EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 19.11.2008 
SEC(2008) 2846 
  
COMMISSION STAFF WORKING DOCUMENT 
Impact Assessment for an EU stra tegy for better ship dismantling 
{COM(2008) 767 final} 
{SEC(2008) 2847} 
 
EN    EN 1.  
TABLE OF CONTENTS  
1. Executive summary...................................................................................................... 4 
2. Introduction / procedural issues ................................................................................... 5 2.1 Organisation and timing............................................................................................... 5 2.2 Consultation and expertise ........................................................................................... 6 2.3 Opinion of the Impact Assessment Board.................................................................... 7 3. Issue at stake: Why an EU strategy on ship dismantling? ........................................... 7 3.1 Definition of the problem............................................................................................. 7 3.2 The economics and politics of ship di smantling - drivers of the problem................. 10 
3.3 Who is affected, in what wa ys and to what extent? ................................................... 14 
3.4 Effects of non-action.................................................................................................. 16 3.5 International and national policy approaches............................................................. 16 3.6 Industry approaches ................................................................................................... 18 3.7 The right of the EU to act........................................................................................... 18 4. Policy objectives ........................................................................................................ 19 5. Description of policy options..................................................................................... 19 
5.1 Option 1: No additional action at EU level................................................................ 20 
5.2 Option 2: Emphasis on voluntary action.................................................................... 20 5.3 Option 3: Comprehensive EU legislation on ship recycling...................................... 21 5.4 Option 4: Integrated policy approach......................................................................... 22 6. Impact analysis........................................................................................................... 23  
6.1 Impacts of Option 1: No addi tional action at EU level.............................................. 23 
6.1.1 Short and medium term.............................................................................................. 23 6.1.2 Long term: Effects of the IMO regime ...................................................................... 24 6.2 Impacts of Option 2: Emphasis on voluntary action.................................................. 28 6.2.1 Measures to encourage ship disman tling in the EU/OECD (sub-option 1) ............... 28 
6.2.2 Measures to encourage ship dismantling in  higher-standard faci lities worldwide (sub-
option 2) ..................................................................................................................... 3 3 
6.2.4 Summary Option 2 ..................................................................................................... 38 
 
EN    EN 6.3 Impacts of Option 3: EU legi slation on ship recycling.............................................. 39 
6.3.1 Implementation of the Ship  Recycling Convention................................................... 40 
6.3.2 Complementing legal measures: Fill ing the gaps of the Convention ........................ 43 
6.3.3 Stricter enforcement of the Waste Shipment Regulation........................................... 50 
6.3.4 Anticipatory effects of legislation.............................................................................. 51 6.3.5 Summary Option 3 ..................................................................................................... 51 6.4 Impacts of Option 4: Integrated policy approach....................................................... 53 7. Comparing the options ............................................................................................... 57 7.1 Impact matrix ............................................................................................................. 5 7 
7.2 Conclusion................................................................................................................. . 60 
8. Monitoring and evaluation ......................................................................................... 60 Annex I: List of references.................................................................................................... ... 62  
Annex II: Report of Stakeholders Meeting …………………………………………………..62 Glossary………………………………………………………………………………………63 
 
EN 4   EN  
2. EXECUTIVE SUMMARY  
This impact assessment (IA) accompanies the Commission proposal for an EU strategy on 
better ship dismantling.  
The IA identifies the problem as a global market  failure in the sense that the present ship 
recycling market operates under unacceptable c onditions for the environment and workers' 
health in South Asia, and that this failure c oncerns also the EU on account of the high number 
of European-flagged and European-owned ships that go for scrapping to facilities in 
Bangladesh, India or Pakistan. 
The general objective of an EU strategy on ship dismantling is to ensure that ships with a 
strong link to the EU in terms of flag or  ownership are dismantled only in safe and 
environmentally sound facilities worldwide. This  includes as specific objectives: to prevent, 
in line with the Waste Shipment Regulation, th e export of hazardous e nd-of-life ships from 
the EU to developing countries and to redu ce significantly and in a sustainable way by 2015 
the negative impacts of shipbreaking, especial ly in South Asia, on human health and the 
environment without creating unnecessary economic burdens.  
Four options were considered to address these objectives: 1) a continuation of the current 
level of EU activities as "baseline", 2) a policy with emphasis on voluntary action by 
shipowners and recycling facilities, 3) comp rehensive EU legislation to implement key 
provisions of the forthcoming IMO Convention and complement it with certain mandatory 
provisions, and 4) an integrat ed policy approach combining selected legislative and non-
legislative measures. 
The first option would imply a low level of EU activity, essentially relying on Member States 
for the implementation of the IMO Ship Recycling Convention in the longer term. 
The second option would favour non-legislative measures to promote voluntary action by the 
shipping industry, i.e. encourage shipping comp anies to use only safe and environmentally 
sound ship dismantling facilities. It would focus on positive incen tives and not on the stricter 
enforcement of the current EC Waste Sh ipment Regulation. Two sub-options are 
distinguished, according to whether incentives should be used to encourage clean ship dismantling in the EU or candi date countries, or promote be tter practices worldwide. 
Under the third option, EU legi slation would transpose key el ements of the future Ship 
Recycling Convention (survey and certification requirements for sh ips, essential requirements 
for recycling facilities, and rules on communication and reporting) into EU law and complement it where necessary to fill ga ps. Beyond implementation, the EU legislative 
instrument would envisage additional measures  to extend future Convention standards to 
government vessels of Member States, require EU-flagged ships go only to audited and certified facilities for dismantling, and establish a list of ships ready for scrapping to improve 
the control system of the Waste Shipment Regulat ion for ships. In this  context, some other 
possible legislative actions - more prohibitions  on hazardous materials in ships, stricter 
obligations for pre-cleaning or  a ban on beaching - are also  assessed. Apart from new 
legislation, the option would cover other measures (guidance documents, IMPEL-TFS 
projects, infringement proceedings, cooperati on with third countries) to ensure better 
enforcement of current waste shipment la w with regard to end-of-life ships. 
 
EN 5   EN The fourth option combines a selection of  legal proposals under op tion 3 with certain 
supporting actions under option 2 in an integr ated policy approach. This would include 
legislation to implement, as a priority, ke y elements of the envisaged Ship Recycling 
Convention as soon as adopted by  the IMO diplomatic conference  foreseen to take place in 
May 2009, in particular provisions  concerning surveys and certific ates for ships, essential 
requirements for recycling facilities and rules on reporting and communication. It would also 
include rules for the clean dismantling of warshi ps and other government vessels and certified 
dismantling facilities, and a list of ships rea dy for scrapping. . Supporting actions would mean 
a range of non-legislative measures, such as a campaign for voluntary commitments, streamlining of shipping aids, certification and award schemes, and technical assistance to 
developing countries, but not subsidie s for ship dismantling in the EU.  
The impact analysis of these options presents an assessment of environmental, social and 
economic impacts. It gives an indication on the extent to which each of the options can resolve the problem, and discusses the costs an d possible drawbacks. As the Communication 
on an EU ship dismantling strategy does not repres ent a concrete legislative proposal, and that 
the impacts of such measures that may be adopted  subsequently will be analysed in detail in 
separate IAs, the level of analysis is  deemed proportionate at this stage. 
Finally, the impacts of the options are compared  in two tables, disti nguishing impacts in the 
short and medium term (until 2010 and 2015, re spectively) from thos e in the long term. 
The conclusion of this IA is that the fourth option (integrated policy ap proach) is preferable, 
as it is the only one that can achieve altoge ther positive environmental, social and economic 
impacts in the short and medium as well as in the long term. This option would ensure a high 
level of compliance with current waste shipme nt law and reduce significantly in the next 
years the negative impacts of sh ipbreaking on human health and the environment, especially 
in South Asia, without creating excessive burden on EU taxpayers. 
The implementation of the ship dismantling stra tegy would need regular monitoring in order 
to evaluate changing impacts and adapt the actions accordingly. 
3. I
NTRODUCTION / PROCEDURAL ISSUES  
3.1. 2.1 Organisation and timing 
This impact assessment (IA) accompanies the Commission proposal for an EU strategy on 
better ship dismantling. The IA has been prepared with input from the European Maritime 
Safety Agency (EMSA). The information contai ned in the document has been updated as far 
as possible until early June 2008. 
Specific actions to be developed out of the strategy proposal will be accompanied by separate 
impact assessments as needed. This applies in particular to legislatio n proposed to implement 
and complement the International Conventio n for the Safe and Environmentally Sound 
Recycling of Ships ("Ship Recycling Conventi on") that is scheduled for adoption in May 
2009. As the Convention is currently still unde r negotiation in the International Maritime 
Organisation (IMO), any assessment of its e ffects and of the need for complementing 
measures is bound to be prel iminary at this stage. 
 
EN 6   EN 3.2. 2.2 Consultation and expertise 
This impact assessment is based on: the Green Paper on better ship dismantling1 adopted by 
the Commission in May 2007; the results of  the following public consultation and a 
stakeholder workshop held in Brussels on 28 November 2007; and on a broad range of 
studies, expert advice and media information on the subject.  
Apart from DG ENV, other Commission serv ices (SG, DGs TREN, ENTR, COMP, EMPL, 
FISH/MARE, RELEX, REGIO and TRADE) and EMSA have been involved in the 
framework of an Inter-service group on ship recycling. 
In the public consultation process on the Green  Paper, other Europ ean institutions, the 
Member States, non-governmental stakeholders and the public were invited to comment and 
used this opportunity widely. Participants gene rally encouraged the EU to take urgent action 
on ship dismantling. Apart from stronger EU coordi nation at the internati onal level in order to 
achieve an effective IMO Convent ion, the expectations of stake holders focused on legislation 
for its early implementation, guidance from the Commission, an EU label for the certification 
of clean ship dismantling facilities and resear ch on ways to establish a sustainable funding 
system to upgrade the industry ("ship dism antling fund"). On the other hand, most 
stakeholders opposed to the idea of subsidie s for the strengthening of ship dismantling 
capacity in the EU. The results of the consul tation are published on the website of the 
Commission 2 and annexed to this Impact Assessment. 
The general principles and minimum standards for consultation of inte rested parties by the 
Commission were respected.3 
On 21 May 2008, the European Parliament debate d the Green Paper and adopted a resolution 
specifying the actions it expects of  the Commission and the Member States in the field of ship 
dismantling.4 
Various studies launched by the Commissi on between 2000 and 2007 - most recently the 
COWI/DHI study on "Ship dismantli ng and pre-cleaning of ships"5 and the ongoing EMSA 
study on “Certification of ship recy cling facilities” - were used for this impact assessment. So 
were relevant reports a nd impact assessments by institutions of Member States, in particular 
the Regulatory Impact Assessment for the UK Ship Recycling Strategy of February 20076 and 
the report of the French Inter-departmental Committee on the Dismantling of Civilian and Military End-of-Life Sh ips (MIDN) of March 2007
7. Further data on shipping and ship 
dismantling were provided by EMSA, IMO, the maritime press and consulted experts. For the environmental and social impacts of ship dismantling in South Asia, additional information 
                                                
 
1 COM (2007) 269 final, with Annex and references in Commission Staff Working Document 
SEC(2007) 645. 
2 http://ec.europa.eu/envi ronment/waste/ships/pdf/r eport_consultation.pdf. 
3 Cf. COM(2002)704, published at: 
http://ec.europa.eu/civil_society/consultation_standards/index_en.htm. 
4 http://www.europarl.europa.eu/sides/getD oc.do?pubRef=-//EP// TEXT+TA+P6-TA-2008-
0222+0+DOC+XML+V0 //EN&language=EN. 
5 COWI/DHI / EC-DG ENV, Ship Dismantling and Pre-cleaning of Ships, Final report of June 2007, 
published 
on the Commission website at http://ec.europa.eu/environment/waste/ships//index.htm . Further references are to 
be found on the same webpage. 
6 Department for Environment, Food and Rural Affairs (DEFRA), published at 
http://www.defra.gov.uk/ENVIRONM ENT/WASTE/strategy/ship.htm . 
7 Hereafter called "MIDN report"; French original (w ith annexes) and English translation published at: 
http://www.sgmer.gouv.fr/ar ticle.php3?id_article=52 . 
 
EN 7   EN was given by governments, indus try and NGOs and in particular  derived from two workshops 
in Mumbai (India) and Dhaka (Bangladesh) attended by Commission a nd EMSA experts in 
January 2008.  
Nevertheless, there are considerable data limitati ons which have to be taken into account in 
this assessment. Notably, the available statistics on ship dismantling vary significantly if different databases are consulted. The cost effects of the future IMO Ship Recycling 
Convention are still in many resp ects uncertain and will depend on further specifications in 
the final drafting of the Convention and the accompanying guidelines.  For these and other 
aspects it has often not been possible to make precise forecasts but only to indicate that a 
measure would more or less probably have a high, medium (limited) or low impact. 
3.3. 2.3 Opinion of the Impact Assessment Board 
A draft of this Impact Assessment was submitted to the Impact Assessment Board on 11 June 
2008. The Impact Assessment Board submitted written technical comments on 26 June 2008 and issued its final Opinion on the draft IA on 18 July 2008. Five main areas of further 
improvement have been identified by the Board: 
A more detailed analysis of how the propo sed policy options will  solve the current 
compliance problems; 
A more complete description of  how the Waste Shipment Regul ation applies to end-of-life 
ships; 
The need to support the analysis of options wi th clearer and additiona l quantitative data for 
the better assessment of th e administrative burden; 
Further clarification of the net impact s of the integrated  policy approach; 
The choice of legal instruments for the implem entation of the international Ship Recycling 
Convention should be further explained. 
The technical comments and the Opinion of  the Impact Assessment Board have been 
answered by the author DG, and additional in formation and/or clarifications have been 
incorporated in the relevant IA  sections. In particular, the te xt was revised to describe the 
legal provisions and documented implementa tion problems of the Waste Shipment 
Regulation, and supporting data for the proposed  options have been added to the text. 
4. I
SSUE AT STAKE : WHY AN EU STRATEGY ON SHIP DISMANTLING ? 
4.1. 3.1 Definition of the problem  
Worldwide, between 200 and 600 large end-of- life ships are dismantled every year. Their 
steel, other scrap metal and equipment constitute  valuable raw materials. Most of this ship 
dismantling nowadays takes place in South As ia, on tidal beaches and under unacceptable 
conditions from the point of view of safety  and environmental protection. The rate of 
accidents is high, many workers contract lethal di seases, and water, soil and coastal habitats 
are heavily polluted by hazardous materials from sh ips. Furthermore, due to a backlog in ship 
scrapping and the phasing out of  all single-hull oil tankers in 2010 or 2015, the number of 
ships that have to be dismantled will  rise sharply in the years to come. 
 
EN 8   EN As 25% of the merchant ships worldwide fly th e flags of EU Member States and about 40% 
of the world tonnage is owned by European comp anies, the situation is of concern to the 
European Union. EU legislation is affected in  particular where it covers the export of 
hazardous waste. Regulation (EC) No 1013/2006 on shipments of waste ("Waste Shipment 
Regulation") prohibits the export of hazardous wast es and certain other wa stes from the EU to 
non-OECD countries also if the waste in questi on is destined for recovery (recycling). This 
export prohibition (known as the "Basel Ban") tr ansposed a not yet internationally effective 
amendment to the Basel Convention on Transbou ndary Movements of Hazardous Wastes into 
binding EU law. Due to the hazardous materials on board of older ships - in particular 
asbestos, polychlorinated biphenyls (PCBs), tri butyl tin (TBT), heavy metals in paints, F-
gases in insulation and air conditioning systems, and large quantities of oils and oil sludge - 
ships going for demolition usually have to be regarded as hazardous waste. 
However, the application of the hazardous waste export ban of the Community Waste 
Shipment Regulation only applies to the EU te rritory. If a ship has left European waters 
(without having been recognised as waste) an d the owner then deci des to send it for 
dismantling in other parts of the world, th e Community rules do not apply. Such ships 
containing hazardous waste will be  subject to the prior notificat ion and consent rules of the 
Basel Convention. However, when they arrive fo r the purpose of recovery in the state of 
destination, the governments of mo st Asian recycling states are reluctant to apply the Basel 
Convention to ships, apparen tly for economic reasons. In some cases also competent 
authorities of EU Member States show that th ey are uncertain about a pplication of the Waste 
Shipment Regulation to end-of-life ships whic h leave from their ports. Shipowners on their 
side complain that there is too little guidanc e available especially on clean dismantling 
facilities that exist worldwide. 
The problem is further exacerbated because EU Member States, including some of the major 
maritime nations of the world, react very differe ntly to the challenge and few have a national 
strategy on ship dismantling. There is a general fear that any national  legislation on this 
subject runs the risk of drivi ng ship-owners to re-fla g to flags of convenience, to circumvent 
Community rules once a ship ha s left the EU territory.  
The International Maritime Or ganization (IMO) is currently developing an international 
convention on the safe and environmentally sound recycling of ships. This convention is for 
the most part finalised and expected for adoptio n by a diplomatic conference foreseen to take 
place in May 2009. It will, however, not be suffici ent as a solution for the whole problem. The 
current draft does not cover warships and ot her state-operated vessels, the compliance 
mechanisms appear weak and it is uncertain when the new regime will become binding and effective.. Moreover, the IMO Convention ne eds the active support and implementation by 
the major Parties (flag states a nd recycling states) if it is to  generate real change on the 
ground.  
Table 1: Top 10 flags and EU Member St ates in world merc hant shipping (ships ≥ 500 GT,  
1 January 2008)
8 
No Flag state Tonnage 
in million GT % of world 
fleet Average age 
of ships (in years) 
                                                 
8 Compiled on the basis of data from DG TREN / Lloyd's Register database. 
 
EN 9   EN No Flag state Tonnage 
in million GT % of world 
fleet Average age 
of ships (in years) 
 1 Panama 251.5 22.9 17 
 2 Liberia 117.4 10.7 13 
 3 Bahamas 62.7 5.7 15 
 4 Greece 60.6 5.5 18 
 5 Hong Kong 59.6 5.4 11 
 6 Marshall Islands 59.4 5.4 11 
 7 Singapore 56.6 5.2 12 
 8 UK 44.3 4.0 13 
 9 Malta 41.2 3.8 17 
10 China 37.0 3.4 23 
World total (90 states and 
territories) 1,097.8 100.0 19 
EU-27 250.4 22.8 16 
 
Table 2: Top 10 flags of dismantled merchant ships ( ≥ 100 GT) by tonnage in 2006-20079 
Flag state Dismantled tonnage 
2006-2007 (1,000 GT) % of world 
fleet 2006-2007 
Panama 1,550 16.0 
Tuvalu 1,208 12.4 
Liberia 828 8.5 
Mongolia  502 5.2 
Malta 453 4.7 
St. Vincent & Grenadines  413 4.2 
Norwegian Internat. Register 343 3.5 
USA 327 3.4 
                                                 
9 Compiled on the basis of data from EMSA / LMIU (Lloyd's Marine Intelligence Unit) database. 
 
EN 10   EN Marshall Islands 282 2.9 
St. Kitts-Nevis 282 2.9 
Total (100 states, territories and 
international registers) 9,717 100.0 
EU flags (21 first registers) 949 9.8 
EU flags with overseas 
territories / second registers 1,091 11.2 
 
4.2. 3.2 The economics and politics of ship dismantling - drivers of the problem  
The Green Paper of May 2007 has described in detail the working of the ship recycling 
market which in brief may be described as follo ws: Ship owners who have decided to end the 
economic life of a vessel will usually look for a so-called cashbuyer. This basically happens when the maintenance costs of the vessel start to exceed possible revenue, or when the vessel 
has become unattractive for the second-hand market , i.e. it is unlikely that it can be sold on 
for further use. The cashbuyer will either be  a dedicated broker or the scrapyard operator 
himself. Typically, the ship will take cargo for a final voyage to the region where the 
scrapyard is located. After comp letion of this voyage , the ship will be  brought, under its own 
power, to the scrap yard. This is in most cases a defined strip of a 20-30 km long tidal beach near Chittagong (Bangladesh), Alang (India) or Ga dani (Pakistan) which is usually leased by 
the state to an operator and where the ship w ill be dismantled step by step. After the removal 
of reusable equipment (machinery, furniture etc)  and the cutting-up of the hull in increasingly 
smaller portions on site, the steel plates from th e ship will be carried to metal works in the 
hinterland. Most often, especially in Bangladesh, the steel is treated "col d" in re-rolling mills 
and then used as construction material. 
This market does not exist in Europe any more . Due to stricter product regulations and less 
demand, the machinery from old ships is rarely re-used, and the scrap steel will have to be 
recycled "hot" via furnaces.  
Ship recycling is a fully globalised market driv en by factors like freight rates, the price of 
steel scrap and the costs of maintaining an agei ng fleet, which decide at  what point in time a 
ship will be scrapped. The choice of the disman tling location is influenced in particular by the 
metal price a facility can offer to the ship owner or the intermediary cas hbuyer. This price in 
turn depends on the demand for recycled steel in the area concerned and on the costs of the 
recycling operations. The costs of ship recycli ng differ considerably according to the price of 
labour and the costs of infrastructure for wo rkers' safety and environmental protection. 
Besides, a higher price for metal is be paid by the yard owner if th e scrap steel can be 
recycled "cold", without energy-intensive and th us expensive re-melting in electrical furnaces. 
More than 80% of the larger end-of-life ships worldwide si nce 2004 (in terms of tonnage) 
have been dismantled in India, Bangladesh and Pakistan. In these countries the "beaching" method is used, which means that the vessels are driven - usually by their own steam - onto 
sandy beaches and broken up without heavy machinery and without other containment than the hull of the ship itself. Other countries like China, Turkey and several EU Member States where under-used capacity exists for ship dismantling in dry docks, at piers and on hard slipways only account for a small fraction of the market. EU facilities have managed to 
 
EN 11   EN survive essentially where they concentrated on recycling of small ships (especially fishing 
vessels), where dismantling is performed as an a dditional service to ship repair or where they 
could rely on certain market niches like the recy cling of oil rigs or river barges as their 
economic mainstay.  
Ship recycling is an important source of raw material supply and of employment particularly 
in Bangladesh. Here it is esti mated that 90% of the domestic steel supply for the building 
industry comes from scrap ship s. Shipbreaking offe rs direct employment opportunities for 
about 25,000 workers and 200,000 more are said to be engaged in relate d business activities.10 
The economic importance of the industry in India is less pr onounced: The workforce numbers 
between 3,000 and 5,000, and the share of ship scra p in the overall steel supply is below 10% 
and decreasing.11 In the EU, the current number of jobs in the industry (even if all approx. 50 
locations for at least occasional ship recycli ng are included) is probably below 300, and the 
role of ship scrap on the market for raw materials is negligible.12 
Table 3: Top 10 dismantling countries by  number of dismantled merchant ships ≥ 100 GT in 
2006-200713 
No Country Ships 
in 2006  Ships 
in 2007 Total 
ships 
2006-2007 % of 
world 
2006-
2007 
 1 Bangladesh 161 118 279 28.5 
 2 India 113 155 268 27.3 
 3 Turkey 60 50 110 11.2 
 4 Pakistan 22 38 60 6.1 
 5 Denmark 32 18 50 5.1 
 6 China 30 14 44 4.5 
 7 Spain 5 23 28 2.9 
 8 UK 8 13 21 2.1 
 9 USA 10 7 17 1.7 
10 Norway 8 5 13 1.3 
                                                 
10 Md. M. Hossain / M. M. Islam, Ship Breaking Activities and its Impact on the Coastal Zone of 
Chittagong, 
Bangladesh, 2006, p. 10. 
11 Cf. MIDN report, Annex XVI. 
12 For an overview of ship dismantling capacity in the EU and worldwide see Table 6 on page 26 The 
largest of the continuous operators in DK, NL and BE employ around 20 staff each (direct information 
from companies and cf. MIDN report, Annex XVI). The forthcoming dismantling of the French aircraft 
carrier Clemenceau in Hartlepool (UK) is reported to preserve or create  about 170 jobs in  the facility of 
Able UK; MailOnline of 2 July 2008, http://w ww.dailymail.co.uk/news/worldnews/article-
1030971/The-toxic-ship-shunned-world--lets-bring-Britain.html#. 
13 Compiled on the basis of data from EMSA / LMIU database, May/June 2008. 
 
