Commission of the European Communities
COM(2007) 269 final
GREEN PAPER
On better ship dismantling
(Presented by the Commission){SEC(2007)
645}
GREEN PAPER on Better Ship Dismantling
1. Introduction: Europe 's
Contribution to Tackling a Worldwide Problem
The dismantling of ships in the era of
globalisation is a reason for concern. At present it is sustainable from a narrow
economic point of view, but the costs for human health and the environment are
high. A radical change is needed as soon as possible.
· Each year between 200 and 600 sea-going
ships of over 2 000 dead weight tons (dwt) are dismantled worldwide. A peak is
expected in 2010 when around 800 single-hull tankers will have to be phased
out.
· Nowadays two thirds or more of these
ships are dismantled on beaches and river banks on the Indian sub-continent,
with Bangladesh
· Between 2001 and 2003 14% of the ships
that went for scrapping flew the flags of EU Member States and 18% the flags of
states which acceded to the EU in 2004. At least 36% of world shipping tonnage
in 2006 was owned by companies domiciled in the EU.
· Approximately 100 warships & other
government vessels flying EU flags - most of them French and British - are
expected to be decommissioned in the next 10 years. The naval vessels that were
built between the 1960s and the early 1980s contain relatively high quantities
of asbestos and other hazardous materials.
· From the ships scrapped between 2006
and 2015 an estimated 5.5 million tonnes of materials of potential
environmental concern will end up in dismantling yards (in particular oil
sludge, oils, paints, PVC and asbestos).
· None of the sites used for ship
dismantling on the Indian sub-continent has containment to prevent pollution of
soil and water, few have waste reception facilities, and the treatment of waste
rarely conforms to even minimum environmental standards.
· Ship scrapping is an important source
of raw materials in South Asia . Bangladesh Bangladesh
· Shipbreaking is a dangerous activity.
According to a recent Indian report, one in 6 of the workers at Alang , India Bangladesh
· At present there is "green"
ship recycling capacity, i.e. conforming to environmental and safety standards,
to handle at most 2 million ldt/year worldwide, which is around 30% of the
predicted total scrapping demand in normal years. Most of these facilities -
particularly in China , but
also in some EU Member States - find it difficult to operate, as they cannot
offer the same scrap prices and have much higher costs than their competitors
in South Asia .
In principle, the transfer of
end-of-life ships from industrial to developing countries is covered by
international law on the shipment of waste, and the export from the European
Community of vessels containing hazardous materials is banned by the EC's Waste
Shipment Regulation. However, in recent years several high-profile cases of
European ships going for recycling to South Asia
have shown the problems of implementing this legislation.
These obvious deficiencies and the
failure to provide for socially and environmentally sustainable ship
dismantling have alerted the international public and created political
momentum. The International Maritime Organisation - IMO - has started to work
on an international convention for the safe and environmentally sound recycling
of ships. Some maritime countries, such as the UK
In its conclusions of 20 November 2006
the Council of the EU acknowledged that environmentally sound management of
ship dismantling is a priority for the European Union. It stated that recent
events and forecasts of tonnages to be dismantled in the near future call for
urgent and appropriate action from the international community, including the
EU. The Council welcomed the Commission's intention to work towards an EU-wide
strategy on ship dismantling. This strategy should strengthen the enforcement
of existing Community law, recognising the specificity of the maritime world,
developments taking place therein, particularly in international maritime
legislation, and the final objective of reaching a globally sustainable
solution. In this context, the Commission is invited to assess the need for
building up sufficient ship dismantling capacity in the EU.
The Commission already set out its
position in the Green Paper on Maritime Policy of June 2006[1]. It proposed
that a future EU maritime policy should support initiatives at international
level to achieve binding minimum standards on ship recycling and promote the
establishment of clean recycling facilities. However, the EU might also have to
pursue a set of regional initiatives to account for the gaps in the forthcoming
international regime and the possible delay until it becomes effective.
This Green Paper attempts to come up
with fresh ideas on ship dismantling, in order to continue and intensify the
dialogue with Member
States South Asia of a major
source of revenue. On the contrary, while acknowledging the structural
comparative cost advantage of such countries, the ultimate aim of the EU is to
ensure that minimum environmental and health and safety standards are observed
worldwide.
2. Key issues
2.1. Legal situation: the ban on
exports of hazardous waste
In the late 1980s cases of toxic waste
from industrialised countries sent to developing countries resulted in
international outrage. Eight thousand drums of chemical waste dumped in Koko
Beach, Nigeria, and ships like the Karin B sailing from port to port trying to
offload their cargoes of hazardous waste made the newspaper headlines. A
reinforced international legal framework was called for. The United Nation's
Basel Convention was adopted on 22 March 1989 to set up a framework for
controlling the movement of hazardous wastes across international frontiers. To
date 168 countries have signed the Convention and 165 have ratified it. The
European Community as a whole is a party to the Basel Convention, as are all
the Member States.
