The Origin and Evaluation of Ship Breaking Regime of South Asia: A Critical Perspective From Bangladesh

Ship-breaking, Ship Recycling, Hong Kong Convention, End of Life

Ships, Ship Breaking and Ship Recycling Rule.

A ship is the largest human-made moving object on the planet.

About 90% of world trade is carried by international shipping industry.

Ship-breaking or ship recycling, although is not a part of maritime navigation, is an essential part of maritime industry. Ship recycling is a process of dismantling End of Life (EOL) vessels after their useful lives are over.

After about 25-30 years of continuous service, a ship becomes unseaworthy, dangerous for navigation & life at sea.

When a ship’s maintenance cost outweighs its income, the vessel outlives its utility; it is then sent for scrapping as a matter of practical necessity.

Around the world, annually, almost 1800 sea-going ships over 500 GT become obsolete.

Several other modes of disposal of EOL ships are available globally but ship recycling remains the most sensible option, and currently there is no other feasible alternative.

Ship-breaking is considered as the most dangerous occupation in the world and is known as a pollution-heavy industry.

The heaviness of environmental pollution and the casualties involved in ship-breaking are hardly comparable with other hazardous industries known in current time.

Sound management in ship breaking with optimum regard to the safety of life and environment raises critical question of economic viability of this very industrial activity.

The international industry of ship breaking was a highly mechanized industry until it piled up in South Asian beaches in 1980s. Beginning from the mid-1980s, the southern region and peninsula of Asia has turned into the global epicenter of ocean-going ship recycling. Over 80 percent of obsolete vessels from around the world, since the 1980s, have been sent only to three countries of South Asia namely Bangladesh, India and Pakistan. The availability of cheap labor, geographical advantage, favorable weather conditions, and huge demand of scrap metals in the growing construction industries, as well as lack of enforcement of workers’ rights, environmental and coastal laws are believed to be the predominant reasons for its progressive transition to these nations of poorer economy.

Bangladesh, a newly developing country, has emerged as the market leader in ocean going ship recycling, transforming the highest amount of recyclable tonnage from EOL vessels, both in LDT measurement and in terms of number of ships dismantled annually. In 2019, Bangladesh met almost half of the global demand for decommissioning obsolete vessels. Notably, the predominant ship dismantling practice that occurs in Bangladesh and its neighbouring competitors, India and Pakistan, is known as ‘beach breaking’ or ‘beaching’.

Beaching is considered the most treacherous, but the least expensive, method of recycling currently available worldwide. In this method, ships are run full steam ahead during high tide towards the sea shore until the vessel is finally grounded on the mud flat on the beach. The ship is then gradually winched forward up the beach, bit by bit in semidiurnal tidal water. Workers get on board the ship to begin dismantling operations using mainly traditional tools and techniques.

Ship breaking on the beach of the Southern peninsula of Asia is a controversial activity, where human casualty and irreversible degradation of marine environment have been an alarming phenomenon. Almost 700 lives have been lost and 10,000 workers have suffered from permanent disability only in Bangladesh in last three decades. In South Asia, the average rate of accident and death in the beach breaking sites have remained unchanged.

since last several decades. According to United Nation Environment 28

Program (UNEP), shipbreaking activities remain the largest land source

marine pollution in South Asia . Unilateral regulations to control the 29

industry have been ineffective, given the industry’s global character with

the large number of actors involved internationally. According to many, 30

there has been an urgent necessity to forge a global regime to jointly control all aspects of the industry.31

After three decades of anarchy and lawlessness in global ship recycling

activity , the Hong Kong Convention for the Safe and Environmentally

Sound Recycling of Ship 2009 shortly, the Hong Kong Convention

(HKC) was adopted under the auspicious International Maritime organization (IMO) but the convention has failed to see the light of success 32

because of the difficulty in fulfilling its three stage entry into force criteria.

As per the entry into force criteria of this global treaty, ratification by

both ship owning and ship recycling states having certain track record 33

of history of ship recycling ten years preceeding the date of accession is

essential.34 For the last several decades, the industrially developed countries which mostly belong to the ship owning nations were hardly associated with EOL ship recycling.35 Most leading ship recycling states, representing the developing nations, have negligible number of merchant

fleets registered in their registries. Due to this lopsided track record in 36

the history of shipbreaking, the success of this convention now depends

primarily on the policy choices of these South Asian ship recycling nations. The position does not change even if the whole world ratifies the 37

convention, including China, the fourth largest ship recycling state in the world. In other words, the ratification by the whole world has little 38

meaning to this convention unless any two of these four giant ship recycling states, namely Bangladesh, India, Pakistan and China accede to the

convention.39 However after India’s recent accession to the HKC in December 2019, the fate of the convention is now clearly depends on the

policy choices of one of the remaining three leading ship recycling states.

However, a closer look reveals that pursuant to the legal and recent

political position of China, the ratification of the convention is extremely

unlikely, given the recent ban on importing foreign EOL ships for recycling in China By taking this move, China to a great extent has denied 40

the transcontinental character of this convention. As per the HKC, a

member state is also not allowed to discriminate between party and nonparty ships in their treatment on recycling of ships. Predictably on rati 41 -

fication of the convention, how China would address the issue of discrimination between party states remains questionable. Furthermore, 42

China belongs to the top five ship owning states. The ratification by China will likely add another 8.8 percent of the world’s fleet. This 44

would satisfy the second entry into force criteria of the HKC but make 45

the fulfillment of the third entry condition more onerous than what it exists currently. For the same reason, Liberia and Marshall Islands, the 46

second and third largest ship owning states have already been advised 47

by the IMO not to accede to the HKC unless China, Bangladesh or Pakistan ratifies the convention first. Given the latest position of China, it 48

is extremely unlikely for this state to accede to the convention any time

soon.

