THE ECONOMICS OF SHIP DISMANTLING, SHIP BREAKING AND SHIP RECYCLING
Why Ship-owners Sell Ships for Ship dismantling, shipbreaking and ship
recycling?
When the maintenance costs of the vessel start to exceed possible
revenue, or when the vessel has become unattractive for the second-hand
market.
How Ships are sold for Ship dismantling, ship breaking and ship
recycling?
Ship-owners who have decided to end the economic life of a vessel will
look for a cash buyer. The cash buyer will either be a dedicated broker
or the scrap yard operator himself. Typically, the ship will take cargo
for a final voyage to the area where the scrap yard is located. After
completion of this voyage, the ship will be brought, under its own
power, to the scrap yard where it will be dismantled. The cash buyer
pays a price in US$ per light displacement ton (ldt), which is roughly
equivalent to the steel weight of the ship.
What is normal price at Ships are sold?
For years the price has been around 150 US$/ldt (with lows around 100
US$/ldt and highs around 200 US$/ldt), but recently the strong demand
for steel scrap in China and the low supply of ships have driven prices
up to record levels of nearly 500 US$/ldt for average vessels and more
for particularly valuable ones.
What affects Ship Breaking Industry Most?
Freight market, the number of ships available for scrapping depends on
conditions on the freight market. If ships can still earn good money,
owners will not decide to send the ship for scrapping. In the past two
years, scrapping volumes were very low due to a booming and profitable
freight market.
The large majority of ships for scrapping will have to come from the
deep sea merchant fleet and will be mainly tankers and bulk carriers
(which are the “volume” segments). Other market segments, such as
warships, inland waterways vessels and offshore structures, are of
limited size and availability and so can hardly provide a steady stream
of material for large-scale recycling. The operator of a modern
recycling facility will therefore have difficulty building a business
model that fully covers its amortization costs.
What is life span of normal ship?
Ships are individual constructions with a long life-cycle and will have
undergone many repairs and maintenance in their 20-30 years of
operation. . The ships currently heading for the scrap yards were built
in the 1970s using materials that are no longer used today (e.g.
asbestos).
What is dismantling capacity in the EU?
There are facilities for larger ships mainly in Belgium, Italy and the
Netherlands, with a combined capacity of about 230,000 ldt/year, and a
multitude of smaller facilities for fishing vessels and other small
craft in most other maritime Member States. Taken together, the
existing capacity in the EU for ship dismantling may be estimated at
approximately 500,000 ldt per year. The EU neighbouring Turkey having
20 dismantling yards on the shore of Aliaga (near Izmir) have a joint
capacity of approximately 1 million tons per year. (As on 2007).
Source : http://scrapshipbreaking.com/2011/05/20/the-economics-of-ship-dismantling-ship-breaking-and-ship-recycling/
GADANI SHIP BREAKING YARD, PAKISTAN
Gadani ship-breaking yard is the world’s third largest ship breaking yard. The yard consists of 132 ship-breaking plots located across a 10 km long beachfront at Gadani, Pakistan, about 50 kilometres northwest of Karachi.
In the 1980s, Gadani was the largest ship-breaking yard in the world, with more than 30,000 direct employees. However, competition from newer facilities in Alang, India and Chittagong, Bangladesh resulted in a significant reduction in output, with Gadani, today, producing less than one fifth of the scrap it produced in the 1980s. The recent reduction in taxes on scrap metal has led to a modest resurgence of output at Gadani, which now employs around 6,000 workers.
In the 2009-2010 fiscal year, a record 107 ships, with a combined light displacement tonnage (LDT) of 852,022 tons, were broken at Gadani whereas in the previous 2008-2009 fiscal year, 86 ships, with a combined LDT of 778,598 tons, were turned into scrap.
http://scrapshipbreaking.com/2011/05/08/gadani-ship-breaking-yard-pakistan/
28/05/2011
26/05/2011
Supreme Court Worried about Ship Dismatnling on Alang Beach
Note: Some 120 ships are currently standing on once pristine Alang beach. The hazardous industrial operations in this fragile coasatal environment began in the early eighties in the pre-Environment Protection Act, 1986 era. It is about time Alang beach taken away from the vice like grip of ship owning companies and countries and is restored to its earlier glory.
Danish companies have strong stake in ship-breaking in Alang, Gujarat and they pursue goal of dumping hazardous wastes by mutilating Basel Convention and by supporting International Maritime Organisation (IMO) Convention on Shipbreaking calling it recycling.
It may be recalled that the Danish ship “Ricky” (51 year-old asbestos laden ship, Kong Fredrick IX) contained hazardous wastes entered Alang beach for scrapping ilegally as it was bought by Jupiter Ship Management, a Mumbai based company. On 15 April, 2005, Connie Hedegaard, Denmark's environment minister alerted her Indian counterpart A Raja about the illegal movement of this ship. Ricky ('Kong Frederik IX') left Denmark on 16 March 2005. One wonders as to why did it take one month for the Danish Minister to alert the Indian auhtorties? What is the fate of the case that was filed against the original ship owner in Denmark? Letters were sento Danish authorties but no reply was recieved.
Per Stig Moller, the then Danish Minister of Foreign Affairs also wrote to K Natwar Singh, the then Indian Foreign Minister. This was followed-up by meetings between Michael Sternberg, the then Danish ambassador in Delhi and the Pradipto Gosh, the top bureaucrat and Secretary at the Indian Ministry of Environment and Forests (MoEF).
On 23 April 2005, "Riky" arrived for scrapping at Alang under the jurisdiction of Gujarat Maritime Board. Even the flag under which the ship sailed in isn't perfectly clear. N B Deshmukh, the then Assistant Commissioner, Customs Division, Bhavnagar, Gujarat said that Riky was carrying the flag of Democratic Peoples Republic of Korea (North Korea). An application was filed in 2005 challenging the MoEF in the Supreme Court on the ship's admission into India because the ship sailed in under the flag of Roxa, a non-existent "country". The case is till pending in the Supreme Court.
Ship owning countries and compnies are using IMO Convention to make such state of affairs legitimate. If that happens Alang will practically be deemed a place outside the jurisdiction of Government of India.
Is it wild to draw a possible link between India's best kept secret of the night when arms rained over Purulia in Bengal at night on 17th December, 1995 and Alang's ship breakers with business relations with Danish enterprises?
The next date of listing of the hazardous wastes case is 5th August, 2011.
Gopal Krishna
ToxicsWatch Alliance (TWA)
The Supreme Court bench of Justice G.S. Singhvi and Justice C.K. Prasad expressed concern over the environmental impact of dismantling and recycling of foreign ships carrying radioactive material and other toxic wastes at Alang port in Gujarat.
The apex court wished to know as to why these ships were not dismantled or broken in the country of their origin. Justice Singhvi said that tonnes of toxic waste was being brought to Alang port and dumped there.
The court said that recycling and breaking of ships at Alang port could be beneficial for some people in Gujarat or in other states but it was adversely impacting the environment.
"Why don't they break these ships in their own countries," Justice Singhvi asked.
The court made it clear that it would not be an indifferent spectator if there was any adverse bearing on the environment because of ship recycling activities. "If there is a threat to environment, then this court will intervene," said Justice Singhvi.
The court's observations came in the course of the hearing of a petition by Alang port-based Ship Recycling Association (India) seeking direction to Gujarat Maritime Board (GMB) not to go ahead with the auction of four plots each measuring 120 square metre.
The association asked the court to direct the board to first implement the recommendation of the committee of technical experts which said that smaller plots of 30 square metre each should be merged to create bigger plots as the smaller plots were not suitable for carrying out ship recycling activities.
The association told the court that the board accepted the recommendation of the committee and decided in favour of larger plots by phasing out the existing smaller plots.
The association sought orders restraining the board from auctioning the four plots without first merging the existing smaller plots to create bigger plots. The court declined the plea.
The court dismissed the application by the association.
The order dated 25/05/2011 by the (VACATION BENCH) is as under:
UPON hearing counsel the Court made the following
O R D E R
In this application filed by Ship Recycling Association (India), prayer has been made to restrain the Gujarat Maritime Board (for short, 'the Board') from auctioning the four vacant plots measuring 120 square meters at Alang Ship-Recycling Yard and to direct the Board to amalgamate and/or convert the existing smaller plots measuring 30 square meters into bigger plots before auctioning the four vacant plots.
While, learned counsel for the applicant heavily relied upon the recommendations made by the Standing Monitoring Committee on Ship Breaking Yard at Alang which is said to have recommended for merger of the available plots with the smaller plots, learned counsel representing the Board submitted that in view of the provisions contained in the Gujarat Maritime Board Act, 1981 (for short, "the Act"), the Gujarat Maritime Board (Conditions and Procedures for Granting Permission for Utilising Ship Recycling Plots) Regulations, 2006 (for short, "the Regulations") and the policy framed by the Board for amalgamation/merger of the existing plots, the smaller plots on which the members of the applicant association are carrying their operations, cannot be merged with the four plots proposed to be auctioned. Learned counsel also produced site map to show that the plots proposed to be auctioned are far away from the 30 square meters plots and argued that the same cannot be amalgamated or merged with the smaller plots.
