COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on ship recycling This report commits only the Commission's services involved in its preparation and does not prejudge the final form of any decision to be taken by the Commission.
Date: 2012-03-23
Institutions: European Commission
Subjects: EU Member State, environmental standard, export of waste, hazardous waste, recycling technology, ship's flag, vessel, waste recycling, working conditions

EUROPEAN COMMISSION 

Brussels, 23.3.2012  
SWD(2012) 47 final 

COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 
on ship recycling 

This report commits only the Commission's services involved in its preparation and does 
not prejudge the final form of any decision to be taken by the Commission. 

{COM(2012) 118 final} 
{SWD(2012) 45 final} 

EN 

   EN 

 
 
 
  
 
 
COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 
on ship recycling 

This report commits only the Commission's services involved in its preparation and does 
not prejudge the final form of any decision to be taken by the Commission. 

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TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

2. 

2.1. 

Procedural issues and consultation of interested parties .............................................. 6 

Organisation and timing............................................................................................... 6 

Consultation for the Impact Assessment...................................................................... 6 

Problem definition and identification of the drivers .................................................... 9 

Large commercial European ships end up in substandard dismantling facilities 
outside the OECD leading to negative health and environmental impacts.................. 9 

2.2.  What are the underlying drivers of the problems? ..................................................... 13 

2.3.  Who is affected, in what ways, and to what extent? .................................................. 22 

2.4. 

2.5. 

2.6. 

2.7. 

3. 

3.1. 

3.2. 

3.3. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

5. 

5.1. 

5.2. 

5.3. 

5.4. 

How would the problem evolve, all things being equal? ........................................... 22 

International and national policy approaches............................................................. 23 

Industry approaches ................................................................................................... 26 

The right of the EU to act........................................................................................... 27 

Policy objectives ........................................................................................................ 28 

General objective: ...................................................................................................... 28 

Specific objectives: .................................................................................................... 29 

Consistency of the objectives with fundamental rights.............................................. 29 

Description of policy options ..................................................................................... 29 

Option A: the baseline option .................................................................................... 30 

Option B: implementing key elements of the Hong Kong Convention in the current 
European legislation................................................................................................... 32 

Option C: addressing the dismantling of large commercial vessels through domestic 
legislation of the EU Member States only ................................................................. 33 

Option D: covering ship dismantling by specific rules implementing the Hong Kong 
Convention ................................................................................................................. 33 

Option E: covering ship dismantling by specific rules implementing and going 
beyond the Hong Kong Convention: ......................................................................... 34 

Analysis of impacts .................................................................................................... 35 

Assumptions and methodology used for the quantitative assessment ....................... 36 

The impact of options on where ships are dismantled ............................................... 38 

Baseline scenario........................................................................................................ 40 

Option B: implementing key elements of the Hong Kong Convention in the current 
European legislation................................................................................................... 45 

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5.5. 

5.6. 

5.7. 

5.8. 

5.9. 

6. 

6.1. 

6.2. 

6.3. 

6.4. 

7. 

Option C: addressing the dismantling of large commercial vessels through domestic 
legislation of the EU Member States only ................................................................. 46 

Option D: covering ship dismantling by specific rules implementing the Hong Kong 
Convention ................................................................................................................. 47 

Option E1: addressing also government vessels, including navy vessels, in the new 
legislation instrument transposing the Hong Kong Convention. ............................... 48 

Option E2: requesting EU flagged ships to be treated in facilities which are providing 
a level of protection of health and of the environment equivalent to EU facilities. .. 50 

Option E3: allowing the export of EU-flagged ships only to a list of third party 
certified and audited facilities. ................................................................................... 52 

Comparing the options ............................................................................................... 55 

Effectiveness .............................................................................................................. 55 

Efficiency ................................................................................................................... 56 

Coherence................................................................................................................... 56 

Recommended option ................................................................................................ 56 

Monitoring and evaluation. ........................................................................................ 57 

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COMMISSION STAFF WORKING PAPER 

IMPACT ASSESSMENT 
Accompanying document to a legislative proposal on ship dismantling 

This report commits only the Commission’s services involved in its preparation and does 
not prejudge the final form of any decision to be taken by the Commission. 

Introduction 

According to the current legislation (the Waste Shipment Regulation1), the EU flagged ships 
which are going for dismantling are hazardous waste and can only be dismantled within the 
OECD.  This  legislation  is  almost  systematically  circumvented  by  EU  flagged  ships2. 
Currently,  most  EU  controlled  ships  are  indeed  dismantled  in  Asia  (India,  Pakistan  and 
Bangladesh),  usually  through  "beaching"  method  and  with  significant  environmental  and 
health impacts.  

This widespread non-compliance is firstly linked with the lack of recycling capacity available 
within  the  OECD  in  particular  for  the  largest  ships.  Developing  capacity  within  the  OECD 
has  not  been  feasible  in  particular  because  of  the  lack  of  economic  viability.  The  non-
compliance  is  also  partially  driven  by  the  interest  of  shipowners  to  avoid  the  costs  of 
environmentally and socially acceptable dismantling in OECD facilities, and partially by the 
ease  with  which  the  legislation  can  be  avoided:  EU  shipowners  can  with  limited  effort 
maximise the profit from selling their old vessels by choosing a non-EU jurisdiction for their 
vessels at the end of the life of the ships. 

The  Commission  adopted  a  Green  Paper  on  better  ship  dismantling  in  2007  and  a 
Communication  proposing  an  EU  strategy  on  ship  dismantling3  in  2008.  This  strategy 
proposed measures to improve ship dismantling conditions as soon as possible, including in 
the interim period before the entry into force of the Hong Kong Convention4: i.e. preparing 
the  establishment  of  measures  on  key  elements  of  the  Convention,  encouraging  voluntary 
industry action, providing technical assistance and support to developing countries and better 
enforcing  the  current  legislation.  The  Commission  also  announced  that  it  would  look  at  the 
feasibility  of  developing  a  certification  and  audit  scheme  for  ship  recycling  facilities 
worldwide, addressing also navy ships and other government vessels not covered by the Hong 
Kong  Convention  and  establishing  a  mandatory  international  funding  system  for  clean  ship 
dismantling.  

1 

2 

3 

4 

Regulation  (EC)  No  1013/2006  of  the  European  Parliament  and  of  the  Council  of  14  June  2006  on 
shipments of waste. More information about the Basel Convention and the Waste Shipment Regulation 
are provided for in Annex III 
In 2009, more than 90 % of EU flagged ships have been dismantled outside the OECD mostly in South 
Asia. 
Communication COM (2008) 767 final of 19 November 2008 presenting an "EU strategy for better ship 
dismantling, and its impact assessment in Commission Staff Working Document SEC(2008) 2846 
The  Hong  Kong  International  Convention  for  the  safe  and  environmentally  sound  recycling  of  ships 
was adopted in May 2009 by the International Maritime Organization.  

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The Hong Kong Convention, when it comes into force, will require Parties to the Convention 
(including  EU  Member  States)  to  dismantle  their  large  commercial  ships  only  in  countries 
that are Party  to the Convention. This will  include Asian  countries, whose  ship  dismantling 
facilities  will  need  to  meet  internationally  accepted  standards  (higher  than  the  current 
standards).  These  facilities  will  have  to  treat  the  ships  coming  from  non-Parties  to  the 
Convention in a similar manner as ships flying the flags of the Parties to the Convention ("no 
more favourable treatment" clause).  

The Convention was adopted in 2009 but needs to be ratified by a sufficient number of large 
flag  and  recycling  states  in  order  to  enter  into  force  and  start  producing  effects.  This  is  not 
expected to happen before 2020 at the earliest.  

Broadly  speaking,  this  Impact  Assessment  considers  the  options  for  the  development  of  a 
regime  for  ship  recycling  which  can  be  effectively  enforced.  The  analysis  considers  the 
economic, social and environmental impacts of different options by examining the changes in 
ship dismantling behaviour.  It has been prepared by the  Unit  for Waste Management of the 
Directorate General for Environment (DG ENV) and is the basis for a legislative proposal on 
ship recycling.  

1. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

1.1. 

Organisation and timing 

The  impact  assessment  process  was  steered  by  the  Inter-Service  Group  on  ship  dismantling 
which  was  used  as  an  Impact  Assessment  Steering  Group.  This  group  was  chaired  by  DG 
ENV and with members from SG and DGs COMP, DEVCO, ENTR, EMPL, MARE, REGIO, 
RTD, SANCO, TRADE and MOVE. Furthermore, experts of the European Maritime Safety 
Agency (EMSA) provided valuable input and advice for the impact assessment studies.  

1.2. 

Consultation for the Impact Assessment 

In  developing  this  Impact  Assessment,  the  Commission  services  consulted  stakeholders  and 
drew upon external expertise through a public consultation and three expert workshops.  

1.2.1.  Public consultation and expert workshops. 

The preparation of this report has been preceded by a public consultation on a new initiative 
regarding  dismantling  of  ship  open  from  April  to  June  2009  in  order  to  gather  as  many 
comments and suggestions as possible from the stakeholders concerned.  

Given the complicated nature of the topic, participation was relatively large: 27 contributions 
were received from various stakeholders active at local, national, European and international 
level: EU Member States, local authorities, environmental NGOs5, individual companies and 
industry  associations  (shipowners,  recycling  facilities,  P&I  clubs,  classification  society6), 
trade  unions,  academia.  Both  public  (Member  States)  and  private  shipowners  (through  their 
professional associations) have actively contributed to the public consultation as well as to the 
stakeholder  workshops.  Contributions  have  been  received  from  national  (France,  Belgium), 

5 

6 

The  NGO  Platform  on  Ship  Breaking  is  a  global  coalition  of  15  environmental,  human  and  labour 
rights' organisations.  
Lloyd's register 

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European  (European  Community  Shipowners’  Association7)  and  International  associations 
(the Internation Chamber of Shipping8, Intertanko).  

The  detailed  inputs  received  have  been  summarized  in  a  report  published  on  DG 
Environment's website9 and are addressed in a detailed manner in this report (in the sections 
presenting problem definition, identifying and assessing of the possible options).  

Some  stakeholders  have  asked  for  a  continued  involvement  of  stakeholders  on  a  on-going 
basis and not only through a general public consultation. For this reason, and in order to get 
more  detailed  information  to  support  the  study  undertaken  to  supporting  this  impact 
assessment, the Commission services also organised three expert workshops on 9 June and 23 
October  2009  in  Brussels  and  on  26  and  27  June  2011  in  the  European  Maritime  Safety 
Agency in Lisbon. The presentations provided during these workshops as well as a summary 
of the information gathered from the experts have been made available on DG Environment's 
website10  in  order  for  both  experts  and  all  interested  parties  to  further  contribute. 
Contributions have been received in particular from recycling facilities located in Turkey and 
India directly or though the coordinator of the DIVEST Project11 and taken into account in the 
studies undertaken on behalf of the Commission12.  

Most stakeholders clearly supported a prompt ratification  of the Hong Kong Convention by 
the  EU  Member  States  in  order  to  fulfil,  to  a large  extent,  its  entry  into  force  of  provisions 
related to flag States13 whilst encouraging ratification by other States. Many stakeholders are 
in  favour  of  early  implementation  of  the  Convention  by  the  EU  since  they  consider  that 
waiting  for  entry  into  force  of  the  Convention  is  unacceptable  when  ship  breaking  workers 
continue to be killed or injured at work and considerable environmental damage occurs. Some 
consider  that  the  EU  should  not  impose  additional  requirements  that  go  beyond  the 
Convention.  

The  main  positive  consequence  of  early  implementation  would  be  the  improvement  of  ship 
recycling  operations  with  respect  to  worker  health  and  safety  and  environmental  protection. 
Many stakeholders take the view that an harmonised transposition at EU level will ensure a 
more  level  playing  field  and  reduce  administrative  burdens  for  ship  owners  and  recycling 
facilities in the EU. Early transposition could  also encourage  the  development  of  more  ship 
recycling  facilities.  It  was  noted  that  such  EU  legislation  should  also  comply  with  ILO 
conventions  and  recommendations.  It  is  suggested  that  the  Commission  should  promote 
ratification  among  the  Member  States  and  use  its  political  influence  to  encourage  recycling 
States to take similar action so that sufficient global ship recycling capacity is maintained.  

7 

8 

9 
10 
11 

12 

13 

ECSA represents all the European shipowners as it is composed of the national shipowners associations 
from European Member States. It represents 40 % of the shipowners worlwide. 
The  International  Chamber  of  Shipping  (ICS)  is  the  principal  international  trade  association  for  the 
shipping industry, representing all sectors and trades. ICS membership comprises national shipowners’ 
associations whose member shipping companies operate two thirds of the world’s merchant tonnage. 
http://ec.europa.eu/environment/waste/ships/pdf/summary%20of%20contributions.pdf  
http://ec.europa.eu/environment/waste/ships/index.htm  
DIVEST  (Dismantling  of  Vessels  with  Enhanced  Safety  and  Technology)  is  a  Research  and 
Technology  Development  collaborative  project  funded  by  the  European  Union  as  part  of  the  7th 
Framework  Programme 
and  Demonstration 
(http://www.divest-project.eu/). 
COWI study for DG Environment: "Support to the impact assessment of a new legislative proposal on 
ship dismantling" Final report of December 2009 
For more information about these provisions, see Annex IV.  

for  Research,  Technological  Development 

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The  most  significant  negative  consequence  of  early  implementation  identified  by  the 
stakeholders  is  the  risk  of  reflagging  of  EU  ships  during  their  operational  life  to  an  "open 
register" , or the reflagging of ships nearing the end of their life to non-EU countries in order 
to avoid complying with regional measures. Reflagging would result in a reduction of the size 
of  the  EU  fleet  and  the  EU’s  influence  with  regard  to  maritime  issues.  Another  risk  is  that 
implementation  would  be  too  rapid  and  there  would  not  be  enough  recycling  capacity 
available for EU flagged ships in view of the phasing out of single hull tankers. Finally, some 
stakeholders point out that since early implementation at EU level could make ratification by 
Member States apparently redundant and therefore discourage them to ratify the Convention 
thus postponing its entry into force.  

The  public  consultation  and  the  expert  workshops  met  the  minimum  standards  for 
consultation. The contributions received to the public consultation are available, together with 
the 
website: 
http://ec.europa.eu/environment/waste/ships/index.htm 

responses, 

following 

summary 

the 

the 

on 

of 

1.2.2.  Opinions expressed by the European institutions on the Communication.  

The  European  Parliament,  the  European  Economic  and  Social  Committee  and  the  Council 
debated  the  Communication  and  adopted  respectively  a  resolution  on  26  March  200914,  an 
opinion on the 13 May 200915 and conclusions on 21 October 201016on an EU Strategy for 
better ship dismantling.  

1.2.3.  External contractor  

External  contractors  carried  out  preparatory  studies  for  this  IA,  that  are  published  at: 
http://ec.europa.eu/environment/waste/ships/index.htm.  Moreover,  in  order  to  update  the 
available information about the world fleet and dismantled ships in 2008 and 2009, additional 
data  have  been  provided  to  the  Commission  through  a  contract  with  one  of  the  leading 
companies (IHS Fairplay) managing maritime databases. 

1.2.4.  Results of the consultation of the Impact Assessment Board (IAB) 

Following the submission of a draft report to the Impact Assessment Board (IAB) on 27 July 
2011  and  a  written  procedure,  the  IAB  sent  its  opinion  on  8  September  2011.  The 
recommendations of the IAB were duly taken into account and the main modifications were 
the following: 

• 

the problem definition was revised to: 

• 

• 

include  more  information  about  the  dismantling  capacity  in  the  EU  and  the 
current and expected competitiveness of the ship recycling countries,  

clarify to what extent the current problems are going to be solved by the Hong 
Kong Convention and describe what would be the outstanding problems which 
would justify the need to go beyond the requirements of this Convention, 

14 

15 

16 

http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P6-TA-2009-
0195+0+DOC+XML+V0//EN&language=EN  
http://eescopinions.eesc.europa.eu/EESCopinionDocument.aspx?identifier=ces\nat\nat425\ces877-
2009_ac.doc&language=EN  
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/envir/110626.pdf  

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• 

• 

• 

• 

• 

More detailed information was provided about the stakeholders' positions, 

A table presenting the follow up of the actions announced in the 2008 EU Strategy 
on ship dismantling was introduced.  

The  specific  and  operational  objectives  were  reformulated  so  as  not  to  pre-empt 
discussions on policy options,  

The  content  of  the  policy  options  was  clarified  and  more  explanations  were 
introduced  regarding  their  impacts,  proportionality  and  effectiveness  focusing  in 
particular on compliance aspects.  

The  indicators  for  monitoring  the  intended  effects  of  the  legislation  were  clarified 
and expended in order to address employment, the state of ratification of the Hong 
Kong Convention and the effective enforcement of this Regulation. 

2. 

PROBLEM DEFINITION AND IDENTIFICATION OF THE DRIVERS 

Small ships and governmental vessels are usually dismantled within the European Union or in 
Turkey.  For  technical  (inability  to  travel  in  high  sea  and  impossibility  to  tow  them)  and 
economic  reasons  (travel  costs)  small  ships  are  generally  dismantled  locally17.  Some 
stakeholders expect the small local markets will continue to exist handling coastal, fishing and 
inland waterway vessels. These stakeholders consider that while these can provide models of 
responsible  ship  recycling  and  best  practice,  it  is  not  realistic  or  economic  to  expect  such 
facilities  to  handle  significant  volumes  of  larger  ships,  given  the  high  labour  costs  and  low 
recycled value. It is therefore more cost-effective to devote resources to improving standards 
and upgrading facilities in more appropriate countries, rather than creating artificial markets 
and subsidised facilities in high cost countries.  

Large governmental vessels (including navy ships) are dismantled within the OECD because 
the  existing  recycling  capacity  is  adequate  but  also  to  protect  some  sensitive  technologies. 
The recycling demand has been estimated at 40 000 LDT per year for these ships while the 
existing capacity has been estimated at 250 000 LDT18.  

2.1. 

Large commercial European ships end up in substandard dismantling facilities 
outside the OECD leading to negative health and environmental impacts.  

The dismantling of ships is at present sustainable from a narrow economic point of view, but 
the costs for human health and the environment are high. It is fair to say that with regard to 
end-of-life  ships  the  polluter  pays  principle  is  usually  not  applied.  Ship  owners  generally 
make  a  profit  from  selling  their  obsolete  ships  to  ship  dismantling  facilities  or  intermediate 
buyers, and they can maximise this profit when selling to facilities which do not follow the 
strictest health and safety and environmental standards. 

17 

18 

See  the  Annex  10  of  the  Rapport  de  la  Mission  Interministérielle  portant  sur  le  Démantèlement  des 
Navires civils et militaires en fin de vie 
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 

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Ships have a normal life span of about 30 years after which they are sent for dismantling. The 
average  dismantling  age  varies  over  time  and  depending  on  several  factors19.  Due  to  the 
shipping  crisis  and  to  regulatory  developments  (phasing  out  of  single  hull  tankers  in  2015), 
the  number  of  ships  sent  for  dismantling  since  2008  has  doubled  compared  to  the  previous 
yearly averages20. 

Ship  dismantling  is,  in  principle,  a  very  positive  activity  leading  to  reuse  and  recycling  of 
large amounts of valuable resources (steel, other scrap metal and equipment in particular). But 
ships also contain large amount of hazardous materials such as asbestos, PCB, heavy metals, 
oil, mercury, ozone depleting substances (ODS) which, if not handled, removed and disposed 
of in a safe and environmentally sound manner (ESM) lead to significant detrimental effects 
on both human health and the environment. 

Member  States  and  companies  in  the  EU  are  concerned  since  they  play  a  major  role  in 
international shipping (17 % of the international merchant fleet tonnage is flying EU flags and 
about 37 % of the tonnage belongs to EU owners). The dismantling of EU flagged ships will 
produce an estimated yearly average of 80 600 tonnes of hazardous waste in the period 2012-
203012. 

Most  ship  dismantling  takes  place  nowadays  in  South  Asia,  on  tidal  beaches  and  under 
unacceptable conditions from the point of view of safety and environmental protection. This 
has not always be the same. Looking back, the demolition of (European) vessels has moved 
from the Europe  and  Japan during the 60's  and 70’s to Asian  countries such as Taiwan and 
South  Korea  in  the  80’s  where  dismantling  took  place  along  piers  in  connection  with  ship 
building activities. As the economy grew in South Korea and Taiwan, labour costs increased 
making ship dismantling less attractive in these countries.  

During  the  1980's  the  method  of  "beaching"21  became  the  most  frequent  method  used  for 
demolition  since  expensive  infrastructures  like  piers,  sufficient  depth  of  the  harbour,  cranes 
etc. could be replaced by a mud flat, portable equipment and a huge labour force. As shown in 
Figure  3  in  Annex  VII,  the  South-East  Asian  countries  are  nowadays  dominating  the 
dismantling  industy22.  Today,  95%  of  ship  dismantling  takes  place  in  five  countries 
(Bangladesh,  China,  India,  Pakistan  and  Turkey)23.  In  these  countries  ship  dismantling 
provides  for  employment  opportunities,  and  resources  such  as  scrap  metals  which  are 
important in particular for the construction sector (Pakistan, Bangladesh, India) and for ship 
building (China). The current practices have however significant costs in the short and in the 
long term for human health and the environment.  

The EU and Turkey treat today almost exclusively government vessels, including navy ships, 
and small ships. Both EU and non-EU flagged ships are recycled in the EU.  

19 
20 

21 

22 

23 

Further explanations are provided for in Annex VII.  
For  several  years,  the  number  of  ships  going  for  dismantling  was  limited  to  200  to  600  per  year. 
According to data provided by HIS Fairplay, 744 and 1299 ships have respectively been dismantled in 
2008 and 2009. According to the broker N. Cotzias, 1256 ships have been sent for dismantling in 2010: 
http://www.cotzias.gr/reports/overcapacity/NCSCOCREP2010_%28JAN-DEC2010COMP%29.pdf.  
"beaching” means that the vessels are driven — usually under their own steam — onto sandy beaches 
and broken up without heavy machinery and without other containment than the hull of the ship itself 
COWI study for DG Environment: " Support to the impact assessment of a new legislative proposal on 
ship dismantling" Final report of December 2009 
Calculation made by DG ENV based on data provided by IHS Fairplay.  

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In 2009, 28 ships which were non-EU flagged have been recycled in the EU.  

The  three  largest  vessels  were  navy  vessels  from  the  United  States  dismantled  in  the  UK. 
These vessels are not included in the scope of the Hong Kong Convention. The other vessels 
are all small to medium-sized (from 233 to 3470 GT) and owned by European, Norwegian, 
Russian or Ukrainian ship owners. These vessels are not expected to be relocated outside the 
EU for the following technical and economic reasons: 

- these ships are usually not designed to navigate in high seas,  

-  the  economic  advantage  of  countries  offering  low  labour  costs  and  low  level  of 
mechanisation  is  less  important  when  the  ships  are  small.  The  fee  applied  for  transiting 
through the Suez Canal would also have an important impact for these ships, in particular, as 
they will have difficulties to arrange for a final journey given their limited capacity and the 
overcapacity of the shipping market .  

As a conclusion, it is expected that the ships which are currently dismantled in the EU would 
continue to do so and would therefore not be affected by the proposed changes.  

Ship dismantling provides for hundreds of jobs but with important short term and long term 
impacts.  

The number of jobs associated with ship dismantling depends upon the dismantling practices. 
It  is  pretty  limited  in  the  countries  which  uses  the  slipway;  docking  or  afloat  method24.  In 
countries  using  the  beaching  method,  such  as  Bangladesh,  India  and  Pakistan  the  level  of 
mechanisation and the labour costs are low and this industry offers thousands of jobs.  

But in these countries, ship dismantling involves high risks for human health both at the time 
of  dismantling  (deaths,  injuries)  and  in  the  long  term  (asbestosis  for  example).  This  is 
primarily due to dangerous working practices (lack of training and of protective equipement, 
insufficient  precautions  against  explosions  and  falling  hazards...)  and  to  the  hazardous 
materials on board old ships.  

Safety  and  health  conditions  in  many  South  Asian  facilities  are  known  to  be  critical  but 
official  records  are  rarely  kept,  accidents  and  incidents  are  underreported  and  access  to 
facilities  by  third  party  is  often  restricted25.  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  even  if  the  situation  could  hopefully  improve  after  a  recent 
judgment from the High Court26.  

Workers are mainly migrant. No workers’union exists at present in Bangladesh, and although 
many  workers  believe  that  a  union  would  bring  improvements  to  their  situation,  most  are 

24 
25 

26 

See Table 4.  
The existing information has been compiled and is summarized in page 43 of the study supporting the 
impact assessment (see footnote 12) 
On  7  March  2011,  the  High  Court  authorized  the  yards  to  be  temporarily  reopened  provided  that  a 
certain number of conditions are met. Requirements apparently include pre-cleaning of tanks and holds 
before being entered for cutting to ensure they are gas-free, a prohibition to employ children workers 
and the obligation for all workers to be trained at an institute that is to be set up under supervision from 
the  Bangladesh  Marine  Academy.  A  team  of  engineers  will  be  required  to  be  onsite  during  the 
dismantling process to monitor safety and environmental conditions. No dismantling would be able to 
take place after dusk and yards must provide a separate rest and eating area for workers. At this stage, 
the judgment is not available is writing. 

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averse  to  organizing  one  for  fear  of  putting  their  jobs  at  risk30.  In  Pakistan,  the  Gadani 
workers  have  organized  themselves  into  a  Ship-breaking  Labor  Union,  which  in  February 
2009 successfully campaigned for a 40 percent wage increase, better working conditions, and 
improvements  in  medical  facilities.  Some  reports  describe  a  “pocket”  union,  composed  of 
“loyal” workers, that has been put in place by the ship breakers to rival the official union, thus 
denying true worker representation30. 

Child labour is still a reality in Bangladesh, as children represent a cheaper work force that is 
easy to control and unlikely to defend its rights, and even more unlikely to organize into trade 
unions27.  The  recent  judgment  from  the  Supreme  Court,  if  implemented,  might  improve  the 
situation by prohibiting the use of workers under the age of 18.  

Ship dismantling is also hazardous in the long term. It is estimated that thousands of labourers 
contract  irreversible  diseases  from  handling  and  inhaling  toxic  substances  without  proper 
safety precautions in particular in Bangladesh where most shipbreaking workers do not even 
have  helmets,  gloves  and  shoes  to  protect  themselves.  According  to  a  medical  report  to  the 
Indian Supreme Court of September 2006, 16% of the workforce handling asbestos in Alang 
(India) showed symptoms of asbestosis and were thus at serious risk of mesothelioma.28 As is 
known from medical research, the incidence of this form of lung cancer reaches its peak only 
several decades after exposure. 

Ships  contains  large  amount  of  hazardous  materials  which  are  not  treated  in  an 
environmentally sound manner thus creating negative impacts  

According  to  estimates  from  the  World  Bank,  more  than  80  000  tons  of  asbestos,  256  000 
tons of PCB, 224 000 tons of Ozone Depleting Substances (ODS) and around 74 000 tons of 
heavy metals are expected to be sent in ships for dismantling to Bangladesh and Pakistan over 
2010-2030. Since there are no formal waste disposal sites in these countries, the waste mainly 
remain  in  the  facilities  and  pollutes  the  water,  the  beach  sediments,  the  soil  of  the  seashore 
and coastal habitats29. A small part is sold in equipments (PCB or ODS) or sent to rerolling 
mills (paints)30.  

The  dismantling  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. 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. End-of-life ships are rarely pre-cleaned before 
their arrival. As shown in a study undertaken on behalf of the Commission31, pre-cleaning is 
indeed  costly  and  raises  particular  safety  concerns  as  a  ship  which  is  properly  pre-cleaned 
usually  has  to  be  towed  to  the  recycling  facility.  While  some  stakeholders  (European  Ship 
Recycling  facilities,  environmental  NGOs)  still  insist  on  pre-cleaning  prior  to  sending  the 
ships for dismantling, others (academia, shipowners) consider that any "pre-cleaning" is better 

27 

28 
29 

30 

31 

Report  from  International  Federation  of  Human  Rights  "Childbreaking  Yards  –  Child  Labour  in  the 
Ship Recycling Industry in Bangladesh", 2008 at http://www.fidh.org/IMG/pdf/bgukreport.pdf  
Lloyd's List of 8 September 2006. 
Soil samplings in dismantling yards in Bangladesh and Pakistan showed large contamination notably by 
heavy metals. See the study from the World Bank "The Ship Breaking and Recycling Industry 
in Bangladesh and Pakistan", December 2010.  
Study from the World Bank "The Ship Breaking and Recycling Industry in Bangladesh and Pakistan", 
December 2010.  
See 18.  

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and more economically done close to the site of eventual demolition and not in areas like the 
EU prior to a lengthy towing.  

Whereas in Alang (India) a landfill for hazardous waste (mainly asbestos and glass wool) was 
built  in  2005,  and  waste  reception  facilities  and  asbestos  removal  cells  are  in  operation  on 
some  of  the  facilities,  no  such  facilities  exist  currently  in  Pakistan  nor  in  Bangladesh.  In 
Bangladesh, asbestos is crushed and handled without protective equipment and permeates the 
demolition  zone.  In  Pakistan,  it  is  buried  on-site  and  the  locations  are  not  marked30.  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.32 

The current and long term impacts of these unsound practices on the environment  

It  is  often  difficult  to  document  the  impact  of  these  practices  on  the  environment  in  detail. 
Indications  exist  mainly  for  the  impacts  on  the  marine  environment  rather  than  on  land 
conditions or air emissions33.  

In India the responsible regional authority (Gujarat Maritime Board) conducted sampling and 
analysis of various parameters in coastal water in 2005, and found only "low" or "moderate" 
levels  of  hazardous  substances34.  In  the  context  of  its  recent  study  commissioned  by  the 
World Bank30, soil samplings have been collected and analysed in Pakistan and Bangladesh. 
They  show  a  widespread  varying  contamination  of  the  ship  dismantling  facilities  at 
Chittagong (Bangladesh) with cadmium, chromium, lead and mercury and less contamination 
at Gadani (Pakistan).  

Significant  restoration/decontamination  would  be  required  in  Bangladesh  to  allow  for  any 
change of the land use and to prevent the loss of the pollutants in the event of sea level rise35, 
leading  to  loss  of  biodiversity  and  negative  impacts  for  other  economic  sectors  such  as 
fisheries, fish and shrimp farms as well as hatcheries.  

2.2.  What are the underlying drivers of the problems? 

2.2.1.  Driver 1: insufficient dismantling capacity within the OECD 

According  to  the  Waste  Shipment  Regulation,  end  of  life  ships  are  hazardous  waste  and 
should be dismantled in the OECD only36.  

Several  stakeholders  mentioned  the  lack  of  sufficient  dismantling  capacity  (shipowners, 
Member States) as one of the main reasons leading to a lack of implementation of the current 
legislation and, consequently, as one of the main issues to resolve in any possible legislation. 
At the same time, trade unions also mentioned the need to maintain the existing dismantling 

32 

33 

34 

35 

36 

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. 
For  example,  emission  of  dioxins  produced  by  the  open  burning  of  cables  or  by  the  processing  of 
painted metal in the re-rolling mills.  
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. 
The  costs  associated  with  the  remediation  of  closed  yards  were  estimated  at  10  millions  dollars  for 
Bangladesh.  See  on  page  83  of  the  Study  from  the  World  Bank  "The  Ship  Breaking  and  Recycling 
Industry in Bangladesh and Pakistan", December 2010.  
Thoroughly cleaned ships of all hazardous materials could be legally exported to non-OECD. But this is 
in practice rarely happens because of the costs of pre-cleaning and towing operations (see footnote 31). 

