Opinion of the European Economic and Social Committee on the Green Paper on better ship dismantling COM(2007) 269 final
Date: 2007-12-13
Institutions: European Economic and Social Committee
Subjects: environmental protection, hazardous waste, international standard, maritime safety, occupational safety, public health, shipping policy, vessel, waste recycling

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Official Journal of the European Union

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Opinion of the European Economic and Social Committee on the ‘Green Paper on better ship
dismantling’

COM(2007) 269 final

(2008/C 120/08)

On 22 May 2007 the European Commission decided to consult the European Economic and Social
Committee, under Article 262 of the Treaty establishing the European Community, on the

Green paper on better ship dismantling.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing
the Committee's work on the subject, adopted its opinion on 31 October 2007. The rapporteur was
Mr Adams.

At its 440th plenary session, held on 12 and 13 December 2007 (meeting of 13 December 2007), the
European Economic and Social Committee adopted the following opinion unanimously.

1. Conclusions and Recommendations

1.1
The European Economic and Social Committee (EESC)
welcomes the Commission's proposal for action at both the
international and regional level to change, as soon as possible,
current unacceptable ship dismantling practices.

1.2
As presently structured the international ship dismantling
industry ranges from safe, well regulated, dry-dock facilities to
beaches where vessels are taken apart by hand with the
minimum of health, safety and environmental protection. Most
merchant shipping currently ends its life on one of
these
beaches in South Asia. There is a serious worldwide shortage of
dismantling facilities compatible with principles of environ-
mental and social sustainability.

1.3
The Committee is concerned that this situation will be
aggravated by the ‘bulge’ in the number of ships going out of
service in the next few years following the global phase out of
single hull oil tankers; the current back log of an estimated
15 million Light Displacement Tonnage (LDT) (1); and the recent
boom in shipbuilding. Part of the surplus vessels needing to be
disposed of in the coming years is a result of actions taken by
the International Maritime Organisation (IMO), prompted by the
EU to protect its own environment so the EU has a clear
responsibility for action.

1.4
It is noted that some ship owners do not make provision
in their operating costs for safe, contained, end-of-life ship
disposal though a large group (2) see the need for action and are
beginning to set in place voluntary measures.

1.5
It is also noted that although legal provision exists in the
EU which should prevent ships making a final voyage to be
dismantled at a location with inadequate facilities, this is easily
avoided. The EESC has consistently argued, most recently in
March 2007 in its Opinion on the green paper Towards a future
Maritime Policy for
that Member States should

the Union (3),

(1) European Commission,

Environment Directorate-General:

Ship

Dismantling and Pre-cleaning of Ships Final report June 2007.

(2) Members of ICS, BIMCO, ESCA, INTERTANKO, INTERCARGO, that

together make up a large part of the world's fleet.

(3) OJ C 168, 20.7.2007, p. 50.

promptly ratify international Conventions on maritime safety
and environmental protection and ensure that they are properly
enforced.

It is recognised that the dismantling of end-of-life vessels
1.6
is a complex issue involving an important contribution in jobs
and raw material resources which accrue to the developing
countries offering low-cost dismantling. At the same time, the
Committee acknowledges that structural poverty and other
social and legal problems in some areas of South Asia is
strongly linked to the absence or non-implementation of even
minimum standards of safety at work, minimum labour stan-
dards and environmental protection.

The EESC therefore recommends the following:

regime for

A strong international

1.7
the identification,
control and disposal of end-of-life ships should be established
through the IMO. This regime must have an equivalent level of
control as that found in the Basel Convention: incorporate all
relevant International Labour Organisation (ILO) standards; not
allow exemptions and prevent end-of-life ships with hazardous
waste going to countries that are not party to the convention
and which have inadequate facilities.

However, implementation of such an IMO agreement will

1.8
take several years, therefore:

— effective voluntary programmes by ship owners to minimise
disposal problems should be encouraged and supported;

— the EU should unequivocally apply its existing legislation by
enforcement of the Waste Shipment Regulation. Immediate
action should be taken to ensure that port states have the
power to declare a ship ‘end of
life’ and to support a
guidance document clarifying the terms ‘intent to dispose’
the
and

EESC also requests

state’. The

‘exporting

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Commission to urgently devise and implement additional
measures to prevent evasion, such as requiring bonds on
ships older than 25 years or specified as high risk and
linking continued subsidies for the shipping industry to
using ‘green’ ship dismantling and/or pre-cleaning facilities;
and

— the EU should develop a third party certification and
auditing scheme
and environmentally sound
dismantling facilities. This has been called for by the ship
owning industry and will help create a transparent,
level
playing field.

safe

for

1.9
The EESC strongly supports encouraging best-practice
ship recycling and the pre-cleaning of ships from gas and toxic
waste within the EU. A commitment by member states to deal
with all state-owned ships in this way and binding end-of-life
clauses when such ships are sold to third parties are initial
crucial steps in support of such an approach. Pre-cleaning
vessels before export will provide avenues for getting clean
secondary steel to South Asian destinations where the demand
is high. A pre-cleaning guidance document should be developed
for this purpose.