We have considered the respective submissions and carefully perused the documents on which reliance has been placed by learned counsel for the parties. We have also gone through the provisions of the Act and the Regulations as also the guidelines framed by the Board for amalgamation of the plots.
In our view, the prayer made by the applicant is thoroughly misconceived and there is no valid ground, much less, justification for restraining the Board from auctioning the four plots or for issue of a direction for conversion of the existing smaller plots into bigger plots by adding portions of the four plots with the smaller plots. Although, there is some dispute between the parties about the exact distance between the smaller plots on which members of the applicant association are carrying their operations, they are ad idem that two kinds of plots are situated at some distance. The Regulations framed by the Board in exercise of the power conferred upon it under Sections 37, 38, 39, 41 and 110 of the Act and Clause-A of the guidelines do not permit for amalgamation of the plots by shifting the existing plots to another plot location.
The guidelines also prohibit amalgamation of two working plots. In terms of sub-clause (2) of Clause-A, the vacant plot located in between two working plots having 30 square meters width can be offered to both adjoining plot holders in equal measure. However, there is no provision for amalgamation of larger plots with the smaller plots irrespective of the distance between two plots. Therefore, there is no warrant for staying the auction of the four plots measuring 120 square meters or for issue of a direction to the Board to merge portions of the bigger plots with the smaller plots.
In the result, the application is dismissed.
Danish companies have strong stake in ship-breaking in Alang, Gujarat and they pursue goal of dumping hazardous wastes by mutilating Basel Convention and by supporting International Maritime Organisation (IMO) Convention on Shipbreaking calling it recycling.
It may be recalled that the Danish ship “Ricky” (51 year-old asbestos laden ship, Kong Fredrick IX) contained hazardous wastes entered Alang beach for scrapping ilegally as it was bought by Jupiter Ship Management, a Mumbai based company. On 15 April, 2005, Connie Hedegaard, Denmark's environment minister alerted her Indian counterpart A Raja about the illegal movement of this ship. Ricky ('Kong Frederik IX') left Denmark on 16 March 2005. One wonders as to why did it take one month for the Danish Minister to alert the Indian auhtorties? What is the fate of the case that was filed against the original ship owner in Denmark? Letters were sento Danish authorties but no reply was recieved.
Per Stig Moller, the then Danish Minister of Foreign Affairs also wrote to K Natwar Singh, the then Indian Foreign Minister. This was followed-up by meetings between Michael Sternberg, the then Danish ambassador in Delhi and the Pradipto Gosh, the top bureaucrat and Secretary at the Indian Ministry of Environment and Forests (MoEF).
On 23 April 2005, "Riky" arrived for scrapping at Alang under the jurisdiction of Gujarat Maritime Board. Even the flag under which the ship sailed in isn't perfectly clear. N B Deshmukh, the then Assistant Commissioner, Customs Division, Bhavnagar, Gujarat said that Riky was carrying the flag of Democratic Peoples Republic of Korea (North Korea). An application was filed in 2005 challenging the MoEF in the Supreme Court on the ship's admission into India because the ship sailed in under the flag of Roxa, a non-existent "country". The case is till pending in the Supreme Court.
Ship owning countries and compnies are using IMO Convention to make such state of affairs legitimate. If that happens Alang will practically be deemed a place outside the jurisdiction of Government of India.
Is it wild to draw a possible link between India's best kept secret of the night when arms rained over Purulia in Bengal at night on 17th December, 1995 and Alang's ship breakers with business relations with Danish enterprises?
The next date of listing of the hazardous wastes case is 5th August, 2011.
Gopal Krishna
ToxicsWatch Alliance (TWA)
The Supreme Court bench of Justice G.S. Singhvi and Justice C.K. Prasad expressed concern over the environmental impact of dismantling and recycling of foreign ships carrying radioactive material and other toxic wastes at Alang port in Gujarat.
The apex court wished to know as to why these ships were not dismantled or broken in the country of their origin. Justice Singhvi said that tonnes of toxic waste was being brought to Alang port and dumped there.
The court said that recycling and breaking of ships at Alang port could be beneficial for some people in Gujarat or in other states but it was adversely impacting the environment.
"Why don't they break these ships in their own countries," Justice Singhvi asked.
The court made it clear that it would not be an indifferent spectator if there was any adverse bearing on the environment because of ship recycling activities. "If there is a threat to environment, then this court will intervene," said Justice Singhvi.
The court's observations came in the course of the hearing of a petition by Alang port-based Ship Recycling Association (India) seeking direction to Gujarat Maritime Board (GMB) not to go ahead with the auction of four plots each measuring 120 square metre.
The association asked the court to direct the board to first implement the recommendation of the committee of technical experts which said that smaller plots of 30 square metre each should be merged to create bigger plots as the smaller plots were not suitable for carrying out ship recycling activities.
The association told the court that the board accepted the recommendation of the committee and decided in favour of larger plots by phasing out the existing smaller plots.
The association sought orders restraining the board from auctioning the four plots without first merging the existing smaller plots to create bigger plots. The court declined the plea.
The court dismissed the application by the association.
The order dated 25/05/2011 by the (VACATION BENCH) is as under:
UPON hearing counsel the Court made the following
O R D E R
In this application filed by Ship Recycling Association (India), prayer has been made to restrain the Gujarat Maritime Board (for short, 'the Board') from auctioning the four vacant plots measuring 120 square meters at Alang Ship-Recycling Yard and to direct the Board to amalgamate and/or convert the existing smaller plots measuring 30 square meters into bigger plots before auctioning the four vacant plots.
While, learned counsel for the applicant heavily relied upon the recommendations made by the Standing Monitoring Committee on Ship Breaking Yard at Alang which is said to have recommended for merger of the available plots with the smaller plots, learned counsel representing the Board submitted that in view of the provisions contained in the Gujarat Maritime Board Act, 1981 (for short, "the Act"), the Gujarat Maritime Board (Conditions and Procedures for Granting Permission for Utilising Ship Recycling Plots) Regulations, 2006 (for short, "the Regulations") and the policy framed by the Board for amalgamation/merger of the existing plots, the smaller plots on which the members of the applicant association are carrying their operations, cannot be merged with the four plots proposed to be auctioned. Learned counsel also produced site map to show that the plots proposed to be auctioned are far away from the 30 square meters plots and argued that the same cannot be amalgamated or merged with the smaller plots.
We have considered the respective submissions and carefully perused the documents on which reliance has been placed by learned counsel for the parties. We have also gone through the provisions of the Act and the Regulations as also the guidelines framed by the Board for amalgamation of the plots.
In our view, the prayer made by the applicant is thoroughly misconceived and there is no valid ground, much less, justification for restraining the Board from auctioning the four plots or for issue of a direction for conversion of the existing smaller plots into bigger plots by adding portions of the four plots with the smaller plots. Although, there is some dispute between the parties about the exact distance between the smaller plots on which members of the applicant association are carrying their operations, they are ad idem that two kinds of plots are situated at some distance. The Regulations framed by the Board in exercise of the power conferred upon it under Sections 37, 38, 39, 41 and 110 of the Act and Clause-A of the guidelines do not permit for amalgamation of the plots by shifting the existing plots to another plot location.
The guidelines also prohibit amalgamation of two working plots. In terms of sub-clause (2) of Clause-A, the vacant plot located in between two working plots having 30 square meters width can be offered to both adjoining plot holders in equal measure. However, there is no provision for amalgamation of larger plots with the smaller plots irrespective of the distance between two plots. Therefore, there is no warrant for staying the auction of the four plots measuring 120 square meters or for issue of a direction to the Board to merge portions of the bigger plots with the smaller plots.
In the result, the application is dismissed.
10/04/2011
Some IMO Influence on Special Rapporteurs' Report on Shipbreaking, Still Facts Are Glaring
Note: Having accompanied the Special Rapporteur on Toxic waste to Alang, ToxicsWatch Alliance (TWA) finds the statement of the Special Rapporteur with regard to "improving health and safety conditions in shipbreaking yards" to be factually incorrect. The assertion that "considerable decrease in the number of work-related injuries resulting in death or permanent or temporary disabilities" at shipbreaking yards is a figment of someone's imagination. Even newspapers reports can reveal the falsehood of this statement. TWA is aware that one IMO official was working overtime to influence the statement and report of Special Rapporteur. Having interacted with Prof. Okechukwu Ibeanu personally, I refuse to believe that he has made this statement. It appears that officials who drafted his report were under some influence. I suspect that someone else has attributed these views without cross-checking it with Prof Ibeanu.
The statement on page 2 of the Special Rapporteurs' report which one finds here also has the resonance of one IMO official:
With specific regard to shipbreaking, the Special Rapporteur notes with satisfaction
the improvement of the health and safety conditions in Alang/Sosiya, as well as the efforts made by the regulatory authority and the industry to improve the health and quality of life of workers and their families.
The Special Rapporteurs' views on hazardous waste management is also evidently incorrect because the National Inventory of Hazardous Wastes Generating Industries & Hazardous Waste Management in India prepared by India's Central Pollution Control Board (CPCB) available on its website reveals the correct picture. India has 36, 165 hazardous waste generating industries, generating 62, 32, 507 Metric Tonnes of hazardous wastes every year in the face of paucity of capacity to deal with it.
