Officials defend ship-scrapping program More vessels to go to breakers in '98

December 17, 1997|By Will Englund and Gary Cohn | Will Englund and Gary Cohn,SUN STAFF

WASHINGTON -- Navy and Defense Department officials defended their troubled ship-scrapping program yesterday and said they plan to sell 25 more ships for scrap in early 1998.

While acknowledging that the program has had serious problems with pollution and injuries to workers over the past six years, they said that bidding procedures adopted a year ago will weed out unqualified shipbreakers.

"This is a developing industry," said Jesse A. Atkins, deputy commander of surface ships for the Navy. "As it goes on, we will find out how viable this is. I think we have to give the process we have in place an opportunity to work."

Jeffrey A. Jones, principal executive director of the Defense Logistics Agency, which handles ship sales for the Navy, said it would deal from now on only with reputable companies. "We won't contract with anyone else," he said.

Atkins and Jones, interviewed jointly yesterday, made the first detailed public remarks by Defense Department officials about the ship-scrapping program since a series of articles documenting the industry's problems was published in The Sun last week. The articles described deaths, accidents, fires, oil spills and mishandling of asbestos in the scrapping industry in the United States.

The Defense Department has repeatedly sent ships to scrappers with records of bankruptcies, fraud, payoffs of government inspectors and environmental and safety violations.

The articles also looked at India, the world's leading shipbreaking nation, where working conditions are extremely dangerous and regulation virtually nonexistent.

Atkins said a Navy plan to export ships for scrap to South Asia is only under consideration. "No decision has been made to go," he said. "We're not there yet."

He said the Navy was concerned about the flawed scrapping projects at ports across the United States. "It hasn't worked really well, and we realized that," Atkins said.

But he and Jones said the problems in the domestic program had been addressed in 1996 by tightening procedures to qualify potential scrappers.

Scrapyards have to describe how they plan to break up a ship, how they will dispose of hazardous substances, how they will comply with health and safety requirements, and show that they have the financial ability to complete a scrapping project.

Atkins and Jones said they were convinced that a shipbreaker could pay the government for a ship, follow environmental and safety laws in breaking it up, and still make a profit.

Critics of the program disagreed yesterday.

E. Grey Lewis, a former Navy general counsel, has made a study of the shipbreaking program and believes that the Navy will have to subsidize the disposal of its ships.

"It's my opinion they still haven't stepped up to the plate yet," Lewis said yesterday. "No one can make any money out of this."

Eve Bach, of a San Francisco environmental group, said that scrapping Navy ships -- laden with asbestos, PCBs and other hazardous materials -- can't be done both properly and profitably. "I think it's an inadequate response saying they are going to choose more carefully, because basically it's not a viable business," she said.

"Hoping you can find someone who can do it under the present set of rules and follow all the applicable environment and worker safety rules is whistling in the dark. It fails to take into account that the structure of the program doesn't work."

James Moorman, a former assistant U.S. attorney general who is now an environmental lawyer in Washington, said the Navy needs to rethink its whole approach.

"The problem seems to be that the Navy is trying to make money by selling these ships instead of viewing the ships as a problem it has to spend money to take care of," he said. "What else does the Navy try to make money off? Why try to make money off an environmental problem? I don't get it."

The Navy's ship-scrapping program is connected to several Defense Department agencies. Jones works for the Defense Logistics Agency, which oversees the Defense Reutilization and rTC Marketing Service, or DRMS, an agency based in Battle Creek, Mich., which administers the program.

Atkins works for the Naval Sea Systems Command, which oversees surface ships. At yesterday's interview, Jones and Atkins were accompanied by nine aides, lawyers and observers from other agencies.

DRMS was set up to sell surplus equipment -- boots, hats, desks, lamps. Its experience is in sales and not in contract monitoring. Jones expressed confidence in the agency's ability to run the program, although he noted that ships are not like other equipment.

"These are small cities we are disposing of," he said. "Complicated commodities -- they go beyond commodities."

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