ICS Leadership Insights Live: Ship Recycling round-up and complete event recording. https://t.co/DKcYbwkKTb… https://t.co/7l6xYgxG9N

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#ShipRecycling Market - Week 20 - PARADOX IN CRISIS! Steel plate prices were up for the second consecutive week, d… https://t.co/4YpUosE5SD

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Criticized for environmental pollution and accidental deaths of workers until a decade ago, Alang in India has sinc… https://t.co/jNKLGhCu5r

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EU Ship Recycling Regulation: An Inhibitor or Catalyst for Greening Ship Recycling Yards? Access the latest articl… https://t.co/8V7Q1rOSNi

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BLOG & PRESS RELEASE



Demystifying Ship Recycling - Issue 14

Drills at HKC Compliant recycling facilities – Part 2 

 

In Drills at HKC compliant recycling facilities - Part 1, we discussed the drills, including fire and explosion on the plot & ship, confined space rescue, and evacuation from ship and Plot. In addition to those drills, few more drills are conducted at recycling facilities:

Falling from Height:

When the ship is recycled, she is sitting on the ground. The ship's structures are quite high from the ground. During the recycling, process workers need to board the vessel regularly. Although workers use PPE and the NO GO areas are marked & barricaded on the vessels, there is a hazard of falling from the height.  Therefore, yard workers need to understand the actions which should be taken if a person falls from a height. Falling from height drill is conducted by simulating the fall of a human dummy. Workers are trained to rescue the person who fell down and give him first aid and medical attention.

Ship-Recycling-yard-drill

 

Medical Emergency on Plot and Ship:

At any ship recycling yard, around 80 to 100 workers are present on a typical working day. It is important for workers to understand how to react if any of their colleagues face medical emergencies such as heart attack, fainting, etc. In this drill, workers are explained about the significance of first aid and the use of medical equipment. 

Oil spillage on Sea Water and Plot: 

When a vessel is delivered to the recycling facilities, it usually contains small quantities of fuel oil, lube oil, bilge water, and oily sludge. These oils are transferred from the vessel to the oil collection tanks using oil transfer pumps with the help of flexible hoses. Transfer of oil possesses the risk of oil spill either on sea water or on the Plot. Yard workers must understand how to respond in case of oil spillage as it is a major environmental hazard. Recycling facilities have oil spill kits to contain and collect the spilled oil. The kit has all the necessary material to clean the oil, such as oil absorbent pads, booms, shovels, drums, etc.  

Ship-Recycling-yard-drill

Monsoon and Storm:

More than 90 % of ship recycling is done at southeast Asian facilities. India, Bangladesh, and Pakistan face the monsoon season from June to September every year. During monsoon, it is obvious to face heavy rainfalls, rough seas, and occasional storms. Therefore, it is significant for yard owners and workers to understand the actions to be taken during the monsoon. 

Every week emergency sirens are function tested to ensure the workers' awareness of different patterns of the emergencies. All drills are recorded, and post drill debriefings are done and discussed in the toolbox meetings. Drills are recorded until expected performance is achieved. 

HKC compliant recycling facilities strictly comply with the annual schedule of various drills to ensure safety at yards.

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Demystifying Ship Recycling - Issue 13

Drills at HKC Compliant recycling facilities – Part 1 

Any person related to shipping is aware of the various mock drills. Whenever any movie is filmed on ships, it’s apparent to see bells ringing, hooter sounding, and drills held on the ships. Have we ever wondered what types of drills are conducted on the Hong Kong Convention compliant yards while recycling the vessels? The entire ship recycling process is related to gas cutting, heavy plates lifting and their movements, confined space entries, working at a height, etc.

Although the workers employed in the yards receive regular training, it is vital for them to participate in mock drills and understand the procedures followed during actual emergencies. The motto behind carrying out any drill at recycling facilities is to make the workers acquainted with various procedures to be followed during emergencies. Participation in mock drills is the way to make the workers familiar with the methods and equipment which can be used in a crisis. It helps workers to understand the SOPs to be followed. 

Ship-Recycling-yard-drill

 

Fire and explosion on plot and Fire and Explosion on Ship:

While conducting a fire drill on the ship, a small fire is simulated and workers are asked to extinguish the fire as the SOP. Actions taken during the drills by each worker are observed, and their timing is recorded. In the drill, different types of fire extinguishers are function tested. Post drill review meetings are conducted under the guidance of the safety officer for effective learning.

