MarIus

1.1 Background and problem discussion

Shipping is a global business(1) Falkanger, Brautaset, and Bull, Scandinavian Maritime Law - The Norwegian Perspective, 26., and with globalisation having reached another level than ever before, new legal questions arise in the area of liability. The media has drawn more and more attention to business conduct and the consequences of outsourcing or selling off business and property as a way to avoid liability.(2) This includes the many cases on parent companies’ liability for its subsidiaries, such as in the infamous Rana Plaza building collapse, see Das v. George Weston Limited [2017] ONSC 4129. This includes the area of ship recycling.(3) The same issues are also seen in the earlier stages, namely the ship building. See for instance the Danish case where North Korean workers were exploited in a Polish Shipyard, where the work environment was considered unsafe, the workers were not paid and one worker ended up dying, cf. Krigslund, ‘North Korean Laborers May Have Worked on Maersk Vessels’; ‘Dansk krigsskib bygget med hjælp fra nordkoreanske tvangsarbejdere’; The Mediation and Complaints-Handling Institution for Responsible Business Conduct, ‘Specific Instance on the Danish NCP’s Own Instigation: The Due Diligence Process of the Danish Ministry of Defence in Regard to the Contracting and Building of the Inspection Vessel Lauge Koch’; Lillevang, ‘Nordkoreanske tvangsarbejdere havde kontrakt på at bygge dansk inspektionsskib’. An example hereof is found in a recent Norwegian appeal, which upheld the conviction of a Norwegian shipowner. He received a six months prison sentence over the attempted illegal export of the vessel “Harrier” from Norway to Pakistan for recycling.(4) 19-183171MED-SUHO Notably, this case is one regarding the “old” rules on transport of waste, as the specific recycling rules for ships had not entered into force at the time of the incident. The case has been appealed and upheld at appeal, see Ismail and Klevstrand, ‘Opprettholder Dom På Seks Måneders Fengsel for Skipsreder Georg Eide’. The final judgement has however not yet been released.

The ship recycling industry has been said to be not only the most dangerous job in the world,(5) ‘The Toxic Tide’; The same has been said by The Global Trade Union IndustriAll, cf. Ship recycling: reducing human and environmental impacts, ‘Science for Environment Policy (2016)’, 3. but also the cause of severe environmental problems.(6) Falkanger, Brautaset, and Bull, above no 1, 136; Ship recycling: reducing human and environmental impacts, above no 5. This has led to various international legal instruments.(7) Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal; Regulation (EC) No 1013/2006 on shipments of waste; OECD, Decision of the Council on the Control of Transboundary Movements of Wastes Destined for Recovery Operations, OECD/LEGAL/0266; Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships; UNEP, Decision VII/26. Environmentally sound management of ship dismantling; Regulation (EU) No 1257/2013 of the European Parliament and of the Council of 20 November 2013 on ship recycling and amending Regulation (EC) No 1013/2006 and Directive 2009/16/ECText with EEA relevance. However, the practice of unsafe and non-environmentally friendly recycling still continues. This is partly due to the gaps in the regulatory regimes, which make it easy to circumvent the legislation by arguing that a decision to recycle was made somewhere outside the scope of the regulation or reflagging the vessel prior to recycling. It is also partially due to the international nature of the maritime industry that makes it hard to codify and enforce one set of rules for the entire world. Whilst the immediate tortfeasor may be sued under national law and potentially found liable hereunder, their funds may be limited.(8) The fact that the Deceased's employer in Begum v Maran was not known, speaks in favour of the assumption that it will be hard for the injured party to recover from the immediate tortfeasor, see Begum v Maran (UK) Ltd (Rev 1) [2020] EWHC 1846 (QB) paragraph 11. In addition, developing countries may often have weaker legal systems with limited law enforcement.(9) Millington, ‘Responsibility in the Supply Chain’, 363; Rühmkorf, Corporate Social Responsibility, Private Law and Global Supply Chains, 80; Ulfbeck, Andhov, and Mitkidis, Law and Responsible Supply Chain Management, 9; Mitkidis, ‘Enforcement of Sustainability Clauses’, 68; Van Dam, ‘Tort Law and Human Rights’, 226, 228; Ulfbeck, ‘Virksomhedens Privatretlige Erstatningsansvar for Overholdelse Af Menneskerettigheder i Udlandet’, sec. 5.2.

Interestingly, a somewhat recent case(10)Begum v Maran (UK) Ltd (Rev 1) [2020] EWHC 1846 (QB); Begum v Maran (UK) Ltd (Rev1) [2021] EWCA Civ 326. may pave the way for closing those very same regulatory gaps. The case involved a widow of a deceased shipyard worker who sued the operating agent Maran for owing the deceased an English law duty of care by selling the vessel, knowing the vessel would probably end up at a scrapyard with poor working conditions and lacking environmental standards. The High Court and Appellate Court held that the operating agent could owe a duty of care to the deceased worker in Bangladesh, even though the general rule under English law is that there must be a relationship of proximity, and that a party is not liable for harm done to another party by a third party. This was held to be the case even where there are multiple third parties involved in the transaction if the case is that the former operator created the danger. This poses an interesting question of how far the duty of care extends for agents, shipowners and other parties on the selling part of the transaction. The case is however not the final judgement but a mere allowance of letting the case proceed to trial. This will, albeit not lessen the importance of the judgements by the High Court and Appellate Court as the reasonings of the Courts have revealed the somewhat willingness to allow a duty of care to exist even though it would be “an unusual extension of an existing principle”(11)Begum v Maran (UK) Ltd (Rev1) [2021] EWCA Civ 326 paragraph 37.. This leads to the following research question.