A.P. Moller - Maersk

1.5 - Company logo
1.1 - Primary company name

A.P. Moller - Maersk

1.3 - Head office location

Copenhagen, Denmark

1.4 - Website

https://www.maersk.com/

1.6 - Number of ships operated

680

1.6.1 - Number of ships owned

300

1.6.2 - Total DWT of ships owned

28000000

1.6.3 - Number of ships chartered

380

1.6.4 - Total DWT of ships chartered

20000000

1.8 - Please provide a brief introduction to your company

The company is working to connect and simplify its customers' supply chains. As the global leader in shipping services, the company operates in 130 countries and employs roughly 70,000 people. With simple end-to-end offering of products and digital services, seamless customer engagement and a superior end-to-end delivery network, Maersk enables its customers to trade and grow by transporting goods anywhere - all over the world.

1.9 - What is your overall approach / positioning on ship recycling?

A.P. Moller - Maersk aspires to enable opportunities for responsible ship recycling globally for the benefit of Maersk, workers and the environment as well as responsible yard and ship owners. In 2019, around 89% of the annual million gross tonnage dismantled worldwide is beached at sub-standard facilities in South Asia. This happens despite many large shipowners having a policy on responsible ship recycling. This is an industry problem which leads to widespread underpayments, unsafe working conditions and environmental pollution as well as an uneven playing field within the shipping industry. No shipowner can solve this alone. In the absence of relevant and enforced global legislation, industry-led solutions promoting transparency are needed to make responsible ship recycling a reality. A high, voluntary standard must go hand in hand with strong implementation on the ground, achieved through robust supervision and audits. Since 2009, A.P. Moller - Maersk has had a responsible ship recycling standard based on a strict interpretation of the Hong Kong Convention (HKC) regarding health, safety and environmental issues but also going beyond the HKC in that it does not allow contact in the intertidal zone with blocks from primary cutting and as it includes all internationally based standards on all relevant social issues as well as downstream waste management. Furthermore, we have restricted ourselves not to sell vessels off if they are close to the end of life, eliminating incentives for selling vessels with the aim of substandard recycling by third parties Maersk will continue to create change on the ground and engage with shipowners and other stakeholders to accelerate change.

2.1 - Does the company have a written policy on ship recycling for its owned vessels?

Yes

2.1.1 - Is it publicly available?

Yes

2.1.2 - Please provide a URL

https://www.maersk.com/about/sustainability/shared-value/leading-change-in-ship-recycling-industry

2.1.3 - Since when has this policy been applied?

2009

2.1.4 - How many ships does the policy apply to?

51-75%

2.2 - Does the company keep records of ships which have been sent for recycling?

Yes

2.2.1 - Are the records public?

Yes

2.2.2 - Please provide a URL

https://www.maersk.com/about/sustainability/shared-value/leading-change-in-ship-recycling-industry

2.2.3 - Please provide further details

Yards undergo external audits at various stages of the ship recycling process and the summary reports are public.

2.4 - Does the EU Ship Recycling Regulation apply to the company’s owned ships?

Yes

2.4.1 - How many ships does the regulation apply to?

25-50%

2.5.1 - Please comment

Since 2009, A.P. Moller - Maersk has had a responsible ship recycling standard based on a strict interpretation of the Hong Kong Convention (HKC) regarding health, safety and environmental issues but also going beyond the HKC in that it does not allow contact in the intertidal zone with blocks from primary cutting and as it includes all internationally based standards on all relevant social issues as well as downstream waste management.

2.6 - Does the policy contain restrictions based on geography and/or recycling methods?

No

2.7 - Does the company have a written policy for selecting a yard or buyer for recycling?

Yes

2.7.1 - Please provide further details including a URL if the policy is public

Yards undergo external audits - prior to commencement of recycling, during recycling and after completion of the process. Maersk-appointed staff is present on the ground for supervision, training and capacity building with contractual rights to stop-work when observing unsafe behavior or processes. Audits, supervision, the right to stop-work and specific recycling plot to be used are all stipulated in the contract with the buyer (including cash-buyers) and enforced at the yards.

2.8 - Does the company make ship recycling part of the company’s sustainability goals?

Yes

2.8.1 - Please provide further details

SDG Targets: 8.8 - Decent work and economic growth 14.1 - Life below water 17.16 - Partnerships for the goals

2.9 - Does the company include ship recycling information in its sustainability reporting?

Yes

2.9.1 - Is this information verified by a third party?

Yes

2.9.2 - Please provide further details including a URL to the latest sustainability report

The sustainability reports can be found at: https://www.maersk.com/about/sustainability/reports

2.10 - Does the company have a ship recycling standard* (or similarly named) in force?

Yes

2.10.1 - From when has this been in force?

2009

3.1 - Does the company have a policy to promote responsible recycling of owned vessels sold for further trading?

Yes

3.1.1 - Please provide further details

i. When the selling price vessel is more than 40% higher than the best net scrap value, owned vessels of any age can be sold third party entities without any recycling provisions. ii. When the selling price is less than 40% higher than the best scrap market price but higher than 25%, the vessel can be sold without any recycling provisions, as long as the new buyer guarantees that the vessel is traded for a minimum of 2 years. iii. When the selling price is below 25% higher than the best scrap market price the vessel will have to be recycled accordingly to the provisions in the Maersk RSRS.

3.2 - Does the company impose legally binding covenants or offer commercial incentives to the buyer to encourage responsible ship recycling?

Yes

3.2.1 - Please provide further details

See above

3.3 - Does the company take steps to promote responsible recycling of vessels chartered for 5 years and over, released for redeployment or recycling?

