Op-ed: The hidden danger of beached fishing vessels
François Mosnier is a financial research analyst at London, U.K.-based non-profit financial think tank Planet Tracker.
While the beaching of old fishing vessels in countries like India and Bangladesh is a cheap solution for fishing-vessel owners, it has a severe human and environmental impact. But there is hope for both shipbreakers and the environment if investors and lenders engage with fishing vessel owners to implement strict decommissioning policies.
When fishing vessels reach retirement age, they are often beached (deliberately laid ashore) and dismantled in India or Bangladesh, with a terrible human and environmental impact. Using data from The Shipbreaking Platform, Planet Tracker analyzed the beneficial ownership of scrapped fishing vessels, their flag states, and the location of their dismantling.
The average age of a Russian fishing vessel is currently 28 years, while the average age at which vessels are dismantled is 36 years – and therefore fast-approaching. This has led Russia’s Federal Agency for Fishery to incentivise fishing companies to renew their vessels, with half of the Russian fleet expected to be renewed between 2018 and 2030. Russia is also expected to ban fishing vessels older than 30 years in 2033.
Planet Tracker calculates that, between 2014 and 2020, fishing vessels with a cumulative gross tonnage of at least 219,000 tonnes have been removed from the oceans and dismantled. In tonnage terms, 55 percent of these vessels can be traced back to Russian companies, while 75 percent belonged to either Russian, American, Taiwanese, or South Korean companies, according to Planet Tracker calculations based on The Shipbreaking Platform data.
Where do old fishing vessels go?
In tonnage terms, half of the fishing vessels scrapped between 2014 and 2020 ended up in India and Bangladesh and typically belonged to Russian, Taiwanese, South Korean, and Ukrainian companies. Alang-Sosiya in India and Chattogram (formerly known as Chittagong) in Bangladesh are key destinations for obsolete vessels. This is because ship recycling costs as much as USD 3 million to USD 7 million (EUR 2.5 million to 5.9 million) more than ship-breaking for the average ship owner, and beaching sites in South Asia are the cheapest of all.
To avoid the responsibilities linked to shipbreaking in India and Bangladesh, many fishing vessels change their flags. Some 19 percent of the fishing vessels dismantled between 2014 and 2020 sailed with another country’s flag or a “flag of convenience,” according to data from The Shipbreaking Platform and the Environmental Justice Foundation. The most common flags of convenience are Comoros, St Kitts and Nevis, Panama, Palau, and Belize.
The human and environmental costs of shipbreaking in India and Bangladesh are such that these countries’ shipbreaking yards are not on the list of approved facilities where ships sailing under an E.U. flag can be dismantled. As a result, vessels whose beneficial owners are registered in E.U. countries are not typically sent to India or Bangladesh to be dismantled.
The human and environmental cost of beached vessels
Shipbreaking in India and Bangladesh comes at a high human cost. Blow-torch cutting exposes workers to toxic fumes and explosions, falls, fires, and suffocation are all common. More than 1,000 people have died in shipbreaking yards in Bangladesh since the 1980s, according to the non-profit social development organization Young Power in Social Action. In India, the incidence rate of fatal accidents is two per 1,000 workers. To contextualize this, the fatal accident rate of mining – which is generally considered to be dangerous – is 0.34 per 1,000 workers.
The environmental cost is also severe. Hazardous materials contained in the ships, as well as rust and metal remnants, are dumped locally – contaminating the sands and sediments. Currents and tides then distribute the pollutants, an effect that is heightened during monsoon season. Of course, this affects marine life. Near Chattogram, 21 species of fish and crustacean have been destroyed by the local shipbreaking industry, and another 11 species are now endangered, according to The Shipbreaking Platform. At least 60,000 mangrove trees along just a 14-kilometre costalline have been cut down to make way for more ships.
Regrettably, Planet Tracker’s research shows that the impact of shipbreaking is likely to intensify in the coming years. The average age of the global fishing fleet has been rising steadily since the 1990s. In 2003, it was 24 years old on average. Many territories now have very old fishing fleets, such as the U.S. North Pacific (40 years), Russia (28 years), and the Mediterranean and the Black Sea (29 years). As these fleets approach dismantling age, more vessels are likely to be beached in India and Bangladesh.
The opportunity for change
To limit the environmental and human cost of beached vessels, Planet Tracker urges investors to consider the following questions when engaging with fishing vessel owners:
- What is the current decommissioning plan for the fishing fleet? How does it translate into company financials?
- If the plan includes beaching, where will it take place? What measures will ensure it is undertaken in a way that minimizes human and environmental costs?
- Does the company have policies that ban the use of flags of convenience (to bypass tighter decommissioning and recycling requirements)?
Investors and lenders can then condition funds or offer preferential financing terms linked to the implementation of measures that benefit shipbreaking workers and the environment. For example, owners of fishing vessels dismantled in E.U.-approved shipyards could be offered better financing terms.
Addressing the impact of the growing number of beached fishing vessels will be challenging. The first step for investors and lenders in the fishing industry is to realize the magnitude, complexity, and growing importance of the issue.
Photo courtesy of JHMimaging/Shutterstock