EN 12   EN No Country Ships 
in 2006  Ships 
in 2007 Total 
ships 2006-2007 % of 
world 2006-2007 
Total (40 states and 
territories) 493 487 980 100.0 
All EU recycling states (14) 68 76 144 14.7 
 
 
EN 13   EN Table 4: Top 10 dismantling countries by tonnage of dismantled merchant ships ≥ 100 GT in 
2006-2007 
No Country Total 
tonnage 2006-2007  (1,000 GT) % of world 
2006-2007 
 1 Bangladesh 5,025 51.7 
 2 India 2,413 24.8 
 3 China 636 6.5 
 4 Pakistan 632 6.5 
 5 Turkey 410 4.2 
 6 Unknown 201 2.1 
 7 USA 165 1.7 
 8 Canada 41 0.4 
 9 Denmark 26 0.3 
10 Norway 25 0.3 
Total (40 states and territories) 9,717 100.0 
All EU recycling states (14) 111 1.1 
 
Operators in South Asia employ many unskilled  labourers at extremel y low wages of about 
1 dollar or at most 2 dollars per day. Investment  in permanent constructions and machinery at 
the yards is very limited. Of th e three countries on the sub-continent, only India has developed 
some central infrastructure for hazardous wast e management, workers' training and health 
care in the last 2-3 years. The highest price for metal from ship s in the first months of 2008 - 
up to 700 $ per ton - was paid by operators in  Bangladesh where the standards of workers' 
safety and pollution prevention were lowest, and most steel was processed without melting in re-rolling mills. There is thus a strong economic incentive for ship owners to choose recycling 
facilities with a particularly poor social and environmental standard. 
The advantages of low-cost countries increase with the size of a ship, as more man-hours are 
needed to dismantle a large and especially comp lex vessel, the profit from higher steel prices 
rises and the transport costs to Asia are less re levant. For small ships (with less than about 500 
GT
14) these advantages are relatively smaller, wh ich explains why fishi ng vessels are usually 
broken up near to their home port, and that c ountries like Denmark and Spain count relatively 
                                                 
14 GT = gross tons, the measure of the overall size (inter nal capacity) of a ship. The weight of a scrap ship 
is most often expressed in light  displacement tonnes (LDT) which is calculated without cargo, fuel, 
ballast water etc and roughly equals the steel weight of a vessel. In order to compare gross tonnage/GT and LDT, different conversion factors are applied, depending on the type of ship: LDT equals e.g. 54% 
of the GT for fishing vessels and 46% of the fully loaded weight for warships; cf. COWI/DHI study of 
June 2007, at p. 40. 
 
EN 14   EN high in numbers of dismantled ships, but not in tonnage. Other small and medium ships 
operating solely in Europe ar e often dismantled in Turkey. 
Bangladesh is in relation to it s competitors the recycling countr y with the greatest difficulties 
of governance in relation to the shipbreaking industry. Alt hough there is some relevant 
legislation on national level, the industry - about 32 compan ies grouped together in the 
powerful Bangladesh Ship-Breakers Associ ation (BSBA) - takes advantage of a laisser-faire  
climate where government inspectors rarely in tervene. Trade unions are not allowed to 
operate inside the yards and the current military caretaker government restricts their activities, 
as well as those of the media. Whereas in I ndia several judgments by the Supreme Court in 
2003 and 2007, on applications by environmental a nd human rights organisations, forced the 
authorities to take action and shipbreakers to upgrade their facilities to some extent, similar changes by legal proceedings do not seem to  be possible at present in Bangladesh. 
4.3. 3.3 Who is affected, in what ways and to what extent?  
Shipbreaking offers jobs for thousands of poor  labourers in Bangladesh, India and Pakistan 
but it also involves high risks for human health  and the local environment in these countries. 
This is primarily due to dangerous working practices (e.g. insufficient precautions against 
explosions and falling hazards) and to the haza rdous materials on board old ships. As was 
shown by a study for the Commission in 2004
15, most vessels that were built before the mid-
1980s contain large amounts of asbestos, oils  and oil sludge, PCBs (polychlorinated 
biphenyls), tributyl tin and heavy me tals in paints and equipment.  
When sent for dismantling, old ships represent one of the major streams of hazardous waste 
from industrialised countries to the deve loping world. The 2004 study for the Commission 
(DG TREN) estimated that oil sludge from e nd-of-life ships alone might total between 
400,000 and 1.3 million tonnes per year until 2015. Of the hazardous waste in dismantling 
facilities every year, asbestos would am ount to 1,000-3,000 tonnes, TBT 170-540 tonnes and 
environmentally harmful pain ts to 6,000-20,000 tonnes.  In addition, the release of ozone-
depleting f-gases from cooling systems (a pprox. 150-400 tonnes per y ear) by careless ship 
dismantling would contribute to worldwide climate problems. 
The scrapping of ships in South Asia takes pl ace on sandy beaches without concrete covering 
or any other containment other than the hull of th e ship itself. End-of-life ships are rarely pre-
cleaned before their arrival on the shores of  South Asia. Instead, one of the traditional 
"cleaning" methods is the drilling of holes into  the beached ship through which sea water can 
wash out oil-contaminated tanks at high tid e. Whereas in Alang (India) a landfill for 
hazardous waste (mainly asbestos and glass wool) has been built in 2005, and waste reception facilities and asbestos removal cells are in opera tion on some of the yards,  no such facilities 
exist currently in Banglades h. Here, on the beach of Chitta gong, asbestos is crushed and 
handled without protective equipment and pe rmeates the demolition zone. Waste oils are 
dumped into unsealed holes in the ground from where a large part of the toxic material seeps 
away within a few days.
16 
The impact of these practices on the environment ha s rarely been studied in detail. In India the 
responsible regional authority (G ujarat Maritime Board) conducted sampling and analysis of 
                                                 
15 COWI / EC-DG TREN, Oil Tanker Phase Out and the Ship Scrapping Industry, 2004; published at: 
http://europa.eu.int/comm/transport/maritime/saf ety/doc/prestige/2004_06_scrapping_study_en.pdf .  
16 Results of investigations on site by IMO and EU experts in January 2008; cf. also Third Progress 
Report Identification Mission for EC support in the area of Environment and Disaster Management  
Bangladesh, J. Caldecott / A. Karim, 25 February 2008. 
 
EN 15   EN various parameters in coastal water in 2005, and found only "low" or "moderate" levels of 
hazardous substances.17 This may also be due to the pow erful tide current which tends to 
disperse contaminants over a wide sea area. In Bangladesh, researchers from the Institute of Marine Sciences of Chittagong found consid erable changes in the physico-chemical 
properties of sea water, beach soil and sediment s and a significantly reduced diversity of fish 
species caused mainly by the discharge of ammoni a, oil spillage, floatable grease balls, metal 
rust and other wastes, together with high turbidity of sea water.
18 Due to the disappearance of 
commercially important species, many coastal fisher men had to give up their profession in the 
last two decades. 
Table 5: Heavy metal concentra tion in the sediments of shi pbreaking sites in Bangladesh 
(2004)19 
Sampling stations (1-4 = affected si tes) Trace metal concentration (µg/g) 
 Fe Cr Ni Zn Pb Cu Cd  Hg  
1) Salimpur 12 68 23 84 37 21 0.57 0.02 
2) Bhatiari 35 87 35 102 122 40 0.83 0.02 
3) Sonaichhari 41 78 49 143 148 31 0.94 0.12 
4) Kumira 21 23 25 120 42 28 0.59 0.05 
5) Sandwip (control site) 3 19 4 22 9 2 0.19 0.02 
 
Safety and health conditions in many South As ian scrap yards are critical. According to a 
2004 government report in India, there were 434  incidents at the Alang yards between 1996 
and 2003, killing 209 labourers.20 In Chittagong/Bangladesh, according to media reports, 
more than 400 workers were killed a nd 6,000 seriously injure d between 1985 and 2005.21 The 
number of fatal accidents has significantly decreas ed in the last four years (with "only" 10 
deaths in Chittagong in 2006, 8 in 2007 and 9 until June 2008)22, which may be attributed to 
the current slump in shipbreak ing activity. However, unlike in  India where the regional 
government has started to organise safety tr aining for workers, no systematic accident 
precautions are at present visible in Bangladesh.  
In addition, it is estimated that  thousands of labourers contract  irreversible diseases from 
handling and inhaling toxic substances without pr oper safety precautions. Th is is at present in 
particular true for Bangladesh where most sh ipbreaking workers do not even have hard hats, 
gloves and shoes to protect themselves. But also in India, according to a medical report to the 
Indian Supreme Court of September 2006, 16% of  the workforce handling asbestos in Alang 
                                                 
17 Presentation to IMO National Workshop in Mumbai, 8-10 January 2008; data also published at: 
http://www.gmbports.org/env_issues.htm  , Environment / Alang Sosia Shipbreaking Yard. 
18 M. Hossain / M.M. Islam, Ship Breaking Activitie s and its Impact on the Coastal Zone of Chittagong, 
Bangladesh, 2006. 
19 Hossain/Islam, op. cit., at p. 29. 
20 Lloyd's Register - Fairplay of 1 March2005.  
21 YPSA, Workers in shipbreaking industries: A base line survey of Chittagong (Bangladesh), 2005, p. 15 
et seq. Other reports q uoted by YPSA speak of 200 deaths from shipbreaking accidents between 1998 
and 2003 alone. 
22 Information from YPSA, latest data published on: http://www.shipbreakingbd.info/ 
 
EN 16   EN at the time showed symptoms of asbestosis and were thus at serious risk of mesothelioma.23 
As is known from medical researc h, the incidence of this form of lung cancer re aches its peak 
only several decades after exposure. 
4.4. 3.4 Effects of non-action  
The current situation of the ship recycling ma rket is characterised by fierce competition 
between the major recycling states Bangladesh, India and (to a lesser extent) Pakistan, while 
other competitors with higher technical standards, such as facilities in China, Turkey and the 
EU are only able to occupy market niches for speci al types of ships, small vessels or the fleet 
of particularly committed shipowners. Banglades h in the first months of 2008 acquired again 
a lead, due to the particularly high prices  (700 $ per ton and more ) its shipbreakers could 
offer. As a consequence, even major Euro pean shipping companies are still choosing 
Bangladesh as the locati on to scrap their ships.24 
Without any binding international regime on ship dismantling it is highly  probable that this 
market situation will persist and that also  the coming peak in ship recycling around the 
phasing-out dates for single-hull tankers (2010 and 2015) will essentially benefit the most 
primitive sub-standard facilities. A peak in  shipbreaking activity is bound to lead to a 
resurgence of lethal accidents and occupational diseases, as the new staff will be recruited 
among the poorest and usually in experienced rural labourers. 
4.5. 3.5 International and national policy approaches  
The IMO is planning to finalis e its work for an internatio nal Convention on the Safe and 
Environmentally Sound Recycling of Ships in  October 2008. This convention should be 
adopted at a diplomatic conference in May 2009 and may enter into force some years later. 
Supplementing guidelines on the ce rtification of ship s and the operation of ship recycling 
facilities are to be adopted by the Marine E nvironment Protection Committee (MEPC) of the 
IMO in July 2009. 
The draft Ship Recycling Convention - in line w ith other IMO instruments - does not apply to 
ships of less than 500 GT and not to warships , naval auxiliary or ot her state-owned or -
operated vessels which are used only on government non-commercial service. In addition, ships for domestic transport, i.e. operating th roughout their lifetime inside the waters of the 
flag state, would be excluded from the scope. However, the Convention requires that these 
ships act in a manner consistent with the Conve ntion in so far as this is "reasonable and 
practicable". The exemption for small and domestic  vessels is more significant in number than 
that for warships but less relevant for the problem, as smaller ships are not normally taken to developing countries for dismantling.
25 
The Convention is meant to provide a comprehensive system of control and enforcement from 
“cradle to grave” and relies in particular on the survey and certification of ships and the 
authorization of ship recyclin g facilities. Limitations are fo reseen for the use of hazardous 
materials in shipbuilding and the most dangerous of them should be removed also from 
existing ships during thei r period of operation. 
                                                 
23 Lloyd's List of 8 September 2006.  
24 "Bangladesh snaps up vintage Naftomar tanker", TradeWinds.no, 28 March 2008. 
25 For warships and other government vessels cf. below 6.2.1.3. According to data from EMSA, 26% of 
the 11,583 EU-flagged vessels in 2006 had less than 500 GT. Among the ships that went for 
dismantling in 2007 and were counted by the French "Robin des Bois", none had a tonnage below 500 
GT (see: http://www.r obindesbois.org/dossiers/a_la_c asse_demolition_bilan_2007.pdf). 
 
EN 17   EN The current draft of the Convention establ ishes certain requirements for safety and 
environmental protection in ship recycling faci lities but does not explic itly rule out beaching 
as a dismantling method. Implementation and compliance mechanisms are still under discussion but a mandatory third-party audit for recycling facilities ha s been rejected by IMO 
parties. The decision whether prior informed c onsent of the competent authority is necessary 
before each recycling operation can start will pr obably be left to each recycling state as an 
opt-in clause in the Convention. 
In the context of the Basel Convention, the key issue under discus sion is whether the 
proposed Ship Recycling Convention will ensu re an equivalent level of control and 
enforcement as established under the Basel Convention. This would be the condition for releasing ships covered by the new internati onal regime from the scope of the Basel 
Convention. The EU has expresse d its view on the point of equi valency in a submission to the 
Basel Secretariat of January 2008.
26 The Conference of the Partie s will assess the issue at its 
next meeting (COP 10) in 2011. 
The IMO, the (Conference of the Parties to the) Basel Convention and the International 
Labour Organisation (ILO) have a ll adopted their own technical gui delines for ship  recycling, 
ship dismantling or shipbreaking, respectively.27 These non-binding gu idelines reflect the 
different focus of the three bodies on maritime safety, waste shipments, and workers' safety 
and health. An ILO/IMO/Basel Convention Joint Working Group on Ship Scrapping has held 
two meetings in 2005 and will meet again in October 2008 to discuss joint technical cooperation 
activities and a coordinated approach to interim measures  before the entry into force of the Ship 
Recycling Convention. 
Some countries have developed national policies or strategies for ship dismantling. The UK 
Ship Recycling Strategy28 was adopted in February 2007 after a public consultation process 
and provides a policy on government-owned ve ssels as well as guidance for private 
shipowners and recommendations for the envi ronmentally sound management of ship 
recycling facilities. Key elem ent of the government's polic y on its own vessels is the 
commitment to have them recycled only in e nvironmentally sound facil ities within the OECD 
and, in case a vessel is sold for further use, to nego tiate the inclusion of  provisions in the 
contract ensuring similar standards for the ev entual recycling and re quiring the government's 
consent before a ship is disposed of. In the recommendations for owners of UK-flagged vessels the government expresses its expectation that the rule s of the EC Waste Shipment 
Regulation and of the Basel Convention for the notification of waste shipments and the ban on 
exports of hazardous waste to non-O ECD countries are complied with. 
The report by the French Inter-departmental Co mmittee on the Dismantling of Civilian and 
Military End-of-Life Ship s (MIDN) of March 2007
29 proposes, on the basis of extensive fact-
                                                 
26 EU Assessment on ship dismantling with particular reference to the levels of control and enforcement 
established by the Basel Convention and the expected level of control and enforcement to be provided 
by the draft Ship Recycling Convention in th eir entirety, 21 January 2008, published at: 
http://www.basel.int/ships/c ommentsOEWG6/oewg6.html . 
27 Basel Convention: Technical guidelines for the environmentally sound management of the full and 
partial dismantling of ships (adopted December 2002); ILO: Safety and health in shipbreaking. 
Guidelines for Asian countries and Turkey (October 2003); IMO guidelines on ship recycling 
(December 2003). 
28 Published by the Department for Environment, Food and Rural Affairs (defra) at: 
http://www.defra.gov.uk/ENVIRONM ENT/WASTE/strategy/ship.htm . 
29 French original (with annexes) an d English translation published at: 
http://www.sgmer.gouv.fr/ar ticle.php3?id_article=52 . 
 
EN 18   EN finding missions, a policy line for state-owned ship s, for merchant vessels flying the French 
flag and for ship recycling in general. Accordin g to this, French warships as well as other 
European state-owned ships should be dismantle d only in EU or EFTA  facilities. The same 
should apply to merchant vessels flying the French  flag but this restriction is seen as limited 
in scope, since the French merchant fleet is one of the youngest in Europe. The MIDN 
suggests various measures to promote cleaner sh ip dismantling and advises, in case the steps 
foreseen in the IMO Convention prove to be le ss efficient than expected or hindered by the 
national prerogatives of recycling countries , to prepare and discuss ideas for binding 
incentives. France encourages the EU to be re solute in helping the emergence of the IMO 
Convention and show the way by adopting a support and transition plan. 
Some other countries like Denmark and the US A have provided their industry with guidance 
documents on the "implementation of green sh ip dismantling" and regulatory compliance in 
this field.30  
4.6. 3.6 Industry approaches  
The shipping industry itself, under the co-ordina tion of the International Chamber of Shipping 
(ICS), has prepared in 2001 an Industry Code of Practice on Ship Recycling. It outlines a 
series of recommendations which constitute “good practice” with respect to ships destined for 
recycling. In July 2007, the same Industry Wo rking Group on Ship Recycling agreed on a 
recommendation concerning interim measures fo r shipowners intending to sell ships for 
recycling (such as yard selection, providing an  inventory of hazardous materials, and gas-
freeing), by which shipowners could contribu te to safe and environmentally sound ship 
recycling.31 The language of the recommendation is cau tious, so that with regard to yard 
selection, for instance, owners who sell ships for recycling are "encouraged" to  select only 
those yards  which have stated they are willing to undertake operations compatible with the 
measures recommended in this document. 
4.7. 3.7 The right of the EU to act 
The Community competence to  take action on ship dismantling matters comes in 
particular from the articles of the EC Treaty related to the protection of the environment and to maritime transport. According to Article 174(1) of the EC 
Treaty, Community policy on the environmen t shall contribute, among other things, 
to promoting measures at international le vel to deal with re gional or worldwide 
environmental problems. Treaty provisions  on common transport policy (Articles, 
70, 71 and 80.2) give the Community a right to  take measures to improve the safety 
of transport at sea, which will be affected by the ship-related elements of the forthcoming Ship Recycling Convention (e.g. the Inventor y of Hazardous Materials 
that ships will have to carry).  
Because of the international dimension of the ship dismantling problem, it cannot be solved at 
national level. The 27 EU Member States are al l individually members of IMO. However, the 
EU has greater political and economic weight to ensure better ship dismantling if it acts 
                                                
 
30 Draft Pocket Manual on Implementation of Green Ship Recycling, prepared by the Danish Environment 
Protection Agency, December 2005; U.S. EPA “A Gu ide for Ship Scrappers – Tips for Regulatory 
Compliance”, 2000, bo th published on the website of the Basel Convention at 
http://www.basel.int/ships/compilation.html#7 .  
31 Both published at http://www.marisec.org/recycling/ . 
 
