GMS: Response To Recent “Kveikur” Documentary

Thought Leadership is much more than transacting business and the Dollars and Cents we all watch ebb and flow every day. When a company operates its business with true commitment and passion, there is a lot more at stake than just the bottom line. In the ship recycling industry, that commitment and passion is what motivates GMS in ensuring that the ship recycling industry is viewed accurately and impartially by the outside world and not through a prism of intentional misdirection.

With that at the forefront of our work, this edition of Thought Leadership aims to address the recent Icelandic documentary that seems to have intentionally & incorrectly depicted, not only specific shipping companies, but the Indian ship recycling industry at large. As economist Alan Greenspan once stated, “people are entitled to their own opinions, but not their own facts”. It is critical to bear this in mind as one watches the recent Icelandic “Kveikur” documentary titled “Where Eimskip ships go to die”, produced by the Icelandic television and radio network “Ríkisútvarpið (RÚV).”

Unfortunately, the insatiable appetite for NGOs seeking media attention from news and media outlets chasing ratings, seems to once again be the fuel feeding the misinformation and falsehoods that have been reported by the Icelandic media in this so-called “documentary” regarding two vessels that were recently sold by Eimskip. In a breathtaking display of the paltry efforts put in by the so-called “journalists” who “researched” the subject matter, the sensationally misinformed 30-minute documentary increasingly displays the desperation for attention grabbing stories, in an attempt to garner viewer ratings and advertising dollars. The journalists seem to have carelessly embarked on a disinformation campaign and “reported” factually inaccurate information, in an effort solely to generate public interest through “tabloid-style” journalism .

It is therefore no surprise to those in the industry that they have also included references to a previously debunked BBC news story, which also inaccurately reported on the ship recycling industry and recruited the recklessly ill-informed NGO Shipbreaking Platform, in an effort to paint a picture more akin to a fictional show rather than a factual documentary.

With the ship recycling industry being one of the primary pillars of the greater shipping markets that support the worldwide economy, it is critical that outside observers base their news on FACTS and not fiction. It is with this in mind that this piece is aimed at confronting the Icelandic journalists’ inaccuracies in the Kveikur program. FALSE ACCUSATIONS – It is essential to first address a general theme throughout this “documentary” that implies EIMSKIP somehow acted illegally or even criminally, when they sold two of their container ships that were eventually recycled.

It is critical to understand that these ships, which were Faroe Islands-flagged and later converted to Liberian flag, were lawfully sold to legitimate ship owning entities as further trading deals. The sales of these assets were based on standard MOAs (Memorandum of Agreements) and had absolutely no reference to recycling. Although not legally relevant (as these ships were sold for further active trading), neither the Faroe Islands nor Liberia falls under the EUSRR (European Union Ship Recycling Regulation) for the recycling of ships. Right after delivery of the vessels, the ships were put on charter, trading in northern Europe. The vessels remained on time-charter and operated until the end of their minimum redelivery periods.

Regrettably, the globally devastating economic effects of COVID-19 that have been felt worldwide, resulted in the container market being one of the hardest-hit sectors in the shipping industry. As a result of the massive reduction in container cargo movements during the late spring period, the assets in question were redelivered. Having failed to find further employment for the ships for several weeks thereafter, the owners eventually put the ships in the market for resale for further trading once again. At least one of the ships was committed to charterers but eventually failed on subjects. Eventually, the owners had no further option but to make the commercial decision and sell the ships for recycling at a much lower price than the assets’ anticipated residual value at the time.

In reality, EIMSKIP was rather fortunate to have found a further-trading buyer and they were able to monetize the assets’ full trading value for its shareholders at the time it did and EIMSKIP’s management should be APPLAUDED for acting in the best interests of the company and its stakeholders. Contrary to the Icelandic documentary and the NGO Platform’s one-track commentary that falsely misdirects the viewer into assuming that some type of shady or even illegal activity had taken place, the fact of the matter is that neither Eimskip nor the owners of the vessels had engaged in any illegal or criminal activity whatsoever. As such, statements made by these parties could essentially be viewed as defamatory in nature.

It is crucial that the greater shipping industry and the general public continue to hold the FAKE NEWS MEDIA and their irresponsible journalists accountable for their unprofessional indiscretions, in order to avoid having their own distorted versions of reality portrayed to the public, a practice that not only continues to hurt owners throughout the tonnage supply chain or the economic well-being of the ship recycling industry that hundreds of thousands of people rely on, but also the negligent disinformation they continue to spread to their viewers, thereby further creating uneducated and biased opinions. In effect, their efforts seemingly bode on the side of propaganda than news.

