Bangladesh shipyard explosion highlights regulatory failures

Ship owners often use intermediaries and exploit loopholes to bypass international laws that prevent ships from being sent to dismantling yards in Bangladesh, which lack proper environmental and labour safeguards.

The MT Suvarna Swarajya, previously owned by the Shipping Corporation of India, was sold to Last Voyage DMCC, a subsidiary of Best Oasis, one of the largest cash buyers of ships, in March 2023. Last Voyage DMCC then sold it in May to S.N. Corporation in Bangladesh for dismantling, despite the company's record of poor safety, with at least 14 deaths and 22 injuries since 2010, before the sale.

"The tragic explosion at one of SN Corporation's shipbreaking yards underscores the dangers of an international regulatory system set up to profit the shipping industry rather than protect workers' rights and safety," said Julia Bleckner, senior health and human rights researcher at Human Rights Watch.

"The Hong Kong Convention and its so-called certificates of compliance, like the one granted to SN Corporation, create the dangerous illusion that these yards are safe and environmentally sustainable."

The explosion took place at S.N. Corporation's Unit-2 yard, which had been certified just a few months earlier by Nippon Kaiji Kyokai, following the standards of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, overseen by the International Maritime Organisation (IMO). While the Convention will only officially take effect on June 26, 2025, some yards have already started obtaining voluntary certifications based on its guidelines.

Human Rights Watch, the NGO Shipbreaking Platform, and other organisations have consistently raised concerns that the Hong Kong Convention provides insufficient environmental and safety protections.

Human Rights Watch sent enquiries to S.N. Corporation, Best Oasis, the Shipping Corporation of India, and Nippon Kaiji Kyokai about the September 7 explosion. Nippon Kaiji Kyokai responded on September 15, stating that its audit was based on IMO guidelines. S.N. Corporation, Best Oasis, and the Shipping Corporation of India did not reply.

Countries attending the International Maritime Organisation's Marine Environment Protection Committee meeting on September 30, including Bangladesh, should agree that the Hong Kong Convention does not replace the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, which covers end-of-life ships and provides stricter controls, the organisations said.

Following the explosion, Bangladesh authorities shut down the yard where the incident occurred indefinitely, halted all work on the MT Suvarna Swarajya, and launched an investigation. The Department of Environment has suspended the yard's environmental clearance and ordered SN Corporation to explain within three days why the yard should not be permanently closed.

According to data from the NGO Shipbreaking Platform, six workers have been injured across S.N. Corporation's three yards in 2024 alone. Two of these injuries occurred on the MT Suvarna Swarajya in May: one worker's leg was broken by a falling pipe, while another worker's hand was injured by a steel rope. In 2021, a worker died after falling from a ship during cutting operations, and in 2020, another worker died after being struck by a falling metal cable in another S.N. Corporation yard.

In July 2022, workers at S.N. Corporation's yards told Human Rights Watch about dangerous conditions in the shipbreaking yards. A 27-year-old cutter said: "I face risk every day that I work in the shipbreaking yard. Nobody wants to work here because they know there is a risk and accidents may occur at every step. The owners do not provide us with any safety measures. They overlook these things."

He added that while the yard provided him with a helmet and gloves, he had to buy his own boots, goggles, and protective clothing, even though he earned less than US$1.50 per hour, far below Bangladesh's minimum wage for shipbreaking workers.

While Bangladesh's interim government has taken action against S.N. Corporation's failure to ensure worker safety, the international corporations involved in the dismantling of the MT Suvarna Swarajya should also be held accountable, the groups said.

If found responsible, companies like S.N. Corporation, Best Oasis, and the Shipping Corporation of India should cover the medical expenses and rehabilitation costs for the injured workers, and provide compensation to the families of those killed. Despite being asked about measures for compensation, none of the companies responded.

Cash buyers such as Best Oasis operate as brokers for end-of-life ships, allowing the original owners and operators of these vessels to avoid responsibility for accidents and fatalities that occur during the dismantling process.

Given that most cash buyers, including Best Oasis, sell ships almost exclusively to shipbreaking yards in South Asia, where labour abuses and environmental damage are well-documented, shipping companies that sell their vessels through these buyers are likely aware that their ships will be scrapped under harmful conditions.

Cash buyers often use shell companies or less-regulated ship registries to obscure the ownership of ships before they are sold to shipbreaking yards that have low environmental and safety standards.

Many shipping companies, including those in Europe and North America, use cash buyers to bypass international and regional rules that prohibit them from sending ships to substandard yards, prioritising profit over compliance.

In 2019, the Bangladesh High Court ruled that ships flying flags that are gray or black-listed for frequent violations of port state controls should not be allowed into Bangladesh. However, more than 100 ships were imported under these flags in violation of the court's ruling last year.

To be imported to Bangladesh for dismantling, a ship must obtain a "No Objection Certificate" from the Bangladesh Ship Recycling Board, confirming that the vessel contains no hazardous materials. The Department of Environment must also issue an environmental clearance certificate, and the Department of Explosives must certify the ship as "gas free for man entry" and "gas free for hot work."

In a 2023 report, Human Rights Watch reviewed 21 leaked certificates for hazardous materials onboard ships sent to Bangladesh for dismantling. The language used in these certificates was often identical, raising concerns that inspections were not being properly conducted, thus increasing the likelihood of accidents like the MT Suvarna Swarajya explosion, according to the organisations.

Bangladesh's interim government should enforce the 2009 High Court order that suspended the import of ships for recycling until worker safety standards were met. The government should also rigorously implement the High Court's 18-point directive and follow-up rulings requiring stringent health, safety, labour rights, and environmental protections, including the ban on importing ships under flags that are gray- or black-listed.

The Ministry of Industries should immediately shut down shipbreaking yards that employ children, conduct night operations, or commit severe violations of worker rights. It should also set a timeline for all yards to relocate ship dismantling operations away from beaches, where dismantling is more dangerous and environmentally harmful. Proper industrial platforms should be installed in accordance with the Basel Convention's guidelines for ship recycling.

Following the UN Guiding Principles on Business and Human Rights, shipping companies should implement due diligence policies ensuring oversight of where ships are recycled. Companies must ensure that their ships, including those previously owned or operated, are not dismantled in yards using the beaching method.

Human Rights Watch and the NGO Shipbreaking Platform stressed the need for stronger regulation in the ship recycling industry and urged companies to stop using cash buyers.

"The fire on the MT Suvarna Swarajya is a grave and revolting reminder both of the shipbreaking sector's failure to comply with national requirements and of the weak standards set by the Hong Kong Convention," said Ingvild Jenssen, director at the NGO Shipbreaking Platform.

"It calls for action also at the international level to put a halt to practices that cause irreparable damage, including by taking apart ships laden with toxic substances on tidal mudflats. Beaching can never be safe, nor environmentally sound, and, if allowed to continue, amounts to endorsing the exploitation of vulnerable communities and ecosystems in developing countries." (ANI)