Switzerland by the sea

(c) Pradeep Shukla

An MSC ship broken down on the beach in Alang, India

The scientist James Hansen was once asked: “If climate change continues at this pace, is anywhere going to be safe?” His answer: “Switzerland would be a good guess.” Because places like Geneva, Lausanne and Zürich will not be affected by rising sea levels while port cities like Antwerp, Rotterdam and Genoa of course will. Then again, these Swiss locations also aren’t the main entryways into Europe. No shipping, no maritime glory, right?

Wrong. Switzerland hasn’t needed a sea to become a shipping nation. Atlanship S.A., Doris Maritime Services S.A., FleetPro Passenger Ship Management AG, Lumar S.A., MSC Mediterranean Shipping Co, Sallaum Group SA, Shipfin S.A., Sider Navi S.p.A., Taunus Shipping SA – their names may be unfamiliar to most Swiss, but these home-grown companies play in the shipping industry’s big league.

In addition to being Swiss-incorporated entities that ship goods and people across the globe, these companies share another key characteristic – they have all exported end-of-life cargo ships to be recycled and broken into smaller parts on South Asian beaches. As a matter of fact, at least 92 Swiss-owned ships have been scrapped worldwide between 2009 and now. Ninety of these vessels ended up on beaches in Bangladesh, India and Pakistan.

According to the UN Conference for Trade and Development (UNCTAD), Switzerland ranks 20th in the world in terms of the number of ships owned, but 15th in terms of the number of ships scrapped on beaches. “The percentage of Swiss ships that ended up on the beach is almost 100%. That puts Switzerland in the top 10 of global dumpers,” said Nicola Mulinaris from the Brussels-based NGO Shipbreaking Platform, an international coalition of organisations that strongly opposes the beaching of vessels for breaking and recycling.

Out of the 90 Swiss-owned vessels scrapped on South Asian beaches in the last nine years, 80 belonged to the second-biggest container shipping company in the world – Mediterranean Shipping Co, or MSC. Le Monde puts the annual turnover of the family-owned Swiss company at €27 billion. According to figures cited in a presentation given by MSC chief sustainability officer Dirk Vande Velde to UNCTAD, the company has 450 offices in more than 150 countries, and 465 vessels that ply over 200 routes and serve more than 315 ports of call. Vande Velde put the number of staff at 24,000 but many other documents, including the company’s own 2017 sustainability report, cite a far higher number of 70,000 employees.

MSC’s ambitions as a company go beyond just turning a profit. In 2009, CEO and co-founder Gianluigi Aponte, an Italian national, received the Neapolitan Excellence of the World Award from then Prime Minister Silvio Berlusconi. Four years later, he received the Cavaliere del Lavoro (Knight of Labour) honorary title from President of the Republic Giorgio Napolitano. To be considered for the title, candidates must have an impeccable record of civil and social accomplishments, and have abided by all tax laws while paying special attention to the protection of workers.

MSC was also nominated for Lloyds Loading List’ Shipping Line of the Year for the sixth time in 11 years in 2007. And in October 2018, MSC won the Greenest Ship Owner of the Year award at the annual Green Shipping Summit in Amsterdam. “MSC was commended for its efforts to promote the sustainable use of marine resources and investments in green technologies,” the company writes on its website.

How can a shipping company that aims “to become the most sustainable, technologically-advanced and customer focused shipping line in the industry,” to use Vande Velde’s words, at the same time continue to send its decommissioned vessels to beaches? I contacted MSC two weeks after it was honoured with the Greenest Ship Owner award to better understand this paradox. I wrote them that I wished “to speak to the person responsible for the end-of-life cycle of the vessels used and owned by MSC […] We would like to get the correct facts and numbers about ships sent off for breaking/recycling and understand the decision processes or criteria used by MSC.”

The response that came back from the company’s global communications senior specialist was brief and empty. “Thank you for your interest in MSC’s environmental strategy. As of today we decline to take part in your research.” I was subsequently directed to MSC’s sustainability policies and reporting in which, the email said, “MSC discloses a variety of information about our activities and initiatives to promote responsible environmental practices.”

But those documents didn’t contain the information I was looking for. So I wrote back and told them that “the only reference I find to ship recycling is the paragraph stating ‘Our ship recycling practice is another important area of emphasis for MSC, as it is strictly related to labour standards, environmental protection and human rights […] Only recycling yards with IMO HKC standards, ISO 14001 (environment), ISO 30001 (ship recycling management) and OSHAS 18001 (Health & Safety) standards are selected for recycling at the end of the useful life of a ship.’”

A telling detail: even at the time of writing this article, no such standard as ISO 30001 even existed. It could be symbolic for MSC’s whole sustainability praxis.

I asked the communications specialist whether she could “confirm that MSC has (by its own inspection or otherwise) confirmed that all these requirements are fulfilled for the yards in Alang, used by MSC this year and last year? (As far as I could find, these are the yards concerned: Jawandamal Dhannamal, Madhav Steel, Ghasiram Gokulchand Ship Breaking, Honey Ship Breaking (RKB), Prakesh Re-Rolling Pvt Ltd, Shree Ram Steel and Rolling Industry, Panchvati Ship Breakers). Does MSC visit these yards (regularly) to verify their compliance with the company’s high standards of sustainability, or do you rely on certification (only)?”

