The decade-long battle faces a crucial test next week

2011.10.13- ship recycling.jpgThe decade-long battle by the shipping industry to prevent rules on the international shipment of hazardous waste being applied to ships sold for scrap faces a crucial test next week.

A diplomatic meeting in Cartagena, Colombia, is due to deliver its verdict on whether the process of dismantling ships is to be covered by a convention adopted by the International Maritime Organization (IMO) or by a separate treaty originally designed for land-based industries.

The meeting of the Conference of the Parties (COP) to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal might find the IMO's Hong Kong convention on ship-recycling up to scratch or it might say it is faulty compared with Basel.

The discussions in Cartagena are taking place against a backdrop of ship owners, hammered by over-capacity, dumping excess tonnage in recyclers' facilities in near-record amounts, with Capesize bulkers and VLCCs prominent among those going under the torch. Under the Basel system of licensing and approval, the likelihood is that the process of disposing surplus tonnage would be reined in by red tape, delaying any recovery.

The IMO convention, still waiting to enter into force, was created to head off the growing campaign orchestrated by environmental groups for the Basel convention to be enforced against ships. In its attempt to resist the Basel brigade, the industry had persuaded the UN maritime agency to extend its remit across the shoreline by annexing what is essentially a land-based activity in order to prevent a land-based law hijacking a maritime one.

The Hong Kong Convention, adopted in 2009, however, had to be assessed by the governments signed up to the Basel convention on its equivalency to the latter treaty in its levels of control and enforcement. If it were to be found to be equivalent, then the IMO convention would take precedence; if not, then either it would have to be adequately improved or Basel would apply.

With the European Commission, speaking in this instance as one for European Union member states, said to be backing the IMO in the Cartagena face-off, industry observers are quietly confident the Basel-for-breakers backers will COP it, while being braced for the inevitable backlash from the usual suspects in the green camp.

A pro-IMO decision should also resolve the treatment by EU member states of ships earmarked for recycling outside the EU. The EU's law on waste shipment goes further than the Basel convention that is aimed primarily at exports from Organisation for Economic Co-operation and Development (OECD) countries to what might be described as poor countries. The EU decided in 2006 to implement a Basel amendment that seeks to ban rather than control hazardous-waste exports, even though the amendment has yet to come into force internationally but may do so after the Cartagena meeting.

Bureaucrats trying to apply the EU law to ships have tripped up over their own red tape as they check whether a ship - an elderly LNG carrier, say - is actually setting sail for the breaker's yard in India or Pakistan and whether their own country, from whose waters the ship at the time is intending to sail, can be defined as the "state of export". The European Commission, in a 2010 report comparing the EU law, the Basel convention and the IMO convention, admitted some states had already faced difficulty in applying the EU rules to "suspected end-of-life ships".

The EC report also noted that the IMO convention applied a "cradle-to-grave" policy to ships, whereas both the EU law and Basel are applicable only when ships can be defined as waste, something that the report admitted was in itself problematic.

Comparing (paragraph by paragraph, line by line) the IMO convention with its Basel counterpart to check for equivalency in the areas of control and enforcement has occupied the minds of lawyers, diplomats and self-appointed do-gooders for more time than probably most would have preferred.

One opinion from a group of Washington-based environmental lawyers is that the Hong Kong Convention fails the equivalency test on seven counts, including the failure to include the "prior informed consent mechanism" of Basel (essentially, licensing by exporting and importing country).

But if the Hong Kong Convention is accepted as Basel-equivalent next week, IMO member states will still have to enact the necessary legislation and devise a system of enforcement for the complex process of ships being sold for recycling where middlemen play an important role. Ship owners, for example, will be required to notify the relevant flag-state of the intention to recycle a ship "in due time" to enable the relevant inspection and certification to take place. What exactly will qualify as "due time", when a lot can happen, remains to be seen.

In the meantime another Basel-IMO dispute - this time over the legal status of "ship-generated waste" (engine-room oily residues and cargo tank washings, for example) - remains to be fully resolved. The key phrase being debated is "normal operation of ships", with the finally agreed definition determining whether some such wastes are Basel, meaning their disposal could be banned in some parts of the world, or IMO, retaining the existing and somewhat less onerous system of controls.

The two issues serve as a reminder of the vulnerability of the IMO's status as the prime agency in regulating shipping to outside pressures. The industry's arguments that in these and in other issues, such as climate change, only the IMO can provide the necessarily international regulatory framework can only be sustained if the system is perceived to be reasonably effective.

Rightly or wrongly, that argument is weakened whenever there is a serious maritime incident. Those attending the Cartagena meeting will not have failed to notice the news, accompanied by the all-too-familiar pictures of oiled sea-birds and pollution caused by a ship grounding on a well-known reef in a bay in New Zealand. Whether this latest incident will have any bearing on a decision to allow the industry to regulate how ships are recycled remains to be seen.

Source: BIMCO, Andrew Guest