The end-of-life of ships


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This presentation discusses issues regarding the dismantling (recycling) of ships and the present (and future) legal framework.

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  • Alang, in the Gulf of Gambay, which is well known for its high tides of around ten meters. These high tides, along with the gentle sloping beaches, allow ships to simple ram their hulls into the beach at high tide, leaving the ship beached at low tide, and ready to be anchored to the shore. This saves salvage crews the expense of building dry docks and other associated costs involved in ship salvage.Indication of how active the industry in Alang is: experts in metal prices factor in the level of activity at the Alang ship salvage yards when predicting the future price of steel, as the activity in Alang has a direct influence on the worldwide price.
  • IMO Guidelines are in reader. Notlegally binding. Hong Kong Convention is based on these guidelines.OECD: 34 countries,The OECD originated in 1948 as the Organisation for European Economic Co-operation.Later, its membership was extended to non-European states. In 1961, it was reformed into the Organisation for Economic Co-operation and Development.Most OECD members are high-income economies with a very high Human Development Index (HDI) and are regarded as developed countries. EU, Australia, New Zealand, Canada, US, Israel, S. Korea, Mexico, Turkey
  • Dus vlaggenstaat niet relevant?India and Bangladesh both Party toBaselConvention, but even thoughAlangexists. Baselbadlyenforced, especiallyby non-OECD countries.
  • Badly enforced by Parties, especially developing countries.
  • De EVA-landen zijn Noorwegen, IJsland, Zwitserland en Liechtenstein. EFTA = European Free Trade Association.
  • Maar toch ook buiten EU en zelfs non-OECD countries?Article 37.
  • Considerationswhynot waste: Ship was in such a state thatnormalusage as a motorvessel or cargoship was no longerpossible without seriousandcostlyrepairs.Not green-listed: notonly cargo, but hazardous waste in ship must beconsidered as well.
  • Schip voer niet onder Nederlandse vlag. Niet relevant voor EVOA? Turkije = OECD.
  • Legally-binding: beforeseveral IMO Guidelines on ship recycling (reader). Conventionlargelybased on these guidelines.Countrieslike India, Pakistan are Bangladesh are partiestoBaselConvention. Thenwhystillenvironmentallyunsound recycling? Conventionspoorlyenforced.Basel Convention for example also had obligation to ‘Ensure the availability of adequate disposal facilitites’ (article 4)
  • Warshipsandothershipsusedonlyforgovernment non-commercial service, howeverensurethat these ships as well are arerecycled in manner consistent with the Convention.Ships <500 GT are alsoexcludedPreparation: ship recycling planCertification: inventory of hazardous wasteNo internationalenforcementAssignmenttoPartiesto take the neccessarymeasurestocomplywithConvention
  • Controls:Parties must estabilishlegislation , regulationsand standard toensurethatship recycling facilities are safe andenvironmentally sound.Authorization:Ship recycling facilitiesrequireauthorization of the authorities, takinginto account the IMO GuidelinesAuthorizationshallberenewed at leastevery 5 yearsAuthorizationmaybesuspended or withdrawn in case the conditions of the Convention are no longerfulfilled.Ship recycling facilities plan:Establishedby the boardPrevention of adverse effectsPreventfires, explosion, unsafeconditions, harmfromdangerousatmosphers, prevention of accidents, occupationaldiseases, preventemisions or spills, takinginto account the IMO Guidelines
  • Date entry in force: 2014/2015
  • Recycling facilities are governedindirectlbyproposal: shipownersmayonlybringshipto facility if facility meetscertainrequirments.
  • Surveys: beforeships are put in service of beforeinventorycertificatePrior topublication of European List, shipsmayonlyberecycled in EU member state or OECD.Contract is only EU, not Hong Kong.