Out of the total waste generated within the country, as per CPCB, Land Fillable Hazardous Wastes is 27, 28, 326 MTA (Metric Tonnes/Annum), Incinerable Hazardous Waste is 4, 15, 794 MTA and Recyclable Hazardous Wastes is 30, 88, 387 MTA It is obvious that the recyclable portion of Hazardous Wastes is in the range of 49.55 % and is more than other two categories. The land disposable portion and incinerable portion are in the tune of 43.78 % and 6.67 % respectively.
India has only 22 Common Treatment, Storage and Disposal Facilities (TSDF) for the disposal of hazardous wastes in 10 States only namely Gujarat, Maharashtra, Uttar Pradesh, Andhra Pradesh, Himachal Pradesh, Madhya Pradesh, West Bengal, Punjab, Rajasthan and Tamil Nadu. Total disposal capacity of these facilities, is 15, 00, 568 MTA which is much less than the present generation of 27, 28, 326 MTA of land-disposable hazardous wastes. The deficit of TSDF capacity is 12, 27, 758 MTA. It is obvious that the additional TSDF to the tune of 15, 00, 000 T/A must be developed to accommodate the present and future quantities of land disposable hazardous wastes.
For incinerable hazardous waste as per CPCB, there are 14 Common Incinerators in 7 States and 127 individual incinerators in 12 States. Total incineration capacity of these incinerators is 3, 27, 705 MTA while the present generation of Incinerable hazardous wastes is 4, 15, 794 MTA. It is clear that there is a deficit of 88,089 MTA of incineration capacity of the country. It is proposed by different States to install additional incinerators to provide an additional incineration capacity of 2, 56, 710 MTA. From these figures reported in the “National Inventory of Hazardous Wastes Generating Industries & Hazardous Waste Management in India”, it is quite clear that Special Rapporteur has erred in welcoming "the significant progress the country has made in the area of the management and disposal of hazardous products and wastes" at page of his report.
The inconsistency with regard to his views on ship breaking is quite manifest when he says, "Regulatory authorities in Alang/Sosiya and the shipbreaking industry should
step up their efforts to improve health and safety in the yards" because he also states and observes his major concerns as "the health and safety situation
prevailing at the shipbreaking yards continues to remain critical, as witnessed by the 12 fatal accidents that occurred in Alang/Sosiya during the course of 2009, and there are a number of identifiable shortcomings which need to be addressed" at page 12 of his report. TWA agrees with the latter part of it.
TWA agrees with the report when it states, "Health facilities in Alang/Sosiya do not possess sufficient human, technical and financial resources to provide any treatment other than first aid for minor injuries. The nearest hospital equipped to deal with life-threatening conditions is in Bhavnagar, more than 50 kilometres away. The Red Cross hospital in Alang, which the Special Rapporteur visited, can count on only four medical doctors and nine beds to provide health care not only to some 30,000 workers in the yards, but also to the neighbouring villages of Alang (which has a population of about 18,000 people) and Sosiya (4,000 people)" on page 14.
TWA agrees, "In Mumbai the situation is even worse, with no permanent facilities except first aid and ambulance services."
TWA shares the observation that "most workers, but reportedly also a number of yard owners, are not aware of the serious life-threatening work-related diseases which may result from long-term exposure to toxic and hazardous substances and materials present on end-of-life ships. In particular, it appears that the majority of the
workforce and the local population do not know the adverse consequences of prolonged
exposure to asbestos dusts and fibres and are not familiar with the precautions that need to be taken to handle asbestos-containing materials."
It is true that "The majority of the workforce lives in overcrowded makeshift facilities just outside the yards. Most accommodations lack basic amenities such as kitchens, toilet facilities, electricity and running water. The water and sanitation facilities available in Alang/Sosiya remain grossly inadequate to deal with the consumption, cooking, and personal and domestic hygienic requirements of the 30,000 workers who work and live there. In Mumbai, the situation is even worse, with no safe drinking water available in the yards."
On page 13, he observes, "the vast majority of the workforce in Mumbai do not
receive any information on the hazards or risks to health and safety, nor do they receive any training on how to avoid or minimize them. With regard to safety training, the Special Rapporteur is of the view that existing training opportunities in Alang/Sosiya should be improved, considering the magnitude of the risks associated with shipbreaking activities and the hazardous substances workers are potentially exposed to." He adds, "Due to the informal nature of working arrangements, workers are not covered by social protection schemes, and do not receive any benefit in case of work-related injuries or diseases." TWA agrees with it.
He observes, employers do not pay for long-term medical treatment or for expenses
linked to chronic work-related illnesses. Workers do not usually receive any wages or
benefits when absent from work on medical grounds. TWA agrees with it.
TWA endorses Special Rapporteur's assessment wherein it says "in India ships are
dismantled on beaches, a method commonly referred to as “beaching”.5 This method of
ship dismantling fails to comply with generally accepted norms and standards on
environmental protection. Although very little work has been carried out to assess its
environmental impact, the dismantling of ships on sandy beaches without any containment other than the hull of the ship itself appears to have caused high levels of contamination of soil, air, and marine and freshwater resources in many South Asian countries, and to have adversely affected the livelihood of local communities surrounding the shipbreaking facilities, which often rely on agriculture and fishing for their subsistence" at page 9 of his report.
TWA welcomes Special Rapporteur's recommendation seeking "an independent study be
carried out to assess the actual and potential adverse effects caused by the discharge
of hazardous substances and materials into the natural environment. Such a study
should also assess the steps that need to be taken for the gradual phasing out of
“beaching” in favour of more environmentally friendly methods of shipbreaking" at page 21 of his report.
It appears that while making general observations, the report has erred but in many specific instances it has stated facts which merit the attention of Government of India, ship owning countries, companies and IMO who continue to contaminate South Asian beaches like Alang even as they cherish such beaches in their own countries. IMO treaty on ship recycling by promoting status quo with regard to shipbreaking activities on beach appears racist.
Gopal Krishna
ToxicsWatch Alliance (TWA)
Statement of the Special Rapporteur on Toxic waste
concludes his visit to India
The Special Rapporteur on the adverse effects of the movement and dumping of toxic and dangerous products and wastes on the enjoyment of human rights, Mr. Okechukwu Ibeanu, during a 10-day mission, from 11 to 21 January 2010, assessed the progress made India in minimizing the adverse effects that hazardous activities, such as shipbreaking and the recycling of electronic waste (e-waste), have on the human rights of countless individuals working in these sectors or living close to the places where these activities take place.
The Special Rapporteur visited the capital New Delhi and an e-waste recycling facility in Roorkee, informal small-scale laboratories for the dismantling and recycling of electronic products in a suburb of the capital, a facility for the treatment, storage and disposal of hazardous wastes in Ankleshwar, and a number
of shipbreaking yards in Alang and Mumbai.
”I welcome the significant progress India has made in improving health and safety conditions in the shipbreaking yards, as witnessed by the considerable decrease in the
number of work-related injuries resulting in death or permanent or temporary disabilities, but a number of serious concerns remain to be properly addressed”, Mr.
Ibeanu said.
“First and foremost, I urge the owners of the yards to comply with the existing labour and social security legislation, and the Government to monitor its effective
implementation”, he added. Training opportunities need to be improved, and personal protective equipments (PPEs) should be provided to, and used by, all workers in the
yards. Medical facilities do not possess sufficient human, technical and financial resources to provide any treatment other than first aid for inor injuries, and there are no schools or formal education facilities for the children of those employed in the yards, 20 per cent of whom are accompanied by their families. In India , ships are currently dismantled on the beaches, a method commonly referred to as “beaching”, and the impact of this on the surrounding environment and the livelihood of local communities relying on agriculture and fishing for their subsistence continues to be debated.
“In order to ascertain the environmental impact of the shipbreaking industry, I recommend that an independent study be carried out to assess the actual and potential
adverse effects that may be caused by the discharge of hazardous material into the natural environment, as well as the level of risk”, Mr. Ibeanu said.
The Special Rapporteur noted that he was “shocked by the extremely poor conditions in which most workers live in Alang and Mumbai”. Semi-skilled and unskilled workers
live in makeshift facilities lacking basic sanitation facilities, electricity and even safe drinking water. “I call on Governmental authorities to provide appropriate plots of lands, and facilitate the construction of adequate housing facilities for those who work in the yards. Adequate sanitation and drinking water facilities should also be put in place”.
The statement on page 2 of the Special Rapporteurs' report which one finds here also has the resonance of one IMO official:
With specific regard to shipbreaking, the Special Rapporteur notes with satisfaction
the improvement of the health and safety conditions in Alang/Sosiya, as well as the efforts made by the regulatory authority and the industry to improve the health and quality of life of workers and their families.
The Special Rapporteurs' views on hazardous waste management is also evidently incorrect because the National Inventory of Hazardous Wastes Generating Industries & Hazardous Waste Management in India prepared by India's Central Pollution Control Board (CPCB) available on its website reveals the correct picture. India has 36, 165 hazardous waste generating industries, generating 62, 32, 507 Metric Tonnes of hazardous wastes every year in the face of paucity of capacity to deal with it.
