The Norwegian pension fund Kommunal Landspensjonskasse (KLP) excluded the Norwegian-led oil shipping company Nordic American Tankers (NAT) from its investments in January in a bid to help prevent the controversial practice of scrapping ships on beaches in Asia.
The fund, which has NOK675.6bn (€69.6bn) under management and runs pensions for local authorities, said this latest move had been made as part of over a decade of work it had been doing to prevent the practice, which it says causes not only serious environmental pollution but also gross violations of human rights.
KLP said its work on this issue began in the mid-2000s when the pension fund became aware that ships belonging to the companies Odfjell and BW Gas had ended up on beaches in Asia. A 2009 documentary put the problem into sharper focus.
Jeanett Bergan, head of responsible investments at KLP, said: “The fact that these ships are continuing to end their lives on these beaches is a declaration of failure. It is the grotesque shadow side of international trade and shipping and the consequences of a philosophy which says profit trumps all – including human dignity, life and enviroment.”
The non-governmental organisation (NGO) Shipbreaking Platform – whose data KLP said it has used in its work – said recently that companies sell commercial vessels for the highest profit to beaching yards that disregard worker rights with unsafe working conditions.
NGO Shipbreaking Platform executive director and founder Ingvild Jenssen said: “No ship owner can claim to be unaware of the dire conditions at the beaching yards, still they massively continue to sell their vessels to the worst yards to get the highest price for their ships.
“The harm caused by beaching is real. Workers risk their lives, suffer from exposure to toxics, and coastal ecosystems are devastated,” she added.
The NGO reported that in 2018 at least 35 workers died when breaking apart the global fleet. It also said that NAT, which is listed on the New York Stock Exchange, is the second worst recorded dumper of ships. According to the NGO, the company said it made $80m (€71m) from the sale of eight vessels to beaching yards in India and Bangladesh.
Since the exclusion of NAT, KLP has blacklisted five other companies on this basis and said that it has questioned 30 companies in recent years regarding their scrapping practices.
The fund also said that from the beginning of 2018, all ships sailing under EU flags must be scrapped in yards on the EU’s white list.