For a company that prides itself on its corporate social responsibility, the response I received was disappointing. “Dear Mr. Goris, I hereby confirm that we are not able to satisfy your request. On this occasion we decline the opportunity.” I decided I should give the company one more chance to respond. Aponte, the company’s CEO, had after all been very clear on MSC’s environmental obligations, when he stated: “We recognise the world’s oceans are precious and must be protected from pollution. That is why MSC is committed to the development of positive ethical and environmental change within our company.”

So I resent my questions and repeated my request “to talk to a relevant person from MSC, in order to provide me with the opportunity to double-check some of my findings or statements others have given. I consider that standard good journalism, as I would hope your company understands that communication starts with reports but cannot be complete without follow-up research or discussion.” But the line went dead.

A threat to coastal ecosystems

The issues to discuss with MSC are many. Already in 2013, Greenpeace singled out MSC for its poor end-of-life fleet management. According to the environmental NGO, MSC scrapped 21 ships between 1999 and 2003 in India, usually without properly decontaminating the vessels before sending them off – as is required under the 1992 Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal. This treaty sought to regulate and reduce the transnational movement of hazardous wastes, from developed to developing countries in particular.

The later 1995 Basel Ban Amendment, which has not yet entered into force at international level but has been incorporated into EU aw, completely prohibits the export of hazardous waste from Annex VII countries, that is, OECD countries, to developing countries. End-of-life ships that contain hazardous materials such as asbestos, heavy metals, PCBs or residue oils fall within the scope of the Basel Convention. When a ship owner intends to sell a ship that contains hazardous materials for recycling, which is almost always the case, that ship becomes waste under international environmental law.

The responsibility for enforcement of the Basel Convention is placed with the exporting state, the transit state and the importing state. The port state from where a ship destined for breaking departs is considered the exporting state, irrespective of the ship’s flag and owner. Ship owners routinely circumvent the Basel Convention by not disclosing their intention to dispose of a ship to port authorities.

As a consequence, port states are seldom able to enforce the Basel Convention, and ship owners who illegally export vessels to substandard breaking yards have for the most part done so without legal consequences. The EU Waste Shipment Regulation (WSR), which is a transposition of the Basel Convention and Ban Amendment into EU law, hasn’t yielded many successes either. EU member states have succeeded in halting the illegal traffic of hazardous end-of-life ships in just a few cases.

A paper written by researchers at the University of St.Gallen that hasn’t yet been publicly released paints a stark picture of MSC’s ship recycling policies, or rather the lack thereof. “The situation and the perils of the shipbreaking industry as conducted in India, Bangladesh and Pakistan are well known and have been minutely documented for at least ten years. As knowledge about the negative ramifications of shipbreaking has been established, it can be inferred that owners and operators of shipping fleets across the world should be aware that the disposal of their vessels at the end of their life-cycle is not without its challenges. Over the last years, the shipping industry has taken action and started avoiding shipbreakers, which were not able to guarantee a clean and safe dismantling process of the vessels. Though the possibility of sound shipbreaking exists today, MSC opted against such good practice.”

“[…] The existence of clean and safe alternatives of shipbreaking reinforces the idea that the unfortunate and recurrent human rights violations as well as the environmental devastation caused by [MSC] would have been avoidable,” the authors conclude. “More than anything, [MSC] demonstrates unwillingness to adhere to existing conventions and standards and hence to use its privileged market position to render its business practices, including those of its shipbreaking service providers, environmentally and socially sound.”

In 2015, 32 multinational companies issued a joint statement promising to do exactly what the researchers at the University of St.Gallen had called for – to embrace clean and safe alternatives.

There have been rumours that one or more of these multinationals ended their business relationship with MSC over the company’s shipbreaking practices following the release of this statement. None of the companies I contacted would confirm this on the record; nor did MSC respond to our queries about this.

Adding to MSC’s woes is a French political crisis involving Alexis Kohler, a nephew of Aponte’s wife. Kohler had to step down as the secretary-general of the Elysée palace after the local anti-corruption group Anticor filed a complaint against him and the Mediapart website published detailed coverage of an alleged conflict of interest. As a representative of the French state, Kohler served on the governing board of the St. Nazaire shipbuilding site while MSC was negotiating a monster order for four mega cruise ships, worth €4 billion and representing 37 million hours of labour.

The Mediapart news reports also alleged he played an active role in securing a contract between the port of Le Havre and MSC while he was in public office. Kohler briefly left his senior administration position to join MSC in Geneva as the company’s financial director in the summer of 2016, only to return to Paris a few months later and assume his role as President Emmanuel Macron’s right-hand man as the chief of staff. That is, until Kohler was forced to step aside after Anticor filed its complaint and Mediapart published its stories. The anti-corruption case is pending before the French courts.

