Ship Recycling is the Commission’s Titanic

Maria Damanaki, Member of the EC in charge of Maritime Affairs and Fisheries, received Sharon Dijksma, Dutch Minister for Agriculture.

Maria Damanaki, Commissioner of Maritime Affairs and Fisheries, received Sharon Dijksma, Dutch Minister for Agriculture. (EC Audiovisual Services)

It was the symbolic date of 12/12/12 that the international NGO, Center for International Environmental Law, decided to publish a legal opinion denouncing as 100% illegal the European Commission’s proposal for a new regulation on ship recycling. This coincided with the legal analysis by the former chief counsel of the European Commission , Dr. Ludwig Kramer, where he uncovered how the proposal of the Commission contained substantial violations of the Basel Convention.

But let’s take one step at a time. In order to see why those people together with various NGOs like Greenpeace and the Shipbreaking Platform condemned the initiative of the European Commission, we need to shed some light first on the hot issue of Ship Recycling, or Ship Breaking, as it is mostly known. Ship Breaking is the process of scrappage of old ships in shipyards where they are being dismantled and recycled. As everybody can understand, this process is not as easy and straightforward as the recyclation of batteries or PET bottles. This is mostly due to the size of tankers that can reach up to a length of half a kilometer and also to the highly dangerous toxic properties of the ship and its carriage.

Imagine that you were the owner of a huge Ultra Large Crude Carrier (ULCC) tanker that has been carrying oil for several years and you want to scrap it due to its age or mechanical problems. Where on earth will you find a massive shipyard to send your tanker for demolition?

Do it like Exxon Valdez

Exxon Valdez, the notorious tanker that was responsible for the biggest oil spill ever in the USA, after running aground in Alaska’s Prince William Sound in 1989, is still lying dead in Alang, India, the biggest ship graveyard in the world. According to the Spiegel, that was the ship’s final destination where its corps is still being devoured by hundreds of Indian workers in return of a few rupees per day.

Exxon Valdez might probably be the most famous but certainly not the only one. Thousands of ships every year arrive to Alang but also other shipyards of the South Asia region for scrappage. The reason is the limited or absent environmental controls in those parts of the world, the low competitive price and the significant distance from the west.  And of course when it comes to the melting and burning down of highly dangerous for the environment and health vessel properties like asbestos, the mineral mix that is highly linked with cancer and other diseases, machine oil and radioactive material, all the “developed” western countries want to keep that out of their house.

It is seriously very sad what is happening in places like Alang in India. Regardless of the tremendous ecological damage that nobody is able to estimate due to the lack of controls, hundreds of poor workers are killed or severely injured during the demolition process. In the case of ship recycling, like in various other cases, the west is continuously sending to the developing countries death and ecological chaos, in order to avoid the burden of their own waste. That may be sound preposterous but still it is the truth.

Business as usual

Of course, all those developing countries in the South Asia region, like India, Pakistan or China are seeing this as a big business opportunity. During the scrappage of old ships, huge parts of steel can be pocketed by the local companies and thus boost the steel industry of the country. The business is so profitable that for a vast country like India the steel extracted by ship breaking amounts to an approximate of 9 % of the country’s steel demand, according to the Spiegel. Hence, those countries make sure that they have competitive prices and conditions for foreign customers, with that possibly meaning also to turn a blind eye when the demolition causes a severe environmental damage. Moreover, sometimes they even fight between each other on who is going to get the customer.

So, basically, we are talking about a lucrative business here. Unfortunately, it is a trade of ecological and health hazard and it is always at the expense of the weak, namely here the developing countries. Now that I have sufficiently described the way ship breaking “industry” operates, and feeling the urge to give hope to my reader that there are some basic regulations that try to minimize the social and environmental impact of this chaos trade, I feel ready to come back to the initial allegations that the recent legislation proposal of the EU to change the ship recycling regulations is illegal.

The Commission wants the biggest piece of the pie

The above allegations that the European Commission is running an unprecedented illegal proposal to restructure European ship breaking are referring to the infamous proposal published on the 23rd of March 2012 in Brussels. Indeed, in this proposal the European Union is planning to change the map of ship recycling concerning the European ships. But, of course, before we find out about the changes planned, we need to know the current status first. Are there any existing rules and limitations that control this rather dodgy and hazardous business?

In 1989 the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal was adopted. The European Union abides by the Basel Convention and the Basel Ban Amendment that explicitly prohibits the export of hazardous waste from the European Union to non OECD (Organization for Economic Co-operation and Development) countries. Of course, neither India nor Pakistan nor China is a OECD member and yet, according to the Commission, in 2009 more than 90 % of the European fleet chose his last voyage destination to be South Asia. That the Basel Convention is not enforced is not news. The problem lies in the fact that there is a loophole in the regulation that lets EU ships change their flags to something else in the middle of the Ocean, hence they can escape the Basel Convention. Thus, the Basel Convention is hard to be enforced and this can be also confirmed by the evidence that the Guardian recently brought to light that  365 European ships were scrapped only in 2011 in South Asia, with Greece being one more time the negative example with 174 ships, Germany 49, Norway 37, Britain 32 and so on. So, perhaps a reform is highly needed and the NGOs are wrong to accuse the Commission this time, or not?

