Ships End in North Sydney?

There I was, looking for signs of shipbreaking on Sydney harbor and I forgot to mention North Sydney. Apologies to all my North Sydney readers, who must have been left scratching their heads.

How did I forget about that time the Cape Breton Regional Municipality (CBRM) sold Archibald’s Wharf, a waterfront recreational property off North Sydney’s main street, to Canadian Maritime Engineering (CME)?

How could I have failed to recall citizen concerns that the company would use its newly acquired property for a shipbreaking operation?

Or CME President Tony Kennedy’s response to those concerns? Perhaps your memory is a bit hazy too, this excerpt from a May 2015 Chronicle Herald article will jog it:

Kennedy said the work would include removing various components, such as weapon systems, from decommissioned government vessels but stopped short of calling it ship breaking.

“It’s not our intention to do ship breaking. We’re not into scrap business. Our intention is not to take ships apart. We’ll be dealing with anything that’s controlled under the Defence Production Act.

“Our main focus, our company’s main mandate, is to expand our fabrication business. This includes our ship repair, shipbuilding business, vessel construction and manufacturing, which is proven to be safe and clean.”

 

VARD Report

Kennedy may have “stopped short of calling it shipbreaking” but Vard Marine Inc had no trouble using the term in this 2016 report for Transport Canada (TC) on Canadian shipbreaking and recycling capacity.

Look at the entry for CME North Sydney in this table of “Potential Large Vessel Disposal/Recyling Facilities” from that report:

Source: Vard Vessel Recycling and Disposal Final Report, March 2016

VARD’s research consisted of “literature surveys, targeted questionnaires, and discussions with selected stakeholders.” Much of that literature came from TC itself, which had already begun compiling an inventory of Canadian shipbreaking/recycling facilities. (Excluding, it’s worth noting, the Irving Shipyards in Halifax as they will “be fully occupied with new construction for the foreseeable future.”)

I requested a copy of a report entitled Review of Ship-Breaking (Ship Recycling) in Eastern and Central Canada, December 2014 from Transport Canada but was told it contained confidential third-party information and that I would have to file an access to information request (which I will) to get a copy.

Whether it gleaned its information through a stakeholder interview, a literature review or a completed questionnaire, VARD was sure enough of CME’s plans for North Sydney to include them in its table and to state:

In Nova Scotia, the AECON/Fabco Pictou Shipyard recently conducted the shipbreaking and
recycling of two Department of National Defense (DND) vessels, the HMCS Terra Nova and the
HMCS Gatineau. The Canadian Maritime Engineering North Sydney Shipyard is also seeking
opportunities to perform shipbreaking of steel ships. In addition, the Lunenburg Foundry Shipyard has conducted shipbreaking of former steel fishing vessels but the number of projects have been limited.

Which is interesting not just because it seems to contradict what citizens were told at the time of the Archibald’s Wharf sale but because the report’s general take on large vessel (over 100 gross tons) shipbreaking is that it isn’t much of a business proposition in Canada.

 

Unattractive economics

Large vessels, says the report, “face a variety of barriers to being recycled in Canada,” beginning with their relative scarcity — the only ships likely to be recycled in Canada are ships owned and operated in Canada and there are only 2,700 vessels that meet VARD’s definition of “large” (over 100 gt) in the Canadian Large Vessel Registry.

(Which is why, I should note, much of the report is devoted to small — under 100 gt vessels — of which there are 4 million in Canada; the “great majority” being recreational vessels.)

The over 100 gt vessels tend to be steel-hulled commercial or government ships:

 

Source: Canadian Large Vessel Registry

 

The Canadian Navy also has “roughly 30 units” that fall into the “large vessel” class, although these are not included in this list (for reasons the authors do not explain). The Navy is committed to recycling its ships domestically and is willing to pay a premium to do so.

Also worth noting: those barges listed above are more attractive to recyclers than are “self-propelled” vessels — they have “few systems and little equipment” on board, therefore fewer hazardous materials, and the steel and other metals used in their construction tend to have significant scrap value.