An absolute ban on exports of hazardous
waste from OECD countries to non-OECD countries was adopted in 1995 as an
amendment to the Basel Convention. The ban was introduced due to political
concerns raised both by developing and developed countries regarding the
increased amounts of hazardous waste being exported from developed countries to
developing countries and then managed in an uncontrolled and risky manner.
This "Basel USA China , Indonesia ,
Egypt and Nigeria have accepted the ban amendment, while Australia , Brazil ,
Canada , India , Japan ,
Korea and Russia Member States are promoting, together with their
international partners, the ratification of the "Basel
In international waste shipment law it
is recognized that a ship may become waste as defined in Article 2 of the Basel
Convention and that at the same time it may be defined as a ship under other
international rules3. The definition of waste in Community law, according to
which waste means any substance or object in the categories set out in Annex I
to the Waste Framework Directive4 which the holder discards or intends or is
required to discard, applies also to ships sent for dismantling. If a vessel
contains considerable quantities of hazardous substances, or in the words of
the relevant waste entry GC 030, has not been "properly emptied" of
hazardous materials, it will be considered a hazardous waste. The export of
such a vessel for scrapping from the EC to a non-OECD country is prohibited
under the Basel
The obligations for the EU Member
States under conventions of the International Maritime Organisation (IMO) do
not invalidate these waste shipment rules, even though a ship should not be
stopped or undergo "undue delay" if it has valid IMO certificates.
The Basel Convention and the export ban on hazardous waste, as implemented at
EU level through the Waste Shipment Regulation, are binding and need to be
enforced in the Member States. Both systems of rules are compatible, since both
the Law of the Sea and IMO conventions also provide for the rights (and duties)
of coastal states to enforce other applicable rules of international law with
regard to environmental protection.
In practice, the notification
requirements of the Basel Convention, which are binding on all its parties, are
rarely complied with in the case of end-of-life ships. It is difficult to apply
the export ban under the EC Waste Shipment Regulation if a ship has left
European waters and the owner then decides to send it for dismantling in other
parts of the world. Specific legally binding international rules on ship
recycling are proposed in the draft Convention that is currently being
discussed in the IMO, but do not exist at present.
2.2. The economics of ship
dismantling
Currently the ship dismantling market
functions as follows. Ship-owners who have decided to end the economic life of
a vessel will look for a cash buyer. This basically happens when the
maintenance costs of the vessel start to exceed possible revenue, or when the
vessel has become unattractive for the second-hand market, i.e. it is unlikely
that it can be sold on. The cash buyer will either be a dedicated broker or the
scrap yard operator himself. Typically, the ship will take cargo for a final
voyage to the area where the scrap yard is located. After completion of this
voyage, the ship will be brought, under its own power, to the scrap yard where
it will be dismantled.
The cash buyer pays a price in US$ per
light displacement ton (ldt), which is roughly equivalent to the steel weight
of the ship. For years the price has been around 150 US$/ldt (with lows around
100 US$/ldt and highs around 200 US$/ldt), but recently the strong demand for
steel scrap in China and the low supply of ships have driven prices up to
record levels of nearly 500 US$/ldt for average vessels and more for
particularly valuable ones. The highest prices are currently paid in Bangladesh
A very large crude oil tanker (VLCC)
with a cargo carrying capacity of 300,000 tonnes or so will be around 45,000
ldt so can fetch 5 to 10 million US$ (or even much more), depending on market
conditions. These figures are just rough indications as the price is also
affected by other factors like the amount and quality of the steel, the
presence of metals such as copper or nickel, and the equipment that can still
be sold. Whether or not there are problematic substances on board do not seem
to affect the price.
The Commission looked into the
economics of ship scrapping in a study conducted in 20006. The study concluded
that under current conditions it would be extremely difficult to make ship
recycling economically viable while at the same time respecting sound
environmental standards for various reasons.
· The number of ships available for
scrapping depends on conditions on the freight market. If ships can still earn
good money, owners will not decide to send the ship for scrapping. In the past
two years, scrapping volumes were very low due to a booming and profitable
freight market. The large majority of ships for scrapping will have to come
from the deep sea merchant fleet and will be mainly tankers and bulk carriers
(which are the "volume" segments). Other market segments, such as
warships, inland waterways vessels and offshore structures, are of limited size
and availability and so can hardly provide a steady stream of material for
large-scale recycling. The operator of a modern recycling facility will
therefore have difficulty building a business model that fully covers its
amortisation costs. This is why the remaining operators in Europe
were able to survive only by concentrating on niche markets, in particular
offshore structures, fishing boats and inland waterway vessels.