Well, the thing is that those loopholes in the Basel Convention are very well-known and the shipping industry is making insanely large amounts of money every year out of them. An attempt to cover these gaps was the Hong Kong Convention under the umbrella of the International Maritime Organization of the United Nations that was adopted in 2009. The latter convention, that has not been ratified yet, permits the ship breaking to happen in countries out of the OECD that have ratified the Convention and under certain requirements. However, since no ratification has been made yet and is not expected to be made until 2020 or so, the Hong Kong Convention has no validity at this moment. Therefore, the only universal regulation for this issue that is valid is the Basel Convention.

It was, thus, inside all this mess that the European Commission, that more than often operates as a huge conglomerate, decided to bring on the table its own rules and regulations. The “European Company” with this proposal aims to early break the limitation of the European ships not to be scrapped in non OECD countries. Basically, what the NGOs claim is true. The proposal of the commission appears to be illegal because it is against the Basel Convention and even the Commission’s previous regulation 1013/2006. But we need to show some understanding here to the European arrivism. The Commission just broke the law to do business.

Nobody resists an open jar of marmalade

The European Commission acted as a pure opportunist on this one. They even admit this in a way in their proposal. They bluntly say that they take this initiative because they cannot wait for 2015 or later that the Hong Kong Convention will be ratified. Hence they defy the Basel Convention, they break the barriers of the non exports in non OECD members, and all this, in order to make profit. You see, time is money for the European Conglomerate.

They saw a door and they just came in. They even propose a system where there will be EU controls and standards that will allow the ship breaking outside OECD. We have to admit that this is not a regulation proposal. This is an excellent business plan. All this will eventually bring a lot of money to the Commission and will make this chaotic trade of toxic waste a very lucrative business for the Old Continent. They even dared to state in the infamous proposal that this regulation will “hasten the entry of the Hong Kong Convention into force globally”.

In short, the European Conglomerate, namely European Commission, is violating an international Convention to exploit an opportunity and make aggressive business while on the top of that they act like the saviours of the world. The vanity is so immense that this time they even went against the interests of the Shipping Industry, that they often tend to serve, like in their recent decision not to prolong maritime transport antitrust guidelines any more. The Ship lords, namely International Chamber of Shipping (ICS), met in London on the 5th of February and did not omit to go against the Commission on this initiative-proposal while praising the Hong Kong Convention. Of course, those rich ship owners are seeing that the European Conglomerate with its initiative is setting its own rules in the business and this will steal significant market share from them.

The Epitaph of a European Business Plan

The truth is that the Commission caught all those ship lords sleeping this time. It does not want only a good piece of the pie. It wants the entire pie for itself to the great disappointment of the Ship owners that were seeing the Hong Kong Convention as their big chance to boom the ship breaking business in the developing world. I think it is quite clear what is going on here. These are pure competitive business plans and certainly not policy making. I think the EC has completely forgotten about its role this time. The ship recycling business is a sad business just like the war business. Companies make profit from environmental chaos and death. Instead of finding ways to end this madness and limit the environmental and health impact of this business with unanimous consent and serious global strategic actions, Europe is trying to make extra profit from that. I am wondering then: Is this the role of the European Commission? And most importantly, is this the future of Europe?

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Comments

  1. M Swallow says:

    Your initial summary is correct, but then degrades into a rant about the evil EU. you ignore however some realities.
    The HK Convention is dated 2009, but according to their office not a single country in the world has yet ratified it because…..they are all waiting for each other to step first etc. zzz.
    The EU initiative may well be flawed but it is recognizing the lack of progress, and taking the lead. Technically they may have to leave the Basel Convention in order to move forward, but at least for once the EU is taking a lead in an important area of world pollution reduction. Are you seriously suggesting Schlyter wants the EU to have a more relaxed environmental regime than under Basel?
    The proposed Schlyter levy/subsidy is a crude attempt to give breakers affiliated to the EU area a chance at demonstrating how ships can be demolished environmentally. It may well be that this subsidy should be wider available once bedded down.
    The separate problem of ship re-flagging in order to evade environmental controls is harder to tackle, although perhaps a study of the USA protectionist system should be made, as they manage to force US ship owners to almost exclusively use US yards to break their ships, perhaps to the detriment of he breakers elsewhere. Somehow they prevent re-flagging? And of curse somehow the US system is not caught as an anticompetitive practice through WTO regs ?!
    I think the EU proposal is an important step, perhaps others don’t like being seen to have lost the initiative in ‘their patch’?

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