EN 19   EN coherently. As in the context of other interna tional conventions, the EU is widely seen as a 
leader on environmental issues and its exampl e encourages third countries to follow. For 
example, in the case of the AFS Convention concerning harmful anti-fouling systems on 
ships, Panama as the most important flag state decided to ratify the convention and thus let it 
pass the necessary quorum shortly after the impl ementing EU regulation entered into force. 
Conversely, if the EU does not act  coherently, this is seen by those who are not interested in 
changing current practices as a confirmati on of their position, and consequently also 
international efforts may be slowed down.  
The inclusion of the Convention into Community law would promote harmonised 
decision-making and speed up the ratificati on process among the Member States. In 
addition, early action by the EU would infl uence third countries much more than 
action by individual Member States and th us is more likely to bring the Ship 
Recycling Convention quickly into force.  
In summary, individual Member State acti ons are insufficient to address the problem 
effectively, and the EU can act in a unified  manner, whilst respecting the principle of  
subsidiarity . 
In addition, any improvements to existing and re levant EU legislation,  such as the improved 
enforcement of the Waste Shipment Re gulation, are within EU competence.  
5. POLICY OBJECTIVES  
The general objective of an EU strategy on ship dismantling is to ensure that ships with a 
strong link to the EU in terms of flag or  ownership are dismantled only in safe and 
environmentally sound facilities worldwide. 
This includes as specific objectives: to prev ent, in line with the EC Waste Shipment 
Regulation, the export of hazar dous end-of-life ships from the EU to developing countries, 
and to reduce significantly and in a sust ainable way by 2015 the negative impacts of 
shipbreaking, especially in South Asia, on human health an d the environment without creating 
unnecessary economic burdens.  
In order to reach these aims, the followi ng operational objectives will be relevant: 
• To improve substantially the implementation of current EC waste shipment law with 
regard to end-of-life ships;  
• To ensure an effective and early transposit ion of the forthcoming international Ship 
Recycling Convention in the EU; 
• To supplement the Ship Recycling Convention with the necessary measures to address 
negative impacts of ship dismantling that ar e not covered by the Convention and promote 
its practical effectiveness. 
• The improvement of the economic  situation of ship dismantli ng facilities in the EU may 
become a welcome side-effect of some measur es under the present strategy, but is not in 
itself a policy objective.  
6. DESCRIPTION OF POLICY OPTIONS  
Four main policy options for the EU are identified in the field of ship dismantling and will be 
assessed in the following chapters:  
 
EN 20   EN (1) The "baseline option" would mean a continuati on of the current level of EU activities, 
with only minimum amendments to legisl ation and no additional initiatives for 
voluntary commitments. It will mean in the longer term that the key provisions of the forthcoming Ship Recycling Convention ar e implemented only by the Member States. 
(2) Option 2 puts the emphasis on encouragement at EU level for voluntary action by 
shipowners and recy cling facilities.  
(3) Option 3 envisages comprehensive EU legisl ation to implement key provisions of the 
future Ship Recycling Convention as s oon as adopted by th e IMO diplomatic 
conference foreseen to take place in Ma y 2009 and complement it with mandatory 
requirements where necessary. In addition, measures to strengthen enforcement of the current law would be take n in the interim period. 
(4) Option 4 would combine selected legislative and enforcement measures with voluntary 
actions in an integrated policy approach. 
(5) Better enforcement of the current Waste Ship ment Regulation has not been defined as 
a separate option because it would not be  sufficient to achieve the objective of a 
worldwide improvement of ship recycling practices. 
6.1. 5.1 Option 1: No additional action at EU level 
The "baseline option" is defined here as maintaining EU activities at current levels which 
essentially consist of 
• Ensuring implementation of the EC Waste Ship ment Regulation in individual cases of end-
of-life ships that become known through medi a reports (TV programmes or articles in 
newspapers or maritime journals); 
• Participation of the Commission, in particul ar as an observer at  the IMO, in the 
development and future implementation of  a new Ship Recycling Convention;  
• Occasional research and pilot projects to assess developments and promote better ship 
dismantling technology, e.g. under the EU 7
th Framework Programme for research. 
In addition, some minimal amendments to curr ent EU legislation woul d probably be carried 
out in any case, by including references to the new Convention in the directives on port state 
control and classification societies. However, almost all initiative in implementing the Ship 
Recycling Convention would be left to the Member States. 
6.2. 5.2 Option 2: Emphasis on voluntary action  
This option would still leave the legal impl ementation of the Ship Recycling Convention 
largely to the Member States but  in addition measures at EU le vel would be taken (especially 
in the interim period) to promote voluntary ac tion by the shipping industry, i.e. encourage 
shipping companies to use only safe and envi ronmentally sound ship dismantling facilities. 
The focus here is on positive incentives and not on the stricter enforcement of the current Waste Shipment Regulation. Two sub- options can be distinguished: 
(1) Encourage shipowners to send their end-of -life ships to facilit ies in the EU or 
candidate countries in accordance with current waste shipment law. To have 
major effect this sub-option would have to rely especially on subsidies which 
compensate the loss of revenue that owners would otherwise receive in South Asia. In addition, the sub-option woul d include streamlining of existing 
maritime aids, grants and loans to bring them into line with waste shipment 
 
EN 21   EN rules, and in the case of vessels owne d by Member States, more activities by 
the Commission to coordinate their decommissioning and safe dismantling. 
This coordination could take the form  of an initiative by the Commission 
inviting Member State experts to elaborate EU-wide guidelines or recommendations for the decommissioning of warships and common minimum requirements for their dismantling; 
(2) Promote voluntary commitments of the shipping industry to use at least higher-
standard facilities in developing countries and conclude pa rtnerships for upgr ading facilities 
there. Suitable instruments w ould be a public campaign for vol untary agreements with the 
shipping industry (shipowners' associations , major shipping lines), an EU-specific 
certification and audit scheme for ship recyc ling facilities, awards for exemplary industry 
action, EU participation in IMO pilot project s for clean ship recycling, and Commission 
guidance for shipowners in the form of a list of  "green" ship dismantling facilities.). This sub-
option would be linked with technical assistan ce out of public funds for improving workers' 
safety and environmental protection in th e recycling facilitie s of South Asia.  
(6) The measures within the sub-options are not mutually exclusive, i.e. a campaign to 
win shipowners for partnerships with higher-s tandard recycling fac ilities in developing 
countries could go along with an award for exemplary action and a certification 
scheme for those facilities. Within the analys is of sub-option (1), special attention will 
be given to subsidies for ship dismantling in the EU which have much stronger environmental, social and economic impacts than all other options or measures.  
(7) Both sub-options could be supported by Commission guidance documents on good 
ship dismantling practice, in particul ar a list of "green" facilities.  
6.3. 5.3 Option 3: Comprehensive EU legislation on ship recycling 
Under this option, new legislation would be pro posed and relevant existing legislation would 
be strengthened.  
An EU Ship Recycling legislative instrument  would transpose key elements of the Ship 
Recycling Convention as soon as adopted by the IMO diplomatic conference foreseen to take 
place in May 2009 into EU law and complement it where necessary to fill gaps. The EU act 
would ensure early implementati on of the Convention rules on: 
(1) Survey and certificate requirements for ships, in particular to ca rry an Inventory of 
Hazardous Materials on board and be certified as "ready for recycling" before going to 
a dismantling facility; 
(2) Essential requirements for ship recycling facilities;  
(3) Communication and reporting requirements fo r shipowners, recycling facilities and 
recycling states. 
Beyond implementation, the EU legislative instrument could envisage additional measures. 
The following will be assessed in more detail: 
(1) Extension of Convention rules to wa rships and other government vessels; 
(2) More prohibitions on hazar dous materials in ships; 
(3) Stricter obligation for pre-cleaning of ships from hazardous materials; 
(4) Ban on “beaching”; 
 
EN 22   EN (5) Requirement that EU-flagged ships go to audited and certified facilities for 
dismantling; 
(6) List of ships ready for scrapping. 
Again, the measures would as a rule not excl ude each other; only the ban on beaching would 
be clearly more stringent than th e requirements under (3) and (5).  
The form of the legal measure a nd the specific impacts of each will not be assessed at this 
stage but left for discussion to the specif ic impact assessment accompanying the later 
legislative proposal.32 
A more far-reaching option to create a "s hip dismantling fund" based on mandatory 
contributions from the shipping industry to fina nce ship recycling in safe and environmentally 
sound facilities will be the subject of a sepa rate Commission study to be launched in 2008 and 
thus not be assessed in this document. 
Apart from new legislation, Option 3 would also cover selected measures to improve 
enforcement of the current Waste Shipment Regulat ion at least for an interim period. As such 
are envisaged in particular: 
(1) Guidance document for Member States' competent authorities on the 
application of the Waste Shipment Regulation to end-of-life ships,  
(2) Funding for an IMPEL project on end-of-life ships, 
(3) Infringement proceedings against non-compliant Member States,  
(4) Increased cooperation with countries  of destination and transit.  
6.4. 5.4 Option 4: Integrated policy approach  
This option combines the more effective of the legal proposals and the enforcement measures 
under option 3 with the more promising ideas to encourage voluntary action under option 2. 
Combining voluntary and legal approaches aims to prevent negative anticipatory effects and 
ensure positive environmental and social impact s already in the short term without creating 
excessive costs. There is an advantage in sel ecting the most promising measures that can be 
voluntary or legal in nature. This provides a go od balance of both "carro t" and "stick" that 
working together can offer an optim al response to the problem at hand. 
The legislative proposals could include the ke y measures for implementation of the IMO 
Convention as listed above in 5.3, together with an extension to government vessels, a 
requirement for EU-flagged ships to go only to a udited and certified recycling facilities, and a 
list of ships ready for scrapping. This would be supported by se lected voluntary actions, such 
as a campaign for shipowners' commitments to clean dismantling, certification and award 
schemes, technical assistance and research, stre amlining of shipping aids (but not subsidies 
for ship dismantling in the EU), and on the ot her hand guidance, project funding and sanctions 
to strengthen enforcement of current wast e shipment law by the Member States 
                                                 
32 Cf. below 6.3. 
 
EN 23   EN 7. IMPACT ANALYSIS  
7.1. 6.1 Impacts of Option 1: No a dditional action at EU level  
7.1.1.  6.1.1 Short and medium term 
Taking no additional action at EU level would m ean in the short and medium term, until the 
new international regime is in place and transpos ed by Member States, that the current trends 
in ship dismantling would continue unabated.  The problems of enforcement of the Waste 
Shipment Regulation with regard to end-of- life ships and the decommissioning of a ship 
outside the EU waters, will remain unsolved. 
Environmental impacts:  The pollution of water, soil and habitats in South Asia would at least 
remain unchanged and increase when peaks of sh ip scrapping due to the phasing out of single-
hull oil tankers reach the South Asian beaches, probably around 2010 and 2015. The 
likeliness of natural disasters might increase due to the further destruction of coastal mangrove forests in Bangladesh.  
The negative effects of various materials on bo ard ships for the aquatic environment and for 
climate are to continue, in so far as they ar e not already banned by ot her legal instruments. 
Such a ban is in place within the EU fo r PCBs through the St ockholm Convention and 
Regulation (EC) No 850/2004
33, for organotin compounds (fro m 17 September 2008 also on 
foreign-flagged ships entering the EU) through the Anti-Fouling Systems - AFS - Convention 
and Regulation (EC) No 782/200334 and for the production and use of ozone-depleting 
substances through Regulation (EC) No 2037/200035. Similarly, prohibiti ons with certain 
exemptions exist in the EU for perfluoroocta ne sulfonates (PFOS) as from June 2008 by 
virtue of Directive 2006/122/EC36 and for trichlorobenzene (TCB) since June 2007 on 
account of Directive 2005/59/EC37, but e.g. for the time being not for mercury or brominated 
flame retardants. Especially the latter are sti ll widely used, although some of them (like 
HBCDD and TBBPA) are known to be persistent , bioaccumulating and ve ry toxic to aquatic 
organisms. 
Social impacts:  Employment in the EU recycling sector would remain at the current low level. 
Likewise, the high safety hazards and accident rates for workers in South Asian shipbreaking yards would remain unchanged and increase in peak times, as more inexperienced labourers 
                                                
 
33 Regulation (EC) No 850/2004 of the European Parliament and of the Council of 29 April 2004 on 
persistent organic pollutants and amending Directive 79/117/EEC, OJ L 229, 29.6.2004, p. 5. 
34 Regulation (EC) No 782/2003 of the European Parliament and of the Council of 14 April 2003 on the 
prohibition of organotin compounds on ships, OJ L 115, 9.5.2003, p. 1. 
35 Regulation (EC) No 2037/2000 of the European Parliament and of the Council of 29 June 2000 on substances 
that deplete the ozone layer, OJ L 244, 29.9.2000, p. 1.  
36 Directive 2006/122/EC of  the European Parliament and of the Council of 12 December 2006 amending 
for the 30th time Council Directive 76/769/EEC on the approximation of the laws, regulations and administrative provisions of the Member States relating to restrictions on the marketing and use of 
certain dangerous substances and preparations (perfluorooctane sulfonates), OJ L 372, 27.12.2006, p. 
32.  
37 Directive 2005/59/EC of the European Parliament and of the Council of 26 October 2005 amending for 
the 28th time Council Directive 76/769/EEC on the approximation of the laws, regulations and administrative provisions of the Member States relating to restrictions on the marketing and use of 
certain dangerous substances and preparations (toluene and trichlorobenzene), OJ L 309, 25.11.2005, p. 
13. 
 
EN 24   EN are then employed. Child labour would conti nue, with sometimes fatal consequences.38 The 
existing criminal structures in part of the Asian shipbreaking i ndustry are not likely to change. 
The low or medium safety hazards associated with dangerous substances on board for shipyard workers and seafarers worldwide might slowly decrease in so far as vessels built 
until the 1980s with asbestos as flame retardant are increa singly being decommissioned. As 
for the substances mentioned above in the envi ronmental context, the use of asbestos in 
shipbuilding is already toda y prohibited under the IMO SOLA S Convention and in the EU 
since 2005 for all types of asbe stos (including chrysotile).
39  
Economic impacts:  The competitive disadvantages of EU recycling facilities are certain to 
continue, with the large cost a nd price disparity to Asian yard s allowing them to occupy only 
niches in the market. The revenues of shipowne rs for the sale of scrap ships would probably 
continue to be high, depending on developments  on the freight and steel markets. Their 
operating costs would remain largely unaffecte d, as would transport and consumer prices, 
administrative costs and intellectual property righ ts in the EU. Some shipowners might invest 
early and create business and j ob opportunities in classification societies by anticipating the 
IMO requirements on certificates and i nventories of hazardous materials.  
The supply of steel scrap and used ship equipment for the South Asian economies, the 
revenues of shipbreaking yard ow ners and the job opportunities for workers would stay at the 
current level or increase in peak times. On th e other hand, local fishing and agriculture would 
continue to lose in quality and quantity, especially in Bangladesh. 
7.1.2.  6.1.2 Long term: Effects of  the IMO regime  
After transposition of the IMO Sh ip Recycling Convention into th e national law of flag states 
and recycling states, positive effects are expected in a step by step process. First would come probably the prohibition to install certain materials (asbestos, ozone-depleting substances, PCBs and organotin compounds) on sh ips in general directly after entry into force of the new 
Convention. Improvements would be limited here to ships produced in or flying the flags of 
countries that do not yet have relevant legislati on in place (unlike the EU). The obligation to 
carry an Inventory of Hazardous Materials (IHM ) would in parallel become applicable for 
new ships which are, however, defined as ships for which the building contract is placed after 
that point in time or for which the delivery is  30 months later. For existing ships, the IHM 
requirement would become mandatory not later th an 5 years after the Convention's entry into 
force. 
The dates when the Convention requirements fo r ship recycling facilities should come into 
force are currently at the centre of discussion and will be decided by MEPC 58 in October 2008 or by the Diplomatic Conference in May 2009. The time schedule for the improvement of shipbreaking yards, especially in Southern Asia, is thus at pr esent uncertain, and it is even 
unclear whether the Convention wi ll specify concrete da tes or define time lines in terms of 
years after entry into force. It seems probable, however, that in view of alleged difficulties to 
mobilise sufficient ship recycli ng capacity with Convention sta ndard in the short term, the 
                                                
 
38 According to information from YPSA, e.g. a newly-re cruited 16-year-old worker died in Chittagong on 
14.7.2008 from being hit by a steel plate and drowning in the oil sludge tank of a ship. 
39 On account of various EU  directives, most recently Commission Dir ective 1999/77/EC of  26 July 1999 
adapting to technical progress for the sixth time Annex I to Council Directive 76/769/EEC on the approximation of the laws, regulations and administrative provisions of the Member States relating to 
restrictions on the marketing and use of certain dangerous substances and preparations (asbestos), OJ L 
207, 6.8.1999, p. 18. 
 
EN 25   EN majority of the Parties will want to postpone th e effectiveness of the pr ovisions for recycling 
facilities in any cas e by several years. 
Experience with IMO conventions suggests that  it takes on average six years from adoption 
until entry into force of a convention. In the case  of the Ship Recycling Convention there is a 
widespread expectation that th e waiting period might stay belo w average and the treaty could 
come into force around the year 2013. How many flag states and recycling states will have 
ratified the Convention by then, however, and whether for example Bangladesh will become a 
Party is currently a matter of sp eculation. At present it is expect ed that the major flag states 
and, among the Asian recycling countries, at le ast China, Turkey and India will subscribe to 
the new international regime. 
Without EU action it is probable that several Me mber States will, by their own decision, ratify 
the Convention and transpose it into their nati onal legislation within the next 2-4 years. 
However, the statistics on rati fication of IMO instruments sh ow differing practices among the 
Member States and altogeth er considerable delay. Th e Anti-fouling Systems (AFS) 
Convention of 2001, for instance,  was ratified four years la ter only by a minority of 5 
Member States.40 Implementation of the Ship Recycling Convention in the EU by purely 
national legislation is thus bound to be incoherent and partly delayed. 
A minimum amendment of existing EU maritime directives on port state control (95/21/EC) 
and classification societies (94/57/EC) by in cluding references to the Ship Recycling 
Convention would integrate the ne w certificates and in particular  the Inventory of Hazardous 
Materials (IHM) into the harmonised control systems within the EU. However, amendments to the control-related EU directives would not as such transpose the substantial elements of 
the Convention into EU law and make the IH M and the Ready for Recycling certificate 
mandatory for shipowners. This would st ill depend on Member States' legislation. 
Environmental impacts:   
The draft Ship Recycling Convention contains in  its Annex 1 a broad set of requirements for 
ship recycling facilities. The l eading principle is that facilities which recycle ships to which 
the Convention applies need an authorisation from the competent authority. Further 
requirements include the preparation of a R ecycling Facility Management Plan and the 
utilisation of procedures for accident prev ention, safe removal of hazardous materials, 
emergency response, workers' training and repor ting of incidents and o ccupational diseases.  
The Ship Recycling Convention would not substan tially alter the environmental conditions for 
the few existing ship dismantling facilities in the EU, as stricter requirements for water 
protection and waste management are already in place. The same is probably true for facilities 
in other OECD countries and China. The only new element of the Convention for EU 
operators is the requirement of a Recycling Facility Management Plan, in so far as they do not 
follow a similar procedure alrea dy under country-specific rules, EMAS or ISO standards. This 
management plan could improve compliance of an operator with environmental and safety rules. 
In South Asia, since the draft Convention doe s not prohibit the beaching method as such, 
improvements would also be limited and depend on the strict implementa tion of its provisions 
on environmentally sound management by recyc ling states, taking into account also the 
envisaged guidelines on the operation of ship r ecycling facilities. In th e case of India, the 
                                                
 
40 Commission Staff Working Document SEC(2005) 1497 of 23.11.2005 (Impact Assessment on the draft 
Flag State Directive), at p. 16. 
 
EN 26   EN Convention apparently has some anticipatory e ffects on account of a S upreme Court decision 
of September 2007 which obliged  shipbreaking yards to meet certain environmental and 
safety requirements modelled on the draft Conve ntion. India's government is of the opinion 
that the industry in Alang co mplies today already with 90% of the Convention requirements.41 
In South Asian recycling states  that do not ratify th e Convention, the pollution of water, soil 
and habitats would remain unchanged or  increase also in the longer term.  
The banning of hazardous materials on ships might  have positive environmental impacts in so 
far as countries that are not ye t Parties to other relevant inte rnational agreements like the 
Stockholm (POPs) Convention or the AFS Conventi on decide to bind themselves for the first 
time with the Ship Recycling Convention. The numb er of such countries is not likely to be 
very high. For ozone-depleting substances the Ship Recycling Convention would hardly make 
any difference, as similar obligations have been accepted already by the 191 Parties of the 
Montreal Protocol. In essence, the Conven tion's provisions on hazardous materials alone 
would lead to no or only minor substantia l improvements for the environment during the 
operating life of ships.  
A minimal amendment of Annex VIII to th e EC Waste Shipment Regulation No 1013/2006 
by referring to the new IMO Convention and its envisaged guidelines  on ship recycling 
facilities instead of the current technical guidelines of IMO on ship recycling would in 
principle provide guidance on the present me aning of environmentally sound management 
when the Waste Shipment Regulation is applied to  ships. On the one ha nd it would update the 
Regulation on the recent developmen ts in the field of ship dismantling and clarify that for the 
time being a dual regime of IMO and Basel Conve ntion would apply to ships. On the other 
hand, this would create additional uncertainties in practice due to contradictions between the 
technical requirements of the Basel guidelines on ship dismantling (e.g. complete containment 
/ impermeable floors) and those of the new IMO regime. In sum, however, the practical 
impacts of the reference are likely to be very small. 
Social impacts:   
In principle, no impacts of the Ship Recycling Convention are to be expected for the working 
conditions in EU dismantling faci lities, due to the more stringe nt provisions in existing EU 
directives on workers' health and safety at work and protection agains t exposure to asbestos 
which the Member States have to respect. The same is true probably for facilities in other 
OECD countries (including Turkey) and China. 
In the South Asian shipbreaking yards, de pending on strict implementation of the 
Convention's safety requirements by recycling facilities and competent authorities, accident 
rates and occupational health hazards for work ers are expected to go down. The quality of 
implementation, however, would in turn depend on awareness, public a ttention and effective 
sanctions in case of non-compliance. The weak position of trade unions and the tendency of certain governments in Asia to refuse access of the media and independent observers to the yards favour implementation deficits.  
Structures of organised crime which are reported to exist at least in part of the shipbreaking 
industry in South Asia would probably reced e with the increasing regulation and higher 
operating costs in those countries that implement the Convention.  
                                                
 
41 Gujarat Maritime Board, presentation to IMO National Workshop on the IMO Ship Recycling 
Convention, Mumbai, 8-10 January 2008. 
 
