New transparency initiative to accelerate responsible ship recycling practices
Industry leaders and non-profits Forum for the Future and the Sustainable Shipping Initiative have announced the launch of the Ship Recycling Transparency Initiative with the goal of increasing responsible ship recycling practices.
This call to the industry comes at a time when existing legislation, enforcement mechanisms and internationally-agreed standards are not applied consistently or can be circumvented.
Transparency in ship recycling policies and practices are insufficient. This information gap leads to bad practices not being scrutinised, good practices not being rewarded and stakeholders not being able to make well-informed business decisions.
Out of a world fleet of 50,000 ships, 835 were recycled in 2017. Shipbreaking is a difficult process which is often carried out in the informal sector with few safety controls. It generates many health and safety and environmental hazards, and more responsibility needs to be taken for preventable deaths, injuries and pollution.
At the same time, investors seeking to mitigate their risk exposure and make improvements are increasing pressure on the industry to demonstrate responsible recycling practices when using ships as collateral for loans or when seeking to finance for shipbuilding. Awareness is also growing among the customers to the shipping industry, increasingly concerned to ensure the environmental and social integrity of their supply chains.
The Ship Recycling Transparency Initiative (SRTI), facilitated by the global sustainability non-profit Forum for the Future and independent charity the Sustainable Shipping Initiative, brings together leading ship owners, banks and other key stakeholders from across the industry.
It aims to improve transparency in the global ship recycling value chain by facilitating voluntary disclosure of recycling practices and related data by ship owners, and to support the use of this information by cargo owners, investors and financial stakeholders to make better decisions.
Stephanie Draper, Chief Change Officer, Forum for the Future said: “We see increasing levels of transparency as a key lever for change in ship recycling. If shipowners share their practices then it raises awareness of what’s happening, puts pressure on under-performers and allows customers and owners to reward good performance. Ultimately this will lead to better social and environmental outcomes which are so critical for ship recycling.”
The SRTI’s initial signatories are ship owners A.P. Moller Maersk, Hapag-Lloyd, Wallenius Wilhelmsen, The China Navigation Company and NORDEN; financial stakeholders Standard Chartered Bank, Nykredit and GES; and classification society Lloyd’s Register. The group is working with stakeholders to develop a common set of disclosure criteria and an independent, user-friendly online platform where ship owners will be able to share critical information that will be accessible to investors, customers and the wider public.
The aim is to bring other leading organisations from across the industry into the Initiative, including ship owners, cargo owners, cash buyers and financiers, to support the development of the disclosure criteria and share their practices on the platform.
“We have been working on ship recycling for over three years with our members and are delighted to be part of this Initiative”, said Tom Holmer, General Manager, Sustainable Shipping Initiative. “Responsible ship recycling not only has a positive impact on workers’ lives and the environment but can also contribute positively to the circular economy and holds great value for both the shipping industry and global society.”
LR's Nick Brown, Director – Marine and Offshore, said: “Lloyd’s Register welcomes the SRTI as part of our commitment to drive industry change, by supporting responsible ship recycling practices and initiatives. We believe that increasing transparency is an essential step in this process, which will hopefully, accelerate the industry-wide implementation of safe and environmentally sound ship recycling practices, to the benefit of all.
The SRTI was launched at the TradeWinds Ship Recycling Forum in Hamburg on 7th March, with a stakeholder roundtable to help develop the disclosure criteria held on 9th March.