Providing financial and technical assistance to South
1.10
Asian countries to improve their facilities — at a minimum
converting beach operations to contained pier or dry-dock
handling and providing better safety and downstream waste
management
the worst
facilities — will mitigate some of
problems.

1.11
The EESC recognises that effective action on this issue
will involve extra costs. It supports the outline proposals by the
Commission for mechanisms to ensure that provision for such
costs become part of the normal operating costs of shipping. In
particular further action is urged by the IMO and ship owners,
to provide every ship with a recycling fund, either built up over
its working life or established as a bond when it is launched.
institutions are well-placed to structure and
Various financial
operate such measures. If such a fund is not made possible, the
EU should look into regional mechanisms such as port state
taxes or similar.

the EESC supports efforts, both through the EU, IMO and by
ship owners and builders.

2. Introduction

2.1
The context of the Opinion is international shipping and
the international shipment of waste. 200-600 large ships are
broken up each year and recycled for their steel and other raw
materials. Much of this takes place on tidal beaches in South
Asian countries, with little regard for workers' safety or environ-
mental protection. It is estimated that in the next eight years
some 5.5 million tonnes of hazardous materials will arrive in
these dismantling yards in end-of-life ships, notably oil sludge,
oils, paints, PVC and asbestos.

2.2
None of the sites used for ship dismantling on the Indian
sub-continent has containment to prevent pollution of soil and
water and the treatment of waste rarely conforms to even
minimum environmental standards. Due to the low level of
safety measures, high accident rates are prevalent and long term
health risks created through the workers handling toxic material
without adequate protection (4).

2.3
The transfer of end-of-life ships from industrial to devel-
oping countries is covered by international law on the shipment
of waste, and the export from the EU of vessels containing
hazardous materials is banned by the EU's Waste Shipment
Regulation. However, transfer to ship brokers and re-flagging
obscures ownership and responsibility issues making it difficult
to enforce existing legislation and allowing scope for irrespon-
sible owners to evade their obligations.

2.4
Part of the solution is to encourage greater capacity in
the EU. However, although this would be a positive step, and
could be taken up by naval and state-owned ships, it will be
unlikely to deal with more than a small percentage of the esti-
mated 105 million LDT that will go for dismantling by
2020 (5).

The green paper

2.5
is therefore urgently seeking ways
and comprehensively
cost-effectively
forward which will
improve standards in line with existing European and interna-
tional legislation as mentioned above.

3. Summary of the Green Paper

environmentally

sound management of

The conclusions of the November 2006 Council meeting
3.1
ship
that
were
dismantling was a priority for
the European Union. The
Commission had already set out its position in the Green Paper
on Maritime Policy of June 2006 (6) where a future EU maritime
policy should support initiatives at international level to achieve
binding minimum standards on ship recycling and promote the
establishment of clean recycling facilities.

1.12
Recycling-aware design, identifying existing hazards and
substituting as much toxic material as possible from ships when
they are built will, in the long term, have a positive effect and

(4) Young Power in Social Action (YPSA) report (2005) on workers in ship-

breaking industries.
(5) European Commission,

Environment Directorate-General:

Ship

Dismantling and Pre-cleaning of Ships Final report June 2007.

(6) COM(2006) 275 final, Brussels 7.6.2006.

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This Green Paper presents

3.2
to
continue and intensify the dialogue with Member States and
stakeholders, prepare the ground for future action and invites
responses to a series of leading questions which highlight the
main problems.

fresh ideas

in order

The main purpose of this exercise is the protection of
3.3
the environment and of human health; the objective is not to
artificially bring back ship recycling business volumes to the EU,
thus depriving countries in South Asia of a major source of
revenue and necessary materials. The final objective is to reach
globally sustainable solutions.

competitors

At present there is ship recycling capacity conforming to
3.4
environmental and safety standards, to handle, at most, 2 million
tonnes per year worldwide — 30 % of the predicted total scrap-
ping demand in normal years. Most of these facilities — particu-
larly in China, but also in some EU Member States — cannot
offer the same scrap prices and have much higher costs than
their
(and all other)
in South Asia. These
facilities will come under pressure shortly as up to 1300 single-
hulled tankers have to be taken out of service by 2015
following action taken after the Erika and Prestige disasters (7).
The main concern is that the recruitment of less skilled workers
to deal with greatly increased volume will
lower safety and
environmental standards still further. A peak will be reached in
2010, when it is estimated some 800 single hull ships may be
scrapped so the need for action is urgent.

