Bangladesh, one of the world’s largest buyers of EOT (End-of-Life Tonnage), has ratified the Hong Kong Convention (HKC). The ratification is still several formal steps away, but the decision ensures that Bangladesh will accede to the HKC, bringing it one step closer to full international entry into force.
The ratification decision has been in the making since 2018, when the provisions of the HKC were incorporated into Bangladesh’s domestic legislation. The challenges posed by COVID-19 prevented Bangladesh’s beaching yards from upgrading to meet the standard of the HKC, but yards that have not upgraded will still have another two years to comply.
The announcement was welcomed by those advocating for European access to the South Asian shipbreaking market. Currently, European shipowners are limited to a list of approved yards from the EU, all of which are lower paying recyclers from Turkey, the EU, and the US. These shipbreakers make up only a small portion of the market and charge millions of dollars less per large tanker/bulker.
"The Hong Kong Convention compliance has become the norm for ship recycling sales and the recycling process itself, and ratification by a leading ship recycler like Bangladesh confirms this, and with its entry into force, we will see a global level playing field, which has been developing for a generation, in the ship recycling industry. Regional systems that disregard the economic reality of the industry are easy to bypass, and this positive development ensures sufficient compliant recycling capacity." - John Stawpert (International Chamber of Shipping)
India, one of India’s closest competitors in the EOD segment, has ratified the Convention and has been trying for some time to be included in the European Union SRR for its yards.
Pakistan is the only South Asian scrap destination that has not ratified the Hong Kong Convention (HHC). Pakistan’s end of life (OL) imports have been affected by political and economic turmoil, and its scrap prices are low compared to regional counterparts, according to GMS, the leading cash buyer in South Asia.
