MSC urged to align operations with global standards amid environmental violations

One of the world’s largest container shipping companies, Switzerland’s Mediterranean Shipping Company (MSC), has been put under the spotlight for its “substandard and hazardous” dismantling of obsolete vessels on tidal beaches in South Asia, the Belgium-based NGO Shipbreaking Platform has stressed.

Although the Swiss giant has faced criticism for breaching international environmental and labor rights standards before, the NGO Shipbreaking Platform believes that the company has so far not made ‘sufficient steps’ to improve the alleged practices.

According to the UN Conference for Trade and Development (UNCTAD), in the 12 months leading up to January 1, 2022, among the top 25 ship-owning countries, Switzerland recorded the highest increase in tonnage at 17%, followed by China at 13%.

In terms of the number of vessels scrapped under dangerous conditions on South Asian beaches, the NGO Shipbreaking Platform underscored that Switzerland in general has ‘slowly taken the lead’ here, as well.

Overall global numbers inspire little confidence, too. In a 2023 analysis, the NGO Shipbreaking Platform found that out of the 446 ocean-going commercial ships and offshore units scrapped during that year, some 85%, equaling 325 in total, were taken apart on a beach in Bangladesh, India, or Pakistan.

Out of the 90 Swiss-owned vessels scrapped on South Asian beaches in the last nine years, the Belgian NGO said that 80 of them belonged to MSC. From a broader perspective, as per the NGO, in the last 15 years, the Swiss shipping player has sold more than 100 end-of-life vessels for scrapping in this part of Asia.

Among those, in the last six months, the company allegedly scrapped nine on the beach of Alang in India, or a total of 27 in the last two years, including the MSC Floriana and MSC Giovanna.

It is understood that these units left respectively from Spanish and Turkish waters, directly violating European and international laws prohibiting the export of hazardous waste from OECD to non-OECD countries.

Yet, these occurrences have not been confined to Alang. As understood, some MSC vessels also ended up in Chittagong, Bangladesh, where labor and environmental conditions have been described as “generally much worse” than Alang.

In fact, Bangladesh itself has been under the spotlight for recent tragedies concerning shipbreaking practices, particularly in the case of MT Suvarna Swarajya where an explosion on the tanker led to six deaths and over a dozen severely or critically injured workers.

MSC’s management of its end-of-life assets comes at a ‘stark’ contrast when the company’s financial strength is considered, the NGO further argued. With a whopping $86 billion turnover in 2022, MSC has been expanding at a “massive rate” with estimates suggesting its capacity could soon match the combined fleets of competitors, Denmark’s A.P. Møller – Mærsk and Germany’s Hapag-Lloyd.

In spite of the pecuniary capacity to sustainably recycle its fleet, however, the NGO Shipbreaking Platform insisted that the Swiss business “prefers to accumulate profits” and in doing so expose workers, coastal communities and sensitive ecosystems to harm.

Specifically, in a new report, the platform cited several examples of this, going back as far as 2009. Back then, the MSC Jessica caught fire during dismantling in Alang, resulting in the deaths of six workers who were in the engine room using torches to cut the ship apart when the fire broke out.

Much more recently, namely in 2017, the MSC Alice was dismantled at the Honey Ship Breaking yard, which, despite claims of compliance with international standards, was reportedly found to still leave ‘significant’ environmental damage and safety issues unaddressed.

While MSC has shown certain environmental initiatives, such as the Waste Shipment Intelligence Service launched in collaboration with the UK Environmental Agency to curb the illegal trade of waste on-board its vessels, the NGO Shipbreaking Platform highlighted that the efforts are juxtaposed to “evident cases of malpractice”.

“Whilst we applaud MSC for its commitment to assist authorities in combatting illegal waste trade, it is ironic, even hypocritical, that MSC does this all whilst continuing to dump its own toxic waste on beaches in South Asia. We urge MSC to reform its ship recycling policy to ensure that its end-of-life vessels are disposed of in line with the highest safety and environmental standards,” Jenssen stated.

Currently, the Belgium-based NGO remarked, MSC’s recycling policy remains weak, relying solely on the Hong Kong Convention (HKC) which has already been under scrutiny for not banning beaching and properly managing hazardous waste downstream. At the same time, while MSC has stated that it audits scrapping yards, Jenssen and her team argue a “lack of transparency” in this process.

In fact, as per the NGO, independent audits have found some big flaws in MSC-used yards that claim HKC compliance, particularly in South Asia.

To add, the NGO Shipbreaking Platform reminded that MSC’s top management had also been criticized by Swiss media for its lobbying efforts, reportedly directed at the Swiss Federal Tax Administration (FTA). The claim was that this was done with the intention of introducing a ‘favorable’ tonnage tax regime in the country, which could have resulted in virtually zero taxation for the shipping major.

However, Switzerland’s National Council allegedly rejected the draft proposal in May 2024.

Considering everything, the Belgian NGO has accentuated that now more than ever is the time for not just MSC, but all shipping industry players, to “truly” shift – or rather, align – their operations to meet all international environmental and labor rights standards, especially given the fact that global (sustainability) regulations are practically right around the corner with just a bit over two decades left to go net zero (by 2050).