Commission staff working document - Impact Assessment for an EU strategy for better ship dismantling {COM(2008) 767 final} {SEC(2008) 2847}
Date: 2008-11-19
Institutions: European Commission
Subjects: environmental protection, hazardous waste, international standard, maritime safety, occupational safety, public health, shipping policy, vessel, waste recycling

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 19.11.2008 
SEC(2008) 2846 

COMMISSION STAFF WORKING DOCUMENT 

Impact Assessment for an EU strategy for better ship dismantling 

{COM(2008) 767 final} 

{SEC(2008) 2847} 

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1. 

TABLE OF CONTENTS  

1. 

2. 

2.1 

2.2 

2.3 

3. 

3.1 

3.2 

3.3 

3.4 

3.5 

3.6 

3.7 

4. 

5. 

5.1 

5.2 

5.3 

5.4 

6. 

6.1 

Executive summary...................................................................................................... 4 

Introduction / procedural issues ................................................................................... 5 

Organisation and timing............................................................................................... 5 

Consultation and expertise ........................................................................................... 6 

Opinion of the Impact Assessment Board.................................................................... 7 

Issue at stake: Why an EU strategy on ship dismantling? ........................................... 7 

Definition of the problem............................................................................................. 7 

The economics and politics of ship dismantling - drivers of the problem ................. 10 

Who is affected, in what ways and to what extent? ................................................... 14 

Effects of non-action .................................................................................................. 16 

International and national policy approaches............................................................. 16 

Industry approaches ................................................................................................... 18 

The right of the EU to act........................................................................................... 18 

Policy objectives ........................................................................................................ 19 

Description of policy options ..................................................................................... 19 

Option 1: No additional action at EU level................................................................ 20 

Option 2: Emphasis on voluntary action.................................................................... 20 

Option 3: Comprehensive EU legislation on ship recycling...................................... 21 

Option 4: Integrated policy approach......................................................................... 22 

Impact analysis........................................................................................................... 23 

Impacts of Option 1: No additional 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 dismantling in the EU/OECD (sub-option 1) ............... 28 

6.2.2  Measures to encourage ship dismantling in higher-standard facilities worldwide (sub-
option 2) ..................................................................................................................... 33 

6.2.4 

Summary Option 2 ..................................................................................................... 38 

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6.3 

Impacts of Option 3: EU legislation on ship recycling .............................................. 39 

6.3.1 

Implementation of the Ship Recycling Convention ................................................... 40 

6.3.2  Complementing legal measures: Filling 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 

7. 

7.1 

7.2 

8. 

Impacts of Option 4: Integrated policy approach....................................................... 53 

Comparing the options ............................................................................................... 57 

Impact matrix ............................................................................................................. 57 

Conclusion.................................................................................................................. 60 

Monitoring and evaluation ......................................................................................... 60 

Annex I: List of references....................................................................................................... 62 

Annex II: Report of Stakeholders Meeting …………………………………………………..62 

Glossary………………………………………………………………………………………63 

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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  conditions  for  the  environment  and  workers' 
health in South Asia, and that this failure concerns 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,  the  export  of  hazardous  end-of-life  ships  from 
the EU to developing countries and to reduce significantly and in a sustainable way by 2015 
the  negative  impacts  of  shipbreaking,  especially  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)  comprehensive  EU  legislation  to  implement  key 
provisions  of  the  forthcoming  IMO  Convention  and  complement  it  with  certain  mandatory 
provisions,  and  4)  an  integrated  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  companies  to  use  only  safe  and  environmentally 
sound ship dismantling facilities. It would focus on positive incentives and not on the stricter 
enforcement  of  the  current  EC  Waste  Shipment  Regulation.  Two  sub-options  are 
distinguished,  according  to  whether  incentives  should  be  used  to  encourage  clean  ship 
dismantling in the EU or candidate countries, or promote better practices worldwide. 

Under  the  third  option,  EU  legislation  would  transpose  key  elements  of  the  future  Ship 
Recycling Convention (survey and certification requirements for ships, essential requirements 
for  recycling  facilities,  and  rules  on  communication  and  reporting)  into  EU  law  and 
complement  it  where  necessary  to  fill  gaps.  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  Regulation  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,  cooperation  with  third  countries)  to  ensure  better 
enforcement of current waste shipment law with regard to end-of-life ships. 

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The  fourth  option  combines  a  selection  of  legal  proposals  under  option  3  with  certain 
supporting  actions  under  option  2  in  an  integrated  policy  approach.  This  would  include 
legislation  to  implement,  as  a  priority,  key  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  certificates  for  ships,  essential 
requirements for recycling facilities and rules on reporting and communication. It would also 
include rules for the clean dismantling of warships and other government vessels and certified 
dismantling facilities, and a list of ships ready 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 subsidies 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 and possible drawbacks. As the Communication 
on an EU ship dismantling strategy does not represent 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, distinguishing impacts in the 
short and medium term (until 2010 and 2015, respectively) from those in the long term. 

The conclusion of this IA is that the fourth option (integrated policy approach) is preferable, 
as it is the only one that can achieve altogether 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  shipment  law  and  reduce  significantly  in  the  next 
years the negative impacts of shipbreaking on human health and the environment, especially 
in South Asia, without creating excessive burden on EU taxpayers. 

The implementation of the ship dismantling strategy would need regular monitoring in order 
to evaluate changing impacts and adapt the actions accordingly. 

3. 

INTRODUCTION / 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 contained 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 legislation proposed to implement 
and  complement  the  International  Convention  for  the  Safe  and  Environmentally  Sound 
Recycling  of  Ships  ("Ship  Recycling  Convention")  that  is  scheduled  for  adoption  in  May 
2009.  As  the  Convention  is  currently  still  under  negotiation  in  the  International  Maritime 
Organisation  (IMO),  any  assessment  of  its  effects  and  of  the  need  for  complementing 
measures is bound to be preliminary at this stage. 

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2.2  Consultation and expertise 

3.2. 
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 services (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  European  institutions,  the 
Member States, non-governmental stakeholders and the public were invited to comment and 
used this opportunity widely. Participants generally encouraged the EU to take urgent action 
on ship dismantling. Apart from stronger EU coordination at the international level in order to 
achieve an effective IMO Convention, the expectations of stakeholders focused on legislation 
for its early implementation, guidance from the Commission, an EU label for the certification 
of  clean  ship  dismantling  facilities  and  research  on  ways  to  establish  a  sustainable  funding 
system  to  upgrade  the  industry  ("ship  dismantling  fund").  On  the  other  hand,  most 
stakeholders  opposed  to  the  idea  of  subsidies  for  the  strengthening  of  ship  dismantling 
capacity  in  the  EU.  The  results  of  the  consultation  are  published  on  the  website  of  the 
Commission 2 and annexed to this Impact Assessment. 

The  general  principles  and  minimum  standards  for  consultation  of  interested  parties  by  the 
Commission were respected.3 

On 21 May 2008, the European Parliament debated 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  Commission  between  2000  and  2007  -  most  recently  the 
COWI/DHI study on "Ship dismantling and pre-cleaning of ships"5 and the ongoing EMSA 
study on “Certification of ship recycling facilities” - were used for this impact assessment. So 
were relevant reports and 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  Ships  (MIDN)  of  March  20077.  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 

2 
3 

4 

5 

COM  (2007)  269  final,  with  Annex  and  references  in  Commission  Staff  Working  Document 
SEC(2007) 645. 
http://ec.europa.eu/environment/waste/ships/pdf/report_consultation.pdf. 
COM(2002)704, 
Cf. 
http://ec.europa.eu/civil_society/consultation_standards/index_en.htm. 
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P6-TA-2008-
0222+0+DOC+XML+V0//EN&language=EN. 
COWI/DHI / EC-DG ENV, Ship Dismantling and Pre-cleaning of Ships, Final report of June 2007, 
published 

published 

at: 

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 
http://www.defra.gov.uk/ENVIRONMENT/WASTE/strategy/ship.htm. 
7 
http://www.sgmer.gouv.fr/article.php3?id_article=52. 

Hereafter called "MIDN report"; French original (with annexes) and English translation published at: 

Department for Environment, Food and Rural Affairs (DEFRA), published at 

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was given by governments, industry and NGOs and in particular derived from two workshops 
in Mumbai (India) and Dhaka (Bangladesh) attended by Commission  and EMSA experts in 
January 2008.  

Nevertheless, there are considerable data limitations 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  respects  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  proposed  policy  options  will  solve  the  current 
compliance problems; 

A  more  complete  description  of  how  the  Waste  Shipment  Regulation  applies  to  end-of-life 
ships; 

The need to support the analysis of options with clearer and additional quantitative data for 
the better assessment of the administrative burden; 

Further clarification of the net impacts of the integrated policy approach; 

The  choice  of  legal  instruments  for  the  implementation  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  information  and/or  clarifications  have  been 
incorporated  in  the  relevant  IA  sections.  In  particular,  the  text  was  revised  to  describe  the 
legal  provisions  and  documented  implementation  problems  of  the  Waste  Shipment 
Regulation, and supporting data for the proposed options have been added to the text. 

4. 

ISSUE 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  Asia,  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 diseases, and water, soil and coastal habitats 
are heavily polluted by hazardous materials from ships. 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. 

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As 25% of the merchant ships worldwide fly the flags of EU Member States and about 40% 
of  the  world  tonnage  is  owned  by  European  companies,  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 wastes and certain other wastes from the EU to 
non-OECD  countries  also  if  the  waste  in  question  is  destined  for  recovery  (recycling).  This 
export prohibition (known as the "Basel Ban") transposed a not yet internationally effective 
amendment to the Basel Convention on Transboundary Movements of Hazardous Wastes into 
binding  EU  law.  Due  to  the  hazardous  materials  on  board  of  older  ships  -  in  particular 
asbestos,  polychlorinated  biphenyls  (PCBs),  tributyl  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  territory.  If  a  ship  has  left  European  waters 
(without  having  been  recognised  as  waste)  and  the  owner  then  decides  to  send  it  for 
dismantling  in  other  parts  of  the  world,  the  Community  rules  do  not  apply.  Such  ships 
containing hazardous waste will  be subject to the  prior  notification and consent rules of the 
Basel  Convention.  However,  when  they  arrive  for  the  purpose  of  recovery  in  the  state  of 
destination,  the governments of most Asian recycling states are reluctant  to apply the Basel 
Convention  to  ships,  apparently  for  economic  reasons.  In  some  cases  also  competent 
authorities of EU Member States show that they are uncertain about application of the Waste 
Shipment  Regulation  to  end-of-life  ships  which  leave  from  their  ports.  Shipowners  on  their 
side  complain  that  there  is  too  little  guidance  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 differently 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 driving ship-owners to re-flag to flags of convenience, to circumvent 
Community rules once a ship has left the EU territory.  

The  International  Maritime  Organization  (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 adoption by a diplomatic conference foreseen to take 
place in May 2009. It will, however, not be sufficient as a solution for the whole problem. The 
current  draft  does  not  cover  warships  and  other  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  needs  the  active  support  and  implementation  by 
the  major  Parties  (flag  states  and  recycling  states)  if  it  is  to  generate  real  change  on  the 
ground.  

Table 1: Top 10 flags and EU Member States in world merchant shipping (ships ≥ 500 GT,  
1 January 2008)8 

No  Flag state 

Tonnage 
in  million 
GT 

%  of  world 
fleet 

Average  age 
(in 
of  ships 
years) 

8 

Compiled on the basis of data from DG TREN / Lloyd's Register database. 

