13 July 2013

Why four countries rejected EU proposal for responsible scrapping:

Four countries chose to vote no when EU’s member countries in late June voted on the proposal to secure more responsible scrapping of EU-flagged ships. However, the proposal was adopted with a minimal majority. The proposal could have severe consequences, believes both Cyprus and Bulgaria which voted no along with Malta and Estonia.

Both countries fear the risk of reflagging from the EU fleet and cite this as a reason to vote against the proposal. However, the fear of discrimination of EU ships and the need for international law similar to the Hong Kong Convention also played a role, write the countries’ representatives in Bruxelles via e-mail to ShippingWatch.

”The Regulation underestimates the mobility of and the ease with which ship owners will shift outside Europe, in search of the most beneficial and least burdensome regimes under which to operate. De-flagging will be inevitable as will the economic implications of a shrinking EU fleet. Another consequence of a smaller EU fleet is the weakening of the EU negotiating position within the IMO and other fora,” writes Cyprus.

This assessment is backed by Bulgaria which emphasizes the country’s full acknowledgement of the great environmental problems that the current scrapping practices in South East Asia are creating.

“The major issue arising from the early implementation through the EU Commission proposed Regulation is the reflagging of EU ships which will result in economic impacts for the member states and reduction of the EU fleet and at the same time will not have added value from environmental point of view,” writes Bulgaria, which sees the Hong Kong Convention as the most obvious instrument to regulate scrapping of ships.   

Worsened competitive capabilities

The regulation does not only create a risk of reflagging, but will also worsen the fleet’s competitive capabilities compared to others outside the EU, the countries believe, in part because the initiatives will create extra costs for EU-registered ships. Additionally, it could become difficult to live up to a completely crucial part of the proposal, says Cyprus. According to the regulation, the EU Commission must produce a list of approved scrapping facilities in the EU and in countries outside the OECD, and here a central demand is that the facilities must operate from firm ground.

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“The obligation for recycling facilities to operate from “built structures” automatically excludes the largest number of recycling facilities worldwide. This provision defeats the very purpose of the proposal, i.e. to encourage substandard facilities to ameliorate their practices and ratify the Hong Kong Convention. It will lead to discouragement of ratification of the Hong Kong Convention, rendering any efforts to establish a global safe and environmentally-sound ship recycling regime futile,” writes Cyprus.

Locking horns with Turkey

Cyprus also fears that the proposal will create problems for its shipowners and in this connection, the country points to the equality principle of the Lisbon treaty.

“The disregard for the principle of equality means that Cyprus-associated ships will be excluded from using EU-approved recycling facilities in Turkey, thereby limiting recycling options. More crucially, this will lead to a loss of flags from the Cyprus registry as well as a negative impact to the Cyprus port and shipping management industries, as ship owners will choose to avoid hubs where they might encounter difficulties.” 

Source: shipping watch. BY KATRINE GRØNVALD RAUN

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