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capacity and employments in the EU which is mainly devoted to small and navy ships. It is 
noteworthy that even the limited existing European recycling capacity is not entirely used and 
that a number of investment projects for green ship recycling in Europe did not materialise. A 
majority  of  ship  owners  indeed  prefers  to  have  ships  dismantled  where  the  revenue  from 
selling  the  ships  is  higher,  thus  making  the  establishment  of  a  business  case  in  the  EU 
extremely difficult. 

The  EU  flagged  ships  represented  in  2009  a  volume  of  more  than  0,81  million  LDT37.  The 
existing  dismantling  capacity  in  the  EU  (0,2  million  LDT)  is  sufficient  to  treat  the  fishing 
vessels,  navy  vessels  and  other  government  owned  vessels  but  not  all  the  EU  flagged 
merchant  ships.  A  total  of  0,06  millions  tons  LDT  of  ships  (mainly  navy  ships  and  small 
ships) have been dismantled in the EU in 2009 and only 44 % of these ships were EU flagged 
ships. During the period 2012-2030, an estimated average volume of 1,64 million LDT of EU 
flagged  ships  would  need  to  be  dismantled  each  year31.The  existing  capacity  in  the  EU  is 
therefore  able  to  treat  around  12  %  of  the  volume  of  all  EU  flagged  ships  going  for 
dismantling.  The  existing  capacity  is  able  to  treat  small  ships  and  government  owned  ships 
(including  navy  ships)  but  not  the  total  volume  commercial  EU  flagged  ships  which  are 
expected to be sent for dismantling in the coming years.  

According  to  a  study  conducted  for  the  Commission38,  the  existing  capacity  is  of  60  000 
LDT/year in Belgium, 30 000 in the Netherland, 25 to 30 000 in Denmark and 150 000 in the 
UK while an estimated average volume of 1,64 million LDT of EU flagged ships would need 
to be dismantled each year during the period 2012-2030. In addition, the existing capacity in 
the EU is adapted to small and medium sized ships but not to very large ones like Very Large 
Crude Carriers and Ultra-Large Crude Carriers39. In 2009, the largest EU flagged ships which 
have been sent for dismantling had a draught of 14,5 meters. According to the report of the 
French Interdepartmental Committee on the Dismantling of Civilian and Military End-of-Life 
Ships40,  the  largest  facilities  located  in  the  EU  could  accommodate  ships  only  up  to  10-12 
meters.  The  dismantling  capacity  within  the  EU  is  therefore  not  able  to  accommodate  the 
largest EU flagged ships. 

The dismantling capacity within the EU is therefore not able to accommodate the whole range 
and the total volume of the commercial EU flagged ships. 

Apart  from  Turkey,  the  other  OECD  countries  tend  to  reserve  their  capacity  for  the 
dismantling  of  their  own  flagged  ships.  Turkey  can  provide  for  some  dismantling  capacity 
(conservatively estimated at 0,05 million LDT per year) even if the total number of facilities 
is not expected to increase due to geographical limitations.  

It is argued that a significant dormant capacity could exist in the EU and in Turkey41. But this 
capacity has not really materialized since it can compete neither with environmentally sound 

37 

38 

39 
40 
41 

The weight of a scrap ship is 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.  
See the list on page 175 of the BIO intelligence service study for DG Environment:" Feasibility of a list 
of “green and Safe” ship dismantling facilities and of a list of ships likely to go for dismantling". The 
facility located in Italy does not have a waste management license and has therefore not been retained in 
the calculation of the EU recycling capacity.  
See page 68 of the study referred to in footnote 31.  
See: http://www.sgmer.gouv.fr/IMG/pdf/Annex_3_Dismantling_site_in_Europe_and_OECD.pdf  
See  footnote  31.  The  indicated  volume  is  an  average.  Larger  volumes  are  expected  to  be  sent  for 
dismantling in particular in 2015 due to the phase-out of single hull tankers.  

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dismantling in countries benefiting from low labour costs nor with unfair practices of unsafe 
and unsound dismantling.  

A  significant  recycling  capacity  exist  outside  the  OECD  in  China,  India,  Pakistan  and 
Bangladesh.  

Responsible European shipowners have invested in safe and sound recycling facilities located 
in  China  and  applying  EU  standards.  The  current  existing  capacity  available  in  China  (2,83 
millions LDT in 2009 ) is already largelly sufficient to treat all EU flagged ships by 2030 (the 
maximum  yearly  volume  in  the  period  2012-2030  will  be  of  1,88  million  LDT)  and  a  new 
facility with a capacity of 1 million LDT will shortly start its activities.  

2.2.1.  Driver 2: An unfair competition in favour of poor quality dismantling 

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. 
According  to  the  prices  paid  in  2009,  the  most  competitive  country  is  Bangladesh  (299 
$/LDT) followed by India (273$/LDT ) and Pakistan (271$/LDT )42.  

Other competitors with higher technical standards are only able to occupy market niches for 
special types of ships like small ships and government vessels including warships 43 (EU and 
Turkey)  or  the  fleet  of  committed  shipowners  (Turkey  and  China).  China,  Turkey  and  EU 
facilities offered respectively  251, 181 and 82 $/LDT in 200944. Facilities in China, Turkey 
and the EU are considered to be compliant already with the standards set up in the Hong Kong 
Convention. Limited investment will be needed in India where facilities have improved after 
the Supreme Court had decided to turn some key requirements of the, at the time draft, Hong 
Kong  Convention  into  domestic  law.  As  highlighted  in  the  study  from  the  World  Bank30, 
significant investments in infrastructure, training and protective equipements would however 
be necessary in Pakistan and Bangladesh.  

Contrary to other type of waste, shipowners are paid for getting their ships recycled. From a 
shipowner's  point  of  view,  ship  recycling  is  beneficial  and  depend  mainly  upon  the  price 
offered by the ship recycling facility or by an intermediate (the "cash buyer").  

The costs of transport for the last journey of a vessel to the recycling facility are indeed very 
limited and not accounted for in general. The final journey is usually relatively short, as the 
shipowner  of,  for  instance,  a  cargo  ship  will  often  succeed  in  arranging  a  last  transport  of 
cargo from near his ships present location to a destination close to the recycling facility45. 

Ship owners do usually not sell directly the recycled materials. This task is undertaken by the 
ship recycling facilities themselves.  

42 
43 

44 
45 

For more detailed information see Annex V and Annex VII.  
As  explained  in  the  IA  supporting  the  EU  Strategy  on  ship  dismantling,  government  vessels  are 
composed of navy ships and of state-owned ships for civilian purposes with a respective tonnage of 300 
000  and  100  000  LDT  over  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.  
See footnote 42.  
See COWI study for DG Environment: " Support to the impact assessment of a new legislative proposal 
on ship dismantling" http://ec.europa.eu/environment/waste/ships/pdf/final_report080310.pdf  

EN 

15 

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As  explained  in  the  Impact  Assessment  accompanying  the  EU  Strategy  for  better  ship 
dismantling46,  shipowners  decide  at  what  point  in  time  a  ship  will  be  sent  for  dismantling 
based on an economic comparison between the costs (maintenance, renewal of certificates..) 
and  benefits  (freigh  rates)  of  maintaining  an  ageing  ship  in  operating  conditions  and  the 
benefits of sending it for dismantling. According to Clarkson, the average earnings per days 
were of 12 674 $ (or 380 220 $ per month).  

The choice of the dismantling location is then influenced, in particular, by the price a facility 
can offer to the intermediary “cashbuyer”or to the ship owner. This price in turn depends on:  

• 

• 

Labour costs: operators in South Asia employ many unskilled labourers at extremely 
low wages of about 2,5 dollar per day47. Detailed information about the labour costs 
are provided in Table 14 in Annex VII. 

Costs  of  infrastructure  for  worker's  safety  and  environmental  protection  which  are 
linked with the dismantling methods employed as well as the existence and the level 
of  implementation  of  national  and  international  regulations  regarding  workplace 
safety and environmental impacts. 

Table 1:Dismantling locations of large EU flagged commercial ships in terms of percentage of total 
recycling (GT48 based) in 2009 23. 

Dismantling location for EU 
flagged - ships 

Main dismantling 
method 

Dismantling fraction of 
total  

India, Pakistan, Bangladesh 
China  
OECD non EU 
EU 
Other  

Beaching 
Afloat 
Landing, afloat  
slipway, docking 

Total 

69,81%
22,75%
6,36%
0,85%
0,23%
100,00%

In terms of method and infrastructure, more than 2/3 of large commercial EU flagged ships49 
(in  terms  of  tonnage)  have  been  dismantled  in  2009  in  India,  Bangladesh  and  Pakistan  in 
“beaching” facilities which do not require heavy machinery. According to the World Bank30, 
there  are  virtually  no  obligations  applied  to  ship  dismantling  facilities  in  Pakistan  and 
Bangladesh in terms of compliance with any health or environmental standards or inspection 
by  the  authorities.  So  investment  in  permanent  structures  and  machinery  at  the  facilities 
continues  to  be  very  limited.  Only  India  has  developed  some  central  infrastructure  for 
hazardous waste management, workers’ training and health care50. The Chinese government 

46 

47 

48 
49 
50 

Communication COM (2008) 767 final of 19 November 2008 presenting an "EU strategy for better ship 
dismantling, and its impact assessment in Commission Staff Working Document SEC(2008) 2846 
According to the study from the World Bank "The Ship Breaking and Recycling Industry in Bangladesh 
and Pakistan", December 2010, the daily wage in Bangladesh is of TK 225 (2,25 €)  and Rs 350 (2,78 €) 
in Pakistan.  
GT stands for gross tons which is the measure of the overall size (internal capacity) of a ship. 
For information about EU flagged and EU owned ships, please consult Table 11 in Annex VII. 
For detailed information about the waste management practices in the dismantling countries and their 
compliance  with  EU  waste  management  requirements  and  with  the  obligation  of  the  Hong  Kong 
Convention  see  pages  47  to  61  of  the  COWI  study  for  DG  Environment:  "  Support  to  the  impact 

EN 

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has  prohibited  beaching  some  years  before  and  closed  down  all  the  existing  facilities  using 
this  method.  Important  investments  notably  from  European  shipowners  have  been  made  in 
order to develop the existing facilities which are operated largelly according to EU standards, 
to create new ones, to train the workers and regarding the handling of hazardous waste51.  

Other factors affecting costs include: 

• 

The domestic market demand for steel scrap and goods present on board ships. Scrap 
steel from ship is indeed a valuable raw material and higher price for metal can be 
paid  if  it  can  be  recycled  “cold”,  without  energy-intensive  and  thus  expensive  re-
melting in electrical furnaces, 

• 

Tariffs and duties. 

The  better  price  for  steel  scrap52  from  ships  are  paid  by  operators  in  Bangladesh  where  the 
standards  of  workers’  safety  and  pollution  prevention  are  the  lowest53,  and  most  steel  was 
processed  without  melting  in  re-rolling  mills.  India  and  Pakistan  offer  similar  prices  while 
China and Turkey offer lower prices.  

There  is  thus  a  strong  economic  incentive  for  ship  owners  who  are  not  willing  to  act 
responsibly  to  choose  recycling  facilities  with  a  particularly  poor  social  and  environmental 
standard. Other countries like China, Turkey and several EU Member States with capacity for 
ship  dismantling  in  dry  docks,  at  piers  and  on  hard  slipways  only  account  for  a  smaller 
fraction of the market as they are typically priced out of the market.  

Current situation and likely evolution of the ship recycling market:  

According to one of the major "cash buyers" (GMS), Bangladesh was the most competitive 
country in August 2011. It offered prices comprised between 500 and 525 US$/LDT. India is 
ranking second with prices comprised between 495 and 520 US$/LDT, followed by Pakistan 
(485  to  510  US$/LDT)  and  finally  China  (450  to  465  US$/LDT).  Since  large  commercial 
vessels  are  currently  not  sent  for  dismantling  in  Europe,  it  is  difficult  to  collect  updated 
information. Using as a proxy the price recently paid by Turkey for a large navy vessels from 
the UK, the prices offered are in the range of about 150 $/LDT. 

Forecasting  the  evolution  of  the  market  and  in  particular  the  share  between  the  different 
recycling  countries  is  linked  with  a  great  uncertainty.  The  dismantling  costs  offered  by  the 
facilities  are  indeed  fluctuating  strongly  since  they  depend  upon  the  economic  situation 
(evolution  of  the  shipping  market)  as  well  as  upon  the  legal  situation  in  the  countries  (the 

51 

52 
53 

assessment of a new legislative proposal on ship dismantling" Final report of December 2009 and pages 
31  to  33  of  the  World  Bank  study  "the  Ship  Breaking  and  Recycling  Industry  in  Bangladesh  and 
Pakistan" of December 2010.  
See  the  Annex  II  of  the  report  of  the  French  Inter-departmental  Committee  on  the  Dismantling  of 
Civilian  and  Military  End-of-Life  Ships  and  BIO  intelligence  service  study  for  DG  Environment:" 
Feasibility of a list of “green and Safe” ship dismantling facilities and of a list of ships likely to go for 
dismantling" Final report of January 2010.  
Detailed information about the dismantling prices in 2009 is provided in Annex VII.  
For detailed information about the waste management practices in the dismantling countries and their 
compliance  with  EU  waste  management  requirements  and  with  the  obligation  of  the  Hong  Kong 
Convention  see  pages  47  to  61  of  the  COWI  study  for  DG  Environment:  "  Support  to  the  impact 
assessment of a new legislative proposal on ship dismantling" Final report of December 2009 and pages 
31  to  33  of  the  World  Bank  study  "the  Ship  Breaking  and  Recycling  Industry  in  Bangladesh  and 
Pakistan" of December 2010.  

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17 

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dismantling facilities have, for example, been closed in Bangladesh for the last months by the 
High Court).  

According to the latest information available: 

- the facilities located in China and Turkey are already operating under the standards of the 
Hong Kong Convention. The ship recycling capacity in China will expand significantly since 
a very large recycling facility is about to start operating in Dalian. It will be able to receive 75 
ships per year including the largest ships of the world fleet.  

-  India  has  already  made  some  improvements  after  the  judgment  from  its  Supreme  Court 
which  included  some  requirements  of  the  (at  the  time)  draft  Hong  Kong  Convention  into 
domestic legislation. It has benefited during the last months from the administrative closure of 
the dismantling facilities in Bangladesh. A recent inspection showed however that the landfill 
for hazardous waste is almost full54 and that a new one should rapidly be developed.  

-  Bangladesh  has  been  closed  for  several  months  and  is  expected  to  invest  in  upgrading  its 
facilities  following  recent  judgments  from  its  High  Court  which  has  made  some  of 
requirements of  the  Hong  Kong  Convention mandatory. From an economic perspective,  the 
investments  needed  to  upgrade  the  facilities  to  a  level  of  compliance  with  the  Hong  Kong 
Convention are of about 10 to 11 $/LDT55 while the profits generated by the facilities are of 
62 $/LDT. Bangladesh is therefore expected to upgrade its facilities because: 

• 

• 

• 

ship recycling is the major source of raw material for the industry,  

it  will  be  necessary  in  order  for  the  facilities  to  be  allowed  to  continue  their 
operations,  

facilities  would  continue 
improvements. 

to  be  profitable  and  competitive  after 

the 

-  Pakistan  has  already  benefited  from  technology  transfer  and  is  willing  to  improve  its 
facilities.  For  several  years,  it  was  virtually  driven  out  of  the  recycling  market  in  particular 
due to its taxes and duties. Ship recycling has started again notably because of closure of the 
facilities  in  Bangladesh.  Investments  have  been  estimated  at  around  10  $/LDT  which  is 
comparable  with  the  current  profit  generated  by  the  facilities.  It  might  therefore  be  slightly 
more  difficult  for  Pakistan  than  for  Bangladesh  to  make  the  necessary  improvements  for 
compliance with the Hong Kong Convention while staying competitive. Facilities located in 
Pakistan  already  encounter  taxes  and  duties  which  are  2,6  times  more  important  than  those 
located in Bangladesh.  

According  to  a  recent  study  conducted  by  the  World  Bank30  the  likelihood  of  seeing  new 
countries emerging as major ship scrapping destinations once the standards and therefore the 
costs of existing facilities have been upgraded is limited.  

Three  possibilities  for  a  relocation  from  the  ship  dismantling  industry  from  Pakistan  and 
Bangladesh  were  assessed:  a  relocation  to  another  "pollution  haven",  a  relocation  back  to 
Europe  or  an  industrialized  country  and  the  pre-cleaning  in  country  of  ownership.  The  two 

54 
55 

http://bargad.files.wordpress.com/2011/06/site-visit-report-of-smc-to-alang-on-24-1-2011.docx  
For more information see Annex XI.  

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latest options were considered as highly unlikely for economic reasons (the lower revenue and 
higher  costs  associated  with  dismantling  in  European  and  industrialised  countries  and  the 
importance of the additional cost induced by pre-cleaning).  

The  first  option  was  studied  in  more  details  and  is  also  considered  as  unlikely  although  it 
cannot  be  ruled  out.  The  necessary  characteristics  of  a  potential  candidate  country  are  the 
following:  

- Strong domestic demand for steel plate and re-bars not readily available from other sources, 

- A market for equipment and consumables, 

- Few, if any, enforced regulations on workers’ health and safety and environmental pollution, 

-  Wages  as  low  as  in  Bangladesh  or  lower. Cambodia and Myanmar both  have  lower wage 
rates than in Pakistan, whereas Bangladesh might still be able to compete with them. Hence, 
the risk of relocation from a wage point of view seems more threatening for Pakistan 

-  Natural  hydrographical  conditions  to  allow  beaching  (or  similar  capital-extensive 
methodology).  Few  states  meet  these  requirements,  and  the  need  for  a  considerable  tidal 
gauge itself is an obstacle for most of Africa or other candidate countries in the Bay of Bengal 
or the South China Sea (such as Myanmar or Cambodia).  

Given  the  relatively  low  likelihood  of  meeting  all  these  conditions  in  other  locations,  the 
study  did  not  considered  it  likely  to  see  relocation  on  a  large  scale  of  ship  recycling  from 
Bangladesh and Pakistan in the immediate future. This does however not totally rule out the 
possibility of seeing new ship recycling countries emerging with a small share of the market. 
The Philippines have expressed interest during the last months in developing ship recycling 
and ratifying the Hong Kong Convention.  

Building  upon  the  experience  gained  during  the  last  decade,  the  following  drivers  have 
stimulated the upgrading of ship recycling facilities:  

– 

– 

– 

– 

– 

Political  willingness  from  the  public  authorities  to  promote  specifically  the  green 
ship recycling market (Turkey, China), 

Court cases imposing new requirements (India, Bangladesh), 

Investments and contractual requirements of commited shipowners (Turkey, China),  

Collaboration  between  facilities  in  order  to  jointly  invest  in  the  infrastructure 
(Turkey), 

Public pressure through, for example, reports from NGOs (Turkey , India, Pakistan). 

A  couple  of  years  before,  Chinese  authorities  decided  to  close  down  all  their  substandard 
facilities and to focus on the green ship recycling market. Beaching was therefore prohibited 
by  the  law.  Strategic  partnerships  have  been  developed  between  Chinese  facilities  and 
responsible shipowners (in particular European and Japanese ones). The later invested in the 
upgrading of the facilities which would reserve a certain ship recycling capacity for them in 
case of huge recycling demand. China continues to develop its ship recycling capacity within 

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its approach of a circular economy. Contrary to other recycling countries, the scrap metal is 
indeed used strategically to produce new ships and not for construction work. 

2.2.2.  Driver  3:  the  regulatory  failure  of  a  legislation  not  well  adapted  to  the  particular 

characteristics of ship.  

The  experience  gained  regarding  the  implementation  of  other  waste-related  legislative 
instruments  with  enforcement  problems  bring  only  limited  pertinent  information  for  ship 
recycling due to the specificities of ships and international shipping. Compared to electronic 
waste,  ships  can,  for  example,  change  their  location  since  they  are  self-movable  (thus 
rendering the notion of "state of export" difficult to apply) and can change their legal regime 
(by changing flags). Another important difference is that while a significant effort, triggered 
by  EU  legislation,  is  being  made  to  develop  recycling  capacity  for  WEEE  and  end-of-life 
vehicles  in  the  EU,  the  recycling  capacity  for  ships  in  the  EU  is  (and  will  remain)  clearly 
insufficient.  

When asked during the public consultation about the ways to improve the enforcement of the 
current legislation, several stakeholders (shipowners, Member States, academia) insisted that 
this legislation is not adapted to the particularities of ships as waste. In particular, this is due 
to the difficulty to identify when a ship becomes waste and the possibility to change its flag56. 
Indeed, there have been very few clear-cut cases where ships became waste while being under 
EU  jurisdiction  and  being  in  EU  waters  and  were  still  send  to  facilities  outside  the  OECD 
countries. 

Identifying when ships turns into waste. 

As  explained  before,  shipowners  decide  to  send  their  ships  for  dismantling  based  on  an 
economic  comparison  between  the  costs  and  benefits  of  maintaining  a  ship  in  operating 
conditions and the benefits of sending it for dismantling.  

If  this  decision  is  taken  while  the  ship  is  in  international  waters  or  in  waters  under  the 
juridiction of the recycling state, it is very difficult or impossible to apply the procedures of 
the  Waste  Shipment  Regulation,  in  particular  for  ships  which  are  registered  under  non-EU 
flags. Moreover, commercial ships leaving European ports and waters usually optimize their 
last voyage by delivering goods in Asia prior to going for dismantling. If the ship-owner does 
not  declare  the  intention  to  dismantle  its  ship  when  leaving  an  EU  port,  the  relevant 
authorities  can  in  general  not  intervene.  It  is  also  not  uncommon  to  sell  a  ship  to  another 
operator  under  the  pretence  that  the  ship  would  continue  trading  when  it  is  then  actually 
transferred directly to a ship dismantling facility. 

As announced in the Communication, the Commission took steps during the last years when it 
was alerted that specific ships would go for dismantling. It has contacted the Member States 
concerned (flag state, port state and even state of nationality of the owner) in order to verify 
that  these  individual  ships  would  not  go  for  dismantling.  However,  in  a  certain  number  of 
cases,  shipowners  declared  that  the  ships  would  continue  to  be  used  and  that  it  was  not 
intended  to  be  sold.  Since  port  states  can  not  block  unduly  ships  without  justification, 
Member States had to release the ships based on the evidence produced by the owners. Some 
Member States even informed recycling states about the risk of seeing a particular EU flagged 

56 

As  noted  by  one  stakeholder  "  Ships  change  hands  many  times  in  their  life,  moving  down  the  ‘food 
chain’  up  to  a  dozen  times  in  a  life  that  often  exceeds  thirty  years.  Ships  are  mobile  and  can  re-flag 
easily, i.e. change nationality".  

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ship illegally arriving in their facilities. Recycling countries have however not required these 
ships to be reimported to the EU as they are entitled to do according to the Basel Convention. 
Most recycling countries — with the exception of Turkey — are indeed reluctant to use the 
Basel Convention's procedures of notification and consent for ships imported for dismantling, 
as it goes against their financial interests.  

The possibility to change flag. 

Every ship has to be registered under a flag. The flag state, as defined by the United Nations 
Convention  on  the  Law  of  the  Sea,  has  overall  responsibility  for  the  implementation  and 
enforcement of international maritime regulations for all ships granted the right to fly its flag. 
Changing flag, which can be done with very limited effort in time and expenditure, allows the 
shipowners to change the legal regime for the ship. 

The  large  majority  of  stakeholders  (shipowners,  Member  States,  environmental  NGOs...) 
commented on the difficulty for enforcing legislation given the ease with which owners can 
change flags.  

The  current  Waste  Shipment  Regulation  is  applicable  to  EU  flagged  ships  as  well  as  ships 
which are in the exclusive economic zone with regard to the protection and preservation of the 
marine environment within this zone. This Regulation would therefore not allow EU Member 
States  to  prohibit  the  export  of  a  non-EU  flagged  ships  (irrespective  of  whether  they  are 
owned  or  not)  based  on  the  possibility  that  this  ship  would  create  environmental  negative 
impacts in third countries.  

Change  of  flag  prior  to  dismantling  is  already  a  reality  since  EU  flagged  ships  represented 
17,6 % of the active fleet57 but only 8 % of the ships at the time of dismantling58 in 2009 and 
15,1 % in 2008. It is driven by several factors which are presented in Annex VI. Certain flags 
offer specific short term/single voyage registration for around 10 000 dollars (for a Panamax 
ships this would represent 1 $/LDT) which is a negligible cost compared with prices offered 
by the recycling facilities. The difference in offer prices between facilities in OECD countries 
and  Asian  beaching  facilities  can  amount  to  several  hundreds  of  dollars  depending  on  the 
actual market situation and on the type of ships59. In addition, some shipowners prefer to sell 
their  ships  to  brokers  (called  "cash  buyers")  instead  of  negotiating  directly  with  ship 
dismantling facilities60.  

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

2.3.1.  EU Member States as flag states, port states and recycling states  

EU  Member  States  have  to  apply  the  existing  legislation  (Waste  Shipment  Regulation)  and 
are expected to become Parties to the Hong Kong Convention which will have implications 
on  them  as  flag  states  (17%  of  the  world  fleet  is  EU  flagged),  recycling  states  (mainly  for 
small ships and military vessels) and port states (for port state control).  

57 
58 
59 

60 

See Table 18 and Table 19 in Annex VIII. 
See Table 15 in Annex VII. 
According to Cotzias, the prices ranges of Turkey, India, Bangladesh and Pakistan were respectively in 
2009 : [140-265], [106,720], [220,393], [90,340].  
According  to  data  published  by  Cotzias,  ships  sold  to  cash  buyers  represented  1,3  %  of  all  large 
commercial ships in 2009 and 3,5% of EU flagged ships.  

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2.3.2.  EU ship owners 

EU  ship  owners  want  to  sell  their  ships  at  the  best  possible  price.  Faced  with  the  lack  of 
recycling  activities  in  the  OECD,  some  responsible  shipowners  have  invested  in  green 
facilities  located  outside  the  OECD  (China)  to  secure  sufficient  capacity  while  benefiting 
from  low  labour  costs.  Others  are  choosing  their  recycling  facilitiy  by  only  taking  into 
account  the  price  offered  for  their  ships  by  the  dismantling  facilities  and  by  totally 
disregarding the environmental and social impacts.  

The  implementation  of  the  Hong  Kong  Convention  will  imply  administrative  costs  and 
reduced  benefits  from  selling  their  ships  for  dismantling  since  dismantling  facilities  are 
expected to pass on the majority of the additional costs linked with the improvement of their 
practices. 

2.3.3.  EU ship dismantling facilities 

The implementation of the Hong Kong Convention will have very limited implications since 
they  are  already  complying  with  labour  and  environmental  requirements  which  are  stricter 
than  the  Hong  Kong  Convention.  They  are  expected  to  continue  to  dismantle  small  ships 
which  are  not  expected  to  be  sent  in  South  Asia  for  safety  (navigation  in  high  seas)  and 
economic  reasons.  Governement  and  navy  vessels  are  not  per  se  in  the  scope  of  the  Hong 
Kong  Convention  but  Members  of  the  IMO  have  to  ensure  that  such  ships  act  in  a  manner 
consistent with the Convention "so far as is reasonable and practicable"61.  

2.3.4.  Third countries (recycling countries)  

Ship dismantling provides for employment and is a source of raw materials and used goods 
but is associated with significant impact on the human health of workers in the dismantling 
facilities as well as on the environment of the communities (see section 2.1).  

2.4. 

How would the problem evolve, all things being equal?  

Large numbers of ships are expected to be sent for dismantling in the coming years as a result 
of an overcapacity of the world fleet which is estimated to remain for at least 5 to 10 years30. 
Before 2008, old ships were kept in service62 and significant amount of ships were ordered in 
order to benefit from the high freight rates. As a follow-up of the financial crisis, the demand 
for maritime transport has decreased and the freight rates have sharply decreased. On top of 
sending  ships  for  dismantling,  several  actions  have  been  taken  by  shipowners  in  order  to 
reduce the overcapacity of the world fleet: cancellation of orders for new ships (482 in 2009 
and 929 in 2010)  20, laying up of ships (around 1000 ships139 in January 2011) or voluntary 
slowing  down  ships  ("slow  steaming").  They  are  however  insufficient  as  the  world  fleet  in 
service  has  grown  by  10.1  %  in  terms  of  carrying  capacity  in  2010  compared  to  200920.  In 
2009  and  2010,  around  3  new  ships  were  delivered  for  each  ship  sent  for  dismantling.  The 
evolution of the world fleet from 2004 to 2009 is presented in Figure 8 in Annex VIII.  

61 
62 

See article 3 of the Hong Kong Convention.  
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.  

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In  addition,  the  coming  peak  in  ship  recycling  around  the  phasing-out  dates  for  single-hull 
tankers (2015) is expected to essentially benefit the most primitive sub-standard facilities. 

The  expected  evolution  of  ship  recycling  in  the  major  recycling  state  has  been  presented  in 
section 2.2. 

If the Hong Kong Convention does not enter into force and if the European legislation is not 
modified,  it  is  highly  probable  that  the  current  market  situation  and  important  level  of  non-
compliance  will  persist.  A  peak  in  dismantling  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.  

Even  in  the  scenario  of  a  recovery  of  the  economy  -  and  a  resorption  of  the  world  fleet's 
overcapacity,  fewer  ships  will  be  sent  for  dismantling  thus  leading  to  a.  more  fiercely 
competition amongst ship recycling facilities in favour of the substandards ones.  

2.5. 

International and national policy approaches  

The  Hong  Kong  Convention  was  adopted  in  May  2009  but  is  not  expected  enter  into  force 
and to start producing effects before 2020. Conventions from the IMO usually contains entry 
into  force  provisions  related  to  flag  states  only  (number  of  states  and/or,  percentage  of  the 
world  fleet)  and  take  an  average  of  6  years  to  enter  into  force63.  But  the  Hong  Kong 
Convention needs to to be ratified by both major flags states and recycling states which will 
take  longer.  More  detailed  information  about  the  entry  into  force  requirements  of  the 
Convention is provided for in Annex IV.  

According  to  the  latest  information  available64,  China  is  expected  to  ratify  the  Hong  Kong 
Convention in 2012 and Japan in 2013. Turkey is making good progress, but seems reluctant 
to be the first recycling country to ratify. India has the support of the government executive 
for ratification, but is facing problems with its recycling associations.  

In June 2011, 11 Member States plus Norway reported on their progress towards ratification. 
Two  countries  are  aiming  at  ratification  by  the  end  of  2011.  Several  Member  States  agreed 
that  EU  legislation  would  be  helpful  for  ratification.  Some  countries  cannot  though  ratify 
without having legislation in place. 
The Council conclusions65 adopted in 2009, encouraged strongly EU Member States to ratify 
the  Hong  Kong  Convention  as  a  matter  of  priority  so  as  to  facilitate  its  entry  into  force  as 
early as possible and to generate a real and effective change on the ground.  