Confined Space Rescue:

Ships are built of steel and have multiple compartments. Double bottom tanks, fuels oil tanks and smaller auxiliary tanks are all confined spaces. It’s foremost for yard workers to understand the significance of confined space rescue. Keeping this in mind, yards conduct the drills to rescue a person from confined spaces. It helps workers to respond promptly during an actual emergency. 

Evacuation from ship and plot: 

Once the ship recycling commences, its structure changes every day due to the slicing of the hull and the access to the vessel is altered as per the structure. Workers need to understand the evacuation from the ship and plot in case of emergency. Therefore, yards regularly conduct the evacuation from ship and plot drills. 

The drills are also conducted during the audit by the SOC issuing classification society. 

Each type of drill has its own significance. HKC compliant recycling facilities strictly comply with the annual schedule of various mock drills.

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TO OUR READERS AND BUSINESS ASSOCIATES IN THE INDUSTRY

British Broadcasting Corporation (BBC) recently published a news article about the UK cruise ships scrapped in India's graveyard. In this article, the BBC attempts to propagate biased opinions about the ship recycling industry in India. After reviewing the misleading information and erroneous views of the ship recycling industry in India by the BBC, we are required to address some falsified items stated in the report. 

World's largest ship graveyard

BBC has described Alang, a coastal village in Gujarat, as "The world's largest ship graveyard". However, Alang is the largest green ship recycling destination preferred by global ship owners for recycling of their end-of-life vessels for the following reasons:

  • Major blue-chip ship owners from Japan, Norway, Denmark, Italy, and other developed nations have visited, inspected, audited, and vetted the recycling facilities at Alang. Based on the facts observed at Alang, they have been sustainably recycling their vessels in India. Japanese shipowners' association and the Danish shipowners' association representatives have visited and vetted the recycling facilities to their satisfaction. 
  • More than 1000 foreign nationals have visited the Alang to diagnose the difference between facts and opinions spread about the ship recycling at Alang. These visitors are none other than the ship owners, classification society representatives, auditors, safety inspectors, diplomats, capital providers, delegates from international banks and pension funds, etc. 
  • The infrastructure consists of impermeable floors, fire-fighting arrangements, application of heavy-duty cranes, training to workers, effective hazardous waste management, etc. 
  • At present there are 92 out of 120 (77%) yards are Hong Kong Convention compliant and received Statement of Compliance (SOC) from leading classification societies. The classification societies include ClassNk, Lloyd's Register, RINA, and Indian Register of Shipping. They all are members of the International Association of Classification Societies (IACS) who are the Recognized Organizations (ROs) for implementing various international conventions on behalf of flag states. 
  • The Government of India has appointed the Directorate General of Shipping as an apex body to oversee India's ship recycling activities. The Government of India ratified the Hong Kong Convention in Nov 2019 to promote ship recycling at Alang. India is the only country in South East Asia to ratify the Hong Kong Convention. In addition, as Alang is in Gujarat province, the activities at Alang are further supervised by the Gujarat Maritime Board (GMB). 

Alang is a stretch of muddy beach

The remark made in the article about Alang being 'a stretch of muddy beach' is merely incorrect and out of context. 

  1. Alang is blessed with the natural sea front of a hard-rocky bottom with a slope of 15 degrees. This makes it convenient to deliver the vessel to the recycling yards along the side of the sea front. 
  2. Alang is not a muddy beach, but it's a complete ecosphere of the recycling yards, backyards, neighboring villages, steel mills, spare parts warehouses, and yard workers. 
  3. It is a notable example of how recycling of end-of-life vessels becomes a green circular economy. More than 700 shops sell materials recovered from the recycled vessels. These materials include unused spare parts, old machinery & equipment, cutlery, furniture, special tools, etc.  
  4. The steel plates extracted from the vessels are used in the adjacent steel re-rolling mills. Alang is the place where the end-of-life of vessels is given reincarnation. Studies done on the CO2 emissions in the recycling process show that the emissions can be reduced by at least by four times than extracting a similar amount of steel from raw iron ore. Recycling helps to reduce CO2 emissions which is the primary concern of global warming
  5. With the impact of Covid-19 and the global recession, the recycling industry is generating employment opportunities. 

Asbestos Bomb:

The BBC article mentions that any vessels recycled at Alang are asbestos bombs. It is critical to understand how the asbestos, asbestos containing material (ACM), and other hazardous wastes generated during the ship recycling process are removed and disposed of at Alang. 

