1. Introduction
This article examines the international and EU regulation of ship recycling. The demand for recycling of the European fleet exceeds by far the supply available in European ship recycling markets. Therefore, most European-owned commercial vessels are sent to the recycling facilities of third countries, the majority of which are located in South East Asia.(1) See generally Frank Stuer-Lauridsen, Nikolai Kristensen and Jesper Skaarup, Ship-breaking in OECD, Working Report No. 18, 2003 (Arbejdsrapport fra Miljøstyrelsen), available at: <https://www2.mst.dk/udgiv/Publications/2003/87-7972-588-0/pdf/877972-589-9.pdf> (last accessed 13 April 2020).The economic feasibility of using the services of ship scrapping yards located in third countries is also an important consideration for shipowners.
The levels of health, safety and environmental standards on many of these sites are, however, unacceptably low.(2) See Report by the Parliament of Norway on environmental crime (in Norwegian): Meld.St. 19 (2019–2020) Miljøkriminalitet [Environmental Crime], p118–119, available at: <https://www.regjeringen.no/no/dokumenter/meld.-st.-19-20192020/id2698506/>(last visited 26 April 2020). See also reports by IndustriALL Global Union on unsafe accidents in the Bangladesh shipbreaking industry (29.05.2019), Safety crisis in Bangladesh shipbreaking yards continues. Available at: <http://www.industriall-union.org/safety-crisis-in-bangladesh-shipbreaking-yards-continues-0> (last accessed 13 April 2020).Ships may contain hazardous, toxic and explosive cargo residues and dangerous built-in substances, such as asbestos and sometimes even radioactive materials. The so-called “beaching” of ships is an extremely dangerous and environmentally harmful shipbreaking, conducted directly onto beaches, where the ship is washed up with the tidal waters. Beaching is practiced in countries such as Pakistan, Bangladesh and India.(3) See ILO, Ship-breaking: a hazardous work, 23 March 2015: https://www.ilo.org/safework/areasofwork/hazardous-work/WCMS_356543/lang--en/index.htm.At the same time, European-flagged or European-owned ships are estimated to represent a major share of the customers at these sites.(4) European owned ships are reported to amount to one third of end-of-life ships scrapped in South East Asia: see, e.g., Opinion of the European Economic and Social Committee on ‘Shipbreaking and the recycling society’ (own-initiative opinion) (2017/C 034/06) and the information published by NGO Shipbreaking Platform at <https://www.shipbreakingplatform.org/> (last accessed 13 April 2020).
Recently, the problem of beaching and other unsafe shipbreaking practices have come into focus due to both the initiatives by NGOs and media attention.(5) See, e.g., NGO Shipbreaking Platform (above), www.danwatch.dk and IndustriALL Global Union (n. 3 above).To begin with, the competence to adopt and enforce environmental, social and labour conditions at the ship scrapping facilities lies with the State, in whose territory the yard is located. This State – and private owners of the yard – may or may not respect the applicable minimal international standards. In addition, as explained later, there are no sufficiently rigorous international requirements in force which would regulate the ship recycling industry. The concept of sustainable, safe and environmentally sound ship recycling is vague and leaves a significant margin of discretion to States involved in the shipbreaking business.
Shipowners are also required to choose the recycling facilities for their end-of-life ships according to certain rules and procedures. In some countries, proceedings have been initiated against shipowners, as well as so-called ‘cash buyers’ of end-of-life ships, which buy up such ships and deliver them to scrapping yards, as well as against other actors involved, such as insurance companies.(6) See text accompanying n. 68 below.These cases highlight the legal and practical difficulties faced by the authorities in trying to combat what they view as illegal shipbreaking. These cases also highlight legal uncertainty issues for shipowners, which may – unexpectedly perhaps – end up with a violation of environmental law.
Furthermore, the ability of flag States to address the problem of beaching and other unsound ship scrapping is limited. By imposing certain requirements on the owners or operators of ships (for example, by requiring them only to use sufficiently responsible ship yards and imposing sanctions for non-compliance with such requirements), flag States may prompt shipowners to re-flag the ship to a State with less strict regulations. Indeed, studies report significant discrepancies between flag States, citing the discrepancy between the 25 largest flag states and the 25 largest flag states for end-of-life ships.(7) COWI (for European Commission), Support to the impact assessment of a new legislative proposal on ship dismantling, Final report, December 2009, available at: <https://ec.europa.eu/environment/waste/ships/pdf/final_report080310.pdf> (last accessed 13 April 2020) and Urs Daniels Engels, European Ship Recycling Regulation: Entry-Into-Force Implications of the Hong Kong Convention, Springer, Heidelberg, New York Dordrecht London (2013), p. 174.In all cases, flag States will probably be unwilling to take more stringent unilateral measures in the absence of global rules.
In practice, once the ship has sailed away from the State where it is registered or where the shipowner has its place of residence, it may be difficult for the authorities of the home State to trace what happens to that ship at a later stage, and prove a possible infringement of applicable rules. In practice, ships are often sold to the yards through middlemen (so-called ‘cash buyers’), and ownership of a ship may be transferred to other entities a number of times before the actual scrapping occurs. These operations – even if environmentally and socially ignorant – might be viewed as lawful under applicable national rules.
The further discussion will focus on the international regulation and corresponding EU regulation of ship recycling. At both the international and the EU level, regulatory attempts have been made to tackle the problem of unsafe and environmentally unsound scrapping of ships. Section 2 gives an overview of international instruments. Section 3 examines EU law provisions giving effect to and strengthening the international obligations with regard to safe and sound ship recycling. Section 4 contains some final remarks.