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No  Flag state 

Tonnage 
in  million 
GT 

%  of  world 
fleet 

Average  age 
of  ships 
(in 
years) 

 1 

 2 

 3 

 4 

 5 

Panama 

Liberia 

Bahamas 

Greece 

Hong Kong 

 6  Marshall Islands 

 7 

 8 

Singapore 

UK 

 9  Malta 

10  China 

251.5 

117.4 

62.7 

60.6 

59.6 

59.4 

56.6 

44.3 

41.2 

37.0 

22.9 

10.7 

5.7 

5.5 

5.4 

5.4 

5.2 

4.0 

3.8 

3.4 

World  total  (90  states  and 
territories) 

1,097.8 

100.0 

EU-27 

250.4 

22.8 

17 

13 

15 

18 

11 

11 

12 

13 

17 

23 

19 

16 

Table 2: Top 10 flags of dismantled merchant ships (≥ 100 GT) by tonnage in 2006-20079 

Flag state 

Panama 

Tuvalu 

Liberia 

Mongolia  

Malta 

St. Vincent & Grenadines  

Norwegian Internat. Register 

USA 

Dismantled tonnage 
2006-2007 
(1,000 
GT) 

%  of  world 
fleet 
2006-
2007 

1,550 

1,208 

828 

502 

453 

413 

343 

327 

16.0 

12.4 

8.5 

5.2 

4.7 

4.2 

3.5 

3.4 

9 

Compiled on the basis of data from EMSA / LMIU (Lloyd's Marine Intelligence Unit) database. 

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Marshall Islands 

St. Kitts-Nevis 

Total (100 states, territories and 
international registers) 

EU flags (21 first registers) 

flags  with 
EU 
territories / second registers 

overseas 

282 

282 

2.9 

2.9 

9,717 

100.0 

949 

1,091 

9.8 

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 follows: 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 completion 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 Gadani (Pakistan) which is usually leased by 
the state to an operator and where the ship will 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  the  ship  will  be  carried  to  metal  works  in  the 
hinterland. Most often, especially in Bangladesh, the steel is treated "cold" 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  driven  by  factors  like  freight  rates,  the  price  of 
steel scrap and the costs of maintaining an ageing fleet, which decide at what point in time a 
ship will be scrapped. The choice of the dismantling location is influenced in particular by the 
metal price a facility can offer to the ship owner or the intermediary cashbuyer. 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 recycling differ considerably according to the price of 
labour  and  the  costs  of  infrastructure  for  workers'  safety  and  environmental  protection. 
Besides,  a  higher  price  for  metal  is  be  paid  by  the  yard  owner  if  the  scrap  steel  can  be 
recycled "cold", without energy-intensive and thus expensive re-melting in electrical furnaces. 

More  than  80%  of  the  larger  end-of-life  ships  worldwide  since  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 

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survive  essentially  where  they  concentrated  on  recycling  of  small  ships  (especially  fishing 
vessels), where dismantling is performed as an additional service to ship repair or where they 
could  rely  on  certain  market  niches  like  the  recycling  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  estimated  that  90%  of  the  domestic  steel  supply  for  the  building 
industry  comes  from  scrap  ships.  Shipbreaking  offers  direct  employment  opportunities  for 
about 25,000 workers and 200,000 more are said to be engaged in related business activities.10 
The economic importance of the industry in India is less pronounced: The workforce numbers 
between 3,000 and 5,000, and the share of ship scrap 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 recycling 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 

 2 

 3 

 4 

 5 

 6 

 7 

 8 

 9 

Bangladesh 

India 

Turkey 

Pakistan 

Denmark 

China 

Spain 

UK 

USA 

10  Norway 

161 

113 

118 

155 

60 

22 

32 

30 

5 

8 

10 

8 

50 

38 

18 

14 

23 

13 

7 

5 

279 

268 

110 

60 

50 

44 

28 

21 

17 

13 

28.5 

27.3 

11.2 

6.1 

5.1 

4.5 

2.9 

2.1 

1.7 

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 
12 

Cf. MIDN report, Annex XVI. 
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://www.dailymail.co.uk/news/worldnews/article-
1030971/The-toxic-ship-shunned-world--lets-bring-Britain.html#. 
Compiled on the basis of data from EMSA / LMIU database, May/June 2008. 

13 

EN 

11 

   EN 

 
                                                 
No  Country 

Ships 
in 2006  

Ships 
in 2007 

Total 
ships 
2006-2007 

of 

% 
world 
2006-
2007 

Total 
territories) 

(40 

states 

and 

493 

487 

980 

100.0 

All EU recycling states (14) 

68 

76 

144 

14.7 

EN 

12 

   EN 

 
 
Table 4: Top 10 dismantling countries by tonnage of dismantled merchant ships ≥ 100 GT in 
2006-2007 

No 

Country 

 1 

 2 

 3 

 4 

 5 

 6 

 7 

 8 

 9 

Bangladesh 

India 

China 

Pakistan 

Turkey 

Unknown 

USA 

Canada 

Denmark 

10 

Norway 

Total (40 states and territories) 

All EU recycling states (14) 

Total 
tonnage 
2006-2007  
(1,000 GT) 

%  of  world 
2006-2007 

5,025 

2,413 

636 

632 

410 

201 

165 

41 

26 

25 

9,717 

111 

51.7 

24.8 

6.5 

6.5 

4.2 

2.1 

1.7 

0.4 

0.3 

0.3 

100.0 

1.1 

Operators  in  South  Asia  employ  many  unskilled labourers at extremely 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 the three countries on the sub-continent, only India has developed 
some  central  infrastructure  for  hazardous  waste  management,  workers'  training  and  health 
care in the last 2-3 years. The highest price for metal from ships 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 complex vessel, the profit from higher steel prices 
rises and the transport costs to Asia are less relevant. For small ships (with less than about 500 
GT14) these advantages are relatively smaller, which explains why fishing vessels are usually 
broken up near to their home port, and that countries like Denmark and Spain count relatively 

14 

GT = gross tons, the measure of the overall size (internal 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 

13 

   EN 

 
 
                                                 
high  in  numbers  of  dismantled  ships,  but  not  in  tonnage.  Other  small  and  medium  ships 
operating solely in Europe are often dismantled in Turkey. 

Bangladesh is in relation to its competitors the recycling country with the greatest difficulties 
of  governance  in  relation  to  the  shipbreaking  industry.  Although  there  is  some  relevant 
legislation  on  national  level,  the  industry  -  about  32  companies  grouped  together  in  the 
powerful Bangladesh Ship-Breakers Association (BSBA) - takes advantage of a laisser-faire 
climate  where  government  inspectors  rarely  intervene.  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 India several judgments by the Supreme Court in 
2003 and 2007, on applications by environmental and 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  hazardous  materials  on  board  old  ships.  As  was 
shown by a study for the Commission in 200415, 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 metals in paints and equipment.  

When sent for dismantling, old ships represent one of the major streams of hazardous waste 
from  industrialised  countries  to  the  developing  world.  The  2004  study  for  the  Commission 
(DG  TREN)  estimated  that  oil  sludge  from  end-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 amount to 1,000-3,000 tonnes, TBT 170-540 tonnes and 
environmentally  harmful  paints  to  6,000-20,000  tonnes.  In  addition,  the  release  of  ozone-
depleting  f-gases  from  cooling  systems  (approx.  150-400  tonnes  per  year)  by  careless  ship 
dismantling would contribute to worldwide climate problems. 

The scrapping of ships in South Asia takes place on sandy beaches without concrete covering 
or any other containment other than the hull of the 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  tide.  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 operation on some of the yards, no such facilities 
exist  currently  in  Bangladesh.  Here,  on  the  beach  of  Chittagong,  asbestos  is  crushed  and 
handled  without  protective  equipment  and  permeates  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 has rarely been studied in detail. In India the 
responsible regional authority (Gujarat Maritime Board) conducted sampling and analysis of 

15 

16 

COWI  /  EC-DG  TREN,  Oil  Tanker  Phase  Out  and  the  Ship  Scrapping  Industry,  2004;  published  at: 
http://europa.eu.int/comm/transport/maritime/safety/doc/prestige/2004_06_scrapping_study_en.pdf.  
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 

14 

   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  powerful  tide  current  which  tends  to 
disperse contaminants over a wide sea area. In Bangladesh, researchers from the Institute of 
Marine  Sciences  of  Chittagong  found  considerable  changes  in  the  physico-chemical 
properties of sea water, beach soil and sediments and a significantly reduced diversity of fish 
species caused mainly by the discharge of ammonia, 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 fishermen had to give up their profession in the 
last two decades. 

Table  5:  Heavy  metal  concentration  in  the  sediments  of  shipbreaking  sites  in  Bangladesh 
(2004)19 

Sampling stations (1-4 = affected sites)

Trace metal concentration (µg/g) 

1) Salimpur 

2) Bhatiari 

3) Sonaichhari 

4) Kumira 

Fe  Cr  Ni  Zn 

Pb  Cu  Cd   Hg  

12  68  23 

84 

37  21  0.57  0.02 

35  87  35  102  122  40  0.83  0.02 

41  78  49  143  148  31  0.94  0.12 

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  Asian  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 and 6,000 seriously injured between 1985 and 2005.21 The 
number  of  fatal  accidents  has  significantly  decreased  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  shipbreaking  activity.  However,  unlike  in  India  where  the  regional 
government  has  started  to  organise  safety  training  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 proper safety precautions. This is at present in 
particular true for Bangladesh where most shipbreaking 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 

18 

19 
20 
21 

22 

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. 
M. Hossain / M.M. Islam, Ship Breaking Activities and its Impact on the Coastal Zone of Chittagong, 
Bangladesh, 2006. 
Hossain/Islam, op. cit., at p. 29. 
Lloyd's Register - Fairplay of 1 March2005. 
YPSA, Workers in shipbreaking industries: A base line survey of Chittagong (Bangladesh), 2005, p. 15 
et seq. Other reports quoted by YPSA speak of 200 deaths from shipbreaking accidents between 1998 
and 2003 alone. 
Information from YPSA, latest data published on: http://www.shipbreakingbd.info/ 

EN 

15 

   EN 

 
 
 
                                                 
at the time showed symptoms of asbestosis and were thus at serious risk of mesothelioma.23 
As is known from medical research, the incidence of this form of lung cancer reaches its peak 
only several decades after exposure. 

4.4. 

3.4  Effects of non-action 

The  current  situation  of  the  ship  recycling  market  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 special types of ships, small vessels or the fleet 
of particularly committed shipowners. Bangladesh 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  European  shipping  companies  are  still  choosing 
Bangladesh as the location 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 inexperienced rural labourers. 

4.5. 

3.5 

International and national policy approaches  

The  IMO  is  planning  to  finalise  its  work  for  an  international  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  certification  of  ships  and  the  operation  of  ship  recycling 
facilities are to be adopted by the Marine Environment Protection Committee (MEPC) of the 
IMO in July 2009. 

The draft Ship Recycling Convention - in line with other IMO instruments - does not apply to 
ships  of  less  than  500  GT  and  not  to  warships,  naval  auxiliary  or  other  state-owned  or  -
operated  vessels  which  are  used  only  on  government  non-commercial  service.  In  addition, 
ships for domestic  transport,  i.e. operating throughout 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  Convention  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  recycling  facilities.  Limitations  are  foreseen  for  the  use  of  hazardous 
materials  in  shipbuilding  and  the  most  dangerous  of  them  should  be  removed  also  from 
existing ships during their period of operation. 

23 
24 
25 

Lloyd's List of 8 September 2006. 
"Bangladesh snaps up vintage Naftomar tanker", TradeWinds.no, 28 March 2008. 
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.robindesbois.org/dossiers/a_la_casse_demolition_bilan_2007.pdf). 