  1. Alang has developed the infrastructure to dispose of asbestos in an environmentally friendly way. 
  2. The workers use adequate PPE, which comprises helmets, safety glasses, masks, hand gloves, safety shoes, boiler suits, and disposable overalls while removing and packaging asbestos. 
  3. The asbestos is solidified and stabilized with cement and water, converting it into solid cubes and disposed of into engineered landfill at GEPIL (with HDPE geo liner and multiple layers of solids).  
  4. Trained workers with adequate PPE also handle other hazardous materials like lead. They are disposed of to only authorized recycling vendors.

Pumping of waste into the sea and burning the materials on the shore

Furthermore, the BBC article mentioned the worker's statement that the oil and other wastes thrown to sea are completely baseless and merely opinion-based. 

  1. It is essential to know that oil is used as resalable material. There is no cost-benefit of the oil being thrown into the sea. There are a solid infrastructure and SOPs to collect the oil, bilge water, and various types of wastes generated during recycling facilities. 
  2. Each type of waste is collected, quantified, and disposed of as per the environmental standards. Recycling facilities have developed segregated storage facilities within the yard to store segregated wastes for a temporary period 
  3. The law prohibits the burning of oil along with other waste in the recycling facilities. The license issued to yards for recycling vessels is suspended if any yard is observed violating the rule. 

Medical Facilities at Alang:

The BBC article criticizes the Alang for having inadequate medical facilities. However, it is crucial to note that Alang has 3 hospitals within the cluster of recycling yards. 

  1. Alang Hospital, located at South Side Road, Alang, Gujarat 364150, India.
  2. GMB multispeciality hospital Alang, located at South Side Road-Alang, Alang, Gujarat 364150, India.
  3. Redcross Hospital of Alang, located: Near Mahadev Temple, South Side Road-Alang, Alang, Gujarat, 364150, India.
  4. Recently, GMB has granted USD 1.3 Million (INR 9,00,00,000) for upgradation of medical facilities, including a trauma center.

Recycling vessels pollute the beaches:

As a specialized body established under the Government of India's National Green Tribunal (NGT) Act, NGT is equipped with the necessary expertise to handle environmental issues. NGT has also ordered the development of recycling facilities along the coast of the Alang. It approved the 'Beaching' method of ship recycling. It observed that the recycling at Alang would not affect the environment much as claimed by different international NGOs with biased opinions.

Conclusion:

Ship recycling in India is a convincing example of the Green Circular Economy. The Government of India has determined to double the capacity of ship recycling at Alang by developing infrastructure and enforcing regulatory measures. Therefore, comments in BBC's article about Alang being 'India's ship graveyard' are entirely unverified. 

We hope that this release has helped to foster a better understanding of the present status of ship recycling in Alang and that readers recognize the importance of taking the time to understand recycling industry facts vs. biased opinions.

BBC should do responsible journalism and not just publish scripts without fact-checking.  The prejudiced opinions do not affect the sustainable growth that is taking place in Alang. In addition, the Government of India is planning to double ship recycling capacity by the year 2024.

At GMS, we pride ourselves as being responsible leaders in an industry vital to the shipping supply chain. Over the years, we have made it our mission to improve the safety and quality of working and living standards across the industry. The advancements that have been made in the environmental standards and long-term sustainability throughout the ship recycling industry and in the geographic areas that house it has been immense, and GMS considers it an honor to be at the forefront of these developments.

Please feel free to contact GMS at info@gmsinc.net with any comments or questions that you might have.

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Demystifying Ship Recycling - Issue 12

Firefighting arrangements at HKC Compliant recycling facilities 

The entire ship recycling process involves slicing the vessel’s hull into different sections and extracts steel plates, angle bars, and stiffeners of different shapes and sizes. The slicing is primarily done using gas cutting. It is impossible to imagine ship recycling without hot work. There is always a risk of fire in recycling yards due to continuous gas-cutting operations. Hot work is mainly done on the vessel, which is a primary cutting zone. The vessel’s slice is lifted and shifted to the secondary cutting zone with a crane for further hot work. The HKC compliant recycling facilities are designed considering fire safety and firefighting measures.

