From: David Lerman, Daily Press, Newport News, Va.
Published November 28, 2004 12:00 AM

Newport News, Va., 'Ghost Fleet' Casts Shadow over Ship-Breaking Business

Nov. 28—HARTLEPOOL, ENGLAND — On an industrial stretch of the Tees River, just across the water from a nuclear power station and chemical plants, four of Virginia's "ghost ships" sit tied to a dock, awaiting disposal.





A year ago, the arrival of what British media described as a "U.S. toxic death fleet" drew scores of protesters to the banks of this northeast England town. A few activists even bared their buttocks to moon the ships in protest.





Today, the rusting hulks of the James River Reserve Fleet appear largely abandoned — by protesters and ship-breakers alike.





Half a world away from their Newport News home, the ghost ships have spent a year in a state of legal limbo. Environmentalists filed suit, claiming that the United States was violating laws against exporting hazardous waste.





Britain halted all work on the ships after forcing the scrapping company to apply for new permits.





What began as a simple plan to scrap 13 obsolete U.S. ships in England has become an embarrassment for both governments, triggering lawsuits on both sides of the Atlantic and fueling resentment among some in Hartlepool at the idea of becoming America's dumping ground.





The missteps that led to a premature exodus of ships from Virginia — and the admittedly bungled handling of them in Britain — has also forced a re-examination of the rules governing the international transport of waste in a global economy.





In the meantime, the ships continue to float like ghosts on the Tees River — as their decks rust, the paint continues to peel and the signs on sealed-off cabin doors warn of asbestos.





"There was a lot of confusion about these ships," said Elliot Morley, Britain's environment minister. "What this incident has demonstrated is the weaknesses in the whole international structure — weaknesses that go far beyond the James River fleet."





Ask almost anyone about Virginia's ghost ships in this mostly working-class town of 90,000 and one question overrides all others:





Why does a superpower the size of the United States need to export its waste?





"It's America's rubbish," said Barbara Crosbie, a Hartlepool resident who helped form a local group to oppose the ships. "They have vast areas to dispose of it. It's not an overcrowded country without the resources to store it. America should be leading the way as the main consumer in the world, rather than trailing everybody else. It's just not fair."





That is hardly the view back in Washington, where U.S. officials say their options are limited.





For all the country's wealth and its vast shipbuilding capability, the United States boasts little more than a half-dozen small companies with the resources to scrap old ships.





Large naval shipyards, including Northrop Grumman Newport News, simply don't want to do it. Ship-scrapping is a highly specialized — and dirty — industry. It requires the expertise to remove potentially toxic materials such as asbestos, which was built into engine rooms, and solid polychlorinated biphenyls, or PCBs, which were used in the cables and gaskets of a ship's innards.





For decades, there was little need for a homegrown ship-scrapping industry. Obsolete ships were usually sold to Third World nations like India and Bangladesh, which were eager to break the ships apart for their scrap steel.





But those nations' shipyards were always ill-equipped for such environmentally hazardous and dangerous work. The Clinton administration put a stop to the practice of exporting ships in 1993, in the wake of media reports of grave environmental damage and deaths at Third World shipyards.





For much of the next decade, obsolete ships from the National Defense Reserve Fleet started piling up with nowhere to go. Most of the ships were moored off Fort Eustis in Newport News, becoming a floating eyesore and a potential environmental hazard on the James River.





The problem grew severe enough that Congress stepped in, setting a 2006 deadline for removing a backlog of 130 ships from the national fleet, including about 90 on the James. The rest are based in Beaumont, Texas, and Suisun Bay, Calif.





The U.S. Maritime Administration, which owns the ships, suddenly faced a problem. How could it dispose of such a large number of ships in a few years' time without relying on Third World shipyards?





Although some domestic scrappers dispute the claim, U.S. maritime officials said domestic scrapping yards didn't have the capacity to handle such a large volume of ships. Some help from abroad, they argued, would be required.





Then came an offer from a British company that seemed like a golden opportunity.





Few could dispute the environmental credentials of Able UK Ltd., a demolition and reclamation company based in Billingham, about a 15-minute drive from the coastal town of Hartlepool.





The company boasts a 30-year history of dismantling some of the dirtiest and most contaminated facilities around: power stations, petrochemical plants, oil rigs, cooling towers, gas installations and chimneys.





The work included disposing of material contaminated by asbestos, radiation and mercury.





"They have a good reputation," said Morley, the British environment minister. "They've dismantled a lot of offshore oil structures. They're very highly regarded."





But Able UK had no experience with ships when it sought to scrap the James River's ghost fleet last year.