  • The end-of-life of ships

    1. 1. Master Maritime andTransport LawThe end-of-life of shipsEveline Sillevis Smitt and Michiel ClaassenLawyers Regulatory and Government Affairs15 januari 2013 5258471
    2. 2. Subjects to be discussed• Preliminary remarks• Issues regarding the dismantling (recycling) of ships• Present legal framework: Basel Convention (signed 1989; entered into force: May 1992) • European Regulation on the shipment of waste (259/93 as amended 1013/2006)• Future legal framework: Hong Kong Convention (2009) • Proposal for European Regulation on the recycling of ships, dated 23 March 2012 2
    3. 3. Ship graveyard 3
    4. 4. Hulking 4
    5. 5. Artificial reefing 5
    6. 6. Floating and dry-dock storage 6
    7. 7. Sink exercise 7
    8. 8. Dismantling of ships 8
    9. 9. Preliminary remarks• This lecture is limited to the dismantling (recycling) of ships, not the recycling or disposal of its cargo, although the legal framework for the recycling of cargo may overlap• For cargo scandal: Probo Koala/Trafigura: in 2006 Probo Koala sails from Amsterdam carrying hazardous waste which was dumped in the Ivory Coast. 9
    10. 10. Dismantling of ships• Many ships are reaching the end-of-life period and contain hazardous materials, such as absestos, oils and other chemicals• Problems to be addressed: • Environmental issues regarding no sound/proper Alang, India: the “ship break capital of the dismantling, as well as world”. • Concerns for the heath and safety for the workers 10
    11. 11. Dismantling of ships The Ship Breakers 11
    12. 12. Dismantling of ships, facing achallenge:• Large number of ships reaching end-of-life period and expected to be sent for dismantling• As result overcapacity in the world fleet for coming 5 – 10 years• Ship dismantling relocated to non-OECD Countries for economic reasons• Demand for steel, low labour costs, no environmental costs• OECD (Organisation for Economic Cooperation and Development; 34 countries: high-income economies)  12
    13. 13. Dismantling of ships• Present recycling capacity: mainly outside the OECD in China, India, Pakistan and Bangladesh• IMO (International Maritime Organisation) Guidelines on sound ship recycling (2003): not legally binding• Present legal instruments hard to enforce• Hong Kong Convention is based on IMO Guidelines• Urge for Hong Kong Convention in order to ensure: • Environmentally sound recycling of ships, • With concern for the workers (health and safety matters)• Put up in May 2009 13
    14. 14. Present legal framework: BaselConvention 1989/1992• Present international legislation on “waste-ships” laid down in: • Basel Convention (1989/1992), which provides rules for the “control of transboundary movements of hazardous wastes and their disposal” • Proposed Amendment 1995: prohibition on export of hazardous waste to non-OECD countries: not yet entered into force • In Europe implemented in the European Regulation on the shipment of waste (259/93, updated by Regulation 1013/2006)• Ships are waste when sending away/intended for dismantling: “Wastes are substances which are disposed of or are intended to be disposed of or are required to be disposed of by provisions of national law” (art. 1 Basel Convention) 14
    15. 15. Basel Convention• Basel Convention on the control of transboundary movement of hazardous wastes and their disposal• Adopted in response to public outcry in 1980‟s following the dumping toxic waste in Africa and other developing countries• Entered into force on 5 May 1992; Approx. 179 parties to the Convention • Originally not drawn up with the end-of-life ships in mind, but has become very relevant since case law confirms that a ship destined for recycling has to be qualified as waste 15
    16. 16. Basel Convention• Scope: transboundary movement of hazardous waste (i.e. from an area under the national jurisdiction of one state to an area under the jurisdiction of another state; art. 1 and 2, sub 3)• Relevant general obligations, like (art. 4): • Parties shall not permit the export or import of hazardous waste to or from a non-Party country • Parties may prohibit the import of hazardous or other waste for disposal (including recycling: see annex IV) and shall inform other parties hereof • Parties shall prohibit the export of hazardous waste or other waste to parties which have prohibited the import or which do not consent in writing to the specific import 16
    17. 17. Basel Convention• General obligations (art. 4; continued): • Transboundary movement is only allowed: • if the state of export does not have technical capacity or facilities to dispose in an environmentally sound manner; • The waste is required as a raw material for recycling or recovery industry • Ensure the availability of adequate disposal facilities • Parties will not allow the export of hazardous waste to Parties if it has reason to believe that the waste will not be managed in an environmentally sound manner• China, India, Bangladesh: party to Basel convention? Yes• Basel convention not properly enforced in those countries 17