3.5 The legal situation

The Basel Convention of 1989 provides a framework for
controlling the export of hazardous waste across international
frontiers. In 1997 an absolute ban (‘The Basel ban’) on exports
of hazardous waste from OECD countries to non-OECD coun-
tries (8) was incorporated into EU law and is binding on
Member States. Once a ship has left European waters it
is
however very difficult to apply the export ban. Further binding
rules on ship dismantling are proposed for the draft Convention
under discussion by the IMO but the consensus is that the peak
dismantling period will be long past by the time this Conven-
tion comes into effect.

3.6 Economics of ship dismantling

The great majority of ships are now dismantled in South Asia
because of the advantages which result from several economic
factors. The most important of these are:

(7) Regulation (EC) No 417/2002 of EP and Council of 18 February 2002
on the accelerated phasing-in of double hull or equivalent design
requirements, for single hull oil tankers and repealing Council Regu-
lation (EC) No 2978/94.

(8) Council Regulation (EEC) No 259/93 of 1 February 1993 on the super-
vision and control of shipments of waste within, into and out of the
European Community (OJ L 30, 6.2.1993, p. 1), as amended.

— Lower or un-enforced regulatory requirements in waste and

health and safety issues.

— Significantly lower wage costs. Beach dismantling does not
enable the use of heavy machinery and hence manual labour
remains a large element of the cost.

— The supply of ships is irregular and varied. Ships tend to be
taken out of service when the freight rates are low and
vessels vary widely in design and composition.

— The market for used steel and second hand ship equipment
is largely non-existent in OECD countries due to regulatory
requirements.

In essence, the Commission makes it clear that the market in
South Asia functions because of the extreme externalisation of
costs which create highly problematic social and environmental
conditions.

3.7 Environmental and social impacts

Most ship dismantling takes place on open beaches where
containment, reprocessing and disposal facilities are non-exis-
tent. A wide range of environmentally damaging substances
leach into the soil, sand and sea and the burning of paint and
plastic coatings creates atmospheric pollution. Lethal explosions
are commonplace, accident rates are high and safety measures
are regarded as totally inadequate. Workers are liable to contract
irreversible chronic diseases — some 16 % of workers handling
asbestos at the Indian yards of Alang were found to be suffering
from asbestosis. In Bangladesh more than 400 workers have
been killed in accidents and over 6 000 seriously injured in the
last 20 years (9).

3.8 The international state of play

Since 2005 the IMO, together with the ILO and UNEP (United
Nations Environment Programme) has been working towards a
binding international regime for clean ship dismantling. A draft
convention is being negotiated for adoption by 2009 but will
not come into force until some years later. Currently the draft
does not apply to warships and state-owned vessels. Still
outstanding are questions about external, non-IMO standards, a
baseline for ship recycling facilities, reporting requirements —
including state-to-state notification, and compliance mechan-
isms. The Commission suggests that
the
proposed convention will ensure an equivalent level of control,
enforcement and protection as the Basel Convention.

is unlikely that

it

(9) Young Power in Social Action (YPSA) report in 2005 on workers in

shipbreaking industries.

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3.9 International solutions

3.12 Technical assistance and transfer of technology and best practices

to recycling States

The Green Paper suggests that the best medium to long term
approach is supporting the in-progress IMO Convention. A par-
ticular concern is that the Convention is not strong enough and
will come too late to solve the problem of phased-out single
hull tankers; this will require an interim solution. The Commis-
sion therefore sets out options for improving the European
management of ship dismantling which are designed to be
mutually supportive of the efforts at the international level —
an urgent matter as a critically large volume of end-of-life ships
will go for breaking in the next few years.

In spite of severe social and environmental drawbacks, ship
dismantling is a vital contributor to the economic development
of some South Asian countries. Thus encouraging an upgrading
of facilities in these countries through technical assistance and
better regulation needs to be considered. However, it is acknowl-
edged that the absence or non implementation of elementary
rules on safety at work and environmental protection is strongly
linked with structural poverty and other
social and legal
problems. In order to achieve sustainable change, any assistance
would have to be embedded in a wider framework.

3.13 Encouraging voluntary action

3.10 Better enforcement of EU waste shipment law

In addition to better cooperation between member states and
further guidance on definitions of waste and acceptable recy-
cling facilities, this will
involve better enforcement by waste
shipment and port authorities in European ports, targeting ships
above a certain age (say 25 years) or where there is suspicion
they are intended for dismantling. In addition, end-of-life ship
tracking needs to be improved and cooperation with key third
countries (such as Egypt because of the Suez Canal) enhanced.
The Commission also suggests a policy focus on the dismantling
of warships and other state-owned vessels.

