Scrapheap Challenge

New European Union (EU) regulations will require that vessels flying the flag of any EU state can only be scrapped in approved ship-recycling facilities.

What’s happening?

When a ship is scrapped, the vessel itself is classified as hazardous waste. Until recently, the EU Waste Shipment Regulation (EC) 1013/2006 applied to all shipments of waste imported, exported or in transit through EU on board ALL vessels regardless of their flag.

From 31 December 2018, vessels flagged with an EU member state will be required to comply with the Ship Recycling Regulations No. 1257/2013.

Why?

Every year hundreds of vessels are scrapped, predominantly in South Asian countries. Often, the vessels are run aground on beaches before being dismantled. There have been widespread concerns that this work is regularly undertaken by low-paid workers and, in extreme cases, children. There is often little or no personal protective equipment available for the workforce and as a result many serious injuries – sometimes fatal – are attributed to the practice.

As well as the risk to people, there is reportedly a significant risk to the environment from pollution.

The EU hopes the new requirements will reduce the negative impact of scrapping ships in this way.

Who needs to comply? 

Any vessel flagged with an EU member state must comply with the new Ship Recycling Regulations No1257/2013 by the end of this year.

Any non-EU flagged vessel departing European waters to head for scrapping must comply with the Waste Shipment Regulation (EC) 1013/2006.

EU flagged vessels therefore will no longer need to comply with Waste Shipment Regulation (EC) 1013/2006.

What’s the difference?

In 1992, the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal entered into force. It provides control over the movement of hazardous waste by starting a communications chain between countries exporting hazardous waste, and those importing it. It requires the importing country to give prior informed consent. The Basel Convention did include a ‘ban amendment’ which restricted the export of hazardous waste from certain countries to others, but it did not specifically address ships and ship-recycling facilities or vessel flags.

Therefore in 2006 the EU enforced a ban amendment for ship-recycling in the Waste Shipment Regulation (EC) 1013/2006. This banned any ship regardless of flag from leaving EU waters to head for scrapping in certain countries. Over time, however, the system proved difficult to enforce and there were concerns that it was too easy for shipowners to mis-declare their intentions.  

To address these concerns, the EU developed the Ship Recycling Regulations No1257/2013. This means all EU-flagged ships over 500GT must not be scrapped in any non-approved facilities. Notably, it does not matter if the EU-flagged vessel is departing from inside or outside the EU before heading for scrapping.

How do you comply? 

The regulation is based around the Life Cycle Information (LCI) information of the vessel. A ship-specific inventory of hazardous materials must be maintained and is updated throughout the vessel’s life. The vessel is then issued with an inventory certificate.

Other requirements include to:

• Develop a ship recycling plan.
• Give the recycling facility an up-to-date list of hazardous materials.
• Minimise the volume of cargo residues, fuel and waste on board.
• Ensure all tanks and spaces such as pump rooms are ready for hot work.
• Hold a ready for recycling certificate from a recognised authority.
• Use only those recycling facilities approved by the EU.

What does this mean to the shipowner? 

Port State Control in EU ports may ask to see the vessel’s inventory certificate to ensure that it appears to be up-to-date when compared with the equipment on board. They may also ask to see the vessel’s procedure for ensuring the inventory list remains up to date.

One notable aspect is that the list of approved facilities is currently limited to European facilities only. Recycling in Europe has an economic impact on the shipowner as they are likely to achieve less money for the scrap of the vessel compared to outside Europe.

Furthermore, there is a shortage in recycling capacity when compared to the quantity of ships expected to be scrapped. This may tempt owners to re-flag their vessels out of an EU member state to allow for easier scrapping. However, if it is found that an owner had planned the scrapping of their vessel whilst it was flagged in the EU, they could face action and incur large financial penalties.

Shipowners need to be aware of how these new regulations will affect them and the vessel’s operations as well as understanding the potential consequences of any breaches.

The Ship Recycling Regulations No1257/2013 can be read here.

The list of approved facilities can be found here.

If you would like to discuss any of the issues raised by the new EU regulations, contact our loss prevention team.

Author: John Southam
Loss Prevention Executive