    18. 18. Basel Convention• Basel Convention is an international treaty; ratification and enforcement• In the EU, the Basel Convention is implemented in the European Regulation on the shipment of waste (1013/2006)• With ban on export of waste ships to non-EOCD countries (like India, China, Bangladesh) 18
    19. 19. European Regulation on theshipment of waste, 1013/2006• European Community is party to the Basel Convention since 1994• By adopting Regulation 259/1993 on movement of waste, the EU Council adopted for member states an identical system to control movement of waste and comply with requirements of Basel Convention• Update EU Regulation 259/1993: EU Regulation EC/1013/2006 of 14 June 2006 on shipments of waste• European Regulation (like 1013/2006)  direct applicable in the member states, no implementation needed and allowed 19
    20. 20. European Regulation on theshipment of waste, 1013/2006• Distinction is made between legal regime and possibilities for wastes: (1) green list vs (2) red list• Distinction has been made between (1) disposal and (2) recovery (= recycling) activities with the waste involved• Furthermore, different regime depending on destination of waste: • Within the EU (Title II) • Outside the EU to third countries (Title IV) 20
    21. 21. Defintion of waste ship• Regulation 1013/2006, Annex III, under GC 030 (green listed waste), when: • Vessels and other floating structures for breaking up, properly emptied of any cargo and other materials arising from the operation of the vessel which may have been classified as a dangerous substance or waste, however • Taking into account the heading of Annex III: the ship is not green waste if it contains other materials to the extent which: • Increases the risks of recycling in a way that the transboundary movement needs prior notification and consent, or • Prevents the recovery in an environmentally sound manner 21
    22. 22. European Regulation on theshipment of waste 1013/2006• Ships destined for dismantling, however, in general contain hazardous substances such as asbestos, oils and other chemicals• Ships are therefor most of the time not green listed waste 22
    23. 23. European Regulation on theshipment of waste, 1013/2006• Transboundary shipments within EU: • Green listed waste ship meant for recycling within the EU is allowed, provided certain formalities are met • Non-green listed waste ship: prior notification and consent 23
    24. 24. European Regulation on theshipment of waste, 1013/2006• Transboundary shipments outside EU concerning waste ships meant for recycling, not green listed: • Export to non-OECD countries is prohibited (art. 36 EU Regulation) • For 34 OECD countries: not China, India, Bangladesh • Export to OECD and within EU is allowed, provided prior written notification and consent (art. 38 and 4)• Transboundary shipments outside EU concerning waste ships meant for recycling, green listed: • Can be allowed, depending of the procedures confirmed by the receiving non-OECD country (art. 37) 24
    25. 25. European Regulation on theshipment of waste, 1013/2006• Part of the notification is that must be stated how the waste is to be processed (disposal or recovery) by the receiving party• The competent authorities of destination, transit and dispatch have in principle 30 days following the acknowledgement of the notification to consent, consent with conditions or object 25
    26. 26. European Regulation on theshipment of waste (example 1)• Sandrien wanted to leave the Amsterdam harbour in March 2001• According to its documents in order to be dismantled in Alang, India 26
    27. 27. European Regulation on theshipment of waste• Enforcement measures by Dutch Minister of Environmental Affairs• Based on EU Regulation 259/1993: no prior notification and consent for transboundary movement• Sandrien was not allowed to leave the harbour• Legal dispute whether Sandrien should be qualified as waste• Dutch Court (“Afdeling bestuursrechtspraak van de raad van State 19 June 2002, 200105168”) ruled that ship did qualifie as waste and was not „green- listed• Ship was eventually dismantled in the Netherlands (involving high costs) 27
    28. 28. European Regulation on theshipment of wasteResult of Sandrien:• Awareness that ships can be qualified as waste under this EU-Regulation• That it is commercially not interesting to have ships leave European harbours for their last journey• That it is commercially interesting to leave the European harbours with some kind of cargo to the East and sail from there to final destination like China, Pakistan, Bangaldesh or India 28
    29. 29. European Regulation on theshipment of waste (example 2)• This Mexican ship needed repairs in Amsterdam in 1999• Concerning repairs, also lot of asbestos needed to be removed• The ship was eventually taken over by Dutch State 29
