Europe has the capacity and the technical know-how to repair and maintain vessels and oil and gas rigs. There is a strong business case for Europe to maintain and expand a specialised off–shore recycling industry. Many floating oil and gas structures need to be decommissioned in the coming years. Alongside this, the opportunities for the recycling of merchant ships in EU yards will be augmented. Now it is the Commission that needs to seize the opportunity and equip the Ship Recycling Regulation (SRR) with teeth by introducing a financial instrument that encourages ship owners to recycle their vessels in facilities approved by the EU.
Two consecutive events, organised by the European Economic and Social Committee (EESC) and Members of the European Parliament (MEPs) Margrete Auken (DK), Pascal Durand (FR) and Bart Staes (BE) of the EP's Green Group, have highlighted the need for the European Commission to act urgently.
A financial instrument is needed to ensure compliance with the EU Ship Recycling Regulation While the EU's 2013 Ship Recycling Regulation (SRR) effectively bans "beaching" (ship-breaking on beaches) and lays down rules and standards for safe and sustainable recycling of European ships, including floating oil and gas structures, it fails in its purpose, in that international maritime law facilitates the swapping of a ship’s flag. Indeed, end-of-life ships are sold to scrap dealers known for using ‘flags of convenience’, allowing ship owners to shrug off responsibility for proper ship recycling.
In its latest opinion on Shipbreaking and the recycling society, the EESC advocated a financial incentive under the SRR to effectively stop ship owners from circumventing the law by simply swapping the ship’s flag to that of a non-EU state. "Now there is the momentum and right support from a broad coalition of stakeholders to go ahead with introducing a financial incentive under the Ship Recycling Regulation," argued EESC member Martin Siecker and EESC-delegate Richard Adams, with great conviction. "We need a financial instrument that encourages ship owners to care for a dismantling of their end-to-live vessels in a way respecting European standards." The financial instrument proposed by the EESC and now also supported by MEPs Auken, Durand and Staes provides for a specific fee for each ship, held in escrow by a major financial institution that would build up capital to finance safe and sustainable recycling. The amount of the fee would be determined by a combination of tonnage, type of transport, frequency of calling at EU ports, design based on the cradle-to-cradle principle and the presence of toxic materials on board. The capital is created by ship owners who, every time one of their vessels calls at an EU port, pay the appropriate charge to the fund linked to that specific vessel. At the end of the ship's life, this fund could be reclaimed if the ship is indeed recycled in an EU-approved yard and thus used to make up for the loss of revenue stemming from going for responsible dismantling.
European industry ready to seize the opportunity – hundreds of jobs for Europe
Invited representatives of the recycling industry and European ports have confirmed that they have the know-how to dismantle vessels according to European laws and that they are willing to invest and create sustainable jobs in Europe. Initiatives in this regard already exist in several Member States and should be supported. "If the EU takes the Juncker plan seriously, it has to grab such a chance for Europe's industry and provide the necessary legal instruments. Only then can 'beaching' come to a halt", said MEP Margrete Auken. Furthermore, this industry would provide Europe, and particularly its steel industry, with raw materials, whose scarcity and high and volatile prices are a cause for concern. Already fixed oil installations in the North Sea need to be removed and recycled in Europe according to the OSPAR rules.
Ship owners not enthusiastic
However, European ship owners expressed strong reservations arguing that the IMO’s Hong Kong Convention set adequate standards to eliminate the abuses that had been illustrated by participants in the event. This was in spite of the clear evidence presented that HKC-certified ‘yards’ were not meeting even the lower level of compliance required. ECSA, the European Community Shipowners’ Association, also suggested that EU yards had no capacity to meet global demand and costs would be prohibitive. The concept of making ship-owners pay to properly dispose of their end of life vessels was not welcomed.
Europe needs to meet its moral obligation
Ship-breaking on beaches - "beaching" - in countries such as India, Pakistan, Bangladesh, and other countries in South Asia, is the most dangerous job in the world according to the ILO. In the EESC's view, it is also one of the most inhuman. Still, over the last thirty years the great majority of decommissioned vessels have been transported there for "beaching" – rammed ashore where unprotected workers strip it down in the inter-tidal zone, creating environmental havoc. "This needs to be stopped as the EU does also have a moral duty to defend workers' basic rights abroad", said Martin Siecker. “European shipping companies must follow European standards, and the oil and gas sector which has operated in the North Sea and other EU waters should be properly disposed of their assets in facilities on the EU list of approved ship recycling yards” he concluded.