It is noted that non-ratification by China seems hardly influence the

global business of ship recycling. Shipping owners in China receive a

significant subsidy from their government for choosing their ships to be

recycled in China. Almost all Chinese ships are now being recycled in 49

China only, as a result. China belongs to one of the largest shipping 50

nations in the world and as per the report of UNCTAD, the Republic of

Korea, Japan and China built 91.8% of world gross tonnage in the year 2016. China owns the largest share of the General Cargo Vessels in the 51

world. China being the owners of 11% of global tonnage recycles 52 53

about 10% of the world tonnages. It’s not therefore a surprise to learn 54

that bulk of the tonnages recycled in China are owned by Chinese owners

only and this country is not in direct competition with South Asia. Besides, in domestic law, beaching is declared illegal in China.55

On the other hand, except being a domestic instrument dealing with

allocation of plots for ship recycling yards, provisions on tariff and custom duties, and allocation of ship recycling plots by the government, Pakistan has a rudimentary legal mechanism that is specifically designed to

deal with the safety, health and environment in ship-breaking.56 The industry relies solely on general laws applicable to any other ordinary

heavy industries. Therefore it is also very unlikely for Pakistan to uti 57 -

lize these un-mellowed legal instruments to accede to the HKC any time

soon.58

According to the third entry into force criteria of the HKC, the combined maximum for annual ship recycling volume of the states, 10 years

preceding to the date of ratification, must constitute not less than three

percent of the combined merchant shipping tonnages of the same State.59

After India’s ratification of the convention in December 2019, the current

figure reflects 2.6%. Based on the historical records of ship recycling in 60

the last 40 years globally, it is evident that the ball remains now in the

court of Bangladesh, who retains the key to the enforcement leading towards the success of this treaty. It should be mentioned here that the 61

scope of this article is not to go into the details of the provisions of the

HKC but to attempt, from a doctrinal perspective, to focus on the evaluation and critical analysis of the framework regulations on ship recycling

of Bangladesh. Bangladesh is currently the largest and the most dominent

ship recycling state currenty in the world. Attempt will be made to evaluate, in general, the state’s appositeness to acceed to the global treaty on

ship recycling at its current predicament of legislations.

Traditionally the largest section of the global shipping industry counts on

Bangladesh for disposal of their obsolete vessels from international waters.62 Bangladesh recently has designed its domestic framework regulation on ship recycling taking note of the HKC. These include Ship 63

Breaking and Ship Recycling Rule 2011 (Hereinafter referred as the

SBRR 2011) and Hazardous Waste and Ship Breaking Hazardous Waste Management Rule 2011 (Hereinafter referred as the HWR 2011). In

2018, Bangladesh adopted Ship Recycling Act (SRA 2018) that mostly

deals with allocation of ship recycling zones, constitution and operation

of the regulatory board named Bangladesh Ship Recycling Board

(BSRB) dedicated to administering the ship breaking industry in 64

Bangladesh and a number of penal provisions. Importantly the 2018 65

Act has created a statutory obligation for Bangladesh to develop legal

and technical capacity to conform to the provisions of the HKC within

five years of the date of commencement of this Act, in other words by

February 2023.66

Arguably, the ship recycling framework regulations of this country

appear to have attained a transnational character in the true sense of the

term. For the next decade or so, the legal and political position of 67

Bangladesh may potentially decide the fate of this influential global pact.

The domestic ship recycling legislations of Bangladesh guide most of the

global shipping companies around the world as they prefer to recycle

their ships in Bangladeshi yards. For better understanding of the topic,

this article will attempt to plunge into a brief history and an evolution of

the ship recycling regime of this crowing ship recycling state.

Ship-breaking began in Bangladesh in much inorganized fashion. Two

separate incidents are believed to the framer of confidence in businessmen which ultimately gave birth to this country as the epicenter of global

ship recycling industry. In 1965 a Greek ship, M.V Alpin stranded in the 68

Bay of Bengal, was successfully dismantled by the ‘Chittagong Steel

Mill’ with the help of local inhabitants and its workers using mostly 69

traditional tools and techniques.70 Subsequently a Pakistani ship, “Al Abbas” damaged by bombing during the liberation war in 1971, was salvaged on the beach of Chittagong, Bangladesh and successfully dismantled entirely manually in 1974 by the workers of ‘Karnafully Metal

Works.’71

Beginning in the early 1980s, the business of ship recycling in

Bangladesh progressed smoothly and profitably, thanks to cheap labor

and minimum infrastructure, despite pressure mounted steadily by the

environmental, labor and human rights activists resisting progress of this

questionable activity on the pristine beach of this relatively small country.72 In 2008, the protestation culminated in the seminal case,”MT Enterprise”, filed by Bangladesh Environmental Lawyers Association

(BELA) in the Supreme Court of Bangladesh73, against the Government’s decision to allow the import of a tanker named ‘MT Enterprise’

for dismantling.74

Since the beginning, the ship-breaking was steered by the Department

of Shipping (DoS)75 who had limited or no experience in labor management or environmental issues. The Supreme Court unearthed measur 76 -

able failure of the government to comply with rules on environmental

clearances including directions made earlier by the Supreme Court to

frame rules governing hazardous activities and industries in

Bangladesh. In 2009, the Court, acting Suo moto, issued nine specific 77

directives upon the government, including instant closure of all ship

breaking yards operating without clearance from the Department of Environment (DoE), which ultimately affected all the facilities, as none of

them had been operating with valid environmental clearances. Despite the year-long passing of judgment on 17 March 2009 by the highest court

of the country, the government among other respondents failed to comply

with any of the directives of the court, including the framing of rules.79

The condition of the recycling yards remained unchanged. Time peti 80 -

tions were filed by the government on several occasions on many insubstantial grounds. More shockingly, ships were still being imported in 81

clear violation of injunction against import, triggering several other contempt proceedings against violators and all of which remained pending.82

It is noted that Bangladesh is one of the poorest and most densely

populated countries in the world. Poverty is widespread, affecting almost

50 percent of the population. Eventually, the reality of this poor labor 83 84

surplus country 85 was addressed before the court. The emblematic social, economic, national, and international politics hindward the industry

took precedence. The voice of the court subdued in a subsequent petition

moved by the respondents. The government argued that no goal can be

achieved overnight, and if the ban is not lifted immediately, an economic

disaster is inevitable. The petitioner was able to convince the court that 86

not only members of the owners association were in financially impacted

and otherwise, but also the masses had been affected because of the ban

on the import of EOL ships. They averred that the prohibition had 87

placed tremendous pressure on the job market, causing significant reduction of supply of raw materials to specific industries and increased prices

of many common and essential items. The court disposed of the rule, lifting the ban on the import of EOL ships pending the adoption and enforcement of the rule subject to 18 revised and specific directions upon

the ship recyclers and the government.89 This decision effectively withdrew the previous requirement of decontamination of EOL ships before

they are imported to Bangladesh territory. Importantly the later directive

of the Supreme Court was a significant move from the rigor of the earlier

one. According to this new directive except tankers, no ship is required to

be certified gas free until driven onto the beach for recycling.90 This action was adequately covered in the earlier directive number eight, where

pre-cleaning of ships at the source was mandatory. The pre-cleaning 91

includes complete removal of oily waste from all ship’s tank, bilge water

tanks, lube oil tanks, engine room, ballast tanks , paints in the hull, and

all other loose hazardous materials including the complete removal of all

hazardous materials that remain as part of the ships inbuilt structure.92

The Ministry of Environment and Forestry (MoEF) was directed for the

second time to frame rules governing hazardous waste industry in

Bangladesh in line with the Environment Conservation Act 1995, Factory

Act 1965, Labor Act 2006, Basel Convention 1989, Hong Kong Convention 2009, Basel Technical guidelines and ILO guidelines of Ship Recycling within three months of the judgment being served upon them.93

