Union Ministry of Home Affairs
Government of India
August 2, 2013
Subject- Security concerns at Alang beach, Gujarat & Violation of Supreme Court order
This is with reference to the news report Foreign ship captain 'flouts ban' (August 1, 2013, DNA), Satphones ring in security worries (August 2, 2013, The Times of India), 'Dawood Ibrahim active in Alang ship-breaking business' (The Economic Times, 17 July, 2012, Ankur Jain & Arun Janardhanan), and ' Intelligence sharing on Alang operations needed, say officials' (Ankur Jain, The Times of India July 18, 2012)
I submit that the end-of-life ship in question has been purchased by one Shri Kishor Bansal who owns Plot no. V-5 on Alang beach. The entry of this obsolete ship appears to be in violation of Supreme Court order of July 30, 2012. The antecedents of the ship and its current and previous owners must be examined.
I submit that Gujarat based officials have misled the media into believing that "Union Ministry of Environment and Forests finally issued a clarification saying the 2007 SC guidelines and not Basel would be followed" which appears factually incorrect. Someone is manufacturing truth to suit the interest of ship owners and ship breakers unmindful of environmental and occupational costs. It is quite clear to all the law abiding citizens and officials that any so called "clarification" cannot over ride the Supreme Court order of July 30, 2012 which sought compliance with UN’s Basel Convention on Transboundary Movement of Hazardous Wastes and Their Disposal because it is the last order of the Supreme Court that prevails as rule of law. The order banned entry of all end-of-life ships which do not undergo prior decontamination of ships in the country of export as per Supreme Court’s order of October 14, 2003.
I submit that as a consequence of non-seriousness with regard to use of satellite phones or satphones a security threat is looming on the horizon. It was similar approach resulted in the terrorist attack of November 2008.
I submit that international crime syndicates worldwide are earning an estimated US$22-31 billion annually from hazardous waste dumping, smuggling proscribed hazardous materials, and exploiting and trafficking protected natural resources as per INTERPOL documents. It is apprehended that ship breaking has some relationship with this syndicate. A report 'India's shipbreaking industry controlled by organised crime' refers to the involvement of one of Forbes' world's top 10 most dreaded criminals list of 2011. The shipbreaking yards at Alang beach has virtually devastated the sea and fishes with pollution.
I wish to draw your attention towards the fact that although a foreign ship cannot use satphones like Thuraya or Iridum or any other satellite communication devices without permission from the Department of Telecommunications (DoT) such use has come to light. This has been done in violation of pre-arrival notification on security (PANS) rules which requires that anyone carrying such a device has to report to the concerned authorities.
I submit that the news reports reveal that there has been at least five instances of satphone usage in the past week. In two instances, the crew including the captain had even started heading for home without registering their statements as mandated. An urgent inquiry is called for to identify conniving and colluding officials in these acts.
I submit that in the current case the matter came to light on July 25, 2013 when Mr Raliz Pitros, captain of the MT Atlantic headed for Alang beach, was found speaking to Dubai and Greece via his Thuraya phone. The signals were intercepted by the National Technical Research Organization (NTRO) in New Delhi which informed the Coast Guard in Gujarat who in turn asked customs to keep an eye on the ship.
I submit that the role of the shipping agent of MT Atlantic, Shreeji Shipping Agency also requires scrutiny in this regard.
I submit that the practice is that after NTRO intercepts a signal, they check the international vessel traffic management system (VTMS) and get the location of the nearest ship. If it is found not to be related to national security, the case is handed over to customs for further investigation. Lack of coordination between the police, customs and coast guard about checking port-bound vessels appears to be resulting in this situation.
Let me take the opportunity to reiterate that the Director General of Central Excise Intelligence (DGCEI) had issued a notification seeking change in system of invoicing by ship breakers at Alang, Gujarat to ensure more transparency but its directions remain unimplemented. The Public Notice No. 01/2010 dated 26/7/2010 reveals non-transparency in the industrial activity at Alang beach. The White Paper on Black Money forgot to examine this unregulated industry that relies heavily on fake documents.
I submit that in an Office Memorandum No.29-3/2009-HSMD, Government of India, Ministry of Environment & Forests, (HSM Division) dated 9th May, 2011 relating to implementation of Supreme Court directions in respect of ship breaking activities, it has come to light that Ministry of Environment & Forests (MoEF)’s Standing Monitoring Committee (SMC) on Shipbreaking has suggested that since Gujarat Maritime Board (GMB) and Customs were not able to verify the authenticity/genuineness of ship’s registry/flag in the fast in respect of some ships referred to them, this task in respect of each ship may be referred to the Directorate General Shipping, Ministry of Shipping ought to undertake such verification henceforth. The GMB officials informed MoEF that “the suggestion of the committee is acceptable to them subject to such verification by DG Shipping is done within a period of 2 working days. If no information is received from the DG Shipping within 2 working days, it will be presumed that the certificate submitted is authentic and genuine.” Such presumption cannot be accepted as it will amount to acceptance of a fake document.
