Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - An EU strategy for better ship dismantling {SEC(2008) 2846} {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 
COM(2008) 767 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

An EU strategy for better ship dismantling 

{SEC(2008) 2846} 

{SEC(2008) 2847} 

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1. 

INTRODUCTION 

On  22  May  2007  the  European  Commission  adopted  a  Green  Paper  on  better  ship 
dismantling1, which sets out a range of possible measures whereby the EU could contribute to 
safer  and  more  environmentally  sound  treatment  of  end-of-life  ships  worldwide.  A  public 
consultation  process  followed  in  which  other  European  institutions,  the  Member  States, 
stakeholders  and  the  public  were  invited  to  comment.  This  opportunity  was  widely  used  by 
institutions and stakeholders inside and outside the EU. More recently, on 21 May 2008, the 
European Parliament adopted a resolution calling on the Commission and the Member States 
to take urgent action on ship dismantling in various ways2. 

This  Communication  is  based  on  the  results  of  the  consultation,  on  the  developments  that 
have  taken  place  in  the  meantime  with  regard  to  the  draft  international  Ship  Recycling 
Convention, and on information drawn from recent research, such as the Commission study 
on “Ship dismantling and pre-cleaning of ships”3. It is accompanied by an impact assessment 
analysing the environmental, social and economic impacts of the envisaged measures4. This 
Communication is also in line with the Commission's commitments set in the Action Plan for 
An Integrated Maritime Policy for the Union5. 

Compared  to  the  situation  which  prompted  the  Commission  to  start  work  on  a  ship 
dismantling  strategy  in  2006,  some  positive  developments  can  be  identified  today. 
Considerable  progress  has  been  made  by  the  International  Maritime  Organisation  (IMO)  in 
the elaboration of a globally binding regime on ship recycling. More facilities are available in 
Europe and Asia which can provide a good or at least improved standard of ship dismantling. 
Last but not least, public awareness has grown about the problem and the urgency of finding a 
solution.  However,  in  spite  of  the  progress  made,  the  fact  remains  that  the  vast  majority  of 
seagoing  ships  still  end  up  in  scrapyards  without  adequate  infrastructure  to  protect  workers 
from health risks and the environment from pollution. 

2. 

THE  MAIN  CHALLENGES  ON  THE  WAY  TO  SAFE  AND  ENVIRONMENTALLY  SOUND 
SHIP DISMANTLING  

2.1 

Economic drivers towards poor quality dismantling 

As analysed in the Green Paper of May 2007, the economics of ship dismantling are primarily 
driven by market 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 to 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. 

1 

COM(2007) 269 final, with Annex and references in Commission Staff Working Document SEC(2007) 
645. 
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P6-TA-2008 

COWI/DHI, Final report of June 2007, published on the Commission website at 

2 
0222+0+DOC+XML+V0//EN&language=EN. 
3 
http://ec.europa.eu/environment/waste/ships//index.htm. Further references are to be found on the same 
webpage. 
4 
5 

Commission Staff Working Document […]. 
SEC (2007) 1278 of 10 October 2007, Action 4.6, p.16.  

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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 can be paid 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 capacity exists for ship dismantling in dry docks, at piers and on hard slipways 
only account for a small fraction of the market. 

Operators  in  South  Asia  employ  many  unskilled labourers at extremely low wages of about 
1 dollar  per  day.  Investment  in  permanent  structures  and  machinery  at  the  yards  is  very 
limited.  Of  the  three  countries  mentioned,  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 steel scrap from ships in the first months of 2008 — around 
$700 per ton for average quality — 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. 

2.2 

Weak implementation of the current law on waste shipments 

The Basel Convention on Transboundary Movements of Hazardous Wastes and their Disposal 
of  1989  provides  for  a  worldwide  system  of  prior  written  notification  and  consent  for 
shipments of hazardous wastes between countries. An amendment adopted in 1995, which has 
not  yet  entered  into  force,  establishes  a  ban  on  exports  of  hazardous  waste  from  EU  and 
OECD  member  countries  to  non-OECD  countries.  The  EU  has  transposed  the  Basel 
Convention as well as the so-called Basel Ban Amendment into its legislation and prohibited 
the export of hazardous waste from the Community to non-OECD countries since 1998. The 
prohibition is currently contained in Articles 34 and 36 of Regulation (EC) No 1013/2006 on 
shipments of waste6. 