    30. 30. European Regulation on theshipment of waste• Otapan was towed to Turkey (OECD-country) for dismantling (recycling) and Turkisch authorities were notified as required by European Regulation• Upon entering Turkish waters, it became clear that it contained far more asbestos than notified under the Regulation (1.000 kg)• Turkish authorities denied access and Otapan had to return to Amsterdam• Asbestos (77.000 kg) was finally removed in Amsterdam and Otapan was at last again exported to Turkey for recycling 30
    31. 31. Conclusions on internationaland European rules regardingdismantling of ships• The EU and international waste law only applies to waste• As long as a ship is not destined for dismantling, it does not qualify as waste and the rules are not applicable• The EU and international waste law can be evaded by planning the last commercial voyage of a ship to a port in the region of a possible (cheap) recycling yard• Uncertain whether these actions can be qualified as illegal even if the authorities can prove that last commercial voyage is a facade 31
    32. 32. Hong Kong Convention• Hong Kong Convention (IMO, 2009) for the safe and environmentally sound recycling of ships.• Aims to: “effectively address, in a legally-binding instrument, the environmental occupational and safety risks related to ship recycling, taking into account the particular characteristics of maritime transport and the need to secure the smooth withdrawal of ships that have reached the end of their operating lives.”• It is drawn up to replace existing legislation (Basel Convention and the European Regulation on shipments of waste) which are not specifically drawn up for ship dismantling• Largely based on IMO Guidelines for recycling of ships 32
    33. 33. Hong Kong Convention• Scope: • Ships flying under flag of Party • Ship recycling facilities operating under Party jurisdiction• Excluded: • War ships, ships used only for government non- commercial service and ships <500GT• Addresses all issues concerning ship dismantling, taking in regard the life-cycle of ships: • Design, construction, operation and maintenance • Preparation for ship recycling • Certification of ships • Requirements for ship recycling facilities 33
    34. 34. Design, construction, operationand maintenance of ships• Controls of ships hazardous materials (regulation 4) • Prevent the installation or use of hazardous materials• Each ship must have inventory of hazardous materials (regulation 5) • Identify the present hazardous materials (see appendices 1 and 2) and their location in the ship • Existing ships must comply within 5 years or before recycling if that is earlier • Inventory must be maintained and updated 34
    35. 35. Preparation for ship recycling• General requirements (regulation 8) • Ships shall only be recycled at ship recycling facilities that are authorized in accordance with the convention • Ships must be certified as ready for recycling by the authorities prior to any recycling taking place• Ship Recycling Plan (regulation 9) • The ship recycling facility must develop a ship specific Ship Recycling Plan • Include measures to ensure safe working conditions • Must be approved by authorities 35
    36. 36. Certification of ships• Surveys (regulation 10): • Initial survey before ship is put in service or before certificate on inventory of hazardous materials is issued. • Renewal surveys at least every 5 years • Additional surveys in the event of changes, replacements or significant repairs • A final survey before recycling (International Ready for Recycling Certificate)• International Certificate on Inventory of Hazardous Materials (regulation 11) • Cease to be valid if the ship does not correspond with the certificate • Upon transfer of the ship, a new certificate shall only be issued if new Party is satisfied that regulation 10 is met 36
    37. 37. Requirements for ship recyclingfacilities• Controls on ship recycling facilities (regulation 15) • Authorization of ship recycling facilities (regulation 16) • Ship Recycling Facilitiy Plan on how to ensure workers‟ safety and compliance with Convention (regulation 18) • Prevention of adverse effects to human health and environment (regulation 19) • Safe and environmentally sound management of hazardous materials (regulation 20) • Emergency preparedness and response (regulation 21) • Workers safety and training (regulation 22) • Reporting of incidents and accidents (regulation 23) 37
    38. 38. Reporting requirements• Initial notification and reporting requirements (regulation 24) • Shipowner must notify authorities in due time and in writing of intention to recycle ship • Include: flagstate, registration date […] Inventory of Hazardous Materials and draf Ship Recycling Plan• Reporting upon completion (regulation 25) 38
    39. 39. Inspections• Inspection of ship (article 8) • A ship under the Convention may be inspected in any port of another Party • Inspection is limited to verifying presence of International Certificate on Hazardous Materials or International Ready for Recycling Certificate • If ship does not carry valid certificates or if there are clear grounds for believing that ship does not or no longer correspond to certificates, a detailed inspection may be carried out 39