EN 

16 

   EN 

 
                                                 
The  current  draft  of  the  Convention  establishes  certain  requirements  for  safety  and 
environmental protection in ship recycling facilities but does not explicitly rule out beaching 
as  a  dismantling  method.  Implementation  and  compliance  mechanisms  are  still  under 
discussion but a mandatory third-party audit for recycling facilities has been rejected by IMO 
parties. The decision whether prior informed consent of the competent authority is necessary 
before  each  recycling  operation  can  start  will  probably  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  discussion  is  whether  the 
proposed  Ship  Recycling  Convention  will  ensure  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  international  regime  from  the  scope  of  the  Basel 
Convention. The EU has expressed its view on the point of equivalency in a submission to the 
Basel Secretariat of January 2008.26 The Conference of the Parties 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 all adopted their own technical guidelines for ship recycling, 
ship  dismantling  or  shipbreaking,  respectively.27  These  non-binding  guidelines  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  vessels  as  well  as  guidance  for  private 
shipowners  and  recommendations  for  the  environmentally  sound  management  of  ship 
recycling  facilities.  Key  element  of  the  government's  policy  on  its  own  vessels  is  the 
commitment to have them recycled only in environmentally sound facilities within the OECD 
and,  in  case  a  vessel  is  sold  for  further  use,  to  negotiate  the  inclusion  of  provisions  in  the 
contract ensuring similar standards for the eventual recycling and requiring 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  rules  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-OECD countries are complied with. 

The  report  by  the  French  Inter-departmental  Committee  on  the  Dismantling  of  Civilian  and 
Military End-of-Life Ships (MIDN) of March 200729 proposes, on the basis of extensive fact-

26 

27 

28 

29 

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 their entirety, 21 January 2008, published at: 
http://www.basel.int/ships/commentsOEWG6/oewg6.html. 
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). 
Published by the Department for Environment, Food and Rural Affairs (defra) at: 
http://www.defra.gov.uk/ENVIRONMENT/WASTE/strategy/ship.htm. 
French original (with annexes) and English translation published at: 
http://www.sgmer.gouv.fr/article.php3?id_article=52. 

EN 

17 

   EN 

 
                                                 
finding missions, a policy line for state-owned ships, for merchant vessels flying the French 
flag  and  for  ship  recycling  in  general.  According  to  this,  French  warships  as  well  as  other 
European state-owned ships should be dismantled 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 ship dismantling and advises, in case the steps 
foreseen in the IMO Convention prove to be less 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  resolute  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 USA have provided their industry with guidance 
documents on the "implementation of green ship dismantling" and regulatory compliance in 
this field.30  

4.6. 

3.6 

Industry approaches 

The shipping industry itself, under the co-ordination 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  Working  Group  on  Ship  Recycling  agreed  on  a 
recommendation  concerning  interim  measures  for  shipowners  intending  to  sell  ships  for 
recycling  (such  as  yard  selection,  providing  an  inventory  of  hazardous  materials,  and  gas-
freeing),  by  which  shipowners  could  contribute  to  safe  and  environmentally  sound  ship 
recycling.31  The  language  of  the  recommendation  is  cautious,  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 environment shall contribute, among other things, 
to  promoting  measures  at  international  level  to  deal  with  regional  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 Inventory 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 all individually members of IMO. However, the 
EU  has  greater  political  and  economic  weight  to  ensure  better  ship  dismantling  if  it  acts 

30 

31 

Draft Pocket Manual on Implementation of Green Ship Recycling, prepared by the Danish Environment 
Protection Agency, December 2005; 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.  
Both published at http://www.marisec.org/recycling/. 

EN 

18 

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coherently. As in the context of other international  conventions,  the  EU  is  widely  seen  as  a 
leader  on  environmental  issues  and  its  example  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  implementing  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  confirmation  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 ratification process among the Member States. In 
addition,  early  action  by  the  EU  would  influence  third  countries  much  more  than 
action  by  individual  Member  States  and  thus  is  more  likely  to  bring  the  Ship 
Recycling Convention quickly into force.  

In summary, individual Member State actions 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 relevant EU legislation, such as the improved 
enforcement of the Waste Shipment Regulation, 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  prevent,  in  line  with  the  EC  Waste  Shipment 
Regulation,  the  export  of  hazardous  end-of-life  ships  from  the  EU  to  developing  countries, 
and  to  reduce  significantly  and  in  a  sustainable  way  by  2015  the  negative  impacts  of 
shipbreaking, especially in South Asia, on human health and the environment without creating 
unnecessary economic burdens.  

In order to reach these aims, the following 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  transposition  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 are not covered by the Convention and promote 
its practical effectiveness. 

•  The  improvement  of  the  economic  situation  of  ship  dismantling  facilities  in  the  EU  may 
become a welcome side-effect of some measures 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 

19 

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(1) 

(2) 

(3) 

(4) 

(5) 

The "baseline option" would mean a continuation of the current level of EU activities, 
with  only  minimum  amendments  to  legislation  and  no  additional  initiatives  for 
voluntary commitments. It will mean in the longer term that the key provisions of the 
forthcoming Ship Recycling Convention are implemented only by the Member States. 

Option  2  puts  the  emphasis  on  encouragement  at  EU  level  for  voluntary  action  by 
shipowners and recycling facilities.  

Option 3 envisages comprehensive EU legislation to implement key provisions of the 
future  Ship  Recycling  Convention  as  soon  as  adopted  by  the  IMO  diplomatic 
conference  foreseen  to  take  place  in  May  2009  and  complement  it  with  mandatory 
requirements where necessary. In addition, measures to strengthen enforcement of the 
current law would be taken in the interim period. 

Option 4 would combine selected legislative and enforcement measures with voluntary 
actions in an integrated policy approach. 

Better enforcement of the current Waste Shipment 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 Shipment Regulation in individual cases of end-
of-life  ships  that  become  known  through  media  reports  (TV  programmes  or  articles  in 
newspapers or maritime journals); 

•  Participation  of  the  Commission,  in  particular  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 7th Framework Programme for research. 

In addition, some minimal amendments to current EU legislation would 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  implementation  of  the  Ship  Recycling  Convention 
largely to the Member States but in addition measures at EU level would be taken (especially 
in  the  interim  period)  to  promote  voluntary  action  by  the  shipping  industry,  i.e.  encourage 
shipping  companies  to  use  only  safe  and  environmentally  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 facilities 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  would  include  streamlining  of  existing 
maritime aids, grants and loans to bring them into line with waste shipment 

EN 

20 

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rules, and in the case of vessels owned 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; 

industry  (shipowners'  associations,  major  shipping 

(2) 
Promote  voluntary  commitments  of  the  shipping  industry  to  use  at  least  higher-
standard facilities in developing countries and conclude partnerships for upgrading facilities 
there.  Suitable  instruments  would  be  a  public  campaign  for  voluntary  agreements  with  the 
shipping 
lines),  an  EU-specific 
certification  and  audit  scheme  for  ship  recycling  facilities,  awards  for  exemplary  industry 
action,  EU  participation  in  IMO  pilot  projects  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 assistance out of public funds for improving workers' 
safety and environmental protection in the recycling facilities 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-standard recycling facilities in developing 
countries  could  go  along  with  an  award  for  exemplary  action  and  a  certification 
scheme for those facilities. Within the analysis 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 particular a list of "green" facilities.  

6.3. 

5.3  Option 3: Comprehensive EU legislation on ship recycling 

Under this option, new legislation would be proposed 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 implementation of the Convention rules on: 

(1) 

(2) 

(3) 

Survey  and  certificate  requirements  for  ships,  in  particular  to  carry  an  Inventory  of 
Hazardous Materials on board and be certified as "ready for recycling" before going to 
a dismantling facility; 

Essential requirements for ship recycling facilities;  

Communication  and  reporting  requirements  for  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 warships and other government vessels; 

(2)  More prohibitions on hazardous materials in ships; 

(3) 

(4) 

EN 

Stricter obligation for pre-cleaning of ships from hazardous materials; 

Ban on “beaching”; 

21 

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(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 exclude each other; only the ban on beaching would 
be clearly more stringent than the requirements under (3) and (5).  

The  form  of  the  legal  measure  and  the  specific  impacts  of  each  will  not  be  assessed  at  this 
stage  but  left  for  discussion  to  the  specific  impact  assessment  accompanying  the  later 
legislative proposal.32 

A  more  far-reaching  option  to  create  a  "ship  dismantling  fund"  based  on  mandatory 
contributions from the shipping industry to finance ship recycling in safe and environmentally 
sound facilities will be the subject of a separate 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 Regulation 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) 

(4) 

Infringement proceedings against non-compliant Member States,  

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  impacts  already  in  the  short  term  without  creating 
excessive costs. There is an advantage in selecting the most promising measures that can be 
voluntary  or  legal  in  nature.  This  provides  a  good  balance  of  both  "carrot"  and  "stick"  that 
working together can offer an optimal response to the problem at hand. 

The  legislative  proposals  could  include  the  key  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 audited and certified recycling facilities, and a 
list of ships ready for scrapping. This would be supported by selected voluntary actions, such 
as  a  campaign  for  shipowners'  commitments  to  clean  dismantling,  certification  and  award 
schemes,  technical  assistance  and  research,  streamlining  of  shipping  aids  (but  not  subsidies 
for ship dismantling in the EU), and on the other hand guidance, project funding and sanctions 
to strengthen enforcement of current waste shipment law by the Member States 

32 

Cf. below 6.3. 

EN 

22 

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7. 

IMPACT ANALYSIS 

7.1. 

6.1 

Impacts of Option 1: No additional action at EU level 

7.1.1. 

6.1.1  Short and medium term 

Taking no additional action at EU level would mean in the short and medium term, until the 
new international regime is in place and transposed 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 ship 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 board ships for the aquatic environment and for 
climate are to continue, in so far as they are not already  banned by other legal instruments. 
Such  a  ban  is  in  place  within  the  EU  for  PCBs  through  the  Stockholm  Convention  and 
Regulation (EC) No 850/200433, for organotin compounds (from 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,  prohibitions  with  certain 
exemptions  exist  in  the  EU  for  perfluorooctane  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  still  widely  used,  although  some  of  them  (like 
HBCDD and TBBPA) are known to be persistent, bioaccumulating and very 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 

34 

35 

36 

37 

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. 
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 the ozone layer, OJ L 244, 29.9.2000, p. 1. 
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.  
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 

23 

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are  then  employed.  Child  labour  would  continue,  with  sometimes  fatal  consequences.38  The 
existing criminal structures in part of the Asian shipbreaking industry 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 increasingly being decommissioned. As 
for  the  substances  mentioned  above  in  the  environmental  context,  the  use  of  asbestos  in 
shipbuilding  is  already  today  prohibited  under  the  IMO  SOLAS  Convention  and  in  the  EU 
since 2005 for all types of asbestos (including chrysotile).39  

Economic  impacts:  The  competitive  disadvantages  of  EU  recycling  facilities  are  certain  to 
continue, with the large cost and price disparity to Asian yards allowing them to occupy only 
niches in the market. The revenues of shipowners 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  unaffected,  as  would  transport  and  consumer  prices, 
administrative costs and intellectual property rights in the EU. Some shipowners might invest 
early and create business and job opportunities in classification societies by anticipating the 
IMO requirements on certificates and inventories of hazardous materials.  

The  supply  of  steel  scrap  and  used  ship  equipment  for  the  South  Asian  economies,  the 
revenues of shipbreaking yard owners and the job opportunities for workers would stay at the 
current level or increase in peak times. On the 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 Ship Recycling Convention into the 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 ships 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 legislation 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 than 5 years after the Convention's entry into 
force. 

The  dates  when  the  Convention  requirements  for  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 present uncertain, and it is even 
unclear  whether  the  Convention  will  specify  concrete  dates  or  define  timelines  in  terms  of 
years after entry into force. It seems probable, however, that in view of alleged difficulties to 
mobilise  sufficient  ship  recycling  capacity  with  Convention  standard  in  the  short  term,  the 

38 

39 

According to information from YPSA, e.g. a newly-recruited 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. 
On account of various EU directives, most recently 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 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 

24 

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majority of the Parties will want to postpone the effectiveness of the provisions for recycling 
facilities in any case 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 the waiting period might stay below 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 speculation. At present it is expected that the major flag states 
and, among the Asian recycling countries, at least China, Turkey and India will subscribe to 
the new international regime. 