The yards use different types of portable extinguishers which are located within the yard as per the fire plan. The portable extinguishers used are of different types and capacities. It is common to find Dry Chemical Powder, Foam Type, and CO2 type portable fire extinguishers at recycling facilities. In addition, sand buckets are strategically stored, which can be readily used in case of a small fire. The yard workers must undergo compulsory training to use portable fire extinguishers to become eligible to work at recycling yards. Shipyards conduct regular unannounced mock drills for the simulation of fire extinguishers for different types of fires. Portable fire extinguishers are kept on standby when doing hot work on the vessel’s hull. The extinguishers are kept obstruction-free for quick access. The fire extinguishers are examined every month by the safety inspector of the yard. Furthermore, the fire extinguishers are checked by external agencies annually.

Firefighting-arrangements-HKC-Compliant-recycling-facilities

 

Fire blankets are also used for extinguishing small fires.

Recycling yards are provided with fire pumps of adequate capacity to generate sufficient pressure to reach higher sections of the vessel. Fireline is installed in the yard with fire hydrants at different locations to access every part of the yard.

Similarly, fire pumps and fire hoses are arranged on the vessel's hull during the cutting process. Diesel engines drive the fire pumps as the electric power is not available on the vessel also as a backup in case of power failure onshore. Few yards keep the fire hoses under pressure for immediate use. Fire pumps are function tested every morning before commencing the gas cutting work. Fire rounds are taken regularly by the safety officer and trained workers.

In addition to the firefighting arrangements at the yard, there is one external fire station located in Alang, and it's easily accessible to all recycling yards within a short time. The external fire station is equipped with fire engines and trained personnel to extinguish the fire.

HKC compliant recycling facilities strictly comply with the firefighting measures.

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The Ship Recycling Regulations:  Where we stand today and Which standard to follow?

It all started with the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (hereafter The Basel Convention), which was adopted in March 1989 and entered into force in May 1992. To date, it has been ratified by 187 countries (i.e., most of the world with the important exception of the USA). 

The Basel Convention provides controls for the international movement of hazardous wastes and for their environmentally sound management mainly through consent for the shipment between the authorities of the country exporting the hazardous wastes with the authorities of the importing country, and with the involvement of the authorities of any transit State. Consent is given on formal communications (inter-ministerial) confirming that the hazardous waste in question will be treated in an environmentally sound manner in the importing country. In most countries, the implementing authorities of the Basel Convention are Ministries of Environment, for example, in India, the Ministry of Environment, Forests and Climate Change (MoEFCC) is the responsible authority. 

It is important to realise that whereas the Basel Convention may have been most successful in fighting against illegal exports of hazardous wastes to countries that are unable to process and dispose of them in an environmentally sound manner, the Basel Convention, on the other hand, is unsuitable for defining minimum standards for the recycling of ships. The Basel Convention does not contain any requirements that are relevant to ships and to ship recycling facilities, nor does it concern itself with issues on workers' safety. The only relevant requirement of the Basel Convention to ship recycling being its generic requirement that the wastes should be managed in an environmentally sound manner. The mechanism for achieving the Convention's "prior informed consent" relies on the establishment of communications between the authorities of the exporting and importing countries, which, when applied to end-of-life ships, means in practice the authorities of the State from where the ship departed for its last voyage and the authorities of the recycling State. This is because the Convention is not aware of the concept of flag State that is central to the United Nations Convention on the Law of the Sea and to all maritime conventions and therefore leaves no option but to consider the State from where the ship departed for its last voyage as being the exporting State. The flag State has no role in the enforcement of the Basel Convention.

Why the Basel Convention not Suitable for End-of-Life Ships?

Implementing the Basel Convention to control the movements of end-of-life ships creates a number of problems: (a) it takes inordinate amount of time to arrange for the necessary communications between exporting, importing and any transit States -communications which in any case have little or no effect in improving the standards under which ships are recycled; (b) the managers of the ship will most often have no connection with the country that is deemed to be the State of export; (c) a number of countries are unwilling to recognise that Basel Convention should regulate the recycling of end-of-life ships, thus making the communications between the managers of the ship, the State of export and the other involved States even more cumbersome; (d) the decision to recycle a ship may not be taken, or may not be finalized, or may not be admitted until after the ship has departed from the port and is in international waters, in which case there is no exporting State to lead the inter-State communications envisaged by Basel Convention. In practice, the above problems make the Basel Convention impractical and unenforceable to the recycling of ships. Incidentally, the difficulty in applying the provisions of the Basel Convention to ship recycling and the circumvention of the Convention's controls by ships destined for recycling were acknowledged on the website of the Basel Convention. 