Ships are not exempted from waste shipment law, and decisions under the Basel Convention 
have recognised that a ship may become waste as defined in Article 2 of the Basel Convention 
and that at the same time it may be defined as a ship under other international rules. The act of 
“discarding”, which is crucial for the definition of waste in EU law, is frequently identical to 
the  decision  of  a  ship  owner  —  for  example  in  a  demolition  contract  —  to  send  a  ship  for 
dismantling.  As  nearly  all  ships  contain  considerable  quantities  of  hazardous  materials  like 
oils and oil sludge, asbestos, glass wool, PCB, TBT, heavy metals in paints and others, those 
that go for scrapping have to be regarded as hazardous waste. 

Some decisions of EU Member States’ courts — the French Conseil d’Etat in the Clemenceau 
case and the Dutch Raad van State in the Sandrien and Otapan cases7 — have confirmed this 
legal interpretation. However, the rules of waste shipment law are rarely applied to ships sent 

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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”). 
http://www.conseil-
decision 
Conseil 
etat.fr/ce/jurispd/index_ac_ld0607.shtml; Raad van State, judgments of 19 June 2002 (Sandrien) and 21 
February 2007 (Otapan), published in English at: http://www.basel.int/ships/relevcaselaw.html. 

February 

d’Etat, 

2006, 

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for dismantling. Most recycling countries — with the exception of Turkey — are reluctant to 
use  the  Basel  Convention  procedure  of  notification  and  consent  for  ships  imported  for 
scrapping. To apply the EC Waste Shipment Regulation and its export ban is difficult when a 
ship  becomes  waste  outside  European  waters.  Recent  cases  have  also  shown  uncertainty  on 
the part of some Member State authorities as to when and how to enforce the waste shipment 
rules in relation to suspected end-of-life ships. 

2.3 

A volatile market and future risks 

The number and tonnage of ships that went for recycling in the years 2004-2007 has stayed 
well  below  the  forecasts  that  were  made  in  preceding  years.  Whereas  the  recycled  tonnage 
was  10  million  gross  tons  (GT)  and  more  in  any  year  between  1993  and  2003,  the  figures 
have not exceeded 5 million GT in the years since 2005. Parallel to this, the average age of a 
dismantled ship has risen from less than 27 years in the 1990s to more than 32 in 2006. This 
development reflects the unexpected rise in freight rates due to the economic boom in Asia. 

The rise in demand has also led to a boom in shipbuilding over the last years. It is difficult to 
predict  the  exact  consequences  but  there  is  a  high  probability  that  the  growing  backlog  of 
older ships will in a few years result in a rebound of dismantling activity. 

A specific risk exists with regard to oil tankers. Due to international and European legislation 
on the phasing-out of single-hull tankers two peaks of scrapping have been predicted for the 
years  2010  and  2015.  The  number  of  such  tankers  is  currently  assumed  to  be  around  800 
worldwide. It is uncertain, however, to what extent they will require immediate dismantling, 
as  many  of  them  can  be  converted  to  double-hull  tankers  or  used  for  non-oil  transport  or 
storage purposes. 

3. 

INTERNATIONAL STATE OF PLAY 

The  IMO  is  planning  to  finalise  its  work  for  an  international  Convention  on  the  Safe  and 
Environmentally  Sound  Recycling  of  Ships  in  October  2008.  The  Commission  and  EU 
Member States are actively participating in the negotiations of this Convention which should 
be adopted at a diplomatic conference in May 2009. The ratification provisions for the entry 
into  force  of  the  Convention  are  still  being  discussed.  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 or 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, 
will be excluded from the scope. However, the Convention requires that these ships act in a 
manner consistent with the Convention. 

