The Ship Recycling Transparency Initiative published an annual progress report, compiling disclosure information from twelve shipowners sharing their ship recycling policies and practices, while providing updates on progress against the initiative.
To remind, SRTI aims to accelerate a market-driven approach to responsible ship recycling, enabling lenders, investors, cargo owners, and others to make informed decisions and reward good practice.
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As explained, 2020 saw the SRTI bring together the ship recycling community to discuss key topics for the industry: data and transparency; circular economy; and the role of financial stakeholders in demanding and enabling disclosure and accountability.
Key points:
- 3439 vessels are owned and operated by shipowners currently disclosing their approach to ship recycling via the SRTI.
Ship recycling policy and standards
The first section of the SRTI disclosure aims to get an overview of the policies and standards the shipowner adheres to, including international legislation and conventions, restrictions based on recycling method and/or geography, and policies for selecting a yard or buyer for recycling.
Ship recycling contract
- A ship recycling contract is a contract for the sale of a ship for the purpose of recycling.
- Companies may use industry contract templates, such as BIMCO’s RECYCLECON, or develop their own. In either case, the contract may include, for example, a requirement to recycle the vessel in a specific facility, or requirements for access to the yard during the recycling process for monitoring and auditing purposes.
- 8 shipowners always or sometimes use a standard contract for the sale of a vessel for recycling.
Inventory of hazardous materials (IHM) and ship recycling documentation
- 100% of disclosing shipowners provide the buyer or recycler with a class approved IHM, as well as all relevant certificates, plans, procedures and documents in line with the shipowners’ policies and standards.
Implementation of the ship recycling policy and standard
- The final section of the disclosure questionnaire focuses on the implementation of the ship recycling policies and standards during the recycling process.
- Shipowners may require access to the ship recycling facility prior to, during, and after the recycling process for audits and monitoring. This may include the presence of a company representative through the recycling process and the right to stop work at the facility in the event of an incident.
- Shipowners may also have additional requirements for the yard in line with, for example, labour and human rights policies and standards, such as requiring grievance mechanisms for workers or the right to collective bargaining.
The coming decades will see ship recycling play a pivotal role as the shipping industry sets out to achieve its decarbonisation goals and shipowners execute their fleet transition plans, recycling older vessels. At the same
time, growing momentum toward a sustainable shipping industry will bring increased pressure for shipowners, from customers, investors, and others, to report and take action on environmental, social, and governance issues.
Concluding, the past month has seen three new signatories join the initiative across the insurance and shipowner sectors, among others the Swiss Re Corporate Solutions, NYK Line, and the American Hellenic Hull Insurance Company, bringing the total number of signatories to 29.
Explore the annual report here