3.11 Strengthening EU ship dismantling capacity

As ship dismantling capacity in the EU and in other OECD
countries (especially Turkey) is barely sufficient for warships and
other state owned vessels being decommissioned over the next
10 years there will be a considerable deficit
in acceptable
dismantling capacity for the foreseeable future. However, such
‘green’
facilities as do exist cannot compete with the South
Asian ship breakers. Until effective international measures are
applied which serve to level the playing field the Commission
suggests
that action should focus on state-owned vessels.
Member States, acting as they should in an exemplary manner
towards the disposal of warships, could ensure that the capacity
of ‘green’ facilities are utilised. By including end-of-life disposal
clauses in any sale agreement of warships to non-EU countries,
this responsibility can be appropriately extended.

3.11.1
For the substantially larger merchant fleet initiatives
are needed to induce changes in the current practices of the
shipping industry. For example, as mentioned below, a funding
system whereby ship-owners and others contribute to the safe
and environmentally sound dismantling of ships worldwide.

voluntary

examples of positive

A ship-owner is best placed to ensure safe disposal and there
agreements between
are
European ship-owners and dismantling yards to provide support
for upgrading facilities. In the short term there will also be
some benefit in promoting voluntary codes and agreements,
with awards and certification under a corporate social responsi-
bility umbrella (10). Socially responsible accounting practice and
voluntary agreements may be effective when they are properly
designed and are the quickest way to improve things. However,
if it then turns out that the commitment is not followed up in
practice, legislation may still be necessary.

3.14 Ship dismantling fund

It is discussed whether direct financial support for clean ship
dismantling facilities in the EU or to ship-owners who send
their vessels to ‘green’ yards, either for full ship dismantling or
for decontamination, should receive consideration. Emphasis is
put on the high cost of such support and possible conflict with
the ‘polluter pays’ principle. The Green Paper therefore suggests
that the principle that the cost of sustainable end-of-life disposal
should be factored into the operating costs of a vessel should
become standard practice.

3.14.1
Setting up a sustainable ship dismantling fund as a
mandatory element of the new international regime on ship
dismantling via the IMO could also be a positive step. A prece-
dent exists
the
MARPOL Convention.

in the existing oil pollution funds under

3.15 Other options

Several other measures might be useful to assist the process of
upgrading the ship dismantling industry in the short and
medium term. In summary these are:

a) EU legislation, in particular on single-hull oil tankers.

(10) E.g. as developed by Marisec (www.marisec.org/recycling) and the

European Community Shipowners Association.

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b) Streamlining of shipping aids with a link to green ship disman-

tling.

c) Establishment of a European certification system for clean ship

dismantling and awards for exemplary green recycling.

d) Intensifying international research on ship dismantling.

4. General comments

4.1 Much ship recycling takes place in a way that contra-
venes internationally accepted standards on worker health and
safety and environmental protection.

It is vital that the EU ensures that the maritime and
4.2
safety protection it has imposed, for example for single hull
tankers, does not translate to simply transferring the harm to
developing countries, but in fact is addressed by full implemen-
tation of the Waste Shipment Regulation, which incorporates
the Basel Convention, including the Basel Ban Amendment, and
its principles.

4.3
Beyond technical and financial assistance to improve the
conditions at the ship dismantling facilities in developing coun-
tries, funds will be required for the remediation of contaminated
soil and water and other damages caused by uncontrolled

Brussels, 13 December 2007.

shipbreaking activities.
should however also further be
stressed that the types of problems endemic to the situation on
the ground in developing countries cannot be addressed by
simply providing technological advancement alone.

It

4.4
The EESC supports the Commission's concern on this
issue and also its approach, which involves applying a wide-
ranging mix of measures. Due to the urgent need to improve
rapid
facilities and conditions, particularly in Bangladesh,
progress on determining the most effective forms of assistance,
regulation and incentives should be prioritised so that proposals
can be defined in a White Paper and appropriate impact assess-
ments set in hand. The shipping industry also recognises the
need to improve health and safety standards in ship recycling
yards around the world (11) and is positive about the role the EU
can play in this and in influencing the IMO.

5. Specific comments

5.1
To ensure clarity and brevity the specific comments
resulting from the Committee's work on this issue have been
condensed into practical action points and are presented in the
Conclusions and Recommendations section (points 1.1 to 1.12)
which prefaces this Opinion.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

(11) Ship Recycling — The Way Forward, BIMCO, ECSA, INTERTANKO,

INTERCARGO.