The  Hong  Kong  Convention  applies  to  most  privately  owned  and  commercial  ships.  The 
Convention  does  not  apply  to  small  ships  (less  than  500  GT),  warships,  naval  auxiliary  or 
other state-owned or operated vessels which are used only on non-commercial service or ships 
used  exclusively  for  domestic  transport  throughout  their  life.  However,  the  Convention 
requires that these ships act in a manner consistent with the Convention, "as far as reasonable 
and practicable".  

63 

64 
65 

The ratification of new IMO Conventions take time as can be seen from the table showing the state of 
ratification (http://www.imo.org/About/Conventions/StatusOfConventions/Documents/status-x.xls ). 
Workshop organized in EMSA in June 2011.  
Council conclusions on an EU Strategy for better ship dismantling of 21 October 2009, 

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The  Hong  Kong  Convention  requires  ships  flying  the  flag  of  a  Party  ("Party  ships")  to  be 
dismantled only in authorized recycling facilities located in another Party to the Convention 
("Party facilities"). Party facilities would be allow to treat also non-Party ships provided that 
they treat them similarly to Party ships (clause of "no more favourable treatment").  

To  be  authorized,  facilities  will  have  to  comply  with  the  detailled  requirements  of  the 
Convention  regarding  safety,  the  protection  of  human  health  and  the  environment  and  they 
will have to be subjet to a site inspection from  the  authorities.  The  Hong  Kong  Convention 
does not contain requirements which would explicitely rule out the "beaching" method which 
has  been  controversial  because  of  its  environmental  and  health  impacts.  Ships  will  have  to 
minimize and document (Inventory of Hazardous Materials) the amount of hazardous waste 
present on board. Based on this inventory and on its authorization, the ship recycling facility 
will develop a ship-specific document (Ship Recycling Plan) to describe how this particular 
ship  will  be  dismantled  and  how  the  hazardous  waste  will  be  managed  in  the  facility.  The 
shipowner will have to inform in writing its flag state about the intention to recycle the ships 
and then to provide the Inventory of Hazardous Materials (IHM) and the Ship Recycling Plan 
(SRP) to its flag state. The latter will conduct a final survey on board the ship to verify that 
the IHM is complete, that the SRP properly reflect the IHM and about the maintenance of safe 
working conditions for workers and, finally, that the ship recycling facility is authorized. The 
ship  recycling  facility  will  inform  its  authorities  of  the  start  and  the  completion  of  the 
recycling. The authorities will inform back the flag state of the completion of the dismantling.  

The  Parties  to  Basel  Convention  have  been  invited  to  assess  the  equivalency  between  the 
levels  of  control  and  enforcement  of  the Hong  Kong  Convention  and  the  Basel  Convention 
and  to  transmit  the  outcomes  of  the  assessment  to  the  10th  Conference  of  the  Parties  "for 
consideration  and  action,  as  appropriate"66.  The  assessment  developed  by  the  European 
Commission and the Member States has been submitted on the 15 April 2011 concludes that 
"as a preliminary assessment and taking into account a life cycle perpective the Hong Kong 
Convention  provides  a  level  of  control  and  enforcement  at  least  equivalent  to  the  Basel 
Convention's one"67.  

Since it does not contain any geographical limitation, the Hong Kong Convention will allow 
ships  flying  the  flag  of  Parties  to  be  dismantled  worlwide  in  facilities  authorized  by  other 
Parties.  

The  Hong  Kong  Convention  is  adapted  to  the  specificities  of  shipping  since  it  relies  on  the 
system of international surveys and certification for ships during their life cycle, on port state 
controls.  Moreover,  it  contains  an  obligation  for  shipowner  to  inform  in  writing  and  in 
advance  their  flag  state  of  their  intention  to  recycle  their  ships,  thus  resolving  the  current 
problem of identifying when a ship turns into waste.  

Facilities  located  in  Parties  to  the  Hong  Kong  Convention  will  have  to  treat  similarly  ships 
flying the flag of Parties to the Convention and ship not flying the flat of Parties ("no more 

66 

67 

See  decision  IX/30  on  dismantling  of  ships  adopted  during  the  9th  Conference  of  the  Parties  in  June 
2008: http://www.basel.int/meetings/cop/cop9/docs/39e-rep.pdf#ix30  
" As a preliminary assessment and taking a life cycle perspective, it can therefore be concluded that the 
Hong Kong Convention appears to provide a level of control and enforcement at least equivalent to that 
one provided by the Basel Convention for ships which are waste under the Basel Convention and for 
ships  to  which  the  Hong  Kong  Convention  applies  and  to  ships  treated  similarly  pursuant  to  article 
3(4) of this latter Convention".  

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favourable" clause) thus limiting the incentive of changing flags only in order to benefit from 
a more favourable legal regime. As long as the 5 major ship recycling states which represent 
more than 90 % of the dismantling activity are Parties to the Convention, there will be major 
improvements compared to the current situation. One possible problem would be faced if one 
or two recycling countries decides not to join the Hong Kong Convention. In this case, there 
will continue to be two markets competing which each other: one with substandards facilities 
offering  better  prices  for  shipowners  and  another  one  compliant  with  the  Convention.  And 
since changing flag is legal, easy and negligible68, one can expect that some shipowners would 
continue  to  change  flags  in  order  to  circumvent  the  legislation.  In  order  to  help  countries 
lagging  behing  to  improve  their  facilities,  financial  and  technological  support  is  therefore 
currently provided through specific programms undertaken under the Global Programme for 
Sustainable Ship Recycling jointly set up by the IMO, the ILO and the Secretariat of the Basel 
Convention.  

The development of the Hong Kong Convention has already had a positive influence on the 
evolution of the legislation in Bangladesh and India where the High and Supreme Court have 
already included some requirements of the Hong Kong Convention domestically.  
However, as noted already in the Communication on better ship dismantling, the Convention 
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 an non-compliance mechanism in the Convention might 
reduce  its  effectiveness  in  practice.  As  explained  in  the  report  of  a  recent  site  visit  of  the 
Standing  Monitoring  Committee  on  Shipbreaking  Yards  at  Alang69,  Fake  certificates  have 
been submitted by ship owners or their agent and neither the Gujarat Maritime Board not the 
customs were able to verify the authenticity/genuineness of ship’s registry/flag in the fast in 
respect of some ships referred to them.  
The  Hong  Kong  Convention  is  applicable  only  to  the  ship  recycling  facility  but  not  to  the 
facilities involved in the downstream management of the waste. The Convention contains an 
obligation for the facilities to identify the facilities to which hazardous waste will be sent for 
treatment. It does however not ensure that the waste will actually end up in the proper facility 
which  had  been  identified  since  no  traceability  is  foreseen.  This  is  problematic  since  some 
recycling  countries  are  know  for  not  having  any  facilities  authorize  and  able  to  treat 
hazardous waste (Pakistan, Bangladesh) while the hazardous waste landfill in Alang (India) is 
almost full.  
Another  remaining  issue  with  the  Convention  is  that  it  does  not  explicitely  address  the 
"beaching"  method  which  is  currently  used  in  the  major  recycling  countries  and  has  been 
criticized  for  its  environmental  and  health  impacts.  The  environmental  NGOs,  some 
associations of green recyclers and some shipowners as well as the European Parliament have 
called  for  a  total  ban  on  beaching.  The  Council  has  underlined  in  its  conclusions,  that  the 
Hong  Kong  Convention  represents  "an  important  step  towards  phasing  out  unsafe  and 
environmentally  harmful  working  methods,  including  in  relation  to  unsafe  aspects  of  the 
current practise of so called beaching of end of life ships" but has not called for a prohibition 
on beaching. Shipowners and other stakeholders have on the other hand highlighted the fact 
that "beaching" is the major dismantling method.  

68 
69 

For more information about reflagging (including the costs), see Annex VI. 
See http://bargad.files.wordpress.com/2011/06/site-visit-report-of-smc-to-alang-on-24-1-2011.docx 

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2.6. 

Industry approaches 

During the public consultation, the importance of voluntary actions by the shipping industry 
was  highlighted  by  the  shipping  industry  itself  but  also  by  the  Member  States  and  the 
European Economic and Social Committee. 

The  shipping  industry  established  in  1999  an  Industry  Working  Group  on  Ship  Recycling 
which is coordinated by the International Chamber of Shipping (ICS). Its members have been 
actively involved in the development of the Hong Kong Convention. The industry has taken 
voluntary action to start implementing the Hong Kong Convention once adopted. 

In  October  2009,  this  Working  Group  adopted  "Guidelines  on  transitional  measures  for 
shipowners  selling  ships  for  recycling"  providing  guidance  for  shipowners  on  how  to 
voluntarily apply certain elements of the Hong Kong Convention before it enters into force. 
After  the  adoption  of  the  Guidelines  on  the  Inventory  of  Hazardous  Material70,  shipowners 
have  used  them  on  a  voluntary  basis.  Based  on  their  experience,  they  have  proposed  some 
update and amendments of the guidelines which have been approved in July 2011.  

In addition, one association (BIMCO) will adopt a new “green” ship recycling contract and a 
revised  version  of  its  contract  for  the  sale  of  second  hand  vessels  (SALEFORM  93)  in 
January 2012. However, voluntary action by the Industry is limited by the facts that:  

-  the  voluntary  application  of  the  Hong  Kong  Convention  is  not  always  compliant  with  the 
current legislation (for example, sending ships for recycling outside the OECD ). 

- some stakeholders (ship recycling facilities, environmental NGOs) have highlighted in their 
response  to  the  public  consultation  that  they  do  not  consider  non-legislative  measures  to  be 
effective since they have had little impact so far. Prior to the development of the Hong Kong 
Convention,  shipowners  agreed  to  voluntary  develop  the  so-called  Green  Passport  (the 
ancestor of the Inventory of Hazardous Materials). But a limited number of passports have in 
fact  been  developed.  BIMCO  had  also  previously  developed  ship  recycling  contract  which 
have  been  used  by  a  very  limited  number  shipowners  only.  New  voluntary  measures  are 
therefore most likely to follow a similar path. 

European classification societies have been very active in the development of the Hong Kong 
Convention as this could represent new business opportunities for them: for the establishment 
of  Inventories  of  Hazardous  Materials,  for  certifying  ships  (as  recognized  organisations  on 
behalf of flag states) or recycling facilities (as recognized organisations on behalf of recycling 
states or if asked by the facilities themselves on a voluntary basis). 

2.7. 

The right of the EU to act 

Treaty base 

The EU competence to take action on ship dismantling matters comes in particular from the 
articles of the EU Treaty related to the protection of the environment (article 192 of the Treaty 
on the Functioning of the European Union, TFUE).  

The "necessity test"  

70 

Guidelines supporting the Hong Kong Convention. 

EN 

26 

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Ship  dismantling  is  already  covered  by  European  legislation  namely  the  Waste  Shipment 
Regulation.  But  the  current  legislation  is  not  adapted  to  the  specificities  of  ships  and  is 
therefore  largelly  circumvented  and  therefore  ineffective.  The  European  legislation  would 
therefore need to be modifiedeven in the absence of the Hong Kong Convention.  

Subsidiarity principle 

The  subsidiarity  principle  applies  insofar  as  the  proposal  does  not  fall  under  the  exclusive 
competence of the EU.  

As a Party to the Basel Convention, the European Union has the obligation to block the export 
of hazardous waste in countries which are not able to treat them in an environmentally sound 
manner. The EU has therefore an obligation to ensure that EU flagged ships are recycled in a 
safe  and  sound  manner  worldwide.  In  addition,  it  would  be  difficult  to  justify  that  the 
pollution  generated  by  the  dismantling  of  ships  flying  the  flag  of  EU  Member  States  is 
exported to third countries which are not equipped to deal with it in an appropriate manner. 
The environmental problems generated by ship recycling are not only local since hazardous 
chemicals  are  released  directly  into  the  sea  thus  affecting  the  fishes  and  shrimps  which  are 
captured and exported also outside the country.  

The Commission can not ratify the Hong Kong Convention since only Member of the IMO 
are  allowed  to  doso  and  become  Parties  to  this  Convention.  The  EU  Member  States  will 
therefore have a key role, mainly as flag states, in the ratification and fulfillment of the entry 
into  force  provisions  of  this  Convention.  As  explained  in  Annex  VI,  the  ratification  and 
transposition of the Hong Kong Convention by EU Member States is likely to take place at 
different  pace.  There  is  a  clear  risk  of  having  different  legal  requirements  applied  to  large 
commercial  EU  flagged  ships  depending  on  the  different  Member  States  concerned.  This 
situation  could  result  in  change  of  flags  and  unfair  competition  between  the  Member  States 
acting  as  flag  states.  As  highlighted  by  some  Member  States  in  their  response  to  the  public 
consultation, a harmonised  transposition at the European  level  ensures  a  more  level  playing 
field  and  reduces  administrative  burdens  for  ship  owners  and  recycling  yards  in  the  EU, 
compared  to  the  implementation  of  the  IMO  Convention  in  the  the  European  Union  by  27 
diverging versions of national legislation.  

In  addition,  some  Member  States  are  not  prepared  to  ratify  the  Hong  Kong  Convention  as 
long  as  long  as  the  current  EU  legislation  is  not  modified  and  the  risk  of  a  duplication  of 
requirements applicable to ship recycling is not ruled out. Member States having ratified the 
Hong  Kong  Convention  could  be  required  to  apply  the  requirements  of  this  Convention 
through  their  domestic  legislation  as  well  as  the  requirements  of  the  Waste  Shipment 
Regulation.  These  two  sets  of  procedures  are  largelly  redundant  and  duplicating  but  also 
incompatible on some issues (see for example the geographic restrictions regarding the legally 
accessible  ship  recycling  facilities).  This  would  result  in  a  very  confusing  situation  and  in 
increased  non-compliance  while  none  of  the  drivers  identified  in  section  2.2.  would  be 
addressed.  

Maintaining the current legislation would therefore not address any of the problems currently 
faced but could delay or block the ratification of the Hong Kong Convention in a number of 
Member States. 
The inclusion of the Hong Kong Convention's requirements into European legislation would 
on the other hand promote harmonised decision-making and speed up the ratification process 
amongst  the  Member  States.  During  a  workshop  organized  in  EMSA  in  June  2011,  11 
Member States indicated that they are in the process of ratifying the Convention, although at 

EN 

27 

   EN 

different  stages.  The  majority  of  EU  Member  States  considered  that  an  EU  legislation 
implementing the Hong Kong Convention would be useful for their own ratification process. 
A proposal for a Council decision authorising Member states to ratify or to accede to, in the 
interests  of 
the  Safe  and 
Environmentally Sound Recycling of Ships, 2009 will therefore be jointly presented with this 
proposal for a Regulation to ensure a swift and coordinated ratification of the Convention by 
all Member States.  

the  Hong  Kong  Convention  for 

the  European  Union, 

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  Hong  Kong  Recycling 
Convention quickly into force.  

Proportionality principle 

The  proposal  complies  with  the  proportionality  principle.  The  additional  burdens  for 
economic  operators  and  national  authorities  are  limited  to  those  necessary  to  that  ship 
recycling  is  undertaken  in  a  safe  and  environmentally  sound  manner.  While  the  proposal 
implies  additional  costs  for  the  shipowners  (development  of  the  Inventories  of  Hazardous 
Materials  and  surveys),  these  costs  are  expected  to  be  offset  by  the  substantial  social  and 
environmental benefits obtained. 

Going beyond the requirements – in a limited way - of the Hong Kong Convention is needed 
in order to address the limitations of the Convention presented in section 3.5 namely:  

- address the current governance problems in some recycling countries,  

- ensure the proper downstream management of the hazardous waste,  

-  introduce  specific  requirements  to  phase  out  the  current  unsafe  and  environmentally 
unsound recycling methods. 

3. 

POLICY OBJECTIVES 

3.1. 

General objective: 

The general objective is therefore to reduce significantly and in a sustainable way by 2020 the 
negative  impacts  of  ship  dismantling,  especially  in  South  Asia,  on  human  health  and  the 
environment  without  creating  unnecessary  economic  burdens  by  facilitating  the  entry  into 
force of the Hong Kong Convention.  

While  EU  legislation  can  only  address  ships  flying  the  flag  of  EU  Member  States,  it  is 
expected that it could have a positive effect also on ships which are EU-owned but flying flag 
of non-EU countries. 

3.2. 

Specific objectives: 

•  SO1: reduce the human health and environmental impacts by ensuring that the EU flagged 

ships are dismantled only in safe and environmentally sound facilities worldwide, 

•  SO2:  ensure  the  availability  of  sufficient  and  economically  accessible  sound  and  safe 

recycling capacity to dismantle EU flagged ships, 

•  SO3: strengthen the incentives to comply with the EU legislation,  

EN 

28 

   EN 

3.3. 

Consistency of the objectives with fundamental rights  

Measures  designed  to  meet  the  objectives  will  need  to  be  in  compliance  with  relevant 
fundamental  rights  and  principles  embodied  in  the  Charter  of  Fundamental  Rights  of  the 
European Union. Aiming at improving the impacts on human health and on the environment 
of the dismantling of EU ships will have to take into account as well as the freedom of right 
and  association  (article  12),  the  worker's  right  to  information  and  consultation  with  the 
undertaking (article 27), the right of collective bargaining and action (article 28), the right to 
fair and just working conditions (article 31) and the prohibition of child labour and protection 
of young people at work (article 32) as well as on the environmental protection (article 37).  

DESCRIPTION OF POLICY OPTIONS 

4. 
The  EU  Strategy  on  better  ship  dismantling3,  proposed  a  new  EU  initiative  consisting  of  a 
mixture  of  legislative  as  well  as  of  the  following  non-legislative  measures.  After  its 
publication,  inputs  and  comments  have  been  received  from  the  Council,  the  European 
Parliament,  the  European  Economic  and  Social  Committee  as  well  as  from  stakeholders 
during  the  public  consultation  and  workshops.  In  addition,  studies  have  been  conducted  in 
order to further assess the feasibility of some actions. The table below presents the follow up 
actions undertaken by the Commission.  

Action announced in the Strategy 

Actions undertaken by the Commission  

the  Commission,  as  an 
Participation  of 
observer to the IMO, in the development and 
future 
the  guidelines 
supporting the Hong Kong Convention,  

implementation  of 

The  Commission  has  participated  in  the 
development of the guidelines supporting the 
Hong Kong Convention.  

The  Commission  has  actively  participated  to 
the intersessional working groups developing 
the guidelines and was represented during the 
the  Maritime  Environment 
meetings  of 
Protection  Committee  which  reviewed  and 
adopted them.  

At this stage, two guidelines (dealing with the 
inventories  of  hazardous  materials  and  with 
the  development  of  ship  recycling  plans)71. 
have been adopted. 

The  Commission  will  continue  to  actively 
participate  in  the  further  development  of  the 
others  guidelines  supporting  the  Hong  Kong 
Convention  which  are  currently  under 
development72.  

71 

72 

EN 

of 

The Guidelines for the development of the Inventory of Hazardous Materials and the Guidelines for the 
development 
this  website: 
http://ec.europa.eu/environment/waste/ships/index.htm  
Guidelines focusing in particular on the facilities' authorization and procedures to ensure their safe and 
sound operations.  

Recycling 

available 

Ship 

Plan 

the 

are 

on 

29 

   EN 

                                                 
into 

Voluntary  action  by  the  industry  prior  to  the 
the  Hong  Kong 
entry 
Convention,  notably  the  implementation  of 
the Convention's technical guidelines 

force  of 

Conducting  occasional  research  and  pilot 
projects to assess developments and promote 
better ship dismantling technologies 

See section 3.6 

In  order  to  assess  developments  and  to 
promote  ship  dismantling  technologies,  both 
research  and  pilot  projects  have  been 
launched and are currently running:  

and  Technology) 

-  under 
the  7th  European  Research 
Framework  Programme,  a  specific  project 
called DIVEST (Dismantling of Vessels with 
Enhanced  Safety 
is 
currently  undertaken73.  Information  collected 
during  this  project  on  the  composition  of 
ships 
in  hazardous  materials  have  been 
transmitted  to  and  taken  into  account  by  the 
consultant  in  charge  of  the  study  supporting 
the Impact Assessment.  

- a pilot project called RECYSHIP74,financed 
under the LIFE+ program in the action line of 
“Environment  Policy  and  Governance”,has 
started  in  2009  and  will  last  until  2012.  It 
aims at addressing the issue of ship scrapping 
in  matters  of  occupational  safety,  health  and 
environmental protection. 

Further assess: 

-  the  option  to  include  in  the  ship  recycling 
measures, amongst others, rules for the clean 
dismantling 
other 
of  warships 
government vessels. 

and 

- encourage voluntary action by the industry  

-  improve  enforcement  of  the  current  waste 
shipment law with regard to end-of-life ships  

-  the  feasibility  of  developing  a  certification 
and audit scheme for ship recycling facilities 
worldwide. 

- see option E1 in section 4, 

- see section 3.6 

-see section 2.2.2  

- see option D3 in section 4. 

73 

74 

The  project  is  presented  on  this  website  http://www.divest-project.eu/Home.aspx.  In  addition,  an 
exchange platform has been created and is accessible to the persons involved in the project as well as to 
the general public. 
Information is provided on this website: http://www.recyship.com/ .  

EN 

30 

   EN 

 
 
 
 
 
 
                                                 
Additional actions have been undertaken by the Commission.  

At international level, the Secretariats of the Basel Convention, of the International Maritime 
Organization and of the International Labour Organization are indeed working together under 
the  "Global  Programme  for  Sustainable  Ship  Recycling"75  which  aims  at  offering  a 
coordinated approach in addressing the issues faced by the ship recycling industry.  
Under this programme, a Ship Recycling Technology & Knowledge Transfer Workshop took 
place  in  Izmir,  Turkey,  in  July  2010  to  assist  the  government  officials  and  industry  of 
Pakistan to strengthen their regulatory, institutional, procedural and infrastructural capacity to 
fulfil  the  relevant  aspects  of  the  Basel  Convention  in  relation  to  ship  recycling,  particularly 
those dealing with the downstream management of hazardous and other wastes, and the Hong 
Kong International Convention.  
The  Commission  provided  a  grant  under  the  Thematic  Programme  for  the  environment  and 
sustainable management of natural resources, including energy (ENRTP) to this program with 
a view to provide support to the recycling countries wishing to improve their practices.  
The  government  of  Norway  will  provide  six  million  dollars  in  bilateral  aid  through  its 
development agency NORAD to Bangladesh.  
Finally a pilot project is assessing the current practices for recycling of ships not covered by 
the Hong Kong Convention and abandoned vessels within the EU. 

4.1. 

Option A: the baseline option  

The  "baseline  option"  is  defined  here  as  maintaining  the  Waste  Shipment  Regulation 
unchanged in the short (2015), medium (2020) and in the long term (2025).  

As  announced  in  the  Council  conclusions  on  better  ship  dismantling76,  Member  States  are 
expected  to  ratify  and  implement  the  Hong  Kong  Convention  in  their  domestic  legislation. 
This  Convention  is  expected  to  enter  into  force  in  2020.  The  first  positive  impacts  of  the 
Hong Kong Convention are expected to be foreseable in 2020 where ships going for recycling 
will  have  to  establish  inventories  of  hazardous  materials.  But  the  full  effect  of  the  new 
international  regime  is  not  to  be  expected  to  be  seen  before  2025  since  there  are  separate 
deadlines for compliance with the various requirements - for instance 5 years after entry into 
force for an Inventory of Hazardous Materials to be present in existing ships (as opposed to 
new  ships).  Some  Member  States  explicitly  mentioned  in  their  contribution  to  the  public 
consultation the need to maintain these separated deadlines.  

All recycling countries where there are currently substandard facilities are expected to be able 
to be upgraded in order to meet the Hong Kong Convention's requirements by 2020. Since the 
Waste  Shipment  Regulation  would  continue  to  be  applicable,  ships  flying  the  flag  of  EU 
Member States would however always be prohibited to be recycled outside the OECD, even if 
this would be authorized under the Hong Kong Convention. The legally accessible recycling 
capacity  (within  the  OECD)  is  not  expected  to  be  substantially  improved  and  will  remain 
inadequate. It is this therefore foreseeable that even responsible shipowners would continue to 
send their ships for dismantling outside the OECD.  

75 
76 

EN 

For more information, see http://www.basel.int/ships/gpssr/index.html  
See  point 9 of  the  Council  Conclusions on an  EU Strategy  for better  ship  dismantling  adopted on  21 
October 
at: 
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/envir/110626.pdf  

available 

2009 

31 

   EN 

 
                                                 
The  level  of  control  and  enforcement  from  Member  States  is  indeed  expected  to  remain 
similar  as  today.  An  increased  level  of  enforcement  would  indeed  be  costly  and  ineffective 
since ships can be expected to change their flags in order to be able to be recycled outside the 
OECD where the recycling capacity lies. The current situation of large circumvention of the 
legislation is expected to be maintained in the short, medium and long term. Like this is the 
case  today,  substandards  facilities  are  expected  to  benefit  more  than  other  non-OECD  ones 
from  this  situation.  The  assessment  of  the  impacts  of  this  option  are  therefore  based  on  the 
assumption of a high level of circumvention benefiting primarly to the substandard facilities. 
Real  improvements  from  an  environmental  and  health  perspective  are  not  expected  prior  to 
2020 where all ship recycling facilities are expected to have made the necessary investments 
in order to comply with the Hong Kong Convention.  

4.2. 

Option  B:  implementing  key  elements  of  the  Hong  Kong  Convention  in  the 
current European legislation. 

This option was the preferred one identified in the Communication proposing an EU strategy 
on  ship  dismantling.  It  would  a  priori  address  partially  the  inadequacy  of  the  current 
legislation  by  introducing  control  mechanisms  specifically  designed  for  ships.  It  would 
consist of completing the Waste Shipment Regulation by implementing some key elements of 
the Hong Kong Convention by 2014 :  

• 

• 

• 

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

Essential requirements for ship recycling facilities as established by the Hong 
Kong Convention, 

Communication and reporting requirements for shipowners, recycling facilities 
and recycling states.  

In addition, the Member States would be encouraged to ratify the Hong Kong Convention by 
2020 and the Convention is expected to enter into force at this date.  

Similarly  to  option  A,  since  the  Waste  Shipment  Regulation  will  continue  to  constitute  the 
core  of  the  control  mechanism  covering  end-of-life  ships,  the  prohibition  to  dismantle  EU 
flagged  ships  outside  the  OECD  would  be  maintained  even  in  facilities  which  would  be 
authorized under the Hong Kong Convention. 

A huge level of circumvention of the legislation is therefore to be expected which will benefit 
mostly  to  substandard  facilities.  The  assessment  of  the  impacts  of  this  option  are  therefore 
based  on  the  assumption  of  a  high  level  of  circumvention  benefiting  primarly  to  the 
substandard facilities. Real improvements from an environmental and health perspective are 
not expected prior to 2020 where all ship recycling facilities are expected to have made the 
necessary investments so as to comply with the Hong Kong Convention.  

4.3. 

Option  C:  addressing  the  dismantling  of  large  commercial  vessels  through 
domestic legislation of the EU Member States only  

Under this option, ships covered by the scope of the Hong Kong Convention (large seagoing 
vessels) would be exempted from the scope of the Waste Shipment Regulation and, contrary 
to the options A and B, would not be covered anymore by European legislation. They would 

EN 

32 

   EN 

be covered instead by the domestic legislation of Member States as they ratify and implement 
the  Hong  Kong  Convention.  The  transposition  of  the  Hong  Kong  Convention  will  be  left 
entirely to European Member States. 

A priori, this option has the potential to address the lack of the available recycling facilities by 
removing the prohibition to dismantle ships outside the OECD. Since they will not be subject 
to  the  requirements  of  the  Waste  Shipment  Regulation,  ships  will  be  able  to  be  legally 
dismantled  worldwide  prior  to  the  entry  into  force  of  the  Hong  Kong  Convention.  For  this 
reason,  it  is  assumed  that  50  %  of  the  volume  of  ships  currently  dismantled  in  the  EU,  in 
Turkey and in China will be dismantled in India, China and Bangladesh prior to the entry into 
force  of  the  Convention.  Since  substandard  facilities  would  be  able  to  legally  receive  more 
EU  flagged  ships,  they  are  expected  to  delay  their  investments  in  order  to  upgrade  their 
facilities. All recycling countries where there are currently substandard facilities are expected 
to be upgraded and meet the Convention's requirements by 2025 only. 

In addition, in order to remain competitive and avoid reflagging to other flags (both EU and 
non EU ones), it is expected that the rate of ratification will be notably different amongst EU 
Member States. 

Because  of  these  delayed  ratifications  by  both  flag  and  recycling  states,  the  Hong  Kong 
Convention would in this scenario not enter into force before 2025. The first beneficial effects 
of  this  Convention  would  therefore  be  seen  in  2025  and  the  full  beneficial  effects  in  2030 
(inventories of hazardous materials for all ships).  

Once  Member  States  will  have  developed  their  domestic  legislation  tranposing  the  Hong 
Kong  Convention,  this  option  would  also  ensure  that  the  legislation  applicable  to  the 
dismantling of end-of-life ships is adapted to ships.  

4.4. 

Option  D:  covering  ship  dismantling  by  specific  rules  implementing  the  Hong 
Kong Convention  

Under this option, ships covered by the scope of the Hong Kong Convention (large seagoing 
vessels) would be exempted from the scope of the Waste Shipment Regulation. They would 
instead  be  adressed  in  a  new  ad-hoc  Regulation  covering  the  whole  life  cycle  of  ships 
the  Hong  Kong  Convention  while  adapting  and 
transposing 
complementing them when necessary.  

the  requirements  of 

Since the Hong Kong Convention has not yet entered into force, some adaptations would be 
needed  (notification  and  reporting  by  the  shipowners  instead  of  the  ship  recycling  facility77 
and  obligation  to  have  a  contract  between  the  shipowner  and  the  ship  recycling  facility78). 
When the Hong Kong Convention will enter into force, these provisions will not be necessary 
anymore. The proposed Regulation will therefore include an invitation for the Commission to 
review the implementation of the Regulation and present a proposal for revision if appropriate 
when  the  conditions  of  the  entry  into  force  of  the  Hong  Kong  Convention  are  met  (the 
Convention will effectively become applicable two years after this date).  

77 

78 

As  highlighted  by  several  stakeholders  (shipowners'  associations,  Member  States)  it  would  be 
impossible  to  impose  the  whole  set  of  reporting  requirements  to  ship  recycling  facilities  located  in 
countries which are not yet Contracting Parties to the Hong Kong Convention.  
As explained in section 3.6, shipowners themselves are already using such contracts. 

EN 

33 

   EN 

                                                 
The  Hong  Kong  Convention  allows  its  Parties  to  take  more  stringent  measures  in  order  to 
protect human health and the environment. It is therefore proposed to complement the criteria 
included  in  the  Hong  Kong  Convention  for  defining  safe  and  sound  recycling  facilities  in 
order to address the issues which are insufficiently addressed by the Hong Kong Convention 
as explained in section 3.5 (ensuring a proper containment of all hazardous waste and well as 
their proper management in the recycling facilities and in downstream facilities). While it is 
difficult to expect the current "beaching" facilities to be able to meet these requirements, it is 
not  excluded  that  upgraded  facilities  might  be  able  fulfill  these  criteria  the  future.  These 
requirements would continue to be applied even after the entry into force of the Hong Kong 
Convention.  To  increase  transparency,  a  list  of  ship  recycling  facilities  meeting  the 
Regulation's requirements would be established. It would contain facilities located in the EU 
designated  by  the  Member  States  as  well  as  facilities  located  in  third  countries.  The  latter 
would  apply  for  inclusion  in  the  list  by  presenting  evidence  that  they  comply  with  the 
Regulation's requirements.  