During the pendency of the suit, the Government declared ship breaking

as a formal industry, amended the rules of business and the Ministry of

Industry (MoI) was charged with entire responsibility for regulating shipbreaking in Bangladesh.94

Accordingly, on 14 December 2011, the government submitted before

the Supreme Court, a tailor-made domestic regulation on ship recycling

titled ‘Ship Breaking & Recycling Rule 2011’ (SBRR 2011) after a

gazette notification on 12 December 2011. This instrument was the first

ever tailor-made framework regulation adopted by a country that relies

solely on beaching method of recycling of ships. A further regulation

titled ‘Hazardous Waste and Ship Breaking Hazardous Waste Manage ment Rule 2011’ (Herein after referred to as the HWR 2011) was also

adopted by the DoE under the power granted by the ECA 1995. This regulation implemented the Basel Convention in ship-breaking industry and

other industries in Bangladesh dealing with hazardous wastes. In 2018, 95

Ship Recycling Act (SRA 2018) was adopted by the Ministry of Industry

to provide additional legal basis for the framework legislations already

adopted in pursuant to the order of the High Court and to allow the government to develop additional rules or amend the existing rules for the

management , development, and advancement of the Ship- breaking Industry in Bangladesh.

The Definition of Ship

In SBRR 2011, the term ‘ship’ has been very widely defined and includes

Vessels and floating structures of any type operated in the

marine environment and shall include submersibles, floating

structures, floating platform, self-elevating platforms, floating storage unit, floating production storage unit and offloading units, a vessel stripped of equipment or being

towed; destined for breaking purposes.96

The above suggests that the rule did not exclude even a small-scaled

riverboat that may operate in an inland marine environment. The definition of ‘ship’ does not also prohibit inland water vessels, coastal ships,

government ships or warships of any type, capacity or size.

The SBRR 2011 requires both the EOL ships and the ship recycling facility (SRF) owners separately to notify the competent authority (CA) about

their intention to recycle a ship before its arrival at the state territory in

due time. EOL ships are frequently arrested both at the point of exit from

the exporting states or when entering the ship recycling states due to the

application of UN Basel Convention worldwide or the European Waste Shipment Regulation (EUSRR) in EU ports. Any arrest of an EOL 97 98

ship at an anchorage of the recycling state or a stay order of the court

either before or after it is taken to the facility leads to an obvious negative financial consequences for ship recyclers. Ship recyclers mostly 99

rely on bank loans with high rate of interest to import ships for

breaking. It costs in average BDT 175 crore (equivalent to 21 million 100

USD) approximately to buy a scrap ship. Generally, ship recyclers 101

must pay bank interest at the rate of 15% to 16% per annum. To an 102

importer this creates an indebtedness to bank by BDT 4,000 per day per

crore totaling seven lacs per day (equivalent to USD 8,300 approximately) only. The financial stake for an unnecessary delay even for a single 103

day is therefore exceedingly high. The overhead cost of a ship waiting at

the anchorage for beaching is also considerable. These matters prompt 104

them to rush into action and complete the beaching and cutting formalities as quickly as possible. Pursuit of EOL ships proceeding to the recycling states, by the anti-beaching campaigners both at home and abroad

has never been absent. The more the recyclers, in the circumstances 105

can delay this notification of arrival, the more they can reduce the chance

of adverse media coverage to which they are regularly exposed. An unflagging tug of war between yard owners and green activists in all three

South Asian shipbreaking nations is noticeable. An undercover operation

therefore provides a practical benefit to the recyclers in the circumstance.

To avoid the vagaries of local market, the cash buyers and the yard

owners prefer to consume time by notifying the Competent Authority just

a few hours before the next available beaching tide to rise. A beaching 106

tide is a contingent event mostly depends on natural phenomena and does

not occur every day in every week. These circumstances inevitably 107

place acute time pressure even upon the inspection team of the regulatory

agency that eventually leads to a cursory or no inspections being done.108

There seems to be no mechanism to anatomize the term ‘due time’ that

appears in 2011 Rule. Eventually the recyclers and the cash buyers remain the key persons to decide when and how much time to offer to the

regulatory authorities for ship's inspection or whether to frustrate the

process entirely keeping virtually no tangible accountability whatsoever

either of the EOL shipowners namely the cash buyers or the ship recyclers.

Subject to the prescribed formalities, the rule has set a strict time

frame of only two working days for beaching and breaking permis 109 -

sion to be granted. It has also been designed to streamline the boarding 110

process on an expedited basis. These expediting mechanisms although is

designed to increase business efficiency111 of ship recyclers, may adversely affect the quality of screening required by the rule. It is feared

that, the breakneck speed in the process of detection without any safeguards addressing the capacity and resources could result in a perfunctory job.

An ocean-going ship built with hazardous substances in its structure poses environmental issues proportionately at the end of its life when they

are dismantled. It is therefore also necessary to regulate ship builders and

ensure that they avoid using the unnecessary hazardous substances at the

stage of construction of ships in a ship building facility. The 2011 rule

does not forbid new installation of any hazardous material in the structure of a new ship at any shipbuilding facility in the country or a dry

dock while repairing an existing ship at any port facility or offshore terminal irrespective of the flag of the vessel. This omission apparently

covers the ships destined for recycling only. New and operating ships,

both foreign and local, are excluded from the jurisdiction of SBRR 2011.