· Ships are individual constructions with
a long life-cycle and will have undergone many repairs and maintenance in their
20-30 years of operation. Very little of this will be properly documented. The
recycling facility therefore does not know what it is taking on and what
recycling work will be required. This is particularly true for passenger ships
which contain a wide range of materials, including composites which are very
difficult to separate and recycle. The ships currently heading for the scrap
yards were built in the 1970s using materials that are no longer used today
(e.g. asbestos). Consequently, the amount of manual labour required is
significant and likely to remain a major cost factor. The use of heavy
machinery for these types of vessels will be limited.
· Some materials on board can be recycled
and will create revenue. Others need expensive treatment, for which costs are
significant but difficult to calculate in advance.
· The main revenue streams for scrap
yards in Asia are steel which is used in
building, and the second-hand market in ships' equipment. These revenue streams
basically do not exist in developed countries due to regulatory requirements.
Another factor is the difference in
labour costs between Asia and Europe . While
labourers on demolition sites in Bangladesh
and India earn 1-2 US$/day
and employers' expenses for safety and health are negligible, the costs in
Europe can be estimated at around 250 US $/day
for a worker in the Netherlands
and 13 US
These differences in labour costs,
environmental and health requirements and revenue from recycling and
second-hand materials explain why operators in South Asia
can offer far better prices to ship-owners than their potential competitors in
other countries. In Bangladesh
breakers who have no environmental or health and safety costs currently pay
450-500 US $/t for a ship,
while Chinese facilities with slightly better standards offer half this price
and US
As a consequence of market
developments, the dismantling capacity in the EU has been reduced in the last
20 years to a marginal level. Nowadays there are facilities for larger ships
mainly in Belgium , Italy and the Netherlands UK to
allow dismantling activities in two existing shipyards which would have
considerably more capacity (600,000 ldt/year in the case of Able UK Europe , which would be technically suitable for
dismantling, but are not likely to be reopened under current economic
conditions.
More sizeable than the existing
capacity in the EU is that of neighbouring Turkey shore
of Aliaga (near Izmir
The EU facilities in general meet high
standards of occupational safety and environmental protection. Their Turkish
counterparts have made considerable advances in environmental and safety
management over the last years, even though there are still some environmental
concerns. There are also a number of facilities with piers for shipbreaking in China USA
The existing capacity for clean ship
dismantling in the EU, as well as in Turkey is thus sufficient for the warships
and other state-owned vessels - an estimated 100 of more than 1,000 ldt, with a
combined tonnage of up to 500,000 ldt10 - that will be decommissioned over the
next 10 years, but only for a minor part of the merchant fleet under EU flags.
According to UNCTAD reports, a tonnage of between 6 and 30 million dwt have
been sold for breaking per year between 2000 and 2005, while approx. 23% of the
world merchant fleet fly the flags of EU Member States11.
This problem of insufficient
"clean" capacity will be aggravated by the forthcoming phasing-out of
all single-hull oil tankers. Accidents involving tankers like the Erika and the
Prestige have caused major environmental disasters in recent decades. In
reaction to this, EU legislation and international rules were adopted for the
gradual phasing-out of single-hull tankers and will begin to have maximum
effect in the next decade. It is estimated that about 1,300 single-hull tankers
will be decommissioned and go for scrapping by the year 2015, about a third of
them under the flags of Member States12. The demand for ship recycling capacity
is expected to peak around the year 2010, the main phasing-out date for these
tankers. However, there will also be increases in the longer term, due to the
general boom in shipbuilding over the last years.
For the moment the ship scrapping
market is still economically viable, leaving aside the extreme externalisation
of costs. Owners have significant income from selling decommissioned ships (the
Very Large Crude Carrier – VLCC - given above as an example would today cost
some 90 million US$ to build new, and would fetch 10 million US$ or more after
25 years of use). Scrap yards make profits from recycling the materials
recovered. But the market only functions under highly problematic conditions
that will be described below. This is less and less acceptable for the public
in the developed countries where most ship-owners reside and where the
financial returns from the ship's operations are collected, and it is not
compatible with principles of environmental and social sustainability.
2.3. Environmental and social impacts
Most vessels contain large amounts of
hazardous materials, such as asbestos (in particular if built before the
1980s), oils and oil sludge, PCBs (polychlorinated biphenyls), and heavy metals
in paints and equipment. So when sent for dismantling, these ships, represent
one of the major streams of hazardous waste from industrialised countries to
the developing world. In 2004 a study for the Commission (DG TREN) estimated
that oil sludge from end-of-life ships alone will total between 400,000 and 1.3
million tonnes per year until 2015. Of the hazardous waste in dismantling
facilities every year, asbestos will amount to 1,000-3,000 tonnes, TBT 170-540
tonnes and environmentally harmful paints 6,000-20,000 tonnes13.
