Norway’s Wealth Fund Rewards Two Companies for Cleaning Up Their Act on Ship Breaking

Norway’s $1.3 trillion wealth fund announced on Tuesday that it has lifted the exclusion of Thoresen Thai Agencies and ended its observation of Hyundai Glovis after both companies ceased the practice of sending old ships to be dismantled on South Asian beaches.

Thoresen Thai Agencies had been excluded from the fund since 2018 due to its practice of sending decommissioned vessels to be scrapped in Bangladesh, where working conditions are deemed “extremely poor.” The fund noted that the company has not sent any ships for scrapping since 2018, rendering the basis for exclusion no longer relevant. The recommendation to revoke the exclusion was made by the fund’s Council on Ethics in May.

Thoresen Thai Agencies was one of four companies excluded from Norway’s sovereign wealth fund in 2018 for their practice of sending end-of-life vessels for scrapping in Bangladesh, Pakistan, and India, where the controversial beaching method is still commonly used for ship dismantling.

Hyundai Glovis, which had been under observation since 2022 for its own practice of sending ships for scrapping in Pakistan and Bangladesh, has implemented a new policy for responsible disposal of decommissioned vessels to address the issue, leading to the Council on Ethics also recommending that its observation status be lifted.

In a significant step towards ensuring the safe and environmentally friendly scrapping of ships, the Hong Kong Convention reached the required threshold in June for its entry into force in 2025. The milestone comes more than 14 years after the convention was initially adopted by the International Maritime Organization (IMO).

The EU has also been cracking down on harmful ship breaking practices with the European Ship Recycling Regulation, which requires large sea-going vessels sailing under EU flags to use an approved ship recycling facility from the European List, which have been determined to meet strict environmental and safety requirements. The regulation aligns with the Hong Kong Convention. The list of approved yards has been updated to contain 48 yards located primarily in Europe and Turkey.

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