Out of the total waste generated within the country, as per CPCB, Land Fillable Hazardous Wastes is 27, 28, 326 MTA (Metric Tonnes/Annum), Incinerable Hazardous Waste is 4, 15, 794 MTA and Recyclable Hazardous Wastes is 30, 88, 387 MTA It is obvious that the recyclable portion of Hazardous Wastes is in the range of 49.55 % and is more than other two categories. The land disposable portion and incinerable portion are in the tune of 43.78 % and 6.67 % respectively.
India has only 22 Common Treatment, Storage and Disposal Facilities (TSDF) for the disposal of hazardous wastes in 10 States only namely Gujarat, Maharashtra, Uttar Pradesh, Andhra Pradesh, Himachal Pradesh, Madhya Pradesh, West Bengal, Punjab, Rajasthan and Tamil Nadu. Total disposal capacity of these facilities, is 15, 00, 568 MTA which is much less than the present generation of 27, 28, 326 MTA of land-disposable hazardous wastes. The deficit of TSDF capacity is 12, 27, 758 MTA. It is obvious that the additional TSDF to the tune of 15, 00, 000 T/A must be developed to accommodate the present and future quantities of land disposable hazardous wastes.
For incinerable hazardous waste as per CPCB, there are 14 Common Incinerators in 7 States and 127 individual incinerators in 12 States. Total incineration capacity of these incinerators is 3, 27, 705 MTA while the present generation of Incinerable hazardous wastes is 4, 15, 794 MTA. It is clear that there is a deficit of 88,089 MTA of incineration capacity of the country. It is proposed by different States to install additional incinerators to provide an additional incineration capacity of 2, 56, 710 MTA. From these figures reported in the “National Inventory of Hazardous Wastes Generating Industries & Hazardous Waste Management in India”, it is quite clear that Special Rapporteur has erred in welcoming "the significant progress the country has made in the area of the management and disposal of hazardous products and wastes" at page of his report.
The inconsistency with regard to his views on ship breaking is quite manifest when he says, "Regulatory authorities in Alang/Sosiya and the shipbreaking industry should
step up their efforts to improve health and safety in the yards" because he also states and observes his major concerns as "the health and safety situation
prevailing at the shipbreaking yards continues to remain critical, as witnessed by the 12 fatal accidents that occurred in Alang/Sosiya during the course of 2009, and there are a number of identifiable shortcomings which need to be addressed" at page 12 of his report. TWA agrees with the latter part of it.
TWA agrees with the report when it states, "Health facilities in Alang/Sosiya do not possess sufficient human, technical and financial resources to provide any treatment other than first aid for minor injuries. The nearest hospital equipped to deal with life-threatening conditions is in Bhavnagar, more than 50 kilometres away. The Red Cross hospital in Alang, which the Special Rapporteur visited, can count on only four medical doctors and nine beds to provide health care not only to some 30,000 workers in the yards, but also to the neighbouring villages of Alang (which has a population of about 18,000 people) and Sosiya (4,000 people)" on page 14.
TWA agrees, "In Mumbai the situation is even worse, with no permanent facilities except first aid and ambulance services."
TWA shares the observation that "most workers, but reportedly also a number of yard owners, are not aware of the serious life-threatening work-related diseases which may result from long-term exposure to toxic and hazardous substances and materials present on end-of-life ships. In particular, it appears that the majority of the
workforce and the local population do not know the adverse consequences of prolonged
exposure to asbestos dusts and fibres and are not familiar with the precautions that need to be taken to handle asbestos-containing materials."
It is true that "The majority of the workforce lives in overcrowded makeshift facilities just outside the yards. Most accommodations lack basic amenities such as kitchens, toilet facilities, electricity and running water. The water and sanitation facilities available in Alang/Sosiya remain grossly inadequate to deal with the consumption, cooking, and personal and domestic hygienic requirements of the 30,000 workers who work and live there. In Mumbai, the situation is even worse, with no safe drinking water available in the yards."
On page 13, he observes, "the vast majority of the workforce in Mumbai do not
receive any information on the hazards or risks to health and safety, nor do they receive any training on how to avoid or minimize them. With regard to safety training, the Special Rapporteur is of the view that existing training opportunities in Alang/Sosiya should be improved, considering the magnitude of the risks associated with shipbreaking activities and the hazardous substances workers are potentially exposed to." He adds, "Due to the informal nature of working arrangements, workers are not covered by social protection schemes, and do not receive any benefit in case of work-related injuries or diseases." TWA agrees with it.
He observes, employers do not pay for long-term medical treatment or for expenses
linked to chronic work-related illnesses. Workers do not usually receive any wages or
benefits when absent from work on medical grounds. TWA agrees with it.
TWA endorses Special Rapporteur's assessment wherein it says "in India ships are
dismantled on beaches, a method commonly referred to as “beaching”.5 This method of
ship dismantling fails to comply with generally accepted norms and standards on
environmental protection. Although very little work has been carried out to assess its
environmental impact, the dismantling of ships on sandy beaches without any containment other than the hull of the ship itself appears to have caused high levels of contamination of soil, air, and marine and freshwater resources in many South Asian countries, and to have adversely affected the livelihood of local communities surrounding the shipbreaking facilities, which often rely on agriculture and fishing for their subsistence" at page 9 of his report.
TWA welcomes Special Rapporteur's recommendation seeking "an independent study be
carried out to assess the actual and potential adverse effects caused by the discharge
of hazardous substances and materials into the natural environment. Such a study
should also assess the steps that need to be taken for the gradual phasing out of
“beaching” in favour of more environmentally friendly methods of shipbreaking" at page 21 of his report.
It appears that while making general observations, the report has erred but in many specific instances it has stated facts which merit the attention of Government of India, ship owning countries, companies and IMO who continue to contaminate South Asian beaches like Alang even as they cherish such beaches in their own countries. IMO treaty on ship recycling by promoting status quo with regard to shipbreaking activities on beach appears racist.
Gopal Krishna
ToxicsWatch Alliance (TWA)
Statement of the Special Rapporteur on Toxic waste
concludes his visit to India
The Special Rapporteur on the adverse effects of the movement and dumping of toxic and dangerous products and wastes on the enjoyment of human rights, Mr. Okechukwu Ibeanu, during a 10-day mission, from 11 to 21 January 2010, assessed the progress made India in minimizing the adverse effects that hazardous activities, such as shipbreaking and the recycling of electronic waste (e-waste), have on the human rights of countless individuals working in these sectors or living close to the places where these activities take place.
The Special Rapporteur visited the capital New Delhi and an e-waste recycling facility in Roorkee, informal small-scale laboratories for the dismantling and recycling of electronic products in a suburb of the capital, a facility for the treatment, storage and disposal of hazardous wastes in Ankleshwar, and a number
of shipbreaking yards in Alang and Mumbai.
”I welcome the significant progress India has made in improving health and safety conditions in the shipbreaking yards, as witnessed by the considerable decrease in the
number of work-related injuries resulting in death or permanent or temporary disabilities, but a number of serious concerns remain to be properly addressed”, Mr.
Ibeanu said.
“First and foremost, I urge the owners of the yards to comply with the existing labour and social security legislation, and the Government to monitor its effective
implementation”, he added. Training opportunities need to be improved, and personal protective equipments (PPEs) should be provided to, and used by, all workers in the
yards. Medical facilities do not possess sufficient human, technical and financial resources to provide any treatment other than first aid for inor injuries, and there are no schools or formal education facilities for the children of those employed in the yards, 20 per cent of whom are accompanied by their families. In India , ships are currently dismantled on the beaches, a method commonly referred to as “beaching”, and the impact of this on the surrounding environment and the livelihood of local communities relying on agriculture and fishing for their subsistence continues to be debated.
“In order to ascertain the environmental impact of the shipbreaking industry, I recommend that an independent study be carried out to assess the actual and potential
adverse effects that may be caused by the discharge of hazardous material into the natural environment, as well as the level of risk”, Mr. Ibeanu said.
The Special Rapporteur noted that he was “shocked by the extremely poor conditions in which most workers live in Alang and Mumbai”. Semi-skilled and unskilled workers
live in makeshift facilities lacking basic sanitation facilities, electricity and even safe drinking water. “I call on Governmental authorities to provide appropriate plots of lands, and facilitate the construction of adequate housing facilities for those who work in the yards. Adequate sanitation and drinking water facilities should also be put in place”.
Updates from South Asian Beaches
Accident prone MSC Chitra to be dismantled
On August 7 last year the cargo ship MV Khalija-3 collided with the container vessel MSC Chitra 30 nautical miles off the Mumbai port. This was followed by another accident involving the container ship, which occurred on March 19, 2011. This time the mishap resulted in the ship's anchor chain damaging the winch and other parts. The cause of the same was the breaking of mooring lines leading to drifting of the already damaged vessel.
Finally, according to sources in DG Shipping, the authorities have now opted to tear the ill-fated MSC Chitra down, overriding their earlier decision to wash their hands clean of the ship by selling it to the Alang ship-breaking yard.
With the efforts of salvage company Smith Tech, MSC Chitra re-floated safely on March 11. Soon after, the directorate general of shipping (DGS) decided to get rid of the vessel by way of scrapping, and permitted her sending off to Alang ship-breaking yard. However, delay in clearance processes resulted in the mishap. Currently, the ship lay at Alfa anchorage and the salvage company is spending nearly US$2.5L on it per day.