EN 27   EN The occupational health hazards for shipyard work ers and seafarers are altogether expected to 
diminish over the next decades, provided that at  least the major flag states implement the 
Convention and order the substitution of hazardous materials on board ships by less 
dangerous substances. However, the effect would be limited particularly in the EU, as all 
relevant materials in the Convention are al ready covered by prohibitions under other EU 
legislation. The Convention might  make a difference when ships built outside the EU and 
flying foreign flags are repaired in EU shipyards. 
The Inventory of Hazardous Materials (IHM) w ould in general raise awareness and open the 
way for realistic risk assessments and better pr ecautions for shipyard workers, seafarers and 
labourers in recycling facilities. On the basis of the inventorie s, informed decisions can be 
taken by shipowner and flag state on the choice of a suitable recycling facility and the need 
for prior decontamination, and by the scrapping facility and the recyc ling state on necessary 
waste management measures.  
The new surveys and certificates would have a lim ited job effect particularly for classification 
societies. In order to  deal with the approximately 50,000 sh ips of the world fleet (of which 
about 12,000 are EU-flagged), it is  estimated that the major 5 or  6 European societies would 
each require about 100 additional staff (mainly engineers and chemists) in the first 5 years and 
about half of this on a more permanent basis. 
Economic impacts:   
The competitive disadvantages of EU recycling fac ilities in relation to yards in Asia will most 
likely remain also in the longe r term, due to the much higher labour costs in Europe and in 
spite of the fact that EU shi pyards would not need significant investments in order to comply 
with the requirements of the Convention. The national ship r ecycling policies of the UK and 
France might secure a niche for EU or environm entally sound OECD facilities in relation to 
the government vessels of these two Member States. Apart from this, employment and business opportunities in the EU recycling sector would not rise from the current low level.  
For the Asian shipbreaking facilities, the new inte rnational regime might re sult in a separation 
of two distinct markets, one with a higher standard complyi ng with the requirements of the 
Convention and catering for "Convention ships", and the other one continuing sub-standard 
practices for ships flying the flags of non-Partie s to the Convention. It is possible that the line 
will be drawn between China, Turkey and India on the one hand, and Bangladesh and maybe Pakistan on the other. While operators in China and Turkey would most likely have few 
difficulties in complying with Convention standa rds, their counterparts in India would need 
some additional investment in environmental and safety equipment, for example asbestos 
removal installations and equipment (concrete covering, strong pumps) to contain oil spills. 
The additional costs are estimated in th e range of 50 $ per ton of scrap steel. 
The revenues of shipowners whos e ships fly the flags of Conven tion Parties and are sold to 
"Party facilities" would accord ingly go down to some extent which is, however, minor in 
relation to the overall price of 600-700 $ per ton that could be ga ined in the early months of 
2008 (as compared to an average of 500$/t one year before and less than 400$/t in 2006). The operating costs of shipowners would also increa se to a minor extent, due to the additional 
surveys, the maintenance of an Inventory of  Hazardous Materials (IHM) and the need for a 
"Ready for Recycling" certificate. The costs fo r surveys and certificat es of this kind are 
estimated as between 10,000 and 20,000 € each. For existing ships the costs of an IHM may 
be higher, as the information on hazardous material s in the ship's structure is often not readily 
available, but would still be limited in comparison to the seve ral hundred thousand dollars that 
can be earned currently with th e sale of even a smaller mercha nt ship for sc rapping. On the 
 
EN 28   EN other hand, shipowners might save on individu al compensation payments for occupational 
diseases due to hazardous ma terials if they comply w ith Convention requirements. 
The IHM requirement and the necessary documen tation would also cause additional costs for 
shipbuilders and suppliers in th e range of some ten thousand or hundred thousand dollars. The 
precise amount is currently not known. Problems are feared for the protection of intellectual 
property if supplier information is  published or circulated widely. 
As the inventory and survey requirements are generally accepted by the international 
maritime community, it is unlikely that Europ ean shipping companies or shipyards will face 
difficulties in competition even against operators from countries that do not (yet) ratify the Convention. The cost factor of inventories is not big enough to influence competition between shipping companies substantially. 
A visible impact on transport and consumer prices is unlikely. 
Non-action by the EU might, however, create a dditional administrative and legal costs for 
industry due to the usually diverging nationa l legislation and implementation by Member 
States. Especially delays and different timelines  in the introduction of the IHM might lead to 
incoherent control standard s and an uneven playing fiel d for shipping companies and 
shipyards in different parts of the EU. 
7.2. 6.2 Impacts of Option 2: Emphasis on voluntary action  
7.2.1.  6.2.1 Measures to encourage ship dism antling in the EU/OECD (sub-option 1) 
7.2.1.1.  6.2.1.1 Subsidies 
Subsidies are potentially a strong measure for en couraging shipowners to send their ships only 
to good recycling facilities in th e EU or suitable OECD countri es (such as Turkey). This 
could be done in the form of grants or tax benefi ts either directly to sh ipowners to compensate 
for the loss of revenue that they would get in South Asia, or to dismantling facilities to enable 
them to compete with South Asian prices. Anot her option might be for the EU or its Member 
States to buy end-of-life ships at the market price and then tender the dismantling of the vessels to the most competitive environm entally sound facility in the EU/OECD.  
In the EU exists currently a ship disman tling capacity of around 1.4 million ldt per year, 
mostly in smaller facilities, of which only a fraction is used.
42 The accession candidate Turkey 
has a capacity of between 600,000 and 1 million ldt per year at the coas t of Aliaga, though not 
all with a high environmental and safety standar d. Apart from this, a considerable number of 
unused piers and drydocks in Euro pean harbours could be seen as "dormant" capacity that 
could be revived for ship recy cling (which was in fact often executed here until the 1960s or 
70s). The technical capacity in the EU and ne ighbouring OECD countries (i.e. Turkey) would 
thus be sufficient to treat all EU-flagged ships if the economic conditions allowed it.  
Due to the huge cost difference between Europe and South Asia, however, a major 
revitalisation of the European ship recycling industry could only be achieved with subsidies 
that bridge the cost gap. However, such subsidies could lead to distortion of competition and 
                                                 
42 The COWI/DHI study of June 2007 calculated a combined EU capacity of some 200,000 ldt/a. After 
publication, the shipyards of Harland & Wolff in Belfast and Able UK in Ha rtlepool (UK) received 
waste permits for their large drydock facilities with a dismantling capacity of up to 300,000 and 600,000 ldt/a respectively; cf. COWI/DHI, p. 162, and 24dash.com of 26.6.2008: "Able UK finally 
granted permission to break up US 'ghost ships'"; TimesOnline of 2.7.2008: "Hartlepool to break up 
France's toxic flagship Clemenceau". 
 
EN 29   EN have no support in EU state aid rules. The effect s of different alternatives will be discussed 
under "economic impacts". 
Table 6 EU and worldwide ship dismantling capacity43 
Country Number and type of 
facilities  Annual 
capacity (LDT) Method / remarks 
United Kingdom Able UK (Hartlepool), 
Harland & Wolff (Belfast) and approx. 8 smaller facilities 1,000,000? Dry docks, pier-
breaking, slipways 
Italy Simont (Naples) 80,000 Pier-breaking; 
currently inactive 
Belgium Van Heyghen (Gent) 60,000 Pier breaking and 
slipway 
Denmark Fornaes (Grenaa), 
Smedegaarden (Esbjerg) and 2 smaller facilities 60,000? Pier-breaking, 
slipways 
Netherlands Scheepssloperij Nederland 
(s-Gravendeel) and 3 smaller facilities 40,000? Slipways, pier-
breaking 
Spain Approx. 12 smaller 
facilities, mainly for fishing vessels 40,000? Pier-breaking, 
slipways 
GR, LV, EE, LT, 
PL, BG, PT, DE, FI, IE, possibly others Approx. 20 facilities for 
smaller vessels 100,000? Pier-breaking, 
slipways 
EU total Approx. 50 f acilities, mostly 
for smaller vessels 1.4 million 
(?)  
Turkey 21 shipbreaking companies 
in Aliaga (near Izmir) 600,000-
1,000,000 Slipways 
USA  4 facilities in Brownsville 
(Texas) and 3 others  225,000  Pier-breaking; 
currently not open to foreign vessels  
                                                
 
43 COWI/DHI report of June 2007, updated with information from EMSA/LMIU database, May/June 
2008. Information on Spain from J. Casas,  El desguace y reciclaje de buques, at: 
http://www.conama9.org/ 
 
EN 30   EN Country Number and type of 
facilities  Annual 
capacity (LDT) Method / remarks 
China 5 large ship recycling 
facilities 
 800,000* Pier breaking 
Bangladesh 32 shipbreaking companies 
in Chittagong Unlimited Beaching 
India Approx. 30 shipbreaking 
companies in Alang Unlimited Beaching 
Pakistan 33 registered shipbreaking 
companies in Gadani Unlimited Beaching 
 
In principle, support of investments to re inforce regional competitiveness and employment 
under EU Structural Funds is possible for a broa d range of projects, provided they can show 
to be beneficial to a region's ec onomic structure in the longer term. Environmental impacts: 
Effective incentives that would divert EU-fla gged ships (23% of world tonnage) and even 
EU-owned vessels (about 40% of world tonnage) or at least a si zeable fraction of them from 
South Asia to EU and OECD f acilities would reduce the ongoi ng pollution in the South Asian 
recycling yards and might increase the pressure fo r an upgrading of these f acilities. This effect 
would be particularly relevant for Bangladesh where the negative impact of shipbreaking on 
the marine environment appears more acute than  in India. Any significant decrease in the 
number of end-of-life ships going  there for dismantling could st op, if not revers e, the further 
degradation of water quality, aqua tic life and natural habitats.  
Environmental impacts of the extension or re opening of EU dismantling capacity would be 
limited, if existing sites in harbour areas are use d. However, conflicts wi th other interests are 
possible, as in the case of the Able UK facility in Hartlepool/UK whose planned 
modernisation and extension could potentiall y affect a protected habitat in the area. 
Social impacts: 
A significant decrease in the number of ships going for dismantling could have more or less 
grave social consequences, including on liveli hoods, in the South Asian recycling states, 
particularly in Bangladesh. The loss of a quarter of the business would resu lt in a similar drop 
in employment at the yards. On  the one hand, fatal acc idents and occupationa l diseases caused 
by the dangerous practices on the beaching sites would be diminished. On the other hand, thousands of jobs for poor la bourers would disappear. Again, th is impact would be more felt 
in Bangladesh where less job alternatives  exist for the poor than in India.  
The job effect of a fully subsidised "green" dismantling capacity for EU-flagged ships in the 
EU would depend on the degree of mechanisation.  Some figures from existing yards in OECD 
countries show that under average conditions about 100 workers are needed for the 
dismantling of 100,000 ldt or tons of ship steel, i.e. one person per 1,000 tons. With modern 
cutting technology, half of  this number is sufficient. The re cycling of EU-flagged ships with a 
tonnage of 1.6 million per year would thus create industry j obs in the range between 1,000 
 
EN 31   EN and 2,000 Europe-wide. To this might have to be added the experts a nd workers engaged in 
pre-cleaning of a vessel, if undertaken separately. 
Economic impacts: 
The costs of subsidies for ship recycling were  analyzed in the COWI/DHI study of June 
2007.44 For the three alternatives to conventiona l beaching that would be compliant with 
current EU waste shipment law it was estimated that the cheapest alternative, dismantling in Turkey, would reduce shipowners' revenue by approx. 150 $/ldt, while thorough pre-cleaning 
in Europe with following export of the cleaned hull to Asia would result in additional costs of 
180-280 $/ldt, and full green dismantling in th e EU would produce extra costs of 250-400 
$/ldt, depending on the complexity of the ship and differences in labou r costs between various 
EU countries. On the basis of the estimate th at in the average 1.6 million ldt of EU-flagged 
ships will be scrapped per year between 2007 and 2020, the total subsidy that would be 
needed to compensate this cost differenc e was calculated for th e years 2007-2013 with 250 
million $ per year in the first scenario, 290-450 million $ in the second and 400-640 million $ 
in the third (at current exchange rates appr ox. 160, 180-280 and 250-400 million € per year, 
respectively). 
Further economic impacts of this subsidy scenario  are that the supply of steel scrap in Europe 
would be improved at the expense of the current  recycling states in South Asia and would 
force especially Bangladesh to fi nd other, more expensive sources  of raw material for part of 
its construction industry. A measure to devel op and protect the EU dismantling industry in 
this way is bound to provoke heav y criticism by the South Asian recycling states and to 
burden EU trade relations. It may lead to litigation against the Community in the World Trade Organisation. 
The purchase of end-of-life ships by the EU or  its Member States might avoid wasteful 
attribution of grants to the wrong facilities or shipowners but woul d create considerable 
administrative burden for the Commission or the relevant Member State authorities. In 
relation to the other two alternatives, tax benefits  for shipowners would be least effective, as 
the tax burden in this sector is usually not very high anyway. 
7.2.1.2.  6.2.1.2 Streamlining of EU grants  and loans with a link to  clean ship recycling  
A significant amount of grants and especially loans under EU transport policy is today in 
place to improve maritime infrastructure by supporting the acquisition of modern, more 
efficient ferries in replacement of older ve ssels. From 2005 to early 2008, the European 
Investment Bank (EIB) granted low-interest lo ans over 262 million € for such acquisitions in 
Member States. Additional applications for approx. 230 million € to support replacements by 
modern ro-ro ferries are currently under appr aisal. The EIB loans are given under general 
conditions of legal compliance but currently not  with an explicit link to the safe and 
environmentally sound dismantling of the ships that are replaced by the new buildings. 
Impacts 
Establishing a systematic link of EU grants , state aids and loans for ship scrapping or 
replacements with strict requirements on the qu ality of the dismantling would affect a small 
but publicly visible segment of the market and would help to stabilise the economic basis of 
EU recycling facilities. Ferry ope rators would consequently have higher costs or rather earn a 
lower price when they sell their end-of-life vesse ls. The effect would be of medium intensity. 
                                                
 
44 See in particular at pp. 132-135. 
 
EN 32   EN 7.2.1.3.  6.2.1.3 Voluntary coordination of EU govern ments for the clean dismantling of 
their own vessels (in particular warships) 
Currently, the decommissioning of government vesse ls of the Member States - in particular 
warships - follows exclusively national rules and there is no sy stematic cooperation between 
navies or coordination at EU level. 
The fleet of EU warships and other naval vessels  to be dismantled over the next ten years is 
estimated at about 150 ships of more than 1,000  tonnes with a combined tonnage of approx. 
300,000.45 Half of this fleet is French or Britis h. In addition, an uncerta in number of state-
owned ships for civilian purposes with a t onnage of altogether under 100,000 will come up 
for demolition within the next decade. There exis t also a high number of small ships used by 
navies or other government services which, how ever, are normally scrapped near their berth. 
The UK and France have published documents on a national ship recycl ing strategy where the 
governments commit themselves to a strict adhe rence to the EC Waste Shipment Regulation 
and the existing guidelines on environmenta lly sound management. Some other Member 
States, such as Denmark and Ge rmany, have also indicated that  they would send state-owned 
vessels only for dismantling in OE CD countries. However, to date , most EU Member States - 
including the largest flag states (GR, MT, CY ) and the new Member St ates with old naval 
vessels – seem to be reluct ant to make any commitment. 
Environmental and social impacts: 
Although warships and other stat e-owned vessels represent only a minor fraction - 1-2 % - of 
the EU-flagged tonnage, their si gnificance for environment and h ealth is higher on account of 
their relatively heavy contamina tion with hazardous flame retard ants, especially asbestos. A 
coordinated "Green public procur ement" initiative by Member Stat es for the recycling of their 
vessels could thus prevent the export of heav ily contaminated warships to developing 
countries which currently cannot ensure their safe and environmentally sound dismantling, in 
accordance with the existing export ban for ha zardous wastes under the EC Waste Shipment 
Regulation. The amount of hazardous wastes, especia lly asbestos, as a content of ships sent to 
South Asian countries would be reduced by seve ral thousand tons a y ear. To this extent, 
pollution and health hazards would decrea se in the countries of destination.  
The environmental and social impacts in the EU would be relatively low. If public 
procurement strictly adheres to the rules of  workers' safety and environmentally sound 
management, so that only qualified facilities wi th sufficient expertise are charged with the 
dismantling of government vessels , any risks for the local environment and workers' health 
can be limited to a minimum. 
A drawback of the voluntary approach with st ronger coordination by the EU is, however, that 
it relies largely on the goodwill of Member Stat es, and that those states which have not 
developed a ship dismantling policy of their own might show little interest in active 
cooperation on the clean disman tling of government vessels. 
Economic impacts: 
As compared to ship dismantling on a South As ian beach, the additional costs to use a clean 
and safe recycling yard are estimated at between 50 and 150 US $/ton (ldt). Taking into 
account higher production costs and lower prices  for reusable steel in Europe, a cost 
difference of 250-400 $/ldt seems plausible. Th is cost would have to be borne by the 
                                                 
45 French MIDN report of March 2007, at p. 21. 
 
EN 33   EN respective government. On the other hand, the dismantling of state-owne d vessels in the EU 
would create revenue for EU industry of at least 20 million Euros per year.46  
7.2.2.  6.2.2 Measures to encourage ship di smantling in higher-standard facilities 
worldwide (sub-option 2)  
If the emphasis is put not so much on prev enting hazardous waste e xports to developing 
countries under current EU waste shipment law but on reducing the negative impacts of 
shipbreaking in South Asia on human health  and the environment, without creating 
unnecessary economic burdens for the shipping industry or EU taxpayers, a range of other 
measures have to be considered. This takes acco unt of the fact that most European-flagged or 
European-owned merchant ships operate worl dwide and will also become waste usually 
outside of EU waters, so that the EC Waste Shipment Regulation might not apply. Without 
high subsidies it would not be at tractive for owners of these ships to send their ships to EU 
facilities for recycling, due to the large differences  in costs and prices. Nevertheless there is a 
potential to reduce the negative impacts of ship dismantling on human health and the 
environment in the affected Asian states. 
7.2.2.1.  6.2.2.1 Campaign for voluntary agreements with the shipping industry  
Voluntary commitments by ship-owners, their asso ciations and their customers are potentially 
among the simplest and quickest ways to ch ange practices on the ground, and could achieve 
this before the next expected peak of ship scrapping in 2010. The shipping company P&O Nedlloyd, for instance, (now part of the Maersk  Group) maintains a part nership with Chinese 
facilities whose environmental and safety standards were upgraded through technical 
assistance and training. The Industry Working Gr oup on Ship Recycling elaborated in July 
2007 a set of "Interim Measures" to promote clean  ship recycling pending the entry into force 
of the IMO Convention. However, these are only  of a recommendatory nature and appear to 
be worded in rather vague terms.  
Any more ambitious voluntary commitment wo uld require strong poli tical involvement on 
high level, systematic negotiations with major stakeholders in the field, and considerable 
publicity.  
Impacts 
Especially high-level talks with ECSA (Eur opean Community Shipowners' Associations), 
INTERTANKO and major oil compan ies (for single-hull tankers), with European ferry and 
cruise lines (for passeng er ships) and key players in cont ainer and bulk shipping could have a 
positive impact, due to their economic import ance, high public profile and the large 
membership of the owner associations. For the la tter, the limits of influe nce of the association 
on its members have to be take n into account. Voluntary agreements achieved in this way 
could lead to significant envir onmental and social improvements by directing merchant ships 
to higher-standard recycling fac ilities, at the price of a 10-20% reduced profit for ship owners. 
Owners would, however, benefit from positive pub licity, avoidance of administrative burden 
and indemnity against liability risks. Sub-standa rd facilities, especially  in Bangladesh, would 
get less business and employment. This coul d, however, give operators the necessary 
incentive to upgrade their facilities and prompt governments to establish binding 
environmental and safety rules and/or  implement them more effectively. 
                                                
 
46 MIDN report, p. 24; COWI/DHI report of June 2007, p. 124.  
 
EN 34   EN As with all voluntary agreements, their eff ectiveness would depend on transparency, public 
attention and clear performance indicators, as we ll as the possibility of sanctions in case of 
non-compliance, at least in the form of "nam ing and shaming". At present the likelihood for 
achieving such effective voluntary agreements is  not very high. However, the pressure by a 
public campaign in this direction could support and increa se the positive effect of other 
legislative and non-legislative measures. 
7.2.2.2.  6.2.2.2 EU-specific certification and audit sc heme for ship recycling facilities 
An EMSA study is currently looking into the po ssibility of an EU-spe cific certification and 
audit scheme that may be opened to ship recy cling facilities worldwid e. This scheme would 
go beyond the existing ISO 14001 and OHSAS 18001 st andards which are generic, focus on 
procedure and do not include performance st andards. Instead, it  would build on the 
forthcoming Ship Recycling Convention and on the planned specific ISO standard 30001 for 
ship recycling facilities and would establish a system of quality levels. An important element 
would be the publication of th e certificate categories in conn ection with a list of ship 
dismantling facilities worldwide.  
Environmental and social impacts 
By applying this scheme the EU would increase transparency and have a tool to monitor that 
the facilities to which EU-flagged vessels are sent for scrapping comply with the applicable 
standards and rules on safe a nd environmentally sound recycling of ships. The participating 
facilities themselves would have a better contro l of operations and of their compliance with 
international standards, the rule s of the future IMO Convention and also national legislation. 
The certificate would give them an incen tive to improve environmental and safety 
performance. Certified facilities would serve as  a benchmark for the i ndustry and for national 
competent authorities.  
Depending on the number of facilitie s that participate in the syst em, there is a considerable 
potential for the reduction of pollution, accident s and occupational diseases in South Asian 
facilities. However, as with voluntary agreem ents, the chances that a purely voluntary audit 
scheme would be widely used and have a strong impact are at present not very high. 
Significant impacts on the environment and soci al conditions in the EU are not likely. 
Economic impacts 
An EU certificate and audit of th is type would to some extent  duplicate existing or envisaged 
schemes, such as those of ISO. The additi onal auditing of performance indicators and the 
classification would produce co sts for recycling facilities in  the range of 20,000-40,000 € plus 
internal personnel costs of 1-2 man years. The EU scheme w ould be less complex that the 
current EMAS certificate for industrial sites in Europe, but would be more demanding and 
thus also more expensive than the usual ISO certi ficate. It would be attractive in particular for 
better qualified entrants who wa nt to convert these technica l qualities into a marketplace 
advantage. They can also reap financial be nefits through better control of operations and 
avoid sanctions for non-compliance by competent au thorities. Shipping co mpanies, especially 
those with a clear profile of Co rporate Social Responsibility, woul d be enabled to  differentiate 
the yards and still maintain a large pool of compliant facilities. The cost for them would be a reduced profit (by 10-20%) but they would benefit from positive publicity, avoidance of administrative burden and indemnity against liabili ty risks. Sub-standard  recycling facilities, 
especially in Bangladesh, might lose business and employment but would get an incentive to 
upgrade, so that they coul d also meet the standard. 
 
