Ship dismantling

This Green Paper launches a consultation on ship dismantling to identify the most appropriate measures to promote environmentally and socially sustainable dismantling.

ACT

Commission Green Paper of 22 May 2007 on better ship dismantling [COM(2007) 269 final – Not published in the Official Journal].

SUMMARY

Dismantling end-of-life ships, in particular to recover steel from their hulls, is a high-risk activity in terms of the health of workers and of environmental protection.

This Green Paper evaluates the current situation and repercussions of this activity worldwide and puts forward a number of ideas to make it environmentally and socially sustainable.

CURRENT MANAGEMENT OF SHIP DISMANTLING IN EUROPE AND THROUGHOUT IN THE WORLD

The economics of ship dismantling

End-of-life ships, generally when their operation is no longer profitable or when they are no longer attractive for the second-hand market, are mainly bought for dismantling in scrap yards. The materials obtained by dismantling, mainly steel from the hull, are extracted and recycled in these scrap yards.

Most dismantling sites are located in South Asia (in particular in India and Bangladesh). The differences in labour costs and differences linked to environmental and health requirements and revenue from recycling and second-hand materials explain why operators in South Asia can offer far better prices to ship-owners than their potential competitors in other countries, in particular the European Union (EU).

There are various reasons why it is difficult to make ship recycling economically viable while at the same time respecting sound environmental standards: variability of the freight market (mainly oil tankers and bulk carriers); diversity of material contained in ships and the fact that some materials are hard to recycle (composite materials) or are no longer used or banned (such as asbestos); the fact that treating the materials for recycling can be expensive and the dearth of markets for steel recycling for construction and second-hand ship equipment in Europe.

The number of dismantling sites in the EU has fallen over the last twenty years. The available capacity for environmentally sustainable dismantling in the EU and in other OECD countries (in particular Turkey) is sufficient for all warships and other state-owned vessels that will be decommissioned over the next ten years. However there is not enough capacity to process the large merchant fleets under EU flags or owned by companies registered in the EU. This problem will worsen as all single-hull oil tankers are phased out, which is scheduled at EU and international level following accidents involving tankers like the Erika and Prestige.

Environmental and social impacts of ship dismantling

Most vessels contain large amounts of hazardous materials, such as asbestos, oils and oil sludge, PCBs (polychlorinated biphenyls), and heavy metals in paints and equipment. Most dismantling sites in South Asia lack any isolation facilities to prevent these substances from contaminating the soil and water. As a result, coastal waters and beaches are heavily polluted and substantial damage is done to the ecosystems concerned.

In addition, the precarious health and safety conditions of workers in dismantling sites in South Asia means that the risk of accidents is high (due to explosions linked to hydrocarbon residues or the lack of heavy machinery and protection) and of irreversible diseases linked to exposure to harmful substances (such as lung cancer).

The workforce employed in these sites mainly come from the poorest regions of the countries concerned, including a significant proportion of children (for the lighter work), who often work without contracts and health or accident insurance and are not allowed to form trade unions. There is little or no compensation for accidents.

The European and international legal framework regarding the movement of waste

The Basel Convention, signed in 1989 under the aegis of the United Nations Environmental Programme (UNEP) and to which the Community and the Member States are party, governs the movement of hazardous waste. In particular it requires prior authorisation from the country of destination before waste can be moved. One of the amendments to this Convention adopted in 1995 banned exports of hazardous waste from OECD countries to non-OECD countries. However, this amendment was not adopted by all countries party to the Basel Convention.

End-of-use ships destined for dismantling are considered waste under international law and Community law on waste. They are also considered hazardous waste if they contain substantial quantities of hazardous substances or if they have not been properly emptied of their cargo of hazardous substances. The export of such vessels from the EU to a non-OECD country for dismantling is therefore prohibited. These vessels must be processed in an OECD country under environmentally sound conditions or decontaminated so that they no longer constitute hazardous waste.

The World Labour Organisation (WLO), the International Maritime Organisation (IMO) and the UNEP have drafted guidelines for recycling ships and work in coordination on this issue to avoid overlapping. The IMO is also working on a draft convention.

OPTIONS FOR IMPROVING MANAGEMENT AT EUROPEAN LEVEL

Better enforcement of EU waste shipment law

The Commission proposes a number of measures to improve compliance with legislation on waste shipment, including:

• more targeted controls by European waste shipment and port authorities (on vessels more than 25 years old or that meet certain criteria);
• additional guidance on the definition of waste and hazardous waste and a list of proper recycling facilities;
• systematic information exchange between the Commission and the Member States on potential end-of-life ships and their route to dismantling facilities;
• more cooperation with third countries of transit or destination of end-of-life ships;
• particular focus on state-owned ships (such as warships) and commercial vessels that regularly operate in EU waters.
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An international agreement drafted by the IMO

The IMO convention under preparation is a relevant forum for addressing green ship dismantling at global level. It should be adopted as soon as possible and should enable the involvement of regional integration organisations, such as the European Community. In addition, a Community position should be established for the purposes of negotiating this convention, and Member States should further coordinate their positions.

Once adopted, the convention and the recommendations made therein should be transposed into Community law in order to make them mandatory for EU-flagged ships or ships entering EU waters. However, the laws governing the movement of waste, in particular those established at EU level and under the Basel Convention, should not be changed unless the new rules establish an equivalent level of security.

