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“Shipbreaking” is the practice by which oceangoing
ships which reach their end of their working life are
dismantled.
In July 2020, in a case where Leigh Day acted for the Claimant,
an important judgment was handed down in the High Court which could
lead to significant changes to how the shipping industry approaches
shipbreaking.
According to leading NGO
Shipbreaking Platform, more than 70 per cent of the
approximately 800 vessels reaching the end of their operating lives
annually are broken up on the beaches of India, Bangladesh and
Pakistan under rudimentary and dangerous conditions.
The International Labour Organization says:
“Shipbreaking has grown into a major occupational and
environmental health problem in the world. It is amongst the most
dangerous of occupations, with unacceptably high levels of
fatalities, injuries and work-related diseases.”
The practice used to dismantle ships in South Asia is known as
“beaching”, and involves a ship being deliberately run
aground. Workers then take apart the enormous structures with
little more than a blow torch, ropes and their bare hands.
Tragically, workers lose their lives and suffer injuries and
occupational diseases at an alarming rate, due to unsafe working
conditions and exposure to toxic substances. Beaching causes severe damage to coastal
ecosystems and local communities due to toxic spills,
contamination and other types of pollution.
Asbestos is one substance found routinely on vessels, which is
not removed using proper asbestos removal
technology. Workers without PPE, including child labourers,
remove asbestos from ships with their bare hands and discard it on
the beaches where it contaminates the air, land and water. Local
children play on the beaches among the piles of discarded
asbestos.
By spending less on health and safety and environmental
protection, South East Asian shipyards are able to offer much
higher prices for end-of-life vessels than yards in Europe or Asia
where ‘green’ ship-recycling is practised. This allows
the wealthy multinational ship-owning companies to maximise their
profits at the expense of impoverished workers and the
environment.
Leigh Day represents Hamida Begum, the widow of a shipbreaking
worker, MD Khalil Mollah, who suffered a fatal accident while
shipbreaking in Chittagong (now Chattogram) in 2018. Mr Mollah fell
to his death while working on a ship called the EKTA (formerly
Maran Centaurs).
Mrs Begum brought a case against the British shipping company
who, it is alleged, was responsible for the decision or decisions
which led to the Maran Centaurus being beached at Chittagong. The
company, Maran (UK) Limited, is part of the Angelicoussis Shipping
Group (ASG). ASG is one of the largest private fleets in the world
and is headed by John Angelicoussis, Greece’s largest
ship-owner, who is understood to be worth several billion USD. Mr
Angelicoussis was a director of Maran (UK) at the time of the
accident.
In August 2017, Maran Centaurus was sold for demolition in a
transaction worth over US$16m.
The claimant argues that Maran (UK) could have ensured the ship
was recycled in an ethical way, but would then have had to accept a
lower sale price. Given the dangers of shipbreaking in Chittagong,
it is alleged that Maran (UK) owed to workers such as Mr Mollah a
duty of care to ensure that Maran Centaurus was dismantled in a way
which did not lead to a foreseeable risk of death and injury of
those unfortunate enough to dismantle her.
Rather than face a trial, Maran (UK) applied to the court to
have Mrs Begum’s case struck out on the grounds that they
were too far removed (in time and space) from Mr Mollah’s
death to owe him a duty of care. They argued that his accident was
caused by the pre-existing working conditions in Chittagong over
which they had no control.
The strike-out application was heard by Mr Justice Jay in June
2020 and lasted for two days. Jay J, in a judgment handed down on 13 July, refused to
strike out Ms Begum’s negligence claim.
Jay J held that Mrs Begum has an arguable case that Maran (UK)
could have influenced where Maran Centaurus was scrapped, and that
they could have ensured that she was ethically dismantled. The
judge also rejected the Defendant’s argument that the only
relevant factor in Mr Mollah’s death was his fall from
height, stating:
“the proximate cause of the accident was the
deceased’s fall from a height, but on a broader, purposive
approach the accident resulted from a chain of events which led to
the vessel being grounded at Chattogram”.
The decision is likely to cause considerable concern within the
shipping industry, which historically has sent thousands of vessels
to South Asian beaches for great profit. It supports the principle
that a ship owner’s liability does not automatically end once
it sells a ship. If a duty of care exists at the time of sale,
liability may be difficult to avoid if a vessel is scrapped without
proper consideration of the conditions in the shipbreaking
yards.
The judge made two further findings which are highly relevant to
how ships are recycled.
First, Jay J rejected an argument from the Defendant that
because most vessels are broken up using the “beaching”
method in South Asia, they could be not liable as they were not
deviating from standard practice.
The judge gave short shrift to this argument: “if standard
practice was inherently dangerous, it cannot be condoned as sound
and rational even though almost everybody does the same”.
Further, Maran (UK) Ltd also relied on a clause in the sales
contract they negotiated for the vessel. In it, the buyer of the
vessel promised to ensure that Maran Centaurus was scrapped in a
responsible yard.
The judge held that the Defendant could not rely on this clause
when it was obvious that it would be ignored.
The shipping industry is known for structuring itself in such a
way to avoid liability and scrutiny. This case could shine a light
on parts of the industry which might cause discomfort to shipping
companies: such as the use of ‘cash buyers’ (middlemen)
to create distance between themselves and South Asian beaches, or
the knowledge that shipowners have of the appalling conditions that
workers such as Mr Mollah deal with every day.
The Court’s finding is in also line with the prevailing
wind worldwide towards stricter environmental and health and safety
practices across the maritime sector. Criminal cases in the Netherlands, Norway and Bangladesh have made it clear that Courts are
becoming more willing to enforce international statutes to prevent
the trans-boundary movements of hazardous waste.
As this was a strike out application, no final determination has
been made on Mrs Begum’s claim against Maran (UK) Ltd.
Nonetheless, it is hoped that we are seeing the beginning of
long-awaited change in the shipping industry’s consideration
for the human cost and environmental damage caused by their
activities. For example it was recently
reported that the world’s largest containership ever sent
for demolition was sent for green recycling in Turkey. The
ship’s price is expected to have been around $100 per ldt
(light displacement tonnage) lower than would have been obtained if
sold for demolition in South Asia.
It is of utmost importance that ship owners meet international
standards for ship recycling, give proper regard to their ships to
ethical yards, and that there is investment in South Asia to
improve work practices, health and safety and the impact on the
environment.
The case continues.
Originally published 06 August, 2020
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