MarIus

2.2.1 Basel Convention and EU Waste Shipment Regulation

Initially, the recycling of ships was not regulated under separate legislation but included under the rules on transboundary movement of waste. These rules have their outset in the 1989 Basel Convention(1) The Basel Conventions compatibility with UNCLOS lies outside the scope of this thesis., entering into force May 5^th, 1992. It applies to all transboundary movement of hazardous waste between exporting and importing states. The Basel Convention is implemented in the EU by way of the European Waste Shipment Regulation(2) Regulation (EC) No 1013/2006 on shipments of waste..

The question is whether the end-of-life ships are included in the scope of the convention. At the Seventh Conference of the Parties to Basel Convention, the Parties recognised that ships are known to contain hazardous materials, and such materials may become hazardous waste, as listed in the annexes to the convention. Likewise, the decision taken at the Seventh Conference also recognised that a ship may become waste as defined in article 2 of the Basel Convention.(3) UNEP, Decision VII/26. Environmentally sound management of ship dismantling. Thus, end-of-life ships can be rendered as hazardous waste under the Basel Convention.

An end-of-life ship on its way to a recycling facility will fall within the category of waste “which are disposed of or intended to be disposed of”(4) Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, article 2(1). (author’s own highlight), given that the ships are sold for demolition because they have served their purpose and no longer can be of use to the shipowner. This formulation of when waste falls within the scope forms a possibility to circumvent the legislation; the shipowners could argue that the intention was not present at the given time or the non-disclosure of any intention which may have been present regardless. Intent, as a subjective factor, can be very hard to establish solid evidence for a conviction. However, case law has seen instances where intent was present. The first such example was the Seatrade case, where the shipping operator and certain other executives were held criminally liable for intending to export ships in breach of the Waste Shipment Regulation.(5) Prosecutor v X (Seatrade); ‘Ship Recycling’, The case is however up for retrial, as the Defendant successfully appealed the case due to impartiality reasons. Intent was found based on email correspondence before the ships were en route to the shipyards. More recently, a Norwegian shipowner was sentenced to six months imprisonment on the grounds of contribution to an attempt to scrap the vessel in contravention of the Basel Convention.(6) 19-183171MED-SUHO. Here intent was found based on two insurance certificates, which were contradictory to the last destination of the vessel.

According to the Basel Convention, the import and export of hazardous waste to or from non-Parties are illegal.(7) Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, article 4(5). Furthermore, according to the Basel Ban Amendment entering into force on December 5th, 2019, export from OECD(8) Out of the main recycling countries (India, Bangladesh, Pakistan, China, China and Turkey) only Turkey is a member of OECD., EC and Lichtenstein countries to other than those mentioned is not allowed.(9) Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, article 4A.

Essential to the Basel Convention is that all transboundary movement between parties as well as through non-parties is subject to the prior informed consent procedure.(10) Ibid, articles 6, 7. An issue to be identified here is that if the end-of-life ship commences its journey for recycling in a non-party state, the Basel Convention (or EU Regulation) will not apply.

The rules on prior informed consent entail that the exporter must inform the country of import and/or transit of the intended import/transit, and the importer/transit country must give its consent to the requested import/transit. In the case of ship recycling, it is the shipowner, as the generator or exporter of the (hazardous) waste (end-of-life ship), who has the responsibility to notify the exporting and importing state. The export state is the state from which the vessel departs to the recycling facility or which it is planned to depart from.

To sum up, two main gaps appear when considering the scope and enforceability of the Basel Regime. Firstly, the hardship of proving intent means that shipowners can easily argue that they had no intention to recycle the ship or avoid disclosing any evidence hereof. Just as easily it can be argued by the shipowner that the decision to recycle was taken someplace not included in the scope of the Basel Convention, and also hereby circumvent its application. Secondly, the end-of-life vessel may commence its last journey from a state who is not a party to the Basel Convention. This will exclude the vessel from being regulated by the Basel Convention. These gaps led to increased pressure on the maritime industry to form more purposeful and effective regulation, which led to the Hong Kong Convention.

