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Recycling of ships; owners beware…

This week the Dutch Police raided offices and home addresses of a company and its directors in the Netherlands looking for evidence of scrapping a cargo vessel and a tug in January 2018 by Turkish yards in breach of the European Regulation on Ship Recycling. The suspicion is that the vessels were sold for scrap without prior permission from the authorities and/or by a yard that is not licensed to do so. What is the legal position, and what do the owners and directors risk?

Beaching

Until some years ago the standard procedure at the end of the lifetime of a ship was sailing it to a beach somewhere in Turkey or Asia where it would be scrapped at local yards; often in poor working conditions of the people doing the work, causing many accidents and fatalities and pollution of the environment.

Basel Convention

Failing international regulations in respect of scrapping, an instrument used to at least try to have some control, was the Basel Convention of 1989, entering into force in 1992, and implemented in European law in 1993. This convention on the control of transboundary movements of hazardous wastes and their disposal regulated the environmentally sound treatment of hazardous waste in the importing country. Non-mandatory guidelines were published in 2002. This did however little to better the conditions of scrapping, also because it remained unclear to what extent this Convention applied to end-of-life ships.

(EU) No 1013/2006

In 2006 the EU replaced the 1993 regulation with the Waste Shipment Regulation (EC) No 1013/2006, implementing a ban on export of hazardous waste from member states to developing countries. With this Regulation departure from a European Union port for a last voyage to a developing country for purposes of recycling was considered illegal. Nonetheless, about 95% of the world’s tonnage of scrap vessels ended up on the beaches in Asia.

Hong Kong Convention

In 2009 the IMO adopted a convention specifically dealing with recycling of ships: the Hong Kong International Convention for the safe and environmentally sound recycling of ships. This Convention among other things requires (i) ships to have an inventory of hazardous materials on board, a certificate in such inventory, and (ii) yards to have authorization for recycling, a ship recycling facility plan, and for the recycling of a specific ship, a ship recycling plan and a ready for recycling certificate. Under this Convention beaching of ships will still be allowed. The Convention is not yet in force, as not yet 15 States representing 40% of the world merchant shipping fleet by gross tonnage have acceded or ratified it.

(EU) No 1257/2013

The European Union did not want to wait, and has adopted a regulation in 2013: the European Regulation on Ship Recycling (EU) No 1257/2013. This Regulation gives regulations mostly in line with the Hong Kong Convention. Under the Regulation, a list of approved yards was to be published not later than December 31, 2016, and from that date EU flagged ships needed to be certified and have an inventory list on board. Latest by 31 December 2018 ships were to be recycled in accordance with the Regulation. The list contains 26 approved yards, of which only 3 outside the EU: 2 in Turkey and 1 in the US. The Regulation thus targets vessels flying the flag of a EU State, but also states that Member States are encouraged to adopt appropriate measures to ensure that ships excluded from the scope of this Regulation act in a manner that is consistent with this Regulation, in so far as is reasonable and practicable. A real problem here is that of the approved yards only a few seem to have the capability of scrapping big ships. None of the (bigger) beach facilities in the Far East comply with the regulations. It therefore looks like there is insufficient capacity to recycle ships in accordance with the regulations.

Defying the rules

What happens when a ship owner defies the rules and has the vessel scrapped without permission and/or on a beach in Asia or at another yard which is not licensed? Over the years Dutch prosecutors and courts have become involved in a number of cases:

“Otapan” (2001)

The Otapan was undergoing repairs Amsterdam, when the owner bankrupted. The ship contained a lot of asbestos. Part was removed in Amsterdam, whereafter the Dutch authorities gave permission to sail to Turkey for scrapping. In the permit it was mentioned that there was still 1000 kg asbestos on board. There however appeared to be about 77 tons of asbestos on board. The Turkish authorities refused the ship, which returned to the Netherlands and was cleaned at the expense of the Dutch government. After cleaning the ship went to Turkey for final demolition.

“Sandrien” (2001)

The chemical tanker Sandrien, when in Amsterdam, appeared to have asbestos, heavy metals and other hazardous materials on board. The ship was destined for India to be scrapped. The Dutch Council of State declared the ship to be hazardous waste, forbidding the export to India, applying (EU) No 1013/2006.

“Spring Deli”, “Spring Bear”, “Spring Bob” and “Spring Panda” (2012)

These four ships were brought from the Netherlands to beaches in India, Bangladesh and Turkey to be scrapped. The ships contained hazardous materials and therefore considered to be waste. The ships were sold before the last voyage. The owners and directors were criminally prosecuted and sentenced in December 2018 for wilful acting contrary to (EU) No 1013/2006. Because of “first offences” no imprisonment was ordered, but heavy fines instead, with additional punishment.

Conclusion

Scrapping in accordance with the above rules is costly, if possible at all, given the limited capacity available. But defying the rules may be even more costly, and directors of companies even risk prison sentences as shown by recent court cases in the Netherlands. Reflagging and transferring title, with registered vessels, are easy to trace and, if detected, may even qualify as aggravating circumstances. Therefore: owners beware!

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Recycling of ships; owners beware…

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Recycling of ships; owners beware…
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