The problem with ship scrapyards isn't what you think

She was built in 1950, at Bethlehem Steel in Quincy, Mass., a shining 682-foot steamship big enough to carry 1,000 passengers at 23 knots down the "sun lane" from New York to the Mediterranean. She carried President and Mrs. Truman across the Atlantic in 1958. Advertisers boasted her as the first air-conditioned liner, with "American designs, American fabrics, even an American soda fountain, and true American hospitality." They called her the SS Independence.

Now, 58 years later, airplanes have made her transatlantic voyages redundant and her years as a cruise ship in Hawaii are over. Grass is growing between the teak planks of her sun decks and the flowers painted on her stacks are fading. She has been renamed the SS Oceanic, and the asbestos and chemicals she was built with have environmental groups like the Basel Action Network calling her a floating "toxic time bomb." Today the Oceanic is a rogue ship on the high seas—last seen near Dubai—and is the center of a lawsuit between the U.S. Environmental Protection Agency and the shipbrokers who own her.

But even as she deteriorates, the Oceanic remains a valuable property. Ships like these are in demand for their steel, yielding high profits for the brokers who send them to yards to be dismantled. This is one type of recycling, though, that's not always eco-friendly. Old vessels are filled with contaminants, making them dangerous to tear apart. Few governments want this kind of waste on their doorsteps, so the ship graveyards have concentrated in developing countries where regulations are spotty and migrant labor is cheap. That means places like Alang, the Indian scrapyard that took apart as many as 400 ships annually during its peak years of operation.

Alang is less busy now, due to competition from several even less regulated yards in Bangladesh and Pakistan; only 129 ships were dismantled there in 2007. But experts on the industry believe that when the Oceanic left her San Francisco berth under tow on the foggy morning of Feb. 8, Alang was her most likely destination. Her journey was disrupted when the EPA issued a complaint against her owners, Maryland-based Global Shipping LLC, seeking fines of $32,500 per day of transport for violating the Toxic Substances Control Act by exporting a ship for scrap with polychlorinated biphenyl chemicals (PCBs) onboard. "Federal law prohibits companies from exporting PCBs, including those in ships that are sent overseas to be scrapped," Rich Vaille, an associate director for the EPA's waste program enforcement, said in a statement. "When companies illegally export PCB waste, they are circumventing U.S. requirements for proper disposal," he said.

The Oceanic was owned by Norwegian Cruise Lines until she was sold to Global Shipping shortly before setting sail four months ago. According to the U.S. Maritime Administration (MARAD), Global Shipping originally submitted an application to MARAD for approval to transfer the Oceanic for scrapping in India, but that application was withdrawn before the ship was towed. MARAD has legal authority to seize a vessel for violation of foreign transfer laws, but MARAD spokeswoman Susan Clark says that in the case of the Oceanic, "We are not aware of any such violation."

Global Shipping denies knowledge of any toxic material on board the ship and says that it does not intend to scrap the Oceanic but is looking for buyers to restore her. "Vessels of this size, build and history can be put to use in several trades, such as floating hotels, casinos or providing accommodations to laborers," says Shashank Agrawal, a spokesman for Global Shipping. "We must place on record that [the] owners are fully cooperating with the EPA in this exercise."

However, according to a waste stream analysis conducted by Werner Hoyt, a ship recycler in Weed, Calif., the Oceanic is carrying 250 tons of asbestos and 210 tons of toxic PCBs—chemicals that were used as fire retardants in paints, cabling, gaskets and flooring until they were outlawed by the EPA in 1978. Hoyt estimates that if sold for scrap the Oceanic's steel could earn Global Shipping a minimum of $8.5 million.

