EU-led Ship Recycling Regulation Could reverse Positive Effect of Hong Kong Convention on South East Asian Scrapyards Says GMS
As the scrapyards in South East Asia are constantly improving their operations, adhering to the norms which have been set in motion by the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships. Thus, they are in the midst of a significant change.
However, as per the exclusive interview given by Dr Nikos Mikelis, Non-Executive Director, GMS, with Hellenic Shipping News, the European Union’s Ship Recycling Regulation will see European flagged vessels only be permitted to be recycled at yards reviewed, accepted and published in the European List of approved ship recycling facilities.
Dr. Mikelis explains that GMS is very concerned that this regulation appears to re-enforce the idea that, when implemented, it will be interpreted by the European Commission as a total ban on beach recycling for European flagged vessels. If this idea is imposed in this manner, the legislation will set the global recycling industry on a knife-edge and threaten a reversal of the sustainable progress set in motion by the HKC.
This will divide the market with an interpretation of the EU Regulation as a ban on beaching will create precisely the false dichotomy that they say they are working to solve.
Shipping industry considers the issue of ship recycling in South Asia as the “elephant in the room”. It is thus relevant to raise the questions: Why has this been the case and what has been done over the course of time, to reverse this negative view?
Countries where ship recycling is carried out
The foremost factor is that ship recycling plays a vital role in the life cycle of a ship, and is fundamental to the industry. For the last twenty years the ship-recycling yards in 5 countries – Bangladesh, China, India, Pakistan and Turkey have been recycling 97% to 98% of all the tonnage that is recycled in the world. The economies of these five countries are characterised by a great appetite for scrap steel for their steel making needs.
Three South Asian countries referred above are less developed and poorer. This ensures that the local ship recyclers have the market to sell virtually every part of the ship: steel, machinery, fittings, equipment and even furniture. So, these three South Asian countries are the most competitive in terms of the prices they pay for buying end-of-life ships and in the last ten years have dominated the international market by recycling more than two-thirds of the world’s recycled tonnage.
The drawbacks of developing countries
However, underdevelopment and poverty are usually linked to lower safety, social welfare and environmental standards, giving rise over the years to pressures for the development of an international convention to regulate safety, health, environmental protection.
This aspect led to the adoption of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) by IMO in 2009.
Dynamics between shipowners and yards
Presently, the growth of sustainable ship recycling is reliant upon the market dynamics between shipowners and yards. The scrutiny that the industry came under during the development and introduction of the HKC is part of what has been driving change. As the shipping industry becomes aware of its responsibility to improve its sustainability, ship recycling has been developing accordingly.
Ship recycling industry status in South Asia
The demand for responsible ship recycling now exceeds supply in South Asia. As yards that invested in achieving the standards of HKC now see growth for their services based on good health, safety and environmental practices, this has incentivised other yards to also improve standards and consider HKC Statements of Compliance, ISO and OHSAS certification.
Progress evidence
With the fifth Hong Kong Convention-compliant yard having been approved in Alang and fifteen more currently going through the Statement of Compliance process, the progressive change in the ship recycling market is clear to see. High levels of safety and environmental standards are being introduced and achieved in Alang. To keep progressing towards improvement we need to make sustainable ship recycling the ‘norm’ and for shipowners across the world to be holding recycling yards to these standards. In this way, we can continue the virtuous cycle.
The challenges
It cannot be ascertained that all yards have achieved desirable safety and environmental standards. There are many yards that still use poor practices during the ship recycling process. GMS has long been a supporter of the entry into force of the HKC so that compliance with its rigorous safety and environmental standards becomes mandatory. This would introduce a level playing field for all yards to work from. Until this is achieved, owners have the power to drive change by choosing yards that exercise good standards for safety and environmental protection (known as responsible recyclers, or “green yards”). This sends a strong market message that unsafe practices are no longer socially or environmentally acceptable, or economically prudent and that the market will hold them accountable for such practices.
Sustainable recycling of ships
Sustainable recycling of ships is the primary goal of the international community. It is the systematic prevention, and where practicable, elimination of safety and environmental risks through yard facilities, procedures and operations supported by preparatory work by shipowners, flag states and classification societies. The standards of the HKC and its guidelines are designed to be a best-practice approach to sustainable ship recycling and, although it is yet to enter into force, it defines the basis of what we mean when we talk about sustainable ship recycling.
Stipulations on recycling of ships
HKC compliant recycling requires shipowners to carry and provide an Inventory of Hazardous Materials (IHM) detailing the location and approximate quantities of hazardous waste on board. The specific hazardous materials that must be covered by this IHM are specified in the two appendices in the Convention. This part of the process is also part of what is currently required from shipowners by voluntarily certified HKC-compliant yards.
A sustainable and HKC-compliant ship recycling yard will also have a Ship Recycling Facility Plan (SRFP), documenting the yard’s systems and processes for ensuring safety and environmental protection. They have safe removal procedures for hazardous wastes, and have installed advanced hazardous waste handling facilities at their yards (for example, negative pressure asbestos handling units) and specialist employees have been trained and equipped for handling hazardous wastes. Each recycling project is then planned out in advance and managed according to a ship-specific Ship Recycling Plan (SRP). The SRP is developed by the yard using the design particulars of the vessel and its Inventory of Hazardous Materials provided by the shipowner to plan a safe and environmentally friendly recycling sequence.
In the period before the HKC enters into force, a shipowner who choses to follow the standards set by the HKC will need to send his ship to a HKC-compliant yard and ensure contractually with the cash buyer that his ship will be recycled in accordance with the technical standards of HKC. The shipowner should also consider agreeing with the cash buyer the appropriate level of supervision and/or reporting to ensure that the recycling has taken place in the appropriate way.
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Source: Hellenic Shipping News
