PHP Ship Breaking and Recycling Yard of the PHP Family recently obtained a 'Statement of Compliance with the Hong Kong Convention for Safe and Environmentally Sound Recycling of Ships' from international classification society RINA. This is the only yard to gain Hong Kong Convention compliance certification in the country. The ship breaking yard is a unit of the PHP Family, one of the leading business conglomerates of the country, established by the Group Chairman Alhaj Sufi Mohamed Mizanur Rahman in 1969. The corporate house has 20 companies that are engaged in a number of areas, including aluminium, textiles, agriculture and prominently steel, float glass and ship recycling. By naming the corporate house as PHP Family standing for Peace, Happiness and Prosperity, the Chairman cleared his vision to do social goods through business. The managing director of the PHP Ship Breaking Yard, Zahirul Islam Rinku, recently talked to The Financial Express.
Following are the excerpts:
Financial Express (FE): Working environment in the Chittagong ship breaking sector has improved a lot over the years overcoming the once frightful situation and the PHP ship recycling yard has emerged as a model yard. How did it happen?
Managing Director (MD): A lot of things have changed in the industry with the passage of time. The industry started its journey by cutting old scrap ships in the beginning of 1980s. The journey started with inefficient workers cutting ships in absence of a developed technical system of ship cutting. But a lot of things have changed with the passage of time. The foreigners are now frequently visiting our shipyards, coming up with helping hands, providing technical and financial support, consultancy and medical support. They have found that the PHP ship recycling industry has attached highest importance to the compliance issues while safeguarding the physical wellbeing of the workers engaged in the ship cutting.
FE: How many yards are active in the country now?
MD: There are over 150 ship breaking and recycling yards at Sitakunda Upazila along the seacoast of the Bay of Bengal. But the number of effective yards is around 100. The annual turnover of the industry is about Tk 120 billion. Apart from manufacturing rod and ingot from the scrap ships there is a huge supply of furniture, crockery, electrical goods and other household items.
FE: Has the PHP ship breaking yard been awarded international green certificate?
MD: Our ship recycling yard has obtained the international green certificate as a model yard. Our yard is located at Bhatiary of Sitakunda seacoast. It is the first ever ship recycling yard in the country to obtain the acknowledgement as having a safe and balanced environment for cutting ships and recycling from the international classification society RINA. The Society said that this is the first well-protected shipyard as per Hong Kong Convention.
The London Maritime Executive and Trade Winds published the report of awarding the green certificate on October 10, 2017. Globally, three institutions of India, Japan and Italy issue these certificates and RINA of Italy has awarded the certificate to PHP Ship Recycling Yard.
IMO (International Maritime Organization) Secretary General Kitack Lim also visited the yard early this year and said the yard is a role model for others in the country. Cash buyer GMS said it is an important development towards a more sustainable ship recycling industry, further raising the bar in the standards for this sector in Bangladesh. Dr Anil Sharma, president and CEO of GMS said, "PHP Family yard has worked hard to improve their safety and environmental standards by following successfully the Hong Kong Convention guidelines, which are enabling the whole ship recycling industry to achieve sustainable goals for ship recycling. We sincerely hope that this great achievement will attract more ship owners to yards that are endorsing responsible ship recycling and lead as an example for the rest in Bangladesh".
The Hong Kong Convention, adopted in 2009 but not yet entered into force, includes regulations for ship owners, recycling facilities, flag states and recycling states to ensure that end-of-life ships do not pose any unnecessary risk to human health, safety and the environment when being recycled.
The European Union adopted the EU Ship Recycling Regulation in 2013. It brings forward the requirements of the Hong Kong Convention and applies them to end-of-life ships flagged with EU member states. According to the regulation, owners of ships flying the flag of the EU member states will have to ensure that their ships are recycled in facilities included on the EU list of approved ship recycling facilities. The European Commission published its first edition of the EU List in 2016. The next edition of the list, expected to include yards outside Europe, is expected to be published by the end of 2017.
Dr Mikelis, Non-Executive Director of GMS, said, a decision is awaited for the yards that are outside the EU and have applied for inclusion in the EU approved list of recycling facilities. These yards are already holding Statements of Compliance with the Hong Kong Convention, so they have proven that they meet the high safety and environmental standards laid out in the Hong Kong Convention through significant investment, training and development within the region. Excluding these yards would create an insurmountable divide within the industry based solely on their geographic locations and threaten to halt the positive progress made by the Hong Kong Convention in South Asia.
In India, as of the end of August, 41 yards have received Statement of Compliance with the Hong Kong Convention (seven from ClassNK, 30 from RINA and four from IRQS). Another 15 yards are progressing towards obtaining their Statement of Compliance.
FE: What changes have been brought about in the ship breaking yards?
MD: The answer lies with change of attitude in the whole gamut of things from a positive attitude. The entrepreneurs have realised that they would have to be much caring if they like to survive in the industry. Cutting workers, who are treated as life line in the industry, should be provided with personnel protective measures and welfare of their children and families. The industry cannot progress if we don't provide safety and security for them and their children. We must provide education for their children and housing facilities for the workers themselves. The local entrepreneurs have started to feel this and new blood of entrepreneurship has been injected. People having been educated in the developed countries have taken steer in some of the industries and they look at the whole gamut of things from a different point of view.