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 
authorisation  of  ship  recycling  facilities.  Limitations  are  foreseen  for  the  use  of  hazardous 
materials in shipbuilding and the most dangerous among them should be removed also from 
existing ships during their period of operation. 

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 

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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  question  is  whether  the  future  IMO  Ship 
Recycling  Convention  will  ensure  an  equivalent  level  of  control  and  enforcement  to  that 
established under the Basel Convention. The Commission and the Member States are working 
at IMO and Basel level with a view to ensure the establishment of equivalent level of control. 
This could be the condition for releasing ships covered by the new international regime from 
the scope of the Basel Convention. 

4. 

OBJECTIVES OF EU ACTION 

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, in line with the draft Ship Recycling Convention. 

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  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: 

•  Provide  the  necessary  encouragement  and  guidance  for  the  implementation  of  EC  waste 

shipment law with regard to end-of-life ships; 

•  Work  towards  effective  and  early  transposition  of  the  forthcoming  international  Ship 

Recycling Convention in the EU; 

•  Assess the need and possible options 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. 

5. 

ACTION AREAS AND TOOLS 

5.1. 

Early implementation of the forthcoming Ship Recycling 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  suggests  that  it  can  take 
several 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 likely to become effective even 
later. 

Action  or  non-action  by  the  EU  can  have  an  important  influence  on  the  ratification  process 
and  the  effectiveness  of  the  Convention  in  practice.  If  the  EU  does  not  act,  this  risks  to  be 
seen  by  the  international  community  as  a  sign  of  low  priority,  and  ratification  by  Member 

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States and third countries is likely to take place with additional delays. If the EU, on the other 
hand, takes action, in compliance with the provisions of the Ship Recycling Convention, this 
would carry weight in the international arena and could speed up the entry into force of the 
Convention. Experience with IMO conventions such as MARPOL8 and AFS9 has shown that 
third  countries  frequently  ratify  and  implement  an  international  agreement  after  the  EU  has 
made its rules binding for all ships within European waters. 

In order to improve the current unacceptable situation as quickly as possible, it is thus crucial 
that  key  elements  of  the  envisaged  Ship  Recycling  Convention,  such  as  the  surveys  and 
certificates  for  an  Inventory  of  Hazardous  Materials  on  board  ships  and  for  making  ships 
“ready  for  recycling”,  the  major  requirements  for  ship  recycling  facilities  and  the  rules  on 
reporting and communication of information, are taken up as soon as possible after adoption 
of  the  Convention.  The  ship-related  requirements  should  be  applicable  to  all  ships  entering 
EU  waters,  so  that  competitive  disadvantages  for  vessels  flying  the  flags  of  Member  States 
and  consequential  incentives  for  re-flagging  would  be  avoided.  For  the  provisions  on  ship 
recycling facilities the envisaged guidelines which the relevant IMO committee plans to adopt 
in July 2009 should be taken into account. 

Action proposed by the Commission: 

•  Start  preparations  for  establishing  measures  on  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  concerning  surveys  and  certificates  for  ships, 
essential requirements for recycling facilities and rules on reporting and communication. 

5.2. 

Clean dismantling of warships and other 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,  including 
warships  which  have  a  relatively  high  contamination  with  asbestos  and  other  hazardous 
materials, and ships operating throughout their life only inside domestic waters. 

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  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. 

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,  one  of the 
options  would  be  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, sales 

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International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol 
of 1978 
International Convention on the Control of Harmful Anti-fouling Systems on Ships 

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contracts  could  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.  

•  Action proposed by the Commission: 

•  Further assess the option to include in the ship recycling measures, amongst others, rules 

for the clean dismantling of warships and other government vessels. 