The scrapping of ships in Bangladesh , India
and Pakistan
The impact of these practices on the
environment has rarely been studied in detail. Available data suggest that the
physico-chemical properties of sea water, beach soil and sediments are
considerably affected by shipbreaking14. Oil pollution of the beaches and the
adjoining sea is clearly visible on aerial photographs of the dismantling sites
at Alang (India ) and Chittagong (Bangladesh
Safety and health conditions in the
South Asian scrap yards are critical. There is a high risk of dangerous
accidents, particularly because of the lack of heavy machinery (cranes) and
safety equipment for workers. According to a 2004 government report in India Bangladesh
In addition, it is estimated that
thousands contract irreversible disease from handling and inhaling toxic
substances without minimum precautions or protection. According to a medical
report to the Indian Supreme Court in September 2006, 16% of the workforce
handling asbestos in Alang were found to be suffering from asbestosis and thus
at serious risk of mesothelioma17. As is known from medical research, the
incidence of this form of lung cancer reaches its peak only several decades
after exposure.
In 2005 there were an estimated 25,000
scrapyard workers in Bangladesh India
The conditions in shipbreaking
facilities have been criticised by environmental and human rights organisations
and the media, and by India
2.4. International state of play
The problem of ship dismantling has
been discussed for many years, both within the EU and within the international
organisations involved: the International Maritime Organisation (IMO), the
International Labour Organisation (ILO) and the Basel Convention (or more
precisely its parent body, the United Nations Environment Programme, UNEP). All
three organisations have developed non-binding technical guidelines for ship
recycling19. At two meetings in 2005, a Joint ILO/IMO/Basel Convention Working
Group on Ship Scrapping discussed a co-ordinated approach to the issue in order
to avoid duplication of work and overlapping of roles, responsibilities and
competencies between the three organizations.
Since 2005, the IMO has been working
towards a binding international regime for clean ship dismantling. The EU
Member States and the Commission take part in this work. A draft Convention on
the Safe and Environmentally Sound Recycling of Ships is being negotiated in
the organisation's Marine Environment Protection Committee (MEPC) for adoption
by a diplomatic conference in 2008/2009, to enter into force some years later.
The draft has an annex containing regulations on requirements for ships
(including design, construction, operation and maintenance) and for ship
recycling facilities, and some reporting requirements. It aims at a
"cradle to grave" approach to ship recycling, with a view to avoiding
hazardous materials in new ships and removing them from existing ships during
their period of operation. Technical details, which also cover the environmentally
sound management of ship recycling facilities, are supposed to be set out in
recommended guidelines supplementing the Convention.
According to the current draft, the
Convention - in line with other IMO instruments - will not apply to smaller vessels
of less than 400 or 500 gross tons, nor to warships, naval auxiliary or other
vessels which are state-owned or -operated and used only on non-commercial
government service. Controversial issues, which will be discussed by IMO
working groups in 2007, include the question as to whether reference should be
made to rules and standards outside the framework of IMO, the environmental
baseline standard for ship recycling facilities, future reporting requirements
(in particular whether state-to-state notification should be necessary as under
the Basel Convention) and the type of compliance mechanism to help with
implementation of the Convention.
In the context of the Basel Convention,
the key issue under discussion is whether the proposed Ship Recycling Convention
will ensure an equivalent level of control and enforcement as under the Basel
Convention. The 8th Conference of the Parties on 1 December 2006 reiterated
this demand and stated, among other things, that the future legal instrument
should generate conditions of ship dismantling that protect workers and the
environment from the adverse impacts of hazardous wastes and unsafe working
practices.
3. Options for improving European
management of ship dismantling
The Commission has examined the wide
variety of issues involved and identified some options for closing or at least
narrowing the implementation gap and improving the management of ship
dismantling. These options should not be seen as mutually exclusive, but as
supplementing and supporting each other.
3.1. Better enforcement of EU waste
shipment law
The EU Member States are under an
obligation to apply and enforce the EC Waste Shipment Regulation, including the
"Basel
Even though the mobility of ships makes
it relatively easy to circumvent the export ban, enforcement could be improved,
at least in the case of vessels and shipping lines which regularly operate in
European waters.