Risky business

MSC has also played a central role in a number of controversial shipbreaking cases. On 4 August 2009, the MSC Jessica caught fire while it was being disassembled on a beach in Alang, India, resulting in the deaths of six workers. The MSC Jessica was built by Swan Hunter in the UK in 1980 and had been flying the Panamanian flag since 2001, also the year it acquired its current name. The ship had been in the ownership of MSC since 1986 and was beached on 6 June 2009. The fire appears to have broken out in the engine room where six workers were cutting ship parts using torches. The Gujarat Maritime Board later stated that it would conduct an inquiry into the cause of the accident, but its results have not been made public.

At the time of the accident, the MSC Jessica was under a bareboat charter to MSC, but Perigynia Holdings Inc., a Panamanian holding company, had been listed as the registered owner since 5 February 2001. The contact address for the registered owner of the ship was the MSC Hong Kong office, and MSC also appears to have been the ship’s beneficial owner. Records show that the MSC Jessica was sold to “Indian shipbreakers” while it was in Oman around 21 May. However, according to MSC’s answers to questions from the EJOLT research project about the accident, the MSC Jessica was sold to a St. Vincent company in “early June”, suggesting that the MSC may have still been operating the ship when it was beached on June 6, or just before that.

In 2011 the container ship MSC Chitra collided with the Khalijia3 in the port of Mumbai. After a long effort to remove most of the containers from the ship, the MSC Chitra was sold to be scrapped in Alang for around $7 million, according to a TradeWinds article headlined “Too dangerous for demolition?” But after it became clear that the ship was too damaged to be towed even the relatively short distance to Alang, Indian authorities ordered for it to be sunk outside of Indian territorial waters.

The Panama Maritime Authority greenlit the operation; their seal of approval was necessary since the MSC Chitra was sailing under the Panamanian flag. But this did nothing to allay serious concerns about the environmental impact of the sinking operation, even though MSC insisted that cleaning teams were sent aboard before the pumps were shut off. In a rare statement by the company about the incident, MSC emphasised that it was no longer “in control of the vessel when the tow commenced” – an evasion of responsibility that is almost standard practice in the industry.

In 2017, MSC Alice was scrapped at the Honey Ship Breaking yard, which has a privately-issued certificate known as Statement of Compliance with the Hong Kong Convention, a multilateral treaty aimed at regulating ship recycling that isn’t yet in force. Even though this certification suggest that it is one of the better yards in Alang, there is evidence that its scrapping procedures leave a lot of debris behind in the water and on the beach. And the accident on August 31 of this year, in which two workers died while dismantling a cruise ship, shows that these certificates – which have no legal validity and have become a lucrative business onto themselves –  are by no means a guarantee of safe shipbreaking practices.

Wild west companies

MSC hasn’t just been using beaching yards in Alang to scrap its decommissioned ships. Some MSC vessels have also ended up in Chittagong, Bangladesh, where labour and environmental conditions are generally even worse than in Alang.

Mohamed Ali Shahin, who works for Young People in Action (YPSA) and is deeply involved in the shipbreaking issue, tells me on the phone that, earlier this year, two workers died at the Zuma Enterprise yard – Mohamad Khalil, 40, on March 31 and Shatikul Islam, 28, on April 24. Both were working on the MT EKTA, an oil tanker that, according to shipping databases, was sold to the breaker by the Swiss shipping company Navimar and scrap dealer Wirana. Navimar bought the vessel that was operated by Maran Tankers, a subsidiary of Greek Anangel Shipping Group, in September 2017, a mere month before it was brought to the beach of Chittagong – a tell-tale sign that the Swiss company acted as a conduit to scrap the ship. “That a Swiss company would send a ship for breaking and recycling to one of the worst yards in Chittagong is something we find hard to understand,” Shahin said.

“Zuma Enterprise has no safety measures, no compliance to international environmental standards, no waste management. Why would a Swiss company choose to cooperate with such an unsafe yard?” he asks. Zuma is not only unsafe, it is also stingy with workers’ health. “Their practice is to pay the family of a worker who died in an accident the legal minimum of 100,000 taka,” or a little over €1,000, he said. “But other yards would compensate such a tragic loss with 500,000 taka. Unfortunately, nobody seems to have a formal insurance policy.”

Shahin paints a picture of an unchecked industry, one where human lives are dispensable and the environment is treated as a waste dumping ground. Yes, the government could be doing more to make the yards cleaner and safer, but the responsibility doesn’t just lie with Bangladesh, he said. “European ship owners could do so much more to demand and stimulate safe and clean shipbreaking. They can enforce European standards and they should invest, for instance, in waste collection facilities. And, of course, they could start with cleaning out their ships of all the toxics before they even send them down to South Asia. The ship owners have a responsibility to protect the environment, don’t they?”

Shahin notes that out of 50 yards, only one facility – the PHP recycling yard – has a Statement of Compliance with the Hong Kong Convention. PHP is short for Peace, Happiness and Prosperity. That sounds nice, perhaps too nice to be true. Still, they may be lofty and ambitions goals, but doesn’t that make them all the more worth fighting for?

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