Tradewinds – European Parliament vote a big blow for Hong Kong Convention

(Written by Adam Corbett)

3 April 2013 - Anger erupts as the European Parliament calls for an end to beaching and proposes a fund to promote safe and environmentally friendly ship scrapping

A European Parliament (EP) vote in favour of ship-scrapping regulation that contradicts an internationally agreed convention has owners up in arms but there are serious doubts over whether the hard-hitting, unilateral measures will ever come into force.

The vote was in favour of a package of measures proposed by Swedish Green Party politician Carl Schlyter.

Strongly influenced by the green political agenda the regulation includes much stricter measures than the International Maritime Organisation (IMO)-agreed Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (Hong Kong Convention).

Included in the measures are a total ban on the recycling of ships on the beach and fines for European owners who send vessels for demolition at beaching yards, which currently account for nearly 100% of scrapping in India, Pakistan and Bangladesh.

The regulation insists that European-flag owners regularly trading in Europe must opt for European Union (EU)-approved facilities.

A fee on European port calls would also go towards a fund promoting environmentally friendly and safe recycling yards.

Schlyter says the move will “put an end to EU ships being recklessly scrapped in developing countries”.

“Currently, most EU ships are sent to South Asia at the end of their lives, where they are beached and their hazardous materials harm human health and the environment,” he said.

The measures the EP has approved, however, are not included in the Hong Kong Convention, creating a potential inconsistency in global regulation.

The EP’s decision is bound to upset countries such as Japan and Norway, which have strongly promoted the Hong Kong Convention as the way forward for shipping.

Shipowners are not happy with the EP vote either.

The International Chamber of Shipping (ICS)’s external-relations director, Simon Bennett, points out that many scrapping nations, particularly China, are unlikely to allow EU auditors to inspect their facilities, while their exclusion from the recycling industry would leave a severe shortage of capacity.

The emergence of a recycling industry in Europe, Bennett points out, may ironically also stir up a whole new environmental row in the region.

He also fears the move could actually be to the detriment of promoting safe and environmentally friendly ship recycling in Asia. He explained: “Of more concern, however, apart from the fact that, if passed, this would totally undermine the IMO Convention, is that the proposed tax on EU ships would result in large numbers of vessels moving to non-EU flags, and avoiding EU ports whenever possible, having a very negative effect on the EU maritime industry as well as doing little to improve standards in Asian yards, which is the ostensible purpose of this wholly misguided exercise.”

He added: “We therefore hope that even if the EP adopts this ridiculous measure, the EU member states will see sense and ensure that these proposals are brought back into line with the IMO Convention, which is what the [European] Commission [EC] originally proposed.”

Indeed, a further full EP vote in June is required before the regulation can be accepted. But that is only part of a complicated political negotiating process also involving the EC and European Council.

Petros Varelidis explained at TradeWinds’s Dubai Ship Recycling seminar in March that structured three-party discussions through a series of “trialogues” will have to be gone through before a final European policy is determined.

Both the EC and European Council also have their own view on European recycling legislation and a common position will now have to be hammered out with the EP.

The first two bodies basically back the adoption of the Hong Kong Convention.

However, the EC sees the Hong Kong Convention as offering a “framework” and would like to see EU-flag-vessel demolition done within OECD countries or EU-approved facilities in line with the Basel Convention on waste.

The EC also has an idea for penalties for non-compliance and its position on the use of beaching facilities is not yet fully clear. It is under pressure from non-governmental organisations.

The European Council proposal talks more positively of aligning EU regulation with the Hong Kong Convention and it wants to avoid conditions that would promote the reflagging of EU ships.

While the discussions are more likely to temper some of the more radical and possibly impractical elements of the EP proposal, such as the collection of port fees, there are further concerns. Some are worried that a continued lack of progress on ratifying the Hong Kong Convention may well encourage the EU to adopt its own unilateral measures.