The European Commission released its report 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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