Generation of numerous types of hazardous waste is a natural consequence of ship dismantling in any facility. These downstream toxic substances must be removed timely from the facility and disposed of in an

environmentally sound manner through a well-managed downstream

waste management system in other words through an authorized Treatment Storage and Disposal Facility (TSDF). The 2011 rule did not include this inseparable downstream waste management work as part of the

ship recycling activity. However under the 2011 rule when applying 112

for a ship recycling facility plan (SRFP) every ship recycling facility

(SRF) must have an existing membership with a pre-registered treatment,

storage, and disposal facility (TSDF) operator. Currently, there is no 113

TSDF facility authorized by the government of Bangladesh,114 and according to recent SENSREC report more than 150 SRFs have been authorized.115 It is therefore apparent that the SBRR 2011 has failed to provide an interim measure for the authorization of the SRF pending these

essential services are set up by the government.116

The rule did not make any sensible distinction between the terms; ‘hazardous waste’ and ‘hazardous material’ which are completely different

objects and governed by different international regimes. A substance 117

attributed as ‘hazardous waste’, as opposed to ‘hazardous material’, attracts complex prohibitory jurisdiction of the Basel Convetion. The 118

SBRR 2011 without regard has used these keywords interchangeably.119

Even the word ‘waste' has got different meanings in different jurisdictions, and the international law is still struggling to settle this definitional

issue. Apparently, the definition of ‘hazardous waste’ is far from set 120 -

tled in international law. SBRR 2011 is essentially a transnational 121

regime with significant international impact and the ability to govern the

activities of international actors beyond the domestic territory.122 An inconsistent use of core terminologies may contribute to an irreconcilable

transnational jurisprudence on the cross-border movement of goods,

waste and hazardous waste alike.

The rule recognizes that the handling of asbestos is a major area of concern.123 It requires all yard owners to construct ACM (Asbestos Containing Materials) and a negative pressure chamber. However, it’s not 124

mandatory for yards having asbestos containment capacity less than 100

metric tons.125 A scrap ship on average contains 15,000 pounds (approximately seven and one half tons ) of asbestos. Depending on size and 126

capacity, each yard dismantles up to three ships on average per year.127

On the other hand, hazardous waste cannot be stored in a facility more

than ninety days after production. In practice, there would hardly be 128

any need for any yard owners to use and maintain negative pressure

chambers of 100-ton capacity for asbestos management at the facility, as

required by law. It is apparent that a substandard facility with minimal 129

investment in safety may still qualify without violating the standard set

by the rule. The rule also did not make any attempt to eliminate or reduce

the manual labor that has been supporting the industry in South Asia

since the 1980s.

Before being authorized, a SRF is required to submit an undertaking

about its safety, health and environmental management system, its 130

commitment to continuos improvement, identification of rules and 131

responsibilities of the personnel engaged in it,132 and emergency preparedness, or a system of monitoring the performance by safety offi 133 -cers. However, it is not clear, how a violation could legally be as 134 -

sessed, as there has been no attempt to set any specific obligation concerning any of the above activities, including the deadline within which

these undertakings are to be in compliance.

In any event, the cancellation of the permit is restricted to non-compliance with agreed conditions of authorization by the SRFP.135 The approval can be legally reinstated by addressing the shortcomings. There 136

is no consequence for any past violations. This flexibility may not contribute in discouraging breach and a scrupulous owner of an SRF may be

tempted to wait until the faults are detected by the regulatory agencies.

Apparently, there is also no mechanism that guarantees regular inspection of the facility directly on the part of the Competent Authority.

An EOL ship often creates a situation of ‘fait accomli’ on its 137

arrival.138 DoE139 apparently is in a better position to judge environmental issues while issuing the NOC before its imports, but steered clear 140

from such an important process by the 2011 rule. NGOs have adduced

much evidence of fraud committed by cash buyers regarding the pre- 141

cleaning of ships prior to sending them to Bangladesh. There has been 142

no attempt to incorporate this expertise in the policy making process by the government. Filing a dispute in a court regarding the hazardous status

of a vessel at the point of entry into the facility, leading to an arrest of a

ship, has been an ongoing phenomenon in the current ship recycling

market in Bangladesh.143

Before exporting an EOL ship, the SBRR 2011 does not require the ship

owners to remove additional oil from the bunker tanks that are not essential for ship’s last journey to the recycling facility. As such, the rule 144

permits the cleaning process to take place entirely on the beach. Simi 145 -

larly, except tanker, there is no requirement for the issuance of a gas-free

certificate for hot work at anchorage. Hence, such certifications and 146

laborious cleaning operations are not effectually prohibited at the intertidal part of the beach. The tidal differences in the coastal belt of Chittagong, Bangladesh is one of the highest in the world. When ships are 147

dismantled on the open beach, toxic substances are released from the

ship’s mass while dismantling operations take place, and are then washed

away with semidiurnal waves, inevitably reaching the marine environment.

The Ship Recycling Plan (SRP) is a ship-specific document that covers

the detailed planning and sequence of the cutting process.148 This document is prepared by yard owners based on the information on hazardous

materials supplied by the Master of the vessel. Its purpose is to ensure, 149

whether a certain facility can safely manage the hazardous wastes to be

generated from recycling a certain ship. The SBRR 2011 is not clear at

which stage the SRP would be prepared. Given beaching is a non-reversible process, the rule presumes that all authorized SRFs are readily 150

capable of handling all types of ships with any amount of hazardous

waste both inbuilt and onboard without reservation. Therefore, if the

amount of hazardous wastes is found to be unmanageable in a specific

yard due to the lack of its infrastructural capability, this may end up with

a catastrophe.

On the other hand, the rule has imposed exorbitant penalty against

shipowners or their agents for false declaration of hazardous waste found

to be unmanageable for the yard owners after non reversible beaching.151

But it is unclear how this penalty would be enforced against a foreign

ship owner who has concluded a deal of sale and the local agent may not

be capable to satisfy such a huge financial penalty in practice.

The workplace at the ship recycling yards offers some unique challenges.

Unlike ship building, there is no commitment to profit by the skill of

naval architects likely to employ scientific methods in ship

recycling. The myriad of circumstances in which the workers find 152

themselves while dismantling ships often poses unreasonable risk-taking.

Moreover, the rule requires cranes to be tested on regular intervals and

constant supervision is required while heavy loads are lifted by cranes.153

Unfortunately, the rule does not explain how to use cranes alongside the

ship on the soft, moving, muddy beach where they are actually needed.