Strengthening EU ship dismantling capacity

For state-owned ships, including warships, Member State governments may set environmental criteria for tenders or include special clauses on ship breaking in sales contracts with other countries or private firms. This would enable Member States to retain some control on ship dismantling conditions.

In relation to the much larger merchant fleet, the Commission is assessing the case for granting financial aid to green EU dismantling plants or to ship-owners who send their vessels to green yards for dismantling or decontamination. The current guidelines on environmental state aid allow for such funding, on a case-by-case basis, as does the EU's Cohesion Policy. However there are arguments against such funding, such as the long-term use of significant resources without creating sustainable industrial activity, the risk of cross subsidising and the polluter pays principle.

Technical assistance and knowledge transfer

The Commission is in favour of stepping up both technical assistance to countries in which ship dismantling plays a major economic role and promoting regulatory improvement to encourage safe and environmentally sound ship dismantling. The arrangements for cooperation should be reviewed, in particular when negotiating new political or economic agreements or when updating existing agreements with a number of states that provide recycling services.

Encouraging voluntary action

The EU should encourage and support voluntary agreements by ship-owners, associations and their clients, provided they comprise clear mechanisms to ensure implementation of the commitments made and systems for monitoring and control.

Ship dismantling fund

In the longer term ship-owners should take full financial responsibility for green disposal of their ships, in line with the polluter pays principle and producer responsibility principle. This could take the form of a mandatory or voluntary contribution to an international fund managed by the IMO. Contributions to this fund could be linked to IMO registration or the operation of ships (such as through port fees or mandatory insurance schemes). If an IMO-managed fund is not possible, a regional system could be considered.

Other options

The Commission puts forward a number of additional measures to promote safe and green ship dismantling, including:

• the adoption of EU legislation to supplement the rules on maritime safety and on the use of hazardous materials in the construction of ships;
• coupling aid for maritime transport with clean ship dismantling;
• establishing a European certification system for clean ship dismantling, such as under the EMAS system, and awards for exemplary green recycling;
• intensifying international research on ship dismantling.
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Consultation

The Commission launched a consultation on ship dismantling and received contributions from stakeholders (deadline: 30 September 2007). On the basis of these contributions, the Commission will table any appropriate proposals.

The Commission asked stakeholders to answer the following questions in particular:

• How can the enforcement of Community law on waste shipment affecting end-of-life ships be improved? What is the best mix of measures to divert EU-flagged or EU-owned vessels to dismantling sites with high environmental and safety standards?
• Would guidance on waste shipment rules and definitions on end-of-life ships help to improve implementation of rules and business practices, and what form should it take?
• What is the best way of steering the current negotiations on the IMO Ship Recycling Convention in order to improve ship dismantling practices globally?
• Should the EU aim at global environmental and safety standards under the IMO Convention that are comparable with EU standards?
• How can the EU best ensure that European ships are dismantled in a safe and environmentally sound way during the interim period before the IMO Convention becomes effective? What about ships owned by the public sector? Will national strategies and voluntary commitments by ship-owners be sufficient? What additional measures would be needed at EU level?
• Should the EU and its Member States take an active role in increasing the EU's own ship recycling capacity? Should state aid and EU funds be used to help increase capacity and how?
• What measures and actions should the EU take to encourage South Asian states to introduce and implement higher environmental and safety standards for ship dismantling?
• What measures and actions should the EU take to encourage ship-owners to direct end-of-life ships to dismantling sites with high environmental and safety standards?
• How should the EU secure sustainable funding for clean ship dismantling in accordance with the polluter pays principle, and what measures and actions should it take?

RELATED ACTS

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 10 October 2007 - An Integrated Maritime Policy for the European Union. [COM(2007) 575 final - Not published in the Official Journal]. This Communication establishes an action plan for an integrated maritime policy which highlights Europe's maritime identity and leadership, which is worth preserving at a time when environmental pressures are threatening the future of maritime activities. Consequently, maritime policy must aim to promote a maritime industry that is innovative, competitive and environmentally-friendly. In particular, the EU should support initiatives at international level to achieve minimum standards on ship recycling and promote the establishment of clean recycling facilities.

Regulation (EC) No 1013/2006 of the European Parliament and of the Council of 14 June 2006 on shipments of waste [Official Journal L 190, 12.7.2006]. The aim of the above Regulation is to reinforce, simplify and specify the existing procedures for controlling waste shipments. It will thus reduce the risk of waste shipments not being controlled. It also seeks to incorporate into Community legislation the amendments to the lists of waste annexed to the Basel Convention as well as the revision adopted by the Organisation for Economic Cooperation and Development (OECD) in 2001. The Regulation will replace Regulation (EEC) No 259/93 with effect from 12 July 2007.

Council Decision 93/98/CEE of 1 February 1993 on the conclusion, on behalf of the Community, of the Convention on the control of transboundary movements of hazardous wastes and their disposal (Basel Convention) [Official Journal L 39, 16.12.1993]. The Basel Convention lays down rules to control, at international level, transboundary movements and disposal of waste that is hazardous to human health and the environment.

Last updated: 03.06.2008