This will require:
· more controls by waste shipment and
port authorities in European ports, targeting ships that are above a certain
age (25 years) or where other indications make it likely that they are intended
for dismantling;
· possibly additional guidance by the
Commission and the Member States on the definition of waste and hazardous waste
in relation to ships, and a list of recycling facilities that meet standards of
environmentally sound management and are safe to workers;
· more systematic co-operation and
information exchange between the Member States, and between them and the
Commission, including the use of databases and press reports to identify
potential end-of-life ships and follow their route to dismantling facilities;
· more cooperation with certain third
countries, in particular recycling states and transit states (e.g. Egypt in relation to end-of-life ships that pass
through the Suez Canal );
· a policy focus on warships and other
state-owned ships and commercial vessels that regularly operate in EU waters
(e.g. ferries).
As the Waste Shipment Regulation does
not apply only to EU-flagged ships, but to all waste exports, and thus
end-of-life ships that leave EU ports, ship-owners are not able to escape
controls by re-flagging to non-European flags. The risk that shipping activity
in Europe might be reduced by tighter
enforcement is not very high as long as the EU remains an economically
attractive and profitable market. More realistic is the risk that irresponsible
non-European ship-owners affected by controls might abandon their vessels in EU
ports, so that eventually proper disposal has to be paid for by the taxpayer.
This kind of problem can only be addressed by more efficient enforcement of
maritime rules in general.
3.2. International solutions
Within the international bodies
involved, there seems to be general agreement that the most important issue is
to ensure that ships are recycled in an environmentally sound and safe way. In
order to create a level playing-field worldwide, binding international
standards are necessary. Such standards should generate a real change in current
dismantling practices by stopping the frequent pollution of soil and water, and
by protecting workers from accidents and contamination. For instance, safe
containment of oil residue spills, the prior removal of asbestos with
protective equipment, gas-freeing precautions to prevent explosions, and
machinery to carry heavy loads safely should all be made mandatory.
There will still probably be a price
difference between European and Asian countries, even if the latter meet high
environmental and health standards, but it is less likely to prove prohibitive
in all cases. In the foreseeable future, developing countries will be able to
offer lower labour costs and higher prices for steel and reusable equipment.
Still, there would be greater scope for the price gap to be bridged by
voluntary measures that allow a certain amount of ship dismantling to take
place in Europe where there are particularly
high "zero pollution" and "zero human health harm"
standards.
The future international Convention
will be essential for solving the ship dismantling problem globally. Thus, the
IMO is the most relevant forum to deal at the global level with this issue. The
new Convention will have repercussions on the Waste Shipment Regulation and
other EU law on environmental protection and safety at work. The Community as a
whole needs to pursue the objective of becoming a party to this specific
Convention of the IMO, . This can be done by including in the Convention a
clause on regional economic integration organisations ("REIO clause"),
as is the case in all recent multilateral environmental agreements. In order to
achieve safe and environmentally sound international standards as soon as
possible, there is a need to reinforce the role of the Community in the IMO.
It is in the interests of the EU,
firstly, that the work of the IMO be concluded as swiftly as possible, and,
secondly, that the Convention be sufficiently broad in scope and generate sound
standards for health protection and environmental management, as well as the
mechanisms necessary for their enforcement. For this, the Convention should
establish clear obligations and prerogatives of flag states, port states and
recycling states, and a fair balance between them. The IMO system has to be
made effective in the sense of creating a system under which ships can only be
dismantled in an environmentally sound and safe way.
It is unlikely that the forthcoming
legal instrument will include an obligation to decontaminate a ship prior to
its final voyage, since pre-cleaning is seen by the shipping industry as
impracticable from a safety point of view or uneconomic. Under the draft
Convention, prior removal of hazardous materials may not be required if the
recycling facility chosen is fully authorised to manage the type or amount of hazardous
materials contained in the ship. The draft (as of December 2006) seeks to match
the individual ship's requirements and the capabilities of the recycling yard
by means of a Recycling Plan and an International Ready for Recycling
Certificate. However, there is still a need to clarify that, in case the final
recycling facility is not capable of managing certain hazardous materials, the
owner of an end-of-life ship must select another yard or remove the materials
for safe disposal or recovery beforehand. For the time being, since the Waste
Shipment Regulation requires vessels to be "properly emptied" of
hazardous materials in order to be classified as non-hazardous waste, the
Commission works on a study concerning the risks, costs and benefits of pre-cleaning.
The results should be ready in the late spring of 2007.
To change the EC Waste Shipment
Regulation or other Community law affected by the proposed Convention is
currently not an option. This EU legislation should and will remain in force
and there are no plans for changes until international rules under the IMO
achieve the same high standard. In particular, there is no reason to modify the
Basel Convention system for controlling transboundary waste shipments and to
grant exemptions for end-of-life ships unless and until a new international
regime guarantees an equivalent level of control for them.