Earlier, when DGS permitted the sale of MSC Chitra at Alang, Smith Tech had promised to escort the vessel as far as Alang -- nearly 200 miles from Mumbai, and the dead vessel, whilst being towed, would have taken just 4 days to cover the distance. But DGS took too much time to provide clearance to her last voyage, which eventually led to the accident on March 19.
If the ship can safely withstand outer anchorage and be re-floated, being currently grounded 30 to 50 meters in deep water, then it could be brought to Alang. However, the sudden decision to sink her in deep water has raised many questions.
Apr 10, 2011
By Mahebub Kureshi
Bhavnagar
DNA
Wires holding MSC Chitra come apart, ship moved away
The ill-fated ship MSC Chitra has been moved 30 nautical miles off the city harbour as the anchor wires holding it came apart during a strong receding tide, the Directorate General of Shipping said today. During the strong "ebb tide" on Saturday (full moon day), the anchor wires holding the vessel afloat were parted. "Fortunately the vessel was manoeuvred safely out of port without damage to other vessels or blocking the channel," a release issued here by the DGS said, adding that MSC Chitra has been moved to a location about 30 nautical miles north of the entrance of Mumbai Port.
Having partially submerged after an accident in August last year, MSC Chitra was refloated only nine days earlier on March 10 and being prepared to be taken to the Alang ship-breaking yard, the DGS said. During the nine days that it was refloated, it was placed on four point moorings while at its new location, salvors were working with two tugs and one salvage barge to ensure safety of the vessel, it added. The salvors are working again to prepare the vessel for beaching at Alang, it said.
MSC Chitra had collided with the in-bound M V Khalija on August 7 last year while exiting the Mumbai harbour, leading to heavy damage to port operations. After the collision the vessel started taking in water and settled on a shallow patch within Mumbai Port Trust, listed heavily and partly submerged.
March 22,2011
PTI
In the continued absence of ship breakers from Bangladesh from market, both India and Pakistan are proving to valuable outlets for cash buyers and owners alike.
New India Assurance asked to pay for ship wreck loss
The Supreme Court has dismissed the appeal of New India Assurance Company which had rejected the claim of a ship-breaking firm for compensation. The firm bought a Belgian vessel and was bringing it from Singapore on its ‘funeral voyage’ to Alang port in Gujarat for demolition. It wrecked on way in high seas due to bad weather.
The ship was covered by marine insurance and the ship-breaker invoked the policy. The insurer rejected the claim leading to litigation in the consumer forum.
The National Consumer Commission asked the insurance company to pay Rs 14 crore with 9 per cent interest to Priya Blue Industries, the scrap dealer in ships. However, the insurer appealed to the Supreme Court.
It ruled that the loss suffered due to the ship wreck was properly assessed by the surveyors and the commission order was correct.
M J Antony
Business Standard
April 04, 2011
Shipbreaking in Bangladesh
Bangladesh ship breakers have got an interim High Court (HC) order issued in their favour on February 27, 2011. The order says, ship import should not be stopped and sought suggestions from parties concerned to facilitate procurement of old scrap vessels.
Sitakundu in Chittagong emerged as the world's largest ship-breaking destination as Bangladeshi importers had beaten their competitors in India and Pakistan to buy the highest number of scrap vessels sold in the international market during 2007, 2008 and 2009 period.
The active ship breaking yards in Sitakundu, 20 kilometres north of the port city Chittagong, dismantled more than 130 ships in 2007.
Bangladesh used to dismantle nearly 50 per cent of the ships sent to scrap-yards across the globe.
On August 7 last year the cargo ship MV Khalija-3 collided with the container vessel MSC Chitra 30 nautical miles off the Mumbai port. This was followed by another accident involving the container ship, which occurred on March 19, 2011. This time the mishap resulted in the ship's anchor chain damaging the winch and other parts. The cause of the same was the breaking of mooring lines leading to drifting of the already damaged vessel.
Finally, according to sources in DG Shipping, the authorities have now opted to tear the ill-fated MSC Chitra down, overriding their earlier decision to wash their hands clean of the ship by selling it to the Alang ship-breaking yard.
With the efforts of salvage company Smith Tech, MSC Chitra re-floated safely on March 11. Soon after, the directorate general of shipping (DGS) decided to get rid of the vessel by way of scrapping, and permitted her sending off to Alang ship-breaking yard. However, delay in clearance processes resulted in the mishap. Currently, the ship lay at Alfa anchorage and the salvage company is spending nearly US$2.5L on it per day.
Earlier, when DGS permitted the sale of MSC Chitra at Alang, Smith Tech had promised to escort the vessel as far as Alang -- nearly 200 miles from Mumbai, and the dead vessel, whilst being towed, would have taken just 4 days to cover the distance. But DGS took too much time to provide clearance to her last voyage, which eventually led to the accident on March 19.
If the ship can safely withstand outer anchorage and be re-floated, being currently grounded 30 to 50 meters in deep water, then it could be brought to Alang. However, the sudden decision to sink her in deep water has raised many questions.
Apr 10, 2011
By Mahebub Kureshi
Bhavnagar
DNA
Wires holding MSC Chitra come apart, ship moved away
The ill-fated ship MSC Chitra has been moved 30 nautical miles off the city harbour as the anchor wires holding it came apart during a strong receding tide, the Directorate General of Shipping said today. During the strong "ebb tide" on Saturday (full moon day), the anchor wires holding the vessel afloat were parted. "Fortunately the vessel was manoeuvred safely out of port without damage to other vessels or blocking the channel," a release issued here by the DGS said, adding that MSC Chitra has been moved to a location about 30 nautical miles north of the entrance of Mumbai Port.
Having partially submerged after an accident in August last year, MSC Chitra was refloated only nine days earlier on March 10 and being prepared to be taken to the Alang ship-breaking yard, the DGS said. During the nine days that it was refloated, it was placed on four point moorings while at its new location, salvors were working with two tugs and one salvage barge to ensure safety of the vessel, it added. The salvors are working again to prepare the vessel for beaching at Alang, it said.
MSC Chitra had collided with the in-bound M V Khalija on August 7 last year while exiting the Mumbai harbour, leading to heavy damage to port operations. After the collision the vessel started taking in water and settled on a shallow patch within Mumbai Port Trust, listed heavily and partly submerged.
March 22,2011
PTI
In the continued absence of ship breakers from Bangladesh from market, both India and Pakistan are proving to valuable outlets for cash buyers and owners alike.
New India Assurance asked to pay for ship wreck loss
The Supreme Court has dismissed the appeal of New India Assurance Company which had rejected the claim of a ship-breaking firm for compensation. The firm bought a Belgian vessel and was bringing it from Singapore on its ‘funeral voyage’ to Alang port in Gujarat for demolition. It wrecked on way in high seas due to bad weather.
The ship was covered by marine insurance and the ship-breaker invoked the policy. The insurer rejected the claim leading to litigation in the consumer forum.
The National Consumer Commission asked the insurance company to pay Rs 14 crore with 9 per cent interest to Priya Blue Industries, the scrap dealer in ships. However, the insurer appealed to the Supreme Court.
It ruled that the loss suffered due to the ship wreck was properly assessed by the surveyors and the commission order was correct.
M J Antony
Business Standard
April 04, 2011
Shipbreaking in Bangladesh
Bangladesh ship breakers have got an interim High Court (HC) order issued in their favour on February 27, 2011. The order says, ship import should not be stopped and sought suggestions from parties concerned to facilitate procurement of old scrap vessels.
Sitakundu in Chittagong emerged as the world's largest ship-breaking destination as Bangladeshi importers had beaten their competitors in India and Pakistan to buy the highest number of scrap vessels sold in the international market during 2007, 2008 and 2009 period.
The active ship breaking yards in Sitakundu, 20 kilometres north of the port city Chittagong, dismantled more than 130 ships in 2007.
Bangladesh used to dismantle nearly 50 per cent of the ships sent to scrap-yards across the globe.
07/01/2011
Intelligence Raids Reveals Alang Remains a Fake Document Factory
Press Release
Intelligence Raids Reveals Alang Remains a Fake Document Factory
Dilution of Central Excise Intelligence Opposed
Import of hazardous substances, a Global Threat
New Delhi 7/1/2011: ToxicsWatch Alliance (TWA) welcomes the notification of Director General of Central Excise Intelligence (DGCEI), Union Ministry of Finance seeking change in system of invoicing by ship breakers at Alang, Gujarat to ensure more transparency. This Public Notice No. 01/2010 dated on 26/7/2010 vindicates TWA’s allegations about non-transparency in Alang. The document is attached.
Notably, Directorate of Revenue Intelligence functions under the Central Board of Excise and Customs in the Ministry of Finance, Department of Revenue has taken note of "problems such as import of hazardous substances that will occupy centre stage in the future as the emerging global threats." In such a context, the notification assumes huge significance as it will end up helping systematic quantification of material flow and help detect and segregate goods of hazardous nature.