5.3.  What industry can do in the interim period 

The entry into force of the Ship Recycling Convention and its implementation will normally 
take several years. There is thus a risk that the next peak of ship scrapping which is expected 
for  2010,  due  to  the  phase-out  date  for  most  single-hull  tankers  under  the  MARPOL 
Convention  (Annex  I),  will  lead  to  an  uncontrolled  expansion  of  sub-standard  facilities  in 
South  Asia  with  increased  negative  impacts  on  the  environment  and  human  health.  The 
potentially simplest and quickest way to change practices on the ground already in the interim 
period, before entry into force of the Ship Recycling Convention and implementing measures, 
would  be  a  voluntary  commitment  by  the  relevant  stakeholders.  If  ship  recycling  facilities 
agreed to improve their environmental and safety performance in line with the emerging new 
standards, and ship owners were ready to pay the price for this in terms of reduced profits, the 
amount  of  pollution  and  the  number  of  fatal  accidents  and  occupational  diseases  could  be 
significantly reduced. 

The financial burden for ship owners would not be excessive. The additional costs of using a 
clean  and  safe  recycling  facility  instead  of  a  beach  with  polluting  and  dangerous  working 
conditions  are  estimated  at  between  50  and  150  US  dollars  per  ton  of  ship  steel  (ldt).  This 
compares  to  the  current  price  of  around  700  $/ldt  that  South  Asian  facilities  pay  to  ship 
owners or the intermediate cashbuyers. 

Under these conditions and in view of the principles of producer responsibility and “polluter 
pays”,  subsidies  out  of  public  funds  for  clean  ship  dismantling  cannot  be  justified.  Instead, 
European  ship  owners  can  be  expected  to  act  in  a  spirit  of  corporate  social  responsibility. 
Practical examples for this exist already today: the Maersk Group of shipping companies, for 
instance,  maintains  a  partnership  with  Chinese  facilities  whose  environmental  and  safety 
standards have been upgraded through technical assistance and training. Some of the major oil 
companies follow a similar concept. 

Voluntary  action  by  European  ship  owners,  their  associations  and  their  customers  could  be 
encouraged  by  an  EU-wide  public  campaign  and  systematic  high-level  negotiations  with 
major  stakeholders  in  the  field.  A  new  specific  EU  award  for  exemplary  ship  recycling 
activities or the inclusion of ship dismantling in a re-introduced “Clean Marine Award” could 
provide public recognition for recycling and shipping companies with a clear environmental 
profile. In addition, guidance for ship owners with a list of “green” ship dismantling facilities 
worldwide could fill remaining knowledge gaps and provide benchmarks. 

Public funding to third countries could play a limited role in the framework of development 
aid programmes where technical assistance could promote in particular the safety training of 
workers  and  support  the  establishment  of  basic  infrastructure  for  environmental  and  health 
protection  in  a  poor  state  like  Bangladesh.  However,  any  such  financial  support  would 
necessarily depend on the willingness and the strong support of concerned governments and 
industry to cooperate for the improvement of ship dismantling practices. Moreover, additional 

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actions  may  be  needed  to  ensure  the  effectiveness  of  technical  assistance  and  voluntary 
measures, such as political follow-up, incentives, such as advantages for high standards sites. 
Action proposed by the Commission: 

•  Encourage  voluntary  industry  action  by  various  measures,  such  as  an  EU-wide  public 
campaign,  an  award  for  exemplary  activities  and  guidance  with  a  list  of  clean  ship 
dismantling facilities. 

5.4. 

Better enforcement of waste shipment rules 

The current efforts for an international Ship Recycling Convention aim, among other things, 
at avoiding regulatory duplication and exempting end-of-life ships (at least merchant vessels) 
from the rules of the Basel Convention on Transboundary Waste Movements. Provided that 
the Ship Recycling Convention enters into force and that the Parties to the Basel Convention 
regard it as ensuring an equivalent level of control,  larger commercial vessels on their final 
voyage to the demolition yard would no longer be subject to waste shipment rules. 

However, it would in any case take several years until the Basel Convention is amended along 
these lines and even more until this amendment is transposed into domestic law. In the short 
and  medium  term  the  EC  Waste  Shipment  Regulation  will  remain  applicable  to  end-of-life 
ships.  An  EU  ship  dismantling  strategy  therefore  has  to  look  into  measures  which  could 
improve  the  implementation  of  waste  shipment  rules  in  relation  to  end-of-life  ships  and  in 
particular prevent direct exports of such ships from the EU to developing countries. 