Sometimes

3.3.1 - Please provide further details including number of vessels

Chartered vessels shall not fall into the scope of Maersk’s RSRS when sent for recycling, with the following two exceptions: a. When Maersk operated a chartered vessel for 16 years or longer and the vessel is sent for recycling right after the end of the charter with Maersk, Maersk will require that the owners at their cost recycle the vessel in accordance to HKC requirements (or better). b. For all Maersk owned vessels sold since 2015 to 3rd party owners against a charter back (bareboat or time charter) to Maersk, Maersk shall remain responsible for ensuring that the owners recycle the vessel in line with the Maersk RSRS in case the vessel is sent for recycling within two years after the end of the charter to Maersk. The owners of these chartered vessels shall be responsible for carrying out responsible recycling at HKC certified yards.

3.4 - Does the company take steps to promote responsible recycling of vessels chartered for 2 years and over released for redeployment or recycling?

Sometimes

3.4.1 - Please provide further details including number of vessels

See above

3.5 - Does the company take steps to promote responsible recycling of vessels owned through JVs?

Sometimes

3.5.1 - Please provide further details

Only a very small fraction of our total capacity is under JV (minor tugboats).

4.1 - Does the company follow a Standard Contract for the sale of vessels for green recycling (e.g. RECYCLECON from BIMCO)?

Always

4.1.1 - If an industry standard contract template used, please specify

RECYCLECON from BIMCO, with RSRS-related specific clauses.

4.2 - Does the contract include an explicit requirement to recycle the vessel at a specific ship recycling facility?

Always

4.2.1 - Please provide further details

See above

4.4 - Does the contract require compliance with the company’s written policy on ship recycling?

Yes

4.5 - What protection is in place for the seller to ensure that milestones can be set, that access to the ship and monitoring can be maintained throughout the ship recycling process?

The recycling contract includes the below: a. Work at a yard where Maersk vessel lands shall commence only after RSRS compliance is achieved, as verified by external auditors. b. The Maersk-appointed supervision staff shall be in the yard to monitor and control the operations whilst verifying these are carried out as per RSRS. Also, the supervision team has the authority to stop-work, in case of unsafe acts of RSRS non-conformances. c. The yards shall undergo external audits to verify continual RSRS compliance at any point during the recycling operations.

5.1 - Does the company have a Ship Recycling Plan for each vessel?

Yes

5.2 - Does the company provide the buyer or ship recycler with a Class approved IHM, at the time of finalising the ship recycling contract?

Always

5.3 - Does the company provide all relevant ship certificates, plans, procedures and documents, to enable the yards to follow applicable ship recycling guidelines (and the relevant standards from question 2.2. that the company is aligned to)?

Always

5.4 - Does the company have specific requirements for handling hazardous materials as listed in The Stockholm Convention?

No

5.5 - If owning or operating tankers, does the company have specific requirements to ensure that tankers arrive at the Ship Recycling Facility in a condition ready for certification as Safe-for-entry or Safe-for-hot-work?

No

6.1 - Does the company require the ship recycling facility to have a Hong Kong Convention statement of compliance issued by a Classification Society?

Always

6.1.1 - Please provide further details

The company considers it a starting point to consider a yard worthy of undergoing the RSRS audit. This is done by credible external auditors against RSRS and an improvement plan drawn up. Work at a recycling yard, where Maersk vessel lands, commences only after RSRS compliance is achieved. Also, audits are carried out at routine intervals during the recycling process.

6.2 - Does the company carry out additional audits to verify compliance prior to recycling?

Always

6.2.1 - Please provide further details

The company carries out an initial RSRS audit as part of the shortlisting process and prior finalising any yard for ship recycling.

6.3 - Does the company monitor yard compliance during the recycling process?

Always

6.3.1.1 - Please specify

The company deploys a responsible ship recycling supervision team on a daily and full-time basis, who is in attendance to monitor with contractual rights to stop-work when observing unsafe behavior or processes. Also, external audits are carried out at routine intervals during the recycling process.

6.3.2.1 - Please specify

The monitoring covers verification of compliance with RSRS. This is with a contractual authority to ‘stop-work’, in case the team sights an unsafe act or non-compliance in relation to RSRS. Further, the company engages external auditors to carry our routine RSRS audits. The RSRS requires the yard to carry out a detailed environment testing, sub-contractor audits and tracking the safe removal, temporary storage and disposal of all hazardous materials removed on an ongoing basis.

6.4 - Does the company have the contractual right to stop work at the facility, in case of unsafe operations or other non-compliances?

Always

6.5 - Does the company require facilities to provide a process whereby yard workers can voice and resolve concerns and grievances regarding all workplace issues without fear of retribution?

Always

6.5.1 - Please provide further details

The RSRS has elements, outlining mechanisms through which the yard workers can voice their concerns anonymously. Also, several open meetings are conducted where worker concerns are/can be raised and resolved in a constructive manner.

6.6 - Does the company require facilities to enable yard workers to associate and bargain collectively?

Always

6.6.1 - Please provide further details

The RSRS has elements empowering yard workers to associate and bargain collectively. In the absence of Union at certain ship-recycling destinations, a Work’s Committee, in-line with the national law, is formed by the workers with an aim to achieve the same objectives.

7.1 - Please use this area to provide further information on the company’s approach to ship recycling if not already covered

The company plays an active and a suitable role in the wider development of the Alang ship recycling industry by partnering with credible local players to: i. To run a Mobile Health Unit (MHU) project aimed at addressing existing gaps in the primary health care services. The qualified medical professionals in the MHU provide free treatment and medicine for all Alang workers and the wider community. ii. The training project aimed at creating awareness amongst all Alang workers, thereby mitigating health risks.