Monday, April 8, 2019

European Authorities Accused of Protectionism as Ship Breaking Remains a Contentious Issue  

Recycling Issues Can Lead to Unscrupulous Vessel Reflagging

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Shipping News Feature WORLDWIDE – In 2015 NGO Shipbreaking Platform published a notice 'What a difference a Flag Makes' pointing out the duplicitous methods used by ship owners to allow them to dispose of a vessel, including any and all hazardous components, on the beaches of Bangladesh, Pakistan or India, countries where 70% of the world's fleets of tankers, container ships and cruise vessels meet their end.

The document illustrated clearly that no attempts to enforce the Basel Convention or EU WSR on end-of-life ships were being made on the basis of a ship’s flag or ownership country and subsequently the EU took action to produce an approved list of ship breaking yards where vessels registered in its jurisdiction must be recycled in future.

The amended Regulation (EU) 1257/2013 of the European Parliament and the Council on ship recycling, initially drafted in 2013, came into force on 1 January 2019. It requires EU flagged ships to be recycled at approved yards on the EU list. EU yards are apparently allowed on the list without fulfilling uniform criteria, whereas non-EU yards have to be inspected by European Commission appointed auditors according to clear criteria before inclusion on the list. So far, only two Turkish and one US yard have been included.

Currently, some Asian yards have waited two years for approval after submitting their application without any prospect or pathway to inclusion on the list. According to vessel owners organisation BIMCO, only nine shipyards, out of 26, on the EU list of approved recycling facilities are realistically open for ship recycling, and only three of the 26 could recycle a large ship (Panamax size or larger), and this lack of progress has now caused a fierce reaction from BIMCO, whose Secretary General & CEO Angus Frew, commented:

“The EU list is hard to take seriously. I called one of these ‘recycling shipyards’ a few months ago, and they hadn’t even started building the yard yet. The list look a little like protectionism and clearly disadvantages European ship owners. BIMCO wants the facilities to improve their safety and environmental performance, but if there is no path for non-EU facilities to get on the EU list, the regulation will continue failing to achieve that objective, and simply be an act to protect the EU ship recycling market.”

When the facilities in China and Turkey are included with the three Asian countries they account for 98% of all ship recycling and BIMCO says the Hong Kong Convention needs to enter into force as soon as possible, and it is essential that improvements are recognised also from the decision makers in Europe.

The problem is of course that the scarcity of proper facilities, doubtless coupled with cost factors, mean that unscrupulous merchants can reflag vessels outside of the EU and simply ignore the regulations. No operator, no matter how big, can ignore the responsibilities. In 2017 Maersk sold of four container vessels to interests in Singapore which paid cash. All were immediately re-registered in the flag-states of Comoros and Palau before sailing to Alang for breaking.

The introduction of the European Regulation in January is specifically aimed at preventing this practice, however whether or not it actually succeeds in this remains to be seen.

The BIMCO study commissioned from Marprof Environmental in February 2019 ‘Report on the European List of Ship Recycling Facilities’ can be downloaded HERE.

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