EN 35   EN 7.2.2.3.  6.2.2.3 Award schemes 
A new specific award for exemplary ship recy cling or the inclusion of ship dismantling 
aspects in a re-installed "Clean Marine Award",  on the lines of the pr ize awarded to shipping 
lines in 2004 by Commissioner Wallström, could provide public recogniti on for recycling and 
shipping companies with a clear environmenta l profile and also show the Commission's 
commitment to the issue. The 2004 award, which focused on air emissions from ships and was celebrated with a hi gh-profile event in conn ection with the Green W eek, did not involve a 
financial reward but neverthele ss worked as an incentive for 11 shipping companies plus ports 
and other stakeholders to compete for the prize in various classes. In order to draw public 
attention and stimulate suffici ent interest from industry fo r the more challenging ship 
recycling issue, it might be necessary to f und the award with at least 100,000 € which would 
have be split in different classes or prize levels.  
 
EN 36   EN Impacts 
If made attractive enough, an EU award could have limited positive impacts on environmental 
and safety practices in ship recycling. A potentia l drawback of award schemes is that, besides 
the positive incentive for the winner, it may at the same time cause disappointment with those 
facilities that have not been nominated in spite  of their functioning in accordance with green 
and safe standards. However, the range of pot ential contenders (best-practice facilities and 
shipping lines) is for the time being sma ll and the drawback could be overcome by a 
sufficiently broad and transp arent selection scheme.  
Participation in the award scheme as such would produce only minor costs for the competing 
ship owners and recycling f acilities, but would presuppose higher investments or a CSR 
policy involving more renunciation of  profit than for average opera tors or users of certified 
ship recycling facilities unde r 6.2.2.2. On the other hand, the publicity of the award would 
also promote the reputation and CSR profile of a prize-winner to a particularly high extent 
and could thereby benefit his economic performance. 
7.2.2.4.  6.2.2.4 Technical assistance fo r developing countries 
Technical assistance to recycling states in South Asia can help to support the quick upgrading 
of dismantling facilities and associated infrastr ucture (waste management, transport, health-
care, training facilities etc), so that they can comply with the forthcoming international regime 
on ship recycling. Measures would have a part icularly high impact in Bangladesh, the poorest 
of the big recycling countries, whereas the infr astructure and some facilities of its major 
competitor India are being developed already on the basis of domestic resources and without 
significant assistance from abroad.  
EU technical assistance could be orga nised in various ways, for instance: 
• Country projects; 
• Contribution to the UNEP/IMO/IL O "Global Programme" for su stainable ship recycling; 
• Contribution to the IMO "Ship recycling fund" for voluntary technical assistance. 
The advantage of country projects is that they  can be tailor-made to the specific needs of a 
country and organised as part of a country-s pecific development strategy. In the case of 
Bangladesh, for example, the us e of "challenge funds" to pr omote health and safety in 
shipbreaking would be possible in the framework of the Mission for EC support in the areas 
of Environment and Disaster Management in Bangladesh (MIP 2007-2010). However, at 
present (spring 2008), government and recyclin g industry in Bangladesh show no particular 
interest in development coope ration focusing on environment and health matters. As the 
industry draws considerable profits from shipbr eaking - the biggest opera tor (PHP) is reputed 
to earn 50 million $ per year with this business -, the main problem does not seem to be financial and technical resources but governance and the political will to implement standards 
of environmentally sound management. 
For this reason, the Secretariat of the Basel Convention which has init iated, in cooperation 
with IMO and ILO, a "Global Programme for su stainable ship recyclin g" currently does not 
foresee concrete projects in Bangladesh. The IMO "Ship recyclin g fund" for voluntary 
technical assistance contains at present 5,500 $ and is for the time being not expected to 
provide the necessary potential for development measures. 
 
EN 37   EN Moreover, in the interim period before the entry into force of  the Ship Recycling Convention 
the major recycling States, notably Banglades h and India, could be approached in the 
framework of the EU Cooperation Agreement to negotiate, on a b ilateral basis, the 
introduction of a mandatory inventory of hazard ous materials on board ships in order to be 
certified as ready for recycling before going to a dismantling facility. An item on this issue 
could be added in the existing (or future) ac tion plan of the EU Cooperation Agreement.  
Impacts 
At present, therefore, positive impacts of de velopment aid programmes in the field of ship 
recycling are not very likely, although this situation might ch ange quickly if  a widespread 
acceptance of the IMO Convention and higher st andards make technical assistance more 
attractive for government and industry in Bangladesh. 
The scope of such programmes will probably be limited to financing training schemes and 
low-level infrastructure and thus not involve large sums of money. 
A general drawback of country -specific technical assistance is that it may interfere in 
international competition at the expense of other countries which have made more efforts with 
their own resources to achieve a good standard of environmental and health protection. This 
risk is clearly apparent in the competiti on between Bangladesh on the one hand and India, 
China and Turkey on the other. 
7.2.2.5.  6.2.2.5 Participation in IMO pilot projects for clean ship recycling according to 
the draft Convention 
Pilot projects for safe and environmentally s ound ship recycling in accordance with the draft 
IMO Convention are currently en visaged in Turkey and Japan. Turkey has invited foreign 
participation in the Steering Committee for its project. Subject to available resources, EMSA 
will participate on behalf of the Commission. The p ilot project is meant to test the procedural 
and substantive provisions of the draft Conve ntion on the dismantling of two ships at the 
Aliaga facility in Turkey. Supporting this project would have a political impact - 
demonstrating the strength of EU commitment  to achieve practical progress with the new 
IMO Convention - and improve to some extent th e competitive position of the Turkish facility 
concerned in relation to other dismantling yards.  
7.2.2.6.  6.2.2.6 Commission guidance for shipowners (list of ship dismantling facilities) 
Guidance of the Commission for the shipping i ndustry could be of part icular value if it 
informed about higher-standard facilities in  developing countries, as  the cost difference 
between them and badly managed yards in those c ountries are much smaller than in relation to 
EU facilities, so that there is a higher chance of convincin g shipowners to choose the better 
option. 
As there exist already several technical guide lines by ILO, IMO and Basel Convention on safe 
and environmentally sound ship recycling, an d the IMO will elaborate new guidelines to 
accompany the Ship Recycling Convention, once it is adopted, the idea of Commission guidance is not to duplicate these efforts but to add new informati on, in particular with a list 
of worldwide ship dismantling facilities which satisfy the re quirements of the Convention or 
EU legislation. 
Preliminary tables listing such facilities have been included in the Annex to the Green Paper 
and in the COWI/DHI study on "Ship dismantling and pre-cleaning of ships".  
Impacts 
 
EN 38   EN A regularly updated list of higher-standard facilities would provide information on key 
features (design of the facilit y, capacity, authorisation status, certificates, limitations etc) in a 
standardised format and thus enable shipowne rs to compare. Publication would make it 
possible for interested users and third parties (trade unions, NGOs) to verify the information. 
Better-qualified facilities would gain a market place advantage, which in turn would create 
incentives for upgrading the environmental and safe ty performance of the industry in general. 
Updating the list would require considerable ex pertise and human reso urces, in view of a 
frequently changing market. Annual costs of  100,000 € for a Commission service contract 
appear realistic. 
7.2.3.  6.2.4 Summary Option 2  
The impacts of the actions under Option 2 are summarized in the following table: 
Table 7: Measures to encourage voluntary action and their impacts 
Sub-option  / 
measure Positive impacts 
Affected group or concern: 
Likelihood / intensity Negative impacts 
Affected group or concern: 
Likelihood / intensity Recommended 
selection: 
Sub-option 1: Encourage dismantling in EU/OECD    
Subsidies for EU 
dismantling Environment + workers' safety 
in South Asia: high / high 
Jobs + revenue in EU recycling 
industry: high / medium 
Fishing in South Asia: 
medium / medium 
 Jobs in South Asia: high / high 
Costs for EU: high / high 
Revenue for industry in S. Asia, 
steel supply (especially Bangladesh) : high / high 
Trade relations with South Asia: 
high / high Subsidies could lead to distortion 
of competition and have no 
support in EU state aid rules: high 
/ high  Reject 
    
EU coordination for 
warships Environment + workers' safety 
in South Asia: low  / medium 
Jobs + revenue in EU recycling 
industry: low / medium  Costs for EU navies: low / 
medium  
Environment + workers' safety in 
EU: low / low  Reject  
Sub-option 2: 
Encourage clean 
dismantling worldwide     
Campaign for voluntary 
agreements Environment + workers' safety 
in South Asia: low  / medium (but 
potentially effective in short term) 
Jobs + revenue in EU recycling 
industry: low / low  No major impacts Accept  
 
EN 39   EN Sub-option  / 
measure Positive impacts 
Affected group or concern: 
Likelihood / intensity Negative impacts 
Affected group or concern: 
Likelihood / intensity Recommended 
selection: 
EU certification & 
audit scheme Environment + workers' safety 
in South Asia: low  / medium   
Jobs + revenue in EU recycling 
industry: low / medium  Costs for shipowners + recycling 
facilities: low / low (or even net 
positive)  Accept  
Award scheme Environment + workers' safety 
in South Asia: medium  / low   
Reputation for EU shipowners + 
other participants: medium / 
medium 
Jobs + revenue in EU recycling 
industry: medium / low  Costs for EU: high / low  Accept  
Technical assistance for 
developing countries Environment + workers' safety 
in South Asia : medium / medium  
Fishing in South Asia:   
medium / medium  Costs for EU: high / low 
Effect on competition:  
medium / low  Accept  
Participation in pilot 
projects Environment + workers' safety 
in South Asia : low / low  
Jobs + revenue in EU recycling 
industry: low / low  No major impacts Accept  
Guidance for 
shipowners (global list 
of dismantling facilities) Environment + workers' safety 
in South Asia: medium  / medium  
Jobs + revenue in EU recycling 
industry: medium / medium
 Costs for EU research: high / low  
 Accept  
 
7.3. The actions presented above as accepta ble would encourage voluntary actions 
by shipowners to improve the worldwide practice of ship dismantling, but will 
not necessarily address the gaps with regar d to end-of-life ships in the current 
EU legislation. 
7.4. 6.3 Impacts of Option 3: EU legislation on ship recycling 
It should be noted that before any integrat ion of Convention provi sions into EU law a 
detailed impact assessment, including a conf ormity check will have to be carried out 
with a view to avoiding any possible incomp atibilities with the already existing EU 
acquis  e.g. in the field of health and safe ty at work. For the present strategy 
communication which does not contain detailed legislative proposals, a more simplified 
impact assessment seems proportionate. 
Overall, it is expected that there would be positive environmental, social and 
economic impacts of implementing IMO Conven tion into EU law. In  particular with 
respect to the baseline desc ribed in section 6.1, the follo wing positive impacts are to 
be expected:  
• A coherent approach, for example ensuri ng uniform controls across the EU in 
ports and shipyards.  
 
EN 40   EN • Faster potential for legislation to ta ke effect and speeding up information 
processes such as on recycling facilities in Member States.  
• Greater certainty and level playi ng field for operators in the EU  
• Reduction of administrative burden for both Member States and EU operators  
• Each of these in turn would benefit workers safe ty and the state of the 
environment. Specific aspects of implem enting the IMO Conven tion into EU law 
are dealt with in the following sections 6.3.1 and 6.3.2.  
7.4.1.  6.3.1 Implementation of the Ship Recycling Convention 
An EU Ship Recycling legislative instrument th at transposes the key elements of the future 
IMO Convention into Community law would be able to harmonise im plementation EU-wide. 
Differences between Member States concerni ng the point in time when the Convention 
requirements take legal effect would be considerably reduce d. Delays, especially if going 
beyond the deadlines of the Convention itself,  could be addressed with the means of 
Community law. Coherence would thus be much  better ensured than with the possibly weak 
implementation and control mechan isms of the Convention itself. 
Moreover, an EU legislative instrument could foresee an early implementation of Convention 
requirements independent of the treaty's en try into force in international law.  
Transposition of Convention elements into the Ship Recycling legislative instrument would 
not be necessary where existing EU legislation already covers the issue and provides for a 
higher standard of safety or en vironmental protection. This is th e case particularly for the ban 
on hazardous materials on board ships or the envi ronmental and workers' health and safety 
requirements in recycling facilities. Here a refere nce to the relevant provisions of EU law (for 
the latter e.g. Directive 2006/12/EC on wast e, Directive 89/391/EEC on measures to 
encourage improvements in the safety and h ealth of workers at work, and Directive 
83/477/EEC on the protection of workers from the ri sks related to the expos ure to asbestos at 
work, as amended) would be sufficient. 
The most important elements of a Ship Recyc ling legislative instrume nt to implement the 
IMO Convention would be the following: 
• Introduction of a mandatory Inventory of H azardous Materials (IHM) on board ships, of 
the "Ready for Recycling" certificate, and the surveys necessary for them; 
• Specification of the key requirements for ship recycling facilities, including an obligation 
to prepare a Recycling Facility Management Plan;  
• Obligations on Member States to communicate relevant information (especially on ship 
recycling facilities, competent au thorities, recycled ships, viol ations and actions taken) to 
the IMO, as well as directly to othe r Member States and the Commission; 
• Reporting requirements for shipowners and recy cling facilities which could be linked to 
the existing requirements of the EC Waste Sh ipment Regulation for notification and prior 
informed consent. 
7.4.1.1.  6.3.1.1 Inventory of Hazardous Material s, surveys and certificates 
The environmental, social and economic impact s of the new survey and certificate system 
have been described already in the c ontext of the IMO Convention (above 6.1.2). 
 
EN 41   EN Harmonization of standards and procedures for surveys and certificates by an EU legislative 
instrument would establish a level playing field for operators in the EU and reduce 
administrative and legal costs. It  would also increase the effectiv eness of EU controls in ports 
and shipyards which in turn benefits health and safety of seafarers and workers. This effect 
could be strengthened by incorporating im portant elements from the envisaged IMO 
guidelines on the various certificate s into the set of binding rules. 
7.4.1.2.  6.3.1.2 Requirements for ship recycling facilities 
The Convention requirements for ship recycling facilities ha ve been outlined above under 
6.1.2. Current EU legislation does no t regulate such facilities e xplicitly, but as performing an 
operation for the recycling of metals they fall under the permit requirement of Directive 
2006/12/EC on waste. A recyclin g facility management plan  does not exist as a legal 
obligation under Community law. Other substa ntial requirements for the protection of 
workers' health and safety, however, are essent ially contained in rele vant EU directives. 
Transposing the relevant provisi ons of the Convention into an EU Ship Recycling legislative 
instrument would therefore not introduce new el ements - apart from the management plan - 
but rather clarify th e legal situation.  
EU rules on the Recycling Facility Management Plan would cause no additional 
administrative costs in relation to national legislation but could reduce such costs by 
preventing different standa rds in Member States. 
7.4.1.3.  6.3.1.3 Information duties of recycling states 
The draft Ship Recycling Convent ion requires Parties (in this cas e recycling states) to report 
to the IMO various relevant data, e.g. a list of  authorized ship recy cling facilities and an 
annual list of ships recycled within  the jurisdiction of that state. 
Such obligations are useful tools to ensure transparency and contri bute to an effective 
implementation of the Convention, provided the lists contain sufficient information and are 
regularly updated and disseminated to all interested part ies and the public. 
EU legislation would have the positive effect  of harmonising implementation and ensuring a 
minimum standard of communication. The add itional obligation on Member States to 
communicate the information directly to other Member States and the Commission (instead of 
waiting for the IMO to disseminate it) would simplify and speed up the process and enhance its effectiveness in the EU. The information on r ecycling facilities, recycled ships, violations 
of the Convention and action ta ken would be important for a ny implementation of an EU-
wide strategy on ship dismantling.  
The administrative burden for Member States' au thorities and the recycling facilities would 
not be substantially increased in relation to what is requir ed by the Convention (baseline 
scenario). In case the Convention does not foresee information to be submitted by recycling states on the capacity, the stat us of authorisation and certification, and the limitations of 
recycling facilities concerning sh ip type and size a nd hazardous wastes, th ese details would be 
made obligatory by EU legislation, but essentia lly be limited to a one-page document. This 
elementary information could be quickly establ ished at minimal costs and would on the other 
hand benefit EU facilities which, as a rule, have an economic inte rest in more transparency, so 
as to document their comparatively hi gh environmental and safety standard. 
 
EN 42   EN 7.4.1.4.  6.3.1.4 Reporting requirements for shipow ners and recycl ing facilities 
The requirements currently foreseen in the draft Convention with regard to initial notification 
of a planned ship recycling and the reporting upon completion can be seen as a weaker 
version of the notification pr ocedure under the Basel Conventi on and the EC Waste Shipment 
Regulation. The opt-in clause foreseen in the cu rrent Regulation 25(5) of the draft Convention 
would allow recycling states that have made a prior declaration to that  effect, to require a 
review period of 14 days for objections or t acit consent to a planned ship recycling. In 
addition, recycling facilities will be required under the draft Convention to report on 
incidents, accidents, occupational diseases and chronic effects. The EU  legislation would not 
go beyond these reporting requirements of the baseli ne scenario and thus not create additional 
administrative burden. 
Under the current EC Waste Shipment Regula tion, mandatory prior no tification and consent 
procedures are in place for transboundary waste shipments. The competent authorities for this 
regime are, however, normally different from  those concerned with the application and 
enforcement of IMO rules. Also the type of information to be reported is more ship-specific under the draft IMO Convention.  
For an indefinite period, until Basel Convent ion Parties may find th e new control regime 
equivalent to that of the Basel Convention and thus exempt ships from waste shipment rules, 
the two control procedures would co-exist side  by side. The additiona l administrative burden 
of the IMO system for shipowners and recyc ling facilities cannot be avoided for the time 
being, but EU rules could reduce it to some ex tent by obliging the rele vant authorities to 
cooperate and exchange information. In the case that a ve ssel is transported to a ship recycling 
facility in the EU, for instance, the Ship Recy cling legislative instrument could foresee that 
one national competent authority  has to be nominated as a contact point, to which all 
necessary notifications by shipowner and recycling facility can be addressed. 
7.4.1.5.  6.3.1.5 Impacts of the timing of implementing the Convention  
Before the final negotiations for the Ship Recycling Convention in May 2009, and as its 
entry-into-force mechanism still remains to be sp ecified, it is at present uncertain when the 
Convention will become binding in interna tional law.. Experience with other IMO 
conventions suggests that it takes in the average six years from adoption until entry into force of such an instrument. This means that the new regime on ship recycling would become 
effective around the year 2015. As the draft C onvention contains separate deadlines for 
compliance with the various requi rements - for instance not later than five years after entry 
into force, or before going for re cycling if it is earlier for an  Inventory of Hazardous Materials 
to be present in existing sh ips (as opposed to new ships)- the full effect of the new 
international regime is not to be expected before 2020. 
The new Convention potentially raises problems of capacity. If 50,000 larger ships worldwide 
have to be surveyed and certified within a few years, a shortage of qualified staff in 
classification societies is probable. Likewise, the mobilisation of sufficient clean dismantling 
facilities might create temporary difficulties if the entry into force of the Convention coincides with a peak of vessels coming up for demolition. 
An early implementation of the Convention rules at EU level fo r ships flying EU flags would 
create additional costs for ship owners only in so  far as it obliges them to pay for surveys and 
certificates some years in advance of what would have been necessary under the Convention 
itself. Early movers might, however, benef it from avoiding bottlenecks of survey and 
certification capacity and being able to us e certificates as a marketing argument.  
 
