Norway Fines Shipowner $750,000 for Illegal Export of Ships for Scrap

Four years after raiding the offices of the shipping company then known as Teekay Offshore, Norwegian regulators today imposed an approximately $750,000 fine for illegally exporting two ships to India for scrapping. The company today known as Altera Infrastructure continues to dispute the allegations saying that it has not received replies and justification from the Norwegian National Authority of Investigation and Prosecution of Economic and Environmental Crime (Økokrim).

The two vessels in question were shuttle tankers operating in the North Sea ferrying oil from the larger ocean-going tankers to terminals. Økokrim contends for commercial reasons the maximum operating age of North Sea shuttle tankers is 20 years and both vessels were exported for scrap as they approached 20 years.

Both vessels were built in 1998 and at the time they were retired were registered in Panama. The Navion Britannia was 124,000 dwt and departed Norway in March 2018 bound for India. The Alexita Spirt was 127,000 dwt and departed four months later in July 2018. Both vessels were beached in India to be dismantled.

The following year, Teekay highlighted that since 2017 it had recycled four vessels in India, all at recycling facilities that have been verified to be in compliance with the Hong Kong Convention. “Before selecting these facilities, we audited the yards to ensure they could meet our strict standards. In addition, throughout the recycling process, which typically takes about 6-8 months, our staff continually monitor HSEQ performance and visit regularly to perform inspections and provide skills training to increase the safety and sustainability performance of the yard,” the company said in a release posted to its website.

Økokrim however is calling scrapping on the beach such as what is done at Alang, India “a major global environmental problem.” They highlight the environmental concerns for pollution from heavy metals and other hazardous substances. Norwegian law requires companies to receive approval to transport vessels outside the country as waste.

“Økokrim takes a serious view of export of Norwegian-operated obsolete ships and their associated waste and environmental problems to developing countries with weaker legislation and law enforcement than Norway,” said Maria Bache Dah, Økokrim's police prosecutor. They said they had offered the company a briefing on the investigation’s findings.

A spokesperson for the company responded to media inquiries claiming that the vessels had been offered for further service. They contend the company spent a year looking for further service and expected that the ships would “get a new life.”

“We completely disagree,” said Steffen Rogen, spokesperson for Altera. He says the company believes, “that there is no factual basis for either allegation.” He says they are demanding the background and basis for the claims. The company cooperated after Økokrim raided its offices in Stavanger in 2020. 

The dispute highlights the challenges shipowners face in disposing of obsolete, end-of-life, vessels. There are only a handful of recognized facilities for recycling and it will be getting harder as the Hong Kong Convention comes into force after its 2023 ratification. Yards in Asia are mostly not approved by the EU for disposal. 

Altera spun off from Teekay in March 2020 emerging as a public-traded infrastructure company. Under Norwegian regulations, the company has two weeks to consider whether they will accept the fine.