Hong Kong Convention

In recognition of the difficulty to enforce the Basel Convention to the recycling of ships, in 2004, the governing body of the Basel Convention in its decision VII/26 requested the International Maritime Organization to develop a new convention specific to the recycling of ships.  IMO agreed to develop the new convention and following concentrated work over three and a half years, it adopted in May 2009 the "Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009", also known as "the Hong Kong Convention", or the "HKC".  The Convention will enter into force 24 months after the date on which the following conditions are met:

  • ratification or accession by 15 States,
  • the fleet of the States that have ratified or acceded to represent at least 40 percent of world merchant shipping by gross tonnage, and
  • the combined maximum annual ship recycling volume of the States during the preceding 10 years to constitute not less than 3 percent of the gross tonnage of the combined merchant shipping of the same States.

EU Waste Shipment Regulation and EU Ship Recycling Regulation

The Basel Convention adopted in March 1994 its "Ban Amendment", banning the export of hazardous wastes from OECD to non-OECD countries. The entry into force condition of the Amendment is 90 days following ratification by at least three-quarters of the 87 countries that were Parties to the Convention at the time the Amendment was adopted. The 66th ratification was deposited in September 2019 by Croatia and consequently, the entry into force of the Ban Amendment is the 5th December 2019, twenty-five years after its adoption. However, the Ban Amendment has already been enforced unilaterally in the European Union through the European Waste Shipment Regulation, which implements the Basel Convention together with the Ban Amendment in European Union law. The European Union had implemented the Basel Convention into European law from as early as February 1993. In 2006 the Union replaced its earlier regulation by the Waste Shipment Regulation (EC) No 1013/2006 (the WSR), which additionally implemented unilaterally the Ban Amendment, forbidding the export of hazardous wastes from member States of the European Union to any developing (i.e., non-OECD) countries and controlling their export to OECD countries through the prior informed consent mechanism of the Basel Convention. When the European Commission tried to enforce the WSR to end-of-life ships, it faced many difficulties and much evasion.

This was primarily because, in enforcing the Ban Amendment, the European Waste WSR deems illegal the recycling in Bangladesh, China, India, or Pakistan of any ship that has started its last voyage from a European Union port (i.e., exporting EU State, regardless of the flag the ship flies). The simple reality is that these four non-OECD countries have consistently recycled around 95% of the world's tonnage. In fact, a study by the European Commission in 2011 reported that (at least) 91% of ships under the scope of the WSR had ignored or circumvented its requirements. The European Commission publicly recognized that the enforcement of its own Waste Shipment Regulation to recycle ships had not worked. Unwilling to wait until the HKC enters into force, the Commission embarked on developing new legislation for regulating the recycling of European flagged ships. This led the European Commission in 2012 to propose the development of a new European Regulation on Ship Recycling. 

On 30 December 2013, the European Union brought into force the European Regulation on Ship Recycling (EU) No 1257/2013". The provisions of the Regulation will be applied progressively as certain conditions are met.  In particular, European flagged ships will be required to be recycled in line with the requirements of the Regulation starting from sometime between the end of 2016 and the end of 2018 (the exact date being dependent on the European Commission having approved a critical volume of ship recycling capacity).  From that date, European flagged ships will be excluded from the scope of the European Waste Shipment Regulation, whereas non-European flagged ships visiting European Union ports prior to their recycling will continue to be subject to the Waste Shipment Regulation, which forbids their export to developing countries.  Furthermore, all ships visiting European Union ports, regardless of their flag, are required from December 2020 to be provided with inventories of hazardous materials (IHMs).

The European Regulation replicates the standards and the mechanisms of HKC and makes direct reference to the set of guidelines that IMO developed for HKC.  It is worth quoting from the preamble to the Regulation: "This Regulation is aimed at facilitating early ratification of the Hong Kong Convention both within the Union and in third countries by applying proportionate controls to ships and ship recycling facilities on the basis of that Convention." The European Regulation differs from HKC in the way yards are authorised, and also in requiring the inventories of hazardous materials for EU flagged ships to include information on two additional hazardous materials.  For yards located in EU countries, the Regulation requires each member State to enforce the requirements of the Regulation and to authorise the operation of yards in its jurisdiction.  Yards located outside the European Union wanting to be included in the European List of approved facilities are required to apply to the European Commission, providing evidence of their compliance with the detailed requirements of the Regulation, together with certification by an "independent verifier" who has inspected the site.  Additionally, yards must accept the possibility of being subject to a site inspection by the Commission or its agents. 