The government has also come forward with encouraging schemes in view of the immense potential of the ship breaking and recycling industry. During Prime Minister Sheikh Hasina's previous tenure she had declared the sector as an industry and different surveys had forecasted that the industry in the country has a huge potential as has been seen in Turkey and other countries. A joint study conducted by Chittagong University and Tokyo University showed that 39% of the industrial production in Bangladesh comes from this sector. 50, 000 people are directly involved with the industry and over one million indirectly. The industry provides raw materials for several thousand small, medium and large steel industries apart from leaving a host of linkage industries. These industries could not have survived without raw material support from the ship breaking industry. The industry is contributing a lot of other industries in different countries of Asia including China, Japan, Thailand, India, Pakistan, South Korea, Taiwan, Vietnam, the Philippines, Turkey and Bangladesh.
FE: What are the challenges confronting the industry in the country?
MD: There are a lot of challenges. Implementation of compliant rules of the Hong Kong Convention and Basel Convention is time-taking while the ship mantling rules in the European countries are more law-abiding. The industry has yet to formulate guiding rules for proper growth. It requires favourable steps from the government and boldness of the industry entrepreneurs. But some NGOs including BELA (Bangladesh Environmental Lawyers Association), YPSA (Young Power in Social Action) and Ship Breaking Platform have resorted to multiple pressures for the development of working environment in the yards. Partially their initiative is welfare-oriented but there is a lot to create suspicion. It seems that they are more concerned with propaganda in the external world than improving working atmosphere in the industry. As a result, the industry is confronting an uneven competition from other ship recycling industries of the world. A good number of mainstream industries are showing reluctance. I went to Singapore last year to attend the Trade Winds Ship Recycling Conference as representative of the Bangladesh Ship Breakers Association and confronted a battle of arguments with other participants. I told the conference that the ship recycling industry is not only a struggle for survival of the industry insiders but also related with the economic advancement of the country. We have ensured responsibility, justice, transparency and accountability. If anyone of you has doubt please visit our yards without giving ears to rumour. It is true that all yards have not been developed equally but there are a number of yards with whom you can do business.
FE: How would you improve the waste management system?
MD: In Turkey we have seen that there is one stop service centre under which all relevant government agencies are working. They get all required documents including the NOC within a week. They have even provisions of getting NOC after dismantling a ship because the ship breakers in that country are sincere to comply with the environmental rules and regulations. We will sincerely follow the norms and rules of waste removal and management in the ship cutting and recycling industry in line with the system followed by Turkey and China which are considered models in the world.
Turkey's waste management system has improved as the yard owners send the yard wastes to the central purification system. But such a system would cost about Tk 5 billion to be set up. Furthermore, the sand of Turkey seacoast is comparatively rocky than that of ours. That is why the ship breaking industry in Turkey is advantageous. About 10 million metric tonnes of scrap ships are dismantled a year around the globe of which Bangladesh, India and Pakistan import 75% of scrap vessels. Bangladesh is currently dismantling 2.5 million to 3.00 million tons of imported scrap vessels per year which is over 25% of the total ships dismantled in the world. The annual turnover of the sector in our country is Tk 50 billion while the sector deposits Tk 10 billion a year to the national exchequer.
Bangladesh's ship breaking industry is committed to support proper use of the personal protective equipment (PPE) through training and awareness programmes from time to time. A lot has improved now as the yard owners have engaged themselves in a battle to fight out negative image of the industry with adequate support from the government. Following these image-building steps of the BSBA leadership the ambassadors of different European countries have visited several yards and provided suggestions to improve situation in the country's thriving ship building industry. The European Parliament member Jean Lambard visited the ship breaking yards and praised the industry as a very potential sector. He invited the representatives of the BSBA to visit the European parliament in Brussels of Belgium. I went to Brussels and gave a clear picture on the compliance issues and safety measures taken in the sector over the last few years. Under a contract with the BSBA a foreign consulting firm named Creative Consultant is providing training to the trainers and workers at the shipyards at Sitakunda with the financial support of the Royal Dutch Embassy.
FE: What about the government support to the industry?
MD: The present government has always been supportive to this industry. The government has undertaken a project to make all ship breaking and recycling yards at Sitakunda seashore with non-permeable floor under a grant of the Norway donor agency NORAD and IMO at the cost of Tk 120 million. Under the project, the NORAD and the IMO would extend financial and technical support to make the ship breaking yards more durable, with treatment storage disposal facility (TSDF) in line with the TSDF system, introduced in the shipyards of Turkey, within next two years. If implemented, the new facilities would improve environment of the ship breaking yards, make the yards safe for workers and improve waste reception facility. We have also set up a hospital with total support system for all yard workers.
Zahirul Islam Rinku is also an EC Member (foreign affairs) of BSBA
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