I submit that it is quite significant that Directorate of Revenue Intelligence that functions under the Central Board of Excise and Customs in the Ministry of Finance took note of "problems such as import of hazardous substances that will occupy centre stage in the future as the emerging global threats."
I wish to draw your attention towards the news item 'Customs seize Greek vessel at Alang for under-invoicing' (The Times of India, September 15, 2011). Greek vessel 'Syros' was seized off Alang coast which was brought for salvaging. This is just the tip of the iceberg.
I also wish to draw your attention towards 'Pirates' scare hits Alang' (The Times of India, Vijaysinh Parmar, July 13, 2012). It has come to light that watchman of one of the ship beaking plots on Alang beach Sitaram Devmurari was killed on June 28, 2012.
In such a context, the notification assumes huge significance as it will end up helping systematic quantification of material flow and help detect and segregate goods of hazardous nature.
I wish to draw your attention towards the 23rd December, 2010, Press Note (attached) issued by Mr Raju, Commissioner, Central Excise, Bhavnagar referring to “ a number of cases of Revenue leakage in Alang against Ship Breakers who fraudulently passed on Cenvat Credit worth crores of Rupees. They were also not showing production, clearance, transportation and Service Tax related information in their statutory records. The investigations are going on and some notices have been issued by ADG (CEI). In order to curb these malpractices, the Public Notice No. 02/2010 was issued on 13.12.2010 by the Central Excise Commissionerate, Bhavnagar. The public notice requires them to maintain certain records which would make it difficult for those who choose to evade duties by clandestine clearances.”
I submit that the Press Note says, “around 100-150 persons came to Central Excise, Head Quarters office, Bhavnagar and informed that they were from the Alang Ship Breaking Association”, “they continued shouting slogans and fearing damage to public property, and a as matter of abundant precaution, police force was called to ensure peace and security of the Government office”.
In such a backdrop, it appears that under pressure due to strike, DGCEI decided to put the notification seeking change in system of invoicing by the ship breakers for transparency, in abeyance for one month after the intervention of Chief Commissioner, Ahmedabad.
In view of the recent news reports based on credible security concerns, any amendment in the notification or delay in the enforcement of the notification of 13.12.2010 compromises national interest.
It is noteworthy that Office of the Commissioner of Central Excise & Service Tax, Bhavnagar, Department of Revenue, Union Ministry of Finance issued on 26/7/2010, a Public Notice No. 01/2010 saying, “It has been brought to the notice of this Commissionerate that the Ship Breaking Units situated in Alang, Sosiya and other areas falling within its jurisdiction are not issuing their Central Excise invoices by declaring correct value and description of the scrap, plates etc generated as a result of their manufacturing activities. Investigations recently initiated by Director General of Central Excise Intelligence, Ahmedabad Zonal Unit revealed that the documentation and procedures followed by the ship breaking units are suffering from several infirmities resulting in substantial loss of Government Revenue.”
As per power conferred under Central Excise Rules, 2002, it said, “All ship breaking units are directed to discontinue their present system of mentioning general description of ship breaking materials in their invoices. They should declare the correct and full description of the goods...”
It was indeed quite a matter of satisfaction that for the first time since 14th October, 2003, in compliance of the Supreme Court order, this Public Notice sought proper inventory saying, “Ship breaking units are also directed that as soon as they complete dismantling and clearance of materials obtained from each imported ship, vessel or any other floating structure, they should submit a statement to the jurisdictional Range Superintendent indicating the LDT of the imported ship, nature of the imported ship [cargo, passenger, tanker etc], total quantity of scrap of each metal obtained and cleared, total quantity of plates of each metal and different sizes [thickness] obtained and cleared, total quantity of each item of non-excisable goods obtained and cleared [wood, furniture, old engine, machinery, stores etc.], and the percentage difference of total weight of goods and materials obtained and cleared vis-a-vis the LDT of the imported ship etc.”
I submit that the four-day-long strike by ship breakers at Alang happened to protest this notification asking for a ship-wise break-up of material obtained from dismantled vessels. The notification was issued in July 2010 and ship-breakers were asked to periodically submit details of excisable and non-excisable items obtained from the ships they bring for scraping. Ship-breakers were told to maintain ship-to-ship stock register. At present, ship-breakers submit details goods-wise, and not ship-wise. The notification was issued after a multi-crore excise duty evasion ''racket'' at Alang came to light. The ship breakers were allegedly hiding value addition to scrap and were inflating the quantity of items exempted from excise duty. The strike ended on 31st December, 2010 evening after the representatives of ship-breakers met officials of central excise and other departments. The work at Alang yard was resumed on 1st January, 2011. Ship breaking at Alang came to a halt on December 21, 2010 remained suspended for four days in protest of the notification.
