KLP, Norway’s largest pension fund, commissioned the International Law and Policy Institute (ILPI) to write a report on the human rights and environmental risks related to the current practice of dismantling end-of-life ships on intertidal beaches. The report entitled Shipbreaking practices in Bangladesh, India and Pakistan. An investor perspective on the human rights and environmental impacts of beaching was released last week and examines the shipbreaking practices in Bangladesh, India and Pakistan in light of internationally recognised frameworks for responsible business conduct, as well as the practice of the Council on Ethics for the Norwegian Governmental Pension Fund.
The report argues that the responsibility of companies operating in the global market place does not stop at its own doorstep, but extends to adverse human rights impacts in the entire value chain. KLP joins a number of other investors and clients of shipping  that increasingly raise concerns over the current conditions of the shipbreaking industry in South Asia.
“The dismantling of ships using the ‘beaching’ method as it is practiced on the beaches of South Asia is dangerous for people and the environment”, said Jeanett Bergan, head of responsible investment at KLP.
International standards by which corporate responsibility can be measured include the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles for Business and Human Rights (UNGP). Companies are required to carry out a risk-based due diligence with respect to the human rights as well as environmental impact of their business activities, including their value chain.
In the report’s foreword, CEO of KLP, Håvard Gulbrandsen, states: “We hope that the report can help raise awareness of the severe human and environmental risks beaching can entail for shipping industry companies, their customers, and also for other investors. KLP hopes to encourage investors to work together to engage with companies on improving labour and environmental conditions. The shipping industry is and will be an important part of Norwegian investors’ portfolios for the foreseeable future. KLP’s goal is to work towards a future where responsible shipbreaking is the industry standard.”