EN 43   EN Early legislation at EU level would give a boos t to ship recycling as a business field of 
classification societies and is li kely to put EU companies in a lead position against their non-
EU competitors without a home market. 
Temporary disadvantages for EU ship owners  would be completely eliminated if the 
requirement to carry an Inventory of Hazardous Materials or - where applicable - the Ready 
for Recycling Certificate were ex tended beyond EU-flagged ships to all vessels that  call at EU 
ports. 
The bottleneck problem is less relevant for ship recycling facilities. Sufficient clean 
dismantling capacity for EU-flagged ships exists already today in the EU, Turkey and China and could be extended in 2-3 years to cover even a peak demand. The necessary legislation, 
certification schemes and guidanc e would have to be based on the Convention of May 2009 
and the guidelines on ship recycling facilities  that are scheduled fo r adoption by the IMO 
(MEPC 58) in July 2009. 
In order to profit from the advantages of ea rly moving and, in line with policy objectives, 
reduce significantly the negative environmental and social impacts of shipbreaking before 
2015, it would be necessary to develop and adopt EU  legislation as soon as possible after July 
2009.  
7.4.2.  6.3.2 Complementing legal measures: Filling the gaps of the Convention 
The Ship Recycling Convention is to be unders tood as an international minimum standard on 
ship dismantling. Like other international conventi ons it explicitly (in Article 1.2 of the draft) 
acknowledges the right of Partie s to take, individually or join tly, more stringent measures 
consistent with international law with respect to safe and environmen tally sound recycling of 
ships in order to reduce or minimize the adverse effects on human health and the environment. Neither Member States nor the EU are thus prevented from legislation that lays 
down more stringent measures on environmental a nd health protection and fills relevant gaps 
of the Convention.  
All measures at national or EU level that are no t foreseen in the text of the Ship Recycling 
Convention run potentially the risk of driving ship owners to cha nge the flag of their ships to 
a "flag of convenience". The quantif ication of this risk is difficu lt but there is some experience 
with maritime legislation which suggests that no t every unilateral legal measure will result in 
a significant out-flagging. The ma in driver here is the net financial burden. While a ship 
owner will be ready to change flag if measures  mean high costs for him, he may be less likely 
to do so if the costs are outweighed by the advantages of a good reputation (for big 
companies) or the risks of tighter port state controls affecting flags of convenience. The re-
flagging risk is also limited if the new meas ure closely resembles an existing scheme and 
enjoys broad public acceptance. 
This re-flagging risk in relation to the proposed  complementing measures, and particularly the 
potential increase in costs and administrative burden, will be further analysed by the Commission through studies to support the fort hcoming legislative instrument on ship 
dismantling. The complementing measures that  are assessed in the following section and 
those mentioned in the section on "implement ation" (6.3.1) are not mutually exclusive. 
7.4.2.1.  6.3.2.1 Extension of Convention rules to government vessels  
The draft Ship Recycling Convention exempts th ree categories of ships from its scope: small 
vessels below 500 GT, ships used only on govern ment non-commercial service, and ships 
operating throughout their life only inside domesti c waters. The most serious exemption is 
 
EN 44   EN that for warships in the second category, on a ccount of their relativ ely high contamination 
with asbestos and other haza rdous materials (see above 6 .2.1.3). Unlike the IMO, which 
traditionally provides for a "government" exempti on due to concerns for national sovereignty, 
the EU is not a priori prevented from laying down environmental and safety rules for state-
owned vessels. Article 296 of th e EC Treaty in particular doe s not rule out EU action, but 
allows for such an exemption only in exceptional and clearly defined cases if this is necessary for the protection of Member States' essential security interests which are 'connected with the production of or trade in arms and war material '. However, in so far as the future IMO 
Convention regulates also the design, construc tion and operation of ships (for instance 
requiring an Inventory of Hazardous Materials), in terests of military secr ecy would have to be 
taken into account. 
With its legislation, the EU would follow th e explicit provision in Article 3(2) of the 
Convention that exempted ships should act in a manner consistent with the Convention. 
Extension of the Convention rules to small sh ips and domestic transport in the EU is a 
possible option but not regarded as urgent at th is stage, since those ships do not normally go 
for dismantling to Asian facilities, and significant environmental and safety risks caused by their recycling in the EU are not apparent. 
In order to make a regime on the scrapping of state-owned ships more effective it would be 
necessary to impose conditions also  on the sale of ships to third states or private companies 
before they become waste. As laid down in the UK Ship Recycling Strategy, all sales 
contracts would have to contain clauses oblig ing the new owner to comply with IMO and 
Basel Convention rules on clean ship dismantling and not to dispose of the vessel without prior written consent of the Member State's govern ment. In addition, sales could be restricted 
to those countries, or private ow ners flying the flag of those count ries, that have declared their 
agreement to apply for the time being the Basel Convention to e nd-of-life ships.  
In view of their prerogatives  on security and defence maters , an EU rule on the sale of 
warships would have to be agreed by Member States. 
Impacts 
An explicit legal requirement at EU level to dismantle all state-owned or -operated ships in 
Europe or OECD countries according to C onvention standards woul d in substance not go 
beyond the already existing export  ban for hazardous wastes under the EC Waste Shipment 
Regulation but would clarify the le gal situation and explicitly ob lige Member States to act in 
an exemplary fashion with regard to their own ships.  
The environmental, social and economic impact s outlined in the context of a stronger EU 
coordination would be much more certain th an with a voluntary commitment of Member 
States. The risk of out-flaggi ng is not a major one for governm ent vessels, as the action of 
states is much more under public scru tiny than that of private operators. 
If rules on the sale of government vessels for fu rther use were included in the legislation, the 
freedom of navies and other Member State agen cies to dispose of their vessels would be 
restricted. This has the potential to depress c onsiderably the price that  the government agency 
would otherwise receive on the market. 
7.4.2.2.  6.3.2.2 More extensive bans on hazardous materials in ships 
As mentioned under 6.1.1, existing EU legislat ion on the marketing and use of hazardous 
substances is more stringent than the prohibi tions envisaged in the draft IMO Convention. 
Even where the Convention bans a material like asbestos, this ba n is subject to a wide range 
of exemptions (e.g. asbestos in vanes and watertight joints) that  have long been abandoned in 
 
EN 45   EN EU law. In order not to weaken the existing acquis  and in the interest of clarification, it would 
thus be necessary not to copy the provisions of  the Convention but to refer to the current EU 
prohibitions on hazardous substances in a future  EU Ship Recycling legislative instrument. 
Some other hazardous substances used on ships might be considered for a ban or substitution 
by less hazardous materials. In particular  for brominated flame retardants like 
hexabromocyclododecane (HBCDD) and tetrabro mobisphenol A (TBBPA) which are widely 
used, scientific evidence suggests that they ar e persistent, bioaccumulating and highly toxic to 
aquatic organisms. Both substances are clas sified under the OSPAR C onvention as priority 
substances for reduction or elimination of re leases, and Norway has proposed to include at 
least HBCDD - for the time being unsuccessfully - in the minimum list of items for the Inventory of Hazardous Materials.  An IMO technical working gr oup will assess this proposal 
in more detail. A further substance ban could concern mercury, in line with the aims of the 
EU Mercury Strategy to reduce global  mercury supply, trade and demand. 
However, inclusion in a Ship Recycling legislat ive instrument would ha ve to be done in line 
with the results of ongoing risk assessments (e.g. for HBCDD) and with the more general 
substance-related EU legislation. 
Impacts  
A Norwegian study found low economic impacts bu t high environmental benefits to be 
expected from the prohibition of both flame retardants.
 47 
A ban on materials covered by existing EU directiv es would have additional impact only if it 
is extended to all ships calling at EU ports re gardless of their flag. Such an extended ban 
would benefit the marine environment of the EU , as considerably more ships (about one third 
of global shipping) have an EU port as origin or destination th an fly the flags of EU Member 
States (nearly 25 % of  the world tonnage). 
In case the additional substance bans are limited to EU-built or EU-flagged ships, unilateral 
action is likely to have negative impacts in pa rticular on EU ship s uppliers who would face 
difficulties in relation to Asian competitors. A part icular risk is to be seen in the delays to 
obtain "material declarations " for region-specific products. 
Apart from this, substance bans could be used  in practice as an excuse to limit necessary 
investigations on risk mate rials in the supply chain. 
For this reason, European prohibitions in the field need further assessment and should in any 
event be extended to all ships entering EU waters. 
7.4.2.3.  6.3.2.3 Stricter pre-cleaning obligations 
The current EC Waste Shipment Regulation No 1013/2006 provides alrea dy for an indirect 
obligation to pre-clean ships th at go for dismantling, since it lists as "green", non-hazardous 
waste in Annex III vessels and other floating structures for breaking up only if "properly emptied" of any cargo and other materials aris ing from the operation of the vessel which may 
have been classified as a dangerous substa nce or waste (entry GC 030). The draft Ship 
Recycling Convention, on the other hand, contai ns only an obligation to minimize the amount 
of cargo residues, fuel oil and (loose) waste on board prior to entering the recycling facility, 
                                                
 
47 IMO document MEPC 57/3/19 of 8 February 2008; EFTA Surveillance Authority, Impact assessment 
of a proposal for prohibition on certain hazardous substances in consumer products (Sept. 2007), 
published at www.eftasurv.int. 
 
EN 46   EN and requires no pre-cleaning of the ship's structure if the recycling facility is fully authorized 
to handle hazardous materials and does not by itself request the pre-cleaning. 
Environmental and social impacts: 
An explicit obligation to decontaminate an  EU-flagged ship to the maximum extent 
compatible with keeping it afloat as a vessel would clarify the legal s ituation and in theory 
prevent the export of a large qua ntity of hazardous wastes to developing countries via ship 
recycling. This would benefit th e marine environment especially  due to the minimization of 
oils and of organotin compounds, PCB and heavy metals in paints  on the hull of  a scrap ship. 
The safety and health of recyc ling workers would profit especial ly from the prior extraction of 
asbestos from the structure of the ship. 
A minor additional risk might be created for the workers of the pre-cleaning facility and for 
seafarers if the decontamination is not carri ed out thoroughly enough a nd under strict safety 
precautions, so that e.g. asbestos fibres are rel eased from the structure into the air inside the 
ship. Also, the removal of the engine and oil ta nks has the effect that the vessel has to be 
towed to its destination and the acc ident risk en route is higher th an with a self-propelled ship 
(the COWI/DHI study estimated a risk increase of 60%). Besides,  the dismantling of a vessel 
that has arrived under tow in a South Asian facilit y cannot take place on the beach itself but in 
the water and thus involves additi onal hazards for environment and workers' health as long as 
the current primitive working methods are maintained. 
Economic impacts: 
A recent example - the pre-treatment of the chemicals tanker "Otapan" in the Netherlands 
before its dismantling in Turkey - shows that  a thorough pre-cleaning is  feasible but also 
involves considerable costs. The removal of 76 tonnes of as bestos and 332 t of asbestos-
containing material (plus other hazardous wast es) from the 22,000-dwt ship took one year and 
cost the Dutch administration in the end 4 million €.48 
Efficient management and rationalisation eff ects might significantly reduce the pre-cleaning 
costs per ship, so that an average of 230 US $ or 150 € per ldt could be reached (see above 
6.2.1.1). Nevertheless, the economic burden for shi powners would be rela tively high. On the 
other hand, pre-cleaning on a la rge scale could provi de good business o pportunities and job 
effects for the European ship repair industry. As the decontamination process cannot be easily 
mechanised, the job potential c ould be higher than with the me re dismantling of a vessel. 
The drawback of any obligation to pre-clean ships flying the fl ags of EU Member States is 
that it can be avoided by changing flag before  the intention to recy cle a vessel is announced. 
Re-flagging is already today a widespread practice before the final voyage of a ship but is 
likely to take place even earlier in a lot of cases  if decontamination is made mandatory for EU 
end-of-life ships. The only vessels where the obligation could be made effective are state-
owned or -operated ships and vessels for whic h the owner receives public subsidies or loans 
under this condition. The subsidy would have to  be high enough, however, to compensate all 
additional costs if the desire d effect is to be achieved. 
                                                 
48 Press release Basel Action Network (BAN) of 16 May 2008, published at 
http://www.ban.org/ban_news/2008/080516_vi ctory_for_proper_ship_scrapping.html. 
 
EN 47   EN 7.4.2.4.  6.3.2.4 Ban on beaching 
The Basel Convention's technical guidelines on ship dismantling state that the primary block 
breaking area of a dismantling facility should be  equipped with adequate impermeable bottom 
protection (containment) and a sy stem for pumping, draining and storage, and by this indicate 
that shipbreaking on a sandy beach is not compatible with environmentally sound management.
49 
The draft Ship Recycling Convention does not envisage an explicit ban on beaching, even 
though it would be difficult (if not impossible) to  fulfil also this Conve ntion's requirements on 
pollution prevention and safe waste manageme nt with the primitive operating method. The 
Japanese draft of Guidelines for safe and en vironmentally sound ship recycling cautiously 
acknowledges this difficulty by stating that "beaching method should not be recommendable 
for facilities to be newly established".50 The government of India and South Asian operators 
nevertheless have indicated that they inte rpret the draft Convention as allowing the 
continuation of beaching practi ces in the existing yards. 
Impacts: 
A prohibition for EU-flagged ships to go fo r dismantling to beac hing facilities would 
therefore mean a clear break with established practices. The environmental and social impacts 
would potentially be similar to those of full su bsidies to achieve high compliance with the 
Waste Shipment Regulation for EU -flagged ships (see above 6.2.1.1).  
If a ban on beaching could be enforced effectiv ely for EU-flagged ships, owners would have 
to use recycling facilities with a higher stan dard (drydock, pier-bre aking or slipways). 
Alternatives with sufficient capacity would be available in Turkey, China and to a lesser extent in the EU. It is also possible that th e Pipavav dockyard in India, which was built with 
Japanese subsidies as a model ship recycling f acility but due to the competitive disadvantage 
turned to shipbuilding instead, might revert to  its original purpose, and that some beaching 
operators could invest in jetties and concrete surfaces to upgrade their yards.  
As a consequence of using higher-standard facilitie s, the cost of ship re cycling would increase 
by at least 150 $/ldt and thus re duce the current revenue for the sa le of a scrap ship by approx. 
one fourth (see above 6.2.1.1). European facilities  might acquire a small share of this market, 
although it is probable that the vast majority of shi powners would choose the cheaper 
facilities in Turkey or China fo r the dismantling of their ships. 
However, overall the ban on beaching would not have a great effect because shipowners 
would have a much easier and ch eaper alternative by simply cha nging flag, which is a legally 
acceptable practice. In view of the considerable financial advantage it is likely that the large 
majority of owners would choose to do this at least some time before they openly show their 
readiness to recycle a ship. 
7.4.2.5.  6.3.2.5 Obligation for EU-flagged ships to  go to certified facilities for 
dismantling 
Independent of the idea  of an EU-specific cer tification and audit sche me (see above 6.2.2.2), a 
proposal based on discussion papers by EM SA to include provisions on a voluntary 
certification and audit scheme for ship recycling facilities in th e draft Convention is currently 
                                                
 
49 UNEP/CHW.6/23, published at http://www.basel.int/m eetings/cop/cop6/english/Report40e.pdf#vi24, at 
p. 70. 
50 IMO document MEPC 56/3/4 of 6 April 2007, Annex I, no. 2.  
 
EN 48   EN under discussion in the IMO. This is meant as a mechanism to ensure a higher level of 
transparency and a more harmonised and eff ective implementation of  the requirements for 
ship recycling facilities.  
The provisions on auditing and certification of dismantling facilities are still under discussion 
at IMO level. Depending on the outcome of those discussions the Commission will examine how it can be ensured that ships flying the flag s of EU Member States go for dismantling to 
certified and audited facilities
.  
Flag states are generally free to  take more stringent measures than those foreseen in IMO 
conventions and lay down additional rules for ships flying their flag, in order to protect human health or the environment.  
A legal requirement for ships to go to certified and audited facilities for dismantling would be 
less rigid than a total ban on beaching and more in  line with the certificate-based approach of 
IMO conventions and resembling the existing vol untary audit scheme of IMO for flag state 
administrations. It has more potential to gain acceptance among shipowners and recycling 
yard operators, and would thus be more readily enforceable and having a generally positive impact. An EU rule to that e ffect would carry more weight in  the international arena than 
purely national legislation and would give the certification a nd audit scheme a chance of 
success.  
Environmental and social impacts: 
The audits under the scheme would look into th e environmental and safety performance of 
ship recycling facilities and thus establish whet her they comply with the requirements of the 
Ship Recycling Convention. A dditional criteria would be pr ovided by the envisaged IMO 
Guidelines on ship recycling and by the forthc oming ISO 30000 standards.  Certificates would 
only be granted to facilities which are in full  compliance with the Conve ntion. If the approach 
suggested by the EMSA study on certification sy stems is followed, beaching facilities would 
not as such be excluded from a certificate but would have to show that they have improved 
infrastructure and operating methods to a leve l where they can fully meet the Convention 
requirements. This would give South Asian opera tors an incentive to u pgrade their facilities 
and reduce the environmental and health impacts of the activities on the beaches. 
Economic impacts: 
Audits and certificates under the scheme would mean an additio nal administrative burden for 
ship recycling facilities on top of  the authorisation by a competent authority that is necessary 
under the draft Convention. In theory, there shou ld be no additional costs for the upgrading of 
facilities compared to those re quired already by the Conventi on itself. In practice, however, 
the impact to be expected from audits and cer tificates by an independent third party is that 
they ensure more effectively than the auth orisation an upgrading to a good performance 
standard. For South Asian beaching facilities the costs of this are estimated in the range of 
approx. 50 $/ldt (cf. above 6.1.2).  
For European, Chinese and probably also Turkis h facilities additional investments on account 
of the audit scheme would, as a rule, not be n ecessary. The costs of a udit and certification are 
not likely to be higher than  50-100,000 € (see above 6.2.2.2). The certificate could serve to 
raise the profile of the faciliti es that have acquired it and t hus improve business opportunities, 
especially if it is entered as information into  a worldwide list of ship dismantling facilities 
published by the IMO or the EU. 
 
EN 49   EN For shipowners the impact would not consist in administrative burden - as the procedures 
(notification of selected facility to the flag State, ship recycling pl an etc) would follow the 
IMO model - but in a reduction of profit for th e sale of the ship in accordance with the 
improved performance standard of the recycling facility. 
7.4.2.6.  6.3.2.6 List of ships ready for scrapping 
The European Parliament in its Resolution of 21 May 2008 suggested that the Commission 
should compile and maintain a list of seagoing sh ips which are likely to be scrapped within a 
few years and to envisage mechanisms where by such ships are considered as "pre-waste 
ships". This is meant primarily to promote an effective implementation of the current Waste Shipment Regulation. It would, however, go beyond existing waste legi slation, since the 
register and the consequential monitoring obliga tions for Member States would target ships 
that are not yet "waste". 
The actual technical and le gal feasibility of a list of ships ready for scrapping is uncertain and 
shall be further assessed by the Commission taking into account the pro cedures contained in 
the future Ship Recycling Convention.  
Although information about the age and condition of ships is to some extent available already 
now through maritime databases, its dissemina tion and use by the Commission, EMSA and/or 
Member States' authorities would indeed  require an explicit legal basis.  
Moreover, there does not seem be a simple way to effectively target the ships ready for 
scrapping. Even though the likelihood that a me rchant ship will be scrapped increases 
significantly beyond the age of 25 years, it can still vary c onsiderably depending on the 
category and individual quality of a vessel.  
The Commission will therefore laun ch a study to assess the rele vance of criteria like the poor 
standard qualifying for a phase-out  (e.g. single-hull oil tankers), special risk factors (such as 
prior accidents) or an age approaching the scrapping average.  
This study will also assess how such a list co uld improve the enforcement of the Waste 
Shipment Regulation for example for further insp ections. In view of the high number of older 
ships that call at EU ports - approx. 1300 per week  and thus one in four ships were beyond 25 
years in 2006 - inspections re quiring a lengthy de tention should be too burdensome and 
should not contravene international obligations  of port states not to cause undue delay for 
ships visiting their port. Another option which ca n be examined by the future study is that of 
introducing a "label" for high qua lity ships which would provide incentives to ship-owners 
buying these ships.  
Impacts:  
The obligation to report the age of a ship to national and EU authori ties would not as such 
mean additional burden for shipowners, as this information is already today part of the IMO ship identification system and entered into various databases. The additional administrative burden induced by the creation and update of the list will be further assessed by the Commission. , Additional inspections might entail  delays and costs for operators of older 
ships calling at EU ports. In  2006 the number of such merchant ships (>500 GT, >25 years) 
was between 1,200 and 1,500 per week; the number of calls amounted to 1,800-2,800 per week all over the EU.
51 The frequency of additional checks and thus the administrative burden 
is, however, difficult to quantify as older ships are anyway more subject to inspections under 
                                                 
51 Data compiled by EMSA from Equasis database. 
 
EN 50   EN the new risk-based system of port state contro l in the EU, and the envisaged pre-waste checks 
would probably overlap w ith these inspections.  
A side-effect of any such regime  might be that ships beyond the age limit or with special risk 
factors would avoid EU ports. This could contribute to higher maritime safety in EU waters, since older ships are more prone to accidents and causing marine pollution than modern ones. 
A DNV study of 2004, for instance, revealed a significant rise in accident frequency when 
ships turn 15 years old.
52 Even India recently banned chartere d vessels that are older than 25 
years from its waters in the monsoon season for fear of accidents.53 
An impact on consumer prices due to the costs of inspections, additional port fees for older 
ships or a scarcity of shipping volume is altogeth er not likely, in view of the current boom in 
shipbuilding. Negative impacts on trade or the competitive position of EU ports are not to be expected in most of Europe but  could occur for transit ports in the Mediterranean where non-
EU ports might offer an alternative.  
7.4.3.  6.3.3 Stricter enforcement of th e Waste Shipment Regulation 
EU measures focusing on better implementa tion of the current EC Waste Shipment 
Regulation (WSR) and its application to ships might  be considered partic ularly for the interim 
period until the new international regime becomes fully effective.  
Impacts of the proposed measures 
A guidance document on the application of the WSR to end-of-life ships would not have 
binding force but clarify the Commission's position on this legal question and instruct Member States' authorities on the best ways to take action agains t ships in their ports. Public 
dissemination would raise awar eness further and prevent ope n contraventions of the 
Regulation. The effect in practice would, however , be limited, as the application of the WSR 
ends outside EU territory and thus can be eas ily avoided by a shipowner's decision to send a 
ship for dismantling once it is outside EU wate rs. Already today shipowners' associations are 
well aware of the Commission's legal view, and i ndividual owners make considerable efforts 
to hide any intention that they may have of  sending a ship for scrapping from an EU port. 
A specific project of the EU implementatio n and enforcement network IMPEL and its 
"TransFrontier Shipment of Waste" (TFS) clus ter on end-of-life ship s would intensify the 
awareness-raising in competent authorities and help to build cap acity by exchanging 
information on best practices. The effect iveness would, however, depend on active 
participation of the major flag and port states  in the EU (GR, MT, CY, IT, UK/Gibraltar). A 
project of this type would need  public funding from the EU and/or Member States in the 
range of at least 100,000-200,000 €. 
Infringement proceedings against reluctant Me mber States can provide a strong additional 
incentive for compliance with the current law but would be rare due to the above-mentioned 
reasons. 
Increased cooperation with countrie s of destination (recy cling states) for the application of the 
Basel Convention to ships is likely to be di fficult in nearly all cases, except for Turkey. 
Cooperation with transit states would focus in particular on Egypt, due to the crucial 
importance of the Suez Canal for th e transfer of end-of-life ship s from Europe to South Asia. 
                                                
 
52
 http://www.dnv.com/press_area/press_releases/2 004/25percentofallshipsrepresent51percentofa
llshipaccidents.asp 
53 Lloyd's List of 19 May 2008. 
 
