by Michael Hansen, Hawaii Shippers Council, September 23, 2015

The American Shipper Magazine in an article “Matson praised for pledging not to scrap ships in South Asia” reports that Matson has made a commitment to a key Swiss-based environmental group not to sell their old ships to breakers in South Asia (India, Pakistan & Bangladesh) due to the unregulated conditions there.

The South Asian ship breakers are notoriously dangerous for the workers and the environment due to their handling of hazardous materials found in the ships. However, they are a key source of employment and commerce for very poor people.

Matson’s commitment will mean that they will send their old ships to ship breakers in the United States or elsewhere in the developed countries. Instead of receiving a full payment from the third world ship breakers based upon the scrap value of the ship, Matson will receive a much smaller payment from the first world ship breaker – or have to pay them to recycle the ship.

This will impact Matson’s financial results by lowering revenue and possibly increasing costs, which lead to the need for increased freight revenue from their customers.

Key excerpts quote:

Two environmental group are praising Matson Line for a pledge to no longer recycle their ships in South Asia.

The group Basel Action Network (BAN), which seeks to end trade in toxic materials, said in a press release that Matson had released a statement saying, “Because of concerns with recycling practices in South Asia, Matson has decided to expressly prohibit recycling of its vessels in this region going forward.”

That statement was praised by both BAN and the NGO Shipbreaking Platform in Brussels.

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