The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (Hong Kong Convention) is set to take effect on June 26, 2025. However, uncertainties remain regarding its legal framework and how it will align with the Basel Convention, which governs hazardous waste movement. This lack of clarity poses legal risks for shipowners, including potential criminal liability and ship arrests.
Key Concerns
Legal Uncertainty Between Hong Kong and Basel Conventions
- Ships that receive an International Ready for Recycling Certificate (IRRC) under the Hong Kong Convention might still be classified as hazardous waste under the Basel Convention.
- This could expose shipowners to legal action and penalties, especially in South Asian recycling yards.
- Some experts argue that the Hong Kong Convention should take precedence since it is more recent and specifically regulates ship recycling, but this view is contested.
State-Level Implementation and Compliance Risks
- The IMO Circular HKSRC.2/Circ.1, issued in October 2024, provides provisional guidance on managing both conventions but does not offer clear, enforceable rules for shipowners.
- Flag States will play a key role in determining how the Hong Kong Convention is implemented in national laws.
- Shipowners must navigate overlapping regulations, including EU Waste Shipment Regulation (1013/2006) for ships operating in or near European waters.
Legal Cases Highlighting Risks
- Several high-profile legal cases in Europe demonstrate the growing enforcement of ship recycling laws:
- Eurus London case (injuries at a Chittagong recycling yard) was settled out of court.
- Seatrade case (illegal scrapping of four ships) led to a €5.7 million fine.
- Eide Carrier case resulted in a six-month prison sentence for the shipowner and a NOK 7 million fine for the cash buyer.
Impact on Insurers
- Non-compliance with recycling laws may also expose insurers to liability if they unknowingly insure illegal ship scrapping activities.
What Shipowners Must Do
Ensure Compliance: Ships over 500 GT trading internationally must have:
- Inventory of Hazardous Materials (IHM)
- International Certificate on Inventory of Hazardous Materials (ICIHM)
- Be sent to authorized recycling facilities
- Monitor Regulatory Developments: Decisions at the Basel Convention’s April/May 2025 meeting will clarify legal uncertainties.
- Plan Ship Recycling Early: Avoid last-minute risks by ensuring compliance with both conventions and Flag State laws.
Despite the uncertainty, industry leaders urge shipowners to stay on course and prepare for the Hong Kong Convention’s enforcement. If states align their regulations, the Hong Kong Convention could provide the legal clarity and structure needed for responsible ship recycling.
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Source: International Chamber of shipping