The rule did not clarify the specific use of the crane at beaching

facilities.154

In SBRR 2011, there is no requirement to set up any permanent firefighting infrastructure and the rule has put substantial reliance on portable fire extinguishers.155 The Rule relies heavily on the informal neighborhood assistance.156An emergency response system relying on unorganized, untrained voluntary workers from the neighboring populace may

be inadequate when needed.

It is apparent that the SBRR 2011 was adopted in the face of mounting

criticism against lawlessness in the governance of this pollution-heavy

industry in Bangladesh. This was followed by the order of the High

Court Division of the Supreme Court of Bangladesh in a Writ Petition

that compelled the government to adopt the rule hastily within a specified timeframe.157 Evidently, in absence of a settled independent regulatory agency, there was a severe lack of effective competition within this

industry in Bangladesh and the potential for the undue exercise of market

power was considerable. NGOs have reported that in any stage of the 158

law making process in both the SBRR 2011 and the SRA 2018, little or

no substantive consultations took place with relevant stake holders such

as environmental or labour activists. In their adoption processes and in 159

the legislative texts, no reflection of any of the long standing and established general principles of environmental laws such as polluter pay

principle, proximity principle, precautionary principle or common and

differentiated responsibility have been noticeable.

Furthermore, under the international law on ship recycling, namely the

HKC, the Competent Authority is a governmental regulatory agency. A 160

regulatory agency is a public body responsible for exercising autonomous power over some areas of human activity in a supervisory role.

Regulatory agencies or authorities are commonly established to enforce

standard of safety and to protect the consumers in a market with lack of

fair competition or the potential for the excessive or undue use of market

power. Regulatory agencies are therefore typically part of the executive

branch of the government and have received their power from the legislative branch. Their actions are generally open to scrutiny by way of

judicial review. Under the BSRA 2018, the governing bodies of the

Competent Authority for the ship recycling in Bangladesh namely the

BSRB is formed by 13 members of the board where at least three members are appointed by the government who represents ship recycling industry who are the subject of governance by the BSRB. Given only 161

one third board members are required to form the quorum as per the

BSRA 2018 for a meeting to be valid in the board level and no quorum is required in the adjourned meetings162 there is a significant cause for concern about the optimum functioning of this regulatory agency. Attaining

sustainability in this industry in Bangladesh using these questionable legal provisions may prove to be a difficult exercise.

The supreme law that governs the right of workers against their employers in Bangladesh is the Labour Act 2006 (LA 2006). Under this law, a

shipbreaking yard is an industrial establishment as well as a factory 163

where production process is carried on. This Act applies to the ship 164

breaking workers.

The 2011 rule imposes considerable penalty upon the yard owners for

engaging uncertified workers , women workers, and underaged 165 166

workers. The same rule applies to the workers supplied by 167

contractors. However, as far as the employment rights of the workers, 168

provided by contractors, are concerned, the SBRR 2011 is silent, and

Labour Act 2006 (LA 2006) imposes this obligation upon the current

employers, which in the ship breaking sector is mostly the 169

contractors. Under the recent amendment of the Labour Act 2006, es 170 -

tablishment of any contractor and subcontractor engaged in shipbreaking is also a separate and independent industrial organization171 and is accountable for all its actions as an employer. The Labour Rule 2015 (LR

2015) enacted under the power granted in LA 2006 confirms that a contractor’s establishment is a separate and independent organization.172

However, the temporary employment practice makes it easy for the yard

owners to shift many substantive obligations to the workers upon the

contractors and the subcontractors. As per the LA 2006, the yard owners

do not have to take the financial liability to compensate workers if a casualty is resulted from a breach of contract or the negligence of the contractor. The remedy of workers for compensation on death and injury 173

may practically lie in most cases to the contractors only.174 This is a significant possibility as contractors are the principal supervising authorities

for the workers who owe primary duties to supply PPE and training for

their workers under the latest amendment of LA 2006.175

To obtain a registration, a contractor is required to be solvent and requires executing a bond or surety.176 The security deposit for a contractor's establishment able to supply workers up to hundred is only BDT

200,000 (USD 2,500 approximately). Although license fees are 177

charged as per the nature of establishment such as a shop, restaurant, factory, bank or an insurance company but there is no such distinction is

made between a hazardous industry like ship breaking and others. A 178

ship breaking yard has therefore been considered in equal term with nonhazardous industry like bank, restaurant, food court, hair salon or a departmental store where the question of compensation for loss of life or

limb is hardly relevant. The question of financial liability arising out of

coastal pollution in beach breaking is crucial but how such miniature establishments would bear all such great liabilities pose many impenetrable

questions.

To confer same right as a regular worker, the term ‘temporary workers' has recently been included in the definition of “worker” under the

latest amendment of LA 2006. A wide range of rights, widely claimed 179

by the industry, are now readily available to the workers of the ship

breaking industries who mostly are temporary workers. These include 180

right to have a service book,181 an appointment letter, ID card with photos, overtime payment, casual leave, medical leave, sick leave, year 182 183 -

ly holiday with wages, festival holidays, ad-hoc or unpaid wages and

many more. There are also special provisions for welfare, dispute resolution, right to form a trade union, restrictions on recruitment of children

and adolescent labors, etc.

Apparently, the ship breaking workers are now favored with many

substantive rights, but most of such rights are tied to the status of permanent employment. The benefits are measured according to the duration of

service within a closed loop of a year or one-half year of continuous service. The SBRR 2011 does not mandate employing permanent workers

irrespective of the financial ability of the yard owners. As noted earlier,

over 70% are migrant workers who mostly arrive from the northern and

impoverished part of the country.184

A worker may not also be able to work with the same contractor every

day. The service book that contains essential rights such as the service record, performance and experience is reserved for the permanent 186

workers and not available for the temporary workers under the LA

2006. Under Sec.100 of the LA 2006, the regular working hours are 187

forty-eight per week. If any worker works more than forty-eight hours 188

in each week, he is entitled to receive overtime benefit which is almost

twice than his regular pay rate. The maximum permitted hours are 189

eight hours in a day with two hours overtime permitted subject to section

108 of the LA 2006. Hence, if a worker can work for four days with 190

ten hours in each day of a given week, it would remain up to the dis 191 -

cretion of contractors whether to pay him overtime wage or not. This is

unlikely, as calculating a six-day slot of the week, a worker may not fulfill the forty-eight hours threshold in each week. Similarly, the provisions

on weekly holiday do not assist temporary workers as they may be operated under different contractors on different days of the week.