Sanctions,  which  would  be  more  adapted  to  ship  recycling  will  be  introduced  in  order  to 
ensure  compliance  with  the  legislation.  In  order  to  avoid  confusion,  overlaps  and 
administrative burden, ships covered by this new legislation would not be covered anymore 
by the EU Waste Shipment Regulation. The Hong Kong Convention is expected to enter into 
force at international level in 2020.  

4.5. 

Option  E:  covering  ship  dismantling  by  specific  rules  implementing  and  going 
beyond the Hong Kong Convention:  

This option consists of option D plus the following elements:  

(1) 

Option  E1:  addressing  also  government  vessels,including  navy  vessels,  in  the  new 
legislation instrument transposing the Hong Kong Convention. 

As the option B, this option was announced in the Communication proposing an EU strategy 
on ship dismantling.  

Including these ships under the scope of the specific Regulation transposing the Hong Kong 
Convention  will  imply  that  these  ships  would  be  allowed  to  be  dismantled  in  facilities 
compliant with the Hong Kong Convention worldwide. The volume of these ships dismantled 
in the EU and in the OECD is therefore expected to decrease significantly. It is however not 
expected to see all these ships being dismantled outside the OECD notably for navy ships in 
order to protect certain sensitive technologies. 

Not all requirements of the Hong Kong Convention would be applicable to navy ships since 
they benefit from specific immunities (no port state control' inspection of their inventory of 
hazardous materials could, for example, be foreseen).  

Like for option D, the Hong Kong Convention is expected to enter into force in 2020. By this 
date,  it  is  expected  that  all  substandard  facilities  could  be  upgraded  so  as  to  meet  the 
Convention's requirements.  

EN 

34 

   EN 

(2) 

Option E2: requesting EU flagged ships to be treated in facilities which are providing 
a level of protection of health and of the environment equivalent to EU facilities79.  

This option would consist in strengthening the option D by requiring that all ship dismantling 
facilities should fulfil criteria which would imply that they have impacts on human health and 
on  the  environment  comparable  to  the  European  ones.  Ships  would  be  allowed  to  be 
dismantled only in the EU, in China and in Turkey (investments would be required in China 
and Turkey so as to reach EU standards by 2015). These requirements would continue to be 
applied  even  after  the  entry  into  force  of  the  Hong  Kong  Convention  which  is  expected  to 
take place in 2020 similarly to option D. 

This  option  is  compatible  with  the  Hong  Kong  Convention  which  allows  its  Parties  to  take 
more  stringent  measures  in  order  to  prevent,  reduce  or  minimize  any  adverse  effects  on 
human health and on the environment.  

(3) 

Option E3: allowing the export of EU-flagged ships only to a list of third party audited 
facilities.  

The rational for introducing this option, would be to address the governance problems faced 
in certain ship recycling countries by involving third parties in the verification of the facilities. 
This  would  respond  to  one  of  the  possible  weaknesses  of  the  Hong  Kong  Convention 
presented in section 3.5.  

This  option  is  compatible  with  the  Hong  Kong  Convention  which  allows  its  Parties  to  take 
more  stringent  measures  in  order  to  prevent,  reduce  or  minimize  any  adverse  effects  on 
human health and on the environment.  

This requirement for a third party audit of facilities would continue to be applied even after 
the  entry  into  force  of  the  Hong  Kong  Convention  which  is  expected  to  take  place  in  2020 
similarly to option D.  

5. 

ANALYSIS OF IMPACTS 

This section provides the qualitative and quantitative assessment of the impacts of the options 
over the short (2015), medium (2020) and long term (2025). 

5.1. 

Assumptions and methodology used for the quantitative assessment  

The  quantitative  analysis  provided  in  this  Impact  Assessment  is  based  on  the  best  available 
data and information collected by the Commission from stakeholders, Member States and the 
literature.  However,  data  remains  incomplete  regarding  some  aspects  and  in  particular  for 
health and safety impacts in third countries which are either not reported or underreported.  

The methodology used to estimate the environmental, social and economic impacts is based 
on the volume of EU flagged ships going for dismantling and on the impacts of the methods 
used in the different dismantling countries (beaching, landing, afloat and docking).  

79 

These  facilities  employing  on  the  following  methods:  afloat,  landing,  slipway  of  docking,  and 
corresponding  to  the  medium  level  (AA)  of  the  theoretical  and  safety  benchmark  for  accidents  and 
facilities. These facilities would not employ children workers and would ensure that all the hazardous 
waste would be treated in the facility and in downstream facilities according to EU standards.  

EN 

35 

   EN 

                                                 
The volume of EU-flagged ships to be dismantled yearly up to 2030 has been estimated based 
on  the  age  profile  of  the  existing  fleet  and  the  life  expectancy  of  the  current  fleet.  The  life 
expectancy  has  been  updated  in  order  to  reflect  the  changes  implied  by  the  shipping  crisis 
since 2008. This approach allows for comparison between different options by reflecting the 
overall  trend  in  volumes.  It  will  however  not  reflect  e.g.  the  true  ups  and  downs  of  the 
dismantling market business cycle that comes from fluctuating freight rates.  

Each recycling method is associated with a certain level of quality in terms of safety and of 
protection of health and the environment. A specific set of data has therefore been developed 
in order to be able to quantify the impacts of ship dismantling based on the volume of ship 
dismantled  in  a  given  recycling  country  and  depending  to  the  recycling  method.  Data  are 
based on pilot projets (ship's composition of hazardous and non hazardous waste), on ratios 
(CO2 emissions, value of statistical life indicated in the IA guidelines), on experts estimates 
(amount of hazardous waste treated in an environmentally sound manner, administrative costs 
for shipowners and authorities) and on theoretical benchmark based on EU statistics regarding 
accidents and incidents in facilities. Using the theoretically based accident data is necessary to 
take into account the underreporting practices in south Asian third countries. This is of course 
associated  with  a  considerable  uncertainty  in  terms  of  actual  numbers,  but  is  however 
expected  acceptable  for  comparing  the  relative  differences  between  the  scenarios.  More 
information about the data, the hypothesis and the methodology are provided in Annex V.  
The  environmental,  social  and  economic  impacts  of  the  baseline  scenario  are  developed  in 
section 5.3. The quantitative impacts are summed up in Table 2. As recommended by the IA 
guidelines, the report will focus only on the additional impacts of the other options compared 
to the baseline scenario. 

EN 

36 

   EN 

Table 2: Quantification of the additional impacts of the different scenarios compared to the baseline scenario in the short, medium and long term.  

Environmental 
Hazardous 
waste treated in 
an ESM 
manner80 

Work 
load 
EU81 

Workload 
(protected 
workers)81

Workload 
(not 
protected 
workers) 
81 

0% 
-6% 
23% 
30% 
23% 
0% 
-20% 
0% 
16% 
0% 
0% 
0% 
0% 
16% 
0% 

0 
-5 
0 
0 
0 
0 
-6 
0 
0 
0 
0 
0 
0 
0 
0 

0 
189 
1 423 
-938 
1 423 
0 
-2 497 
0 
-3 778 
0 
0 
0 
0 
-3 428 
0 

0 
468 
-2 246 
-2 385 
-2 246 
0 
3 244 
0 
0 
0 
0 
0 
0 
0 
0 

Impacts 

m
r
e

t

t
r
o
h
S

m
r
e

t

i

m
u
d
e
M

m
r
e

t

g
n
o
L

)
5
1
0
2
(

)
0
2
0
2
(

)
5
2
0
2
(

B 
C 
D 
E2 
E3 
B 
C 
D 
E2 
E3 
B 
C 
D 
E2 
E3 

Workload 
(not 
protected 
children 
workers) 
81 
0 
159 
-764 
-811 
-764 
0 
1 103 
0 
0 
0 
0 
0 
0 
0 
0 

Social 

Fatal 
accidents 
(adults)82

Non 
fatal 
accidents 
(adults)82 

Fatal 
accidents 
(children) 
82 

Non fatal 
accidents 
(children) 
82 

Social 
costs83  

Economic 

Revenues 
ships 
owners83 

Administrative 
costs 
(Member 
States) 83 

0 
1 
-2 
-4 
-2 
0 
1 103 
0 
0 
0 
0 
0 
0 
-2 
0 

0 
184 
-473 
-1 105 
-473 
0 
3 
0 
-2 
0 
0 
0 
0 
-756 
0 

0 
0 
-1 
-1 
-1 
0 
633 
0 
-833 
0 
0 
0 
0 
0 
0 

0 
29 
-133 
-148 
-133 
0 
1 
0 
0 
0 
0 
0 
0 
0 
0 

0 
969 792 
-3 372 237
-5 401 791
-3 372 237
0 
5 993 494 
0 

-1 952 011 
12 540 267 
-22 019 545 
-66 349 943 
-22 221 755 
-112 036 486
31 192 613 
-112 036 486
-2 820 429 -189 916 941
-112 266 395
149 062 972 
159 369 991 
149 062 972 
63 072 738 
148 854 325 

0 
0 
0 
0 
-3 114 124
0 

378 604 
0 
356 430 
356 430 
356 430 
640 117 
-436 341 
617 943 
617 943 
617 943 
22 174 
-879 612 
0 
0 
0 

80 

81 
82 
83 

EN 

Percentage of waste generated by ship recycling treated in an environmentally sound manner (ESM) for each option compared to the baseline option. In the short term, this 
baseline option considers that the legislation would continue to be circumvented and that ships would end up in substandard facilities located in Bangladesh and Pakistan 
which can not ensure the ESM of waste. In the medium and long term, facilities located in these countries are expected to have been upgraded and meet the Hong Kong 
Convention's requirement. A better ESM of the waste generated in these countries is therefore expected.  
Expressed in man years 
Number of persons. 
Expressed in €. 

37 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
                                                 
5.2. 

The impact of options on where ships are dismantled 

Options  A  and  B  consist  in  maintaining  the  current  prohibition  for  EU  flagged  ships  to  be 
dismantled outside the OECD will imply that there will be a continuous gap between the need 
and  the  legally  available  recycling  capacity  for  large  commercial  EU-flagged  ships.  Even 
responsible shipowners can therefore be expected either to not inform their flag state of their 
intention  to  dismantle  their  ships  thus  circumventing  the  Waste  Shipment  Regulation  or  to 
change their flag in favour of countries which are not Parties to the Hong Kong Convention. 
A larger proportion of ships could also be sold to "cash buyers". A large reflagging from EU 
to non-EU flag is to be expected if there is an attempt to strongly enforce the prohibition to 
dismantle  ships  outside  the  OECD.  It  is  therefore  expected  that  the  current  level  of  low 
enforcement of the legislation will be maintained as well as the current share  of  the market 
between the dismantling locations. Large EU-flagged ships are therefore expected to continue 
to  be  dismantled  in  South  Asian  countries  (India,  Pakistan  and  Bangladesh):  in  substandard 
facilities in the short term and in upgraded ones meeting the requirements of the Hong Kong 
Convention  in  the  medium  and  long  term.  As  it  is  currently  the  case,  some  responsible 
shipowners  are  expected  to  continue  sending  their  ships  to  facilities  located  in  Turkey  and 
China. No Member State is expected to be specifically impacted as a flag state.  

Large commercial EU flagged ships would not be covered anymore by European legislation 
under option C. These ships would therefore be allowed to be dismantled in any facility and 
any country of the world prior to the entry into force of the Hong Kong Convention. In the 
short  and  medium  term,  it  is  conservatively  assumed  that  half  of  the  volume  currently 
dismantled  within  the  EU,  Turkey  and  China  will  be  sent  for  dismantling  in  substandard 
facilities  located  in  South  Asian  countries  (India,  Pakistan  and  Bangladesh).  More  Member 
States can therefore be expected to send their ships to South Asian countries and those which 
are  already  doing84  so  are  expected  to  increase  the  volume  of  their  ships  send  in  these 
countries. Taking into account only the difference between the dismantling prices, these ships 
should  theoretically  all  be  sent  to  South  Asia.  However,  since  a  significant  volume  is 
nowadays  dismantled  in  China,  it  seems  reasonable  to  assume  that  part  of  these  ships  will 
continue  to  be  dismantled  there  by  responsible  shipowners.  The  facilities  located  in  the  EU 
and Turkey treat mainly small and medium-sized ships which are not expected to be largely 
exported  to  South  Asia  either  because  they  are  not  able  to  sail  in  high  seas  or  because  the 
costs  of  transport  would  be  too  important.  Turkey  is  in  a  particular  situation  as  an  OECD 
country  (thus  legal  recipient  of  EU  flagged  vessels  for  dismantling)  with  low  labour  costs 
compared to the EU but higher costs than non-OECD countries and is likely to lose part of its 
market  share  to  non-OECD  facilities.  By  2025  onwards,  it  is  expected  that  the  facilities 

84 

Mainly Malta, Cyprus, Greece, Spain and Bulgaria see  

Table 12 in Annex VII. 

EN 

38 

   EN 

 
 
                                                 
 
 
 
 
 
 
 
 
located  in  South  Asian  countries  will  have  invested  so  as  to  meet  the  requirements  of  the 
Hong  Kong  Convention.  Under  this  option,  it  is  not  expected  to  see  large  number  of 
shipowners  replacing  their  EU  flags  by  non-EU  flags  since  the  legally  available  recycling 
capacity will always be largely sufficient.  

Under option D, ships would be allowed to go for dismantling worldwide in facilities meeting 
the requirements of the Hong Kong Convention. In these cases, owners would be incentivised 
to use upgraded facilities while accepting a lower profit from the sale. Taking into account the 
investments needed, Indian facilities are expected to meet the Convention's standards by 2015 
while  installations  in  Pakistan  and  Bangladesh  would  not  be  able  to  do  so  before  2020. 
Facilities  located  in  the  EU,  Turkey  and  China  are  considered  as  already  meeting  the 
requirements of the Hong Kong Convention. In the short term (2015), it is assumed that the 
ships  currently  dismantled  in  South  Asian  countries  would  be  dismantled  in  upgraded 
facilities in India. A limited volume of ships might however either be sent to higher standard 
facilities  (China)  or  to  lower  standard  facilities  (Pakistan,  Bangladesh).  Reflagging  is 
expected to be limited since the available dismantling capacity in the EU, Turkey, China and 
upgraded  Indian  facilities  will  be  sufficient  to  treat  all  EU  flagged  ships.  The  maximum 
volume of EU flagged ships to be dismantled in the period 2012-2030 will be of 1,88 million 
LDT while the Chinese facilities alone treated 2,83 millions LDT in 2009 with an announced 
extension  of  1  million  LDT.  In  the  short  term,  the  Member  States85  which  are  currently 
sending a significant part of their ships to facilities located in Pakistan and Bangladesh would 
be affected more than the other Member States. In the medium and long term, the impacts are 
expected to be similar for all Member States.  

Option  E1  focuses  on  governmental  vessels  including  navy  ships.  These  ships  are  currently 
dismantled  within  the  EU  and  Turkey  only.  Including  them  in  a  specific  ad-hoc  regulation 
based  on  the  Hong  Kong  Convention,  would  allow  them  to  be  dismantled  also  outside  the 
OECD. It is assumed that these ships would be dismantled in the same proportion than large 
commercial  ships  namely  in  the  EU,  Turkey,  China  and  India  in  the  short  term  and  in  all 
upgraded  facilities  in  all  recycling  states  worldwide  the  medium  and  long  term.  Since 
governments do usually not largely change the flags of theirs ships, reflagging is not expected 
to be a significant problem. Member States are expected to be affected in the same manner by 
this option.  

Option  E2  consists  in  requiring  that  all  ship  dismantling  facilities  should  have  impacts  on 
human health and on the environment comparable to the European ones. In the short, medium 
and long term, large commercial EU flagged ships would be allowed to be dismantled in the 
EU,  in  China  and  in  Turkey  only.  As  explained  before,  the  legally  accessible  recycling 
capacity  will  be  largely  sufficient.  Responsible  shipowners  which  are  already  sending  their 
ships  for  dismantling  in  China  are  expected  to  continue  to  do  so.  Shipowners  which  are 

85 

Malta, Cyprus, Greece, Bulgaria and the UK see  

Table 12 in Annex VII. 

EN 

39 

   EN 

 
                                                 
 
 
 
 
 
 
 
 
currently sending their ships to South Asian countries might potentially reflag their ships to 
continue to do so, in particular, if the facilities there have been upgraded and meet the Hong 
Kong Convention's requirements. This option would indeed imply that EU is imposing stricter 
requirements  that  the  ones  agreed  upon  at  international  level.  The  South  Asian  countries 
might  consider  this  as  a  trade  barrier.  The  Member  States  which  are  sending  their  ships  to 
India,  Bangladesh  and  Pakistan  can  be  expected  to  be  affected  more  than  those  which  are 
sending their ships in China86.  

Option E3 will have the same impacts on the dismantling locations as option D.  

5.3. 

Baseline scenario 

Option A is based on the assumption that the Hong Kong Convention will enter into force in 
2020. In order to test the sensitivity of this assumption, a scenario consisting in maintaining 
the  current  legislation  unchanged  and  considering  that  the  Hong  Kong  Convention  will  not 
enter into force before 2030 has been studied in Annex X. This scenario would have the worst 
social and environmental impacts in the medium and long term compared all other options. 

5.3.1.  Environmental impacts 

5.3.1.1.  Generation of non-hazardous and hazardous waste 

The  prohibitions  to  use  certain  material  on  board  ships  contained  in  the  Hong  Kong 
Convention are already applicable through EU legislation87. The impacts of the phasing out of 
hazardous  substances  like  asbestos,  PCB,  TBT  and  ozone  depleting  substances  has  been 
taking into account in the calculation of the projected amount of hazardous and non-hazardous 
waste  generated  by  ship  dismantling.  The  amounts  of  hazardous  and  non  hazardous  waste 
generated in the short, medium and long term are the following:  

Non hazardous waste (t) 
Hazardous waste (t) 
Total (t) 

2015
1 197 346
72 847
1 270 193

2020 
1 361 366 
82 806 
1 444 172 

2025
1 235 460
75 060
1 310 520

There will not be any substantial difference between the scenarios regarding the generation of 
non-hazardous  and  hazardous  waste  since  they  are  all  related  to  the  volume  of  EU  flagged 
ships going for recycling. 

86 

These countries are identified in  

Table 12 in Annex VII.  
87 

Detailed explanations can be found in Annex X.  

EN 

40 

   EN 

 
 
                                                 
 
 
 
 
 
 
 
 
5.3.1.2.  Management of hazardous waste 

The  percentage  of  hazardous  waste  which  will be  treated  in  environmentally  sound  manner 
(ESM)  instead  of  being  released  directly  into  the  environment  (air,  soil,  water)  will  be  of 
70 % in the short term and 84 % in the medium and long term.  

5.3.2. 

Social impacts 

5.3.2.1.  In the EU 

Since  the  majority  of  ship  dismantling  is  expected  to  take  place  outside  the  EU,  the 
employment opportunities in the EU are expected to remain limited (respectively 10, 11 and 
10 man/years in the short, medium and long term).  

The health and safety requirements currently applicable in the EU are strict thus resulting in 
practically  no  fatal  or  non-fatal  accidents  for  adult  workers.  The  employment  of  children 
workers is prohibited.  

5.3.2.2.  In third countries 

Facilities located in India, Pakistan and Bangladesh are more labour intensive than facilities in 
the  EU,  Turkey  and  China.  The  current  insufficiency  of  proper  protective  measures  for 
workers and the possibility (in Bangladesh) to employ children in facilities however implies 
that  the  workers  in  these  facilities  will  suffer  from  high  number  of  fatal  and  non-fatal 
accidents.  The  entry  into  force  of  the  Hong  Kong  Convention  in  2020  will  result  in  the 
prohibition  of  work  by  unprotected  workers  and  in  a  reduced  number  of  fatal  and  non-fatal 
accidents as show in the table below.  

In order to be able to do a cost-benefit comparison between the impacts of the scenarios, the 
costs associated by both fatal and non-fatal accidents of children and adult workers have been 
monetized88.  

Labour (man years) 
Total work load outside EU 
of which protected workers 
of which not protected workers 
of which children 
Accidents (number of persons)  
Adults life 
Adults - non-fatal accidents 
Children - life 
Children - non-fatal accidents 

2015 

5318 
2944 
2385 
811 

4 
1345 
1 
148 

2020 

6047 
6058 
0 
0 

2 
1106 
0 
0 

2025 

5488 
5498 
0 
0 

2 
1004 
0 
0 

Monetized social impacts (€)  

6 101 348 

3 788 139 

4 182 602 

88 

For more information about the methodology see Annex V 

EN 

41 

   EN 

 
 
 
 
 
 
 
                                                 
5.3.3.  Economic impacts 

5.3.3.1.  Impacts on EU shipowners  

In the short term, shipowners are subject to the administrative burden linked with the Waste 
Shipment Regulation. This administrative burden has been estimated at 22 174€ 89 for all EU 
flagged ships. In the medium and long term, they will also be faced with two types of costs 
related to the entry into force of the Hong Kong Convention:  

- administrative costs related to new obligations set out in the Hong Kong Convention which 
will affect new built ships and ships going for recycling first and, within 5 years, all ships,  

- reduced revenues from the recycling of their ships. It is assumed that the costs resulting from 
an  improvement  of  the  ship  dismantling  facilities  so  that  they  meet  the  requirements  of  the 
Hong Kong convention will be passed on to the shipowners at the time of dismantling. 

5.3.3.2.  Administrative burden for EU Member States  

Taking into account the economic dynamic of the recycling market and the current experience 
regarding the application of the Waste Shipment Regulation, continuing to apply the current 
prohibition  to  export  ships  outside  the  OECD  would  imply  very  substantial  administrative 
costs  for  EU  Member  States  linked  with  inspection,  enforcement  and  control.  The  current 
procedures are indeed costly and difficult to apply (see for example the re-importing of EU 
flagged ships which are already in Asia).  

Apart from these costs linked with the enforcement and control of the current legislation, the 
Member States will be mainly affected as flag state in the medium and long term. The Hong 
Kong  convention  indeed  require  the  competent  authorities  of  the  EU  flag  states  to  conduct 
surveys on board ships to verify the existence and correctness of certificates as part of the port 
state control as shown in the table below:  

Administrative costs (€) 
Additional controls in ports 
Issuance and verification of the certificates 
Total 

2015

2020
19 112
417 229
436 341

2025 
906 816 
507 623 
1 414 439 

2030

1 300 974
617 601
1 918 575

5.3.3.3.  Impacts on small and medium sized enterprises 

EU shipowners are the main businesses affected, but these are rarely small and medium sized 
enterprises  (SME)90  though  no  statistics  are  available.  According  to  experts,  a  qualitative 

89 

90 

Based on the hypothesis that all ships dismantled in the EU and in Turkey follow the requirements of 
the Waste Shipment Regulation while the ships dismantled elsewhere do not. Detailed estimates about 
the administrative costs linked with the Waste Shipment Regulation have been provided in the context 
reduction  of  administrative  costs 
of  an  EU  Project  on  baseline  measurement  and 
(http://ec.europa.eu/enterprise/policies/better-
regulation/documents/files/abs_development_reduction_recommendations_en.pdf).  The  administrative 
burden associated with a total of 507 000 shipments of waste was estimated at 124 914 800 euros.  
It  is  not  unusual  to  have  one-ship  companies  involved  in  shipping  but  these  are  usually  in  fact 
composed  of  a  large  group  of  shareholders  with  different  names,  legal  addresses  and  sometimes  in 
different countries. 

EN 

42 

   EN 

 
  
  
  
 
                                                 
assessment is that SMEs would be rarely found in liner shipping but could be more relevant 
for ocean-going tramp shipping (especially for older general cargo ships, some bulk carriers 
and possibly tanker). Taking these elements into account, it is not considered that small and 
medium sized enterprises would be more affected than big enterprises in the baseline and in 
the other scenarios  

5.3.3.4.  Impacts on consumers 

The costs related to the implementation of the Hong Kong Convention for shipowners during 
the  operating  life  of  their  ships  is  negligible  (around  0.01  %)  compared  with  the  benefits 
generated during the life span of a ship (30 years). The costs resulting from an improvement 
of the ship dismantling facilities will be passed on to the shipowner at the time of dismantling. 
Compliance with the Hong Kong Convention would imply that the most substandard facilities 
located in Bangladesh and Pakistan would have to invest around 10 $/LDT during the next 10 
years  which  represents  only  a  small  percentage  of  the  current  prices  paid  by  facilities  to 
shipowners  (between  450  and  525$/LDT  in  June  2011).  The  costs  linked  with  the 
implementation of the Hong Kong Convention over the lifetime of ships are negligible and no 
impact is therefore expected on consumers in the baseline and in the other scenarios.  

5.3.3.5.  EU budget 

In principle, none of the options envisaged in the impact assessment report has a direct impact 
on the EU budget. 

Option  D  and  E3  include  establishing  a  list  of  facilities  and  the  possibility  for  related 
inspections.  In  both  cases,  the  bulk  of  work  would  consist  in  desk  work,  reviewing 
information  provided  by  3rd-country  facilities  and  checking  it  against  publicly  available 
information. Only in a very limited of cases will on-site inspections be necessary. 

This work would be limited in scale and time, namely being significant only in year two and 
three  after  the  adoption  of  the  new  regulation.  During  these  two  years,  the  task  would  be 
undertaken  with  existing  resources,  complemented  by  a  service  contract  under  the  ordinary 
budget. After year three, only maintenance work will be needed.  

5.3.4. 

Impacts on the simplification of the existing legislation. 

The existing EU legislation which is not adapted to the specificities of ships will continue to 
be  applied  in  the  baseline  scenario.  Several  stakeholders  have  strongly  indicated  during  the 
public consultation as well as during expert workshops that the co-existence of two systems of 
control  (one  resulting  from  the  Basel  Convention  and  the  other  one  from  the  Hong  Kong 
Convention)  would  be  very  confusing  and  administratively  burdensome91.  This  option  will 
therefore have a negative impact on the simplification of the existing legislation.  

5.3.5.  Compliance aspects 

In the 2008 Strategy for better ship recycling, it was proposed to enhance the effectiveness of 
the EU control system for waste shipments by the establishment and maintenance of a list of 

91 

This  was  also  recognized  by  Parties  to  the  Basel  Convention  when  they  noted  that  "  duplication  of 
regulatory instruments that have the same objective should be avoided" (see decision IX/30). 

EN 

43 

   EN 

 
                                                 
ships  that  are  ready  for  scrapping  taking  into  account  the  procedures  of  the  Hong  Kong 
Convention.  

The public consultation contained some questions related to the criteria which could be taken 
into account for establishing this list and their advantages/ disadvantages in order to improve 
the enforcement of the legislation.  

The responses received showed that most of the stakeholders (shipowners' associations, some 
ship  recycling  facilities,  classification  societies,  Member  States,  European  Economic  and 
Social Committee …) are not in favour of such a list and have thus not proposed such criteria. 
The arguments for this are mainly that it will be very difficult to establish objective criteria. 
Errors are foreseeable, would influence the negotiation process for the selling of a ship and 
could ultimately raise some questions of liability in case of wrongful inclusion of a vessel in 
the  list.  Almost  all  of  these  stakeholders  explained  for  example  why  the  age  of  a  ship  is  a 
simple  but  ineffective  indicator.  It  does  not  in  itself  reflect  the  level  of  maintenance  of  the 
ship (for example "sister ships" built at the same time but can have widely differing disposal 
ages due to their maintenance) nor its commercial viability, which depends on the fluctuations 
of the freight market.  

This ex-ante approach could result in the wrongful inclusion of ships in the list which would 
in turn have negative economic impacts on the market price of that ship.  

As  explained  in  section  2.2,  the  drivers  of  the  current  problems  of  compliance  with  the 
existing  legislation  are  legal,  technical  and  economical  ones.  Taking  into  account  the 
economic  dynamic  of  the  recycling  market  and  the  current  experience  regarding  the 
application of the Waste Shipment Regulation, continuing to apply the current prohibition to 
export  ships  outside  the  OECD  would  imply  very  substantial  administrative  costs  for  EU 
Member States  linked  with inspection, enforcement and control.  The current procedures are 
indeed difficult and costly to apply.  

As  highlighted  by  most  of  the  stakeholders  (shipowners'  associations,  classification  society, 
Member  States),  the  matter  is  more  an  implementation  than  an  enforcement  concern.  Good 
enforcement  mechanisms  are  not  considered  likely  to  be  implemented  if  they  coupled  with 
unrealistic or unpracticable dismantling rules (current European legislation based on the Basel 
Convention).  These  stakeholders  recalled  that  the  very  reason  for  the  development  of  the 
Hong Kong Convention were the difficulties faced when trying to apply the current legislation 
on ships. 

When  asked  about  way  to  improve  compliance  with  and  enforcement  of  the  legislation 
applicable to ships, some stakeholders (shipowner associations, Member States) stressed the 
importance  of  clear  regulation  of  the  entire  process  from  cradle  to  grave  in  the  ship’s  life 
cycle.  They  also  considered  that  the  co-existence  of  two  systems  of  control  would  be  very 
confusing and administratively burdensome. Member States would, for example, be requested 
to designate two types of competent authorities and focal points for implementing the same 
legislative instrument. Finally they highlighted the necessity to set up effective and deterrent 
sanctions. 

As  explained  in  section  5.2,  large  problems  of  compliance  are  expected  to  be  faced  under 
option A due to the lack of legally accessible recycling capacity as well as to the confusion 
created by the application of two sets of requirements: an European regulation based on the 

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Basel  Convention  and  domestic  legislations  in  Member  States  based  on  the  Hong  Kong 
Convention.  

5.4. 

Option  B:  implementing  key  elements  of  the  Hong  Kong  Convention  in  the 
current European legislation. 

5.4.1.  Environmental and social impacts: 

As  for  option  A,  there  will  continue  to  be  a  discrepancy  between  the  needs  and  the  legally 
accessible recycling capacity for large commercial EU flagged ships. The recycling locations 
and  conditions  will  be  similar  than  the  ones  foreseen  for  option  A  thus  leading  to  similar 
environmental and social impacts in the short, medium and long term.  

5.4.2.  Economic impacts:  

Under  this  option,  some  key  requirements  of  the  Hong  Kong  Convention  would  become 
applicable  at  EU  level  prior  to  their  entry  into  force  at  international  level.  This  anticipation 
would therefore imply additional costs (administrative costs for new ships and ships going for 
dismantling as well reduced revenues for selling ships for dismantling) and therefore negative 
economic  impacts  for  ship-owners  and  for  EU  Member  States  (administrative  costs)  in  the 
short and medium term. In addition, and similarly to option A, continuing to apply the current 
prohibition  to  export  ships  outside  the  OECD  would  imply  very  substantial  administrative 
costs for EU Member States linked with inspection, enforcement and control.  

This option would have a positive economic impact in the long term compared to the baseline 
scenario, as the costs of establishing inventories of hazardous materials for all ships will be 
anticipated. Finally this option will have similar social costs as option A in the short, medium 
and long term.  

5.4.3. 

Impacts on simplification of the existing legislation. 

Similarly to option A, this option would lead to the co-existence of two systems of control at 
European  level,  which  would  be  very  confusing  and  administratively  burdensome.  This 
option will therefore have a negative impact on the simplification of the existing legislation.  