Environmentalists contend that ship owners don't always flag their plans for scrapping contaminated ships. In 2006 Norwegian Cruise Lines told inspecting authorities in Bremerhaven, Germany, that their old, damaged liner, the SS Norway (now the SS Blue Lady), was headed to Malaysia for restoration. She ended up on the beach in India instead, shortly after being sold to Bridgend Shipping, a Liberian company, for just $10, according to a sales receipt. Watchdog groups like India's Ban Asbestos Network claim that Bridgend Shipping was acting as a "proxy buyer," enabling Norwegian to avoid responsibility for costly decontamination while negotiating the ship's real price off the record. AnneMarie Mathews, spokeswoman for Norwegian Cruise Lines, would not comment on why the Blue Lady was sold for $10, citing a lack of information. "We sold the [Blue Lady] a long time ago," Mathews said. Once the longest liner in the world, the Blue Lady is currently being dismantled at Alang, with an estimated 1,200 tons of asbestos onboard.

Global Shipping, the current owner of the Oceanic, is a subsidiary of Global Marketing Systems, a firm that arranges the scrapping of more than 100 ships a year, and environmentalists are worried the company is just weathering the legal storm before sending the ship for dismantling. The reason they expect it to go to Alang is because Global's CEO, Anil Sharma, has a brother there with a ship-breaking plot. "Everybody in the business knows that Anil Sharma wants to scrap this ship," says Jim Puckett, coordinator of the Seattle-based Basel Action Network, a group working to stop the international trade of toxic materials. "It's in the hands of guys who make all their money scrapping ships."

Puckett's group takes its name from the Basel Convention, adopted in 1992 and signed by 170 countries, including India but not the United States. The convention prohibits the international trade of hazardous materials, such as the asbestos, heavy metals, PCBs and other toxic substances aboard almost all old ships. The rules haven't stopped scrapyard workers in Asia from being exposed to contaminants. In 2006 a committee assembled by the Indian Supreme Court found that one in every six workers in Alang shows symptoms of asbestosis—a chronic inflammation of the lungs caused by prolonged exposure to asbestos fibers.

Based on interviews with workers, the International Federation for Human Rights estimates that between 48 and 60 workers die in accidents in Alang every year. In addition to worker safety concerns, Indian environmental groups claim that their country has been the dumping ground for foreign waste for decades.

"These are toxic chemicals," says Gopal Krishna of the Ban Asbestos Network of India. "But the moment these things enter Indian territory they become nontoxic."

Krishna says the responsibility to decontaminate a vessel before scrapping it should lie with the ship's owners, and the legal duty to enforce this should belong to its country of origin. He says the U.S. government hasn't done enough to stop the Oceanic. "The U.S. has a vested interest in allowing the transport of such ships," Krishna says. "It is a nonsignatory to the [Basel] Convention. It facilitates dismantling of the rules as well as dismantling of the ships. This is an act of connivance."

Krishna's group and the Basel Action Network question why the EPA is merely seeking to fine the Oceanic's owners instead of ordering the ship to return to U.S. waters immediately. In 2006 the French government ordered the return of its asbestos-laden aircraft carrier, the Clemenceau, which was seeking admission into Indian waters for scrapping. The ship was recalled before the Indian Supreme Court reached a decision on the matter.

Spokesmen for both the EPA and Global Shipping will not comment on the legal proceedings involving the Oceanic, but Dean Higuchi, EPA spokesman in Hawaii, says, "All ships need to meet our EPA regulations, especially if they are going to be scrapped." But he concedes that the agency's control over the ship was limited once she reached the high seas. "In general the EPA does not have the ability to recall a ship from international waters," Higuchi says.

In September 2007 the Indian Supreme Court issued two rulings on the ship-breaking industry, which maintained India's ability to scrap all types of ships, though requiring the documentation of any toxic materials on board.

"India has the capability to recycle warships, nuclear vessels, passenger carriers and all kinds of ships," says Atul Sharma, environmental engineer at the Gujarat Maritime Board, the authority responsible for monitoring the Alang shipyard.

Praveen Nagarsheth, president of the Indian Ship-Breakers Association, is equally confident. "As far as I'm concerned, the Supreme Court has allowed any ship to come to India," he said. "Now the question comes about American law. If the American government doesn't intervene, [the Oceanic] will come to India and be broken."


Jacob Baynham
Newsweek Web Exclusive
Jun 12, 2008

URL: http://www.newsweek.com/id/141127