EN 51   EN There is a potential for raising the effectiveness of the Basel Convention system of controls if 
Egyptian authorities can be convinced that th is would have financia l advantages for the 
country and not create additional cost risks due to abandoned scrap ships. 
7.4.4.  6.3.4 Anticipatory effects of legislation 
For both the implementing as well as the complementing EU legislation anticipatory effects 
are possible in the short and medium term until its entry into force. These impacts can go in 
both directions: On the one hand, certain prov isions of the forthcoming regime on ship 
dismantling might be implemented voluntarily by  industry, especially where this can produce 
competitive benefits (e.g. early commissioning of surveys for the Inventory of Hazardous 
Materials). On the other hand, some shipowne rs might seek to avoid expected economic 
burdens by selling their end-of-lif e ships quickly to sub-standard  recycling facilities. Negative 
anticipatory effects can be limited to some extent by a mix of voluntary measures (such as organised public campaigns and voluntary agreemen ts) and an increased effort to enforce the 
rules of the current Waste Shipment Regulation. 
7.4.5.  6.3.5 Summary Option 3 
The impacts of the actions under Option 3 are summarized in the following table: 
Table 8: EU legislative measures on ship recycling and their impacts 
Measure Positive impacts 
Affected group or concern: 
Likelihood / intensity  Negative impacts 
Affected group or 
concern:  
Likelihood / intensity  Recommended 
selection 
Measures to implement the IMO Ship Recycling Convention    
Inventory of Hazardous 
Materials, surveys and 
certificates Early harmonization of safety 
rules in EU would  
- establish level playing field  
- reduce costs for shipowners + shipyards 
- increase effectiveness of health 
+ safety controls:  medium / medium  No additional costs in relation 
to baseline (IMO Convention) Accept  
Requirements for ship 
recycling facilities No major impacts, potential 
reduction of costs for 
Management Plan No additional costs in relation 
to baseline (IMO Convention) Accept  
Information duties of 
recycling states Transparency, more effective 
implementation:  
 medium / medium  Additional administrative 
burden for MS: 
 medium / low  Accept  
Reporting requirements 
for shipowners + 
recycling facilities No major impacts, potential 
reduction of costs by rule on 
single contact point No additional costs in relation 
to baseline (IMO Convention) Accept  
Complementing 
measures     
 
EN 52   EN Measure Positive impacts 
Affected group or concern: 
Likelihood / intensity  Negative impacts 
Affected group or 
concern:  
Likelihood / intensity  Recommended 
selection 
Extension of rules to 
government vessels - Environment + workers' safety 
in South Asia,  
- Jobs + revenue in EU recycling 
industry:   medium / medium 
(higher if additional rules on 
sale of ships)  Costs for EU navies:  
medium  / medium  
Environment + workers' safety 
in EU: low / low 
Jobs + revenue in South Asian 
facilities:  medium/low  Accept  
More extensive bans on 
hazardous materials Marine environment : 
 high / high 
Workers' safety + health:  
 high / medium  Interference with EU product 
legislation: 
 high / high 
Competitive position of EU 
ship suppliers: 
 medium / high 
Effectiveness of risk 
investigations: 
 medium / medium Reject 
Stricter pre-cleaning 
obligations for EU-
flagged ships Environment + workers' safety 
in South Asia, low / medium  
- Jobs + revenue in EU recycling 
industry: low / medium   Costs for shipowners: 
 medium / medium  
Re-flagging of EU ships: 
 high / medium  
Additional risks of accidents en 
route + for safety/ environment 
in SouthAsia : 
 low / medium Reject  
(as ineffective) 
Ban on beaching for 
EU-flagged ships Environment + workers' safety 
in South Asia, low / medium  
- Jobs + revenue in EU recycling industry: low / medium  Costs for shipowners:  
 low / medium  
Re-flagging of EU ships: 
 high / medium  Reject  
(as ineffective) 
Obligation for EU-flagged ships to use 
only certified facilities  Environment + workers' safety 
in South Asia: medium  / medium  
- Jobs + revenue in EU recycling 
industry: low / medium 
- Jobs + revenue in class 
societies : 
medium / medium  Costs for shipowners + 
recycling facilities: 
medium / medium 
Re-flagging of EU ships: 
medium / medium  Accept  
List of ships ready for 
scrapping. Prevention of hazardous waste 
ship exports from EU:  medium / medium  
Marine safety + environment 
(prevention of accidents) in EU: medium / medium 
Environment + workers' safety 
in South Asia:  low / medium  Administrative burden for 
shipowners:   low / low (higher for owners of 
older ships)  
Admin. burden for authorities:  
 medium / medium   
Loss of revenue for EU transit 
ports in the Mediterranean:   medium / medium  Accept  
 
EN 53   EN Measure Positive impacts 
Affected group or concern: 
Likelihood / intensity  Negative impacts 
Affected group or 
concern:  
Likelihood / intensity  Recommended 
selection 
WSR enforcement measures     
Guidance document on 
waste ships Prevention of hazardous waste 
ship exports: medium / medium   
Environment + workers' safety 
in South Asia:  low / medium  Administrative burden for EU 
+ Member States: high / low  Accept 
IMPEL-TFS project Preven tion of hazardous waste 
ship exports: medium / medium   
Environment + workers' safety 
in South Asia:  low / medium  Administrative burden for EU 
+ Member States: high / low  Accept 
Infringement 
proceedings Prevention of hazardous waste 
ship exports: medium / high   
Environment + workers' safety 
in South Asia:  low / medium  Costs for EU + MS: low / low  Accept 
Cooperation with third 
countries Prevention of hazardous waste 
ship export, transit and import: 
 low / medium  (countries of 
destination), medium / medium  
(Egypt)  
Environment + workers' safety 
in South Asia:  low / medium  Administrative burden for EU 
+ Member States:  
 high / medium  Accept 
 
7.5. 6.4 Impacts of Option 4: In tegrated policy approach  
Under Option 4, EU legislation to implement and complement the Ship Recycling Convention 
would be combined with suitable non-legi slative measures and actions for a better 
enforcement of the EC Waste Shipment Regulati on, in order to reach ma ximum effect without 
creating unnecessary  economic burden. 
The impacts of the legislative and enforcement measures that would be at the heart of the 
policy are explained above under 6.3., the impacts of the select ed measures to encourage 
voluntary action under 6.2.1.2, 6.2.2 and 6.2.3. 
An extensive OECD study analysed the impact s on environmental effectiveness and economic 
efficiency of using an “instrument mix” approach , rather than a single instrument, to address a 
given environmental problem54. It outlined the main arguments for using such instrument 
mixes, and the instrument mixes currently in use with supporting case studies. The study 
shows that policy mix approaches are particul arly useful when problems are of a "multi-
aspect" nature, when instruments can mutually  support each other, and when addressing 
problems of failures in markets. In particular  mixes can be effectiv e in reducing compliance-
cost uncertainty, enhance enforcemen t and reduce administrative costs.   
                                                 
54 Instrument Mixes for Environmental Policy, OECD, May 2007.  
 
EN 54   EN On top of this, the added value of an integrated  concept for ship dismantling lies in a greater 
effectiveness already in the short term. Whereas EU legislation would ta ke at least 2-3 years 
to enter into force and measures to improve enforcement of current waste shipment law are 
likely to be effective only within EU waters , voluntary commitments by shipowners can have 
an immediate worldwide effect on the European -owned merchant fleet and by their economic 
weight help to improve environmental and soci al conditions in South Asia quicker than any 
other measure. Campaigns for voluntary action are also important to gain acceptance in the international maritime community and political  legitimacy for a higher or lesser degree of 
legal intervention at a later stage. They are re levant especially in the interim period until the 
new international regime ente rs into force, and can prepare the ground for its immediate 
effectiveness in practice.  
Other interactions are to be expected e.g. for the extension of the Convention regime to 
government vessels: This would promote its positive environmental and social impacts not only directly, but also by showi ng to private shipow ners that governments are not exempted 
and have to shoulder an equal, if not  heavier burden for their own ships. 
A potential risk for the effectiveness of the mi x of policies is that shipowners might feel 
unwilling to participate in voluntary actions if rigid enforcement measures or punitive 
sanctions are taken against them. The establishment of a list of "pre-waste ships" in particular 
might be regarded by industry as an unnecessary burden and weaken the readiness of shipowners' associations to enter into voluntar y agreements. This effect could be somewhat 
reduced or even reversed if the control of  prospective end-of-life ships would not be 
introduced from the start but made dependent  on whether voluntary cooperation has proved 
successful within a period of 1-2 years. 
Stronger enforcement measures would, on the ot her hand, to some extent limit negative 
anticipatory effects of the new legislation, especially if they  are combined with closer 
monitoring and "naming and shami ng" of shipowners who try to make quick profits from sub-
standard ship scrapping in the interim period. 
In addition, the balance of enforcement and voluntary actions would be likely to promote 
those operators that have already started to take action. They would also benefit from the 
obligation on owners of EU-flagged ships to use only certified and audited facilities for 
dismantling. In order to ensure the practical e ffect of this obligati on and prevent evasion by 
out-flagging, the Commission (and,  as far as possible, Member  States' governments) would 
have to make it a key element of the ca mpaign for voluntary agreements that would 
emphasise the advantages of the scheme for a good reputation of shipowners and the strong 
link to Corporate Social Responsibility. 
Table 9: Net impacts of measures unde r Option 4 (integrated policy approach) 
Measure Positive impacts 
 Negative impacts 
 Net impact / 
interference 
 
EU legislation    
Inventory of 
Hazardous 
Materials, surveys and certificates Early harmonization of 
safety rules in EU would  
- establish level playing field  
- reduce costs for 
shipowners + shipyards No additional costs in 
relation to baseline (IMO 
Convention) Medium positive impact; no 
interferences expected.  
 
EN 55   EN Measure Positive impacts 
 Negative impacts 
 Net impact / 
interference 
 
- increase effectiveness of 
health + safety controls:  
medium / medium  
Requirements for 
ship recycling facilities No major impacts, potential 
reduction of costs for Management Plan No additional costs in 
relation to baseline (IMO Convention) Minor positive impact; 
no interferences expected. 
Information duties 
of recycling states Transparency, more 
effective implementation  Minor additional burden 
for MS Minor positive impact;  
no interferences expected. 
Reporting 
requirements for shipowners + 
recycling facilities No major impacts, potential 
reduction of costs by rule on single contact point No additional costs in 
relation to baseline (IMO Convention) Minor positive impact;  
no interferences expected.  
Extension of rules to government vessels Less pollution + health 
impacts from contaminated warships in South Asia,  
More jobs + revenue in EU 
recycling industry: Higher costs / less revenue 
for EU navies 
Possibly minor impacts on 
jobs + revenue in South 
Asia 
Possibly minor impacts on 
environment + workers' safety in EU  Medium positive impact;  
no interferences expected. 
Obligation to use 
only certified 
facilities  Less pollution + health 
impacts from EU-flagged 
ships in South Asia 
More jobs + revenue in 
certified facilities, possibly 
in EU  
More jobs + revenue in 
classification societies : Higher costs / less revenue 
for shipowners, minor 
certification costs for recycling facilities 
Possibly out-flagging of 
EU ships Medium positive impact, if 
no major out-flagging. 
Combination with campaign for voluntary action/CSR 
necessary. 
List of ships ready 
for scrapping. 
 Prevention of hazardous 
waste ship exports from EU 
Contributes to protection of 
marine environment by less 
old ships + accidents in EU waters  
Minor impact on 
environment + workers' safety in South Asia More administrative 
burden for authorities and owners of older ships 
through monitoring + 
controls 
Loss of revenue for EU 
transit ports in the 
Mediterranean: Medium positive impact. 
Could interfere with encouragement for voluntary 
actions by shipowners. 
WSR 
enforcement measures     
- Guidance 
document on waste 
ships 
- IMPEL-TFS 
project 
- Infringement Better compliance with 
WSR / prevention of 
hazardous waste ship exports from EU  
Minor impact on 
environment + workers' More administrative 
burden for authorities and 
owners of older ships through additional 
controls  Medium positive impact. 
Rigid execution of measures 
could interfere with encouragement for voluntary 
actions. 
 
EN 56   EN Measure Positive impacts 
 Negative impacts 
 Net impact / 
interference 
 
proceedings safety in South Asia 
Cooperation with 
third countries 
(countries of 
destination + transit) Possibly better compliance 
with Basel Convention / 
prevention of hazardous 
waste ship export, transit and import: 
Possibly medium impact on 
environment + workers' safety in South Asia More administrative 
burden for EU + Member 
States Potentially medium positive 
impact, but successful 
cooperation with countries of 
destination not likely. No interferences expected. 
Measures for 
voluntary actions    
Streamlining 
existing shipping 
aids Better compliance with 
WSR / prevention of 
hazardous waste ship 
exports from EU  
Minor impact on 
environment + workers' safety in South Asia  
More jobs + revenue in EU 
recycling industry  
 Higher costs / less revenue 
for ferry operators:  
 Medium positive impact; no 
interferences expected 
Campaign for 
voluntary 
agreements with shipowners Possibly medium impacts 
on environment + workers' 
safety in South Asia, especially in short term  No major impacts Potential for positive impact, 
especially in short term. 
Interference by legislative + enforcement measures 
possible. 
Award scheme Minor impact on 
environment + workers' safety in South Asia  
Better reputation for EU 
shipowners + other participants 
Possibly more jobs + 
revenue in EU recycling industry Minor costs for EU + 
industry participants (but presupposes already high 
standards). Medium positive impact; if 
transparent + broad scheme no interferences expected. 
Technical assistance for developing 
countries Possibly medium impacts 
on environment + workers' safety in South Asia  
Possibly better conditions 
for local fishermen in South Asia:   Costs for EU funds  
Possibly distortion of 
competition with other 
recycling states  
 Potential for positive impact, 
dependent on cooperation from recycling state. No 
interferences expected. 
Participation in pilot projects Minor impacts on 
environment + workers' 
safety in South Asia No major impacts Minor positive impact. No 
interferences expected. 
Guidance for 
shipowners (global 
list of "green" Possibly medium impacts 
on environment + workers' No major impacts  Medium positive impact. No 
interferences expected. 
 
EN 57   EN Measure Positive impacts 
 Negative impacts 
 Net impact / 
interference 
 
dismantling 
facilities) safety in South Asia  
Possibly more jobs + 
revenue in EU recycling 
industry   
 
8. COMPARING THE OPTIONS  
7.1 Impact matrix 
The two tables below summarize the results of the previous impact analysis. The first table 
addresses short and medium-term impacts,  the second one long-term impacts.  
Short term is here defined as reaching until 2010, medium term until 2015 or until 
national transposition of the IM O Ship Recycling Convention. 
Table 10: Short and medium-term impacts 
Options Environmental Social Economic 
1) No policy 
change Pollution of water, 
soil + habitats in S. Asia would 
continue, probably 
increase - High safety hazards for 
workers in South Asia, 
- Criminal structures in 
shipbreaking yards would 
continue, probably 
increase. 
Low safety hazards for 
shipyard workers + 
seafarers probably 
unchanged - Revenues for shipowners, 
- Transport + consumer prices, - Revenues for yard owners in South 
Asia 
- Raw material supply for S. Asian 
economies,would continue probably at 
same level. 
Competitive disadvantages for EU 
recycling industry certain to continue . 
Losses for fishermen in South Asia 
unchanged, probably increasing . 
2) Emphasis on 
voluntary action A) With full 
subsidies for dismantling in EU/Turkey strong 
positive impacts for 
environment in S. Asia (no pollution 
by EU ships). A) With full subsidies for 
dismantling in EU/Turkey net positive 
impacts on jobs and 
workers' safety:- - Positive for workers' 
health in South Asia (less 
accidents) - Positive for jobs in EU 
- Negative for jobs in S. 
Asia. A) With subsidies net negative impacts: 
- High costs for EU taxpayers, 
- Negative impacts on economy in 
South Asia (revenue from recycling, 
steel supply), 
- Trade conflicts with S. Asia. 
- Positive impacts for EU recycling 
industry 
- Better conditions for fishers in S. Asia 
 B) Without 
subsidies limited positive impacts possible with 
dismantling of 
- state-aid ferries, - warships, 
- some other ships; 
+ through B) Without subsidies 
limited positive impacts on workers' safety + EU jobs possible with 
dismantling of 
- state-aid ferries, - warships, 
- some other ships; 
+ through development B) Without subsidies no major impacts 
expected.  
Costs for development aid, negative 
impacts on competition possible. 
 
EN 58   EN Options Environmental Social Economic 
development aid. aid. 
3) Compre-
hensive EU legislation A) Short term:  
- Negative anticipatory effects 
of legislation 
possible (more ships 
to sub-standard 
yards). 
- Compliance with 
WSR in EU waters improved through enforcement 
measures. 
B) From entry into 
force: - Limited positive impacts on 
environment in S. 
Asia (state-owned 
ships, audit 
requirement) 
- Higher compliance 
with WSR through list of ships. A) Short term:  
- Positive anticipatory effects possible 
(inventories). 
- Negative anticipatory effects possible (more 
ships to sub-standard 
yards). 
 
B) From entry into force: 
limited positive impacts on safety ensured (inventories, state-owned 
ships, audit requirement). 
New jobs in classification 
societies. A) Short term: higher administrative 
burden for authorities through enforcement measures. 
 
B) From entry into force net positive 
impacts: 
- More business for EU recycling 
industry (state-owned ships). 
- Higher costs for shipowners (in 
particular navies), shipyards + S. Asian recycling facilities but less administrative 
costs in EU due to harmonization. 
- New revenues for classification 
societies. 
- Higher administrative burden for 
authorities through monitoring of pre-waste ships. 
4) Integrated policy approach A) Short term:  
- Higher WSR compliance through 
enforcement 
measures. 
- More potential for 
improvements in S. Asia through 
voluntary action 
(2B). 
 
B) From entry into 
force of legislation: combined positive impacts of 2B) and 
3B). A) Short term:  
More potential for improvements on workers' 
safety + EU jobs through 
voluntary action (2B). 
 
B) From entry into force 
of legislation: combined positive impacts of 2B) and 3B).  A) Short term:  
- More administrative costs through WSR enforcement measures. 
- Costs for development aid, negative 
impacts on competition possible. 
 
B) From entry into force of legislation: Combined impacts of 2B) and 3B).  
 