5.4.4.  Compliance aspects 

As for option A and as explained in section 5.2, large problems of compliance are expected to 
be  faced  under  option  B  by  the  large  majority  of  stakeholders  due  to  the  lack  of  legally 
accessible recycling capacity as well as to the confusion created by the application of two sets 
of  requirements  regarding  control  and  enforcement  within  the  same  regulation.  Some  even 
considered that this duplication could act as a deterrent to the ratification of the Hong Kong 
Convention if this Convention is not seen as the key piece of legislation related to the safe and 
sound  recycling  of  ships.  The  environmental  NGOs  and  the  European  Parliament  consider 
that  there  could  be  an  added  value  in  keeping  the  current  legislation  and  complementing  it 
with  some  requirements  from  the  Hong  Kong  Convention  (obligation  to  establish  and 
maintain an inventory of hazardous materials).  

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5.5. 

Option  C:  addressing  the  dismantling  of  large  commercial  vessels  through 
domestic legislation of the EU Member States only  

5.5.1.  Environmental impacts: 

the 
This  option  would  have  significant  negative  environmental 
management of hazardous waste in the short and medium term as a larger proportion of large 
commercial  EU  flagged  ships  would  be  dismantled  in  substandard  facilities  offering  better 
prices to the shipowners but without any treatment facilities for their hazardous waste. In the 
long  term,  the  management  of  hazardous  waste  is  expected  to  be  similar  to  the  baseline 
scenario  since  all  facilities  worldwide  are  expected  to  meet  the  requirements  of  the  Hong 
Kong Convention. 

impacts  regarding 

5.5.2. 

Social impacts: 

As  for  the  environmental  impacts,  the  social  impacts  of  option  C  (compared  to  option  A) 
expected to be negative in the short and medium term and comparable in the long term. In the 
short and medium term, the diversion of half of the volume of ships currently dismantled in 
the  EU,  Turkey  and  China  to  South  Asia  will  lead  to  a  halving  of  the  employment 
opportunities  in  the  EU.  More  jobs  would  be  created  outside  the  EU  where  the  industry  is 
more labour intensive. However, since a large proportion of workers would not be sufficiently 
protected, this will lead to an increase in the number  of deaths and accidents  for  both adult 
and  children  workers.  In  the  long  term,  the  social  impacts  of  this  scenario  would  be 
comparable to the baseline. 

5.5.3.  Economic impacts:  

Since  option  C  would  lead  to  a  delayed  application  of  the  requirements  of  the  Hong  Kong 
Convention, it will be beneficial for ship owners (administrative burden and reduced revenues 
from  recycling)  as  well  as  for  EU  Member  States  (administrative  burden)  in  the  short  and 
medium  term.  In  the  long  term,  it  will  have  similar impacts than the baseline scenario. The 
EU  Member  States  would  be  faced  with  lower  administrative  costs  linked  with  inspection, 
enforcement and control compared to the baseline scenario. The social costs are related to the 
social impacts. They will therefore be important in the short and medium term and similar to 
the baseline scenario in the long term.  

5.5.4. 

Impacts on simplification of the existing legislation. 

The option C would have a positive impact since large commercial EU flagged ships will not 
be covered anymore by European legislation. This impact might be more limited in the long 
term  if  the  EU  Member  States  have  diverging  national  legislation  implementing  the  Hong 
Kong Convention.  

5.5.5.  Compliance aspects 

No compliance problem is expected during the short and medium term since large commercial 
EU flagged ships would not be subject to any legal requirement. In the long term, the level of 
compliance  will  be  similar  to  the  baseline  except  if  Member  States  have  diverging  national 
legislations implementing the Hong Kong Convention.  

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5.6. 

Option  D:  covering  ship  dismantling  by  specific  rules  implementing  the  Hong 
Kong Convention  

5.6.1.  Environmental and social impacts: 

The  majority  of  stakeholders  supported  the  idea  of  complementing  the  requirements  of  the 
Hong  Kong  Convention  with  additional  criteria  (European  Parliament,  Community  of 
European  Shipyards'  associations,  environmental  NGOs,  Ship  Recycling  Facilities, 
classification  society,  Member  States,  trade  unions  )  while  some  (shipowners'  associations) 
considers that the criteria applicable to the facilities should not go beyond the requirements of 
the  Convention.  Their  main  concern  is  the  risk  of  reducing  the  recycling  capacity  legally 
accessible.  

The proposals to go beyond the Convention concerns the need to address beaching (European 
Parliament,  Ship  Recycling  Facilities,  environmental  NGOs),  to  strenghen  requirements 
targetted  at  workers'  protection  (trade  unions)  or  to  take  care  of  the  proper  downstream 
management  of  hazardous  waste  outside  the  ship  recycling  facility  (classification  society, 
Member States, environmental NGOs)  

Under  this  scenario,  large  EU  commercial  vessels  would  be  dismantled  worldwide  in 
(upgraded)  facilities  meeting  the  requirements  of  the  Hong  Kong  Convention  in  the  short, 
medium and long term. As explained before, the legally available recycling capacity will be 
sufficient to treat all large EU commercial vessels. This will result in positive environmental 
and  social  impacts  in  the  short  term  and  to  similar  impacts  in  the  medium  and  long  term 
compared to the to the baseline scenario.  

5.6.2.  Economic impacts:  

Similarly to option B, this option would anticipate the application of the requirements of the 
Hong Kong Convention at EU level. This would therefore imply costs and, therefore, negative 
impacts for ship-owners as for EU Member States in the short and medium term compared to 
the baseline scenario.  

The EU Member states will be faced with additional administrative costs when applying the 
requirements of the Hong Kong Convention compared with option A in the short and medium 
term and with similar costs in the long term. In the short, medium and long term, they would 
be  faced  with  lower  administrative  costs  regarding  inspection,  enforcement  and  control 
compared  to  the  baseline  scenario.  The  option  D  would  have  more  negative  impacts  for 
shipowners  than  option  B  because  fewer  ships  are  expected  to  circumvent  the  legislation 
thereby benefiting from higher revenues for ship recycling. The option D would have positive 
impacts in the long term compared to the baseline scenario for the same reasons as option B.  

5.6.3. 

Impacts on simplification of the existing legislation. 

The  current  EU  legislation,  which  is  not  adapted  to  the  specificities  of  ships,  would  be 
replaced under option D by an ad-hoc legislation based on the requirements of the Hong Kong 
Convention.  No  duplicating  sets  of  requirements  nor  contradicting  requirements  related  to 
diverging  implementation  by  EU  Member  States  would  be  encountered.  This  option  will 
therefore have a more positive impact than the baseline option.  

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5.6.4.  Compliance aspects 

The option D would address the current problems. It will firstly ensure an adequacy between 
the needs and the legally accessible recycling capacity. Moreover it would also be based on a 
system  of  control  adapted  to  the  specificities  of  ships.  The  Hong  Kong  Convention's 
requirements for ship owners to inform in advance and in writing their flag state about their 
intention  to  recycle  their  ships  will  solve  the  current  problem  of  determining  when  a  ship 
turns into waste.  

By providing the legal possibility for ships to be dismantled also outside the OECD, sufficient 
ship  recycling  capacity  will  become  legally  available  at  an  attractive  price.  The  price 
difference between facilities located in China and the rest of Asia is reasonable (50$/LDT or 
10% of the price). Moreover facilities located in China have a capacity which is sufficient to 
address all the EU flags ships in terms of volume and size.  

Enforcement  will  be  more  effective  since  the  number  of  shipowners  who  continue  to 
circumvent  the  legislation  will  be  significantly  reduced  and  alternatives  to  ship  recycling  in 
substandard facilities will be legally available. Shipowners will indeed be legally authorized 
to use the upgraded facilities located in non-OECD countries in which the relevant investment 
have been made. 

As explained in section 3.1 and has identified by the majority of stakeholders, changing a flag 
is cheap, easy and will constitute a serious risk of non-compliance as long as two recycling 
markets (one compliant and one substandard) are co-existing and competing with each other. 
The price difference in July 2011 between facilities located in China and beaching facilities 
located in India was limited (50 $/LDT or 10%). The risks of reflagging or of selling ships to 
"cash  buyers"  would  therefore  be  significantly  reduced.  all  the  5  major  recycling  countries 
upgrade their facilities and are Parties to the Hong Kong Convention, they will have to treat 
ships  flying  the  flag  of  Parties  and  non-Parties  to  the  Hong  Kong  Convention  in  a  similar 
manner. This would remove the incentives to try to circumvent the European legislation. As 
explained  before,  the  likelihood  of  seeing  new  recycling  countries  emerging  as  major 
recycling countries is very limited. 

In order to address the remaining risk of reflagging, specific sanctions will be introduced in 
the  legislation.  They  will  address  in  particular  the  cases  where  ships  are  sold  and  reflagged 
prior to their recycling in order to circumvent the legislation.  

This option would address the current problems and contains specific requirements which will 
ensure compliance before recycling (obligation to inform the flag state in writing) and after 
(sanctions  if  ships  are  not  dismantled  in  authorized  facilities).  It  will  therefore  have  a  very 
positive impact compared to the baseline option. 

5.7. 

Option  E1:  addressing  also  government  vessels,  including  navy  vessels,  in  the 
new legislation instrument transposing the Hong Kong Convention. 

The  stakeholders  expressed  differing  views  as  regards  the  extension  of  the  Convention 
requirements to warships and other government vessels on non-commercial service. Including 
such  vessels  in  the  scope  of  an  EU  Regulation  would  mainly  serve  as  a  mean  of 
demonstrating the commitment of EU Member States in fully implementing the Convention 
requirements  and  contribute  to  a  better  image  of  public  authorities  that  should  play  an 
exemplary  role  by  ensuring  clean  dismantling  of  their  vessels.  It  could  also  increase  the 

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demand for clean recycling and contribute to the improvement of recycling conditions in these 
countries. Others argued that all military and government vessels should be dismantled within 
the  EU  as  it  could  make  the  existence  of  EU  dismantling  facilities  more  economically 
sustainable.  It  was  also  pointed  out  that  these  vessels  would  automatically  follow  the 
requirements for clean dismantling without necessarily being specifically covered by the new 
legislative instrument.  

Details about the economic, social and environmental impacts of option E1 are provided for in 
Annex XV. This option can not be compared directly to the option A since this later option 
only addresses large commercial EU flagged ships. The impacts of E1 have to compared with 
the  continuation  of  the  current  situation  (referred  to  as  “option  E0”)  where  these  ships  are 
dismantled in high quality facilities located in the EU and Turkey only.  

5.7.1.  Environmental impacts: 

The generation of non-hazardous waste (32 804 tons per year) and of hazardous waste (1996 
tons per year) is linked with the volume of governmental vessels going for recycling and will 
be  similar  to  option  E0.  The  emissions  of  CO2  are  expected  to  increase  since  these  ships 
would have to travel specifically for being dismantled outside the EU. This would result in an 
increase of the CO2 emissions of 26.9 tons CO2/year92. 

The  recycling  will  take  place  in  facilities  which  are  providing  a  level  of  protection  of  the 
environment compliant with the requirements of the Hong Kong Convention but lower than 
the  one  provided  for  by  European  and  Turkish  facilities.  In  the  short  term,  recycling  is 
expected to take place in the EU, Turkey, China and in upgraded facilities in India. So 93 % 
of the hazardous waste are expected to be treated in an environmentally sound manner (ESM). 
In the medium and long term, recyling is expected to take place also in upgraded facilities in 
Bangladesh and Pakistan thus resulting in an overall percentage of 84 % of hazardous waste 
treated in an environmentally sound manner. 

Including  government  ships  including  navy  ships  in  an  ad-hoc  legislation  transposing  the 
Hong Kong Convention would therefore have overall negative environmental impacts.  

5.7.2. 

Social impacts: 

The  governmental  ships,  including  navy  ships,  would  be  recycled  outside  the  EU  thus 
resulting in a net loss of EU jobs (29) but to a net creation of employment worldwide (117) 
since facilities outside the EU are more labour intensive. Since dismantling would only take 
place in facilities compliant with the Hong Kong Convention where children work would be 
prohibited  and  protective  equipments  would  be  provided,  no  fatal  accident  is  expected. 
However,  since  the  working  conditions  are  less  strict  in  upgraded  and  compliant  recycling 
facilities  located  in  South  Asian  countries  than  in  the  EU  facilities,  it  is  expected  that  there 
will be an increase of accidents (25 per year).  

Including government ships and in particular navy ships in an ad-hoc legislation transposing 
the  Hong  Kong  Convention  would  have  negative  impacts  on  EU  employment,  positive 
impacts on worlwide employement and negative impacts in terms of accidents.  

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For more details about the calculations, see Annex XV.  

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5.7.3.  Economic impacts:  

EU Member States, acting as ship owners, will be allowed to sell their ships for dismantling 
in  countries  offering  higher  recycling  prices  thus  resulting  in  increased  revenues. 
Implementing  the  requirements  of  the  Hong  Kong  Convention  would  result  in  additional 
administrative  burden  related  to  the  establishment  of  inventories  of  hazardous  materials 
(which  are  expected  to  be  far  more  expansive  for  existing  navy  ships  than  for  commercial 
ships)  and  certifications.  The  administrative  burden  will  however  be  limited  since 
governmental vessels including navy ships will not be subject to port state control during their 
operating life as they benefit from specific immunities.  

Economic impacts for EU Member States compared 
to the continuation of the current situation (€) 

2015 

2020 

2025 

5 393 397

6 549 011 

7 932 318

The  overall  economic  impact  will  be  positive  compared  to  the  continuation  of  the  current 
situation.  

5.7.4. 

Impacts on the simplification of the existing legislation 

Including  government  and  navy  ships  in  an  ad-hoc  legislation  based  on  the  requirements  of 
the  Hong  Kong  Convention  and  not  anymore  under  the  scope  of  the  Waste  Shipment 
Regulation would ensure that these ships would be covered by similar requirements by all EU 
Member States.  

5.7.5.  Compliance aspects 

Compared  to  large  EU  flagged  ships,  government  vessels  including  navy  ships  have  less 
problems  of  compliance  with  the  current  legislation.  There  is  indeed  enough  recycling 
capacity in the EU to treat them and the risk of de-flagging is low for government vessels, as 
the  action  of  states  is  much  more  under  public  scrutiny  than  that  of  private  operators.  The 
level of compliance would not be significantly modified compared to current situation.  

Many  stakeholders  considered  that  including  governmental  including  navy  ships  in  ad-hoc 
legislation  would  mainly  demonstrate  the  commitment  of  EU  Member  States  in  fully 
implementing the Hong Kong Convention and in ensuring that they build a level of expertise 
on the issue from a shipping and recycling perspective.  

5.8. 

Option  E2:  requesting  EU  flagged  ships  to  be  treated  in  facilities  which  are 
providing  a  level  of  protection  of  health  and  of  the  environment  equivalent  to 
EU facilities.  

5.8.1.  Environmental impacts: 

The generation of hazardous and non-hazardous waste and the CO2 emissions will be similar 
to  the  baseline  scenario.  Large  EU  commercial  vessels  would  be  dismantled  worldwide  in 
facilities meeting higher standards than the  Hong Kong Convention (namely EU standards). 
All  hazardous  waste  would  be  treated  in  an  ESM.  This  option  would  therefore  have  very 
positive environmental impacts compared to the baseline scenario in  the short, medium and 
long term.  

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5.8.2. 

Social impacts: 

Large  commercial  EU  flagged  ships  would  be  dismantled  in  facilities  which  are  less  labour 
intensive  thus  disminishing  the  total  number  of  jobs  created  by  ship  reycling.  The 
employment  opportunities  within  the  EU  would  be  maintained.  All  workers  would  be 
protected thus resulting in less fatal and non fatal accidents amongst adult workers (children 
work would be prohibited) compared to the baseline option. This option would therefore have 
overall  positive  social  impacts  compared  to  the  baseline  scenario  in  the  short,  medium  and 
long term.  

5.8.3.  Economic impacts: 

This  option  would  anticipate  the  application  of  the  Hong  Kong  Convention  and  would 
therefore imply additional administrative costs for shipowners and for Member States in the 
short  and  medium  term  compared  to  the  baseline  scenario.  In  addition,  shipowners  would 
only be allowed to use high standard facilities, which will be more expensive than facilities 
compliant  with  the  Hong  Kong  Convention  only.  This  will  result  in  additional  negative 
economic impacts for shipowners in the short, medium and long term. This option will have a 
positive impacts on the social costs compared to the baseline scenario in the short, medium 
and long term.  

5.8.4. 

Impacts on simplification of the existing legislation. 

For  the  same  reasons  as  option  D,  this  option  will  have  positive  impacts  compared  to  the 
baseline scenario.  

5.8.5.  Compliance aspects 

Since this option would be based on a system of control based on the specificities of shipping, 
a better level of compliance is expected compared to option A. Under this option, ships would 
be  allowed  to  be  dismantled  also  outside  the  OECD  thus  resolving  the  current  problem  of 
legally accessible dismantling capacity. However, it can be expected that the legally available 
recycling capacity would be less important than in option D, since option E2 would imply a 
reinforcing of the requirements applicable to facilities.  

It  would  therefore  have  positive  impacts  compared  to  the  baseline  scenario  but  slightly 
negative compared to option D. In addition, since it would affect very negatively the revenues 
of ship-owners, there is a clear risk for ships to be reflagged, so as to be dismantled in other 
facilities  and,  in  particular,  in  facilities  which  would  be  compliant  with  the  Hong  Kong 
Convention.  Several  stakeholders  (academia,  shipowners'  associations,  Member  States) 
considered phased approaches as more desirable so as not to give a large financial incentive to 
non-compliance.  Measures  which  could  be  regarded  as  excessive  but  escapable  (e.g.  by 
reflagging) could amount to only ‘window dressing’, rather than an effective process 

Since all facilities located in third countries including the most advanced ones would need to 
be  upgraded,  this  option  might  face  some  opposition  from  the  recycling  countries  as  this 
would largely go beyond internationally agreed standards. 

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5.9. 

Option E3: allowing the export of EU-flagged ships only to a list of third party 
certified and audited facilities.  

This  option  would  consist  in  complementing  the  option  D  in  order  to  improve  compliance 
with EU legislation in particular prior to the entry into force of the Hong Kong Convention.  

When the Hong Kong Convention will be applicable, both flag and recycling states will have 
to  submit  annual  reports  in  order  to  ensure  compliance  with  the  Convention.  Lists  of  ships 
sent for recycling including information about the name and location on the recycling facility 
will  have  to  be  provided  by  flag  states.  Recycling  states  will  provide  a  list  of  the  ships 
recycling facilities compliant with the Convention as well as an annual list of ships recycled 
within their jurisdiction. By comparing the list of ships sent for dismantling with the list of 
ships  recycled,  it  will  be  possible  to  ensure  compliance  with  the  Convention  as  well  as  to 
measure de-flagging. Ship recycling facilities will indeed have to report all ships dismantled 
wherever  they  will  fly  the  flag  of  a  Party  to  the  Convention  or  not  ("no  more  favourable 
treatment" clause). 

However  these  reporting  requirements  will  only  become  applicable  once  the  Hong  Kong 
Convention will enter into force. In the short time, shipowners, when selecting their facilities, 
and flag states, when conducting the final survey prior to recycling, will have to ensure that 
the facilities comply with the requirements set out in the EU legislation. In order to mutualise 
these tasks and to ensure a level playing field at European level, it is proposed to establish a 
list  of  third  party  audited  facilities.  This  list  will  contain  both  information  contained  in  the 
yearly reports as well as information to be compiled by the ship recycling facilities in order to 
be authorized under the Hong Kong Convention and which would be helpful for shipowners 
in order to select adequate facilities93 and for EU Member States acting as flag states.  

In  the  medium  and  longer  term,  this  option  would  also  address  the  potential  weaknesses 
identified  in  the  EU  Strategy  on  ship  dismantling  which  are  linked  with  the  limited  non-
compliance mechanism of the Convention as well as the heavy reliance of its control system 
on authorities of developing countries with existing governance problems.  

The audit scheme contained in the Hong Kong Convention concerns only the mechanism to 
be  put  in  place  by  Parties  in  order  to  ensure  that  their  facilities’  compliance  with  the 
Convention. It is voluntary and will be conducted by the Parties themselves (self-audit) or by 
organizations that recognized by them.  

Stakeholders were consulted on the possible positive and negative impacts of the introducing 
an EU audit and certification scheme as well as on the organisations and actors which could 
be  playing  a  key  role  in  such  scheme.  Several  stakeholders  questioned  the  effect  of  a 
voluntary scheme and argued that the scheme should be made mandatory.  
There were diverging views on the criteria which should be used to certify and audit facilities. 
Some  considered  that  this  scheme  should  only  rely  on  the  requirements  of  the  Hong  Kong 
Convention, other proposed additional criteria related to transparency, human health and the 
environment.  
Almost  all  stakeholders  agreed  that  the  national  authorities  and/or  the  classification 
societies/accreditation  organisations  would  have  a  key  role  to  play  in  such  an  audit  and 
certification scheme. It was suggested that this should be done by an independent supervision 
and control organisation, while the State’s role would be to control implementation. Such an 

93 

Recycling capacity in terms of ship's size (length, breadth, lightweight), maximum authorized recycling 
capacity, information about the management of hazardous waste in and outside of the recycling facility.  

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organisation  must  be  independent  from  the  construction  and  demolition  sector.  Two  of  the 
stakeholders  specifically  mention  the  European  Maritime  Safety  Organisation  (EMSA)  as 
having a key role to play within such system as its inspectors are indeed already visiting third 
countries to verify their compliance with the training education and certification system under 
the STCW Convention94. One stakeholder proposes that local trade unions should play a key 
role in auditing and improving standards and ‘giving voice to workers’. 
At the same time, some stakeholders argued that an EU specific third party certification and 
audit scheme could have a counterproductive effect given some recycling States' insistence on 
sovereignty  rights  during  the  negotiations  of  the  Hong  Kong  Convention.  However,  during 
the workshop organized in EMSA, it was also mentioned that such audits would open up to 
the EU market and would work as an incentive for ship recycling facilities to upgrade their 
facilities. Finally, a few stakeholders argued that such EU rules could result in the reflagging 
of EU ships as a result of lack of compliant recycling capacity.  

It is proposed to request the recycling facilities to be audited and certified by private European 
and  non-European  companies  (classification  societies)  recognized  by  the  EU95.  This  will 
ensure  that  potential  governance  issues  are  addressed  while  respecting  as  much  as  possible 
sovereignty’s concerns.  

5.9.1.  Environmental and social impacts 

In  principle  the  environmental  and  social  impacts  will  be  similar  to  option  D  and  therefore 
positive in the short and medium term compared to the baseline scenario.  

5.9.2.  Economic impacts  

The additional auditing of performance indicators and the classification would produce costs 
for  recycling  facilities  in  the  range  of  20,000-40,000  €  plus  inte rnal  personnel  costs  of  1-2 
man  years96  (2160-4320  €).  These  costs  would  be  passed  over  to  shipowners  through  a 
reduced price offered for their ships.  
A study undertaken on behalf of the Commission125 developed a list of criteria based on the 
Hong Kong Convention as well as a first list of 25 facilities with a total dismantling capacity 
of 2,4 million LDT. Considering that during the 5 years in which they will be certified, these 
facilities  will  treat  an  yearly  average  of  1,6  million  LDT  of  EU-flagged  ships,  the  auditing 
cost would represent 0.139 €/LDT and is therefor e considered as negligible compared to the 
current  dismantling  prices.  It  is  therefore  not  expected  to  have  a  noticeable  impact  on 
shipowners' revenues, on transport costs or on consumers. In June and July 2011, the average 
dismantling  prices  offered  by  ship  recycling  facilities  was  indeed  comprised  between  450 
(China) and 525 (Bangladesh, India) €/LDT. 

5.9.3. 

Impacts on the simplification of the existing legislation. 

The impacts are expected to be similar to the ones of option D and therefore a positive impact 
compared to the baseline scenario.  

94 

95 
96 

The international Convention on Standards of Training, Certification and Watchkeeping for Seafarers 
(STCW)  has  been  adopted  in  1978  by  the  IMO  and  sets  the  standards  of  competence  for  seafarers 
internationally. . 
See http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:131:0047:0056:EN:PDF  
Costs have been estimated based on the labour costs in China see Table 14 in Annex VII 

EN 

53 

   EN 

 
                                                 
5.9.4.  Compliance aspects 

Several other stakeholders environmental NGOs, European Dredging Association, some ship 
recycling companies, trade unions,…) insisted on the need for third Party audit and increased 
transparency  for  an  effective  implementation  of  the  legislation  applicable  on  ship  recycling 
facilities.  By  applying  this  scheme  the  EU  would  increase  transparency  and  compliance  by 
providing  a  tool  to  monitor  that  the  facilities  to  which  EU-flagged  vessels  are  sent  for 
recycling 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 namely the rules of the Hong 
Kong Convention. Moreover there would be an economical incentive for these facilities to be 
in the scheme so as to be legally authorized to receive EU flagged ships. 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. 
Several stakeholders (shipowners' associations, Member States) however highlighted that the 
establishment of an international audit scheme was strongly rejected by some recycling states 
during the development of the Hong Kong Convention. Some regretted it but all considered 
that this would render this option potentially difficult from a diplomatic perspective and lead 
to legal and operational implications. This could hinder the acceptability of third party audit 
of ship recycling facilities by the Asian recycling countries.  

This option is therefore expected to have less positive impacts on compliance than option D 
taking into account a possible lower level of support from third countries due to sovereignty 
issues.  

EN 

54 

   EN 

 
6. 

COMPARING THE OPTIONS 

The options will be assessed against the following criteria: 

•  effectiveness – the extent to which options achieve the objectives of the proposal; 

•  efficiency – the extent to which objectives can be achieved at least cost; 

•  coherence  –  the  extent  to  which  options  are  coherent  with  the  overarching 
objectives of EU policy, and the extent to which policy options are likely to limit 
trade-offs across the economic, social, and environmental domain. 

This  will  be  done  based  on  a  partial  cost-benefit  analysis  since  the  environmental  impacts 
have  been  quantified  but  not  monetized.  The  summary  of  the  quantified  impacts  of  the 
different options is shown in the table 2. 

6.1. 

Effectiveness  

Option B has a neutral impact on the achievement of the Specific Objective 1 (improve the 
human  health  and  environmental  impacts)  while  options  C  and  E1  have  a  clear  negative 
impact. Options D and E3 have a positive impact in the short term and a neutral impact in the 
medium  and  long  term.  Option  E2  has  a  high  effectiveness  in  achieving  this  Specific 
Objective.  

Option B would have a negative impact on the achievement of the Specific Objective 2 since 
large commercial EU flagged ships would still be prohibited to be recycled within the OECD. 
The level of non-compliance with the EU legislation can therefore be expected to continue to 
be  very  important.  The  option  E1  has  a  neutral  impact  on  the  achievement  of  the  Specific 
Objective 2. Option C would have a positive impact in the short and medium term since all 
the dismantling facilities worldwide could be used by EU-flagged ships during this period of 
time. Options D and E3 would have a very positive impact since they would allow open the 
possibility for EU flagged ships to be dismantled in facilities compliant with the Hong Kong 
Convention  worldwide.  Option  E2  would  have  a  positive  impact  since  it  would  open  the 
possibility for EU flagged ships to be dismantled worldwide. The impact will however be less 
positive than for options D and E3 since only EU equivalent facilities could be used by EU 
flagged ships.  

Since  the  current  legislation,  which  is  not  adapted  to  the  specificities  of  ships,  would  be 
maintained  in  option  B,  this  option  will  have  a  negative  impact  on  the  achievement  of  the 
Specific Objective 3. The option C would have a positive impact insofar as all EU Member 
States effectively ratify and implement the Hong Kong Convention. The options D, E2 and E3 
will have positive impacts as they would replace the current legislation by another one more 
adapted to the specificities of ships and introduce sanctions specifically designed to address 
the current problem linked with the circumvention of the legislation by changing flag shortly 
prior to recycling. Option E1 would have a slightly positive impact.  

EN 

55 

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6.2. 

Efficiency 

Due  to  the  very  nature  of  the  ship  recycling  market  (90  %  of  recycling  is  undertaken  in  5 
major  countries),  the  expected  environmental  and  health  benefits  will  be  encountered  in  a 
limited number of third countries.  

The option B would globally have a negative efficiency. By implementing key elements of the 
Hong  Kong  Convention  in  the  EU  legislation  it  would  decrease  the  revenues  of  EU 
shipowners and increase the administrative costs of Member States. In addition, EU Member 
States would be faced with higher administrative costs linked with control and enforcement. 
And since the current problem of the lack of legally accessible dismantling capacity will not 
be  solved,  the  Regulation  would  continue  to  be  largely  circumvented  thus  resulting  in 
environmental and social impacts similar to the baseline scenario.  

Option  C  would  have  positive  impacts  on  the  revenues  of  ship  owners  as  well  as  on  the 
administrative  costs  for  EU  Member  States  during  the  period  considered  but  they  will  be 
offset by important negative environmental and social costs in the short and medium term.  

Option  D  contains  effective  measures  accompanied  by  limited  implementation  and 
administrative costs. It contributes therefore efficiently to all specific objectives.  

Option E1 would have a globally negative effectiveness regarding the specific objectives. It 
would have positive economic impacts for EU Member States but negative environmental and 
social impacts in the short, medium and long term.  

Option E2 implies very substantial costs for shipowners mainly related to the obligation for 
ships to be dismantled in high standard and more costly facilities than what would be required 
internationally.  They  are  partially  offset  by  the  important  benefits  in  terms  of  social  costs 
resulting from the reduction of fatal and non-fatal accidents of adults and children.  

Option E3 will  not bring  substantial additional costs for shipowners but would  significantly 
improve the compliance with the legislation proposed under option D. It contributes therefore 
efficiently to all specific objectives.  

6.3. 

Coherence 

Only options D, E2 and E3 are coherent with all the overarching objectives of EU policy.  

The  analysis  seems  to  indicate  that  option  E3  and  to  a  lesser  extent  option  E2  presents  a 
limited trade-off between the different types of impacts and an increased level of compliance 
with EU legislation. Option E2 presents an important trade-off between: firstly, the positive 
impacts on human health and on the environment on; and, secondly, the negative impacts on 
the revenues of ship owners. It presents a higher risk of non-compliance than the options D 
and E3.  

6.4. 

Recommended option 

From an effectiveness point of view, the option D seems the most attractive. Indeed, it offers 
the  highest  potential  level  of  achievement  of  all  specific  goals  and  a  higher  level  of 
compliance than option E3.  

EN 

56 

   EN 

 
Moreover, as shown by the analysis of coherence, even if option D presents some trade-offs 
between  the  positive  environmental  and  social  impacts  on  the  one  hand  side,  and  the 
economic  impacts  on  the  other,  the  trade-offs  are  lower  than  for  option  E2.  In  terms  of 
coherence, option D therefore ranks highest. 

In view of the above the option D is the recommended option. 

The  table  below  summarizes  the  comparison  between  the  options  in  terms  of  effectiveness, 
efficiency and coherence.  

Option 

B 

C 

D 

E1 

E2 

E3 

Effectiveness 

SO1 

negative 

negative 

negative  positive 

positive 

positive  in  the 
short  term  and 
neutral  in  the 
long term 

SO2 

negative 

very 
positive 

very positive 

neutral 

positive 

very positive 

SO3 

negative 

positive 

positive 

slightly 
negative 

positive 

positive 

Efficiency  

negative 

negative 

very positive  

negative  positive  

very positive 

Coherence 

no 

no 

Yes 
limited 
off  

no 

with 
trade 

Yes  but  with 
important trade 
off  and  risk  of 
non 
compliance 

with 
Yes 
trade 
limited 
off  but  with 
risks  of  non-
compliance 

Conclusion  

Recommended 
option 

7. 

