Total Waste Disposed

CNCo monitors waste generation both ashore and aboard. CNCo’s owned and chartered tonnage follow the IMO MARPOL Waste categorising system.

It was designed to control waste management on board vessels and define the ways in which different materials can be handled, either through disposal ashore, to sea, or disposal through incineration on board.

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The following categories are defined and included in the reportnig from our ships under MARPOL:

Cat. 1     Plastic (discharge to shore only)

Cat. 2     Biodegradable timber and paper materials

Cat. 3     Ground biodegradable rags, glass or metal

Cat. 4     Paper products, rags, glass, metal, bottles, cargo residue etc.

Cat. 5     Food waste

Cat. 6     Incinerator ash (non-plastic)


As a company determined to emphasise the importance of sustainable development and reduce its impact on the environment, CNCo also monitors the following from its own ships, in addition to the categories above:

  • Batteries sent ashore
  • Drums sent ashore
  • Waste oil sent ashore
  • Scrap metal recycled ashore

In our operating offices, CNCo endeavours to reduce paper and printer cartridge usage and wastage by recycling both.

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2012 Case Study: CNCo’s decision to seek and use responsible, “Green and Safe” ship recycling yards when recycling the four “D class” ships.

The China Navigation Company (“CNCo”) voluntarily adopted a policy in 2012 as it started its fleet rejuvenation programme that “It would only send vessels for recycling to yards that have valid and verified certification issued by a reputable independent third party against all standards: ISO 9001:2008, ISO 14001:2004, OHSAS 18001:1999 and particularly ISO 30000:2009, and preferably be an “A” member of the International Ship Recycling Association”.

It is widely reported that a large number of ship recycling yards globally using the beaching method have poor (or very poor) health, safety and environmental standards and are often found using child labour along with violating labour and human rights. This evasion (or “leakage”) of the costs of responsible recycling by some shipowners is causing wholly avoidable harm to both the beaching yards’ workers and the nearby communities.

Our corporate recycling policy will not permit us to support this and so we have taken the decision, at an acknowledged small cost premium, to go beyond the existing legislation and to positively promote the use of, and in so doing hopefully encourage the expansion of, more responsible “Green and Safe” ship recycling yards.

This has not gone unnoticed by the yards we have used and they, and others, have seized on this as a differentiating business opportunity that can deliver them a higher margin in a keenly cost-driven global commodity market.

It is also simultaneously a way for the yards to both maintain and enhance their ‘local licence to operate’ by the provision of a safer workplace for their employees, a less polluted environment and thus lead to a more harmonious society for the key stakeholder communities.

Already around 19% of ships to be recycled are reported to be routed to “Green and Safe” yards.

24 years ago, the then Chairman of the Swire group exhorted all companies to “always seek to be ahead of legislation rather than reacting to it: that even if the environmentally “clean” way of doing something is more expensive and therefore on the face of it uneconomic, we should always, regardless of mandatory legislation, have a close look at the overall feasibility of adopting such a practice”. CNCo and all other group companies still follow this today.

Even if only a percentage of the publicity is correct, and the ship recycling yards that practice beaching do cause harm to workers and the environment in their surrounding communities, this can be mitigated by a commitment from shipowners to not support those yards commercially.

In 2012, as we commenced our fleet rejuvenation programme, and recognising that many of the old ships would be sent for recycling, we discussed and adopted the policy detailed in the summary on the previous page. We did this in the knowledge that in the early years this may cost us a small premium but senior management decided that responsible recycling was the most sustainable option.

The key decision requires the adoption of a completely new view of the way the company defines the boundaries of its operations. Historically, responsibility for an asset has ceased on completing the sale transaction. In the new paradigm, the prior owner now continues to take some responsibility for its asset, (in this case – its responsible recycling) after all liabilities and responsibilities would hitherto have been passed to a third party: the willing and aligned buyer.

There are a number of yards that have been externally and independently audited by the EU and awarded “Green and Safe AA” status. Already around 19% ships to be recycled are reported to be routed to yards rated / operating this way. This is a start, but our industry has a long way to go still. For CNCo’s ships being recycled in 2012 a brokerage commission was paid to ensure that the recycling process was carefully managed.

Recycling Plans in accordance with the still not adopted HK Convention were produced before work started. The Green and Safe yards chosen were subject to on-site Superintendency and number of detailed audits from both our Fleet Managers plus Lloyds Register (“LR”) which was engaged as our independent process monitor. Close out payments were dependent on the production of a satisfactory recycling completion report by LR.

The yards were clean, and importantly injury-free, whilst ‘our’ ships were there, and any hazardous waste was all disposed of appropriately.

Working closely with the yards to achieve successful recycling was an iterative process. LR audited and issued non-conformances during the recycling, but the yard took these in the spirit of continuous improvement and closed them all out prior to the completion of the recycling.

This shows that the yards are willing to improve their practices in a market where they receive financial incentive and are not squeezed out financially. It also shows that a joint commitment will lead to better outcomes for all parties.

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The cost to CNCo of exercising this leadership by voluntarily but proactively using more responsible, “Green and Safe” ship recycling yards over the yards with poorer standards was a loss of around 8.0% the potential net profit from the disposal of the ships (53,906 light deadweight tons total).
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The driver behind the decision was CNCo’s adoption of a recycling policy that required us to avoid supporting facilities reported to have poor safety and environmental practices. We were mandated to preferentially use recycling facilities where workers had comprehensive externally audited safety training, a good safety record and proactive safety practices and observed the appropriate environmental disposal of hazardous materials.

However, we believe that this voluntary taking of additional responsibility will be recognised by our employees, who will see us as an Employer of Choice - and we have evidence that this is in fact the case (and so increase our retention/ decrease turnover costs within the company). It will also be reconised by our customers, finaciers and business partners that we are striving to be an industry leader in operating sustainably, as further evidenced by our membership of the Sustainable Shipping Initiative.
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Further, detailed research in this area would permit either the evaluative or predictive Social Return On Investment (“SROI”) to be quantitatively calculated, based on the inputs (leakage of recycling work, and better commercial returns, from yards with poorer, to those with better standards), outputs (reduced fatalities, injuries and environmental harm) and impacts on the communities and the businesses.
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As taking a more extended responsibility for the ‘Life Of Asset’ and for those workers associated with it when it is up- cycled, becomes more widely accepted in our industry, evidence of the increased use of “Green and Safe” yards will be demonstrated commercially to the yards with poorer standards.
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However boycotting those yards not on the “Green and Safe” list must only be the first step; it is clearly recognised that a close second intent must be that the pan- industry organisations and industry leaders must forge a partnership with those yards that have the commitment (driven by market forces) and to help them raise their standards.
The owner of the ship to be recycled must decide to exercise leadership in the industry, even in the absence of legislation. This involves the paradigm shift of taking responsibility for an asset even after it has been transferred to a new owner.

What are the first steps an organisation can take to replicate this idea/initiative?

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The owner of the ship to be recycled must decide to exercise leadership in the industry, even in the absence of legislation. This involves the paradigm shift of taking some continuing responsibility for an asset even after it has been transferred to a new owner.
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The owner of the ship to be recycled must establish an internal policy to accept the need to pay a reasonable premium to support safer working practices and better protection of the environment in key stakeholder communities that the shipping industry has historically relied on, but have been under the radar for many in the past.