At a time when few others in England could offer such skills, Able UK hoped to get into the ship-breaking business, at least partly because it already owned a 25-acre flooded basin that could be converted into a drydock.





Building the drydock required replacing old metal gates with sturdy new ones that would seal off the basin and keep water out. In 1997, Able UK won a planning permit required to install the new gates in the basin, which sits on the outskirts of Hartlepool but within the city limits.





But with an estimated price tag of 15 million British pounds — close to $30 million — the company was not prepared to make that investment without the guarantee of steady work.





"What we needed was a job large enough to justify it," said Peter Stephenson, Able UK's chief executive.





Initially, Stephenson said, Able UK wanted to scrap the entire ghost fleet sitting in Virginia — about 90 ships. With a large drydock, the company could easily scrap 16 ships a year, he said.





"The more we have, the cheaper we can do it," he said.





The U.S. Maritime Administration, or MARAD, reacted more cautiously. In July 2003, the agency announced a $17.8 million contract to remove 15 obsolete ships from the James, of which 13 would be scrapped at Able UK. The deal also included the sale of two uncompleted Navy oil tankers the agency said were worth $3 million.





The contract marked the largest ship-disposal effort since 1993, when overseas sales were stopped. MARAD defended the deal, saying the British proposal offered the best value to taxpayers among all bids submitted by scrapping the largest number of ships for the lowest price.





From its inception, the contract drew a storm of protest. Domestic scrappers complained loudly that work should not be sent overseas when American ship-breakers were struggling. Many were also angered to learn of the inclusion of the two Navy oil tankers — a provision critics said sweetened the pot and made the British scrapping offer unfairly competitive.





The Government Accountability Office, the investigative arm of Congress, agreed to conduct a study of how MARAD awards contracts for ship dismantling.





Then environmentalists filed a lawsuit in U.S. District Court, claiming that the export of ships with toxic materials on board would violate U.S. environmental laws.





A federal judge allowed four ships to go to England last year, saying they were part of a pilot program specifically authorized by Congress. But Judge Rosemary M. Collyer blocked the remaining nine ships from leaving Virginia, pending further review. Collyer is expected to issue a ruling on those ships in coming weeks.





The court challenge marked a clear setback to MARAD's effort to dispose of ships quickly. It also threatened to derail Able UK's ability to open its drydock and hire an estimated 200 workers for its new ship-breaking business.





But Able UK could take heart last year that it could at least get started with four ships and prove itself as a top-notch ship recycler.





"Once we got the drydock opened, it would help bring in ships from all over the world," Stephenson said. "We're open to do ships from anywhere. That's the object."





For a brief moment last year, things appeared relatively on track — until word reached Hartlepool that toxic ghost ships were coming from America.





In this waterfront community not far from the Scottish border, the arrival of four foreign ships last year became an international media spectacle.





Hotel rooms were sold out. Helicopters hovered, hoping to catch the first glimpse of the ships as they were towed into port. And with political tensions already heightened by the Iraq war, scores of protesters stood on shore, eager to make clear their frustration with becoming "America's toilet."





The news was made more difficult, officials said, because of the term used to describe the vessels — "ghost ships" — and mistaken impressions that they contained toxic cargoes of asbestos and PCBs. While such hazardous material is embedded in the ships, there was no cargo onboard.





"I think people expected these boats to come in through the mist with oil leaking," said Robert Pailor, the Hartlepool-area manager for the Environment Agency, the British equivalent of the U.S. Environmental Protection Agency.





"When the ships finally came, I think people thought, 'What's all the fuss about?' "





Tempers have clearly cooled over the last year, and public opinion appears divided, with some welcoming the jobs the ships bring and others fearful of the environmental impact.





Yet an unscientific survey of a few dozen Hartlepool residents one morning at a local shopping center found that everyone interviewed had heard of the ghost ships — and that most would prefer seeing them go. "I don't want them here, with all the asbestos," said Linda McLean, a 56-year-old cake-factory employee. "Everyone's against it. Why here?"





The Hartlepool Council clearly felt such political heat last year as it grappled with foreign ships suddenly parked on its doorstep.





Officially, the council had no authority over whether the ships would come. But it had one powerful weapon at its disposal: the planning permit needed to build Able UK's drydock.





"From the start, we said we didn't believe Able UK had planning permission for the drydock," said Hartlepool Mayor Stuart Drummond. The council argued that the permit issued in 1997 had lapsed and that a new one would be required.





Able UK challenged that decision in court, but Britain's High Court ruled in December that the original planning permit applied only to drydocks meant to hold "marine structures" such as oil rigs, not ships.