However, in order to enhance Community
involvement in the IMO negotiations on an international Ship Recycling
Convention, it is necessary:
1. to
establish a Community position and possibly give the Commission a mandate for
the further negotiation of the IMO Ship Recycling Convention, because of the
Community legislation that might be affected;
2. to
have a "REIO clause" inserted in order for the Community to become a
party to the Ship Recycling Convention;
3. to
intensify the co-ordination of positions in the negotiations between the EU
Member States and the Commission; co-operation is already good but further
reinforcement is needed.
After their adoption, the Convention
and its guidelines have to be transposed into Community law in order to make
them mandatory for EU-flagged ships or ships entering EU waters. This was the
case with a number of IMO conventions, like for instance the Anti-fouling
System (AFS) Convention, introduced into Community law by Regulation (EC) No
782/2003. This approach to establish EU rules on the basis of international
legal instruments is currently the basis of EU actions in maritime transport
issues which allows taking into account the specificities of international
shipping.
The Ship Recycling Convention, however,
may come too late to solve the problem of phased-out single hull tankers, as
IMO conventions take on average 6 years to enter into force, and the peak for
phasing-out is expected around 2010. So while it is necessary to push for the
earliest possible entry into force of the Convention, solutions have to be
found for the interim period.
3.3. Strengthening EU ship
dismantling capacity
As described above under 2.2, the
available capacity for ship dismantling in the EU and in other OECD countries
(especially Turkey) is sufficient for all the warships and other state-owned
vessels that will be decommissioned over the next 10 years, but not for the
much higher number of oil tankers and other large merchant ships that fly EU
flags or are owned by EU-domiciled companies. This situation will not change
significantly even after several shipyards in the UK China
However, the under-utilization of
existing "green" or upgraded facilities in the EU, Turkey and China
Reacting to this situation, the Council
of the EU has issued a statement on 17 May 2006, according to which Member
States would use their best endeavours to increase capacity for ship
dismantling in the EU. Furthermore, the Member States would do their utmost to
ensure that good progress is made in the international negotiations to
establish mandatory requirements at the global level on ship dismantling. In
the Council conclusions adopted on 20 November 2006, before the 8th Conference
of the Parties of the Basel Convention, the Commission was invited to assess
the need for building up sufficient ship dismantling capacity in the EU.
Looking at ways to strengthen the
position of clean ship dismantling facilities in general and EU facilities in
particular for the interim period, until a new international regime has
established a level playing-field worldwide, action should focus on state-owned
vessels. The governments of EU Member States are under a special obligation to
comply with Community legislation and to act in an exemplary manner with regard
to the dismantling of warships and other vessels which are state property. As
regards warships, an additional responsibility is derived from the relatively
high proportion of hazardous materials (especially asbestos) on board older
vessels.
The governments of Member States could
trigger the supply of "green" dismantling and pre-cleaning services
for their end-of-life ships by way of public tenders, in which they follow
strict public procurement rules that allow dismantling only in accordance with
current waste shipment law and high standards of environmentally sound
management. The viability of dismantling facilities in Europe
could be promoted already by more transparency in the decommissioning of
state-owned ships, a coordinated time-schedule, and EU-wide harmonisation of
the quality standards required by governments in dismantling contracts.
Where Member States sell their vessels
for further use to other countries or commercial buyers, they can still retain
some leverage by including provisions on dismantling, such as a clause on prior
government consent to disposal, in the sales contract. Such provisions are part
of the proposed UK Ship Recycling Strategy published in March 200621.
In relation to the much larger merchant
fleet, the economic considerations described above are of prime importance. As
long as no binding international regime is fully established, and probably even
after that date, strong incentives are needed to induce changes in the current
practices of the shipping industry. In the longer term, the objective should be
to establish a sustainable funding system whereby ship-owners and possibly other
beneficiaries of shipping contribute to the safe and environmentally sound
dismantling of ships worldwide. Possible details of such a system are discussed
below (3.6).
For the interim period, voluntary
commitments in the spirit of Corporate Social Responsibility can play a certain
role and should be encouraged (see below 3.5). Awards and certification systems
in particular can help to show the way forward.
The question as to whether or not
direct financial support should be given to clean ship dismantling facilities
in the EU or to ship-owners who send their vessels to "green" yards,
either for full ship dismantling or for decontamination, should receive special
attention. Such support to innovative facilities might indirectly reduce the
number of ships dismantled under unacceptable conditions. It is, however, easy
to see the risk that huge sums would be needed for a long period of time
without creating a sustainable industrial activity and risking
cross-subsidisation to other activities, particularly in the shipbuilding
sector where competition is very strong. Apart from this, subsidising
dismantling facilities, and even more ship-owners directly, would go against
the "polluter pays" principle of European law. For this reason,
unsurprisingly, the state aid rules on this kind of aid are rather limited.