MONITORING AND EVALUATION.  

Given  the  existing  compliance  problems,  progress  should  be  monitored  to  check  the 
implementation and effectiveness of the EU legislation and its contribution to the objectives.  

Indicators of the progress in this context could be in particular: 

• 

the  number  of  ship  recycling  facilities  that  are  fulfulling  the  criteria  of  the 
Regulation; 

EN 

57 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
• 

• 

• 

the  number  and  percentage  of  EU-flagged  ships  dismantled  in  such  facilities 
compared to the worldwide number and percentage; 

the state of ratification of the Hong Kong Convention by the major flag and recycling 
states;  

data  on  the  type  of  employements  in  ship  recycling  facilities  (typology  of 
employement, accidents, occupational diseases) as well as date on the environmental 
pollution associated with ship recycling, as available. 

Taking these indicators into account, it is necessary to review the EU policy concerning ship 
recycling  on  a  regular  basis  and  to  submit  regular  implementation/progress  reports  to  the 
European Parliament and the Council.  

The  mandatory  annual  reports  of  Member  States  on  ship  recycling  facilities  and  recycled 
ships  will  be  the  main  source  of  information.  It  could  be  completed  by  the  purchase  of 
detailed  data  about  the  world  and  EU  flagged  ships  as  well  as  about  ship  dismantled 
worldwide.  In  view  of  probable  delays,  gaps  and  inaccuracies  it  is  highly  recommended  to 
contract a study for the preparation of each policy review.  

Should  compliance  problems  continue,  further  actions  could  be  undertaken  at  EU  level  like 
the setting up of an EU ship dismantling fund.  

EN 

58 

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Annex I : glossary of terms ...................................................................................................... 60 

Annex II: Bibliography ............................................................................................................ 62 

Annex  III:The  Basel  Convention  on  the  control  of  transboundary  movements  of  hazardous 
waste and heir disposal............................................................................................................. 69 

Annex IV: The Hong Kong Convention. ................................................................................. 71 

Annex V: Data used in the Impact Assessment and general methodology.............................. 77 

Annex VI: Flags . ..................................................................................................................... 87 

Annex VII: Detailed information about ship dismantling........................................................ 92 

Annex VIII: Detailed information about the fleet and its evolution. ..................................... 102 

Annex IX: Options rejected after a first screening................................................................. 107 

Annex  X:  Estimate  of  impacts  if  the  EU  legislation  is  not  modified  and  the  Hong  Kong 
Convention does not enter into force before 2030. ................................................................ 109 

Annex XI: Estimate of impacts for option A (baseline option). ............................................ 115 

Annex XII: Option B.............................................................................................................. 126 

Annex XIII: Option C ............................................................................................................ 129 

Annex XIV: Option D ............................................................................................................ 133 

Annex XV: Option E1............................................................................................................ 139 

Annex XVI: Option E2 .......................................................................................................... 143 

Annex XVII: Option E3 list of certified facilities.................................................................. 146 

EN 

59 

   EN 

 
 
 
Annex I : Glossary of terms 

Basel Convention  

COP 

CSR  

ECSA 

EMAS 

EMSA 

EU 

GT 

HBCDD 

The  Basel  Convention  on  the  on  the  Control 
of  Transboundary  Movements  of  Hazardous 
Wastes  and  their  Disposal  adopted  in  1989 
and in force since 1992  

Conference of the Parties 

Corporate Social Responsibility 

European EU Shipowners' Associations 

European  Union's  Eco-Management  and 
Audit Scheme  

European Maritime Safety Agency 

European Union 

Gross tons 

Hexabromocyclododecane  

Hong Kong Convention  

The Hong Kong Convention for the Safe and 
Environmentally  Sound  Recycling  of  Ships 
adopted by the IMO in May 2009 

IA 

ICS 

IHM 

ILO 

IMO 

ISO 

LDT 

MEPC 

MIDN 

OECD 

OJ 

Impact Assessment 

International Chamber of Shipping 

Inventory of Hazardous Materials 

International Labour Organisation 

International Maritime Organisation 

International 
Standardization 

Organization 

for 

Light Displacement Tonnes  

Marine Environment Protection Committee 

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

Organisation for Economic Co-operation and 
Development 

Official Journal (of the European Union) 

EN 

60 

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PCBs 

PFOs 

TBBPA 

TBT 

TFS 

WSR 

UNEP 

Polychlorinated biphenyls 

Perfluorooctanes  

Tetrabromobisphenol A  

Tributyl tin 

TransFrontier Shipment of Waste 

Waste Shipment Regulation 

United Nations Environment Programme 

EN 

61 

   EN 

 
 
Annex II: Bibliography 

European Community legislation and documents 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

(11) 

Communication COM (2010) 88 final presenting "An assessment of the link between 
the IMO Hong Kong Convention for the safe and environmentally sound recycling of 
ships,  the  Basel  Convention  and  the  EU  waste  shipment  regulation".  Available  at: 
http://ec.europa.eu/environment/waste/ships/pdf/report0310.pdf  

ship  dismantling 
Council  Conclusions  on  an  EU  Strategy 
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/envir/110626.pd
f  

for  better 

Results  of  the  stakeholders'  workshop  organised  on  the  9  June  2009  and  on  the  23 
October 2009 http://circa.europa.eu/Public/irc/env/cons_ship_dis/library  

Results  of  the  stakeholders'  consultation  on  the  EU  Strategy  for  better  ship 
dismantling 
2009) 
http://ec.europa.eu/environment/waste/ships/pdf/summary%20of%20contributions.p
df 

(April- 

June 

European Parliament resolution of 26 March 2009 on an EU strategy for better ship 
dismantling 
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-
//EP//TEXT+TA+P6-TA-2009-0195+0+DOC+XML+V0//EN&language=EN  

Communication  COM  (2008)  767  final  of  19  November  2008  presenting  an  "EU 
strategy for better ship dismantling, and its impact assessment in Commission Staff 
Working Document SEC(2008) 2846.  

European Parliament Resolution of 21 May 2008 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. 

Results  of  the  stakeholders'  consultation  on  the  Green  Paper  on  better  ship 
dismantling http://ec.europa.eu/environment/waste/ships/pdf/report_consultation.pdf. 

Green Paper of 22 May 2007 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"). 

Commission  Regulation  (EC)  No  1418/2007  of  29  November  2007  concerning  the 
export  for  recovery  of  certain  waste  listed  in  Annex  III  or  IIIA  to  Regulation  (EC) 
No 1013/2006 of the European Parliament and of the Council to certain countries to 
which  the  OECD  Decision  on  the  control  of  transboundary  movements  of  wastes 
does not apply 

(12) 

Commission  Regulation  (EC)  No  740/2008  of  29  July  2008  amending  Regulation 
(EC) No 1418/2007 as regards the procedures to be followed for export of waste to 
certain countries 

EN 

62 

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Commission's studies and research projects  

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

(11) 

(12) 

BIO intelligence service study for DG Environment:" Feasibility of a list of “green 
and  Safe”  ship  dismantling  facilities  and  of  a  list  of  ships  likely  to  go  for 
dismantling" Final report of January 2010, published on the Commission website at 
http://ec.europa.eu/environment/waste/ships/pdf/bio_ship%20dismantling.pdf  

COWI  study  for  DG  Environment:  "  Support  to  the  impact  assessment  of  a  new 
legislative proposal on ship dismantling" Final report of December 2009, published 
on 
at 
http://ec.europa.eu/environment/waste/ships/pdf/final_report080310.pdf  

Commission 

website 

the 

Milieu/COWI for DG Environment " Study in relation to options for new initiatives 
regarding  dismantling  of  ships  "  Final  report  of  October  2009:  published  on  the 
Commission website at http://ec.europa.eu/environment/waste/ships/index.htm  

COWI/Litehauz study for EMSA, ‘Certification of Ship Recycling Facilities’, 2008.  

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.  

COWI  for  the  European  Commission,  DG  Transport  and  Energy,  Study  on  "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 

DNV/Appledore  (for  DG  III/Enterprise),  study  on  ‘Technological  and  Economic 
Feasibility  Study  of  Ship  Scrapping 
: 
http://ec.europa.eu/enterprise/maritime/maritime_industrial/ship_scrapping_study/shi
p_scrapping_study_21feb01.pdf  

in  Europe’,  2001,  published  at 

SHIPDISMANTL Cost-effective and environmentally sound dismantling of obsolete 
vessels, 6th European Research Framework Programme (FP6).  

SHIPMATES Shiprepair to maintain transport which is environmentally sustainable, 
6th European Research Framework Programme (FP6) 

DIVEST  Dismantling  of  Vessels  with  Enhanced  Safety  and  Technology,  7th 
European Research Framework Programme (FP7). 

RECYSHIP  (Reference:  LIFE07  ENV/E/000787) ;  pilot  project  for  the  dismantling 
and decontamination of end of life ships  

BOATCYCLE  Management,  recycling  and  recovery  of  wastes  of  recreational  boat 
scrapping (Reference LIFE08 ENV/E/000158  

International Maritime Organisation (IMO) 

(1) 

EN 

Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships 
at: 
adopted 
http://ec.europa.eu/environment/waste/ships/pdf/Convention.pdf  

available 

2009 

May 

19 

63 

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(2) 

Existing guidelines on ship dismantling97 

•  IMO, 2003, Resolution A. 962(23), Guidelines on Ship Recycling International Maritime 

Organisation (IMO) 

•  IMO, 2004, Guidelines for the Development of the Ship Recycling Plan (MEPC/Circ.419) 

•  IMO, 2005, Resolution A.980(24), Amendments to the IMO Guidelines on Ship Recycling 

•  IMO, 2005, Implementation of the IMO Guidelines on Ship Recycling: ‘Gas-free-for-hot-

work’ certification (MEPC/Circ.466) 

•  IMO,  2005,  Promotion  of  the  Implementation  of  the  IMO  Guidelines  on  Ship  Recycling 

(MEPC/Circ.467) 

•  IMO,  2009,  Guidelines  for  the  development  of  the  Inventory  of  Hazardous  Materials. 
at: 

Available 
http://www5.imo.org/SharePoint/blastDataOnly.asp/data_id=26464/179%2859%29.pdf  

Basel Convention  

(1) 

(2) 

(3) 

Basel  Convention  on  the  Control  of  Transboundary  Movements  of  Hazardous 
Wastes  and  Their  Disposal,  concluded  22  March  1989,  entered  into  force  5  May 
1992, 1673 UNTS 126 

Basel  Convention, 
the  Environmentally  Sound 
Management  of  the  Full  and  Partial  Dismantling  of  Ships’,  Basel  Convention 
series/SBC No 2003/2, ISBN 92-1-158620-8, 2003 

‘Technical  Guidelines 

for 

Comments received from Parties pursuant to the decision taken by the ninth meeting 
of the Conference of the Parties on the Dismantling of Ships :  

•  European Union: "Submission by the European Community and its Member States related 

to decision IX/30 on Dismantling of Ships", January 2009 

•  European  Union;  "Preliminary  assessment  pursuant 
(Environmentally sound dismantling of ships", April 2011. 

to  decision  OEWG-VII/12 

(4) 

European Union: Submission by the European Community and its Member States of 
an  "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" , January 2008 

(5) 

Decisions of meetings of the Parties to the Basel Convention on ship dismantling: 

•  Decision V/28: Dismantling of ships 

97 

A list of the guidelines supporting the Hong Kong Convention is provided for in Annex IV.  

EN 

64 

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•  Decision VI/24: Technical Guidelines for the Environmentally Sound Management of the 

Full and Partial Dismantling of Ships  

•  Decision  VII/25:  Joint  Working  Group  of  the  International  Labour  Organization,  the 

International Maritime Organization and the Basel Convention on Ship Scrapping  

•  Decision VII/26: Environmentally sound management of ship dismantling  

•  Decision VII/27: Abandonment of ships 

•  Decision VIII/11: Environmentally sound management of ship dismantling  

•  Decision  VIII/12:  Joint  Working  Group  of  the  International  Labour  Organization,  the 

International Maritime Organization and the Basel Convention on Ship Scrapping  

•  Decision VIII/13: Abandonment of ships on land or in ports  

•  Decision IX/30: Dismantling of ships 

•  Decision OEWG-II/4: Legal aspects of the full and partial dismantling of ships  

•  Decision OEWG-III/3: Legal aspects of the full and partial dismantling of ships  

•  Decision OEWG-IV/5: Environmentally sound management of ship dismantling  

•  Decision OEWG-IV/6: Abandonment of ships  

•  Decision OEWG-V/7: Abandonment of ships  

•  Decision OEWG-V/8: Environmentally sound management of ship dismantling  

•  Decision  VI/17:  Environmentally  sound  management  of  ship  dismantling  and  the 

abandonment of ships on land or in ports 

•  Decision OEWG-VII/12: Environmentally sound dismantling of ships 

International Labour Organization (ILO)  

(1) 

‘Safety and Health in Ship Breaking – Guidelines for Asian Countries and Turkey’ 
International Labour Organisation, ISBN 92-2-115289-8, 2004 

Other international conventions, guidelines and initiatives  

(1) 

(2) 

(3) 

United  Nations  Convention  on  the  Law  of  the  Sea,  concluded  10  December  1982, 
entered into force 16 November 1994, 1833 UNTS 3 

Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other 
Matter 1972 (London Convention) and 1996 Protocol Thereto 

International Convention on the Control of Harmful Anti-fouling Systems on Ships, 
2001 

EN 

65 

   EN 

 
(4) 

(5) 

Joint ILO/IMO/Basel Convention Working Group on Ship Scrapping, 2005 and 2008 
and sessions (http://www.basel.int/ships/jimbwg.html; http://www.basel.int/ships/ilo-
imo-bc-WG3Report.pdf; http://www.basel.int/ships/ilo-imo-bc-WG3Report.pdf) 

Rotterdam  Convention  on  the  Prior  Informed  Consent  Procedure  for  Certain 
Hazardous Chemicals and Pesticides in International Trade, concluded 10 September 
1998, entered into force 24 February 2004, 38 ILM 1 (1999) 

National ship recycling strategies and reports 

•  United Kingdom 

(1) 

(2) 

Strategy, 
DEFRA: 
(http://www.defra.gov.uk/environment/waste/strategy/ship.htm) 

Recycling 

Ship 

UK 

February 

2007 

Ship 

DEFRA study on "Potential Transitional Technology Solutions For Environmentally 
2009, 
Sound 
(http://randd.defra.gov.uk/Default.aspx?Menu=Menu&Module=More&Location=None&Pro
jectID=15944&FromSearch=Y&Publisher=1&SearchText=WR1110&SortString=ProjectCo
de&SortOrder=Asc&Paging=10#Description )  

Developing 

Countries" 

Recycling 

In 

•  France 

(1) 

(2) 

(3) 

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 
at: 
http://www.sgmer.gouv.fr/article.php3?id_article=52 

translation 

published 

Report  of 
(http://www.sgmer.gouv.fr/article.php3?id_article=52)  

the  Inter-ministerial  mission  on  ship  dismantling,  April  2007 

Parliamentary 
(http://www.assemblee-nationale.fr/12/rap-info/i3609.asp) 

the  dismantling  of  warships, 

report  on 

January  2007 

(4) 

Parliamentary report on the dismantling of ships, June 2010  

Voluntary action by industry  

(1) 

(2) 

(3) 

(4) 

Industry  Working  Group  on  Ship  Recycling  "Guidelines  on  Transitional  Measures 
for  Shipowners  Selling  Ships  for  Recycling,  October  2009"  available  at: 
http://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---
safework/documents/publication/wcms_117945.pdf  

Industry  Working  Group  on  Ship  Recycling  recommendation  concerning  ‘Interim 
Measures for Shipowners Intending to Sell Ships for Recycling’, July 2007 

International  Chamber  of  Shipping,  Industry  Code  of  Practice  on  Ship  Recycling, 
2001  

contract 

Standard 
http://www.bimco.org/Corporate%20Area/Documents/Document_samples/Sundry_
Other_Forms/DEMOLISHCON.aspx 

vessels 

sale 

the 

for 

for 

recycling: 

of 

EN 

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Other studies, publications and information sources 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

(11) 

(12) 

(13) 

COWI  for  Danish  EPA  ‘Project  Identification  Note  –  Options  for  Demonstration 
Projects on Green Ship Recycling’, February – September 2007. 

ECORYS, ‘The ship recycling fund. Financing environmentally sound scrapping and 
recycling of sea-going ships’, February 2006.  

EMSA, Workshop Report: ‘Ship Recycling – the draft IMO Convention on the safe 
and environmentally sound recycling of ships’, Lisbon, 24 April 2007. 

Knapp S, Kumar S, Bobo Remijnc A., ‘Econometric analysis of the ship demolition 
market’, Vol 32 Marine Policy (Elsevier), November 2008. 

Mikelis  N.,  ‘Developments  and  Issues  on  Recycling  of  Ships’,  East  Asian  Seas 
Congress, Haikou City, Hainan Province, PR China, December 2006. 

Mikelis  N.,  ‘A  statistical  overview  of  ship  recycling’,  International  symposium  on 
maritime safety, security and environmental protection, Athens, September 2007. 

Ormond  T.,  ‘Enforcing  EU  environmental  law  outside  Europe?  The  case  of  ship 
dismantling’ Environmental Law Network International No. 1/2009 

Andersen  AB,  ‘Worker  safety  in  the  ship-breaking  industries.  An  issue  paper’ 
2001: 
Geneva, 
http://www.ilo.org/public/english/dialogue/sector/papers/shpbreak/wp-167.pdf 

ILO, 

Danish Environmental Protection Agency ‘Shipbreaking on OECD’ Working Report 
No. 
2003: 
17, 
http://www.mst.dk/homepage/default.asp?Sub=http://www.mst.dk/udgiv/publication
s/2003/87-7972-588-0/html/kap01_eng.htm 

Det  Norske  Veritas,  ‘Decommissioning  Guidelines  the  GUEDEC  Approach’  DNV 
Report  No  2000  3156  and  ‘Third  Party  Environmental  Verification  Ship 
Decommissioning (ENVER)’ Report No 2000 3157. 

Det  Norske  Veritas,  ‘Ship  recycling:  Industry  concern,  industry  response:  The  way 
forward, 
2000: 
http://www.skibstekniskselskab.dk/download/F2005_DNVShipRecycling.pdf#search
='ship%20recycling%202001' 

challenges, 

response’, 

DNV 

Environment Canada, Environmental Protection Branch, Pacific and Yukon Region: 
‘Cleanup  Standards  for  Ocean  Disposal  of  Vessels’  and  ‘Cleanup  Guidelines  for 
1998: 
Ocean 
of 
http://www.artificialreef.bc.ca/AResources/cleanup_guidelines.html 
and 
http://www.artificialreef.bc.ca/AResources/cleanup_standards.html 

Vessels’, 

February 

Disposal 

Environment, Food and Rural Affairs Committee (UK), ‘Dismantling defunct ships 
in 
2004: 
http://www.publications.parliament.uk/pa/cm200304/cmselect/cmenvfru/834/83402.
htm 

November 

UK, 

the 

11 

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(14) 

(15) 

(16) 

(17) 

(18) 

(19) 

(20) 

(21) 

(22) 

(23) 

(24) 

regulatory 

Environmental  Protection  Agency  (EPA)  (USA),  ‘A  guide  for  ship  scrappers:  Tips 
2000: 
for 
http://www.epa.gov/Compliance/resources/publications/civil/federal/shipscrapguide.
pdf 

compliance’,  Washington, 

EPA, 

D.C, 

Greenpeace International, ‘Destination unknown: European singlehull oil tankers: No 
place 
2004: 
http://www.greenpeaceweb.org/shipbreak/destination.pdf 

December 

go’, 

to 

International  Chamber  of  Shipping  (ICS),  ‘Industry  code  of  practice  on  ship 
recycling’: http://www.marisec.org/recycling/ 

International Organization for Standardization (ISO), ‘Ships and marine technology: 
Ship recycling management systems: Specifications for management systems for safe 
and  environmentally  sound  ship  recycling  facilities’  Geneva,  ISO,  2008  (ISO/PAS 
3000). 

Occupational Safety and Health Administration  (OSHA) (USA), ‘OSHA  fact Sheet 
on  shipbreaking’,  US  Department  of  Labor  -  Occupational  Safety  and  Health 
2001: 
Administration, 
http://www.ilo.org/pubcgi/links_ext.pl?http://www.osha.gov/OshDoc/data_Maritime
Facts/shipbreakingfactsheet.pdf 

Rahman  A/  Ullah  AT,  ‘Ship  breaking:  A  background  paper  prepared  for  the  ILO’s 
Sectoral 
1999 : 
http://www.ilo.org/public/english/protection/safework/sectors/shipbrk/shpbreak.htm 

Programme. 

Activities 

Dhaka, 

Sawyer,  JF,  ‘Shipbreaking  and  the  North-South  debate:  Economic  development  or 
environmental  and  labor  catastrophe?’  Penn  State  International  Law  Review,  Vol. 
20/No. 3, pp 535-562, 2002. 

US  Environmental  Protection  Agency,  Office  of  Enforcement  and  Compliance 
Assurance:  ‘A  Guide  for  Ship  Scrappers  –  Tips  for  Regulatory  Compliance’,  EPA 
315-B-00-001, Summer 2000: http://es.epa.gov/oeca/fedfac/scrap.pdf 

US  Department  of  Transportation  –  Maritime  Administration 
(MARAD): 
‘Environmental Assessment of  the  sale of national defence reserve fleet vessels for 
scrapping’,  Report  No.  MAENV-820-96003,  July  1997  (including  Appendix  D: 
Sampling and analysis, Appendix E: Survey of ships and materials, and Appendix F: 
The markets, cost and benefits of ship breaking/ recycling in the United States). 

US  Department  of  Transportation  -  Report  to  Congress  on  the  progress  of  ship 
2005 
disposal, 
http://www.marad.dot.gov/Publications/Fy%2006/ReportToCongress11_05%20Final
%20ver%202-21-2006.pdf 

United Nations Environment Programme (UNEP) - Technical Working Group of the 
Basel  Convention,  16th  Session  3-5  April  2000  –  Dismantling  of  ships.  Geneva, 
(UNEP/CHW/TWG/16/3  &  UNEP/CHW/TWG/16/3/Add.1): 
UNEP, 
& 
http://www.basel.int/meetings/twg/twg16/predocs/twg16_3.pdf 
http://www.basel.int/meetings/twg/twg16/predocs/twg16_3a1.pdf 

2000 

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Annex III: The Basel Convention on the control of transboundary movements of 
hazardous waste and heir disposal.  

The Basel Convention on the control of transboundary movements of hazardous wastes and 
their disposal was adopted in 1989. All individual Member States and the EU are Parties to 
the Basel Convention. 

The  Basel  Convention  to  regulate  the  movements  of  hazardous  waste  across  international 
frontiers. The overall goal of the Convention is to protect human health and the environment 
against  adverse  effects  which  may  result  from  the  generation,  management,  transboundary 
movements, and disposal of hazardous wastes. 

The Convention applies to hazardous wastes and certain other wastes (mixed waste collected 
from households and residues arising from the incineration of household waste). In decision 
VII/26,  Parties  to  the  Basel  Convention  noted  that  a  ship  may  become  waste  as  defined  in 
Article  2  of  the  Convention  while  at  the  same  time  being  defined  as  a  ship  under  other 
international  rules.  Due  to  their  content  of  hazardous  materials,  when  ships  are  waste,  they 
have  to  be  considered  as  hazardous  wastes.  The  Basel  Convention  thus  applies  to  all  ships 
which are "waste" as defined by the Convention.  

In 1995, an amendment to the Convention, the so-called "Basel Ban" was adopted. It prohibits 
all  shipments  of  hazardous  waste  from  a  group  of  countries  (European  Union,  OECD 
countries and Lichtenstein) to countries which do not belong to this group. 

The European Union transposed the provisions of this amendment in the EU Waste Shipment 
Regulation98. However, internationally the Ban amendment has not yet entered into force due 
to an insufficient number of ratification by Parties to the Basel Convention.  

In  order  to  break  the  deadlock,  Indonesia  and  Switzerland  have  launched  an  initiative  with 
key  Parties  to  the  Basel  convention  and  will  propose  a  draft  decision  for  consideration  ad 
adoption at the next Conference of the Parties to the Basel Convention99 .  

Faced with the difficulties to implement the Basel Convention to ships and in order to cover 
the whole life cycle of ships, the Parties to the Basel Convention welcomed the intention of 
the  International  Maritime  Organisation  (IMO)  has  developed  an  ad-hoc  Convention.  The 
Hong  Kong  Convention  for  the  Safe  and  Environmentally  Sound  Recycling  of  Ships 
(thereafter  referred  to  as  the  Hong  Kong  Convention)  provides  a  system  of  control  and 
enforcement over a ship's lifetime from design, through construction, operation and up to the 
recycling stage. Parties to the Basel Convention welcomed its adoption in May 2009.  

During the negotiation of the Hong Kong Convention, Parties to the Basel Convention invited 
the International Maritime Organization to ensure that the new Convention to be adopted by it 
would establish an equivalent level of control as that established under the Basel Convention, 
noting that the duplication of regulatory instruments that have the same objective should be 
avoided100.  Durig  the  ninth  Conference  of  the  Parties  to  the  Basel  Convention,  it  was 
decided101  to  carry  out  a  preliminary  assessment  on  whether  the  Hong  Kong  Convention  as 

98 

99 
100 
101 

Regulation  (EC)  no  1013/2006  of  the  European  Parliament  and  of  the  Council  of  14  June  2006  on 
shipments of waste.  
COP 10 will take place from 17 to 21 October 2011 in Colombia.  
See decision VII/26 : http://www.basel.int/meetings/cop/cop8/docs/16e.pdf#viii11  
See decision IX/30: http://www.basel.int/meetings/cop/cop9/docs/39e-rep.pdf#ix30  

EN 

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adopted, establishes an equivalent level of control and enforcement as that established under 
the Basel Convention, in their entirety, after having developed the criteria necessary. The EU 
has submitted criteria in January 2009102 and a set of criteria and a methodology have been 
agreed upon during the 7th Open Ended Working Group of the Basel Convention103. On this 
basis, Parties and stakeholders have been invited to conduct their assessment ant to transmit 
the  results  to  the  eleventh  Conference  of  the  Parties  to  the  Basel  Convention  "for 
consideration and action, as approptiate".  
The  EU  has  completed  its  assessment  in  April  2009  (see:  http://www.basel.int/ships/oewg-
vii12-comments/comments/eu.doc) and concluded that the Hong Kong Convention appears to 
provide  a  level  of  control  and  enforcement  at  least  equivalent  to  that  one  provided  by  the 
Basel  Convention  for  ships  which  are  waste  under  the  Basel  Convention  and  for  ships  to 
which  the  Hong  Kong  Convention  applies  and  to  ships  treated  similarly  pursuant  to  article 
3(4) of this latter Convention. 

In  addition,  the  system  of  control  and  enforcement  for  transboundary  movements  of 
hazardous  waste  through  the  Prior  Informed  Consent  Procedure  of  the  Basel  Convention  is 
considered as strict and functioning relatively well for most hazardous wastes, but as difficult 
to enforce in relation to end-of-life ships. The Hong Kong Convention takes a rather different 
approach to control and contains other elements of control and enforcement which are more 
adapted to the specificities of the maritime world. 

102 
103 

See http://www.basel.int/ships/ix30-comments/comments/eu-2009-01-30.doc.  
See decision OEWG VII/12: http://www.basel.int/meetings/oewg/oewg7/docs/21e.pdf#vii12  

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Annex IV: The Hong Kong Convention.  
General presentation of the Hong Kong Convention:  

The International Convention for the Safe and Environmentally Sound Recycling of Ships104 
aims at addressing in a legally binding instrument, the environmental, occupational health and 
safety  risks  related  to  ship  recycling,  taking  into  account  the  particular  characteristics  of 
maritime transport and the need to secure the smooth withdrawal of ships that have reached 
the end of their operating lives. To this end, it regulates: 

• 

• 

• 

The  design,  construction,  operation  and  preparation  of  ships  so  as  to  facilitate  safe 
and  environmentally  sound  recycling  without  compromising  their  safety  and 
operational efficiency;  

The  operation  of  ship  recycling  facilities  in  a  safe  and  environmentally  sound 
manner; and  

The  establishment  of  an  appropriate  enforcement  mechanism  for  ship  recycling 
(certification/reporting requirements). 

The  Hong  Kong  Convention  basically  requires  ships  flying  the  flags  of  Parties  to  the 
Convention  to  be  recycled  only  in  recycling  facilities  authorized  by  other  Parties  to  the 
Convention.  

Structure of the Ship Recycling Convention 

The  Convention  is  divided  into  the  main  text  containing  21  Articles  and  an  Annex  which 
forms an integral part of the Convention. Articles provide for general requirements while the 
Regulations contained in the Annex contain more detailed requirements. If there is a need for 
the  Convention  to  evolve  (for  example  to  add  new  prohibitions  to  use  certain  hazardous 
substances  on  board),  it  will  be  easier  to  modify  the  Regulation  than  the  Articles  of  the 
Convention.  

Article 1  

General obligations 

Article 2  

Definitions 

Article 3  

Application 

Article 4  

Controls related to ship recycling 

Article 5  

Survey and certification of ships 

Article 6  

Authorization of Ship Recycling Facilities 

Article 7  

Exchange of information 

Article 8  

Inspection of ships 

Article 9  

Detection of violations 

104 

IMO Hong Kong International Convention for the safe and environmentally sound recycling of ships, 
2009, (SR/CONF/45) adopted 19 May 2009. 

EN 

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Article 10  

Violations 

Article 11  

Undue delay or detention of ships 

Article 12  

Communication of information 

Article 13  

Technical assistance and cooperation 

Article 14  

Dispute settlement 

Article 15  

Relationship with international law and other international agreements 

Article 16  

Signature, ratification, acceptance, approval and accession 

Article 17  

Entry into force 

Article 18  

Amendments 

Article 19  

Denunciation 

Article 20  

Depositary 

Article 21  

Languages 

Annex: Regulations for Safe and Environmentally Sound Recycling of Ships 

 Chapter 1 (General Provisions) 

Regulation 1  

Definitions 

Regulation 2  

General applicability 

Regulation 3  

Relationship with other standards, recommendations and guidance 

Chapter 2 (Requirements for Ships) 

Part A - Design, construction and maintenance of ships 

Regulation 4  

Controls of ships’ Hazardous Materials 

Regulation 5  

Inventory of Hazardous Materials 

Regulation 6  

Procedure for proposing amendments to Appendices 1 and 2 

Regulation 7  

Technical Groups 

Part B – Preparation for Ship Recycling 

Regulation 8  

General requirements 

Regulation 9  

Ship Recycling Plan 

Part C – Surveys and certification 

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Regulation 10  

Surveys 

Regulation 11  

Issuance and endorsement of certificates 

Regulation 12  

Issuance or endorsement of a certificate by another Party 

Regulation 13  

Form of the certificates 

Regulation 14  

Duration and validity of the certificates 

Chapter 3 (Requirements for Ship Recycling Facilities) 

Regulation 15  

Controls on Ship Recycling Facilities 

Regulation 16  

Authorization of Ship Recycling Facilities 

Regulation 17  

General requirements 

Regulation 18  

Ship Recycling Facility Plan 

Regulation 19  

Prevention of adverse effects on human health and the environment 

Regulation 20  

Safe and environmentally sound management of Hazardous Materials 

Regulation 21  

Emergency preparedness and response 

Regulation 22  

Worker safety and training 

Regulation 23  

Reporting on incidents, accidents, occupational diseases and chronic effects 

Chapter 4 (Reporting requirements) 

Regulation 24  

Initial notification and reporting requirements 

Regulation 25  

Reporting upon completion 

Appendices 

Appendix 1  

Controls of Hazardous Materials 

Appendix 2 

Minimum List of Items for the Inventory of Hazardous Materials 

Appendix 3 

Form of the International Certificate on Inventory of Hazardous Materials 

Appendix 4 

Form of the International Ready for Recycling Certificate 

Appendix 5 

Form of the Authorization of Ship Recycling Facilities 

Appendix 6 

Form of Report of Planned Start of Ship Recycling  

Appendix 7 

Form of the Statement of Completion of Ship Recycling  

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The  Convention  is  supplemented  by  the  following  IMO  guidelines  providing  clarifications, 
interpretations, and uniform procedures for technical issues arising from the provisions of the 
Convention. 

