Yesterday the European Parliament voted in favour of the new EU Ship Recycling Regulation that bans the breaking of EU ships on beaches. The new Regulation only allow ships registered under the flag of an EU Member State to be dismantled in facilities that meet the requirements set out in the Regulation and that are listed by the European Commission. It will also demand inventories of hazardous materials for all ships visiting European ports. These are all welcomed elements that have repeatedly been called for by the NGO Shipbreaking Platform to improve shipbreaking practices globally.

The NGO coalition warns however that the Regulation will fail to change the current state of play if no financial incentive is rapidly introduced to ensure compliance with the new rules.

“Without a financial incentive, circumvention of European law covering end-of-life vessels will persist and European ship owners will be allowed to continue to seek significant financial profits by externalizing environmental and human health costs to the shipbreaking beaches of Bangladesh, India and Pakistan, and to the exploited workforce there,” said Patrizia Heidegger, Executive Director of the NGO Shipbreaking Platform.

Several elements left open

The new Regulation asks the European Commission to elaborate on the possibilities of a financial mechanism to enhance clean and safe ship recycling: The Commission is asked to “submit [...] a report on the feasibility of a financial instrument that would facilitate safe and sound ship recycling and [...] if appropriate, accompany it by a legislative proposal”. Several other elements that can contribute to ensuring a more robust legislative framework are also left open for further development, such as the need to amend the Environmental Crimes Directive (2008/99/EC) to include breaches of the new Regulation and the need to develop adequate technical guidance notes on the requirements for ship recycling facilities and for the certification and auditing of ship recycling facilities outside the EU.

Facilities properly audited and certified

“To ensure that the Regulation has a positive impact on improving ship recycling practices globally the European Commission needs to make sure that the listed facilities are properly audited and certified to guarantee Environmentally Sound Management (ESM) of hazardous waste; that breaches of the law are sanctioned in line with internationally accepted penalty schemes; and that ship owners do not simply flag out to a non-EU flag prior to selling the vessel for dismantling in an attempt to circumvent EU law,” said Patrizia Heidegger.

Jumping to a non-EU flag not prevented

The new Regulation does nothing to prevent ship owners from jumping register to a non-EU flag prior to sending their ships for breaking in order to avoid falling under the requirements of the law. In 2012, three quarters of European owned vessels broken on the beaches of South Asia were registered under non-EU flags such as Panama, Liberia and Bahamas. With the new Regulation being a further incentive to flag out, vessels still registered under a flag of an EU Member State at end-of-life is likely to decline even further to a disillusioning number of ships, rendering the impact of the Ship Recycling Regulation non-existent for the purpose of improving ship recycling practices. In fact, the Regulation may even have the unintended effect of shrinking the number of ships registered under an EU flag, and therefore making the Regulation counterproductive to other EU initiatives aimed at building a more robust EU fleet.

Illegality of unilaterally acting

Recent studies have proposed an array of possible mechanisms to implement the polluter pays principle for end-of-life ships and have clearly shown that a financial incentive for proper ship recycling is legally feasible, enforceable, and necessary.

In adopting the new Ship Recycling Regulation, the EU will also inevitably be forced to reconcile the illegality of unilaterally acting in non-compliance with international law – NGOs, independent environmental law experts and even the European Council Legal Services have warned of the illegality of the new Regulation.