I submit that the Inter-ministerial Committee (IMC) on Ship breaking, Union Ministry of Steel noted in the minutes of its meeting dated 17th September, 2010 that “The Coast Guard representative brought out some security concerns and incidents of communication sets from ships reportedly finding their way to the local fisherman. It was advised to the Ship recyclers to ensure that such equipment are immediately destroyed by the Customs as per the prescribed procedures. The Chairman also advised the Naval, Coast Guard and GMB to regularly interact as per the decisions taken in the earlier IMC meetings and to resolve the major security issues in the Coastal Security Committee meetings conducted at the State Level.” In its minute dated 4th February 2009, the IMC noted the security concerns, saying, “Both the representative of the Coast Guard and the representative from Naval HQ raised concerns over the entry of ships carrying hazardous cargo to Alang for ship breaking and how no information is made available to them regarding the movement of ships to Alang. Besides there was no information regarding whether the Alang Port is compliant with the International Ship and Port Facility Security (ISPS) Code. In the context of the present security concerns in the country, the Chairman advised the representative of the Ministry of Shipping, the GMB officials, the Coast Guard representative and the Naval HQs to address the issue expeditiously so that the security gaps are taken care of and also to verify whether the port at Alang has implemented the ISPS codes. The Coast Guard representative and the Naval HQ representative also expressed apprehensions that the vessels coming in for beaching sometimes ply very close to the oil rigs, which could be a potential for accidents.” It also mentions that the Chairman of the IMC “directed that the Ministry of Shipping may organize a meeting on the matter with GMB, Naval HQ and Coast Guard HQ, Custom etc. immediately and ensure that gaps in the security frame-work issues are addressed immediately.”
I submit that if the notification is enforced it will address some of the concerns of the IMC. On the issue of radioactive materials, IMC observes, “Regarding report of a huge quantity of Smoke Detectors containing radioactive material lying in the Plots at Alang, the AERB informed that due to large volume of non-radioactive materials contained in the smoke detectors, it is difficult for them to accept the material in the present shape for disposal at the BARC facility.” The issue remains unresolved so far.
I submit that Alang coast is a litmus test for government’s sensitivity towards country’s environmental borders in which it has failed miserably so far.
I submit that foreign entities like Japanese Ship-owners' Association and US Maritime Administration are encouraged by lax regulatory regime at Alang beach. They are in the process of turning Alang's 170 ship breaking plots on the beach, spread over a 10 km stretch into a disposal ground for their hazardous wastes and end-of-life vessels.
I submit that while such state of affairs prevails, more than 6000 end-of-life ships have been dismantled without complying with financial, environmental and occupational health regulations since 1983. The theft of excise duty has also been going on since then. The quantum of black money generated in this industry ought to be ascertained besides enforcing the notification.
In view of the above, to begin with I urge you to get the authenticity of the papers submitted by all the end-of-life ships currently at Alang beach and the ones which are entering Indian waters examined by a high powered security team to get to the bottom of the goings on.
ToxicsWatch Alliance (TWA)
Dr Manmohan Singh, Prime Minister
Shri P Chidambram, Union Minister of Finance
Shri Sushil Kumar Shinde, Union Minister of Home Affairs
Shri Beni Prasad Verma, Union Minister of Steel
Shri Anand Sharma, Union Minister of Commerce & Industry
Shri G K Vasan, Union Minister of Shipping
Shri A K Antony, Union Defence Minister
Smt Jayanthi Natrajan, Union Minister of Environment & Forests
Chairman & Members, Parliamentary Standing Committee on Science, Technology, Environment & Forests
Shri A K Seth, Cabinet Secretary, Government of India
Secretary, Union Ministry of Commerce & Industry
Secretary, Union Ministry of Shipping
Secretary, Union Ministry of Environment & Forests
Secretary, Union Ministry of Defence
Secretary, Union Ministry of Steel
Secretary, Union Ministry of Labour
Secretary, Union Ministry of Finance
Director General of Central Excise Intelligence (DGCEI)
Chairman, Inter Ministerial Committee (IMC) on Ship breaking
Additional Director General, HQ, DRI
Additional Director General, DRI, Ahmedabad
Director General of Central Excise Intelligence (DGCEI), Union Ministry of Finance
Chairman, Atomic Energy Regulatory Board, Mumbai
Director, Union Ministry of Commerce & Industry
Director, HSMD, Union Minister of Environment & Forests
Member Secretary, Gujarat Pollution Control Board (GPCB)
Chairman, Gujarat Maritime Board
ACB, Gandhinagar, CBI
Office of Commissioner, Customs, Ahmedabad
Shri C A Joseph, Under Secretary, MF Desk, Union Ministry of Steel
Collector, Bhavnagar District
Superintendent of Police, Bhavnagar District