Existing guidelines 

Guidelines on Ship Recycling  

Guidelines for the Development of the Ship Recycling Plan  

Amendments to the IMO Guidelines on Ship Recycling 

Implementation of the IMO Guidelines on Ship Recycling: ‘Gas-free-for-hot-work’ certification  

Promotion of the Implementation of the IMO Guidelines on Ship Recycling  

Guidelines for the development of the Inventory of Hazardous Materials  

Guidelines supporting the Hong Kong Convention  

Guidelines for the development of the Inventory of Hazardous Materials (adopted in July 2009) 

Guidelines for survey and certification; 

Guidelines for inspection of ships; 

Guidelines for the authorization of Ship Recycling Facilities (expected date of adoption July 2011); 

Guidelines for safe and environmentally sound ship recycling (expected date of adoption July 2011); 

Guidelines for the development of the Ship Recycling Plan (expected date of adoption July 2011); 

Other  guidelines  or  circulars  as  may  be  identified  by  the  Marine  Environment  Protection  Committee  of  the 
IMO 

Entry into force requirements of the Hong Kong Convention105 (article 17):  

In order to enter into force and to start producing effects, the Hong Kong Convention needs to 
be ratified by both major flags states and recycling states.  

As of May 2011, no IMO Member has ratified the Hong Kong Convention. This Convention 
has been open for signature subject to ratification from 1 September 2009 to 31 August 2010. 
In  that  time,  France,  the  Netherlands,  Italy,  Turkey  and  Saint  Kitts  &  Nevis  signed  the 
Convention subject to ratification.  

"This  Convention  shall  enter  into  force  24  months  after  the  date  on  which  the  following 
conditions are met: 
.1  not  less  than  15  States  have  either  signed  it  without  reservation  as  to  ratification, 
acceptance or approval, or have deposited the requisite instrument of ratification, acceptance, 
approval or accession in accordance with Article 16; 

105 

EN 

The 
http://ec.europa.eu/environment/waste/ships/pdf/Convention.pdf  

Hong 

Kong 

text 

the 

of 

Convention 

is 

available 

here: 

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.2 the combined merchant fleets of the States mentioned in paragraph 1.1 constitute not less 
than 40 per cent of the gross tonnage of the world’s merchant shipping;  
and 
.3 the combined maximum annual ship recycling volume of the States mentioned in paragraph 
1.1 during the preceding 10 years constitutes not less than 3 per cent of the gross tonnage of 
the combined merchant shipping of the same States." 

First criteria: number of States.  

This criterion will be relatively easy to meet since the ratification of EU Member States alone 
would  be  sufficient  to  reach  it.  Since  the  European  Union  is  not  a  Member  but  only  an 
observer to the IMO, only EU Member States can ratify the Hong Kong Convention.  

Second criteria: fleet.  
In  2009,  the  world  merchant's  shipping  of  ships  under  500  GT  is  of  993  404  439  GT23.  To 
meet the criteria, ratifying states will need to provide for at least 397 361 776 GT.  
The  EU  flagged  ships  above  500  GT  represent  165  507  822  GT23  or  16,66  %  of  the  world 
fleet. Ratification by major flag states outside the EU will therefore be necessary to meet this 
criteria.  

Third criteria: combined recycling capacity.  

Based on the world merchant fleet above 500 GT in 2009, this means that countries ratifying 
the Convention should represent 11 920 853 millions GT.  

As shown in Figure 1, this implies that ratification by the most advanced recycling countries 
(China  and  OECD)  would  not  be  sufficient.  Ratification  by  India,  Pakistan  or  Bangladesh 
would be required for this Convention to enter into force.  

The figure below shows the maximum recycled volume of the major recycling states during 
the last ten years. 

Three  of  them  have  large  recycling  capacities:  China,  India  and  Bangladesh.  Pakistan  has  a 
medium and Turkey a small capacity.  

Ratification  by  two  large  recycling  capacity  countries  is  presently  more  than  sufficient  to 
fulfill the Convention's entry into force requirements. With an average annual increase of the 
world fleet by 4 %, ratification by two large recycling capacity countries should be sufficient 
until 2015 or even beyond.  

If there is an increase in recycled volumes in 2011 or in 2012, it might become possible to the 
recycling  criterion  to  be  met  with  ratifications  by  one  large,  one  medium  and  one  small 
recycling capacity countries.  

Dismantling country 

Maximum  recycling  volume  (millions 
GT) for the period 2000-2010 

Bangladesh 

China 

India 

6 608 531 

7 737 730 

7 561 258 

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Pakistan 

Turkey 

Rest of the world 

2 351 964 

645 150 

472 221 

Figure 1: World disposal by dismantling country 2000-2009 106 

106 

Data provided by the International Maritime Organisation based on data from ISH Fairplay.  

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Annex V: Data used in the Impact Assessment and general methodology. 

The  analysis  provided  in  this  Impact  Assessment  is  based  on  the  best  available  data  and 
information collected by the Commission from stakeholders and the literature.  

Publicly available data on all aspects of ship dismantling is rather limited in particular since 
the majority of ship dismantling takes place in non-EU countries. A specific methodology was 
developed  to  complete  and  update  the  existing  information  as  well  as  to  assess  the 
quantitative  impacts  of  different  options  in  a  dedicated  study  undertaken  on  behalf  of  the 
Commission12 which has been published on Internet107.  

A  great  number  of  representatives  of  industry,  national  and  international  authorities,  NGOs 
and other stakeholders have been interviewed and contributed information to this study. The 
methodology,  main  base  data  and  the  preliminary  results  were  presented  at  the  stakeholder 
workshop  held  on  23  October  2009  in  Brussels.  Views  and  specific  comments  expressed 
during and after the workshop are reflected in the relevant parts of the study.  

Sources:  

The above-mentioned study drawn on existing studies on ship dismantling.  

EMSA  had  also  provided  an  extensive  amount  of  data  for  instance  updates  on  ship 
dismantling and distribution of flags at the time of dismantling and during operation, which 
has  been  used  for  address  the  size  of  reflagging.  Further  data  and  information  have  been 
provided by stakeholders following the expert workshop on the 23 October 2009 and by DG 
ENV.  

A  number  of  representatives  of  industry,  national  and  international  authorities  and  other 
stakeholders  have  been  contacted  in  relation  to  contribute  information  to  the  study.  The 
contacted representatives include:  

• 

• 

• 

• 

• 

• 

International Ship Recycling Association, ISRA 

International Chamber of Shipping 

European  Ship  Recycling  Facilities  such  as  Van  Heygen  Recycling  S.A., 
Belgium and Scheepssloperij Nederland B.V., the Netherlands, 

Turkish Ship Breakers Association 

International Labour Organization, ILO (safety and health statistics) 

Gujarat Maritime Board. 

While  comments  and  specific  data  submitted  by  stakeholders  have  been  reflected  in  the 
analyses to further qualify the estimates and support the findings, the estimates, including the 
base data are best estimates subject to some uncertainty, given that publicly available data on 
various aspects of ship dismantling data is rather limited. 

107 

http://ec.europa.eu/environment/waste/ships/index.htm  

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The analyses of impacts have been carried out using a dedicated Excel model and a base data 
set108 for assessing the impacts of each of the scenarios. This Excel model is available at this 
address: http://ec.europa.eu/environment/waste/ships/pdf/Appendix_A.xls  

In  order  to  reflect  the  impacts  of  the  shipping crisis  in  2008,  the  data  set  was  enriched  and 
updated on the basis of two additional sets of data identified below.  

Updates and improvement based on new sets of data 

In 2011, DG Environment brought some specific data about the age profile of the world fleet, 
of the EU fleet and detailed information about ships sent for dismantling in 2008 and 2009. 
For the world fleet and for the EU flagged ships, the number of ships and GT of ships above 
100 GT have been provided for the following age ranges: [0-9 years]; [10-14 years]; [15-19 
years]; [20-22 years]; [23-25 years]; [26-28 years]; [29-30 years]; more than 31 years.  

Regarding  ship  dismantling,  the  following  information  have  been  provided:  ship's  unique 
IMO's Ship Identification Number; ship name; GT; the type of ship, the date of built, the flag 
at the time of dismantling, the nationality of the owner at the time of dismantling, the date of 
arrival  in  the  dismantling  yard,  the  date  when  the  dismantling  started,  the  date  when  the 
dismantling was completed, the dismantling country and location.  

In addition, data about ship dismantling published by one prominent shipbroker, Cotzias, have 
been used in the context of this report. Each month, this broker publishes a list of all the ships 
sold for dismantling with the following information: ship's unique IMO's Ship Identification 
Number,  Ship  name,  type  of  ship,  date  of  built,  DWT,  LDT,  price  paid  by  the  dismantling 
facility  (in  dollars  per  LDT),  dismantling  country.  The  owners  of  certain  ships  do  not  sell 
them directly to the dismantling facilities but use the services of so-called "cash-buyers". In 
the  database  published  by  Cotzias,  the  dismantling  country  of  these  ships  is  therefore  not 
indicated  since  it  is  not  known  at  the  time  of  selling.  The  words  "as  is"  are  indicated 
instead109. Finally, this database focuses mainly on large seagoing vessels going to the largest 
dismantling  countries.  Information  about  dismantling  in  the  EU  or  in  the  OECD  (with  the 
exception of Turkey) is pretty limited.  

On the basis of this two set of data, it was possible to make detailed estimations in particular 
about the volume of ships and the price paid by the major dismantling counries in 2009. For 
some  ships,  there  was  no  information  about  the  LDT  and/or  the  price  in  the  information 
published by Cotzias. Estimations were therefore made by DG Environment.  

In order to estimate the missing LDT110, a ratio between the GT and LDT was calculated for 
each type of the ships dismantled in 2009. These ratios are presented in the table below. The 
LDT of each of these ships was then estimated by dividing their GT by the relevant ratio.  

108 

109 

110 

Study  on  the  "Recovery  of  small  vessels  not  used  in  the  fishing  trade"  undertaken  by  COWI  for  DG 
Environment.  
For more explanations about the signification of the word "as if", see the part of this report dealing with 
change of flag.  
571 ships out of 1299 dismantled in 2009 

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Table 3: ratio GT/LDT per type of ships dismantled in 2009.  

Type of ships 

Bulkers 
Containers 
Gas Carriers 
General Cargo 
Navy Ships 
Offshore 
Other Tankers 
Passenger Ships (cruise ships,ferries) 
Ro-Ro Ships 
Specialised Cargo Ships 
Tankers (oil,chemical) 
Average for all ships 

Average GT/LDT 
2,562925079
2,21126458
1,934994284
1,967171755
2,563676705
2,962036788
1,713076923
1,225658922
3,204804212
1,597326529
2,672323709
2,389772035

Number of ships on which the 
calculation was made 
182 
159 
19 
143 
3 
4 
1 
4 
76 
26 
96 
713 

In  order  to  estimate  the  missing  prices111,  the  LDT  (provided  by  Cotzias  or  calculated  as 
explained  before)  was  multiplied  by  the  average  price  per  LDT  paid  in  each  dismantling 
country  in 2009. In the cases  where the dismantling country was not known or  in  the  cases 
where there was no average price, a conservative approach was taken and the estimate from 
COWI for ships dismantled in the EU was used (81,6 euros/LDT) was used.  

Metholodogy for determining future dismantling projections:  

An important input for the impact assessment is the expected future dismantling volumes and 
countries of EU flagged ships. Due to the fluctuations in the ship dismantling activities and in 
the world fleet, it is difficult to project dismantled volumes.  

Dismantling volumes of EU flagged ships 

The decision to dismantle a ship depends heavily on current market conditions, in particular, 
on  the  freight  market.  As  freight  rates  fluctuate  heavily  so  do  the  dismantling  volumes.  In 
2005-2007 when freight rates where high almost no dismantling took place. Since 2008, with 
the low freight rates, dismantling volumes are rising. However, conditions can change quickly 
and therefore the projected yearly dismantling volumes should be interpreted with care.  

The  dismantling  volumes  are  calculated  and  presented  in  Light  Displacement  Tons  (LDT). 
The volumes are historical volumes up till year 2009 and projection from hereon until 2030. 

The projections of future dismantling volumes have been made based on a simple assessment 
of  the  age  profile  of  the  fleet112  and  the  lifetime  expectancy113.  The  projections  have  been 
made following this procedure:  

(1) 

The age profile of the existing fleet for each vessel type is estimated. 

111 
112 
113 

763 ships out of 1299 dismantled in 2009 
See Annex VIII.  
In the projections of the future dismantling volumes, the calculated average lifetimes for 2008 and 2009 
have been applied (See Table 7 in Annex VII). The calculated average lifetimes of the various vessels 
types are assumed constant during the forecast period. 

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(4) 

(5) 

(6) 

(7) 

A decommissioning frequency function, which shows the share of vessels scrapped at a 
certain  age,  has  been  estimated.  A  decommissioning  frequency  function  from  the 
COWI/DHI  (2007)31  study  has  been  used.  The  frequency  function  was  established 
based on historical scrapings of all ship types. 

The conditional decommissioning frequency function has been estimated on the basis 
of  the  decommissioning  frequency  function.  The  conditional  decommissioning 
function  expresses  the  probability  that  a  vessel  is  scrapped  in  the  following  year 
conditional on being in operation at the beginning of the year. 

Combining the estimated age profile and the conditional decommissioning frequency 
function for vessel, estimates of the future dismantling volumes are obtained.  

By  adding  the  dismantling  volumes  for  all  type,  the  aggregate  estimates  of  future 
volumes of dismantling are reached.  

It  should  be  noted  that  by  applying  the  approach  described  above  of  estimating  the  future 
decommissioning  volumes  by  year  (e.g.  when  ships  are  scrapped),  the  projections  will  only 
reflect the overall trend in volumes. Moreover, the projections will not reflect e.g. the true ups 
and downs of the dismantling market business cycle that comes from fluctuating freight rates 
and  future  political  initiatives.  However,  using  the  estimated  age  profile  and  the  fitted 
conditional  decommissioning  frequency  function  to  estimate  the  future  decommissioning 
volumes the trend in the medium and long term will is reflected. 

The Table 21 in the Annex VIII shows the projected future volumes of dismantling of vessels 
not covered by the Hong Kong Convention by year of scrap in terms of number of ships and 
total volume in GT as the total of all ship types. 

Dismantling countries of EU flagged ships 

The longer historical trend for the last 30 years period within recycling location are seen for 
the last 30 years trends (1978 - 2009) in the Figure 3 in the Annex VII. Ship dismantling in 
South Asia started in 1912 in India, in 1947 in Pakistan and in 1960 in Bangladesh. But these 
South-East  Asian  countries  together  with  China  only  took  over  around  the  mid  1980's  and 
have  since  completely  dominated  the  recycling  business.  This  pattern  within  dismantling 
locations is anticipated maintained for the projections of the impact assessment. 

For  the  dismantling  projections,  the  dismantling  locations  are  grouped  according  to  the 
dismantling  methods  applied  and  geography  like  shown  in  the  Table  1.  The  dismantling 
percentages  are  calculated  from  the  dismantling  data  for  2009  for  the  world  fleet  received 
from IHS Fairplay by summing up the percentages for the individual countries.  

Metholodogy for assessing the impacts of the different options:  

General methodology:  

An approach based on the dismantling method was used in order to make projections about 
the potential impacts and the different compliance level for dismantling facilities. The active 
dismantling  countries  are  generally  be  characterised  by  the  recycling  method  applied,  as 
defined in the Table below for the four overall recycling methods: beaching, landing, afloat 
and docking. 

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Table 4: Recycling methods applied in present recycling countries 

Recycling method  Recycling countries 

Docking 

Afloat 

Landing 

Few places in Europe 

China, Europe and US 

Turkey 

Beaching 

South-east Asia: Bangladesh, India and Pakistan 

Each of the four different dismantling methods is associated with a certain Health, Safety and 
Environment  (HSE) quality level, which is used as basis for assessing the HSE impacts of the 
different policy scenarios. The quality levels of the present beaching facilities are below the 
proposed Convention standards, whereas the three other methods in general characterise three 
different compliant levels.  

The three-levelled compliance system, as proposed in the 2008 EMSA study114, forms input to 
the  generation  of  data  for  the  impact  assessment  where  no  historical  statistics  exist.  This 
three-levelled  system  operates  with  three  quality  levels  A,  AA  and  AAA  where  an  A  level 
indicates  implementation  of  IMO  minimum  levels  –  in  the  adopted  Convention  text  and 
guidelines  this  includes  beaching  –  and  two  more  compliant  levels:  the  top  level  (AAA)  is 
indicative of the full standard with double containment in dry dock facilities and the medium 
level (AA) comprising the existing pier and slipway breaking such as carried out in Europe 
and in China, and represent the ultimate (innovative) upgrading possibility for beaching and 
landing facilities.  

The  environmental,  health  and  safety  impacts  of  the  different  EU  policy  scenarios  are 
estimated  by  means  of  a  base  data  set  for  HSE  performance  for  the  different  dismantling 
methods and locations which can be found in the Worksheet entitled "Baseline Case HSE + 
Costs" of the Excel-sheet model115.  

As  explained  before,  these  impacts  are  estimated  per  volume  of  ship  recycled.  The 
percentages of protected workers (including child wokers) has been estimated per dismantling 
location and method as show in the table below: 

Labour 

Unit 

AAA 
EU 

AA  
EU 

AA 
China 
etc. 

A 
Turkey

A 
Upgrad
ed India 

Substan
dard 
India 

A 
Upgrade
d 
Pakistan 
and 
Banglade
sh 

Substan
dard 
Banglad
esh, 
Pakista
n 

Workers 
needed 
per 

Nb 

73 

73 

138 

138 

455 

455 

455 

455 

114 

115 

Study by COWI/Litehauz for EMSA on the Certification of Ship Recycling Facilities. September 2008. 
https://extranet.emsa.europa.eu/index.php?option=com_docman&task=doc_download&gid=620&Itemi
d=193 
Available at: http://ec.europa.eu/environment/waste/ships/pdf/Appendix_A.xls.  

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100.000 
LDT 
of which 
protected 
workers 
not 
protected 
workers 
children 

%  

100 

100 

100 

100 

100 

100 

100 

50 

% 
% 

0 
0 

0 
0 

0 
0 

0 
0 

0 
0 

0 
0 

0 
0 

50 
17 

The  number  of  accidents  (both  fatal  and  non  fatal)  for  adult  and  children  workers  has  been 
estimated per man-years involved in the recycling of ships as shown in the table below.  

AAA 
EU 

AA 
EU 

AA 
China 
etc. 

A 
Turkey

A 
Upgraded 
India 

Substa
ndard 
India 

A 
Upgra
ded 
Pakist
an and 
Bangla
desh 

Substa
ndard
Bangla
desh, 
Pakista
n 

13 

13 

26 

39 

39 

39 

39 

112,88 

6000 

6000  12000 

18000 

18000 

18000 

18000 

31450 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

23,12 

5347 

Accident  

Adults life 

Adults - 
non-fatal 
accidents 
Children - 
life 
Children - 
non-fatal 
accidents 

Unit 
Nb of 
persons/1
00000 
man-
years 
Nb of 
persons/1
00000 
man-
years 
Nb of 
persons 

Nb of 
persons 

Finally, the economic impacts of accidents have been estimated based on the average duration 
of an accident and the cost of a worker per day as show below:  

 Economic impacts  
EU facilities 

AAA 
AA 
A 
Substandard facilities not meeting 
Convention's criteria 

Non EU OECD facilities 

AAA 
AA 
A 
Substandard facilities not meeting 
Convention's criteria 

Accident/ 
million 
LDT 

Days/accident 

43,8 
43,8 

21,9 
21,9 

Costs 
(€)/day 

154,3 
154,3 

Costs 
(€)/million 
LDT 

148 242 
148 242 

165,6 
248,4 

21,9 
21,9 

13,3 
13,3 

48 270 
72 405 

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Other facilities 

AAA 
AA 
Upgraded India 
Upgraded Pakistan + Bangladesh 
Substandard India 
Substandard Pakistan + Bangladesh 

Environmental impacts:  

165,6 
819,0 
819,0 
819,0 
1674,2 

21,9 
21,9 
21,9 
21,9 
21,9 

7,5 
6,9 
2,5 
6,9 
2,5 

27 298 
124 228 
44 557 
124 228 
91 087 

The amounts of hazardous and non hazardous waste generated from recycling of EU-ships up 
to  2030  are  calculated  by  multiplying  the  predicted  recycling  amounts  (LDT)  within  the 
different countries with the base data set on different material amounts per LDT within ships. 
The calculations are done by use of the Excel-sheet model where can also be seen the detailed 
results of the analyses. 

The base data set on materials within ships are presented in the Worksheet entitled "Baseline 
Case HSE + Costs". The base data set are split between merchant and navy vessels.  

The base data set for merchant vessels are primarily based on data from the 1999 Norwegian 
study116 supplemented with on oily sludge provided by the DIVEST project in Turkey. Data 
for  navy  vessels  are  based  on  data  from  Clemenceau117  supplemented  with  the  merchant 
vessel data for copper, non-ferrous and heavy metals, TBT and ODS.  

The phasing out of asbestos, PCB, TBT and ozone depleting substances have been taken into 
account in the projections of the generation of hazardous waste. 

The  proportion  of  each  of  the  hazardous  waste  treated  in  an  environmentally  sound  manner 
for  the  facilities  located  in  the  different  dismantling  countries  are  provided  for  in  the 
Worksheet entitled "Baseline Case HSE + Costs".  

Detailed information about the waste management practices in the dismantling countries and 
their  compliance  with  EU  waste  management  requirements  and  with  the  obligation  of  the 
Hong  Kong  Convention  can  be  found  on  pages  47  to  61  of  the  COWI  study  for  DG 
Environment12 as well as on pages 31 to 33 of the World Bank study30.  

Social impacts  

In  the  study  commissioned  by  the  Commission  to  support  this  Impact  Assessment12,  it  was 
noted  that  it  is  very  difficult  to  obtain  quantitative  information  on  the  health  and  safety 
performance,  i.e.  the  number  of  fatal  and  non-fatal  accidents,  at  the  different  recycling 
facilities.  For  almost  all  recycling  facilities  and  nations,  these  data  are  neither  collected  by 
national authorities nor publicly available.  

116 

117 

Norwegian Ministry of the Environment, 1999. Decommissioning of Ships. Environmental Protection 
and  Ship  Demolition  Practices.  Norwegian  Ministry  of  the  Environment  and  Norwegian  Shipowners 
Association. Technical Report. Report No 99-3065 Revision No. 03. 
Notification received by the DG Environment for the transboundary movement of the Clemenceau.  

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Even when data is available a comparison between the different sources having reported some 
data on the number of accidents, fatal and non-fatal has been made. It helped in highlight an 
additional problem linked with the different practices applied in for classifying an incident as 
an accident in Europe and in Asia. 

As highlighted in table 3-9 of this study the calculated accident rates for India are lower than 
the once for Turkey, which are again lower than the rates for EU. This is opposite to what is 
expected based on reports on the general safety culture and recycling practises on the different 
recycling locations. This trend obviously illustrates a mismatch, which is most likely related 
to  different  definitions  and  classifications  of  non-fatal  accidents  between  the  recycling  sites 
where more also smaller accidents and incidents are registered in EU than in India. This will 
lead to an underestimation of the total accidents in India 

In  order  to  not  underestimate  the  number  of  injuries  and  deaths  associated  with  ship 
dismantling  and  in  view  of  the  quality  of  the  available  quantifiable  data  and  the  general 
information  on  the  health  and  safety  status  and  performance  of  the  different  ship  recycling 
locations, the approach retained for the impact assessment was to apply the theoretical health 
and safety benchmarks as described in a study commissioned by EMSA114.  

This  benchmark  is  based  on  EU  accident  statistics  from  the  most  dangerous  occupations 
(agriculture  and  construction)  and  an  assumption  that  the  combination  of  geography  and 
recycling method results in that accident rates increase from EU facilities to afloat facilities in 
China and again to Turkeys landing facilities and finally to beaching facilities in South-East 
Asia. For the impact assessment, it has thus been assumed that the Indian facilities at present 
have a better health and safety performance than the facilities in Bangladesh and Pakistan. 

Using  the  mostly  theoretically  based  accident  data  are  of  course  associated  with  a 
considerable uncertainty in terms of actual numbers, but is however expected acceptable for 
comparison of the relative differences between the scenarios. 

The  ratios  used  are  indicated  in  the  Worksheet  "Accidents"  of  the  Excel  model 
(http://ec.europa.eu/environment/waste/ships/pdf/Appendix_A.xls ).  

The following information are calculated for each scenario: the workload required in the EU 
and outside the EU, the number of protected and unprotected workers, the number of children 
workers. In terms of accidents, the number of fatal and non non-fatal accidents are provided 
both for adult and for children workers.  

Economic impacts  

The  assessment  of  the  economic  impacts  been  carried  out  by  estimating  the  extra  cost  and 
benefit  related  to  the  change  in  the  different  scenarios  as  a  result  of  implementation  of  the 
Hong Kong Convention. The timeframe for the analysis is 2000 to 2030.  

The  analysis  focuses  mostly  on  the  cost  and  benefits  directly  related  to  Europe.  However 
some benefits are also included even if they do not have direct impact on Europe, e.g. CO2-
emissions in Asia. 

Costs are expressed as the cost in the year presented by applying a discount rate of 4% p.a.  

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The calculation is based on calculated unit costs, e.g. per ship, per death, per unit saved CO2 
etc.  Details  on  the  unit  costs  are  described  in  pages  64  to  69  of  the  study  supporting  the 
Impact Assessment12.  

The main costs identified and included in the economic analyses are the following costs for 
ships in operation:  

(1) 

(2) 

(3) 

(4) 

(5) 

Establishing Inventory of Hazardous Materials (IHM)  

Issuing and checking of certificates based on the IHM 

Port state control of certificates for ships calling EU ports 

Flag-state control for EU Member State flags 

Checking of IHM certificates for ships calling European ports. 

Costs for preparing ships for recycling: 

(6) 

(7) 

(8) 

(9) 

Update of the IHM's 

Issuing and checking of the Ready to recycle certificates 

Issuing and checking of ship recycling plans from EU recycling facilities 

Costs (loss of net revenue) for selling a ship for recycling at a facility with a certain 
minimum HSE standard. 

Costs for EU recycling facilities: 

(10) 

Preparation  and  issuing  of  ship  recycling  facility  management  plan  and  emergency 
preparedness and response plans for EU ship recycling facilities 

(11) 

Authorisation of EU ship recycling facilities 

(12) 

Issuing and checking of Statement of completion. 

The benefits identified are the following: 

(1) 

(2) 

(3) 

118 

119 

Reduced emissions of CO2 

Fewer accidents118 at the ship recycling facilities 

Fewer death119 directly related to work activities at recycling facilities 

For accidents the number of days where the worker is not able to work will be calculated as lost earning 
those days, which is a cost to the society. The calculations do not include  medical cost related to the 
accidents etc., as these are not available. The effects of leaving out these costs are however estimated 
insignificant. 
It  is  expected  that  the  extra  requirements  for  the  dismantling  facilities  will  lead  to  a  reduction  in  the 
relative number of fatal accidents at the recycling facilities. These deaths will be valued by using the 
unit  cost  from  the  Impact  Assessment.  There  are  two  main  approaches  to  value  life.  The  Value  of 

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7.1.1.1.  Distribution of cost and benefits 

The analyses undertaken in the study supporting the Impact Assessment12 include estimation 
of the distribution of the costs between the ships owners and the public administration. More 
specifically, the following elements are provided: the cost revenue for EU shipowners when 
selling their ships, the administrative burden for shipowners and for the Member States, the 
benefits resulting from limited number of accidents and deaths. 

The  costs  for  the  ships  owners  are  linked  with  the  administrative  burden  induced  by  the 
requirements of the hong Kong Convention. In order to avoid double-counting, the additional 
direct costs for the recycling facilities have not been included in the analysis. The cost effect 
for the recycling facilities is indeed captured by the lower price paid for the ships when being 
dismantled at a facility that fulfils the higher requirements.  

The  administrative  costs  are  borne  by  the  public  authorities  and  consist  of  the  costs  of 
administrating, validating and checking of inventories and certificates. 

The  external  costs  and  benefits  can,  for  example,  be  in  the  form  of  environmental 
improvements  or  less  use  of  child  labour.  These  costs  and  benefits  will  not  be  valued 
(monetised) in this study. If one were to undertake a valuation of the environmental impacts, 
this would call for a mapping off the affected areas and the related changes that would occur 
as a result of the dismantling process.  

Statistical Life (VSL) method estimates what the willingness to pay for a life is, whereas the Value of 
Life Year (VOLY) method estimates the value of living one year longer. When using VSL the value of 
a  life  is  the  same  in  the  entire  world  whereas  using  VOLY  combined  with  local  information  of  life 
expectancies, one will achieve variation over the world. Here the VSL method is applied. However as 
the majority of accidents occur in the lower income regions in Asia, the VSL value of 980 000 EUR is 
applied  in  the  analyses.  This  corresponds  to  the  median  VSL  value  indicated  in  the  European 
Commission Impact Assessment Guidelines 15 January 2009, SEC(2009) 92.  

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Annex VI: Flags .  

Every  ship  has  to  be  register  under  a  certain  flag.  The  flag  state,  as  defined  by  the  United 
Nations  Convention  on  the  Law  of  the  Sea  (UNCLOS),  has  overall  responsibility  for  the 
implementation  and  enforcement  of  international  maritime  regulations  for  all  ships  granted 
the right to fly its flag. Changing flag allows the shipowners to change the legal regime for the 
ship. 

The  challenge  that  represent  the  possibility  to  change  flag  for  the  effectiveness  of  any 
legislation at national, European and International level covering the dismantling of ships was 
mentioned  by  the  large  majority  of  the  stakeholders  (shipowners,  Member  States, 
environmental NGOs...).  

It  was  therefore  carefully  assessed  in  the  study  undertaken  on  behalf  the  Commission  to 
support this impact assessment12. The impact on the flag state regime is especially important 
when  evaluating  a  regional  regulatory  approach,  e.g.  a  different  regime  at  EU  and 
international  level,  which  could  lead  to  a  reflagging  of  ships,  whereby  ships  would  simply 
change  their  flag  and  exploit  the  available  legal  loopholes  outside  EU  for  instance.  It  is 
equally relevant to address the reflagging issue in which case ratification and transposition of 
the Hong Kong Convention by EU Member States is likely to take place at different pace. EU 
flagged ships could have an incentive to change flag to another EU Member State not (yet) 
Party to the Convention or to non EU flag states. 