On 23rd December, 2010, Mr Raju, Commissioner, Central Excise, Bhavnagar issued a Press Note (attached) referring to “ a number of cases of Revenue leakage in Alang against Ship Breakers of Alang, who fraudulently passed on Cenvat Credit worth crores of Rupees. They were also not showing production, clearance, transportation and Service Tax related information in their statutory records. The investigations are going on and some notices have been issued by ADG (CEI). In order to curb these malpractices, the Public Notice No. 02/2010 was issued on 13.12.2010 by the Central Excise Commissionerate, Bhavnagar. The public notice requires them to maintain certain records which would make it difficult for those who choose to evade duties by clandestine clearances.” The Press Note says that “ around 100-150 persons came to Central Excise, Head Quarters office, Bhavnagar and informed that they were from the Alang Ship Breaking Association”, “they continued shouting slogans and fearing damage to public property, and a as matter of abundant precaution, police force was called to ensure peace and security of the Government office”.
In such a backdrop, TWA has learnt that under pressure due to strike, now DGCEI decided to put the notification seeking change in system of invoicing by the ship breakers for transparency, in abeyance for one month after the intervention of Chief Commissioner, Ahmedabad. The TWA opposes any amendment in the notification and demands that the notification of 13.12.2010 be enforced rigorously both in letter and spirit because it is in compliance of the Supreme Court’s order in the hazardous wastes/shipbreaking case. Most ship breakers who are law abiding support this notification. The case is listed for hearing on 21st January, 2011.
It is noteworthy that Office of the Commissioner of Central Excise & Service Tax, Bhavnagar, Department of Revenue, Union Ministry of Finance issued on 26/7/2010, a Public Notice No. 01/2010 saying, “It has been brought to the notice of this Commissionerate that the Ship Breaking Units situated in Alang, Sosiya and other areas falling within its jurisdiction are not issuing their Central Excise invoices by declaring correct value and description of the scrap, plates etc generated as a result of their manufacturing activities. Investigations recently initiated by Director General of Central Excise Intelligence, Ahmedabad Zonal Unit revealed that the documentation and procedures followed by the ship breaking units are suffering from several infirmities resulting in substantial loss of Government Revenue.” As per power conferred under Central Excise Rules, 2002, it said, “All ship breaking units are directed to discontinue their present system of mentioning general description of ship breaking materials in their invoices. They should declare the correct and full description of the goods...”
For the first time since 14th October, 2003, in compliance of the Supreme Court order, this Public Notice seeks proper inventory saying, “Ship breaking units are also directed that as soon as they complete dismantling and clearance of materials obtained from each imported ship, vessel or any other floating structure, they should submit a statement to the jurisdictional Range Superintendent indicating the LDT of the imported ship, nature of the imported ship [cargo, passenger, tanker etc], total quantity of scrap of each metal obtained and cleared, total quantity of plates of each metal and different sizes [thickness] obtained and cleared, total quantity of each item of non-excisable goods obtained and cleared [wood, furniture, old engine, machinery, stores etc.], and the percentage difference of total weight of goods and materials obtained and cleared vis-a-vis the LDT of the imported ship etc.”
Earlier, the four-day-long strike by ship breakers at Alang happened to protest this notification asking for a ship-wise break-up of material obtained from dismantled vessels. The notification was issued in July 2010 and ship-breakers were asked to periodically submit details of excisable and non-excisable items obtained from the ships they bring for scraping. Ship-breakers were told to maintain ship-to-ship stock register. At present, ship-breakers submit details goods-wise, and not ship-wise. The notification was issued after a multi-crore excise duty evasion ''racket'' at Alang came to light. The ship breakers were allegedly hiding value addition to scrap and were inflating the quantity of items exempted from excise duty. The strike ended on 31st December, 2010 evening after the representatives of ship-breakers met officials of central excise and other departments. The work at Alang yard was resumed on 1st January, 2011. Ship breaking at Alang came to a halt on December 21, 2010 remained suspended for four days in protest of the notification.
Earlier, the Inter-ministerial Committee (IMC) on Ship breaking, Union Ministry of Steel noted in the minutes of its meeting dated 17th September, 2010 that “The Coast Guard representative brought out some security concerns and incidents of communication sets from ships reportedly finding their way to the local fisherman. It was advised to the Ship recyclers to ensure that such equipment are immediately destroyed by the Customs as per the prescribed procedures. The Chairman also advised the Naval, Coast Guard and GMB to regularly interact as per the decisions taken in the earlier IMC meetings and to resolve the major security issues in the Coastal Security Committee meetings conducted at the State Level.”
In its minute dated 4th February 2009, the IMC noted the Security Concerns, saying, “Both the representative of the Coast Guard and the representative from Naval HQ raised concerns over the entry of ships carrying hazardous cargo to Alang for ship breaking and how no information is made available to them regarding the movement of ships to Alang. Besides this there was no information regarding whether the Alang Port is compliant with the International Ship and Port Facility Security (ISPS) Code. In the context of the present security concerns in the country, the Chairman advised the representative of the Ministry of Shipping, the GMB officials, the Coast Guard representative and the Naval HQs to address the issue expeditiously so that the security gaps are taken care of and also to verify whether the port at Alang has implemented the ISPS codes. The Coast Guard representative and the Naval HQ representative also expressed apprehensions that the vessels coming in for beaching sometimes ply very close to the oil rigs, which could be a potential for accidents.”
It also mentions that the Chairman of the IMC “directed that the Ministry of Shipping may organize a meeting on the matter with GMB, Naval HQ and Coast Guard HQ, Custom etc. immediately and ensure that gaps in the security frame-work issues are addressed immediately.” No action has been taken so far to plug the existing the loop holes.
On the issue of radioactive materials raised by TWA, it observes, “Regarding report of a huge quantity of Smoke Detectors containing radioactive material lying in the Plots at Alang, the AERB informed that due to large volume of non-radioactive materials contained in the smoke detectors, it is difficult for them to accept the material in the present shape for disposal at the BARC facility.” The issue remains unresolved so far.
Even as the Union Steel Ministry is seized with the issue of 58 page Draft Code on Regulations for Safe and Environmentally Sound Ship Recycling prepared in compliance of the Supreme Court's order dated September 6, 2007 to improve the situation, death toll of migrant workers from Bihar, UP, Jharkhand and Orissa in Alang underlines the fact of non-improvement on the Alang beach. In the year 2010 alone, some 20 workers have died while at work. Most of the workers are poor migrants work in a hazardous and toxic working environment. Meanwhile, the ongoing contamination of once pristine Alang beach is yet to see the sight of any effort to remediate the site and take the hazardous industrial activity off the beach, away from coastal environment. Alang is a litmus test for government’s sensitivity towards country’s environmental borders in which it has failed miserably so far.
While such state of affairs prevails, 348 ships were dismantled without complying with environmental and occupational health regulations and Supreme Court’s order in 2010. Since 1983, Alang has so far dismantled 5,200 ships. There are a total of 127 private ship-breaking plots at Alang. The theft of excise duty has been going on for a very long time.
For Details: Gopal Krishna, ToxicsWatch Alliance, Mb: 9818089660, E-mail: krishna2777@gmail.com, Web: imowatch.blogspot.com
Intelligence Raids Reveals Alang Remains a Fake Document Factory
Dilution of Central Excise Intelligence Opposed
Import of hazardous substances, a Global Threat
New Delhi 7/1/2011: ToxicsWatch Alliance (TWA) welcomes the notification of Director General of Central Excise Intelligence (DGCEI), Union Ministry of Finance seeking change in system of invoicing by ship breakers at Alang, Gujarat to ensure more transparency. This Public Notice No. 01/2010 dated on 26/7/2010 vindicates TWA’s allegations about non-transparency in Alang. The document is attached.
Notably, Directorate of Revenue Intelligence functions under the Central Board of Excise and Customs in the Ministry of Finance, Department of Revenue has taken note of "problems such as import of hazardous substances that will occupy centre stage in the future as the emerging global threats." In such a context, the notification assumes huge significance as it will end up helping systematic quantification of material flow and help detect and segregate goods of hazardous nature.
On 23rd December, 2010, Mr Raju, Commissioner, Central Excise, Bhavnagar issued a Press Note (attached) referring to “ a number of cases of Revenue leakage in Alang against Ship Breakers of Alang, who fraudulently passed on Cenvat Credit worth crores of Rupees. They were also not showing production, clearance, transportation and Service Tax related information in their statutory records. The investigations are going on and some notices have been issued by ADG (CEI). In order to curb these malpractices, the Public Notice No. 02/2010 was issued on 13.12.2010 by the Central Excise Commissionerate, Bhavnagar. The public notice requires them to maintain certain records which would make it difficult for those who choose to evade duties by clandestine clearances.” The Press Note says that “ around 100-150 persons came to Central Excise, Head Quarters office, Bhavnagar and informed that they were from the Alang Ship Breaking Association”, “they continued shouting slogans and fearing damage to public property, and a as matter of abundant precaution, police force was called to ensure peace and security of the Government office”.
In such a backdrop, TWA has learnt that under pressure due to strike, now DGCEI decided to put the notification seeking change in system of invoicing by the ship breakers for transparency, in abeyance for one month after the intervention of Chief Commissioner, Ahmedabad. The TWA opposes any amendment in the notification and demands that the notification of 13.12.2010 be enforced rigorously both in letter and spirit because it is in compliance of the Supreme Court’s order in the hazardous wastes/shipbreaking case. Most ship breakers who are law abiding support this notification. The case is listed for hearing on 21st January, 2011.