DISTORTED SAFETY CLAIMS – The program goes on to incorrectly frame the number of deaths in Alang and its safety record, claiming that there are “dozens of injuries weekly” and that there are “no hospitals” in the area. We would like to inform our readers that GMS has previously highlighted and debunked this aspect of BBC’s fake reporting on the matter, in its earlier response to the BBC documentary that is referred to and cited in this program on several occasions.

Although even one death is unacceptable by any measure or standard, the goal is to foster a recycling industry with ZERO casualties. With this said, it is also essential to bear in mind that in the U.S.A. alone, there are over 20 industries and sectors that have fatality rates higher than the ship recycling industry in India. In fact, based on a recent Business Insider news article, using information from the U.S. Bureau of Labor Statistics, the death rate of the Indian ship recycling industry compared to U.S. industries would fall somewhere between construction equipment operators (ranked #20) and professional athletes (ranked #24).

The EIMSKIP documentary also falsely claims there are “no hospitals” in the area; however, there are THREE 24 hour hospitals in Alang alone. Locations and details of these three hospitals can be easily discovered through a simple Google search — something so basic that the producers of the film failed to even fact check form their desks in Iceland, far from having to physically visit Alang to confirm this for themselves. They have intentionally ignored the great strides that have been made towards improving conditions in Alang and these three hospitals are prime examples of such improvements. It is therefore critical for the press to help recognize the progress, in an effort to help foster and encourage future improvements rather than falsely delegitimize and entire industry because of a hidden agenda.

NEGATIVE BIAS & AGENDA – The format of this documentary makes It increasingly necessary to critically evaluate the possible reasons behind the unrelenting broadcasting of false and misleading information as the program has an obvious and transparent bias towards supporting the European Union Ship Recycling Regulation (EUSRR), and the EU approved yards, which are included as part of the EUSRR.

The producers suggest that the Hong Kong Convention (HKC) is not “formally recognized” and that no recognized certifying agency supports or follows its mandates. This is, in and of itself, wholly inaccurate and one of the many clear examples of the program’s underlying bias agenda, as the program also fails to mention that the United Nations specialized agency that developed the HKC for regulating international shipping called the IMO (International Maritime Organization), did so as a means to globally regulate the “Safe and Environmentally Sound Recycling of Ships.” Sound Recycling of Ships.”

15 countries have now ratified the HKC, many of which are not only from Europe (including Germany, Denmark, Norway, and the Netherlands), but India has also taken steps towards formally ratifying the convention with the 2019 introduction of the bill, aptly titled “The Recycling of Ships Bill, 2019”. Further to this, four leading IACS (International Association of Classification Societies) members currently conduct physical audits and eventually issue a Statement of Compliance (SoC) certificate to Indian recycling yards that qualify. This list includes wellknown international members such as Class NK, RINA, LR, and IR. It is also important to note that the internationally formed “Ship Recycling Transparency Initiative (SRTI)” members’ policies on ship recycling, recognizes, supports and adheres to Hong Kong Convention.

The program ignores the fact that the HKC was primarily created and developed by the international community to ensure that it adequately guided and allowed for the inclusion of southeast Asian based recycling yards, given that their participation has always been deemed critical to the success of ANY large scale international ship recycling regulation. The initial architects of the European regulation intended for their efforts and guidelines to serve as a means to help usher in the HKC more quickly. These facts and many more are omitted as they do not suit the “fake news” agenda of the journalists and the NGO Platform, as they inconvenience and contradict their biased narrative. The UN, IMO and SRTI members have researched and thought critically about the industry and their approach to ship recycling and it is necessary that all ship owners and other governing bodies follow suit!

STEREOTYPED BIAS NARRATIVE (India vs. The West) – In an effort to further diminish and degrade the HKC and to portray the recycling methods utilized in South East Asia in a negative stereotypical way, the program focuses on the “gravity method” of recycling, insinuating that it is “unique” only to South East Asia and that it is inherently “bad for the environment.” The reality is that this tried and tested method of recycling maritime assets is used in many places around the world (including Turkey), not just in South East Asia. In fact, this method is not very different from practices regularly used in the West for dismantling old buildings and large commercial structures.

