The European Commission
released its report (here) on the viability of a financial incentive for
sustainable ship recycling under the EU Ship Recycling Regulation this week.
Whilst it acknowledges the benefits for clean and safe ship recycling such an
incentive would bring, the European Commission has decided to wait with its
introduction. NGOs urge the EU to take action now as it is well documented that
ship owners will with ease be able to circumvent the EU Ship Recycling
Regulation by simply swapping the flag of their vessel to that of a non-EU
State.
The report of the European
Commission is based on the study which was conducted by Ecorys, DNV-GL and the
University of Rotterdam/Erasmus, and published at the end of 2016. The proposed
instrument in the study is in the form of a licence which each ship, regardless
of its flag, needs to acquire in order to enter EU ports. This licence can be
bought monthly, yearly, or every 5 years, depending on the trading
requirements, and will be ship-specific. At the end of the ship’s life, the
money spent on buying the licences will have been put aside and can be paid
back to the last owner of that ship once it is recycled at a facility which is
approved according to the EU Ship Recycling Regulation. Such an incentive will
offset the higher profits made when selling to substandard shipbreaking yards
and ensure the proper recycling of EU-trading ships regardless of their flags.
In the report published on 8
August, the European Commission sees this system of the Ship Recycling Licence
as a workable solution if it is demonstrated that there are many ships that
will flag out to circumvent the EU Ship Recycling Regulation, thereby weakening
its effectiveness. All EU-flagged vessels will have to be recycled in an
EU-approved facility starting from the end of 2018 at the latest. Only once it
is clear what the effects of the EU List are on the recycling choices of
shipowners, will the Commission consider whether to go ahead with introducing
the Ship Recycling Licence. Therefore, if shipowners choose to recycle their
vessels responsibly in a facility on the EU List and do not flag out in order
to circumvent the Ship Recycling Regulation, the Commission believes that it
will not be necessary to introduce a financial mechanism.
However, flagging out at
end-of-life is a practice which is already widespread. Most shipowners sell
their obsolete vessels to so-called cash buyers. These scrap-dealers become the
new owners of the ships and both re-name and re-flag the vessels for their last
voyage to the beaching yards in South Asia. Particularly popular registries
amongst the cash buyers are the Paris MoU grey- and black-listed flags of
Comoros, Palau and St. Kitts and Nevis – flags that are known for their poor
implementation of laws governing labour rights and environmental protection at
sea. Maersk also already threatened that it would flag out its fleet from the
Danish registry if the Alang beaching yards they have recently chosen to use
are not approved by the EU. Swapping the flag of a ship is easy and makes it
very simple for cash buyers and shipowners to circumvent the law. The
motivation for doing so is also simple: dirty and dangerous shipbreaking brings
higher profits due to the lack of investments in infrastructure, illicit
handling of hazardous wastes and extremely poor working conditions. For these
reasons the NGO Shipbreaking Platform urges the EU Commission to not wait for
the effects of the EU List, but instead show that it intends to take all
measures possible to change the current deplorable shipping practices and
commit now to making a legislative proposal to introduce a financial incentive.
“The huge benefit of this
licence scheme is that it will also apply to non-EU flagged ships, meaning that
the scope of the EU Ship Recycling Regulation will be much wider and will truly
be a driving force for change in the shipping industry”, says Ingvild Jenssen,
Director of the NGO Shipbreaking Platform. “Those shipowners that are already
taking responsibility for their end-of-life fleet should be supportive of the
Ship Recycling Licence as it will create a level playing field ensuring that
also their competitors pay the price of clean and safe ship recycling,” she
adds.
Legislation based on flag
state jurisdiction alone is far too easy to circumvent. That is why more
policies aimed at improving the social and environmental performance of
shipping is being enforced via port state control. The Ship Recycling Licence
is as such in line with international trade law. Taking also into account the
widespread acknowledgement that financial incentives are key in ensuring the
success of environmental policies, it seems obvious that a return scheme for
ships is needed to change the behavior of shipowners that currently earn
profits at the detriment of workers’ health and lives and the environment.
Source: hellenic
shipping news. 12 August 2017
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