(Published in English on 10 August 2009)
By Erik Hagen
Download the report pdf Hulls at Bargain Prices - The Shipyard's Backyard in the Ukraine
An increasing number of small and large Norwegian shipyards have moved the production of hulls to low-cost countries in Eastern Europe, especially to shipyards on the Baltic Sea and the Black Sea. When the hulls are finished, they are shipped to Norway, where the inner parts are filled in. In this way, the yards save big money.
But it is clear that Norwegian standards are left at home when the hulls are built in the East. The bill is shifted onto the workers, neighbours, and the environment.
Norwatch has visited Sevastopol Shipyard, with a dubious environmental reputation, outermost on the Crimean peninsula in the Ukraine. The shipyard lies squeezed between a university and a residential area in the city of Sevastopol.
Two Norwegian companies have ordered hulls there.
Fitjar Mekaniske Verksted (FMV) has taken delivery of two: first a trawler in 2007 and then a platform supply vessel (to the right), which was ready in the Ukraine before Christmas in 2008.
Fjellstrand AS, another Norwegian shipyard, is halfway through the building of its first hull, which is also a supply ship.
Both FMV and Fjellstrand have put their orders on ice because of the financial crisis and the low-grade quality.
Sevastopol Shipyard was struggling with economic problems even before the two Norwegian companies signed contracts with the Ukrainian shipyard. That is why they accepted contracts with the two Norwegian shipyards with open arms in 2006-2007. In the period up until today they have not built hulls for other shipyards.
In the course of these years the company has had constantly greater economic problems and has gone through a radical reorganisation. The bill seems to have been shifted onto the workers.
Norwatch has revealed a series of extremely criticisable conditions at the workplace:
● Employees with whom Norwatch has talked speak of terrible working conditions, bad sanitary conditions, absent wages and threats of violence. This has occurred during the building of hulls for both FMV and Fjellstrand.
● The safety conditions for the employees were so bad that the Norwegian Directorate of Labour Inspection would have closed the plant if they had had the possibility. Norwatch has obtained an extensive picture collection from the building of the FMV hull, which documents a far worse standard than what FMV permits in Norway. The Directorate has assessed the documentation and considers especially the scaffolding around the hull as “worse than useless”. The pictures were taken in the autumn of 2008, 6 months after FMV promised to turn over a new leaf when a Lithuanian worker died in a fall from scaffolding at Fitjar.
● In contrast to common practice in Norway, FMV’s sand-blasting work was not covered up. The dust is supposed to have blown in over the neighbouring houses.
● In many areas, the Ukraine is an environmental staller compared with Norway. Used blasting sand found inside the plant precincts is poisonous and injurious to health. Waste analyses that Norwatch has carried out show that the quartz level is more than 11 times the Norwegian maximum limit. The level of the heavy metal chrome is 39 times as high as maximum limit. The arsenic level is seven times above limit.
Trying to influence
“Generally speaking, health, environment and safety standards and attitudes are worse in countries such as the Ukraine, Romania and Russia than in Norway. I would imagine that FMV’s building inspectors have pointed out aspects of health, environment and safety conditions, but I don’t have any records or statistics on this,” Hugo Strand, director of FMV, told Norwatch.
He related that the company has no information about the wage relations of the shipyard’s employees but assured us that they try to influence the suppliers to provide safe and good working conditions.
Fjellstrand said that they have been aware of several of the conditions and that they have discussed this with the local shipyard.
“As a customer our people do feel a moral responsibility to make sure that these matters are taken care of when we manufacture our products. But there is a limit to how much influence we have in such places. The shipyard in Sevastopol has probably struggled economically for quite a while, and they have had problems fulfilling the demands satisfactorily,” Asbjørn Tolo, managing director at Fjellstrand, related.
Download the report pdf Hulls at Bargain Prices