Dutch banks ABN AMRO, ING Bank and NIBC, together with the Scandinavian counterparts SEB and DNB, announced today at NOR-Shipping in Oslo that they are all introducing Responsible Ship Recycling Standards (RSRS) for their ship financing.
The announcement was made during the biannual industry gathering with the aim of including more banks into the initiative. The Norwegian fund, KLP, which in 2016 commissioned a report by the International Law and Policy Institute on shipbreaking, had also already taken a stance to reject beaching practices.
The collective move to include ship recycling conditions on loans by leading banks and financial institutions with large shipping portfolios has been described as a positive step to imposing responsible practices on shipowners by NGO Shipbreaking Platform.
"When there is pressure for change coming from shipping financers, who understand that they have a direct tangible impact on the shipping industry, shipowners, rather than finding crafty loopholes in the law, will feel the bite if they do not choose to recycle responsibly off the beach," the NGO said.
"We welcome the leading role taken by the banks to ensure a departure from the unnecessarily dirty and dangerous practice of beaching, and expect that investors and clients of shipping that are increasingly pushing for higher standards for ship recycling will join the initiative," said Ingvild Jenssen, Founder and Director of the NGO Shipbreaking Platform.
Majority of ships are still scrapped in South Asia to beaching yards notorious for their low working standards and high incident rates.
A total of 128 end-of-life ships were sold for scrap to the South Asian beaches during the first quarter of 2017, according to the data by the NGO Shipbreaking Platform.
The number represents 65 percent of ships which reached the shores of Bangladesh, India and Pakistan, out of a total of 196 vessels sold for demolition worldwide during the three-month period.