One of the world’s largest container shipping companies, Mediterranean Shipping Company (MSC), is again under the spotlight for its substandard and hazardous dismantling of obsolete vessels on tidal beaches in South Asia. While the company has repeatedly faced criticism for breaching international environmental and labour rights standards, it has so far not shown any willingness to improve its practices.
Claiming to be committed to sustainable operations, MSC has received several awards including the Greenest Ship Owner of the Year at the 2018 Green Shipping Summit in Amsterdam. Yet, the Swiss shipping giant has over the last fifteen years sold more than 100 end-of-life vessels for dirty and dangerous scrapping on South Asian beaches. In the last six months only, MSC scrapped 9 ships on the beach of Alang in India – 27 in the last two years, including the MSC FLORIANA and MSC GIOVANNA. These vessels left respectively from Spanish and Turkish waters in direct violation of European and international laws prohibiting the export of hazardous waste from OECD to non-OECD countries.
“Dumping toxic ships on tidal beaches is both environmentally destructive and exploitative of poorly-paid and unprotected workers. It constitutes a serious criminal offence, as highlighted by recent rulings in the EU (1). We have therefore alerted relevant authorities of MSC’s blatant breach of environmental law governing international waste trade, and are following up to see what action can be taken”, says Ingvild Jenssen, Director of the NGO Shipbreaking Platform.
MSC’s poor management of its end-of-life assets is particularly deplorable given its financial strength. The company, with a staggering $86 billion turnover in 2022, is expanding rapidly, with an estimated capacity soon matching the combined fleets of competitors Maersk and Hapag-Lloyd. However, despite the financial capacity to sustainably recycle their end-of-life fleet, MSC seemingly prefers to accumulate profits by exposing workers, vulnerable coastal communities and sensitive ecosystems to harm. Indeed, with prices reaching up to $500 per Light Displacement Tonnage (LDT) for scrapping on the beaches of South Asia, MSC can earn up to three times more compared to recycling its assets in EU-approved facilities.
By contrast, earlier this year, MSC UK launched the Waste Shipment Intelligence Service in collaboration with the UK Environmental Agency, aiming to curb the illegal trade of waste on-board its vessels. In August this year, MSC also returned 40 containers of hazardous waste that had been illegally exported on-board two A.P. Moller-Maersk’s A/S – another company that dumps its end-of-life vessels on South Asian beaches – chartered ships from Albania.
“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”, says Jenssen.
Currently, MSC’s recycling policy remains weak, relying solely on the Hong Kong Convention (HKC), a framework widely criticised for failing to ban beaching and properly manage hazardous waste downstream. Also, while the company claims to audit scrapping yards, it provides no transparency on the process or results. Independent audits have already found major flaws in yards that claim HKC compliance, particularly in South Asia, and that are used by MSC.
MSC’s top management also came under scrutiny from Swiss media for its aggressive lobbying efforts directed at the Swiss Federal Tax Administration (FTA). The aim was to introduce an exceptionally favourable tonnage tax regime in Switzerland, which could have resulted in virtually zero taxation for the company. According to detailed reports from Reflekt, MSC succeeded in incorporating several items from its “wish list” into the draft bill of the Swiss tonnage tax regime, including the removal of stringent requirements related to flag states and labour rights compliance. However, the National Council rejected the draft proposal in May 2024.
Repeated attempts by the Platform to engage with MSC’s sustainability team on their recycling policy have gone unanswered. As MSC continues to turn a blind eye to the irreversible damage caused by the poor end-of-life management of its fleet, and lobbies for lowering compliance with international labour rights, there is growing global emphasis on both environmental sustainability and corporate accountability. Companies are expected to align their operations with not only their stated values, but also the law. The Platform remains committed to assisting companies achieve this, including by means of actively supporting technological innovation and meaningful advancements in the ship recycling sector to create capacity for sustainable ship recycling.
MSC’s competitor CMA-CGM is already exploring how to boost sustainable ship recycling in Europe following a commitment in 2022 to not transport plastic waste on-board its vessels. Now is the time for MSC to show whether or not they are truly committed to sustainability throughout their entire operational chain.
NOTE
(1) Several high-profile legal proceedings, such as those surrounding the Harrier case, are drawing attention to persistent violations of EU laws by ship owners attempting to circumvent regulations. Criminal investigations underway in multiple EU nations, including Germany, reflect a growing international commitment to holding offenders accountable and strengthening regulatory enforcement to address environmental and labor hazards associated with unlawful shipbreaking.
