SHIPPING
Pakistan’s struggling shipbreaking and recycling industry is poised for a revival following renewed government attention and support from international organisations aimed at improving labour conditions and environmental management at the Gadani shipbreaking yards. The federal government has approved Rs12 billion for the sector, while the ILO has launched a project in to strengthen national capacity for safe, rights-based, and environmentally responsible shipbreaking practices.
Pakistan’s shipbreaking industry, which dates back to the 1960s, was once the global leader until the 1980s. However, it lost its competitive edge due to persistent government neglect, ceding ground to Bangladesh and India. Today, Pakistan ranks as the third-largest shipbreaking country in terms of scrapped tonnage and the number of ships dismantled annually. Bangladesh remains the global leader in the industry, followed by India and Pakistan. Together, these three countries account for almost 80 per cent of the global gross tonnage scrapped.
The highest number of ships dismantled at Gadani was recorded in 2016; as many as 141 vessels with a cumulative light displacement tonnage (LDT) of 6 million tons. Activity declined sharply thereafter, reaching a low point in 2020, with just 99 ships scrapped, totaling 2.3 million tons. In 2024, Gadani dismantled 111 ships out of 409 scrapped worldwide. These vessels include a wide range of cargo ships, container ships, tankers, gas carriers, and passenger vessels. Ships are typically scrapped between the ages of 25 and 40 years, depending on their type, usage and condition.
Located along a 10-kilometre beachfront in Lasbela District, Balochistan, Gadani is Pakistan’s sole shipbreaking yard. Spanning 1,256 acres and consisting of 335 plots -- mostly owned by the Balochistan Development Authority -- only 135 plots are fully developed, both in public and private sectors, and merely 25 are currently operational. Gadani directly employs over 6,000 workers today, a steep decline from its peak of over 30,000 in the 1980s. The industry has fostered various trade activities and downstream industries, including approximately 20 rerolling mills that employ an additional 15,000 workers.
Despite its economic contributions, the shipbreaking sector has yet to be formally recognised as an industry and therefore remains largely unregulated. It creates substantial employment and supplies a significant quantity of re-rollable scrap to Pakistan’s iron and steel sector. Yet, government oversight remains minimal, working conditions are dismal, and supporting infrastructure is deteriorated. The industry generates over Rs5 billion in annual revenue, yet little has been reinvested into improving safety or standards.
Shipbreaking typically yields recyclable materials such as steel, copper, aluminium, engines, batteries, furniture and various appliances. These materials are sold locally and are especially important as Pakistan's largest steel mill in Karachi has remained closed for over a decade. Scrap generated at Gadani meets at least 30 per cent of domestic demand, reducing the need for costly imports. Pakistan still imports around 4.7 million tons of scrap annually, valued between $3 billion and $4 billion.
A 2023 study by the Pakistan Institute of Development Economics (PIDE) warns that Pakistan is rapidly losing its competitive position in the regional shipbreaking industry
Globally, shipbreaking is classified as a hazardous industry. In Pakistan, thousands of labourers work in unsafe conditions, exposed to hazardous substances such as heavy metals, toxic paint, asbestos, and residual oils. The Gadani yards are ill-equipped for fire prevention or emergency response. Workers often operate manually with inadequate protective gear. Gadani has witnessed several tragedies, including a 2016 explosion that killed at least 29 workers and injured many others.
There is no structured system for disposing of toxic waste, and the lack of hospitals, dispensaries and ambulances poses serious health risks. Thousands of workers, many of whom live with their families, reside in makeshift shelters without access to gas, electricity, sewage or clean drinking water.
To address these issues, the Balochistan government, with federal backing, is implementing an Rs12 billion project to upgrade Gadani. This includes constructing a 30-bed hospital, a rescue centre, a fire station, a school, a park, as well as water, sewage and road infrastructure. The project also aims to enhance workplace safety and environmental safeguards, as well as establish systems for the safe disposal of hazardous materials.
In another significant development, Pakistan has finally ratified the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, which came into force last month. Initially introduced by the International Maritime Organisation (IMO) in 2009, the convention aims to ensure that ship recycling does not harm the environment or human health and prioritises the safety and rights of workers.
In parallel, the ILO is implementing a two-year project in Pakistan titled Safe and Environmentally Sound Ship Recycling and Decent Work (SENREC-DW). The project, which runs until December 2026, aims to align Pakistan’s shipbreaking practices with global labour and environmental standards by enhancing waste management, safety measures, and occupational health.
A 2023 study by the Pakistan Institute of Development Economics (PIDE) warns that Pakistan is rapidly losing its competitive position in the regional shipbreaking industry. The global shipbreaking market is projected to grow from $4.08 billion in 2024 to $7.64 billion by 2032, with more than 15,000 aging ships expected to be scrapped during this period.
Pakistan has the potential to regain its position if it follows a sustainable roadmap: improving infrastructure, enforcing labour and safety standards, investing in skills development and embracing technological innovation.
The writer is retired chairman of State Engineering Corporation.