Tradewinds – Recycling US-flag vessels at home is the best option for environment and jobs

(Written by Denise Krepp)

28 February 2014 - The state scrapping scheme for the National Defense Reserve Fleet is good for the US in a number of ways and should be extended to all government non-combatant vessels, writes Denise Krepp, former MarAd chief counsel who currently advocates on behalf of the US recycling industry

The US Navy and Environmental Protection Agency (EPA) recently signed an agreement concerning the Navy’s Sink Exercise (SINKEX) programme. Instead of sinking government ships, the Administration should mandate that its vessels and US-flag commercial vessels be recycled domestically. Recycling ships helps save the oceans from dangerous environmental toxins, increases the number of US jobs and funds gained from selling the ships for recycling can be applied to other maritime-related government programmes.

Under the SINKEX programme, the Navy uses old ships for target practice. For 15 years, the sinking of the vessels was governed by a 1999 letter between the Navy and EPA. The two agencies signed a new letter on 24 January 2014, which allows the Navy to keep shipboard materials containing polychlorinated biphenyls (PCBs) on the to-be-sunk vessel if they can not be practicably removed. The letter does not define practicability and does not provide an appeal mechanism to contest how the practicability determination is made. Unlike for domestic recyclers or a Jones Act vessel, owners seeking to reflag their vessels for demolition the agreement does not even provide guidelines for the sampling of PCBs.

Instead of spending taxpayer dollars to sink contaminated vessels, it would be more cost efficient and better for the environment to recycle them. The US Maritime Administration (MarAd) has a programme by which National Defense Reserve Fleet (NDRF) vessels — many of which are retired commercial tankers and cargo vessels — are scrapped in facilities in Texas, California, Virginia and Louisiana. Metal recyclers submit competitive bids and monies gained are used to fund the US Merchant Marine Academy, the six-state maritime academies along with the National Park Service (NPS) maritime heritage grant programme. MarAd has raised over $40m and almost $10m has been provided to the schools since 2009.Additionally, MarAd recently signed an agreement with the NPS to provide $7m for its grant programme; more funds should be made available as the agency recycles more ships.

The MarAd programme should be expanded to all US government non-combatant vessels, including those operated by the Department of Defense, US Coast Guard (USCG) and the National Oceanic and Atmospheric Administration (NOAA). Currently, USCG and NOAA vessels are auctioned off by the General Services Administration (GSA). The money gained from these sales goes into the general treasury, not into maritime-related programs.

An additional flaw with the GSA auction system is its failure to require that US government vessels be scrapped in the US. The GSA permits the foreign scrapping of US government vessels — one example is the historic former USCG cutter Storis, currently being scrapped in a Mexican recycling facility. Failing to mandate domestic recycling not only means that highly skilled US workers lose out on opportunities for employment but it allows the US to dump its pollutants on other lands.

The GSA also does not hold foreign metal recyclers to the same high standards as those placed on US metal-recycling facilities. The EPA, Occupational Safety & Health Administration (OSHA) and state regulatory agencies conduct intense oversight over US shiprecycling facilities. US companies do not take ships apart on beaches nor force their workers to breathe in asbestos fibres and other contaminants. Rather, they use efficient modern equipment and their highly skilled workers operate with the utmost safety precautions.

In addition to expanding its programme to cover non-NDRF vessels, MarAd should also close an existing loophole that allows for US commercial vessels and vessels participating in the Maritime Security Program (MSP) to be scrapped abroad. MSP vessel owners receive over $2m per year per ship to participate in the programme but they are not currently required to scrap these vessels in the US. In addition, MarAd also allows US vessel owners to flag out their vessels. The flagged-out vessels can then be scrapped in non-US recycling facilities.

Changing the current procedures will increase US employment in the country and enable more US manufacturers to utilise domestically recycled steel, a win-win for the environment.

As the federal budget continues to shrink, it is more important than ever that the existing public-private partnership concerning ship recycling be expanded to cover the entire US federal non-combatant fleet and commercial vessels. Recycling vessels in the US protects the fragile ocean environment and creates much-needed jobs.

Financing the education of future maritime leaders from the sweat of their forbears also instills respect for the past and a greater understanding of the challenges ahead.