 
Table 11: Long-term impacts 
Options Environmental Social Economic 
1) No policy 
change Limited positive 
impacts of IMO 
Convention (less 
pollution in S. Asia). 
Delays through 
diverging MS 
implementation.  Limited positive impacts 
of IMO Convention on 
workers' safety.  
Delays through diverging 
MS implementation.  
New jobs in classification 
societies. Net negative impacts: 
Limited investment costs for shipowners, 
shipyards + S. Asian recycling facilities. 
Additional costs for EU shipowners + 
shipyards through diverging MS implementation. 
Minor increase of transport + consumer 
prices possible. 
Competitive disadvantages for EU 
 
EN 59   EN Options Environmental Social Economic 
recycling industry certain to continue . 
Positive impacts for S. Asian fishermen 
possible. 
2) Emphasis on voluntary action A) With subsidies 
same strong impacts as in short term 
(Table 3, 2A). A) With subsidies same 
impacts as in short term (Table 3, 2A).. A) With subsidies same impacts as in 
short term (Table 3, 2A). 
 B) Without 
subsidies positive 
impacts on 
environment in S. Asia slightly higher 
than in 1) (state-aid 
ferries, development aid). B) Without subsidies 
positive impacts on 
workers' safety slightly 
higher than in 1) (state-aid ferries, development aid). 
New jobs in classification 
societies. B) Without subsidies 
- essentially same impacts as in 1) 
- Costs for development aid, negative 
impacts on competition possible. 
3) Compre-hensive EU 
legislation Limited positive 
impacts on 
environment in S. 
Asia, higher than in 
1) (state-owned 
ships, audit requirement) 
Higher compliance 
with WSR through 
list of ships and 
enforcement measures. Limited positive impacts 
on workers' safety, higher 
than in 1) (inventories, 
state-owned ships, audit 
requirement).  
New jobs in classification 
societies. Net positive impacts: 
- More business for EU recycling 
industry (state-owned ships). 
- Higher costs for shipowners (in 
particular navies), shipyards + S. Asian 
recycling facilities but less administrative 
costs in EU due to harmonization. 
- New revenues for classification 
societies. 
- Positive impacts for S. Asian fishermen 
possible  
- Higher administrative burden for 
authorities through monitoring of pre-waste ships + enforcement measures. 
4) Integrated policy approach Positive impacts on 
environment in S. Asia higher than in 
other options 
(except 2A), due to combination of 
measures: 
- Binding rules on state-owned ships, 
audit requirement; 
- Additional 
voluntary action for merchant ships; 
- Development aid. 
Higher compliance 
with WSR through list of ships, 
guidance, 
enforcement measures, 
streamlined state 
aids. Positive impacts on 
workers' safety higher than in other options 
(except 2A), due to 
combination of measures. 
New jobs in classification 
societies. Net positive impacts: 
- More business for EU recycling 
industry (warships, state aid ships). 
- Higher costs for shipowners (in 
particular navies), shipyards + S. Asian recycling facilities but less administrative costs in EU due to harmonization. 
- New revenues for classification 
societies. 
- Positive impacts for S. Asian fishermen 
possible.  
- Higher administrative burden for 
authorities through monitoring of pre-waste ships and more WSR enforcement measures. 
- Costs for development aid, negative 
impacts on competition possible. 
 
 
EN 60   EN 8.1. 7.2 Conclusion 
The analysis in chapter 6 has shown that Option 4 (integrated policy approach) would 
probably have the largest positive overall impact s. While Option 2, if full subsidies are used 
for clean ship dismantling in the EU or Turkey, is likely to produce the quickest and strongest 
positive effects for environment and workers' health in South Asia and strengthen business and job prospects in the EU, it involves also a high burden for EU taxpayers and would lead 
to trade conflicts with the South Asian recycli ng states. The other options avoid these negative 
consequences, but are also less effective in keeping European end-of-life ships away from 
sub-standard yards in Asia. Option 4 offers  an appropriate way out of the dilemma, by 
combining the most effective legal proposals and the enforcement measures under option 3 
with the more realistic vol untary actions under option 2.  
This option would  
• in the short term, until legislation is in fo rce, improve enforcement of current waste 
shipment law and prevent the direct export of hazardous waste ships from the EU to 
developing countries; 
• in the medium and long term provide a comprehe nsive set of rules to make the recycling of 
EU ships safer and more environmentally s ound worldwide by an early implementation of 
the forthcoming IMO Convention a nd complementing measures; and 
• in parallel encourage voluntar y actions by shipowners to im prove the worldwide practice 
of ship dismantling already in  the short term and support the transition process in general. 
• In this way, the integrative approach is most  likely to achieve a high level of compliance 
with the EU acquis  and to reduce significantly be fore 2015 the negative impacts of 
shipbreaking on human health and the environm ent, especially in South Asia, without 
creating excessive economic burdens. It is thus the preferred option. 
8.2. 8. Monitoring and evaluation 
Monitoring and evaluation would be an important part of an EU strate gy on ship dismantling. 
Progress on the objectives should be monitored to check the implementation and effectiveness 
of the measures and their contribution to  the objectives of other EU policies. 
Indicators of the progress in this  context could be in particular: 
• the number of ships leaving EU ports and goi ng to developing countries for dismantling; 
• the number of ships whose departure to de veloping countries was prevented (e.g. by 
detention); 
• the number of ship recycling facilities that are authorized, audited and certified in 
compliance with the draft Ship Recycling Convention and the certification scheme under 
the envisaged EU legislation; 
• the number and percentage of EU-flagged ship s and formerly EU-flagged ships dismantled 
in such facilities;  
• the overall percentage of ships dismantled in higher-standard facilities worldwide; and 
• data on accidents, occupational diseases and e nvironmental pollution associated with ship 
dismantling, as available. 
Taking these indicators into account, it is nece ssary to review the EU policy concerning ship 
dismantling on a regular basis (every 3-4 years) and to submit regular 
 
EN 61   EN implementation/progress reports to the Europe an Parliament and the Council. The first of 
these reports should be submitted and published in 2012, after completion of approximately 
half of the period envisaged in  the specific policy objectives.  
Information on "end-of-life" sh ips moving in European waters could come in through the 
continual monitoring of these ships by Member St ates' authorities, possibly assisted by the 
European Maritime Safety Agency (EMSA). In addition, cases of (p revented) exports of 
hazardous waste ships should be contained in the annual implementation reports of Member States under the EC Waste Shipment Regulatio n. Other data on ships and their dismantling 
could be drawn from existing maritime data bases that are used by EMSA, from the 
observation of press reports and contact with ke y experts in the Member States and recycling 
countries.  
From the entry into force of EU legislation implementing the Ship Recycling Convention, the 
mandatory annual reports of Member States on ship recycling facilities and recycled ships 
could be used. The same would apply to other Parties of the Ship R ecycling Convention when 
this instrument becomes effective; these data would be disseminated by the IMO. In view of 
probable delays, gaps and inaccuracies it is highly recommended to contract a study for the preparation of each policy review.  
Annex I: List of references 
Annex II: Report on the public consultation on the Green Paper on better ship dismantling  
 (of 15 October 2007)  
 
EN 62   EN 8.3.  
8.4. Annex I: List of references 
I. European Community legislation and documents  
Green Paper on better ship dismantling COM (2007)  269 final, with Annex and references in 
Commission Staff Working Document SEC (2007) 645. 
Regulation (EC) No 1013/2006 of the European Parliament and of the Council of 14 June 
2006 on shipments of waste, OJ L 190, 12.7.2006, p. 1 ("Waste Shipment Regulation"). 
Results of the stakeholders' consultation on the Green Paper on better ship dismantling http://ec.europa.eu/environment/was te/ships/pdf/repor t_consultation.pdf. 
Commission Communication ‘General  principles and minimum st andards for consultation of 
interested parties by the Commission’ COM (2002)704, published at: http://ec.europa.eu/civil_societ y/consultation_standards/index_en.htm
. 
European Parliament Resolution on Commissi on's Green Paper on better ship dismantling 
http://www.europarl.europa.eu/sides/ge tDoc.do?pubRef=-//EP //TEXT+TA+P6-TA-2008-
0222+0+DOC+XML+V0//EN&language=EN . 
Regulation (EC) No 850/2004 of the European Parliament and of the Council of 29 April 
2004 on persistent organic po llutants and amending Direc tive 79/117/EEC, OJ L 229, 
29.6.2004, p. 5. 
Regulation (EC) No 782/2003 of the European Parliament and of the Council of 14 April 
2003 on the prohibition of organotin compounds on ships, OJ L 115, 9.5.2003, p. 1. 
Regulation (EC) No 2037/2000 of the European Parliament and of the Council of 29 June 
2000 on substances that deplete th e ozone layer, OJ L 244, 29.9.2000, p. 1. 
Directive 2006/122/EC of the European Parlia ment and of the Counc il of 12 December 2006 
amending for the 30th time Council Directive 76 /769/EEC on the approximation of the laws, 
regulations and administrative pr ovisions of the Member States relating to restrictions on the 
marketing and use of certain dangerous subs tances and preparations (perfluorooctane 
sulfonates), OJ L 372, 27.12.2006, p. 32.  Directive 2005/59/EC of the Eu ropean Parliament and of th e Council of 26 October 2005 
amending for the 28th time Council Directive 76 /769/EEC on the approximation of the laws, 
regulations and administrative pr ovisions of the Member States relating to restrictions on the 
marketing and use of certain dangerous s ubstances and prepara tions (toluene and 
trichlorobenzene), OJ L 309, 25.11.2005, p. 13. Commission Directive 1999/77/EC of 26 July 1999 adapting to technical progress for the 
sixth time Annex I to Council Directive 76/ 769/EEC on the approximation of the laws, 
regulations and administrative pr ovisions of the Member States relating to restrictions on the 
marketing and use of certain dangerous substa nces and preparations (asbestos), OJ L 207, 
6.8.1999, p. 18. Commission Staff Working Document SEC (2005) 1497 of 23.11.2005 (Impact Assessment 
on the draft Flag State Directive). Community Guidelines on State Aid for E nvironmental Protection, OJ C 82, 1.4.2008, p. 1 
(paras 126-131). 
 
EN 63   EN II. Studies 
COWI/DHI for the European Commission, DG Environment, Study on "Ship dismantling and 
pre-cleaning of ships", Final report of J une 2007, published on the Commission website at 
http://ec.europa.eu/enviro nment/waste/ships//index.htm . Further references are to be found on 
the same webpage. COWI for the European Commission, DG Tran sport and Energy, Study on "Oil Tanker Phase 
Out and the Ship Scrapping Industry", 2004, published at: http://europa.eu.int/comm/tran sport/maritime/safety/doc/prestige/2004_06_scrapping_study_e
n.pdf  
Department for Environment, Food and Rura l Affairs (DEFRA), "Regulatory Impact 
Assessment for the UK Ship Recycling Strategy", February 2007, published at 
http://www.defra.gov.uk/ENVIRONM ENT/WASTE/strategy/ship.htm . 
Report of the French Inter-departmental Committee on the Dismantling of Civilian and Military End-of-Life Ships ("MIDN report"); Fr ench original (with annexes) and English 
translation published at: http://www.sgmer.gouv.fr/article.php3?id_article=52
 
III. Databases 
DG TREN / Lloyd's Register database 
EMSA / LMIU (Lloyd's Marine Intelligence Unit) database 
IV. International/intergovernme ntal organisations documents 
Draft Ship Recycling Conven tion, 21 January 2008, published at: 
http://www.basel.int/ships/commentsOEWG6/oewg6.html . 
Basel Convention: Technical guidelines for th e environmentally sound management of the 
full and partial dismantling of ships (adopted December 2002);  ILO: Safety and health in shipbreaking. Guide lines for Asian countries and Turkey (October 
2003); IMO guidelines on ship recycling (December 2003). Draft Pocket Manual on Implementation of Gr een Ship Recycling, prepared by the Danish 
Environment Protection Agency, December 2005, http://www.basel.int/ships/compilation.html#7
. 
U.S. EPA “A Guide for Ship Scrappers – Tips for Regulatory Compliance”, 2000, both 
published on the website of the Basel Convention at http://www.basel.int/ships/compilation.html#7
.  
IMO document MEPC 57/3/19 of 8 February 2008. EFTA Surveillance Authority, Impact assessment of a propos al for prohibition on certain 
hazardous substances in consumer products (Sept. 2007), published at www.eftasurv.int. 
Press release Basel Action Network (BAN) of 16 May 2008, published at 
http://www.ban.org/ban_news/2008/080516_vict ory_for_proper_ship_scrapping.html. 
UNEP/CHW.6/23, published at http://www.basel.int/meetings/cop/ cop6/english/Report40e.pdf#vi24
 . 
IMO document MEPC 56/3/4 of 6 April 2007, Annex I, no. 2.  Instrument Mixes for Environmental Policy, OECD, May 2007.  
 
EN 64   EN V. Other publications 
Md. M. Hossain / M. M. Islam, Ship Breaking Activities and its Impact on the Coastal Zone 
of Chittagong, Bangladesh, 2006. YPSA, Workers in shipbreaking industries: A base line survey of Chittagong (Bangladesh), 
2005. 
VI. Press articles 
MailOnline of 2 July 2008 "The forthcoming di smantling of the French aircraft carrier 
Clemenceau in Hartlepool (UK) is  reported to preserve or create about 170 jobs in the facility 
of Able UK", http://www.dailymail.co.uk/news/worldne ws/article-1030971/ The-toxic-ship-
shunned-world--lets-bring-Britain.html# . 
Lloyd's Register - Fairplay of 1 March 2005. Lloyd's List of 8 September 2006. TradeWinds of 28 March 2008: "Bangladesh snaps up vintage Naftomar tanker". TimesOnline of 2 July 2008: "Hartlepool to break up France's toxic flagship Clemenceau". 
Lloyd's List of 19 May 2008. 
VII. Other sources 
On-site investigations by IMO and EU experts in January 2008. 
J. Caldecott / A. Karim, Third Progress Report - Identification Mission fo r EC support in the 
area of Environment and Disaster Mana gement Bangladesh, 25 February 2008. 
Presentation to IMO National Workshop in Mumbai, 8-10 January 2008; data also published at: http://www.gmbports.org/env_issues.htm
 , Environment / Alang Sosia Shipbreaking Yard. 
 
EN 65   EN  
Annex II: Report on the public consultation on the Green Paper on "Better ship 
dismantling" (COM(2007) 269 final) 
The consultation on the Green Paper on "Better ship dismantling" closed on 30 September 
2007. In total, 44 responses were received in this period. 12 EU Member States, 2 local 
authorities, 6 NGOs, 14 industry a ssociations or companies an d 5 trade unions sent their 
comments, while 5 replies came from academia, media and others. Not all contributions answered directly to the questions put forward in the consultation paper;  2 stakeholders sent 
in information brochures on their activities and 3 stakeholders provided information on future 
projects or the ship dismantling situation in So uth Asia. Therefore, the relevant feedback can 
be counted from about 39 contributions. 
The feedback on the questions of the Green Paper can be summarised as follows: 
Question 1: How can the enforcement of current Community law (Waste Shipment 
Regulation) affecting end-of-life ships be impr oved? What is the best mix of measures to 
divert EU-flagged or EU-owned vessels to di smantling sites with high environmental and 
safety standards? 
The majority of the stakeholders consider that the Waste Shipment Regulation (WSR) is 
difficult to apply in this case and indicate that  a legally binding definition on when a ship can 
be considered waste is crucial. However, other stakeholders hold the view  that a definition is 
not necessary but that practical criteria to determine whether a sh ip is an end-of-life ship or 
not should be developed. In order to apply the WSR and guide the authorisation for import and export of waste, it is suggest ed that the EU should adopt it s own certification system, to 
be controlled by an EU authority. 
Concerning the measures to divert EU-flagged/ owned vessels to disman tling sites with high 
standards, it is suggested that the EU should co mpile a list of green re cycling facilities, and 
that authorities should apply stricter controls  to older ships and hold shipowners liable who 
would be fined if not dismantling the ships in adequate sites. It is also mentioned that 
voluntary commitments by shipowners could impr ove the situation. Some stakeholders point 
to the recent proposals in th e International Sta ndardization Organization (ISO) for an 
international standard ISO 30000 "Specificati ons for management systems for safe and 
environmentally sound ship recycling facil ities" and ISO 30003 "Req uirements for bodies 
providing audit and certifi cation of ship recycling management systems". 
Question 2: Would guidance on waste shipment ru les and definitions on end-of-life ships help 
to improve implementation of rules and busin ess practices, and what form should it take? 
Guidance and clear definitions are welcomed. Ho wever, most stakeholders express the view 
that guidance should be in line with the discussions at IMO le vel on a draft Ship Recycling 
Convention and accompanying guidelines. It is sugge sted that resources s hould be directed to 
improving such guidelines and implementing them at  an early stage. Guidelines on the "green 
passport", the "inventory of hazardous materi als" and the term "p roperly emptied" (of 
hazardous materials) are indicated as examples in this context. 
Question 3: What is the best way of steer ing the current negotiations on the IMO Ship 
Recycling Convention in order to improve ship dismantling practices globally? 
 
EN 66   EN National binding solutions can escape enforcemen t. Therefore it is generally seen as very 
important to support the work at IMO level to  establish a globally bi nding regime on ship 
dismantling. Many stakeholders also emphasise the necessity of cooperation with other 
international bodies (ILO, Basel Convention) and with the recycling states on this issue. A 
stronger coordination within th e EU is supported by severa l Member States and other 
stakeholders. There is limited suppor t for EU membership in the IMO. 
Question 4: Should the EU aim at  global environmental and sa fety standards under the IMO 
Convention that are comparable with EU standards? 
Most stakeholders are in favour of aiming at global environmental and safety standards that 
are compatible with EU standards, while at  the same time taking into account the special 
needs of developing countries. Se veral Member States point to  the necessity of a gradual 
improvement, in order not to endanger a worldwide agreement on common minimum 
standards.  
Question 5: How can the EU best ensure that  European ships are dismantled in a safe and 
environmentally sound way during the interim period before the IMO Convention becomes 
effective? What about ships owned by the pub lic sector? Will national strategies and 
voluntary commitments by ship-owners be su fficient? What additional measures would be 
needed at EU level? 
It is suggested that the EU should do its best  to reduce the transitional period (until the entry 
into force of the IMO convention). Various m easures improving transparency and awareness 
and the application of EU law are proposed. Ma ny stakeholders see a role for the EU in 
coordinating and supporting voluntary measures by shipowners. In addition, some Member 
States and NGOs are in favour of  EU legislation anticipating the entry into force of the IMO 
convention by incorporating its ex pected provisions. It is also  suggested that the EU should 
ensure strict public procurement rules for the dismantling of state-owne d ships and compile a 
list of the single hull oil tankers  that are to be phased out. 
Question 6: Should the EU and its Member States take an active role in increasing the EU's 
own ship recycling capacity, and how? 
In general stakeholders do not indicate that there is a need for increasing ship dismantling 
capacity in the EU but rather recommend the upgrading of existing facilities. Some Member 
States and commercial stakeholders point to th e possibility of stimulating the demand for EU 
capacity by restricting expor ts to non-OECD countries. It is also suggested that the EU could 
undertake research on issues like ships' inventories of hazardous waste, economic instruments 
to reflect the "polluter pays" principle, and th e coordination of calls fo r tender by European 
navies. 
Question 7: What measures and actions should the EU take to encourage South Asian states 
to introduce and implement higher environmenta l and safety standards for ship dismantling? 
Many stakeholders take the vi ew that the EU sh ould conduct public awareness campaigns and 
provide technical assistance to South Asian count ries. Also partnerships between shipowners 
and recycling facilities, such as between a leading EU shipping company and facilities in 
China, are seen as helpful and worth of encouragement from the EU. Guidance to shipbreaking countries for the implementation of the Basel Convention is also suggested. 
Question 8: What measures and actions should  the EU take to encourage ship-owners to 
direct end-of-life ships to dismantling sites with high environmental and safety standards? 
Direct high-level talks between the Commis sion and major stakeholders (e.g. shipping 
companies and associations) are suggested as an important means to encourage voluntary 
 
EN 67   EN action. There is some support for the establishm ent of an EU certifica tion system for clean 
ship dismantling (as long as it is compatible with the rules of the envisaged convention and 
not too bureaucratic) and for aw ards for exemplary green recy cling. Several stakeholders 
highlight the importance of Member States' leadership on environmentally sound dismantling of their own vessels. Other suggestions, apart from financial mechanisms mentioned below 
under 9), include stricter enforcement of wa ste shipment rules, the linking of maritime 
subsidies to the beneficiary's use of clean and safe dismantling facilities, and the setting up of 
pilot projects for clean ship dismantling. 
Question 9: How should the EU secure sust ainable funding for clean ship dismantling in 
accordance with the polluter pays principle, and what measures and actions should it take? 
The majority of stakeholders is of the opinion that the establishment of  a sustainable funding 
mechanism to ensure clean ship dismantling should  be in line with the pol luter pays principle. 
Several stakeholders refer to other EU legi slation on waste (end-of-life-vehicles, waste 
electrical and electronic equipmen t, batteries) where extended producer responsibilities have 
been established. It is suggested that in the cas e of ships, due to their long lifetime, a system 
of shared responsibility for shipyards and ship owners should be set up. Some stakeholders 
provide detailed suggestions for funding options (e.g. taxes to be levied on each new ship, 
port fees, yearly tax li nked to IMO registration, etc). The ge neral view is th at, if a ship 
dismantling fund is set up, it should be done at IM O level. Many stakeholders see the need for 
an EU study exploring su ch funding possibilities. 
 
EN 68   EN Glossary  
AFS Convention concerning harmfu l anti-fouling systems on ships 
COP Conference of the Parties CY Cyprus CSR Corporate Social Responsibility EC European Community ECSA European Community Shipowners' Associations EMAS European Union's Eco-Management and Audit Scheme  EMSA European Maritime Safety Agency  EU European Union GR Greece GT Gross tons HBCDD Hexabromocyclododecane  IA Impact Assessment ICS International Chamber of Shipping IHM Inventory of Hazardous Materials  ILO International Labour Organisation  
IMO International Maritime Organisation 
IMPEL European Union Network for th e Implementation and Enforcement of 
Environmental Law  
ISO International Organiza tion for Standardization 
LDT Light Displacement Tonnes  MEPC Marine Environment Protection Committee MIDN Report of the French Inter-departmenta l Committee on the Dismantling of Civilian 
and Military E nd-of-Life Ships 
MT Malta OECD Organisation for Economic  Co-operation and Development 
OHSAS Occupational Health and Safety Advisory Service  
 
EN 69   EN OJ Official Journal (of the European Union) 
OSPAR Convention for the Protection of the Marine Environment of the North-East Atlantic  
PCBs Polychlorinated biphenyls PFOs Perfluorooctane sulfonates SOLAS International Convention for the Safety of Life at Sea TBBPA Tetrabromobisphenol A  TBT Tributyl tin  TFS TransFrontier Shipment of Waste WSR Waste Shipment Regulation  UNEP United Nations Environment Programme UK United Kingdom