Few substantive benefits become due when a worker completes six

months continuous service, and other requires one year under a single

employer in a given calendar year. For example to get compensation as 192

a leased worker, to earn ten days casual leave annually with pay, to 193 194

receive fourteen days sick leave in a year and leave with pay benefit, a worker must complete one-year continuous service under a 196

same employer. These benefits are also tied to a given calendar year 197

and expressly made non-cumulative i.e. nontransferable to the following

year.198

Again to be entitled to compensation for death while in service, the

worker must be in continuous service for two years preceding to his

death as a permanent worker. To be compensated for an occupational 199

decease suffered in the facility, the worker must serve for that establishment for at least six months consecutively. In a ship-breaking facility 200

at least twelve percent of workers suffer from asbestos-related

disease. Very few of the workers would pass this consecutive day of 201

service requirement. Moreover, there is a long latency period and most of

the occupational diseases that are common in these toxic industries may

develop after long time of exposure to toxic conditions. There would 202

also be no scope for joint liability between the employers even if the disease had developed over years of working in two or more facilities if the

duration of service with each employer is less than six months which

happens most frequently. Hence in the absence of any requirement to

recruit permanent workers, there is every incentive to hire temporary

workers as they hardly have anything to claim other than their daily

wages. Under the LA 2006, if the number of permanent workers exceeds

one hundred, the employer is bound to purchase group insurance policy

for the workers. Moreover, there is no hard and fast rule to dismiss 203

temporary workers by the employers who as per the law can be hired and fired at will without any compensation or notice whatsoever which does

not apply to the permanent workers under the LA 2006.204

Under the LA 2006, there is a complete prohibition of child labor in any

industry in Bangladesh. However adolescents can be recruited if a 205

medical certificate or birth certificate is kept in the custody of the employer, and the adolescent must be supervised by an adult competent 206

person at work. Hazardous activities in Bangladesh are listed by the 207

government time to time by gazette notifications. Ship-breaking has 208

been classified as one of the most hazardous activities vide Sec 68 of the

Labor Rule 2015. Under the SBRR 2011, the recruitment of both child 209

and adolescent has been completely prohibited also included are 210

women workers. Under the SBRR 2011 the financial penalty against 211

yard owners for appointing a worker below eighteen is BDT 75,000

(Equivalent to USD 950) per worker. This is a considerable amount in 212

the economic market of Bangladesh given child labor and adolescent

works are ubiquitous in Bangladesh with no practical barrier in the

field. The extreme poverty connected to family backgrounds having no 213

social security from the government prevents these laws from being enforced strictly. There is in fact no shortage of avenues to hide away even

if caught red-handed. Corruption is widely prevalent across the country and ship-breaking industry is not an exception. Many children or 214

adolescents are raised by single parents or have lost their father; the only

source of income. Understandably, all these incidents are coined by

poverty and hunger, not by any gain or profit. Interestingly under the LA

2006, the parents of the child workers may also be penalized. Contrary 215

to the LA 2006, the SBRR 2011 has been quite loud on the issue of child

and adolescent labor but remains mum in addressing the real problem on

the ground; submission of a fake certificate as a proof of age by the employers. It appears that the regulatory authorities in Bangladesh hardly

control the influx of children at ship breaking yards and there is every

chance to employ adolescent workers in a ship-breaking yard by disguising the age without any practical consequence against the yard owners.216

The report of NGO reveals that up to twenty five percent workers are

adolescent across the shipbreaking industry currently in Bangladesh.217

Traditionally, the politicians in Bangladesh have used the trade union as

one of the ways and means to achieve their political dreams. The Fair 218

Labor Association reports that, in 2002, in Bangladesh only three percent

of workers were affiliated with trade union and among them the majority were closely affiliated with national politics, having less involvement 219

with economically active population at work. Almost 75 to 80 percent of

those workers belong to the informal sector in Bangladesh. The major 220 -

ity of these low profile, financially active people lack formal

education,221 and are often dominated by the politicians in the country222

on whose clemency their leaders depend for personal gain with no practical benefit to these ordinary workers. On the other hand, it has been

revealed that 90% of the established employers belong to the owner's

association, unfettered from national politics. The businesspersons, 223

instead, dominate the politics as most of the members of Parliament in

Bangladesh traditionally are high profile business icons. LA 2006 is 224

infiltrated with severe flaws identified by the ILO which has recommended immediate reform in the collective bargaining process.225 However, all these fell on deaf ears as the government has traditionally played

a double role. The government says workers are free to join trade unions

as per their choice, but maneuvered the law in such a way that implementing collective bargaining in the real sense has remained

infructuous.226

LA 2006 has conferred equal rights to both employers and employees

to form and join unions and elect their representatives in full freedom to

pursue their common goals. To enjoy such rights, an employer is no 227

different than an employee. Traditionally, however a broken chain of

command exists between workers and their unions mostly because of

some complicated socio, economic, and cultural equations and political

belief that isolate them more swiftly. Under the LA 2006, there is no threshold in the number of labor unions that can be formed in an organization. On the other hand, the law requires at least 30% of worker participation in the registration of a trade union. Observance of this broken 228

culture followed by ill-disposed legal provisions makes it difficult in

practice to unite them and fulfill the minimum quantitative requirement

for registration. Moreover, until the registration is complete, any function

of union is prohibited by law229 and the code is silent about the preparatory activities directed to form a new union. This gap in law has traditionally been abused by the employers in many industries in Bangladesh

including the ship-breaking, extensively to dismiss a worker attempting

to begin talking about a labor union with other co-workers within a business establishment. ILO committee of expert considers the issue as a 230

severe restriction of the worker's ability of collective bargaining and to

form a union as per their choice which needs immediate reform. It has 231

oftentimes been reported that employees have been persecuted personally

by deploying police to their residence. 232

In fact, the contracts of the contractors with the yard owners often do

not last long and mostly ship specific. A meaningful trade union in 233

such a bizarre circumstance is virtually unimaginable. It appears that

government has traditionally attempted to use the power of lawmaking

and the instrument of law to maintain a status quo thereby legalizing the

vulnerable position of the workers in general.