Enforcement  of  the  EC  Waste  Shipment  Regulation  by  the  Member  States  could  be 
strengthened  by  a  combination  of  measures  such  as  guidance  from  the  Commission  on  the 
application  of  the  Waste  Shipment  Regulation  to  end-of-life  ships,  focused  projects  in  the 
framework of IMPEL-TFS10 and increased cooperation between authorities within the EU as 
well  as  with  countries  of  transit  and  destination.  The  Commission  may  also  come  forward 
with proposals on specific minimum requirements for inspections. 

The effectiveness of the EU control system for waste shipments could be further enhanced by 
the establishment and maintenance of a list of ships that are ready for scrapping taking into 
account the procedures contained in the future Ship Recycling Convention. The feasibility of 
establishing  such  a  list  needs to be further assessed by the  Commission, in particular in the 
interest  of  the  legal  clarity  of  the  relevant  obligations  and  rights  of  authorities  to  exchange 
data about such ready for scrapping ships. In view of the inevitable administrative burden of 
such a measure, its introduction might be made dependent on whether or not voluntary action 
by  the  shipping  industry  improves  the  situation  significantly  in  the  next  1-2  years.  Better 
implementation  of  the  current  waste  shipment  rules  will  provide  an  additional  incentive  for 
the shipping industry to improve practices already in the interim period and thereby help to 
limit negative anticipatory effects of the forthcoming ship recycling measures. 

Action proposed by the Commission: 

•  Improve enforcement of the current waste shipment law with regard to end-of-life ships by 
guidance from the Commission, more multilateral cooperation, and examine the feasibility 
of rules on a list of ships ready for scrapping. 

10 

IMPEL  =  European  Union Network for  the Implementation  and  Enforcement  of  Environmental  Law; 
TFS = cluster on TransFrontier Shipments of waste. 

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5.5. 

The case for auditing and certification of dismantling facilities 

The  future  international  Ship  Recycling  Convention  will  rely  in  particular  on  a  system  of 
surveys and certificates for ships and on authorisations for ship recycling facilities granted by 
the competent authorities of recycling states. This approach reflects the high value of national 
sovereignty  in  international  law.  A  potential  weakness  of  the  control  system  is  that  the 
existing governance problems in some developing countries and the lack of a non-compliance 
mechanism in the draft Convention might reduce its effectiveness in practice. 

A study by the European Maritime Safety Agency (EMSA) has looked into possible solutions 
to the dilemma and proposed a certification and audit scheme for ship recycling facilities as a 
way  to  establish  more  transparency  and  ensure,  through  the  services  of  independent 
recognised  organisations,  a  more  level  playing  field  worldwide11.  Taking  into  account  the 
developments  at  international  level,  this  scheme  would  build  on  the  provisions  of  the 
forthcoming Ship Recycling Convention and on the planned specific ISO standard 30001 for 
ship recycling facilities and would include 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. 

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 operating in Europe, linked to European ownership or flying 
the flags of EU Member States go for dismantling to facilities certified and audited under this 
scheme while minimising possible negative effects on competitiveness of European maritime 
industry. This will be necessary in order to quickly make the system fully effective. 

•  Action proposed by the Commission 

•  To  further  assess  the  feasibility  of  developing  a  certification  and  audit  scheme  for  ship 
recycling facilities worldwide and, based on the current discussions of the Ship Recycling 
Convention,  evaluate  how  it  can  be  ensured  that  a  maximum  number  of  ships,  including 
ships flying the flags of Member States go for dismantling to facilities certified and audited 
under this scheme. 

5.6. 

Ensuring sustainable funding 

The  underlying  concept  of  the  future  Ship  Recycling  Convention  is  that  its  provisions, 
together  with  market  forces,  will  be  sufficient  to  make  ship  dismantling  a  safe  and 
environmentally  sound  activity  within  the  coming  years.  In  reply  to  the  option  of  a  “ship 
dismantling  fund”  proposed  in  the  Commission’s  Green  Paper,  the  shipping  industry  has 
argued  that  such  a  fund  and  the  levies  to  feed  it  would  create  unnecessary  administrative 
burdens. According to industry expectations, the market restructuring process under the new 
rules and standards will provide the funds that are needed to upgrade ship recycling facilities 
worldwide to a level of compliance with the Convention. 

