The International Maritime Organisation (IMO) agreement on ship-breaking was signed last month by 65 countries, and business leaders say the deal finally legitimises their work and should herald major growth for the sector.

But trade unionists and environmentalists have criticised the treaty for failing to address the serious dangers faced by workers and the pollution that the industry causes.

About 25,000 men are employed on the Sitakundu coastline of south-east Bangladesh, exposed to dire conditions and the risk of poisoning from asbestos, mercury and other substances.

Ships are driven into the 10-kilometre (six-mile) stretch of beaches on high tides and then taken apart, with their steel recycled for uses such as construction.

"Around a dozen new companies are popping up here," Enam Ahmed, technical head of the Bangladesh Shipbreakers Association, told AFP from Sitakundu.

"Yards that have been dormant for years are bouncing back to life. There's a sense a boom time is coming with more ships heading our way. The new treaty recognises the way we work."

The agreement set up by the IMO, which is part of the United Nations, requires ship-owners to provide an inventory of hazardous materials before a vessel is sent for scrapping.

It also orders bosses to improve safety procedures for workers, dozens of whom are reported to die every year in accidents.

Nevertheless, the treaty "will give legitimacy to the way Bangladeshi entrepreneurs break ships at Sitakundu," said Bazlur Rahman, head of the government's shipping department.

"It'll tremendously boost growth and remove the stigma attached to it (ship-breaking)."

With no iron ore, Bangladesh is dependent on the recycled steel for its fast growing economy -- and 45 per cent of all global ship-breaking is undertaken in the country.

But environmentalists have slammed the IMO deal, saying it effectively supports an industry that exacts a terrible toll on men and the coastline.

"No doubt Bangladeshi ship breakers will be delighted at the deal. But it legalises some of the worst environmental and labour practices in the world," said Mohammad Ali Shahin, local head of the Platform on Shipbreaking campaign.

He said Bangladeshi shipbreakers dumped an average five tonnes of toxic sludge -- such as mercury and asbestos -- for every ship dismantled.

Last year the shipping department said 200 ships were pulled apart in Bangladesh.

"Each ship brought toxic waste, which was dumped in the water, polluting the entire beach. We have done studies and found it to be a leading cause of deaths of workers," he said.

But Ahmed, who represented the country's ship breaking industry when the deal was struck in Hong Kong last month, said the treaty proved that the business was doing nothing wrong.

"We're aware of the concerns about beaching. But it's not the hazardous practice that some claim it is. It does not destroy beaches," he said.

Ahmed says the agreement was a breakthrough for Sitakundu, which for years has faced the threat of being shut down by environmental lobby groups.

The IMO said the deal would ensure that ships did "not pose any unnecessary risk to human health and safety or to the environment" as they were taken apart.

The new rules also say about 1,000 single-hull oil tankers currently at sea must be mothballed by 2010 -- a deadline that means more business for Bangladesh.

"This will create 50,000 new jobs in scrap yards and in steel mills which melt dismantled ship plates," Ahmed said. "It'll help Bangladesh beat the recession."

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