In general, though, large-vessel disposal in Canada is not exactly a going concern:

A small number of large vessels are disposed of in Canada in any year. There is sufficient capacity in most regions of the country to handle these disposals by shipbreaking and associated recycling of some of the materials; however, the economics are unattractive for most owners. The labour and other costs for domestic disposal are high compared with international shipbreaking, and the prices paid for recyclables such as scrap steel are low. As a result, domestic shipbreakers can only compete where the costs and inconvenience of an overseas disposal outweigh these other cost factors. Also, in many cases Canadian owners prefer to sell ships approaching their end of life to other operators, disposing of their own disposal problem in the process.

VARD notes that the “pass the buck” approach to end-of-life issues applies not just to Canadian commercial vessels:

…a number of Coast Guard ships have been sold over the years to other governments and to private sector interests.

 

Social license

When a ship cannot be sold, VARD says ship owners make their disposal decisions based on three factors: economics, convenience and social license.

A domestic option will need to be cost-competitive with other alternatives. However, lowest cost is not always the deciding factor. Most operators have a limited level of resources to manage ship disposal (and other decisions) and will favour options which simplify the process. Local facilities may have advantages, including ease of delivery.

MV Caribou at Alang shipbreaking yards, India. (Photo via VARD Vessel Recycling and Disposal Report)

The social license factor is particularly interesting and the report’s discussion of it is worth quoting in full:

Social license is somewhat more complex. Many ship owners do not want to be involved with operations that generate poor publicity, but this could arise with either domestic or overseas disposal if, for example, a Canadian facility is accused of using unsafe working practices. This has happened in the past and continues to reverberate – shipbreaking in Newfoundland in the 1970s is still being blamed for health and environmental damage some 40 years onwards. In the 1970’s the Marystown Shipyard, owned by the Newfoundland and Labrador government, conducted the dismantling of the SS Baccalieu passenger ferry and its sister ship the SS Burgeo. Since then, numerous concerns and complaints regarding health and safety issues have been raised, which in 2007 resulted in the provinces Workplace Health and Safety Compensation Commission (WHSCC) compensating 15 former workers following a disease claim from exposure to asbestos. The yard has not conducted any shipbreaking since it was privatized in 2010 and the quest for compensation from various activist groups for their work related illnesses continues.

Some owners are also increasingly cautious over potential adverse publicity following end-of-life sales. The MV Canadian Miner was sold by Upper Lakes Shipping (ULS) to foreign interests with the intention of scrapping the ship in Turkey. When the final voyage turned into a very public wreck off the coast of Nova Scotia, ULS still suffered from the fallout, although the sale had removed its formal liability. When Marine Atlantic sold the MV Smallwood and MV Caribou, the sales terms included a condition that if the buyers decided to recycle the vessels, it would be done in a yard with full green recycling facilities in compliance with International Maritime Organization (IMO) guidelines. In fact the ships ended up on the beach in Alang, one of the most notorious breaking sites worldwide. There was considerable public criticism of this, though no direct consequences for any of those involved.

 

Jobs, jobs, jobs

While Canadians working in shipbreaking are paid far more than their counterparts in Asia, their salaries are markedly lower than those in shipbuilding or ship repair. Says VARD:

Shipyard workers in Canada are typically unionized and paid in the range of $25-50/hour, depending on location and skill set. This is somewhat above the general Canadian salary range for labourers, which is likely to be more typical for shipbreaking operations. There the median Canadian salary is around $18/hour…

Because shipbreaking involves the disposal of hazardous wastes, it falls under Canadian and provincial environmental and health and safety regulations which, says VARD, impose “strict controls…on working conditions for those involved.”

The report also notes that whereas in the countries most associated with shipbreaking — China, India, Bangladesh, Turkey — the work is done in dedicated facilities, in Canada shipbreaking tends to be done in the same shipyards offering shipbuilding and repair services.

So Canadian large-vessel shipbreaking is safer and better paying than offshore shipbreaking, but there’s still something about it that makes it less than appealing as an activity for your town’s waterfront district.

And that’s not even me talking, that’s Vard, which gets the last word on this subject:

Shipbreaking is not a very attractive industrial activity from a visual, auditory or other standpoint.

 

 

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