Britain's Environment Agency compounded the problem by issuing a waste-management license to Able UK based on the assumption that the company had a planning permit in place. The court ruling meant the license, like the permit, would not be valid.





"With hindsight, we admit that was a mistake," said Pailor, the Environment Agency manager. "We wouldn't do that again."





Hoping to head off a crisis, the Environment Agency tried to dissuade U.S. officials from sending the four ships that had already been approved until the permit and licensing issues were resolved.





Cultural differences between the two countries led to a communications breakdown — and an embarrassing problem for British officials.





The Hartlepool Council chambers, adorned with photos of the royal family, is a decidedly civilized place.





By American standards, even the "no smoking" signs have a polite ring to them: "In the interests of health, would you please refrain from smoking in this area."





At an afternoon council work session — known as a "scrutiny forum"— tea was served to council members and spectators alike. And this is a place not for Styrofoam cups but proper china. Neat stacks of cups and saucers were at the ready.





That innate sense of British politesse, officials now acknowledge, may have played a role in obscuring England's desire to delay the transport of the four ghost ships.





On Oct. 3 of last year — three days before the first two ships were to head for England — the Environment Agency contacted MARAD in Washington to alert U.S. officials of the permitting problem and to recommend a delay.





But the e-mail message that MARAD acknowledged receiving was not read as a directive from Britain to stop the ships. Instead, the e-mail said MARAD "may wish to consider the timing of the departure of the vessels to the U.K." because of the confusion over the drydock permit.





British officials, in recent interviews, said they intended the message as a clear recommendation to delay the ships' transport.





"That, to me, would be a stop," Morley said of the e-mail his government sent. "There was a bit of a cultural difference in the language."





U.S. officials, accustomed to a blunt speaking style, said at the time they interpreted the e-mail as a mere advisory about a pending drydock permit. MARAD argued that the ships could be sent anyway because its contract with Able UK did not require a drydock.





Pailor, of the Environment Agency, said British officials did not want to state their request as an order because the agency lacked any authority to stop the ships. They also did not want to risk a lawsuit from Able UK if the agency was seen as blocking a ship transport that had already been approved.





"We were in a hard position," Pailor said. "We had no powers to stop them from leaving. We were saying to MARAD, 'If we were in your position, we wouldn't let the vessels go.' "





Nevertheless, the first two ships — the Canisteo and Caloosahatchee — were towed out of Hampton Roads as scheduled Oct. 6. The Canopus and Compass Island followed soon thereafter.





The British government initially tried to get the ships to reverse course and return to Virginia. Officials finally agreed to allow the ships to dock at Able UK to avoid a risky tow back across the Atlantic in cold weather. The ships wait here still, as British officials and company executives prepare new applications and environmental assessments for scrapping work that now would not begin until next spring at the earliest.





As the four ghost ships — two of which are nearly 60 years old — have continued to rot in a Hartlepool dock, Britain has had plenty of time to assess what went wrong and begin taking steps to correct it.





"It was an embarrassing incident," said Morley, the environment minister. "It doesn't look good to have ships coming and not have licenses in order. But some benefit has come of it. It's turned the spotlight on the whole trade of international ship recycling. It needs to be tightened up."





Environmental activists acknowledged that even as critics protested the arrival of American ships, Britain's own ships often do far more damage when they get scrapped in Third World countries like India.





Officially, British ships are scrapped locally or, more commonly, in Turkey. But, as the government concedes, many British ships are often resold to third parties when they are no longer needed by the Navy. Those owners, in turn, can dump the ships in India and avoid paying costly expenses of environmental cleanup.





The problem could grow worse across Europe because of a European Union decision to phase out the use of single-hulled oil tankers after 2007. More than 2,000 tankers could require disposal, with few well-equipped scrapyards to take them.





An international working group was formed this fall to strengthen voluntary international guidelines for the export and import of hazardous waste, including ship recycling.





And a committee of the British House of Commons, in a report issued this month, called for "the development of a thriving ship-dismantling industry in the United Kingdom" that could dispose of all British vessels "to the highest standards of health, safety and environmental protection."





While no such facilities now exist for large ships in England and Wales, the report said, Able UK's facility in Hartlepool "may be the closest to having the facilities and expertise."





But even if new yards are built and Able UK can open a drydock, Virginia's ghost ships could still get a cool reception if more arrive on the shores of Hartlepool.





"There's a fundamental, philosophical issue as to whether it's acceptable to import another country's waste," said Fiona Hall, a member of the European Parliament who represents northeast England.





"As a matter of principle, that's not something I'm happy with."





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© 2004, Daily Press, Newport News, Va. Distributed by Knight Ridder/Tribune Business News.


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