The current EU guidelines on
environmental state aid22, which are the instrument to define the scope of such
aid, include certain waste management services but not ship dismantling as a
possible object. Whether subsidies for certain activities, such as innovative
investments, the disposal of asbestos or the participation of a company in
certification and monitoring schemes, are state aid in this sense and allowed
by the guidelines, has to be assessed at present on a case-by-case basis.
European cohesion policy can also provide support for shipyards, including for
recycling facilities, on condition that this is in accordance with the
objectives, rules and procedures of the policy.
3.4. Technical assistance and transfer
of technology and best practices to recycling states
In spite of poor and dangerous working
conditions and the degradation of the local environment, ship-breaking yards
are economically important for South Asian countries. For instance, Bangladesh
In order to encourage an upgrading of
facilities in these countries, it will be necessary to provide technical
assistance and encourage better regulation. On a small scale this is already
done by international organisations, some OECD countries, and also the
Commission. This technical and financial aid should be reviewed in close
collaboration with the affected countries and other international donors, with
the aim of promoting safe and environmentally sound ship dismantling. The EU
will soon negotiate new or updated political or economic agreements with a
number of recycling states, and where appropriate, will explore how the goals
of improved labour practices and environmental standards could be reflected.
Within the EU, there is a considerable
amount of experience and technology for environmentally friendly
ship-dismantling available. The EU should endeavour to share such experience
with the recycling states and to promote the relevant transfers of technology
and best practices. By the same token, the EU can transfer experience and
practices in relation to dealing with the risks posed by asbestos, thus helping
to raise the standards of protection and precaution in the countries concerned.
Beyond the technical level, however, it
is necessary to acknowledge that the absence or non-implementation of
elementary rules on safety at work and environmental protection is strongly linked
with structural poverty and other social and legal problems in some areas of
South Asia, such as the lack of property rights and the frequency of extremely
short leases for operators on coastal land, the weakness of enforcement
authorities, and the existence of bad governance practices. In order to achieve
sustainable change, assistance will have to be embedded in a wider framework.
3.5. Encouraging voluntary action
Merchant ships generate large profits
for their owners over a relatively long operating life. When a ship becomes
waste at the end of its life, the owner, as the person who has also typically
taken the decision to send the ship for scrapping and is thus
"producer" of the waste, is best placed to ensure that its disposal
or recovery takes place in a safe and environmentally sound way. Ship-owners
who take their profession seriously should not tolerate the current dismantling
practices, which endanger the life and health of workers and pollute the
environment.
Voluntary commitments by ship-owners,
their associations and their customers are potentially the simplest and
quickest way to change practices on the ground. The shipping company P&O
Nedlloyd, for instance, (now part of the Maersk Group) has formed a partnership
with Chinese facilities whose environmental and safety standards were upgraded
through technical assistance and training. Intertanko, the organisation of
independent tanker owners, announced in September 2006 the adoption of an
"Interim Strategy", according to which ship-owners should only use
recycling facilities that have made demonstrable advances in terms of the
safety and environmental management in Section C of the draft international
Convention.
The Conference of the Parties of the
Basel Convention, in a decision of 1 December 2006, called upon ship-owners and
other stakeholders to take all practical steps to ensure that end-of-life ships
are dismantled in an environmentally sound manner.
Voluntary agreements may be effective
when they are properly designed in terms of substance and comprise clear
mechanisms to ensure implementation of the commitments taken by private
stakeholders as well as systems for monitoring and control. A commitment of
this type is a useful first step to generate change. It should therefore be publicly
encouraged and, where possible, supported with incentives from the European
Union and the Member
States
3.6. Ship dismantling fund
Especially in the longer term it will
not be acceptable for investment in clean ship dismantling facilities in Europe
or Asia to be subsidised out of public funds.
"Polluter pays" and producer responsibility principles require that
the owners take full responsibility for proper disposal. Such a sustainable
funding system could be organised on a voluntary basis, with commitments
particularly from the shipping industry, but in view of strong competition on
the market it seems more effective to establish it as a mandatory element of
the new international regime on ship dismantling. The IMO would be in the best
position to operate this fund, similar to the existing oil pollution funds
under the MARPOL Convention.To guard against re-flagging to states that do not
join the fund system, contributions should be linked to registration at IMO or
the operation of ships over their lifetime, e.g. through port fees or mandatory
insurance schemes.