2.2.2 Hong Kong Convention and EU Ship Recycling Regulation

As a result of the issues of circumventing the Basel regime and the continued unsafe and unhealthy ship recycling practices seen in developing countries, the IMO was urged to draft a set of rules specifically designed for the recycling of ships. From this, the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships(11) Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships. emerged. The convention has however not yet entered into force and will therefore not be further elaborated.

Instead, the focus will be on the EU Ship Recycling Regulation(12) It is outside the scope of this thesis to asses the Ship Recycling Regulation’s illegality in relation to circumventing the Basel Convention., which implements the Hong Kong Convention on a EU-level(13) 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, article 1(3)., albeit with higher standards for the inventory of hazardous materials and ship recycling facilities. The Regulation distinguishes itself from the Basel regime by solely regulating the recycling of ships. “The purpose of this Regulation is to prevent, reduce, minimise and, to the extent practicable, eliminate accidents, injuries and other adverse effects on human health and the environment caused by ship recycling. The purpose of this Regulation is to enhance safety, the protection of human health and of the Union marine environment throughout a ship′s life-cycle, in particular to ensure that hazardous waste from such ship recycling is subject to environmentally sound management.”(14) Ibid, article 1(1)..

The Recycling Regulation takes precedence over the Basel Regime for EU-flagged vessels.(15) That the Basel Convention does not allow for reservations, and that the EU Ship Recycling Regulation illegally creates an exemption to the Basel Convention is not addressed. Given that the Regulation only applies to EU-flagged vessels,(16) 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, 2(1). this poses yet another gap in the regulatory regime, whereby shipowners can circumvent the legislation by so-called reflagging prior to recycling. It is also known as the term flags of convenience.(17) NGO Shipbreaking Platform, ‘Flags of Convenience’; Falkanger, Brautaset, and Bull, above no 1, 58. This means that the flag of the ship will be changed before recycling the ship and thereby exempting the ship from EU regulation. Shipowners will then instead be caught by the Basel regime and then fall back on where the decision to recycle was made, as this can make the export of the ship (as waste) illegal. However, as noted above, it will be difficult to establish intent to recycle the ship even though the flag is changed because reflagging also occurs on other occasions than prior to recycling and is somewhat common in the maritime industry. One could argue that reflagging prior to recycling and then selling to a so-called cash buyer (as is usually the case) highly indicates an intention to recycle.

Exempt from the Ship Recycling Regulation are warships, ships under 500 gross tonnage, and ships flying a member state flag but only operating in that same jurisdiction throughout its lifecycle.(18) 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, 2(2)(a-b). The regulation further sets out the requirement that all new buildings shall have an inventory of hazardous materials.(19) Ibid, article 5(1). Even ships flying the flag of a third country shall have such an inventory if they call at a member state port.(20) Ibid, article 12.

Most importantly, in regards to the purpose of the Recycling Regulation, it requires that all end-of-life ships flying the flag of a member state must be recycled at a facility included in the European list.(21) Ibid, article 6(2)(a). This duty falls upon the shipowners. According to the definitions of the regulation, “‘ship owner’​ means the natural or legal person registered as the owner of the ship, including the natural or legal person owning the ship for a limited period pending its sale or handover to a ship recycling facility, or, in the absence of registration, the natural or legal person owning the ship or any other organisation or person, such as the manager or the bareboat charterer, who has assumed the responsibility for operation of the ship from the owner of the ship, and the legal person operating a state-owned ship”(22) Ibid, article, 3(1)(14).. Thus, it can be concluded that both the legal owner as well as i.e. managers of vessels flying the flag of a member state are under the obligation to only recycle at a yard included in the European List. Thus, the shipowner, as the legal owner, will not be able to circumvent the obligation to use European Listed facilities simply by outsourcing all operations to another entity or agency.

However, given the fact that shipowners are not bound by any rules on when and how many times they can change the flag of the vessel, this obligation seems rather illusory.