Without EU action it is probable that several Member States will, by their own decision, ratify 
the  Convention  and  transpose  it  into  their  national  legislation  within  the  next  2-4  years. 
However, the statistics on ratification of IMO instruments show differing practices among the 
Member  States  and  altogether  considerable  delay.  The  Anti-fouling  Systems  (AFS) 
Convention  of  2001,  for  instance,  was  ratified  four  years  later  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  including  references  to  the  Ship  Recycling 
Convention would integrate the new 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  IHM  and  the  Ready  for  Recycling  certificate 
mandatory for shipowners. This would still 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 leading 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  Recycling  Facility  Management  Plan  and  the 
utilisation  of  procedures  for  accident  prevention,  safe  removal  of  hazardous  materials, 
emergency response, workers' training and reporting of incidents and occupational diseases.  

The Ship Recycling Convention would not substantially 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 already 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  does  not  prohibit  the  beaching  method  as  such, 
improvements would also be limited and depend on the strict implementation of its provisions 
on  environmentally  sound  management  by  recycling  states,  taking  into  account  also  the 
envisaged  guidelines  on  the  operation  of  ship  recycling  facilities.  In  the  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. 

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25 

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Convention apparently has some anticipatory effects on account of a Supreme Court decision 
of  September  2007  which  obliged  shipbreaking  yards  to  meet  certain  environmental  and 
safety  requirements  modelled  on  the  draft  Convention.  India's  government  is  of  the  opinion 
that the industry in Alang complies today already with 90% of the Convention requirements.41 

In South Asian recycling states that do not ratify the 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  yet  Parties  to  other  relevant  international  agreements  like  the 
Stockholm (POPs) Convention or the AFS Convention decide to bind themselves for the first 
time  with  the  Ship  Recycling  Convention.  The  number  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  Convention's  provisions  on  hazardous  materials  alone 
would  lead  to  no  or  only  minor  substantial  improvements  for  the  environment  during  the 
operating life of ships.  

A minimal amendment of Annex VIII to the 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  meaning  of  environmentally  sound  management 
when the Waste Shipment Regulation is applied to ships. On the one hand it would update the 
Regulation on the recent developments in the field of ship dismantling and clarify that for the 
time being a dual regime of IMO and Basel Convention 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  facilities,  due  to  the  more  stringent  provisions  in  existing  EU 
directives on workers' health and safety at work and protection against 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,  depending  on  strict  implementation  of  the 
Convention's  safety  requirements  by  recycling  facilities  and  competent  authorities,  accident 
rates  and  occupational  health  hazards  for  workers  are  expected  to  go  down.  The  quality  of 
implementation, however, would in turn depend on awareness, public attention 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  recede  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 

26 

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The occupational health hazards for shipyard workers 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  already  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) would in general raise awareness and open the 
way for realistic risk assessments and better precautions for shipyard workers, seafarers and 
labourers  in  recycling  facilities.  On  the  basis  of  the  inventories,  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 recycling state on necessary 
waste management measures.  

The new surveys and certificates would have a limited job effect particularly for classification 
societies.  In  order  to  deal  with  the  approximately  50,000  ships  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 facilities in relation to yards in Asia will most 
likely remain also in the longer term, due to the much higher labour costs in Europe and in 
spite of the fact that EU shipyards would not need significant investments in order to comply 
with the requirements of the Convention. The national ship recycling policies of the UK and 
France might secure a niche for EU or environmentally 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 international regime might result in a separation 
of  two  distinct  markets,  one  with  a  higher  standard  complying  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-Parties 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  standards,  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 the range of 50 $ per ton of scrap steel. 

The revenues of shipowners whose ships fly the flags of Convention Parties and are sold to 
"Party  facilities"  would  accordingly  go  down  to  some  extent  which  is,  however,  minor  in 
relation to the overall price of 600-700 $ per ton that could be gained 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  increase  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  for  surveys  and  certificates  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 materials in the ship's structure is often not readily 
available, but would still be limited in comparison to the several hundred thousand dollars that 
can be earned currently with the sale of even a smaller merchant ship for scrapping. On the 

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27 

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other  hand,  shipowners  might  save  on  individual  compensation  payments  for  occupational 
diseases due to hazardous materials if they comply with Convention requirements. 

The IHM requirement and the necessary documentation would also cause additional costs for 
shipbuilders and suppliers in the 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 European 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  additional  administrative  and  legal  costs  for 
industry  due  to  the  usually  diverging  national  legislation  and  implementation  by  Member 
States. Especially delays and different timelines in the introduction of the IHM might lead to 
incoherent  control  standards  and  an  uneven  playing  field  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 dismantling in the EU/OECD (sub-option 1) 

7.2.1.1.  6.2.1.1 

Subsidies 

Subsidies are potentially a strong measure for encouraging shipowners to send their ships only 
to  good  recycling  facilities  in  the  EU  or  suitable  OECD  countries  (such  as  Turkey).  This 
could be done in the form of grants or tax benefits either directly to shipowners 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. Another 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 environmentally sound facility in the EU/OECD.  

In  the  EU  exists  currently  a  ship  dismantling  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 coast of Aliaga, though not 
all with a high environmental and safety standard. Apart from this, a considerable number of 
unused  piers  and  drydocks  in  European  harbours  could  be  seen  as  "dormant"  capacity  that 
could be revived for ship recycling (which was in fact often executed here until the 1960s or 
70s). The technical capacity in the EU and neighbouring 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  Hartlepool  (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". 

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28 

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have no support in EU state aid rules. The effects of different alternatives will be discussed 
under "economic impacts". 

Table 6 

EU and worldwide ship dismantling capacity43 

Country 

Number 
facilities  

and 

type 

of 

United Kingdom 

Able  UK 
(Hartlepool), 
Harland  &  Wolff  (Belfast) 
and 
smaller 
facilities 

approx.  8 

Method / remarks 

Annual 
capacity 
(LDT) 

1,000,000?  Dry  docks,  pier-
breaking, slipways 

Italy 

Simont (Naples) 

80,000 

Belgium 

Van Heyghen (Gent) 

60,000 

Pier-breaking; 
currently inactive 

Pier  breaking  and 
slipway 

Denmark 

Netherlands 

Spain 

GR,  LV,  EE,  LT, 
PL,  BG,  PT,  DE, 
FI, 
IE,  possibly 
others 

EU total 

Turkey 

USA 

(Grenaa), 
Fornaes 
Smedegaarden (Esbjerg) and 
2 smaller facilities 

Scheepssloperij  Nederland 
(s-Gravendeel) 
3 
smaller facilities 

and 

Approx. 
smaller 
12 
facilities,  mainly  for  fishing 
vessels 

60,000? 

Pier-breaking, 
slipways 

40,000? 

Slipways, 
breaking 

pier-

40,000? 

Pier-breaking, 
slipways 

Approx.  20  facilities  for 
smaller vessels 

100,000? 

Pier-breaking, 
slipways 

Approx. 50 facilities, mostly 
for smaller vessels 

1.4  million 
(?) 

21  shipbreaking  companies 
in Aliaga (near Izmir) 

600,000-
1,000,000 

Slipways 

4  facilities  in  Brownsville 
(Texas) and 3 others 

225,000 

Pier-breaking; 
currently  not  open 
to foreign vessels 

43 

EN 

COWI/DHI  report  of  June  2007,  updated  with  information  from  EMSA/LMIU  database,  May/June 
2008. 
reciclaje  de  buques,  at: 
http://www.conama9.org/ 

from  J.  Casas,  El  desguace  y 

Information  on  Spain 

29 

   EN 

 
 
                                                 
Country 

China 

Number 
facilities  

large 
5 
facilities 

and 

type 

of 

Annual 
capacity 
(LDT) 

Method / remarks 

ship 

recycling 

800,000* 

Pier breaking 

Bangladesh 

32  shipbreaking  companies 
in Chittagong 

Unlimited 

Beaching 

India 

Pakistan 

Approx.  30 
companies in Alang 

shipbreaking 

Unlimited 

Beaching 

33  registered  shipbreaking 
companies in Gadani 

Unlimited 

Beaching 

In  principle,  support  of  investments  to  reinforce  regional  competitiveness  and  employment 
under EU Structural Funds is possible for a broad range of projects, provided they can show 
to be beneficial to a region's economic structure in the longer term. Environmental impacts: 

Effective  incentives  that  would  divert  EU-flagged  ships  (23%  of  world  tonnage)  and  even 
EU-owned vessels (about 40% of world tonnage) or at least a sizeable fraction of them from 
South Asia to EU and OECD facilities would reduce the ongoing pollution in the South Asian 
recycling yards and might increase the pressure for an upgrading of these facilities. 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 stop, if not reverse, the further 
degradation of water quality, aquatic life and natural habitats.  

Environmental  impacts  of  the  extension  or  reopening  of  EU  dismantling  capacity  would  be 
limited, if existing sites in harbour areas are used. However, conflicts with other interests are 
possible,  as  in  the  case  of  the  Able  UK  facility  in  Hartlepool/UK  whose  planned 
modernisation and extension could potentially 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  livelihoods,  in  the  South  Asian  recycling  states, 
particularly in Bangladesh. The loss of a quarter of the business would result in a similar drop 
in employment at the yards. On the one hand, fatal accidents and occupational diseases caused 
by  the  dangerous  practices  on  the  beaching  sites  would  be  diminished.  On  the  other  hand, 
thousands of jobs for poor labourers would disappear. Again, this 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 recycling of EU-flagged ships with a 
tonnage  of  1.6  million  per  year  would  thus  create  industry  jobs  in  the  range  between  1,000 

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30 

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and 2,000 Europe-wide. To this might have to be added the experts and 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  conventional  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  the  EU  would  produce  extra  costs  of  250-400 
$/ldt, depending on the complexity of the ship and differences in labour costs between various 
EU countries. On the basis of the estimate that 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  difference  was  calculated  for  the  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 approx. 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 find other, more expensive sources of raw material for part of 
its  construction  industry.  A  measure  to  develop  and  protect  the  EU  dismantling  industry  in 
this  way  is  bound  to  provoke  heavy  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  would  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  vessels.  From  2005  to  early  2008,  the  European 
Investment Bank (EIB) granted low-interest loans 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  appraisal.  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 quality 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 operators would consequently have higher costs or rather earn a 
lower price when they sell their end-of-life vessels. The effect would be of medium intensity. 

44 

See in particular at pp. 132-135. 

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31 

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7.2.1.3.  6.2.1.3 

Voluntary coordination of EU governments for the clean dismantling of 

their own vessels (in particular warships) 

Currently, the decommissioning of government vessels  of  the  Member  States  -  in  particular 
warships - follows exclusively national rules and there is no systematic 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  British.  In  addition,  an  uncertain  number  of  state-
owned ships for civilian purposes with a tonnage of altogether under 100,000 will come up 
for demolition within the next decade. There exist also a high number of small ships used by 
navies or other government services which, however, are normally scrapped near their berth. 

The UK and France have published documents on a national ship recycling strategy where the 
governments commit themselves to a strict adherence to the EC Waste Shipment Regulation 
and  the  existing  guidelines  on  environmentally  sound  management.  Some  other  Member 
States, such as Denmark and Germany, have also indicated that they would send state-owned 
vessels only for dismantling in OECD countries. However, to date, most EU Member States - 
including  the  largest  flag  states  (GR,  MT,  CY)  and  the  new  Member  States  with  old  naval 
vessels – seem to be reluctant to make any commitment. 

Environmental and social impacts: 

Although warships and other state-owned vessels represent only a minor fraction - 1-2 % - of 
the EU-flagged tonnage, their significance for environment and health is higher on account of 
their relatively heavy contamination  with  hazardous  flame  retardants, especially asbestos. A 
coordinated "Green public procurement" initiative by Member States for the recycling of their 
vessels  could  thus  prevent  the  export  of  heavily  contaminated  warships  to  developing 
countries which currently cannot ensure their safe and environmentally sound dismantling, in 
accordance with the existing export ban for hazardous wastes under the EC Waste Shipment 
Regulation. The amount of hazardous wastes, especially asbestos, as a content of ships sent to 
South  Asian  countries  would  be  reduced  by  several  thousand  tons  a  year.  To  this  extent, 
pollution and health hazards would decrease 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  with  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 stronger coordination by the EU is, however, that 
it  relies  largely  on  the  goodwill  of  Member  States,  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 dismantling of government vessels. 