There  is  nevertheless  a  risk  that  unclear  provisions  on  recycling  standards  (e.g.  requiring  in 
general  terms  the  prevention  of  spills  and  the  safe  and  environmentally  sound  removal  of 
hazardous materials but not prohibiting the beaching method as such) and the probable lack of 
non-compliance  mechanisms  in  the  Convention  will  allow  poor  practices  to  continue  and 
create a disincentive to investment. 

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Further  developments  should  be  closely  monitored.  If  it  turns  out  that  the  forthcoming 
international  legislation  and  the  reactions  by  market  participants  do  not  deliver  the  desired 
result,  the  option  of  a  funding  system  implementing  the  “polluter  pays”  principle  should  be 
reconsidered. Although a solution at the level of the IMO would be preferable, an EU-wide 
system involving all ships that operate in EU waters should not be ruled out. 

In order to assess the possible instruments and their impacts more precisely, the Commission 
will launch a study on the issue of a “ship dismantling fund” in the second half of 2008. 

Action proposed by the Commission: 

•  Assess the feasibility of the option of a mandatory international funding system for clean 
ship  dismantling  (“ship  dismantling  fund”)  on  the  basis  of  the  results  of  a  study  to  be 
launched by the Commission. 

6. 

CONCLUSION: AN INTEGRATED POLICY FOR BETTER SHIP DISMANTLING 

If the aim of ensuring safe and environmentally sound dismantling of European ships is to be 
achieved by the year 2015, an integrated policy approach is needed. Rules to implement key 
elements  of  the  envisaged  Ship  Recycling  Convention  and,  if  proven  to  be  necessary,  the 
possibility to supplement it, will have to be combined with measures to encourage voluntary 
action by the shipping industry in the interim period and to improve enforcement of current 
waste shipment law in relation to ships. 

The  Commission  proposes  to  start  developing  rules  on  ship  recycling  that  transpose  the 
essential  Convention  requirements  for  ships  (surveys,  certificates,  Inventory  of  Hazardous 
Materials)  and  ship  recycling  facilities,  as  well  as  obligations  for  reporting  and 
communication  of  information.  It  should  be  assessed  if  the  scope  of  these  rules  should  also 
include  warships  and  other  government  vessels  that  are  not  subject  to  the  Ship  Recycling 
Convention. Depending on the discussions on the Ship Recycling Convention on auditing and 
certification of dismantling facilities, the Commission will examine how it can be ensured that 
a  maximum  number  of  ships,  including  ships  flying  the  flags  of  EU  Member  States,  go  for 
dismantling to facilities certified and audited under this scheme. 

The shipping industry has the means and — in view of the “polluter pays” principle — also 
the  responsibility  to  improve  ship  dismantling  practices  in  the  interim  period,  until  the  new 
international regime takes effect. In order to promote swift action, the Commission proposes 
to  encourage  voluntary  commitments  by  a  range  of  measures  including  public  campaigns, 
award schemes and guidance to ship owners. Technical assistance to developing countries for 
the  upgrading  of  their  relevant  infrastructure  can  also  play  a  role  but  will  depend  on 
cooperation by recycling states. 

On the other hand, better enforcement of current waste shipment law with more guidance and 
multilateral cooperation can contribute to the transition process and limit negative anticipatory 
effects. The Commission will examine the feasibility of measures to establish a list of ships 
ready for scrapping. 

The present Communication to the European Parliament, the Council, the European Economic 
and Social Committee and the Committee of the Regions is meant to stimulate discussion and 
to prepare the way for the legislative proposal that will be initiated after the adoption of the 
Ship Recycling Convention foreseen to take place in the IMO diplomatic conference in May 
2009. The Commission therefore invites the other EU institutions to provide their views and 
contribute to an effective EU policy on better ship dismantling. 

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