Employees have the right to protect their economic interest through

strike. Industrial Relations Ordinance 1969 (Ordinance no XXIII of

1969) recognizes such right. However, the condition of freedom of association looks vulnerable under this law where there is a penalty including imprisonment for instigating illegal strike or lock-out or taking

part in or instigating a ‘go-slow’. The go-slow has been defined under the

ordinance as organized, deliberate and purposeful slowing down of standard output of work by a body of workers. The law has defined illegal 235

lockout and strike but not illegal go-slow. Go-slow technique is used to

persuade an employer to agree to higher pay or better working conditionsusually is a mild version of a strike, it may also be said. So, according to

the definition, any attempt to get the employer to agree to higher pay,

better working condition, could be interpreted as a go-slow action. These

provisions are not difficult to explain in favor of the employers where,

irrespective of the justifiability of go-sow, a company can initiate action

under the Section 53 of the IRO 1969 (Industrial Relations Ordnance

1969). In a condition of pauperism, mere filing criminal cases irrespective of their merit against workers living hand to mouth is good enough

to despoil his entire wherewithal of life with no compensation whatsoever regardless of the outcome of the cases. Also, the words, ‘organized’,

‘deliberate’, and ‘purposeful’ used in IRO 1969 deserve further clarifications to avoid any misuse of power enjoyed by the employers.

Ship recycling is a highly labor-intensive industry with significant rate

of casualty record consistently being apparent since 1980s when the industry migrated to the South Asian region. Due to this high risk factor, 236

this industry has attracted some of the most vulnerable classes of people

from the most destitute parts of some developing counties of South Asia

where the industry has flourished. In both Bangladesh, India and Pakistan there has been a common hallmark of this industry where migrant

people from the poorest parts of the country have constituted the main

body of the ship recycling workers pool. Almost 98% of the workers 237

of this industry is temporary and this position is unlikely to change 238

soon as most ship breaking facilities by virtue of the very nature of the

industry are not engaged in breaking of ships all over the year and the

ship-breaking task therefore can be said as intermittent in nature. The

part time nature of ship breaking works creates a significant hurdle to

create a skilled worker’s pool in the industry which undoubtedly forms

an essential part of the equation of sustainability of this industry. Due to

these special characteristics prevailing in the ship-breaking industry, the mainstream labor law, applicable to all other types of industries in the

country, does not go along easily with this most dangerous and labor-intensive industry in the world. As a truly global industry, it would hardly

be possible to solve this problem unitarily from a state level. To circumvent this problem the ship-breaking labor regulations should be harmonized among ship recycling states, taking note of the special character

and risks involved in ship-breaking works. A separate international

regime like the Maritime Labor Convention (MLC) incorporating the

special rights of ship-breaking labours may be considered. This may incorporate provisions for the standardization of worker’s training and creation of a pool of minimum number of regular workers.

The Department of Environment is entrusted to issue a yard specific

clearance; however, the 2011 rule did not make clear if it is compulsory

to release a ship specific clearance before the beaching permission is

granted. This silence in law has provided the recyclers of ships oppor 239 -

tunities to argue that under the current state of law no environmental

clearance is necessary before beaching and recycling of ships. As a 240

result, in a very few cases, the ship specific NOC is applied for by the

yard owners. In some areas, overlapping of responsibility between two 241

departments of the government has been apparent. For example, both the

DoE and the SRB oftentimes have been entrusted with identical responsibility but with separate accountability to their respective departments.

The responsibilities include regular monitoring of air quality, water and

soil quality using sample from the site. In those circumstances, which 242

department is primarily accountable to address those issues, has been a

debatable issue. As an orange (B) category industry DoE applies the 243

same criteria over the ship breaking industry as applied to all other land based hazardous industries to collect the sample of water, air, soil, etc.244

The same method of testing water and soil sediments does not appear to

be suitable in the coast based industry, working within semidiurnal mode

of tidal water that changes direction in every six hours. The deposits in

the intertidal zone of the sea hardly settle down and wash away directly

into the ocean body continuously. On the other hand, the SRB is required

to carry out the same task of environmental monitoring independently

through an industrial & scientific research lab. Interestingly the SBRR 245

2011 has imposed upon the Competent Authority a hard-hitting duty to

evolve the beaching method into a complete pollution free venture with

zero tolerance by ongoing environmental monitoring practice followed

by scientific data analysis. The rule also has imposed a duty upon the 246

yard owners to support the DoE in their endeavor to the environmental

monitoring by supplying adequate logistics, workforce, testing equipment's, vessels, etc. It is noteworthy that an obligation attached with 247

scientific impossibility is unlikely to be enforced in the court of law.

Moreover, a regulatory duty that relies solely on the technical and logistical support of the regulatees may also potentially be unsuccessful due

to the presence of conflicting interests.

The HWR 2011 implements the Basel Convention in Bangladesh248

however, unlike the Basel Convention, it applies to the entities dealing

with the hazardous waste and hazardous materials alike. These two 249

terms have been interchangeably used with same meaning to impose liability upon the operators of both hazardous waste and hazardous materials in the country. There is no difference made in the content of the definition.251 Under the rule, the importer of the hazardous waste or material needs to ensure that actual product corresponds with the description

in the document.252Any consignment or lot of hazardous material or hazardous waste is illegal unless permitted by the appropriate state authority

of Bangladesh or if permission has been obtained by fraud or

deception.253 In violation of this provision, the importer is primarily responsible for taking the consignment of hazardous waste back to the exporter at his own cost within 30 days of arrival at the anchorage. If due 254

to any inevitable reason the shipment is not possible to return, the importer will remain responsible for bearing the total cost of destruction of

such waste or materials in Bangladesh. Basel Convention, on the other 255

hand, makes such transaction a criminal offense. The Conference of 256

the Parties (COP) of the Basel Convention has declared the EOL ship as

a hazardous waste in its integral form, but the provision of the illegal 257

shipment under Sec 18 of the HWR 2011 does not appear to apply to

EOL ships. It is noted that the rule has used the words consignment or

lot. Logically it applies to any lot or consignment which can be carried as

cargo by a carrier. Hence, it appears that the rule applies to only hazardous wastes or materials when carried as cargo, not the carrier itself

when it is the subject matter of import. On the other hand, the procedure

to import an EOL ship is mentioned separately under section 19 of the

same rule. This makes it more arguable that section 18 does not apply to

EOL ships. Section 17 of the HWR 2011 confirms that Basel Convention

shall be applied to all import and export of hazardous waste and materials, but the rule is silent if an EOL ship in its intact condition is a hazardous waste and its import for scrapping can itself be considered as a lot

or consignment of hazardous waste.