Economic impacts: 

As compared to ship dismantling on a South Asian 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.  This  cost  would  have  to  be  borne  by  the 

45 

French MIDN report of March 2007, at p. 21. 

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32 

   EN 

 
                                                 
respective government. On the other hand, the dismantling of state-owned 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 
worldwide (sub-option 2) 

to  encourage  ship  dismantling 

in  higher-standard 

facilities 

If  the  emphasis  is  put  not  so  much  on  preventing  hazardous  waste  exports  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 account of the fact that most European-flagged or 
European-owned  merchant  ships  operate  worldwide  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 attractive 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 associations and their customers are potentially 
among the simplest and quickest ways to change 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 partnership with Chinese 
facilities  whose  environmental  and  safety  standards  were  upgraded  through  technical 
assistance  and  training.  The  Industry  Working  Group  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  would  require  strong  political  involvement  on 
high  level,  systematic  negotiations  with  major  stakeholders  in  the  field,  and  considerable 
publicity.  

Impacts 

Especially  high-level  talks  with  ECSA  (European  Community  Shipowners'  Associations), 
INTERTANKO  and  major  oil  companies  (for  single-hull  tankers),  with  European  ferry  and 
cruise lines (for passenger ships) and key players in container and bulk shipping could have a 
positive  impact,  due  to  their  economic  importance,  high  public  profile  and  the  large 
membership of the owner associations. For the latter, the limits of influence of the association 
on  its  members  have  to  be  taken  into  account.  Voluntary  agreements  achieved  in  this  way 
could lead to significant environmental and social improvements by directing merchant ships 
to higher-standard recycling facilities, at the price of a 10-20% reduced profit for ship owners. 
Owners would, however, benefit from positive publicity, avoidance of administrative burden 
and indemnity against liability risks. Sub-standard facilities, especially in Bangladesh, would 
get  less  business  and  employment.  This  could,  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.  

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33 

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As  with  all  voluntary  agreements,  their  effectiveness  would  depend  on  transparency,  public 
attention  and  clear  performance  indicators,  as  well  as  the  possibility  of  sanctions  in  case  of 
non-compliance, at least in the form of "naming 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  increase  the  positive  effect  of  other 
legislative and non-legislative measures. 

7.2.2.2.  6.2.2.2 

EU-specific certification and audit scheme for ship recycling facilities 

An EMSA study is currently looking into the possibility of  an EU-specific certification and 
audit scheme that may be opened to ship recycling facilities worldwide. This scheme would 
go beyond the existing ISO 14001 and OHSAS 18001 standards which are generic, focus on 
procedure  and  do  not  include  performance  standards.  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  the  certificate  categories  in  connection  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  and  environmentally  sound  recycling  of  ships. The participating 
facilities themselves would have a better control of operations and of their compliance with 
international standards, the rules of the future IMO Convention and also national legislation. 
The  certificate  would  give  them  an  incentive  to  improve  environmental  and  safety 
performance. Certified facilities would serve as a benchmark for the industry and for national 
competent authorities.  

Depending  on  the  number  of  facilities  that  participate  in  the  system,  there  is  a  considerable 
potential  for  the  reduction  of  pollution,  accidents  and  occupational  diseases  in  South  Asian 
facilities.  However,  as  with  voluntary  agreements,  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 social conditions in the EU are not likely. 

Economic impacts 

An EU certificate and audit of this type would to some extent duplicate existing or envisaged 
schemes,  such  as  those  of  ISO.  The  additional  auditing  of  performance  indicators  and  the 
classification would produce costs for recycling facilities in the range of 20,000-40,000 € plus 
internal  personnel  costs  of  1-2  man  years.  The  EU  scheme  would  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 certificate. It would be attractive in particular for 
better  qualified  entrants  who  want  to  convert  these  technical  qualities  into  a  marketplace 
advantage.  They  can  also  reap  financial  benefits  through  better  control  of  operations  and 
avoid sanctions for non-compliance by competent authorities. Shipping companies, especially 
those with a clear profile of Corporate Social Responsibility, would 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 liability risks. Sub-standard recycling facilities, 
especially in Bangladesh, might lose business and employment but would get an incentive to 
upgrade, so that they could also meet the standard. 

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7.2.2.3.  6.2.2.3 

Award schemes 

A  new  specific  award  for  exemplary  ship  recycling  or  the  inclusion  of  ship  dismantling 
aspects in a re-installed "Clean Marine Award", on the lines of the prize awarded to shipping 
lines in 2004 by Commissioner Wallström, could provide public recognition for recycling and 
shipping  companies  with  a  clear  environmental  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 high-profile event in connection with the Green Week, did not involve a 
financial reward but nevertheless 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  sufficient  interest  from  industry  for  the  more  challenging  ship 
recycling issue, it might be necessary to fund the award with at least 100,000 € which would 
have be split in different classes or prize levels.  

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35 

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Impacts 

If made attractive enough, an EU award could have limited positive impacts on environmental 
and safety practices in ship recycling. A potential 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  potential  contenders  (best-practice  facilities  and 
shipping  lines)  is  for  the  time  being  small  and  the  drawback  could  be  overcome  by  a 
sufficiently broad and transparent selection scheme.  

Participation in the award scheme as such would produce only minor costs for the competing 
ship  owners  and  recycling  facilities,  but  would  presuppose  higher  investments  or  a  CSR 
policy  involving  more  renunciation  of  profit  than  for  average  operators  or  users  of  certified 
ship  recycling  facilities  under  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 for developing countries 

Technical assistance to recycling states in South Asia can help to support the quick upgrading 
of  dismantling  facilities  and  associated  infrastructure  (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 particularly high impact in Bangladesh, the poorest 
of  the  big  recycling  countries,  whereas  the  infrastructure  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 organised in various ways, for instance: 

•  Country projects; 

•  Contribution to the UNEP/IMO/ILO "Global Programme" for sustainable 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-specific  development  strategy.  In  the  case  of 
Bangladesh,  for  example,  the  use  of  "challenge  funds"  to  promote  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  recycling  industry  in  Bangladesh  show  no  particular 
interest  in  development  cooperation  focusing  on  environment  and  health  matters.  As  the 
industry draws considerable profits from shipbreaking - the biggest operator (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  initiated,  in  cooperation 
with IMO and ILO, a "Global Programme for sustainable ship recycling" currently does not 
foresee  concrete  projects  in  Bangladesh.  The  IMO  "Ship  recycling  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. 

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Moreover, in the interim period before the entry into force of the Ship Recycling Convention 
the  major  recycling  States,  notably  Bangladesh  and  India,  could  be  approached  in  the 
framework  of  the  EU  Cooperation  Agreement  to  negotiate,  on  a  bilateral  basis,  the 
introduction  of  a  mandatory  inventory  of  hazardous  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) action plan of the EU Cooperation Agreement.  

Impacts 

At  present,  therefore,  positive  impacts  of  development  aid  programmes  in  the  field  of  ship 
recycling  are  not  very  likely,  although  this  situation  might  change  quickly  if  a  widespread 
acceptance  of  the  IMO  Convention  and  higher  standards  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  competition  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 sound ship recycling in accordance with the draft 
IMO  Convention  are  currently  envisaged  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 pilot project is meant to test the procedural 
and  substantive  provisions  of  the  draft  Convention  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 the 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  industry  could  be  of  particular  value  if  it 
informed  about  higher-standard  facilities  in  developing  countries,  as  the  cost  difference 
between them and badly managed yards in those countries are much smaller than in relation to 
EU facilities, so that there is a higher chance of convincing shipowners to choose the better 
option. 

As there exist already several technical guidelines by ILO, IMO and Basel Convention on safe 
and  environmentally  sound  ship  recycling,  and  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 information, in particular with a list 
of worldwide ship dismantling facilities which satisfy the requirements 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 

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A  regularly  updated  list  of  higher-standard  facilities  would  provide  information  on  key 
features (design of the facility, capacity, authorisation status, certificates, limitations etc) in a 
standardised  format  and  thus  enable  shipowners  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  marketplace  advantage,  which  in  turn  would  create 
incentives for upgrading the environmental and safety performance of the industry in general. 

Updating  the  list  would  require  considerable  expertise  and  human  resources,  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 

Sub-option 1: 
Encourage 
dismantling in 
EU/OECD 

Subsidies for EU 
dismantling 

Positive impacts 

Negative impacts 

Affected group or concern: 

Affected group or concern: 

Likelihood / intensity 

Likelihood / intensity 

Recommended 
selection: 

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 

Reject 

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 

EU coordination for 
warships 

Environment + workers' safety 
in South Asia: low / medium 

for  EU  navies: 

Costs 
medium 

low 

/ 

Reject  

Jobs + revenue in EU recycling 
industry: low / medium 

Environment  +  workers'  safety  in 
EU: low / low 

Sub-option 2: 
Encourage clean 
dismantling 
worldwide 

Campaign for voluntary 
agreements 

No major impacts 

Accept  

Environment  +  workers'  safety 
in South Asia: low / medium (but 
potentially  effective 
in  short 
term) 

Jobs + revenue in EU recycling 
industry: low / low 

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Sub-option / 
measure 

Positive impacts 

Negative impacts 

Affected group or concern: 

Affected group or concern: 

Likelihood / intensity 

Likelihood / intensity 

Recommended 
selection: 

EU certification & 
audit scheme 

Environment  +  workers'  safety 
in South Asia: low / medium  

Award scheme 

Jobs + revenue in EU recycling 
industry: low / medium 

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  shipowners  +  recycling 
facilities:  low  /  low  (or  even  net 
positive) 

Accept  

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 

Accept  

Effect on competition:  
medium / low 

Participation in pilot 
projects 

Environment  +  workers'  safety 
in South Asia: low / low 

No major impacts 

Accept  

Guidance for 
shipowners (global list 
of dismantling 
facilities) 

Jobs + revenue in EU recycling 
industry: low / low 

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  acceptable  would  encourage  voluntary  actions 
by shipowners to improve the worldwide practice of ship dismantling, but will 
not necessarily address the gaps with regard 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  integration of Convention provisions into  EU  law a 
detailed  impact  assessment,  including  a  conformity  check  will  have  to  be  carried  out 
with  a  view  to  avoiding  any  possible  incompatibilities  with  the  already  existing  EU 
acquis  e.g.  in  the  field  of  health  and  safety  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 Convention into EU law. In particular with 
respect to the baseline described in section 6.1, the following positive impacts are to 
be expected: 

•  A  coherent  approach,  for  example  ensuring  uniform  controls  across  the  EU  in 

ports and shipyards.  

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•  Faster  potential  for  legislation  to  take  effect  and  speeding  up  information 

processes such as on recycling facilities in Member States.  

•  Greater certainty and level playing 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  safety  and  the  state  of  the 
environment. Specific aspects of implementing the IMO Convention 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  that  transposes  the  key  elements  of  the  future 
IMO Convention into Community law would be able to harmonise implementation EU-wide. 
Differences  between  Member  States  concerning  the  point  in  time  when  the  Convention 
requirements  take  legal  effect  would  be  considerably  reduced.  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 mechanisms of the Convention itself. 

Moreover, an EU legislative instrument could foresee an early implementation of Convention 
requirements independent of the treaty's entry 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 environmental protection. This is the case particularly for the ban 
on  hazardous  materials  on  board  ships  or  the  environmental  and  workers'  health  and  safety 
requirements in recycling facilities. Here a reference to the relevant provisions of EU law (for 
the  latter  e.g.  Directive  2006/12/EC  on  waste,  Directive  89/391/EEC  on  measures  to 
encourage  improvements  in  the  safety  and  health  of  workers  at  work,  and  Directive 
83/477/EEC on the protection of workers from the risks related to the exposure to asbestos at 
work, as amended) would be sufficient. 