In the West, it is often referred to in the construction and building industry as “controlled demolition,” however, this fact is intentionally overlooked by the program’s makers. The program’s commentary regarding the EU yard featured in Ghent, Belgium, is also particularly interesting. They claim that 98% of a ship in their care is recycled, with 2% of the vessel going to landfills. This is similar to the recycling figures that have been applicable within Indian yards for decades. EU yards should be applauded for their efforts to finally meet Indian standards on this particular issue.

While EU yards are making efforts to become more competitive with Indian facilities, the videos portraying some of these EU yards in this documentary alone, depict a level of dis-organized operation that likely contributes to these yards’ inability to compete internationally on a cost basis. In reality, it is well known that EU yards pay very little for the ships that they recycle and are not price competitive in global markets. Forms of government subsidies such as forcing EU flagged vessels into these facilities that could allow European yards to be less cost-conscious, coupled with low local steel plate prices, which are just some of the true untold economic factors contributing to the significant disparity in pricing between the EU and Indian recycling facilities. This also brings into question, the true long term viability and survivability of such EU yards.

The documentary also attempts to negatively portray Indian recycling yards by featuring a lone disgruntled Indian yard employee. However, the journalists intentionally fail to highlight the tens of thousands of workers who are happy to be employed at these facilities. Another fact that journalists conveniently (perhaps intentionally) omit in the program, is that workers travel from all across India to attain these coveted jobs, which pay above-average local compensation. Unsurprisingly, the program makers go on to omit the commendable and noteworthy humanitarian efforts and actions undertaken by most Indian ship recycling facility owners during the unprecedented COVID-19 pandemic shutdowns in India. Most Indian yards continued to pay salaries to their employees throughout the shutdown period and in order to further ease the severe financial and social discomfort experienced by these workers, food distribution centers were also set up by many of the local recycling yards to ensure these workers were appropriately supported during these challenging times.

FALSE INFORMATION – The breath-taking lack of initiative towards investigating the content of this documentary was also on prime display as GMS itself was incorrectly referred to and mentioned throughout this program. One such reference was made to a company called “GMS Liberia” that was supposedly used in the transactions of the vessels in question. However, a company by this name does not exist, and if it does, it has nothing to do with GMS or its principals. GMS is an agent, acting on behalf of its principals, which are ship owning companies based around the world.

These principals have diverse interests in maritime assets, ranging from very modern and newly built ships, down to end of life vessels that are often operated, chartered, and traded until being sold for further trading or recycling. The fact remains that GMS, as an agent, negotiates the acquisition of more ships and maritime assets on behalf of its principals than any other company in the world.

WATCHING THE “WATCHDOGS” – GMS remains committed to maintaining a high level of ethics in its operations & commercial transactions and will continue to serve as a guardian and leader of the ship recycling industry.
From the NGO Shipbreaking Platform to the television stations that broadcast sensationalized fake news stories about ship recycling in India, to further their own political narratives & agendas and to increase their viewership, we recognize the evergrowing importance of confronting and speaking out against such falsehoods and voicing the truth for those who are involved in the ship recycling industry. By allowing such misinformation and factual inaccuracies to go unchecked, it is not just ship owners and large companies (who depend on ship recycling in India) that are adversely affected, but also the tens of thousands of people who are employed by and derive their livelihoods from these yards, and who work every day to earn an honest living to support their families. For personal and political reasons, these highly aggressive NGOs have chosen to push a misguided political agenda and the narrative within the EU from a policy and media perspective.

This attack on Indian ship recycling threatens the livelihood of hundreds of thousands of people who are dependent on this industry and who do not have a collective voice loud enough to be heard over the well funded NGOs and media outlets that seem focused on exploiting the hard-working people of the recycling industry, in order to benefit themselves. As these intentionally misguided media assaults are becoming more frequent, maintaining an objective perspective and focusing on unbiased facts is vital. We ask that our readers simply take the time to properly understand and appreciate the tremendous progress that has been made in the South East Asian recycling industry and contact us with any questions about the constant efforts being made to improve.

Finally, for better or for worse, GMS remains the only institution in the ship recycling industry that continuously rises up to confront and challenge the FAKE NEWS MEDIA and their false narratives, with hard-hitting truths and facts. As a result, the company invariably ends up being a prime target on the “hit list” of those determined to derail the progress of the HKC and who are ultimately intent on stopping the ship recycling in the Indian subcontinent. We invite ship owners and their associations, capital providers, underwriters, shipbrokers, class societies, auditors, and all those who work in this industry and have studied this business up close, to rise up, speak up, and join us in being thought leaders that will make a difference!
Source: GMS