16 December 2013

An examination of the waste movement regime’s applicability to vessels destined for scrapping and potential improvements made in the IMO Draft Convention on Ship Recycling

Abstract:

The scrapping of ocean-going vessels is currently done mainly in a few states in Asia. Because of the hazardous materials contained in the ships, the scrapping poses a significant danger to both the workers in the shipbreaking yards as well as to the environment. The international community has been aware of the problems related with shipbreaking for over a decade, and has in different ways tried to improve the practices. Moreover, attention has turned to the regime governing the movement of waste, as it has been argued that a vessel destined for scrapping should be defined as waste under the regime. The waste movement regime contains provisions that control and restrict the transboundary movement of waste. Applying the regime could thus hinder vessels containing hazardous materials from being scrapped in Asia. This thesis examines how the shipbreaking industry functions, what considerations are made before selling a ship for scrapping, and where and how the scrapping is done. Furthermore, the study provides an overview of actions taken so far by different stakeholders that are trying to solve the problems connected with shipbreaking. The main attention is, however, paid to the regulations governing the movement of waste and how the regulations can be applied to vessels destined for scrapping. It is argued that although the waste movement regime can be applied to vessels, the enforcement of the regulation contains some major weaknesses. These weaknesses result in the regime not being effective at solving the problems related with the scrapping of vessels. Finally, the thesis examines the IMO Draft Convention on ship recycling. The Convention is currently being negotiated with the intention to adopt it in May 2009. The procedures laid down by the regulation are explained and some issues that remain unsolved are presented. This is accompanied by some critique of the Convention that has been put forward by environmental non-governmental organisations (NGOs). In the light of the critique from the NGOs and the earlier discussed weaknesses of the waste movement regime, the draft Convention is assessed. The conclusion is that although the draft Convention contains clear improvements of the present situation concerning the scrapping of vessels, the enforcement of the Convention still leaves room for some questions. Moreover, the draft Convention does not fully succeed to allocate the costs caused by shipbreaking in a manner that is in accordance with principles of international environmental law.

Conclusions:

Shipbreaking is a complex and a multi-faceted issue. The subject has attracted the interest of several organisations but it does not fall under one single competence. Thus, the ILO, the IMO and the parties to the Basel Convention, all have legitimate interests to consider the practice of shipbreaking. In view of the current shipbreaking procedures, it is also evident that actions are necessary in order to restrict the severe harms currently caused by the scrapping of vessels. In this study it has been shown that the present waste movement regime can be applied to ships destined for scrapping. In many ways, it is not far-fetched to consider a vessel destined for scrapping as waste, in the same manner as a car, a computer or other commodities are considered waste when they are intended to be discarded. Nevertheless, ocean-going vessels destined for scrapping are at the same time very different, although they fulfil the requirements that define waste. Vessels are large constructions with a relatively long life-length and they are able to operate around the world, sometimes far from where they were constructed. Because of these factors, ships destined for scrapping can hardly be accommodated within procedures established by the waste movement regime. Moreover, the enforcement of the waste movement regime to ships destined for scrapping is problematic. In order to define a vessel as waste, an intention to scrap the ship must be established. As has been shown in this study, this is often a rather difficult, if not impossible, task. Furthermore, a movable vessel can escape enforcement relatively easily if the shipowner hides the intention to scrap the ship until it is out on safe waters. Finally, the enforcement of the waste movement regime is also weakened by the fact that the applicability of the Basel Convention to ships destined for scrapping is disputed.

In this thesis it has been argued that the IMO draft Convention is in many ways an improvement compared with the waste movement regime. The draft Convention takes notice of the special features of ocean-going vessels and creates a global and binding regulation exclusively focused on the life of a vessel from its construction until it has been scrapped. It requires inventories of hazardous materials for all ships, supports green construction of vessels and requires the authorisation of shipbreaking facilities. These are all good measures aiming at solving the problems related with the scrapping of vessels. As has been argued in this study, the draft Convention does, however, contain some weaknesses. The present emphasis laid on flag state enforcement, with a restricted possibility for other states to detect and enforce violations, raises concern whether the provisions of the draft Convention will be followed in practice. The emphasis on flag state enforcement is also problematic, considering how easily shipowners can change the flag of their vessels. These problems, nonetheless, concerns generally all maritime legislation and are hard to overcome. The enforcement of the draft Convention is, ultimately, better constructed to the circumstances that apply to end-of-life vessels, than the rules on jurisdiction in the waste movement regime, which are based on the notion of “exporting state” and the belief that waste is produced at one location. Moreover, the study has argued that the allocation of responsibility in the draft Convention is insufficient and does not incorporate the polluter pays principle. At present, the draft Convention puts the burden of responsibility for the scrapping of vessels on the shipbreaking state and the port state. Arguably, these stakeholders are not in the best position to carry the bulk of the costs that implementing the rules of the draft Convention will demand. What is more, the shipowners, which are the ones profiting from the vessels during their lifetimes, can escape bearing the pollution costs that the scrapping of the vessels causes. These costs are instead placed on the shipbreaking states, which are in most cases developing states. This is contradictory to the polluter pays principle and does not represent a fair allocation of the costs for the scrapping of vessels. Finally, it remains to be seen how the dissimilarities between the draft Convention and the existing waste movement regime will be solved. This especially concerns the pre-cleaning of vessels, which as has been show is currently a requirement explicitly stated in the EU Regulation on shipments of waste. Although being a valid requirement for the protection of the environment, the pre-cleaning of vessels before scrapping has to be deemed impossible under the current circumstances. The European Commission appears, however, not to be prepared to change the EU Regulation. Nevertheless, having two regulations applicable to vessels destined for scrapping is not a satisfactory solution and could possibly lead to out-flagging of vessels from the EU.

Reflections:

It will still most likely take several years before the draft Convention enters into force even if the Convention is adopted as planned in May 2009. A fast and widespread ratification would be necessary to meet the increased need of scrapping that is expected in the following years. In order to facilitate a fast entry into force of the Convention, it may therefore be necessary to compromise on the issues that are currently debated and to make some of the requirements in the Convention softer. This regards, for instance, the pre-cleaning of vessels, at what moment the inventory of hazardous wastes must be established and when surveys must be undertaken.

It appears that restricting vessels from being scrapped in Asia is neither a practical nor a sustainable solution. What is instead needed is to improve the standards of the scrapping facilities in the current shipbreaking states. As has been showed, the draft Convention does contain provision that focus on improving the scrapping procedures. This is a positive development, but what is moreover needed is financial support to the shipbreaking states in order for them to improve the standards. Otherwise there is a risk that the provisions of the draft Convention will not have a real impact. In view of this, the shipping industry should be demanded to bear a share of the costs that improving the facilities would require. This would more fairly allocate the costs of pollution which are connected to the scrapping of vessels, and also implement the polluter pays principle into the present shipbreaking practices.

Author: Oskar Sundelin
Master’s Thesis for the Master of Law Programme
Department of Law School of Business, Economics and Law University of Gothenburg
Spring 2008

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