It is noteworthy that Office of the Commissioner of Central Excise & Service Tax, Bhavnagar, Department of Revenue, Union Ministry of Finance issued on 26/7/2010, a Public Notice No. 01/2010 saying, “It has been brought to the notice of this Commissionerate that the Ship Breaking Units situated in Alang, Sosiya and other areas falling within its jurisdiction are not issuing their Central Excise invoices by declaring correct value and description of the scrap, plates etc generated as a result of their manufacturing activities. Investigations recently initiated by Director General of Central Excise Intelligence, Ahmedabad Zonal Unit revealed that the documentation and procedures followed by the ship breaking units are suffering from several infirmities resulting in substantial loss of Government Revenue.” As per power conferred under Central Excise Rules, 2002, it said, “All ship breaking units are directed to discontinue their present system of mentioning general description of ship breaking materials in their invoices. They should declare the correct and full description of the goods...”
For the first time since 14th October, 2003, in compliance of the Supreme Court order, this Public Notice seeks proper inventory saying, “Ship breaking units are also directed that as soon as they complete dismantling and clearance of materials obtained from each imported ship, vessel or any other floating structure, they should submit a statement to the jurisdictional Range Superintendent indicating the LDT of the imported ship, nature of the imported ship [cargo, passenger, tanker etc], total quantity of scrap of each metal obtained and cleared, total quantity of plates of each metal and different sizes [thickness] obtained and cleared, total quantity of each item of non-excisable goods obtained and cleared [wood, furniture, old engine, machinery, stores etc.], and the percentage difference of total weight of goods and materials obtained and cleared vis-a-vis the LDT of the imported ship etc.”
Earlier, the four-day-long strike by ship breakers at Alang happened to protest this notification asking for a ship-wise break-up of material obtained from dismantled vessels. The notification was issued in July 2010 and ship-breakers were asked to periodically submit details of excisable and non-excisable items obtained from the ships they bring for scraping. Ship-breakers were told to maintain ship-to-ship stock register. At present, ship-breakers submit details goods-wise, and not ship-wise. The notification was issued after a multi-crore excise duty evasion ''racket'' at Alang came to light. The ship breakers were allegedly hiding value addition to scrap and were inflating the quantity of items exempted from excise duty. The strike ended on 31st December, 2010 evening after the representatives of ship-breakers met officials of central excise and other departments. The work at Alang yard was resumed on 1st January, 2011. Ship breaking at Alang came to a halt on December 21, 2010 remained suspended for four days in protest of the notification.
Earlier, the Inter-ministerial Committee (IMC) on Ship breaking, Union Ministry of Steel noted in the minutes of its meeting dated 17th September, 2010 that “The Coast Guard representative brought out some security concerns and incidents of communication sets from ships reportedly finding their way to the local fisherman. It was advised to the Ship recyclers to ensure that such equipment are immediately destroyed by the Customs as per the prescribed procedures. The Chairman also advised the Naval, Coast Guard and GMB to regularly interact as per the decisions taken in the earlier IMC meetings and to resolve the major security issues in the Coastal Security Committee meetings conducted at the State Level.”
In its minute dated 4th February 2009, the IMC noted the Security Concerns, saying, “Both the representative of the Coast Guard and the representative from Naval HQ raised concerns over the entry of ships carrying hazardous cargo to Alang for ship breaking and how no information is made available to them regarding the movement of ships to Alang. Besides this there was no information regarding whether the Alang Port is compliant with the International Ship and Port Facility Security (ISPS) Code. In the context of the present security concerns in the country, the Chairman advised the representative of the Ministry of Shipping, the GMB officials, the Coast Guard representative and the Naval HQs to address the issue expeditiously so that the security gaps are taken care of and also to verify whether the port at Alang has implemented the ISPS codes. The Coast Guard representative and the Naval HQ representative also expressed apprehensions that the vessels coming in for beaching sometimes ply very close to the oil rigs, which could be a potential for accidents.”
It also mentions that the Chairman of the IMC “directed that the Ministry of Shipping may organize a meeting on the matter with GMB, Naval HQ and Coast Guard HQ, Custom etc. immediately and ensure that gaps in the security frame-work issues are addressed immediately.” No action has been taken so far to plug the existing the loop holes.
On the issue of radioactive materials raised by TWA, it observes, “Regarding report of a huge quantity of Smoke Detectors containing radioactive material lying in the Plots at Alang, the AERB informed that due to large volume of non-radioactive materials contained in the smoke detectors, it is difficult for them to accept the material in the present shape for disposal at the BARC facility.” The issue remains unresolved so far.
Even as the Union Steel Ministry is seized with the issue of 58 page Draft Code on Regulations for Safe and Environmentally Sound Ship Recycling prepared in compliance of the Supreme Court's order dated September 6, 2007 to improve the situation, death toll of migrant workers from Bihar, UP, Jharkhand and Orissa in Alang underlines the fact of non-improvement on the Alang beach. In the year 2010 alone, some 20 workers have died while at work. Most of the workers are poor migrants work in a hazardous and toxic working environment. Meanwhile, the ongoing contamination of once pristine Alang beach is yet to see the sight of any effort to remediate the site and take the hazardous industrial activity off the beach, away from coastal environment. Alang is a litmus test for government’s sensitivity towards country’s environmental borders in which it has failed miserably so far.
While such state of affairs prevails, 348 ships were dismantled without complying with environmental and occupational health regulations and Supreme Court’s order in 2010. Since 1983, Alang has so far dismantled 5,200 ships. There are a total of 127 private ship-breaking plots at Alang. The theft of excise duty has been going on for a very long time.
For Details: Gopal Krishna, ToxicsWatch Alliance, Mb: 9818089660, E-mail: krishna2777@gmail.com, Web: imowatch.blogspot.com
23/12/2010
Central govt acts tough, shipbreakers go on strike in Alang
The strike by shipbreakers in Alang has brought shipbreaking activities to a halt from 21st December with the ship-breakers protesting a notification issued by Central Excise (CE), Government of India that seeks a ship-wise break-up. The strike has continued for the third day.
The strike by ship-breakers is an attempt to pressurize the the central government. They protesting on the grounds that as they dismantled more than one ship at a time, it was not possible to furnish ship-wise details of material obtained.
This notification was issued on 26 July, 2010 where ship-breakers were asked to periodically give details of excisable and non-excisable items obtained from the ships they bring for scraping. This was after CE's intelligence wing had found large scale duty evasion by some ship breakers who used to inflate the quantity of non-excisable items.
ToxicsWatch Alliance feels that the excise officials are right in saying that the ship-breakers were not complying with all the requirements of the notification.
The Central Excise duties are the largest source of revenue for the country. Approximately 30% of the total revenue receipts are collected from Central Excise duties. The levy and collection of Central Excise duties is under the authority of Central Excise Act, 1944. Section 3 provides for the levy and collection of Central Excise duty.
The rate and amount of duty as well as the items on which duties are levied are those which are indicated in the Central Excise Tariff Act, 1985 and the schedule therein. The taxable event for Central Excise duty as per Section 3 of CEA (Central Excise Act) 1944 is the manufacture or production of goods.
It means that Central Excise duty is leviable as soon as the goods are manufactured or produced. The items on which the excise duty is levied are known as excisable goods.
For the purpose of administrative convenience the actual collection of duty is done at the time of removal of goods from the place of manufacture of production. The rate of duty, which is levied, is the rate of duty applicable to such goods or which is in force at the time of actual removal.
The strike by ship-breakers is an attempt to pressurize the the central government. They protesting on the grounds that as they dismantled more than one ship at a time, it was not possible to furnish ship-wise details of material obtained.
This notification was issued on 26 July, 2010 where ship-breakers were asked to periodically give details of excisable and non-excisable items obtained from the ships they bring for scraping. This was after CE's intelligence wing had found large scale duty evasion by some ship breakers who used to inflate the quantity of non-excisable items.
ToxicsWatch Alliance feels that the excise officials are right in saying that the ship-breakers were not complying with all the requirements of the notification.
The Central Excise duties are the largest source of revenue for the country. Approximately 30% of the total revenue receipts are collected from Central Excise duties. The levy and collection of Central Excise duties is under the authority of Central Excise Act, 1944. Section 3 provides for the levy and collection of Central Excise duty.
The rate and amount of duty as well as the items on which duties are levied are those which are indicated in the Central Excise Tariff Act, 1985 and the schedule therein. The taxable event for Central Excise duty as per Section 3 of CEA (Central Excise Act) 1944 is the manufacture or production of goods.
It means that Central Excise duty is leviable as soon as the goods are manufactured or produced. The items on which the excise duty is levied are known as excisable goods.
For the purpose of administrative convenience the actual collection of duty is done at the time of removal of goods from the place of manufacture of production. The rate of duty, which is levied, is the rate of duty applicable to such goods or which is in force at the time of actual removal.
04/12/2010
Shipbreakers face raid by Economic Intelligence Wing
ToxicsWatch Alliance expresses its appreciation for the notification issued by Director General of Central Excise Intelligence (DGCEI), Government of India seeking ship-wise break-up of material obtained from dismantled vessels. This notification is in compliance of the Supreme Court's order which has been flouted for quite a while.
