The ship-breaking industry in Chattogram, which was labeled as ‘red’ by the Department of Environment (DoE) in April this year, has not yet been reclassified as ‘orange’. This delay is causing significant problems for the industry and disrupting the supply of scrap iron to re-rolling mills in the country.
The Bangladesh Ship Breakers and Recyclers Association (BSBRA) has called on the government to reclassify the ship recycling industry (SRI) from its current ‘red’ classification to ‘orange’, which they had last month. According to sources, BSBRA is worried that the ship-breaking industry has been marked as ‘red’ again without seeking input from stakeholders and the Ship Recycling Board.
Md Abu Taher, president of BSBRA, explained, “The Environmental Conservation Rules-2023 have categorized the ship-breaking industry as ‘red,’ requiring a second round of clearance from the DoE’s Director General office for each ship before it can be dismantled. This additional step adds a delay of one and a half to two months in obtaining permission for ship-breaking work.” He further expressed concerns that industrial entrepreneurs fear facing additional complications and harassment.
Meherul Karim, the CEO of KSRM Group, mentioned that Kabir Ship Recycling Facilities, a ship-breaking yard of Kabir Group, received a ‘Green Yard’ certification from three different international certification bodies. He stated that a total of four recycling yards have received green certification, with many more in the process of getting certified.
Karim pointed out that shipyard owners had invested considerable effort in developing their ship-breaking yards to meet the safety and environmental standards of the Hong Kong Convention (HKC). However, the industry’s ‘red’ classification by the DoE has caused significant financial losses and delays in environmental clearance procedures.
Shipyard owners are requesting a simplified process for reclassifying ships from ‘red’ to ‘orange’ (B) to ease their situation.
The Ministry of Forest Environment and Climate Change published the Environment Protection Regulations-2023 on April 26, reclassifying the shipbreaking industry from ‘orange’ to ‘red’. This change has caused trouble for entrepreneurs in the industry.
In May, a 14-member delegation from the Japanese Ship-owners’ Association (JSA) visited the port city. The delegation inspected six ship-breaking yards in Sitakund, including three ‘green yards’: PHP Ship Recycling, Kabir Ship Recycling Facilities, and SN Corporation. Keiji Tomoda, the vice president of the Japanese Ship-owners Association, emphasized the importance of government support in accelerating the development of Bangladesh’s ship-breaking industry, which he believes has a promising future.
The ship-breaking industry was established in the Sitakunda area of Chattogram in 1970 and currently employs around 40,000 workers. Bangladesh imports over 30 lakh tonnes of scrap ships annually, accounting for more than 25 percent of the world’s total scrap ships. The industry’s total turnover is approximately Tk 50 billion (Tk 5,000 crore) per year.
The shipyards in Sitakunda dismantle four types of old vessels: turbine tankers (TT), motor vessels (MV), steam vessels (SV), and fishing trawlers (FT). Among these, scrapping turbine tankers is considered particularly dangerous.