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Bangladesh Shipbreaking

Bangladesh shipbreaking case is causing international ripples

Alex Wessely and Rachel Bonner explain the important ramifications of a recent judgment concerning a case which involves shipbreaking in Bangladesh.

Posted on 05 August 2020

“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.