Maersk scrapping record defended after Danish government criticism

Criticism by Denmark of Maersk’s ship-scrapping policies has led trade group Danish Shipping to call for a bilateral deal between the EU and India to lift environment and safety standards at breakers’ yards in South Asia, where almost 90% of ships are recycled.

Denmark’s environment ministry questioned  the sales of four former Maersk-operated vessels and their subsequent recycling at Alang, India.

Denmark environment minister Lea Wermelin t that the vessels concerned were container ships Cecilie Maersk (IMO 9064401), Clara Maersk (IMO 8820016), Claes Maersk (IMO 9064396) and Thomas Maersk (IMO 9064267),all of which went to breakers in Alang on the western coast of India after reflagging and undertaking some trading voyages outside out of EU waters.

Hong Kong-flagged Cecilie Maersk was transferred to cash buyer NKD Maritime in February 2019, at which point it was reflagged in Palau.

AIS tracking showed the Cecilie Maersk to have moved back and forth between Oman and Somalia in March 2019, after the recorded sale date. The vessel made a final voyage to Alang several months later, arriving on the beach on May 16th, and was broken up the same month.

The other three vessels had different cash buyers and end-of-life flag service providers, but encountered similar ends.

Since January 1st 2019, under the terms of the EU Ship Recycling Regulation (SRR), all EU-flagged ships over 500 gt have had to be scrapped at EU-approved recycling facilities. Alang is not an approved facility.

None of the four vessels was EU-flagged after the EU SRR took full effect, but they were EU-flagged until 2018.

The Danish ministry is investigating whether the vessels’ reflagging might constitute grounds for an enforcement action.

Wermelin said that it was “unacceptable when ships end up on beaches, pollute the environment and pose risks for workers’ safety. Ships must be handled on facilities that are made for the purpose and which protect the tidal zone from leakages and spills”.

Maersk was an early proponent of the Hong Kong Convention (HKC) certification process for South Asian shipyards, which all utilize the beaching method of demolition. In 2016, with the support of the European Community Shipowners Associations, Maersk publicly announced that it would engage in business with Alang-based yards, beginning with recycler Shree Ram.

Maersk assigned on-site staff at the yard to work on compliance and best practices for safety and environmental protection.

Maersk said it was open to collaborating with Danish authorities and was confident AP Moller-Maersk had fully complied with “all applicable laws”.

Nikos Mikelis, a non-executive director at GMS, which buys ships for scrapping, said Maersk deserved praise for helping improve safety and environmental standards at the South Asian beaches.

Mikelis, who helped set up the 2009 Hong Kong Convention on ship recycling, said that Maersk had demanded higher standards from yards and had accepted lower scrap prices for their ships as a result.. “Instead of being congratulated for being an example to the shipping industry, Maersk risks finding itself accused of breaking a non-existing law while the authorities are contemplating a witch hunt that actually causes damage to the interests of Europe and its shipowners,” he told Lloyd’s List.

Mikelis insisted that standards at South Asian beaches had been transformed since the adoption of the Hong Kong Convention. He said that the Maersk ships were broken up under strict HKC conditions, while also noting that the ships had been trading outside the EU before being sent to India.

Mikelis said that the flagging out of European ships was “an expected consequence of implementing a mutation of the HKC as an instrument of European political will”.

Danish Shipping executive director Maria Skipper Schwenn also said there had been significant improvements at the Asian yards.

She said that the two at Alang met EU standards, apart from the standards governing hospital facilities and downstream waste management – which she said were factors beyond the control of the yards. “If the Indian yards are to make it to the EU list, then we need to have a bilateral agreement between the EU and India. It’s a matter of improving the conditions where almost 90% of all recycling takes place.”

She warned that “you can close the door to South Asia if you want to but you will still see recycling there.”

1994-built, Palau-flagged, 20,842 Cecilie (ex Cecilie Maersk) is owned by NKD Maritime of Chelmsford, UK. It is managed by Silver Star Ship management of Sharjah, UAE.

1992-built, Kiribati-flagged, 18,979 gt Clara Maersk is owned by Ace Ship Recycling Pte Ltd of Singapore. It is managed by Trinitas Ship management Pvt of Mumbai, India.

1994-built, Kiribati-flagged, 20,842 gt Claes Maersk is owned by Scandi Navigation Pte Ltd of Tortola, British Virgin Islands. It is managed by Almanac Ship management LLC of Dubai, UAE.

1994-built, Tuvalu-flagged, 1,859 gt Thomas Maersk is owned by Best Beyond Investment Ltd care of Best Oasis Ltd of Piraeus, Greece. It is managed by VR Maritime Services Pvt Ltd of Mumbai, India.