A ship flying an EU flag is subject to the European Ship Recycling Regulation, which requires that it will be recycled only in a yard that appears in the European List of approved yards, as published by the European Commission. The port of departure of the last voyage of an EU-flag ship, or its location at the time the decision was made to recycle it, has no relevance. (2)  A non-EU flag ship departing on a voyage to a recycling yard from a port of an EU Member State continues to be subject to the European Waste Shipments Regulation, which forbids its export to non-OECD countries. (3)  A non-EU flag ship departing on a voyage to a recycling yard from a port that is not in the EU or where the decision to send the ship for recycling is taken when the ship is in international waters is not subject to European legislation.

Why the Government of India Should Not Worry About Compliance with EUSRR?

The Government of India's vision to double the recycling capacity in Indian ship recycling yards along with an increase in employment by the year 2024 is a welcome step. Besides, the intention to bring more end-of-life ships from Europe and Japan for recycling in India is laudable. Today, India is the largest green recycling destination globally, and major ship owners with green recycling policies opt for Indian ship recycling yards to recycle their end-of-life tonnage. This gives a commercial edge when compared with other recycling countries (Pakistan and Bangladesh). India is the only country among the major ship recycling destinations in South Asia to have acceded to HKC. Accession to HKC by the Government of India gave a positive vibe about the ship recycling activity in the international shipping community. The Government's intention to double the ship recycling business by the year 2024 is good for the industry and the country in terms of revenue generation and employment generation. India will be the global leader in ship recycling if the plan is achieved. India's global share for recycling end-of-life ships will be above 55% compared to the existing 30-35%. The contribution of ship recycling to the domestic steel demand will also increase from the current 4% to 8% by 2024, which is expected to decrease demand for the import of scrap steel. 

As of 19 February 2021, Norway, Congo, France, Belgium, Panama, Denmark, Turkey, Netherland, Serbia, Japan, Estonia, Malta, Germany, Ghana, India, and Croatia have acceded to the Convention. Now with 16 countries already acceded/ ratified HKC, the first condition is met, and the second condition has reached nearly 30% of total fleet size in Gross Tonnage (GT), and the third condition has reached 2.6% of the combined recycling capacity of 16 states.

All ratifications and accessions of the Convention are important and carry weight, but none as much as India's ratification, which took place in November 2019. India is the country with the largest ship recycling capacity as defined in the Convention. According to IMO's definition India has 31 percent of the world's ship recycling capacity, stemming from its recycling of 12.2 million GT of ships in 2012. The transformation that has taken place in most of India's ship recycling yards in the last five years, followed by the country's recent ratification, has cemented the acceptance of the Hong Kong Convention as the mainstream working standard of the industry.

The seventh list of EU SRR approved yards was published by European Commission on 11 November 2020. With the new update, the European List of ship recycling facilities currently contains 43 yards, including 34 yards in Europe, 8 yards in Turkey, and 1 yard in the USA. None of the 20 Indian applicant ship recycling yards have been included in the EU-List so far. 
But does India need EU flagged ships to double its ship recycling volume, or, in other words, do Indian ship recycling yards need to be on the EU-approved list? 
Please note that approximately 35% of all ships worldwide are under European (EU) beneficial ownership, although only 20% are registered under the EU flag. The number of EU flagged ships further declines when you only consider end-of-life ships to approximately 10% of the total amount of recycled ships. This means that the EU flagged fleet is younger than the world average and also that many of the EU-flagged ships are flagging-out when it comes to end-of-life.

We can logically state that there are only three possible outcomes to EU SRR and to the European Union's regulatory role in ship recycling:

Outcome 1:  The Commission interprets EU SRR fully in line with the rationale of HKC and approves all upgraded beaching facilities
This would be the best possible outcome: for EU SRR; for the ship recycling and for the shipping industries; and for the establishment of HKC as the global standard. In this case, EU-flag ships will not have to avoid an impractical EU List by flagging-out. Instead, they will boost the market for HKC compliant recycling, thus yielding commercial advantages to compliant facilities. EU SRR will also be motivating other yards to upgrade, paving the way to the global acceptance of HKC. Furthermore, through its approval process, the Commission will initially provide an additional mechanism for checking and ensuring the yards' continuing compliance. 