DGCEI has unearthed a multi-crore duty evasion at Alang. The ship breakers have been hiding value addition to scrap and were inflating the quantity of items exempted from excise duty.
Alang has been under the scanner of the DGCEI for massive evasion of excise duty and issuing fake Cenvat invoices.
The industry has been involved in this scam along with furnace units. Its a scam of Rs 150 crore - 200 crore a year.
A search operation was conducted by Ahmedabad zonal unit of DGCEI at 18 premises belonging to 11 major industrial groups engaged in ship-breaking in Alang. The operation resulted in recovery of incriminating documents pointing towards large-scale under-valuation of excise duty as well as issuing of fake Cenvat invoices. Alang for long has reputation of being a fake document factory.
DGCEI estimates that the ship-breaking units evade excise duty and other taxes by undervaluing their scrap by over 30%. Fake Cenvat invoices were issued without actual movement of scrap to enable their buyers avail fraudulent Cenvat credit of duty. The scrap recovered from ship-breaking is mostly used by re-rolling units, which avail SSI exemption, and do not require Cenvat invoices. Many induction furnace units across the country do not avail SSI exemption and require Cenvat invoices for input credit of duty.
"The invoices and goods of ship-breaking units of Alang are traded separately and that too at a premium. The scrap generated is delivered to re-rolling units, while Cenvat invoices are sold to furnace units without movement of goods," explained DGCEI officials.
The notification has been enforced after officials at Director General of Central Excise Intelligence noticed that except for a few units, most ship-breakers were ready to comply with the new rule.
Directorate General of Central Excise Intelligence (DGCEI) is the apex intelligence organization functioning under the Central Board of Excise & Customs, Department of Revenue, Ministry of Finance, entrusted with detection of cases of evasion of duties of Central Excise and Service Tax. The Directorate General is headed by Director General. The role of the Directorate General in tackling the menace of duty evasion is manifold. It develops intelligence, especially in new areas of tax evasion through its intelligence network across the country and disseminates information in this respect, by issuing Modus Operandi Circulars and Alert Circulars to appraise field formations of the latest trends in duty evasion. Wherever found necessary, this Directorate General on its own, or in co-ordination with field formations, organises operations to unearth evasion of central excise duty and service tax. In 2004, DGCEI was entrusted with the work of detecting evasion in service tax.
Directorate General of Central Excise Intelligence (DGCEI) was earlier known as Directorate General of Anti-Evasion (DGAE). It was established in the year 1979 as an independent wing under the control of Directorate of Revenue Intelligence, New Delhi with regional units located at Chennai, Delhi, Kolkata and Mumbai. It became a full-fledged Directorate in 1983 headed by a Director. In 1988, the Directorate was upgraded to Directorate General under a Director General with four Zonal Units located at Chennai, Delhi, Kolkata and Mumbai headed by Additional Director General.
The Directorate General was expanded in the year 2000 with the setting up of a number of Regional Units under the respective Zonal Units and was renamed as DGCEI. DGCEI was re-strengthened in the year 2002 with the addition of two more Zones at Ahmedabad and Bangalore. At present DGCEI, with its Headquarters at New Delhi, has 6 Zonal Units and 18 Regional Units.
Directorate of Revenue Intelligence functions under the Central Board of Excise and Customs in the Ministry of Finance, Department of Revenue has taken note of "problems such as import of hazardous substances that will occupy centre stage in the future as the emerging global threats."
Directorate of Revenue Intelligence in its present form is a lean organisation charged essentially with the collection of intelligence, its analysis, collation, interpretation and dissemination on matters relating to violations of customs laws, and to a lesser extent, anti-narcotics law. In order to ensure effective discharge of its responsibilities, DRI maintains close liaison with all the important enforcement agencies in India like the Central Economic Intelligence Bureau, Income-Tax department, Enforcement Directorate, Narcotics Control Bureau, Directorate General of Foreign Trade, Border Security Force, Central Bureau of Investigation, Coast Guard, the State Police authorities and also with all the Customs and Central Excise Commissionerates. It also maintains close liaison with the World Customs Organisation, Brussels, the Regional Intelligence Liaison Office at Tokyo, INTERPOL and foreign Customs Administrations.
Directorate of Revenue Intelligence functions under the Central Board of Excise and Customs in the Ministry of Finance, Department of Revenue. Headed by Director General in New Delhi, it is presently divided into seven zones, each under the charge of an Additional Director General, and further sub-divided into Regional Units, Sub-Regional Units and Intelligence Cells with a complement of Additional Directors, Joint Directors, Deputy Directors, Assistant Directors, Senior Intelligence Officers and Intelligence Officers.
More information about the raid by DGCEI, New Delhi on shipbreakers of Alang to follow shortly.
DGCEI has unearthed a multi-crore duty evasion at Alang. The ship breakers have been hiding value addition to scrap and were inflating the quantity of items exempted from excise duty.
Alang has been under the scanner of the DGCEI for massive evasion of excise duty and issuing fake Cenvat invoices.
The industry has been involved in this scam along with furnace units. Its a scam of Rs 150 crore - 200 crore a year.
A search operation was conducted by Ahmedabad zonal unit of DGCEI at 18 premises belonging to 11 major industrial groups engaged in ship-breaking in Alang. The operation resulted in recovery of incriminating documents pointing towards large-scale under-valuation of excise duty as well as issuing of fake Cenvat invoices. Alang for long has reputation of being a fake document factory.
DGCEI estimates that the ship-breaking units evade excise duty and other taxes by undervaluing their scrap by over 30%. Fake Cenvat invoices were issued without actual movement of scrap to enable their buyers avail fraudulent Cenvat credit of duty. The scrap recovered from ship-breaking is mostly used by re-rolling units, which avail SSI exemption, and do not require Cenvat invoices. Many induction furnace units across the country do not avail SSI exemption and require Cenvat invoices for input credit of duty.
"The invoices and goods of ship-breaking units of Alang are traded separately and that too at a premium. The scrap generated is delivered to re-rolling units, while Cenvat invoices are sold to furnace units without movement of goods," explained DGCEI officials.
The notification has been enforced after officials at Director General of Central Excise Intelligence noticed that except for a few units, most ship-breakers were ready to comply with the new rule.
Directorate General of Central Excise Intelligence (DGCEI) is the apex intelligence organization functioning under the Central Board of Excise & Customs, Department of Revenue, Ministry of Finance, entrusted with detection of cases of evasion of duties of Central Excise and Service Tax. The Directorate General is headed by Director General. The role of the Directorate General in tackling the menace of duty evasion is manifold. It develops intelligence, especially in new areas of tax evasion through its intelligence network across the country and disseminates information in this respect, by issuing Modus Operandi Circulars and Alert Circulars to appraise field formations of the latest trends in duty evasion. Wherever found necessary, this Directorate General on its own, or in co-ordination with field formations, organises operations to unearth evasion of central excise duty and service tax. In 2004, DGCEI was entrusted with the work of detecting evasion in service tax.
Directorate General of Central Excise Intelligence (DGCEI) was earlier known as Directorate General of Anti-Evasion (DGAE). It was established in the year 1979 as an independent wing under the control of Directorate of Revenue Intelligence, New Delhi with regional units located at Chennai, Delhi, Kolkata and Mumbai. It became a full-fledged Directorate in 1983 headed by a Director. In 1988, the Directorate was upgraded to Directorate General under a Director General with four Zonal Units located at Chennai, Delhi, Kolkata and Mumbai headed by Additional Director General.
The Directorate General was expanded in the year 2000 with the setting up of a number of Regional Units under the respective Zonal Units and was renamed as DGCEI. DGCEI was re-strengthened in the year 2002 with the addition of two more Zones at Ahmedabad and Bangalore. At present DGCEI, with its Headquarters at New Delhi, has 6 Zonal Units and 18 Regional Units.
Directorate of Revenue Intelligence functions under the Central Board of Excise and Customs in the Ministry of Finance, Department of Revenue has taken note of "problems such as import of hazardous substances that will occupy centre stage in the future as the emerging global threats."
Directorate of Revenue Intelligence in its present form is a lean organisation charged essentially with the collection of intelligence, its analysis, collation, interpretation and dissemination on matters relating to violations of customs laws, and to a lesser extent, anti-narcotics law. In order to ensure effective discharge of its responsibilities, DRI maintains close liaison with all the important enforcement agencies in India like the Central Economic Intelligence Bureau, Income-Tax department, Enforcement Directorate, Narcotics Control Bureau, Directorate General of Foreign Trade, Border Security Force, Central Bureau of Investigation, Coast Guard, the State Police authorities and also with all the Customs and Central Excise Commissionerates. It also maintains close liaison with the World Customs Organisation, Brussels, the Regional Intelligence Liaison Office at Tokyo, INTERPOL and foreign Customs Administrations.
Directorate of Revenue Intelligence functions under the Central Board of Excise and Customs in the Ministry of Finance, Department of Revenue. Headed by Director General in New Delhi, it is presently divided into seven zones, each under the charge of an Additional Director General, and further sub-divided into Regional Units, Sub-Regional Units and Intelligence Cells with a complement of Additional Directors, Joint Directors, Deputy Directors, Assistant Directors, Senior Intelligence Officers and Intelligence Officers.
More information about the raid by DGCEI, New Delhi on shipbreakers of Alang to follow shortly.
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