This study seeks to strengthen theknowledge base with respect to competitiveness andprofitability of the Ship Breaking and Recycling Industry(SBRI) and to investigate the feasibility of ship breakingcountries in this region, specifically Bangladesh andPakistan, achieving compliance with the Hong Kong Convention(HKC) without jeopardizing the future of the industry there.The objective of the study is to inform key stakeholdersassociated with policy making and ship breaking includingthe government of Pakistan and the government of Bangladeshabout the current problems encountered in the SBRI andsuggest a road map to help strengthen institutional andregulatory systems that can improve work practices in theship breaking and recycling industry. The study addressesthe following: i) it assessed the productivity,competitiveness and growth potential of the industry inBangladesh and Pakistan (chapter two); ii) it undertookenvironmental audits of hazardous waste materials present inships scheduled for dismantling and established a pollutioninventory as well as projections of hazardous materials till2030 (chapter three); and iii) it provides a plan of actionto enable Bangladesh and Pakistan comply with the newlysigned HKC without jeopardizing the future of the SBRI inthese countries (chapter four). In this study, ship breakingand recycling is defined as an industry that, through theuse of land, infrastructure, machinery, and labor andthrough the consumption of utilities, converts ships thathave outlived their economic life into steel and otherrecyclable items, which are then sold in local markets. Thestudy was cover a period of 11 months in 2009. It consistedof an economic and market assessment of the SBRI inBangladesh and Pakistan; environmental audits of ships andship recycling facilities to establish a pollution inventoryand a gap analysis and needs assessment for compliance withthe HKC.