Muddy Waters

Are U.S. shipping companies still sending their clunkers to the toxic scrap yards of South Asia?

A ship-breaking yard

When the 30-year-old cargo ship MV Anders cruised out of Norfolk, Va., at 11 p.m. on Wednesday, Aug. 26, it may have been sailing through one of the largest loopholes in U.S. maritime regulations.

Three weeks earlier, the Anders was a U.S.-flagged vessel called the MV Pfc. James Anderson Jr., named for a young Marine who saved his platoon members’ lives by falling on a Viet Cong grenade. It had hauled cargo for the U.S. Navy for more than two decades and was now retiring. The ship’s new owners, Star Maritime Corp., had renamed it the Anders, painted over the excess letters on the hull, and raised the flag of its new registry—the Caribbean nation of St. Kitts and Nevis. The Anders left Virginia empty.

Its 29-year-old sister ship, the MVBonny (formerly the MV 1st Lt. Alex Bonnyman), followed two days later under the same flag and ownership. The Coast Guard listed the ships’ next port of call as Santos, Brazil. But environmental groups, trade journals, and industry watchdogs claim the ultimate destination for these aging vessels will be the Dickensian scrap yards of Bangladesh.

The Anders and the Bonny served in the U.S. Navy’s Military Sealift Command for 24 years. Stationed at Diego Garcia in the Indian Ocean, they delivered military cargo during both Iraq wars, as well as Operation Restore Hope in Somalia. But the Navy never actually owned the ships. They chartered them from Wilmington Trust, which sold them to Star Maritime earlier this summer. When Star Maritime renamed the ships and submitted an application to reflag them under St. Kitts and Nevis registration, environmental groups recognized the telltale signs of vessels about to be scrapped and cried foul.

The Basel Action Network, a Seattle-based environmental group leading the campaign to stop the export of old ships for scrap, monitors old vessels in U.S. waters and alerts the EPA when their owners attempt to recycle them overseas. There are several reliable warning signs. First, a ship is sold to an obscure company (which U.S. ship-breakers call a “Last Voyage Inc.”), which is sometimes a subsidiary of a larger company active in the scrapping business. Then it is renamed and registered under another nation’s flag before sailing to South Asia.

“It’s outrageous that these ships were allowed to sail,” says Colby Self, director of BAN’s Green Ship Recycling campaign. “In a sense, they were government vessels.” But once the ships’ contracts had expired, all legal responsibilities lay with their owners.

Most of the world’s old ships are sent to die on the shores of India, Pakistan, and Bangladesh. Vessels are beached there at high tide and cut into pieces by teams of poorly paid migrant workers. Heavy equipment and cranes are inoperable on the sand, so workers dismantle the ships by removing large portions, which drop to the beach. They use fire torches to cut through steel hulls—even those of old oil tankers. Dozens of workers die each year from explosions, falling steel, and disease. As for the asbestos, polychlorinated biphenyls (PCBs), tributyltin (TBT), and other toxic materials onboard the old ships, much of it washes out to sea. (PCBs and TBT are persistent organic pollutants that work their way up the marine food chain and damage the nervous systems of large mammals.)

If the Anders and Bonny are headed to Bangladesh, they won’t be alone. South Asia’s ship-breaking yards are experiencing an ironic boom in the middle of the global recession. Ship owners faced with shrinking cargo volumes are culling their fleets by scrapping old vessels rather than paying for them to sit empty. South Asia’s yards, which take advantage of cheap labor, scant regulations, and high regional demand for steel, will buy a vessel for twice the price a U.S. ship-breaker could offer. In Bangladesh, ships like the Anders and Bonny (which are two-and-a-half football fields long and weigh more than 23,000 tons) are worth at least $7 million apiece.

In 1998, the Clinton administration slapped a moratorium on scrapping U.S.-flagged vessels overseas after the Baltimore Sun ran a Pulitzer Prize-winning string of stories about the conditions of the South Asian scrap yards. But ship owners have dozens of so-called “flags of convenience” at their disposal to circumvent the ban. Most of these flags belong to small, poor countries with little maritime oversight—places like St. Kitts and Nevis.

Ship owners submit their reflagging requests to the U.S. Maritime Administration (MARAD), which considers whether the ships would be needed for national security in the event of war. For old vessels, this is seldom the case. MARAD began alerting the EPA of old ships attempting to reflag after the SS Oceanic, a former Norwegian Cruise Liner, slipped out of San Francisco last year with almost 500 tons of asbestos and PCBs onboard.

The Toxic Substances Control Act of 1976 prohibits the export of PCBs, asbestos, and lead-based paint—materials often used in the paint, cabling, and gaskets of older ships because of their fire-retardant qualities. If the EPA suspects a vessel applying for reflagging contains hazardous materials, it can order that vessel to be tested. But because ships are not required to inventory these materials, and the EPA has limited time and resources to devote to every old ship, environmentalists contend that each year many vessels slip through the cracks.

In the case of the Bonny and Anders, EPA spokesman David Sternberg says, “Based on the available information, the EPA has no sufficient reason to contain these ships.” Sternberg adds that the EPA received a letter from the new owners insisting the vessels will be used in trade and will not be scrapped.

This seems unlikely to Kevin McCabe, founder of International Shipbreaking Ltd. in Texas. He says buying two cargo ships at the end of their life spans for their utilitarian purposes alone would “belie the economics of the market today.” McCabe is convinced that the Bonny and Anders will be scrapped in Asia. And he doesn’t think they’re clean, either. “I’ll bet you dollars to doughnuts that there are PCBs on those ships,” he says. “No question about it.” The EPA would be singing a different tune if the ships were to be dismantled at his Brownsville recycling facility, he adds. “When we scrap a ship, we must assume it has hazardous material onboard until we can prove otherwise.”

Colby Self of BAN says he’s disappointed that the Obama administration could so easily let these ships slip away. “[The EPA] made a calculated decision based on their low-risk assessment, and they let them go,” he says. Under the Bush administration, the EPA was very diligent in following up on BAN’s warnings, he says.

But Self isn’t giving up hope that the ships can be stopped before they wash up on South Asian shores. “We will be warning Bangladesh to bar the entry of these renegade vessels,” he says. “This story is far from over.”