The  most  important  elements  of  a  Ship  Recycling  legislative  instrument  to  implement  the 
IMO Convention would be the following: 

•  Introduction  of  a  mandatory  Inventory  of  Hazardous  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 authorities, recycled ships, violations and actions taken) to 
the IMO, as well as directly to other Member States and the Commission; 

•  Reporting  requirements  for  shipowners  and  recycling  facilities  which  could  be  linked  to 
the existing requirements of the EC Waste Shipment Regulation for notification and prior 
informed consent. 

7.4.1.1.  6.3.1.1 

Inventory of Hazardous Materials, surveys and certificates 

The  environmental,  social  and  economic  impacts  of  the  new  survey  and  certificate  system 
have  been  described  already  in  the  context  of  the  IMO  Convention  (above  6.1.2). 

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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 effectiveness 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  important  elements  from  the  envisaged  IMO 
guidelines on the various certificates 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  have  been  outlined  above  under 
6.1.2. Current EU legislation does not regulate such facilities explicitly, but as performing an 
operation  for  the  recycling  of  metals  they  fall  under  the  permit  requirement  of  Directive 
2006/12/EC  on  waste.  A  recycling  facility  management  plan  does  not  exist  as  a  legal 
obligation  under  Community  law.  Other  substantial  requirements  for  the  protection  of 
workers' health and safety, however, are essentially contained in relevant EU directives. 

Transposing the relevant provisions of the Convention into an EU Ship Recycling legislative 
instrument would therefore not introduce new elements - apart from the management plan - 
but rather clarify the 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 standards in Member States. 

7.4.1.3.  6.3.1.3 

Information duties of recycling states 

The draft Ship Recycling Convention requires Parties (in this case recycling states) to report 
to  the  IMO  various  relevant  data,  e.g.  a  list  of  authorized  ship  recycling  facilities  and  an 
annual list of ships recycled within the jurisdiction of that state. 

Such  obligations  are  useful  tools  to  ensure  transparency  and  contribute  to  an  effective 
implementation  of  the  Convention,  provided  the  lists  contain  sufficient  information  and  are 
regularly updated and disseminated to all interested parties and the public. 

EU legislation would have the positive effect of harmonising implementation and ensuring a 
minimum  standard  of  communication.  The  additional  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 recycling facilities, recycled ships, violations 
of  the  Convention  and  action  taken  would  be  important  for  any  implementation  of  an  EU-
wide strategy on ship dismantling.  

The  administrative  burden  for  Member  States'  authorities  and  the  recycling  facilities  would 
not  be  substantially  increased  in  relation  to  what  is  required  by  the  Convention  (baseline 
scenario). In case the Convention does not foresee information to be submitted by recycling 
states  on  the  capacity,  the  status  of  authorisation  and  certification,  and  the  limitations  of 
recycling facilities concerning ship type and size and hazardous wastes, these details would be 
made  obligatory  by  EU  legislation,  but  essentially  be  limited  to  a  one-page  document.  This 
elementary information could be quickly established at minimal costs and would on the other 
hand benefit EU facilities which, as a rule, have an economic interest in more transparency, so 
as to document their comparatively high environmental and safety standard. 

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7.4.1.4.  6.3.1.4 

Reporting requirements for shipowners and recycling 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 procedure under the Basel Convention and the EC Waste Shipment 
Regulation. The opt-in clause foreseen in the current 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  tacit  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 baseline scenario and thus not create additional 
administrative burden. 

Under the current EC Waste Shipment Regulation, mandatory prior notification 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  Convention  Parties  may  find  the  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 additional administrative burden 
of  the  IMO  system  for  shipowners  and  recycling  facilities  cannot  be  avoided  for  the  time 
being,  but  EU  rules  could  reduce  it  to  some  extent  by  obliging  the  relevant  authorities  to 
cooperate and exchange information. In the case that a vessel is transported to a ship recycling 
facility  in  the  EU,  for  instance,  the  Ship  Recycling  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  specified,  it  is  at  present  uncertain  when  the 
Convention  will  become  binding  in  international  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  Convention  contains  separate  deadlines  for 
compliance with  the  various  requirements  -  for  instance  not  later than five years after entry 
into force, or before going for recycling if it is earlier for an Inventory of Hazardous Materials 
to  be  present  in  existing  ships  (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 for 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,  benefit  from  avoiding  bottlenecks  of  survey  and 
certification capacity and being able to use certificates as a marketing argument.  

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Early  legislation  at  EU  level  would  give  a  boost  to  ship  recycling  as  a  business  field  of 
classification societies and is likely 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 extended 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 guidance would have to be based on the Convention of May 2009 
and  the  guidelines  on  ship  recycling  facilities  that  are  scheduled  for  adoption  by  the  IMO 
(MEPC 58) in July 2009. 

In  order  to  profit  from  the  advantages  of  early  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 understood as an international minimum standard on 
ship dismantling. Like other international conventions it explicitly (in Article 1.2 of the draft) 
acknowledges  the  right  of  Parties  to  take,  individually  or  jointly,  more  stringent  measures 
consistent with international law with respect to safe and environmentally 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 and health protection and fills relevant gaps 
of the Convention.  

All measures at  national  or EU level that are not foreseen in the text of the Ship Recycling 
Convention run potentially the risk of driving ship owners to change the flag of their ships to 
a "flag of convenience". The quantification of this risk is difficult but there is some experience 
with maritime legislation which suggests that not every unilateral legal measure will result in 
a  significant  out-flagging.  The  main  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  measure  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  forthcoming  legislative  instrument  on  ship 
dismantling.  The  complementing  measures  that  are  assessed  in  the  following  section  and 
those mentioned in the section on "implementation" (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 three categories of ships from its scope: small 
vessels  below  500  GT,  ships  used  only  on  government  non-commercial  service,  and  ships 
operating  throughout  their  life  only  inside  domestic  waters.  The  most  serious  exemption  is 

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that  for  warships  in  the  second  category,  on  account  of  their  relatively  high  contamination 
with  asbestos  and  other  hazardous  materials  (see  above  6.2.1.3).  Unlike  the  IMO,  which 
traditionally provides for a "government" exemption 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  the  EC  Treaty  in  particular  does  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,  construction  and  operation  of  ships  (for  instance 
requiring an Inventory of Hazardous Materials), interests of military secrecy would have to be 
taken into account. 

With  its  legislation,  the  EU  would  follow  the  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  ships  and  domestic  transport  in  the  EU  is  a 
possible option but not regarded as urgent at this 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  obliging  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 government. In addition, sales could be restricted 
to those countries, or private owners flying the flag of those countries, that have declared their 
agreement to apply for the time being the Basel Convention to end-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  Convention  standards  would  in  substance  not  go 
beyond the already existing export ban for hazardous wastes under the  EC Waste Shipment 
Regulation but would clarify the legal situation and explicitly oblige Member States to act in 
an exemplary fashion with regard to their own ships.  

The  environmental,  social  and  economic  impacts  outlined  in  the  context  of  a  stronger  EU 
coordination  would  be  much  more  certain  than  with  a  voluntary  commitment  of  Member 
States.  The  risk  of  out-flagging  is  not  a  major  one  for  government  vessels,  as  the  action  of 
states is much more under public scrutiny than that of private operators. 

If rules on the sale of government vessels for further use were included in the legislation, the 
freedom  of  navies  and  other  Member  State  agencies  to  dispose  of  their  vessels  would  be 
restricted. This has the potential to depress considerably 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  legislation  on  the  marketing  and  use  of  hazardous 
substances  is  more  stringent  than  the  prohibitions  envisaged  in  the  draft  IMO  Convention. 
Even where the Convention bans a material like asbestos, this ban is subject to a wide range 
of exemptions (e.g. asbestos in vanes and watertight joints) that have long been abandoned in 

EN 

44 

   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. 

In  particular 

for  brominated 

less  hazardous  materials. 

Some other hazardous substances used on ships might be considered for a ban or substitution 
like 
by 
hexabromocyclododecane (HBCDD) and tetrabromobisphenol A (TBBPA) which are widely 
used, scientific evidence suggests that they are persistent, bioaccumulating and highly toxic to 
aquatic  organisms.  Both  substances  are  classified  under  the  OSPAR  Convention  as  priority 
substances  for  reduction  or  elimination  of  releases,  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 group 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. 

retardants 

flame 

However, inclusion in a Ship Recycling legislative instrument would have 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  but  high  environmental  benefits  to  be 
expected from the prohibition of both flame retardants. 47 

A ban on materials covered by existing EU directives would have additional impact only if it 
is  extended  to  all  ships  calling  at  EU  ports  regardless  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 than 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 particular on EU ship suppliers who would face 
difficulties  in  relation  to  Asian  competitors.  A  particular  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 materials 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  already  for  an  indirect 
obligation to pre-clean ships that 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 arising from the operation of the vessel which may 
have  been  classified  as  a  dangerous  substance  or  waste  (entry  GC  030).  The  draft  Ship 
Recycling Convention, on the other hand, contains 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 

45 

   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  situation  and  in  theory 
prevent  the  export  of  a  large  quantity  of  hazardous  wastes  to  developing  countries  via  ship 
recycling. This would benefit the 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 recycling workers would profit especially 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 carried out thoroughly enough and under strict safety 
precautions, so that e.g. asbestos fibres are released from the structure into the air inside the 
ship.  Also,  the  removal  of  the  engine  and  oil  tanks  has  the  effect  that  the  vessel  has  to  be 
towed to its destination and the accident risk en route is higher than 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 facility cannot take place on the beach itself but in 
the water and thus involves additional 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  asbestos  and  332  t  of  asbestos-
containing material (plus other hazardous wastes) from the 22,000-dwt ship took one year and 
cost the Dutch administration in the end 4 million €. 48 

Efficient management and rationalisation effects  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 shipowners would be relatively high. On the 
other hand, pre-cleaning on a large scale could provide good business opportunities and job 
effects for the European ship repair industry. As the decontamination process cannot be easily 
mechanised, the job potential could be higher than with the mere dismantling of a vessel. 

The  drawback  of  any  obligation to  pre-clean  ships  flying  the  flags  of  EU  Member  States  is 
that it can be avoided by changing flag before the intention to recycle 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 which 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 desired 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_victory_for_proper_ship_scrapping.html. 

EN 

46 

   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 system 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 Convention's requirements on 
pollution  prevention  and  safe  waste  management  with  the  primitive  operating  method.  The 
Japanese  draft  of  Guidelines  for  safe  and  environmentally  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  interpret  the  draft  Convention  as  allowing  the 
continuation of beaching practices in the existing yards. 

Impacts: 

A  prohibition  for  EU-flagged  ships  to  go  for  dismantling  to  beaching  facilities  would 
therefore mean a clear break with established practices. The environmental and social impacts 
would  potentially  be  similar  to  those  of  full  subsidies  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 effectively for EU-flagged ships, owners would have 
to  use  recycling  facilities  with  a  higher  standard  (drydock,  pier-breaking  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 the Pipavav dockyard in India, which was built with 
Japanese subsidies as a model ship recycling facility 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 facilities, the cost of ship recycling would increase 
by at least 150 $/ldt and thus reduce the current revenue for the sale 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  shipowners  would  choose  the  cheaper 
facilities in Turkey or China for 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 cheaper alternative by simply changing 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 certification and audit scheme (see above 6.2.2.2), a 
proposal  based  on  discussion  papers  by  EMSA  to  include  provisions  on  a  voluntary 
certification and audit scheme for ship recycling facilities in the draft Convention is currently 

49 

50 

UNEP/CHW.6/23, published at http://www.basel.int/meetings/cop/cop6/english/Report40e.pdf#vi24, at 
p. 70. 
IMO document MEPC 56/3/4 of 6 April 2007, Annex I, no. 2.  

EN 

47 

   EN 

 
                                                 
under  discussion  in  the  IMO.  This  is  meant  as  a  mechanism  to  ensure  a  higher  level  of 
transparency  and  a  more  harmonised  and  effective  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 flags 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  voluntary  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  effect  would  carry  more  weight  in  the  international  arena  than 
purely  national  legislation  and  would  give  the  certification  and  audit  scheme  a  chance  of 
success.  

