Ship Recycling – View from the Bar

In its latest podcast, GMS talks to leading shipping barrister James M. Turner QC of Quadrant Chambers about the challenges associated with scrapping large vessels and the moves towards better standards in India and Bangladesh.

Confirmation last week of Norway’s first jail term handed down to a shipowner for illegal scrapping has turned the spotlight back on the laws governing ship recycling. “It’s a minefield,” admits Turner referring to both the reputation risk and the threat of conventional litigation “if [shipowners] don’t get it absolutely right.”

Quizzed on what shipowners can do to protect themselves when recycling, Turner draws a distinction between a negative and positive approach.

“If you don’t want to be held liable, which is the negative approach, you have to bear in mind that merely because you no longer own the ship when it is taken to the yard, that may not be an answer to a claim brought against you.” He goes on to say, that although not yet tested in court, owners may be able to protect themselves to some extent by “requiring that [the ship] goes to a yard that is Hong Kong certified.”

A more positive approach he says, is to consider your company’s ESG aspirations and “pick a yard that has a good reputation, the right certification” and consider engaging a compliance monitoring service to oversee the dismantling, noting that GMS offers clients’ a sustainable recycling package via its Sustainable Ship & Offshore Recycling Program (SSORP).

Turner says he has sympathy for shipowners with recycling decisions on the table. “You’ve got an asset which can realise some money at the end of its life” and suggests owners should plan accordingly as their vessels approach end of life. Owners who fall foul of the law and find themselves with their “foot in the trap” do so with their eyes open he says, now that “it’s perfectly possible to do the right thing”.

Changes in the way ships are recycled at the waterfront is happening “as recycling yards come to experience that there is money to be made in doing a job properly”. Turner points to “so much of the world’s tonnage” that will be pushed towards recycling in order to meet the climate change goals.