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New Transparency Initiative Aims to Boost Responsible Ship Recycling Practices

Image Credit: Martin Damboldt

In a bid to increase responsible shipping practices, Forum for the Future and the Sustainable Shipping Initiative have launched the Ship Recycling Transparency Initiative (SRTI).

The Initiative brings together key industry stakeholders 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 to inform decision-making.

The move comes at a time when existing legislation, enforcement mechanisms and internationally-agreed standards are not applied consistently or can easily be circumvented. Transparency across ship recycling policies and practices is insufficient. This information gap leads to bad practices not being scrutinized, 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. More regulation is needed to address the associated health and safety and environmental hazards, which include injury 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 financing for shipbuilding. Awareness is also growing among shipping industry customers, who are increasingly concerned about safeguarding the environmental and social integrity of their supply chains.

“We see increasing levels of transparency as a key lever for change in ship recycling. If ship owners share their practices then it raises awareness of what’s happening, puts pressure on underperformers 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,” said Stephanie Draper, Chief Change Officer at Forum for the Future.

Initial signatories to the Initiative 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 online platform where ship owners will be able to share critical information that will be accessible to investors, customers and the wider public.

“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 of the 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.”

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