Environmental and social impacts: 

The  audits  under  the  scheme  would  look  into  the  environmental  and  safety  performance  of 
ship recycling facilities and thus establish whether they comply with the requirements of the 
Ship  Recycling  Convention.  Additional  criteria  would  be  provided  by  the  envisaged  IMO 
Guidelines on ship recycling and by the forthcoming ISO 30000 standards. Certificates would 
only be granted to facilities which are in full compliance with the Convention. If the approach 
suggested by the EMSA study on certification systems 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  level  where  they  can  fully  meet  the  Convention 
requirements. This would give South Asian operators an incentive to upgrade 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 additional 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 should be no additional costs for the upgrading of 
facilities compared to those required already  by the Convention itself. In practice, however, 
the  impact  to  be  expected  from  audits  and  certificates  by  an  independent  third  party  is  that 
they  ensure  more  effectively  than  the  authorisation  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 Turkish facilities additional investments on account 
of the audit scheme would, as a rule, not be necessary. The costs of audit 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 facilities that have acquired it and thus 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 

48 

   EN 

 
For  shipowners  the  impact  would  not  consist  in  administrative  burden  -  as  the  procedures 
(notification  of  selected  facility  to  the  flag  State,  ship  recycling  plan  etc)  would  follow  the 
IMO  model  -  but  in  a  reduction  of  profit  for  the  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 ships which are likely to be scrapped within a 
few  years  and  to  envisage  mechanisms  whereby  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  legislation,  since  the 
register  and  the  consequential  monitoring  obligations  for  Member  States  would  target  ships 
that are not yet "waste". 

The actual technical and legal feasibility of a list of ships ready for scrapping is uncertain and 
shall be further assessed by the Commission taking into account the procedures 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 dissemination 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  merchant  ship  will  be  scrapped  increases 
significantly  beyond  the  age  of  25 years,  it  can  still  vary  considerably  depending  on  the 
category and individual quality of a vessel.  

The Commission will therefore launch a study to assess the relevance 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  could  improve  the  enforcement  of  the  Waste 
Shipment Regulation for example for further inspections. 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  requiring  a  lengthy  detention  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 can be examined by the future study is that of 
introducing  a  "label"  for  high  quality  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  authorities  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 

49 

   EN 

 
                                                 
the new risk-based system of port state control in the EU, and the envisaged pre-waste checks 
would probably overlap with 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 chartered 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 altogether 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 the Waste Shipment Regulation 

EU  measures  focusing  on  better  implementation  of  the  current  EC  Waste  Shipment 
Regulation (WSR) and its application to ships might be considered particularly 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 against ships in their ports. Public 
dissemination  would  raise  awareness  further  and  prevent  open  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 easily avoided by a shipowner's decision to send a 
ship for dismantling once it is outside EU waters. Already today shipowners' associations are 
well aware of the Commission's legal view, and individual 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  implementation  and  enforcement  network  IMPEL  and  its 
"TransFrontier  Shipment  of  Waste"  (TFS)  cluster  on  end-of-life  ships  would  intensify  the 
awareness-raising  in  competent  authorities  and  help  to  build  capacity  by  exchanging 
information  on  best  practices.  The  effectiveness  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  Member  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 countries of destination (recycling states) for the application of the 
Basel  Convention  to  ships  is  likely  to  be  difficult  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 the transfer of end-of-life ships from Europe to South Asia. 

52

53 

EN 

http://www.dnv.com/press_area/press_releases/2004/25percentofallshipsrepresent51percentofa

llshipaccidents.asp 
Lloyd's List of 19 May 2008. 

50 

   EN 

 
                                                 
 
There is a potential for raising the effectiveness of the Basel Convention system of controls if 
Egyptian  authorities  can  be  convinced  that  this  would  have  financial  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  provisions  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  shipowners  might  seek  to  avoid  expected  economic 
burdens by selling their end-of-life 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 agreements) 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 

Negative impacts 

Affected group or concern: 

Likelihood / intensity 

Affected 
concern:  

group 

or 

Likelihood / intensity 

Recommended 
selection 

Measures to 
implement the IMO 
Ship Recycling 
Convention 

Inventory of Hazardous 
Materials, surveys and 
certificates 

No additional costs in relation 
to baseline (IMO Convention) 

Accept  

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 

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 
burden 
 medium / low 

administrative 
MS: 

for 

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 

51 

   EN 

 
 
 
 
 
 
 
Measure 

Positive impacts 

Negative impacts 

Affected group or concern: 

Likelihood / intensity 

Affected 
concern:  

group 

or 

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) 

More extensive bans on 
hazardous materials 

Marine environment : 
 high / high 

Workers' safety + health: 
 high / medium 

Stricter pre-cleaning 
obligations for EU-
flagged ships 

Environment + workers' safety 
in South Asia, low / medium 
- Jobs + revenue in EU recycling 
industry: low / medium  

Ban on beaching for 
EU-flagged ships 

Obligation for EU-
flagged ships to use 
only certified facilities  

List of ships ready for 
scrapping. 

Environment + workers' safety 
in South Asia, low / medium 
- Jobs + revenue in EU recycling 
industry: low / medium 

Environment + workers' safety 
in South Asia: medium / medium 

- Jobs + revenue in EU recycling 
industry: low / medium 

- Jobs + revenue in class 
societies: 
medium / medium 

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 

Costs 
medium / medium 

for 

EU 

navies:  

Accept  

Environment  +  workers'  safety 
in EU: 
low / low 

Jobs  +  revenue  in  South  Asian 
facilities: medium/low 

Interference  with  EU  product 
legislation: 
 high / high 

Reject 

Competitive position of EU 
ship suppliers: 
 medium / high 

Effectiveness 
investigations: 
 medium / medium 

of 

risk 

Costs for shipowners: 
 medium / medium 

Reject  
(as ineffective) 

Re-flagging  of  EU 
 high / medium 

ships: 

Additional risks of accidents en 
route + for safety/ environment 
in SouthAsia: 
 low / medium 

Costs for shipowners:  
 low / medium 

Reject  
(as ineffective) 

Re-flagging  of  EU 
 high / medium 

ships: 

shipowners 

for 
Costs 
recycling facilities: 
medium / medium 

+ 

Accept  

Re-flagging  of  EU 
medium / medium 

ships: 

Accept  

burden 

Administrative 
shipowners:  
 low / low (higher for owners of 
older ships) 

for 

Admin.  burden  for  authorities:  
 medium / medium  

Loss  of  revenue  for  EU  transit 
ports 
the  Mediterranean:  
in 
 medium / medium 

EN 

52 

   EN 

 
Measure 

Positive impacts 

Negative impacts 

Affected group or concern: 

Likelihood / intensity 

Affected 
concern:  

group 

or 

Likelihood / intensity 

Recommended 
selection 

WSR enforcement 
measures 

Guidance document on 
waste ships 

Prevention of hazardous waste 
ship exports: medium / medium  

Administrative  burden  for  EU 
+ Member States: high / low 

Accept 

Environment + workers' safety 
in South Asia: low / medium 

IMPEL-TFS project 

Prevention of hazardous waste 
ship exports: medium / medium  

Administrative  burden  for  EU 
+ Member States: high / low 

Accept 

Infringement 
proceedings 

Cooperation with third 
countries 

Environment + workers' safety 
in South Asia: low / medium 

Prevention of hazardous waste 
ship exports: medium / high  

Environment + workers' safety 
in South Asia: low / medium 

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 

Costs for EU + MS: low / low 

Accept 

Administrative burden for EU 
+ Member States:  
 high / medium 

Accept 

7.5. 

6.4 

Impacts of Option 4: Integrated policy approach  

Under Option 4, EU legislation to implement and complement the Ship Recycling Convention 
would  be  combined  with  suitable  non-legislative  measures  and  actions  for  a  better 
enforcement of the EC Waste Shipment Regulation, in order to reach maximum 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  selected  measures  to  encourage 
voluntary action under 6.2.1.2, 6.2.2 and 6.2.3. 

An extensive OECD study analysed the impacts 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  particularly  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 effective in reducing compliance-
cost uncertainty, enhance enforcement and reduce administrative costs.  

54 

Instrument Mixes for Environmental Policy, OECD, May 2007.  

EN 

53 

   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 take 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 social 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 relevant especially in the interim period until the 
new  international  regime  enters  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 showing to private shipowners 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  mix  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  voluntary  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  other  hand,  to  some  extent  limit  negative 
anticipatory  effects  of  the  new  legislation,  especially  if  they  are  combined  with  closer 
monitoring and "naming and shaming" 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 effect of this obligation 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  campaign  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 under Option 4 (integrated policy approach) 

Measure 

Positive impacts 

Negative impacts 

Net 
interference 

impact 

/ 

EU legislation 

Inventory of 
Hazardous 
Materials, surveys 
and certificates 

of 

harmonization 

Early 
safety rules in EU would  
-  establish 
field  
- 
shipowners + shipyards 

reduce 

costs 

level  playing 

for 

No additional costs in 
relation to baseline (IMO 
Convention) 

Medium positive impact; no 
interferences expected.  

EN 

54 

   EN 

 
 
 
 
 
 
 
Measure 

Positive impacts 

Negative impacts 

Net 
interference 

impact 

/ 

-  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 

in 
No  additional  costs 
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: 

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: 

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 

Higher costs / less revenue 
for EU navies 

Medium positive impact;  
no interferences expected. 

Possibly minor impacts on 
jobs  +  revenue  in  South 
Asia 

Possibly minor impacts on 
environment  +  workers' 
safety in EU 

Higher costs / less revenue 
shipowners,  minor 
for 
certification 
for 
recycling facilities 

costs 

Possibly  out-flagging  of 
EU ships 

More 
administrative 
burden  for  authorities  and 
owners  of  older  ships 
through  monitoring  + 
controls 

Loss  of  revenue  for  EU 
the 
ports 
transit 
Mediterranean: 

in 

Medium  positive  impact,  if 
no  major 
out-flagging. 
Combination  with  campaign 
for  voluntary  action/CSR 
necessary. 

impact. 
Medium  positive 
Could 
with 
interfere 
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' 

administrative 
More 
burden  for  authorities  and 
owners  of  older  ships 
through 
additional 
controls  

impact. 
Medium  positive 
Rigid  execution  of  measures 
could 
with 
interfere 
encouragement  for  voluntary 
actions. 

EN 

55 

   EN 

 
 
 
 
 
 
 
 
Measure 

Positive impacts 

Negative impacts 

Net 
interference 

impact 

/ 

More administrative 
burden for EU + Member 
States 

but 

Potentially  medium  positive 
impact, 
successful 
cooperation with countries of 
destination  not 
likely.  No 
interferences expected. 

Higher costs / less revenue 
for ferry operators:  

Medium positive impact; no 
interferences expected 

proceedings 

safety in South Asia 

Cooperation with 
third countries 
(countries of 
destination + 
transit) 

Measures for 
voluntary 
actions 

Streamlining 
existing shipping 
aids 

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 

Better compliance with 
WSR / prevention of 
hazardous waste ship 
exports from EU  

impact 

Minor 
on 
environment  +  workers' 
safety in South Asia 

More jobs + revenue in EU 
recycling industry 

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. 

Medium  positive  impact;  if 
transparent  +  broad  scheme 
no interferences expected. 

Minor  costs  for  EU  + 
industry  participants  (but 
presupposes  already  high 
standards). 

impact 

on 
Minor 
environment  +  workers' 
safety in South Asia  

Better  reputation  for  EU 
other 
shipowners 
participants 

+ 

Possibly more jobs + 
revenue in EU recycling 
industry 

Possibly  medium  impacts 
on  environment  +  workers' 
safety in South Asia  

Possibly  better  conditions 
for local fishermen in South 
Asia:  

impacts 

Minor 
on 
environment  +  workers' 
safety in South Asia 

Award scheme 

Technical 
assistance for 
developing 
countries 

Participation in 
pilot projects 

Guidance for 
shipowners (global 
list of "green" 

Costs for EU funds 

Possibly distortion of 
competition with other 
recycling states  

Potential for positive impact, 
dependent  on  cooperation 
recycling  state.  No 
from 
interferences expected. 