This link to the ship's operational
phase is also preferable to a deposit at the time a ship is first built, since
often the shipyard that built the ship will no longer exist when the vessel is
finally scrapped. If an IMO-based fund is not achievable, a regional system
could be considered.
3.7. Other options
Several other measures might be useful
to assist the process of upgrading the ship dismantling industry in the short
and medium term:
(a) EU legislation, in particular on single-hull oil tankers. As
these tankers will make up a major proportion of the end-of-life ships to be
scrapped in the next few years, it might be worth considering action to
supplement the relevant maritime safety legislation with rules on the clean and
safe dismantling of the vessels.
Some Member States have indicated that
they would support such a proposal if the Commission took the initiative. The
disadvantage of this legislation is that, since single-hull tankers are largely
banned from EU ports anyway, it would be addressed mainly to EU flag states and
could thus trigger off a wave of re-flagging, without producing benefits for
safety and the environment.
Apart from the specific issue of oil
tankers, more general measures are conceivable to prevent the use of hazardous
materials in the construction of new ships. The recent adoption of the new
chemicals legislation REACH (Regulation (EC) No 1907/2006) provides the
regulatory framework as regards the use of hazardous chemicals. Whether
additional measures, specific to the use of other substances in the construction
of vessels, are needed would require thorough analysis and impact assessment.
(b) Streamlining of shipping aids with a link to green ship
dismantling. Community funding for the shipping industry and state aids for
maritime transport could be linked to the beneficiary's use of clean and safe
dismantling facilities for all ships under its control.
(c) Establishment of a European certification system for clean ship
dismantling and awards for exemplary green recycling. Existing or in future
improved certification systems, such as EMAS, could be used for the benefit of
improving the management of ship dismantling facilities and making this
improvement transparent for clients and the public. The intended revision of
the EMAS Regulation might open the system also for non-EU sites and thus enable
interested operators e.g. in Turkey
(d) Intensifying international research on ship dismantling. At
present, the Sixth Framework Research and Development Programme of the European
Commission funds one research project on the issue ("SHIPDISMANTL")
which looks at technological options under the aspect of international
cooperation. In this framework, research institutes and dismantling yards from
the EU, Turkey and India
Apart from this and other research that
was and is undertaken by the Commission itself, more scientific cooperation in
partnership mode involving teams from Asia and Europe would be useful to
analyse the options and their implications in an integrated way that includes
environmental, social, economic and institutional aspects. It would then be
possible to propose courses of action on a scientific basis which could be
helpful to the different domestic players and in international negotiations.
However, it might be several years before the results of this research become
available.
4. Conclusion
This Green Paper gives the basic facts
on ship dismantling and explains the problems. There are more details and data
in the Annex. To give us a clearer view of the action required of the EU, we
ask Member States, stakeholders and the public to consider the following
questions.
1. How
can the enforcement of current Community law (Waste Shipment Regulation)
affecting end-of-life ships be improved? What is the best mix of measures to
divert EU-flagged or EU-owned vessels to dismantling sites with high
environmental and safety standards?
2. Would
guidance on waste shipment rules and definitions on end-of-life ships help to
improve implementation of rules and business practices, and what form should it
take?
3. What
is the best way of steering the current negotiations on the IMO Ship Recycling
Convention in order to improve ship dismantling practices globally?
4. Should
the EU aim at global environmental and safety standards under the IMO
Convention that are comparable with EU standards?
5. How
can the EU best ensure that European ships are dismantled in a safe and
environmentally sound way during the interim period before the IMO Convention
becomes effective? What about ships owned by the public sector? Will national
strategies and voluntary commitments by ship-owners be sufficient? What
additional measures would be needed at EU level?
6. Should
the EU and its Member
States
7. What
measures and actions should the EU take to encourage South Asian states to
introduce and implement higher environmental and safety standards for ship
dismantling?
8. What
measures and actions should the EU take to encourage ship-owners to direct
end-of-life ships to dismantling sites with high environmental and safety
standards?
9. How
should the EU secure sustainable funding for clean ship dismantling in
accordance with the polluter pays principle, and what measures and actions
should it take?
Contributions in the context of this
consultation process should be sent to the Commission by 30 September 2007, by
email to the address “ship-dismantling@ec.europa.eu ”, or by post to the
following address:
European Commission
Directorate-general Environment
Unit G.4 “Sustainable production and
consumption”
B-1049 Brussels
This Green paper and the contributions
received will be published on the Commission’s website, unless requests not to
do so have explicitly been made. In late 2007, the Commission intends to
present its analysis of the responses received together with, if appropriate,
its proposal and/or initiatives for an EU strategy on ship dismantling.
[1] References are to be found at the
end of the Annex.
Source: (Accessed on 06 Oct 2011)
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