Unlike the Basel Convention, no state to state communication is required in Bangladesh to import any hazardous waste or goods. Seemingly, there is a massive inconsistency in the domestic waste law with the

Basel Convention. It can therefore conveniently be argued that the HWR 2011 applies to the hazardous waste when imported as cargo only and it

does not appear to affect an EOL ships with hazardous waste in its embedded structure. None the less, if the convention were strictly followed,

it would have been illegal to import EOL ships for recycling in Bangladesh without prior informed consent directly from the state authority of

Bangladesh. The rule appears to have made a distinction in case of EOL

ships but does not make it clear as to how an EOL ship is different than

other hazardous wastes under the Basel Convention. This stand is also

inconsistent to the Supreme Court judgment in WP 7602 of 2008, although the court in its later judgment has diluted the rigor of its earlier

version and waived the strict requirements of the Basel Convention for

EOL ships without acknowledging the matter. Eventually, both the

Supreme Court judgment and the HWR 2011 expressly declare that,

Basel Convention applies to all hazardous waste including the EOL

ships, but their factual position is sharply contradictory to the fundamental provisions of the Basel Convention of which Bangladesh is a state

party since 1992.

Punishment for the violation has been established in ship breaking industry in two different laws; The SBRR 2011 and the BSR Act 2018

(Bangladesh Ship Recycling Act 2018). Unless death or injury by negligence occurs, it seems there is no liability for violating any provision of

SBRR 2011. However, the Bangladesh Ship Recycling Board (BSRB)

might ask for rectification without any sanction for past wrongful

action.258 In contravention to any provision of the SBRR 2011, the standard sanction remains the suspension of yard activities. There is no 259

penalty for spillage of oil, sludge, hazardous waste to the environment

unless the workers are supplied with proper equipment at the time of

handling.260 For many types of violations, the suspension and rectification methods do not sit properly with ultimate objective of the law. For

example, if any worker is made to work at a height in a single instance

without a safety belt and the job is already performed without any incident of casually, it would still be a definite violation but it is pointless to

keep the operation of the SRF suspended until such fault is rectified. Few

other penal provisions require fines to be paid to the government treasury for violations such as using uncertified workers, 261women,262 and workers below eighteen, allowing the workers to work at a height after the 263

sunset and false declaration made by the shipowners about hazardous 264

waste that subsequently found unmanageable. It is interesting to note 265

that an action can only be taken against a ship recycler for loss of life and

permanent injury of workers and also subject to proving negligence.266

There is no concept of strict liability or gross negligence or corporate

manslaughter known in SBRR 2011. More interestingly an injury below

than permanent disability is not actionable per se in 2011 Rule.

Bangladesh Ship Recycling Act 2018 (BSR Act 2018) also has incorporated penal provisions for certain activities carried out without permission from the appropriate authorities of the government including fake 267

document submission in any application process. Apparently, all these 268

punishments are restricted to mere financial penalties that do not seem to

be proportional to the offenses and quite insufficient to discourage violations as required by the HKC.269 For example under SRA 2018 , the maximum financial penalty for offences including non-reversible beaching

without obtaining appropriate permission from the BSRB varies from

BDT 10 lacs to 30 lacs which are equivalent to USD 12,000 and USD

35,000 respectively per violation.270 Given the profit margin from recycling of an EOL ship is pretty high , there is no compulsory and fixed 271

penalty of imprisonment available in law against illegal beaching as well

as ships beached illegally are not confiscated by the government, the

threshold of penalty seems much inferior to the profit obtained generally

from such violations. It therefore appears that gaps in the penal provision

in the 2018 Act also would unlikely discourage any possible violations.

Because of such inherent loopholes in the domestic framework regulations pertaining to shipbreaking, imbalance of market powers, reluctance

of the shipyard owners in following adequate safety standards, inadequate arrangements for training of workers , lack of awareness of safety within the ship breaking workers themselves have failed to prevent the

gradual rise of workers casualty in ship-breaking sites.272

Additionally the high cost of litigation, wide ranging corruptions in

the society in general, procedural difficulties in the access to justice have

made it quite difficult for the peasant workers in ship breaking industry

to rip the benefit of law that are available to them.

It has been observed from the discussion above that despite availability

of numerous legal weaponries the temporary nature of job in shipbreaking industry in Bangladesh and serious lack of collecting bargaining for

workers inter alia have resulted into a frustration in receiving the benefit

of law. Controversies exist about the hazardous nature of EOL ships. The

hazardous waste rule governing the hazardous industry in Bangladesh

appears to have made an exception for EOL ships contrary to the Basel

Convention of which Bangladesh is a party. Evidently, the shipbreaking

regime appears to be more flexible than other hazardous waste regimes

in Bangladesh that are still subject to the stricter jurisdiction under the

Basel Convention. Considerable lack of coordination in enforcement

mechanism has been observed. The provision on violation of the legal

provisions of SBRR 2011 and BSRA 2018 and the sanction for violation

do not reflect many realities on the ground and quite inefficient to

demonstrate any retributive or compensatory effect. Keeping all these 273

fundamental issues outstanding, the framework regulations of Bangladesh on ship recycling seem to have contributed too little too late to ensure a safe, environmentally sound ship recycling industry in this preeminent ship recycling state.

Bangladesh along with other South Asian players has been in the premier positions in ship-breaking business for last three decades but there

has been a recent change in the dynamics of global ship recycling industry. Shipowners are increasingly preferring green yards in China and Turkey. On the other hand, India, which is the closest competitor to 274

Bangladesh in global ship breaking has already acceded to the HKC recently in 2019. There are currently about 45 ship recycling yards in 275

India that have already obtained the statement of compliance with the

HKC from international classification societies and more 15 ship breaking yards are now approaching towards this certification. Almost 50% 276

of the active recycling facilities in India have achieved the standards set

by the HKC and its guidelines which no doubt will have a positive impact in India’s competitiveness in this global business. Although it’s not

necessary for Bangladesh to ratify the HKC to apply its standards in its

state territory, with the current circumstances as described, Bangladesh

does not have many options in hand. If the gaps and the general inadequacies that have been identified in this article are not addressed by the

government of Bangladesh within a reasonable time and if the power

dynamics, politics and lobby cannot convince the recyclers in Bangladesh to avoid maneuvering the existing regulatory processes through undue exercise of their market powers, it may not be possible for Bangladesh to keep control and sustain the business in the long run.