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Shipping, Issue 1492
ship-breaking.jpg WHILE the International Maritime Organization (IMO) is midway through a project to improve the safety and environmental impact of ship recycling in Bangladesh, it emerges that one of the key players in this deadly trade is an IMO delegate who runs a small company operating from Romford in east London.

The IMO plan is commendable because the scrapping of toxic ships on the beaches of Bangladesh and other south Asian countries has long been a dirty business, with terrible working conditions and inadequate safety precautions for workers as they dispose of toxic substances such as asbestos, arsenic and mercury. At least 35 workers died in ship-breaking yards in India, Pakistan and Bangladesh last year; and only last month two men died when a fire broke out in the engine room of a beached ship in Chittagong, Bangladesh.

A recent report by the investigative group Finance Uncovered has found that the Romford-based St Kitts and Nevis International Ship Registry Ltd, known as Skanreg, is very active in this field. It charges ship owners to register vessels under the shipping flag of St Kitts & Nevis. According to figures from the NGO Shipbreaking Platform, 143 St Kitts & Nevis vessels have been scrapped on South Asia’s beaches in the past three years. All the registrations were arranged by Skanreg.

Last voyages
Almost half the 532 ships broken on the beaches of south Asia in 2018 flew the flags of three small tax havens: the Comoros Islands in the Indian Ocean, Palau in the Pacific, and St Kitts & Nevis. Under EU rules, there is a ban on ships being exported from European ports to the beaches of south Asia. But ship owners have a big financial incentive to circumvent the rules by re-registering. A beaching yard in a developing country will pay $10m for an oil tanker, whereas at an EU-approved recycling facility the ship owner may have to pay for safe disposal.

Companies such as Skanreg offer short-term registration for “last voyages”, so avoiding the strict rules of other shipping flags. Swapping the flag of a ship to reduce costs and avoid laws is known as “flag hopping”.

Ingvild Jenssen, founder of Shipbreaking Platform, said: “No ship owner can claim to be unaware of the dire conditions at the beaching yards, still they continue to sell their vessels to the worst yards to get the highest price for their ships.”

Toxic ships
Skanreg’s founder and part-owner is Nigel Smith. He is also the representative for St Kitts & Nevis at the IMO. He told Finance Uncovered that registering vessels for scrap was only a small part of Skanreg’s business and that responsibility for the toxic ships is “a commercial matter”.

Given that the IMO is trying to improve ship-breaking conditions, the Eye asked if it knew of Smith’s stake in Skanreg when he was appointed. The IMO’s spokesperson replied: “The decision as to who represents a particular government at IMO is a decision for that government.”

The Eye also asked if Smith recused himself from IMO discussions around ship-breaking. The IMO did not respond.

PS: The IMO adopted the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships in 2009. It sets recycling standards but has been heavily criticised by environmental and human rights groups for rubber-stamping the inadequate disposal of toxic waste and its failure to ban scrapping methods such as beaching. The soft sands of beaches in India, Pakistan and Bangladesh don’t safely support heavy lifting equipment; and they allow pollution to seep into the coastal environment. No developed country allows ships to be broken up on its beaches.

More top stories in the latest issue:

MOTT’S RATES
More on shady practices – tarting up an agent’s flat for £1 apperently! – at Mott MacDonald, one of the government’s largest engineering contractors.

KILLING FIELDS
The National Probation Service will have to answer for its alleged failure to supervise violent offenders when inquests open into the deaths of three of their victims.

AWOL AMEY
Amey has pulled out of the privatised probation service, increasing pressure on justice secretary David Gauke to abandon plans to re-privatise the service.

HIGH PRINCIPALS
As Swansea University announces the arrival of a new vice-chancellor, his current staff at Leicester sound a warning to their colleagues in Wales.

DEEPCUT LATEST
Blunders in collecting evidence at the scene of Geoff Gray’s death at Deepcut barracks will be a ‘major hindrance’, the coroner at his second inquest has said.

MANUEL LABOUR
Britain’s busiest company director appears to be one Manuel Santos, 72, who in the last three years is or has been the director of 5,042 shell companies!

SELECTIVE MEMORY
A new book by a man who claims he was sexually abused by Sir Edward Heath is a revised version of a misery-memoir published in 2017 – which made no mention at all of Grocer Heath.

THICK BLUE LINE
Police who exposed a firefighter who had alerted them to his boss’s dodgy car deal, have apologised for giving the whistleblower’s name to his employer.

MISCARRIAGES OF JUSTICE
The new boss of the Criminal Cases Review Commission, criticised for not referring more dodgy convictions to appeal, offers a novel explanation.

To read all these stories in full, please buy issue 1492 of Private Eye - you can subscribe here and have the magazine delivered to your home every fortnight.

Next issue on sale: 2nd April 2019
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Private Eye Issue 1491