However, we do not believe that Outcome 1 is probable.

Outcome 2:  The Commission interprets EU SRR as a ban to beaching and does not include any of South Asia's facilities in the EU List  
This will be a bad outcome, particularly for the Commission and its Regulation, as it will lead to inevitable flagging-out of most ocean-going EU-flag end-of-life ships. EU SRR will be as inconsequential to regulating the ship recycling industry as the EU Waste Shipments Regulation, and we have already seen more than two years after implementing EU SRR, that only a few ocean-going ships have been recycled according to it. 

Whereas Outcome 2 will inconvenience European flag shipping, on the other hand, it will not pose a long-term problem to South Asia's compliant ship recycling industry, as the failure of EU SRR will inevitably lead to even more vigorous international efforts for HKC to enter into force. 

Outcome 3:  The Commission makes it possible for a handful of beaching facilities to enter the List but also makes it VERY difficult and VERY expensive
This is the most likely outcome as it will enable the Commission to dismiss the industry's persistent criticisms: on protectionism; on being biased against South Asia's ship recycling industry; on wrongly interpreting the Regulation as banning beaching; and for the lack of wide geographic spread and for limited capacity in the EU List.

We expect the Commission will eventually approve beaching yards that use floating barges and large cranes to lift blocks from the aft part of a beached ship directly to the impermeable floor on the shore. With the draconian interpretation of the disputed provision of Article 13(1)(g)(i)), the Commission will also be satisfying the anti-beaching demands of the NGO Platform and of the Green Party.

Suppose the Commission approves only three or four or five yards in India. In that case, this will not provide EU SRR sufficient recycling capacity to alter the economic dilemma of shipowners of EU-flag end-of-life ships. Therefore the exodus from EU flags may continue, reducing the relevance of EU SRR, bringing us back to the situation discussed under Outcome 2.

The Commission may already be walking towards this scenario, considering its efforts to stop flagging out and police compliance for EU flag ships.

It therefore appears that the Commission now wants to differentiate in EU SRR its own standard, which we may conveniently call "the HKC Plus". Already section 6 of the preamble of the Regulation refers to HKC's provision (in its Article 1(2)) for Parties to be able to take more stringent measures in order to prevent, reduce or minimize adverse effects on health and environment. This provision exists in other IMO Conventions and is intended for a flag State to be allowed to have additional requirements on its own ships. It is not intended that a port State may have additional requirements on visiting ships of other flag States. In the case of HKC, we understand that the regulator intended to allow a flag State to place additional requirements on its ships and a recycling State on its yards. However, we do not believe that this is the same with a flag State imposing additional requirements on yards of other States. If that was the intention, why bother having an international Convention?

Article 30 of EU SRR requires the Commission to review the Regulation 18 months before HKC enters into force and to submit any appropriate legislative proposals to consider the inclusion of recycling facilities authorised under HKC "in order to avoid duplication of work and administrative burden". 

On the basis of what we have seen so far, we fear that at that time, the Commission may want to maintain for EU the differentiation of HKC Plus, resulting in three levels of standards in ship recycling: (i) no standards; (ii) HKC; and (iii) HKC Plus. 

Merchant shipping is an international business, and for this reason, it must have common regulations that apply globally to all ships, of all flags, wherever they are trading. This is the only way to ensure a level playing field where safety and environmental protection do not play any part in commercial competition. It is therefore critical at this time to look ahead on how to navigate between EU SRR and HKC and to question how many standards are needed for the international regulation of the ship recycling industry.

The development and adoption of the Hong Kong Convention were intended to create the unified standard that regulates the recycling of ships; in the same way as SOLAS regulates their safety and MARPOL their environmental performance. It would be irrational if international shipping was regulated by multiple and competing standards. If a section of our society believes that the standard ought to be stricter, they should seek to amend the Convention at IMO after it enters into force. 

In summary, the Government of India should only focus on entry into force of HKC. International Maritime Organization needs to appeal to China to accede to HKC, and HKC should be the only international regulation for ship recycling. 

 

Authors

 

Dr. Nikos Mikelis

Non-Executive Director 
Global Marketing Systems

Dr. Anand M. Hiremath

Head, Research & Development
Lead Coordinator, Sustainable Ship and Offshore Recycling Program (SSORP), 
Global Marketing Systems DMCC
DUBAI, United Arab Emirates

ahiremath@gmsinc.ae  
green@gmsinc.net

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