No major impacts 

Minor  positive  impact.  No 
interferences expected. 

Possibly  medium  impacts 
on  environment  +  workers' 

No major impacts 

Medium  positive  impact.  No 
interferences expected. 

EN 

56 

   EN 

 
 
 
 
 
 
 
 
 
 
Measure 

Positive impacts 

Negative impacts 

Net 
interference 

impact 

/ 

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 IMO Ship Recycling Convention. 

Table 10: Short and medium-term impacts 

Options 
1) No policy 
change 

Environmental 
Pollution of water, 
soil + habitats in S. 
Asia would 
continue, probably 
increase 

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). 

Social 
- 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 

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. 

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 

Economic 
- 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. 

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 no major impacts 
expected.  

Costs for development aid, negative 
impacts on competition possible. 

EN 

57 

   EN 

 
 
 
 
 
 
 
Options 

Environmental 
development aid. 

aid. 

Social 

Economic 

3) Compre-
hensive EU 
legislation 

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. 

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. 

4) Integrated 
policy approach 

A) Short term:  
- Higher WSR 
compliance through 
enforcement 
measures. 

A) Short term:  
More potential for 
improvements on workers' 
safety + EU jobs through 
voluntary action (2B). 

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 
positive impacts of 2B) 
and 3B).  

B) From entry into force of legislation: 

Combined impacts of 2B) and 3B).  

- 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). 

Table 11: Long-term impacts 

Options 
1) No policy 
change 

Environmental 
Limited positive 
impacts of IMO 
Convention (less 
pollution in S. 
Asia). 

Delays through 
diverging MS 
implementation.  

Social 
Limited positive impacts 
of IMO Convention on 
workers' safety.  

Delays through diverging 
MS implementation.  

New jobs in classification 
societies. 

Economic 

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 

58 

   EN 

 
 
 
 
 
 
 
 
Options 

Environmental 

Social 

Economic 

A) With subsidies same 
impacts as in short term 
(Table 3, 2A).. 

B) Without subsidies 
positive impacts on 
workers' safety slightly 
higher than in 1) (state-aid 
ferries, development aid). 

New jobs in classification 
societies. 

Limited positive impacts 
on workers' safety, higher 
than in 1) (inventories, 
state-owned ships, audit 
requirement).  

New jobs in classification 
societies. 

Positive impacts on 
workers' safety higher 
than in other options 
(except 2A), due to 
combination of measures. 

New jobs in classification 
societies. 

recycling industry certain to continue. 

Positive impacts for S. Asian fishermen 
possible. 

A) With subsidies same impacts as in 
short term (Table 3, 2A). 

B) Without subsidies 

- essentially same impacts as in 1) 

- Costs for development aid, negative 
impacts on competition possible. 

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. 

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. 

2) Emphasis on 
voluntary action 

3) Compre-
hensive EU 
legislation 

4) Integrated 
policy approach 

A) With subsidies 
same strong 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). 

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. 

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. 

EN 

59 

   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 impacts. 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 recycling 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 voluntary actions under option 2.  

This option would  

•  in  the  short  term,  until  legislation  is  in  force,  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 comprehensive set of rules to make the recycling of 
EU ships safer and more environmentally sound worldwide by an early implementation of 
the forthcoming IMO Convention and complementing measures; and 

•  in parallel encourage voluntary actions by shipowners to improve 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  before  2015  the  negative  impacts  of 
shipbreaking  on  human  health  and  the  environment,  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 strategy 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 going to developing countries for dismantling; 

•  the  number  of  ships  whose  departure  to  developing  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 ships 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 environmental pollution associated with ship 

dismantling, as available. 

Taking these indicators into account, it is necessary to review the EU policy concerning ship 
regular 
dismantling  on 

(every  3-4  years) 

regular  basis 

submit 

and 

to 

a 

EN 

60 

   EN 

 
implementation/progress  reports  to  the  European  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"  ships  moving  in  European  waters  could  come  in  through  the 
continual  monitoring  of  these  ships  by  Member  States'  authorities,  possibly  assisted  by  the 
European  Maritime  Safety  Agency  (EMSA).  In  addition,  cases  of  (prevented)  exports  of 
hazardous waste ships should be contained in the annual implementation reports of Member 
States  under  the  EC  Waste  Shipment  Regulation.  Other  data  on  ships  and  their  dismantling 
could  be  drawn  from  existing  maritime  databases  that  are  used  by  EMSA,  from  the 
observation of press reports and contact with key 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 Recycling 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  
2007) 
 (of 

October 

15 

EN 

61 

   EN 

 
 
8.3. 

8.4. 

Annex I: List of references 

I. European Community legislation and documents 

by 

parties 

published 

(2002)704, 

the  Commission’  COM 

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/waste/ships/pdf/report_consultation.pdf. 
Commission Communication ‘General principles and minimum standards for consultation of 
interested 
at: 
http://ec.europa.eu/civil_society/consultation_standards/index_en.htm. 
European  Parliament  Resolution  on  Commission's  Green  Paper  on  better  ship  dismantling 
http://www.europarl.europa.eu/sides/getDoc.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  pollutants  and  amending  Directive  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 the ozone layer, OJ L 244, 29.9.2000, p. 1. 
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.  
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. 
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 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. 
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  Environmental  Protection,  OJ  C  82,  1.4.2008,  p.  1 
(paras 126-131). 

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II. Studies 

the 

and 

COWI/DHI for the European Commission, DG Environment, Study on "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. 
COWI for the European Commission, DG Transport and Energy, Study on "Oil Tanker Phase 
Out 
at: 
http://europa.eu.int/comm/transport/maritime/safety/doc/prestige/2004_06_scrapping_study_e
n.pdf 
Department  for  Environment,  Food  and  Rural  Affairs  (DEFRA),  "Regulatory  Impact 
Assessment  for 
the  UK  Ship  Recycling  Strategy",  February  2007,  published  at 
http://www.defra.gov.uk/ENVIRONMENT/WASTE/strategy/ship.htm. 
Report  of  the  French  Inter-departmental  Committee  on  the  Dismantling  of  Civilian  and 
Military  End-of-Life  Ships  ("MIDN  report");  French  original  (with  annexes)  and  English 
translation published at: http://www.sgmer.gouv.fr/article.php3?id_article=52 

Scrapping 

Industry", 

published 

2004, 

Ship 

III. Databases 

DG TREN / Lloyd's Register database 
EMSA / LMIU (Lloyd's Marine Intelligence Unit) database 

IV. International/intergovernmental organisations documents 

21 

at: 

Ship 

2008, 

January 

Agency, 

published 

Recycling 

Protection 

Convention, 

Draft 
http://www.basel.int/ships/commentsOEWG6/oewg6.html. 
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). 
Draft  Pocket  Manual  on  Implementation  of  Green  Ship  Recycling,  prepared  by  the  Danish 
Environment 
2005, 
http://www.basel.int/ships/compilation.html#7. 
U.S.  EPA  “A  Guide  for  Ship  Scrappers  –  Tips  for  Regulatory  Compliance”,  2000,  both 
published 
at 
of 
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  proposal  for  prohibition  on  certain 
hazardous substances in consumer products (Sept. 2007), published at www.eftasurv.int. 
Press 
http://www.ban.org/ban_news/2008/080516_victory_for_proper_ship_scrapping.html. 
UNEP/CHW.6/23, 
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.  

(BAN)  of  16  May  2008,  published  at 

release  Basel  Action  Network 

Convention 

December 

published 

website 

Basel 

the 

the 

on 

at 

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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  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",  http://www.dailymail.co.uk/news/worldnews/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 for EC support in the 
area of Environment and Disaster Management 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. 

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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  associations  or  companies  and  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 South 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  improved?  What  is  the  best  mix  of  measures  to 
divert  EU-flagged  or  EU-owned  vessels  to  dismantling  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 ship 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 suggested that the EU should adopt its own certification system, to 
be controlled by an EU authority. 

Concerning the measures to divert EU-flagged/owned vessels to dismantling sites with high 
standards, it is suggested that the EU should compile a list of green recycling 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 improve the situation. Some stakeholders point 
to  the  recent  proposals  in  the  International  Standardization  Organization  (ISO)  for  an 
international  standard  ISO  30000  "Specifications  for  management  systems  for  safe  and 
environmentally  sound  ship  recycling  facilities"  and  ISO  30003  "Requirements  for  bodies 
providing audit and certification of ship recycling management systems". 

Question 2: Would guidance on waste shipment rules and definitions on end-of-life ships help 
to improve implementation of rules and business practices, and what form should it take? 

Guidance and clear definitions are welcomed. However, most stakeholders express the view 
that guidance should be in line with the discussions at IMO level on a draft Ship Recycling 
Convention and accompanying guidelines. It is suggested that resources should be directed to 
improving such guidelines and implementing them at an early stage. Guidelines on the "green 
passport",  the  "inventory  of  hazardous  materials"  and  the  term  "properly  emptied"  (of 
hazardous materials) are indicated as examples in this context. 

Question  3:  What  is  the  best  way  of  steering  the  current  negotiations  on  the  IMO  Ship 
Recycling Convention in order to improve ship dismantling practices globally? 

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National  binding  solutions  can  escape  enforcement.  Therefore  it  is  generally  seen  as  very 
important  to  support  the  work  at  IMO  level  to  establish  a  globally  binding  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  the  EU  is  supported  by  several  Member  States  and  other 
stakeholders. There is limited support for EU membership in the IMO. 

Question 4: Should the EU aim at global environmental and safety 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.  Several  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  public  sector?  Will  national  strategies  and 
voluntary  commitments  by  ship-owners  be  sufficient?  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 measures improving transparency and awareness 
and  the  application  of  EU  law  are  proposed.  Many  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 expected provisions. It is also suggested that the EU should 
ensure strict public procurement rules for the dismantling of state-owned 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 the possibility of stimulating the demand for EU 
capacity by restricting exports 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 the coordination of calls for tender by European 
navies. 

Question 7: What measures and actions should the EU take to encourage South Asian states 
to introduce and implement higher environmental and safety standards for ship dismantling? 

Many stakeholders take the view that the EU should conduct public awareness campaigns and 
provide technical assistance to South Asian countries. 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  Commission  and  major  stakeholders  (e.g.  shipping 
companies  and  associations)  are  suggested  as  an  important  means  to  encourage  voluntary 

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action.  There  is  some  support  for  the  establishment  of  an  EU  certification  system  for  clean 
ship dismantling (as long as it is compatible with the rules of the envisaged convention and 
not  too  bureaucratic)  and  for  awards  for  exemplary  green  recycling.  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  waste  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  sustainable  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 polluter pays principle. 
Several  stakeholders  refer  to  other  EU  legislation  on  waste  (end-of-life-vehicles,  waste 
electrical and electronic equipment, batteries) where extended producer responsibilities have 
been established. It is suggested that in the case of ships, due to their long lifetime, a system 
of  shared  responsibility  for  shipyards  and  shipowners  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  linked  to  IMO  registration,  etc).  The  general  view  is  that,  if  a  ship 
dismantling fund is set up, it should be done at IMO level. Many stakeholders see the need for 
an EU study exploring such funding possibilities. 

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Glossary  

AFS  Convention concerning harmful 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 
Environmental Law  

European  Union  Network  for  the  Implementation  and  Enforcement  of 

ISO 

International Organization for Standardization 

LDT  Light Displacement Tonnes  

MEPC Marine Environment Protection Committee 

MIDN Report  of  the  French  Inter-departmental  Committee  on  the  Dismantling  of  Civilian 
and Military End-of-Life Ships 

MT  Malta 

OECD Organisation for Economic Co-operation and Development 

OHSAS 

Occupational Health and Safety Advisory Service  

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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 

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