    40. 40. Violations• Parties shall co-operate to detect violations (article 9) • A ship can be detained, dismissed or excluded from port (article 9, sub 3)• Any violation of the Convention shall be prohited by national laws (article 10) • For ships, sanctions shall be established by the Party, wherever the violation occures • For ship recycling facilities, sanctions shall be established by the Party holding jurisdiction • The sanctions shall be adequate in severity to discourage violations • Parties informed of a violations by a Party shall promptly inform the Party and IMO of actions taken or inform them why no action has been taken 40
    41. 41. Hong Kong Convention• The convention was approved in May 2009 and will enter into force 24 months after the date when: i. 15 IMO member states, ii. representing no less than 40% of the world cargo shipping capacity in gross tonnage, iii. with a combined maximum annual ship recycling volume during preceding 10 years of not less than 3 per cent of gross tonnage of combined merchant shipping have signed the convention.• The convention is not expected to enter into force before 2020. 41
    42. 42. Proposal for European Regulationon the recycling of ships• Proposal for European Regulation on the recycling of ships (COM(2012)118 final, d.d. 23 March 2012.• European implementation of the Hong Kong Convention• The EU is planning a head start with implementing the Hong Kong Convention• The proposal takes on the unhuman and environmentally unsound undertakings on the beaches of Alang and such• At the same time the proposal aims to provide opportunities for sound and modern recycling facilities, such as Sea2Cradle in Rotterdam. 42
    43. 43. Proposal for European Regulationon the recycling of ships• Based on this proposal ships destined for recycling are no longer governed by the European Regulation on shipments of waste (art. 29).• Scope is identical to Hong Kong Convention: • Ships flying under flag of member state • Recycling facilities, though only indirectly • Same exclusions• Content largely identical to Hong Kong Convention, with few exceptions: EU list, Contract and sanctions 43
    44. 44. Proposal for European Regulationon the recycling of ships• Preparation for recycling: • Ships may only be recycled in facilities on European List (art. 6) and • untill publication only in EU or OECD member states • National authorities may authorize facilities which comply with requirements of art. 12 • Recycling companies outside EU wishing to be included shall submit an application to the European Commission 44
    45. 45. Proposal for European Regulationon the recycling of ships• Contract between shipowner and recycling facility (art. 9) • In addition to ship specific recycling plan • include an obligation to take back ship, where technically feasible, in case of content of hazardous materials that does not allow for appropriate recycling 45
    46. 46. Proposal for European Regulationon the recycling of ships• Member States shall ensure effective, proportionate and dissuasive penalties (art. 23), for inter alia: • not having Inventory of Hazardous Materials • sending ship for recycling in non-EU listed facility• Where a ship is sent for recycling in a non-EU listed facility, the penalty shall, as a minimum, correspond to the price paid to the shipowner for its ship.• Where a ship is sold and within 6 months after selling is sent to a non-EU listed facility, the penalties shall be: • jointly imposed to last and penultimate owner if still flying flag EU Member State • Only imposed to penultimate owner if no longer flying flag EU Member State 46
    47. 47. Conclusions on Hong KongConvention and EU proposal• Hong Kong Convention 2020• Proposal for EU Regulation on recycling of ships ??• Meanwhile and in the event Hong Kong Convention and Proposal are not applicable: Basel Convention and EU regulation on the movement of waste 47
    48. 48. Conclusions on Hong KongConvention and EU proposalImprovement of Basel regime?• Basel focussed on the shipment of waste• Hong Kong takes into account the specific characteristics of ships and „prepares‟ ship and recycling facility for environmentally sound recycling• Under Hong Kong not merely decision of Parties whether or not to allow export of „waste ships‟, but assessment of recycling facility and specific requirements • Incentive for recycling facilities to comply with requirement in order to receive „waste ships‟ 48
    49. 49. Conclusions on Hong KongConvention and EU proposal• Risk of changing the flag of ships destined for recycling in a country that is less strict.• However: • „waste ships‟ that are not governed by this proposal, because they are a non-EU flagstate, are still governed by the European Regulation on shipments of waste. • Penalties for recycling in non-EU listed facility shortly after sale 49
    50. 50. Conclusions on Hong KongConvention and EU proposal• Chances for safe and environmentally sound recycling of ships 50