and old tankers Proximity to major ship breaking sites (Alang and Mumbai) Lack of International Cooperation Established: Oct., 1997 Capacity: 400,000 LDT Features: Two Wet Basins; 680m x 65m 680m x 60m Accommodate the largest VLCC Cost: 90 Million USD Commenced Operations: Shipbuilding Operations 01-April-2009

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RECOMMENDATIONS CONCLUSIONS MCE:  MCE shows that there is financial stability in beaching of vessels. It also suggests that any new beaching yards will offer no attractiveness for future entrepreneurism. MCE values green recycling yards much more than ordinary beaching facilities Green ship dismantling is the way forward with docks and piers for the industry and economic feasibility is doubtful in the sub continent, at least till the time the SRC comes into force; assumed to be 2020. SHORT TERM: The scrapping industry needs to be technically and financially supported immediately to ensure safe and healthy ship recycling with beaching of vessels The deaths, diseases and ill effects of unsafe practices, pollutants and HW cannot be prevented till enforcement of punitive regulations is effected Stricter compliance with OHSAS, ILO, ISO 30000 Ship Recycling Management System CASE STUDY: The site location to choice of industry was wrong. More than the timing of the adventure, Government’s step sisterly attitude dealt a major blow to green ship recycling in India. The GOI, needs a proactive, and comprehensive approach to revive the Ship Breaking Industry. International stake holders (IMO and other countries) need to initiate on a Fund Mechanism to provide the necessary impetus for Green Recycling facilities. LONG TERM: Upgrade all beaching breaking yards to ‘A’ level and above Improve labor, work, and health conditions. Workers housing and employment terms will need a major overhaul. Much has to be seen on ground in terms of infrastructure like providing housing, sanitation, water, electricity and insurance coverage for the beleaguered workers Complete Pre-cleaning may become financially and operationally infeasible but partial cleaning will help in reducing the burden in developing countries like India. It is suggested that partial cleaning be mandatorily enforced to tackle HW dumping and related diseases in ship breaking workers. Stricter legislations are required to stop Flag hopping to escape social, economic and environmental responsibilities