The current state of play in terms of reflagging. 

Table 5: Comparison between the percentages of ships EU owned an EU flagged in the active fleet 
and at the time of dismantling (in 2009).  
Percentage (in GT) 

of EU flagged ships 

of  EU  owned 
ships 

EU  owned  – 
EU flagged 

In the active fleet 

37 

the 

time 

At 
dismantling in 2008 
At 
dismantling in 2009 

time 

the 

of 

33,1 

of 

32,6120 

16,7120 

15,1 

8,0120 

20,3 

18 

24,6 

As shown in the table below, the part of ships flying an EU flag was slightly lower at the time 
of dismantling than in the active fleet in 2008 but significantly lower in 2009.  

 At the time of 
dismantling 

2008 

2009 

evolution 
2009/2008 

2008 

2009 

evolution 
2009/2008 

Volume (GT) 

Number of ships 

EU owned 

2 718 956 

7 834 033

288%

139 

349 

251%

120 

See Table 16 in Annex VII 

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EU flagged 

1 269 298 

1 965 361

Total volume  

8 242 348 

24 015 087

155%

291%

70 

197 

549 

1 299 

281%

237%

Looking at the number of ships going for dismantling, the evolution of EU-flagged ships is 
similar  to  the  evolution  of  EU-owned  ships  and  of  the  entirety  of  the  fleet  going  for 
dismantling. Looking at the volumes sent for dismantling, it is however clear that the volume 
of EU flagged ships going for dismantling has increased but largelly less than the volume of 
EU-owned ships or of the global volume of ships worlwide.  

Drivers behind the change of flag.  

The first factor is that changing of flag is a natural part of a ship's life.  

When  a  ship  is  sold  to  foreign  owner  it  is  often  associated  with  a  change  of  flag.  The 
difference  between  the  part  of  the  active  fleet  and  the  part  of  the  fleet  at  the  time  of 
dismantling which is EU-owned is of 4,2 %.  

Moreover the option chosen by the shipowner to sell its ships also has an impact on the flag at 
the time of dismantling. Ships are indeed committed on one of the two terms – "delivered" or 
"as is"121.  

On a delivery basis, a owner typically sails a vessel to the port at which it has been organised 
to  be  dismantled  within  and  the  ship  is  anchored.  Once  the  vessel  changes  hands  from  the 
owner at the recycling yard, it must be deregistered, as is the case with any change in vessel 
ownership.  

Short-term  registration,  on  the  other  hand,  most  commonly  comes  into  play  when  ships  are 
sold on an "as is" basis. In this case, cash buyer, acting as a middle man between owners and 
dismantlers  takes  ownership  of  vessels  at  common  pick  up  points  such  as  Fujairah  and 
Singapore.  They  are  then  required  to  deflag  the  ship  for  one  last  voyage  to  the  major 
dismantling nations121.  

St  Kitts-Nevis,  Kiribati,  Mongolia  and  Tuvalu  are  ones  of  the  handfuls  of  states  that  offer 
single-voyage  registration  to  owners.  Some  of  these  flags  had  been  identified  by  some 
environmental NGOs in their response to the public consultation. While St Kitts-Nevis, one of 
the  signatories  of  the  Hong  Kong  Convention,  openly  advertises  short-term  registration 
ranging  from  one  to  three  months,  Mongolia,  Kiribati  and  Tuvalu  are  less  open  about  their 
offers. The pricing structure of these flags is not openly available121 but, according to experts, 
the  cost  for  a  ship  to  change  flag  is  estimated  at  about  $  10  000  (7190  €)  or  less,  which 
represents a negligible cost for many shipowners122.  

121 

122 

EN 

In Lloyd's List dated 8 December 2009 "Last rites of passage" and "Short-term registration looks set for 
bumper year"  
Mikelis, Nikos, 2009, “Entry into force conditions of the Hong Kong Convention”, Workshop on Ship 
recycling 
[Available  online: 
www.denizcilik.gov.tr/dm/dosyalar/IMO%20Mr%20Mikelis.pdf] 

the  Hong  Kong  Convention,  23-24  October  2009 

and 

88 

   EN 

 
 
                                                 
A study 12 comparing the 25 major flag states in the global fleet and the 25 major flag states at 
the time of dismantling in 200812 and 2009123, has showed an overrepresentation of flags such 
as Tuvalu, St. Kitts-Nevis St. Vincent & Grenadines, Mongolia, Comoros or Cambodia. An 
updated comparison is available in Table 13. 

The flag is also linked with the age of the ship. Certain shipowners choose to change the flag 
of their when they reach a certain age for economic reasons (maintenance cost, surveys and 
other). As shown in Figure 6 in Annex VIII, EU flagged ships are usually younger than the 
global fleet.  

The second main reason to change flag is to evade certain legal obligations that certain flag 
States may fall under. In the case of the Waste Shipment Regulation, two main reasons can be 
identified as explained before: the lack of dismantling capacity in the OECD and the loss in 
net revenue depending on the dismantling practices and locations.  

Table 6: Calculated reflagging in 2009 depending on the main dismantling locations. 
Dismantling country 

EU flagged 

EU owned 

China  

India 

Bangladesh 

Pakistan 

Turkey 

Average for all dismantling locations 

22,0%

32,6%

40,2%

46,2%

52,3%

32,6%

5,8% 

12,1% 

4,1% 

11,0% 

23,6% 

8,0% 

Reflagging124 

4,2%

-0,2%

-15,7%

-14,8%

-8,3%

-4,2%

This table shows that there  are  no  real reflagging in China and India while Bangladesh and 
Pakistan are characterized by a large reflagging.  

As a conclusion, reflagging before dismantling is already a reality. It differs depending on the 
year  considered  and  is  driven  by  several  factors  notably  the  lack  of  sufficient  dismantling 
capacity as well as by the difference of costs between substandard and acceptable dismantling 
facilities. The reflagging rates are different depending on the dismantling countries.  

The expected evolution of reflagging. 

The  extent  of  reflagging  of  ships  to  evade  a  future  EU  legal  dismantling  regime,  or  that  of 
individual Member States having transposed the Hong Kong Convention, will depend on the 
availability of sufficient safe and sound dismantling capacity as well as on the eventual loss in 
net  revenue  from  dismantling  the  ships  in  environmentally  sound  dismantling  facilities  in 
accordance with the Convention requirements compared to traditional substandard facilities. 

Faced with more stringent legislation, shipowners would have three main possibilities:  

123 
124 

See Table 13 in Annex VII.  
Calculated as the difference between the percentages of EU owned and EU flagged ships at the time of 
dismantling  in  the  dismantling  country  compared  to  the  difference  between  the  percentages  of  EU 
owned and EU flagged ships of the active fleet. 

EN 

89 

   EN 

 
 
 
                                                 
• 

• 

• 

Sell  their  ships  to  non-EU  owners  including  to  cash  buyers  is  legal  but  relatively 
costly,  

Continue  to  hide  their  intention  to  send  the  ship  for  dismantling  when  leaving  EU 
ports.  This  option  is  illegal  and  would  be  more  risky  in  the  future  than  it  is  today 
since  the  Hong  Kong  Convention  explicitly  oblige  shipowners  to  inform  their  flag 
state of their intention to dismantle their ships in advance and in writing.  

Change  flag  to  a  flag  which  is  not  a  Party  to  the  Hong  Kong  Convention  and  in 
particular  to  flags  allowing  single-voyage  registration.  This  option  would  be  legal 
and relatively inexpensive as explained before as long as the ship is not going to call 
anymore at European Ports. However, the flags which are overrepresented at the time 
of  dismantling  are  all  targeted  by  Port  State  Controls125.  Changing  a  flag 
"prematurely"  before  going  for  dismantling,  could  lead  to  additional  operational 
costs for the shipowners as their ships would be blocked more frequently in port for 
port state control.  

Even after the entry into force of the Hong Kong Convention, it likely that some reflagging 
will  take  place  as  long  as  some  dismantling  countries  are  not  Party  to  the  Convention  and 
therefore as long as two markets, one compliant with the Convention and one non compliant, 
are  competing  with  each  other.  The  co-existence  of  these  markets  is  likely  to  happen  if  the 
countries  practicing  substandard  dismantling  do  not  make  the  necessary  investments  to  be 
compliant  with  the  Hong  Kong  Convention  (Bangladesh30),  if  they  can  not  remain 
competitive after making these investments (Pakistan30) or if the industry relocates in others 
countries.  

The  possibility  of  relocation  from  the  ship  dismantling  industry  from  Pakistan  and 
Bangladesh has been assessed in the study from the World Bank30. Three options have been 
studied:  the  relocation  to  another  "pollution  haven",  the  relocation  back  to  Europe  or  an 
industrialized  country  and  the  pre-cleaning  in  country  of  ownership.  The  two  latest  options 
were  considered  as  highly  unlikely  for  economic  reasons  (the  lower  revenue  and  higher  costs 
associated  with  dismantling  in  European  and  industrialised  countries  and  the  importance  of 
the additional cost induced by pre-cleaning).  

The  first  option  was  studied  in  more  details  and  is  also  considered  as  unlikely  although  it 
cannot  be  ruled  out.  The  necessary  characteristics  of  a  potential  candidate  country  are  the 
following:  

• 

• 

• 

• 

• 

Strong domestic demand for steel plate and re-bars not readily available from other 
sources, 

A market for equipment and consumables, 

Few,  if  any,  enforced  regulations  on  workers’  health  and  safety  and  environmental 
pollution, 

Wages as low as in Bangladesh or lower, 

Natural  hydrographical  conditions  to  allow  beaching  (or  similar  capital-extensive 
methodology).Few  states  meet  these  requirements,  and  the  need  for  a  considerable 

EN 

90 

   EN 

 
tidal gauge itself is an obstacle for most of Africa or other candidate countries in the 
Bay of Bengal or the South China Sea (such as Myanmar or Cambodia). 

Regarding  the  wages,  the  information  indicates  that  Cambodia,  for  instance,  and  especially 
Myanmar  both  have  lower  wage  rates  than  in  Pakistan,  whereas  Bangladesh  might  still  be 
able  to  compete  on  wages.  Hence,  the  risk  of  relocation  from  a  wage  point  of  view  seems 
more threatening for Pakistan. 

EN 

91 

   EN 

 
Annex VII: Detailed information about ship dismantling 

Evolution of the average age of dismantling from 1998 to 2009. 

Ships  have  a  normal  life  span  of  about  30  to  40  years  after  which  they  are  send  for 
dismantling. The average dismantling age varies over time (it increased slowly from 2000 to 
2008 and decreased since then as show in Figure 2 below) and depending on the type of ships 
and on their size125.  
Figure 2: Average age of dismantling per type of ship 1998 - 2009 126 

On the basis of data on the vessels dismantled during 2008-2009, the average lifetime for all 
ship types have been calculated and are presented in the table below.  

Table 7: Dismantling volumes in 2008 and 2009 by size - number of ships and total volume in GT 

Ship type  

Bulkers 
Containers 
Gas Carriers 
General Cargo 
Navy Ships 

Average lifetime 
(years) 
31,1 
27,3 
30,4 
33,9 
48,2 

125 

126 

BIO  intelligence  service  study  for  DG  Environment:"  Feasibility  of  a  list  of  “green  and  Safe”  ship 
dismantling facilities and of a list of ships likely to go for dismantling" Final report of January 2010 
United Nation Conference on Trade and Development, Review of Maritime Transport 2010 available at 
http://www.unctad.org/en/docs/rmt2010_en.pdf  

EN 

92 

   EN 

 
 
 
 
                                                 
Offshore 
Other Tankers 
Passenger Ships (cruise ships,ferries) 
Ro-Ro Ships 
Service Ships 
Specialised Cargo Ships 
Tankers (oil,chemical) 
Tugs 
(blank) 
Grand total 

35,4 
35,0 
37,9 
32,3 
34,3 
31,4 
28,8 
44,5 
31,7 
31,7 

The  table  shows  that  the  calculated  average  lifetime  for  vessels  scrapped  in  2008  and  2009 
varies  between  27  and  47  years  dependiong  on  the  type  of  ship.  These  lifetimes  are  high 
compared  to  the  historical  lifetimes  estimated  in  previous  studies127  undertaken  for  the 
Commission. This is partly due to the fact that the high freight rates encountered  in 2007 and 
2008 make it attractive for shipowner to keep as many ships as possible in operation including 
the oldest ones.  

In 2009, the average dismantling age of EU flagged ships (30,0 years) was slightly lower than 
the  dismantling  age  of  non-EU  flagged  ships  (30,6  years)128.  In  2010,  the  average  age  of 
dismantling was 31 years129.  

Dismantling in 2008 and 2009:  

Table 8 : Dismantling volumes in 2008 and 2009 by size - number of ships and total volume in GT 
Note: Large ships are ships of 500 GT and above. Small ships are ships of 500 GT and below (ships 
down to 100 GT). 

Total number of ships 

Gross Tonnage 

Dismantling year 
2008 
2009 
Grand total 

Large 
549 
1 155 
1 704 

Small
195
144
339

Total
744
1 299
2 043

Large 
8 191 256 
23 977 722 
32 168 978 

Small 
51 092 
37 365 
88 457 

Total
8 242 348
24 015 087
32 257 435

The Table 8 shows that only few large vessels were scrapped in 2008. This should be seen in 
the  light  of  high  freight  rates  in  2007  and  most  of  2008.  The  dismantling  volume  almost 
increased by 200% in 2009 reflecting the dramatic drop in freight rates following the world 
wide financial crises that began in the end of 2008. 

Table 9: Dismantling volumes in 2008 and 2009 by vessel type - number of ships and total volume in 
GT (for all ships) 

Ship type 
Bulkers 
Containers 

127 

128 
129 

Total number of ships 

Large 
312 
252 

Small
1
0

Gross Tonnage 

Total
313
252

Large
8 179 359
6 669 265

Small 

169 
0 

Total
8 179 528
6 669 265

Ship 

Dismantling 

COWI for the European Commission, DG Transport and Energy, Study on "Oil Tanker Phase Out and 
the 
at: 
Industry", 
http://europa.eu.int/comm/transport/maritime/safety/doc/prestige/2004_06_dismantling_study_en.pdf 
Calculations from DG ENV based on data provided by IHS Fairplay LTD, January 2011. 
Robin  de  Bois,  January  18,  2011,  Information  and  analysis  bulletin  on  ship  demolition  #22  From 
October 
online:  
http://www.robindesbois.org/english/shipbreaking22.pdf ] 

[Available 

December 

published 

2004, 

31th 

16th 

to 

EN 

93 

   EN 

 
 
 
 
 
                                                 
Gas Carriers 
General Cargo 
Navy Ships 
Offshore 
Other Tankers 
Passenger Ships (cruise 
ships,ferries) 
Ro-Ro Ships 
Service Ships 
Specialised Cargo Ships 
Tankers (oil,chemical) 
Tugs 
(blank) 
Grand total 

54 
390 
13 
17 
11 
15 

177 
6 
75 
251 
2 
129 
1 704 

0
41
0
7
2
21

7
10
5
3
38
204
339

54
431
13
24
13
36

184
16
80
254
40
333
2 043

1 142 758
3 125 288

160 327  

1 060 180
59 483
177 459

3 987 886
7 743
614 882
6 700 168
3 284
280 896
32 168 978

0 
14 908 

2 760 
571 
4 322 

1 877 
2 805 
1 766 
851 
7 823 
50 605 
88 457 

1 142 758
3 140 196
160 327
1 062 940
60 054
181 781

3 989 763
10 548
616 648
6 701 019
11 107
331 501
32 257 435

The  table  shows  that  Bulkers,  Tankers  and  Containers  account  for  largest  share  of  the 
dismantling  volumes  of  large  ships.  For  small  ships  the  largest  share  are  for  General  Cargo 
ships and Tugs. 

Table 10: Dismantling volumes in 2009 by dismantling location - number of ships and total volume in 
GT(for all ships) 

Dismantling location 
Bangladesh 
India 
China 
Pakistan 
Turkey 
Other OECD 
Unknown 
EU 
Other 
Grand total 

Total number of ships 

Large 
184 
375 
284 
96 
108 
13 
35 
35 
25 
1 155 

Small
0
1
0
1
4
9
58
61
10
144

Total
184
376
284
97
112
22
93
96
35
1 299

Large
6 471 508
6 922 965
7 474 511
2 155 345
515 509
69 813

Gross Tonnage 
Small 
0 
468 
0 
398 
1 506 
2 480 
188 755 14 847 
121 848 15 146 
2 520 
23 977 722 37 365 

Total
6 471 508
6 923 433
7 474 511
2 155 743
517 015
72 293
203 602
136 994
59 988
24 015 087

57 468

Bangladesh, India,  China  and Pakistan accounted for more  than 95% of the total volume of 
large ships scrapped (GT) in 2009. However, the same countries only accounted of less than 3 
of the total volume of small ships scrapped (GT). EU countries accounted for approximately 
41 of the dismantling of small vessels in 2009. This share is significantly higher than the share 
of EU flagged small vessels (12%). Spain, and Belgium is by far the three largest countries of 
dismantling of small ship in EU and in the world as a whole. 

EN 

94 

   EN 

 
 
 
 
 
 
 
 
 
Evolution of the dismantling locations from 1978 to 2009  

Figure 3: World disposal by dismantling country 1978-2009 130 

Dismantling countries in 2009 depending for EU flagged and non-EU flagged ships: 
Figure 4: Dismantling countries in 2009 depending on the flag (in Gross Tonnage) 23. 

45,0%

40,0%

35,0%

30,0%

25,0%

20,0%

15,0%

10,0%

5,0%

0,0%

China, People's
Republic of

India

Bangladesh

Pakistan

Turkey

Others

Unknown

for non EU flagged ships

for  EU flagged ships

for all ships

130 

The Shipbuilders' Association of Japan, Shipbuilding Statistics, March 2011 

EN 

95 

   EN 

 
 
 
                                                 
The proportion of EU-flagged ships dismantled in India, Pakistan and Turkey is higher than 
the proportion of non-EU flagged ships.  
Figure 5: Dismantling countries in 2009 depending on the ownership (in Gross Tonnage) 23. 

40%

35%

30%

25%

20%

15%

10%

5%

0%

China 

India

Bangladesh

Pakistan

Turkey

Unknown

Others

non EU owned ships

EU owned ships

Total 

The proportion of EU-owned ships dismantled in Bangladesh, Pakistan and Turkey is higher 
than the proportion of non-EU owned ships.  

Table 11:Dismantling locations of large EU flagged and EU owned commercial ships in terms of 
percentage of total recycling (GT131 based) in 2009 23. 

Dismantling location for EU 
flagged or EU controlled ships 
India, Pakistan, Bangladesh 
China  
OECD non EU 
EU 
Other  

Total 

Main dismantling 
method 

Dismantling fraction of 
total  

Beaching 
Afloat 
Landing, afloat  
slipway, docking 

73,91%
21,89%
3,44%
0,71%
0,05%
100,00%

131 

GT stands for gross tons which is the measure of the overall size (internal capacity) of a ship. 

EN 

96 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Table 12: Total volume (GT131 based) of ships dismantled in non-OECD countries per Member State 
in 2009 23. 

Member State 
Malta 
Cyprus 
Greeece 
United Kingdom 
Bulgaria 
Spain 
Italy 
Estonia 

China  
140 729 
86 316 
43 595 
108 629 
23 363 

32 861 

India 
366 360 
238 518 
170 748 

23 363 
37 049 

Pakistan Bangladesh  Others 
171 617 
167 736 
47 292 
52 140 

45 256 

16 166 

0 
677 
0 
0 
0 
1 309 
1 022 
1 305 

Country 
Flag 

Table 13: Comparison of top 25 flag states by dismantling and operation in 2009.  
Percentag
e of world 
total (GT) 
23 

Cumulativ
e 
percentag
e (GT)  

Top flag 
states by 
tonnage132 

Gross 
Tonnage 
(GT) 

Number 
of ships 

Number 
of 
ships132 

Percentag
e of world 
total 
(DWT) 132 

Panama 

Liberia 

Bahamas 

Singapore 

Marshall 
Islands 
Malta 
Tuvalu 

St Kitts & 
Nevis 
Norway 
Hong 
Kong, 
China 
St Vincent 
& The 
Grenadines 
Cyprus 

India 
Sierra 
Leone 
Korea, 
South 

8 452 
753 
2 826 
278 
1 084 
148 
1 020 
227 

995 886 

849 681 
725 200 

700 157 

677 745 
582 472 

364 

35,2%

35,2% Panama 

8 065 

23,0%

94 

36 

21 

30 

38 
18 

39 

24 
22 

11,8%

47,0% Liberia 

2 306 

10,6%

33,5%

4,5%

51,5% Marshall 

1 265 

5,7%

39,3%

4,2%

Islands 

55,7% Hong 
Kong, 
China 

1 371 

5,4%

44,7%

4,1%

59,9% Greece 

1 498 

5,3%

50,0%

3,5%
3,0%

2,9%

2,8%
2,4%

63,4% Bahamas 
66,4% Singapore 

1 446 
2 451 

5,2%
5,1%

55,2%
60,3%

69,3% Malta 

1 532 

4,2%

64,5%

72,2% China 
74,6% Cyprus 

3 916 
1 016 

3,4%
2,6%

67,9%
70,5%

521 503 

39 

2,2%

76,8% Republic of 

3 001 

1,9%

72,4%

Korea 

432 761 

321 412 
317 693 

265 978 

23 

13 
14 

15 

1,8%

78,6% Norway 

601 

1,7%

74,1%

1,3%
1,3%

(NIS) 

79,9% Germany 
81,2% United 

Kingdom 

961 
1 676 

1,5%
1,3%

75,6%
76,9%

1,1%

82,3% Japan 

6 316 

1,3%

78,2%

Cumulati
ve 
percenta
ge 
(DWT) 
132 
23,0%

132 

UNCTAD, review of Review of Maritime Transport 2009. Situation as of the 1 January 2009  

EN 

97 

   EN 

 
 
                                                 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
United 
States Of 
America 
China, 
People's 
Republic 
Of 
Greece 
Unknown 

230 468 
216 820 

Mongolia 

216 246 

Cambodia 

196 710 

United 
Kingdom 
Vanuatu 
Philippines 
Chinese 
Taipei 

191 116 

189 223 
179 638 
163 662 

261 135 

20 

1,1%

83,4% India 

1 460 

1,3%

79,5%

237 600 

16 

1,0%

84,4% Isle of Man 

345 

1,2%

80,7%

17 
20 

12 

43 

13 

5 
7 
5 

1,0%
0,9%

85,4% Italy 
86,3% Denmark 

1 588 
470 

1,2%
1,0%

81,9%
83,0%

(DIS) 

0,9%

87,2% Antigua 

1 195 

1,0%

84,0%

and 
Barbuda 

88,0% United 
States 

6 435 

1,0%

85,0%

88,8% Bermuda 

153 

0,9%

85,9%

89,6% Malaysia 
90,3% Turkey 
91,0% Saint 

1 238 
1 301 
1 009 

0,8%
0,6%
0,6%

86,7%
87,3%
87,9%

0,8%

0,8%

0,8%
0,7%
0,7%

Vincent & 
the 
Grenadines

The states identified in italics in the Table 13 are states which offer single-voyage registration 
to owners.  
Table 14: Labour costs in dismantling countries in 2009136 

Country 

Sector /comments 

Monthly wage 

Yearly wage 

Europe133 

Turkey133 

India134 

Average labour cost 

3.704 euro 

44.449 euro 

Minimum wage 

319 euro 

3.828 euro 

Basic metal, wage 

113 euro 

1.357 euro 

Bangladesh135 

Ship dismantling 

54 euro 

Pakistan135 

Ship dismantling 

66 euro 

648 euro 

792 euro 

China133 

Construction, wage 

180 euro 

2.160 euro 

Impacts of the dismantling of EU flagged ships in 2009.  

133 
134 

135 
136 

EN 

Source: Eurostat, ILO  
Source:  Study  "Ship  dismantling:  a  status  report  on  South  Asia"  published  in  the  context  of  the  EU-
India 
at: 
2001 
http://www.apsfenvironment.in/images/stories/APSF_ship_dismantling_report.pdf 
Source see footnote 30 
Note: it has been considered than there are 24 working days per month  

(environment), 

available 

Support 

Facility 

Action 

Plan 

98 

   EN 

 
 
                                                 
In 2009, almost 200 EU flagged ships have been sent for dismantling representing 8,2% of the 
total  volume  of  ships  sent  for  dismantling.  Detailled  information  about  the  volume  and 
number of ships dismantled by individual Member States are provided for in Table 15.  

Table 15: Proportion of EU flagged ships for ships dismantled in 200923. 

EU flag 

Malta 
Cyprus 
Greece 
United Kingdom 
Bulgaria 
Spain 
Italy 
Portugal 
Latvia 
Slovakia 
France 
Belgium 
Denmark 
Netherlands 
Estonia 
Sweden 
Ireland 
Germany 
Poland 
Total 

Gross 
Tonnage 

849 681
432 761
230 468
191 116
88 968
78 525
43 093
17 873
13 730
4 043
3 958
2 972
2 802
2 495
1 544
650
301
238
143
1 965 361

Number of ships 
38
23
17
13
6
36
6
5
1
1
21
10
8
3
3
3
1
1
1
197

Percentage of the world 
volume (Gross 
Tonnage) 

3,5%
1,8%
1,0%
0,8%
0,4%
0,3%
0,2%
0,1%
0,1%
0,0%
0,0%
0,0%
0,0%
0,0%
0,0%
0,0%
0,0%
0,0%
0,0%
8,2%

In  2009,  EU  owned  ships  represented  32,6  %  of  the  volume  of  ships  (expressed  in  Gross 
Tonnage) dismantled worldwide as shown in Table 16. 

Table 16: Ownership and flag states of ships dismantled in 200923for all ships).  

Ownership 

Flag 

Non EU owned 

EU owned 

 Grand Total 

Non EU flagged 
EU flagged 
Total 

Non EU flagged 
EU flagged 

Total 

Gross Tonnage  Number of ships 
850 
100 
950 

15 672 352
508 702
16 181 054

6 377 374
1 456 659

7 834 033
24 015 087

252 
97 

349 
1 299 

EN 

99 

   EN 

 
 
 
 
 
 
 
Environmental impacts 

Generation of non-hazardous waste: 

Steel 

Copper 

Non-ferrous metals 

Total 

Non hazardous waste (t)

602 672

81

65 154

667 907

Generation  of  hazardous  waste  and  part  treated  according  in  an  environmentally  sound 
manner (ESM):  

Not treated in 
ESM manner 
87,24
0,21
0,97
0,00
11 504,44
17,85
0,22

13,39
11 624

Treated in ESM 
manner 

63,84 
0,09 
4,65 
6 806,11 
21 884,04 
8,05 
0,10 

6,04 
28 772,73 

Total 

151,08
0,30
5,62
6 806,11
33 388,48
25,90
0,32

19,42
40 396,61

Hazardous wastes  

Asbestos (t) 
PCB (kg) 
Heavy metals (kg) 
Oil (t) 
Oil sludges (t) 
Tri butyl tin (t) 
Mercury (kg) 

Ozone Depleting Substances (t) 
Total (t) 

Social impacts:  

Employment: 

Labour (Man years) 
Workers load required 
Work load EU 
Work load outside EU 
of which protected workers 
of which not protected workers 
of which children 

2009
2 867
20
2 846
1 598
1 269
431

617

49
666

Accidents: 

Accidents 
Adult 

Children 
Total 

Economic impacts:  

Non fatal 

Fatal 

Total 

615

48
663

2

1
3

The  requirements  of  the  Hong  Kong  Convention  (inventories,  certifications...)  are  neither 
legally  binding  nor  in  place.  They  do  not  bring  any  cost  for  shipowners  and  the 
administration. Table 17: Revenues generated by the selling of ships for dismantling in 2009  

EN 

100 

   EN 

 
 
 
Dismantling 
country 

Total 
volume 
(LDT) 

Average 
dismantling 
in 2009 
(dollars per 
LDT) 137 

Volume 
of EU 
flagged 
ships 
(LDT)138

Volume 
of non-
EU 
flagged 
ships 
(LDT)138 

Total 
shipowners' 
revenue 
(euros) 

Shipowners' 
revenue for 
EU flagged 
ships 
(euros) 

Shipowners' 
revenue for 
non-EU 
flagged ships 
(euros) 

China 

India 

251  2 831 564  170 101 2 661 463

511 009 561

30 608 264 

480 311 636

273  3 080 131  360 741 2 719 390

604 589 696

70 601 994 

533 780 889

Bangladesh 

299  2 242 527  106 675 2 135 852

482 100 661

22 866 133 

459 167 546

Turkey 

Pakistan 

Others 

Total 

181 

244 849 

53 062

191 787

31 864 437

6 885 311 

24 958 958

271 

858 659 

89 032

769 627

167 308 843

17 297 143 

149 961 032

82 

202 462 

29 741

172 721

11 936 742

1 748 330 

10 183 290

255  9 460 192  809 352 8 650 840 1 734 478 933 147 957 269  1 586 088 256

The fatal and non fatal accidents represented a social cost of 1 978 603 €. 

137 

138 

Source:  N.  Cotzias  Shipping  Group,  S&P  monthly  report  December  2009  except  for  "Others"  for 
which, conservatively, the dismantling price proposed for EU in the COWI study for DG Environment: 
" Support to the impact assessment of a new legislative proposal on ship dismantling" Final report of 
December 2009 
Volume calculated by DG Environment following methodology explained in Annex V 

EN 

101 

   EN 

 
 
                                                 
Annex VIII: Detailed information about the fleet and its evolution. 

Table 18: The world fleet of small vessels not covered by the Hong Kong Convention (500 GT and 
below) by type - number of ships and total volume in GT 

Total Number of Ships

Total Volume (GT) 

All 

EU flagged

All 

EU 
flagged 

Bulkers 

Containers 

Gas Carriers 

General Cargo 

Offshore 

Other Tankers 

Passenger Ships  

Recreational Boats 

Ro-Ro Ships 

Service Ships 

Specialised Cargo Ships 

Tankers (oil,chemical) 

Tugs 

Navy Ships 

Grand Total 

394

17

45

4 739

1 205

145

2 732

1 123

1 458

1 806

1 091

2 465

198

1 586 783

10

0

4

99

23

641

441

191

343

39

145

150 601

2 472 

6 531

17 331

379 429

41 492

0 

1 290 

56 867 

26 750 

6 611 

648 597

150 604 

323 406

111 741 

447 623

421 907

291 966

799 385

60 255 

78 816 

7 660 

47 397 

12 856

1 672

3 018 250

422 204 

68

39

16 103

8 627 

30 144

3 845

8 149 404

981 294 

The  Table  18  shows  EU  flagged  ships  account  of  approximately  13%  of  all  small  vessels  not 
covered by the Hong Kong Convention (measures by GT). The share varies with the ship type. It 
is  highest  for  Navy  ships,  Recreational  Boats  and  Passenger  Ships  and  lowest  for  Containers, 
Bulkers and Specialised Cargo Ships and Tankers (oil, chemical). 

The  table  below  shows  the  world  fleet  of  large  vessels  covered  by  the  Hong  Kong  Convention 
(500 GT and above) by type in terms of the number of ships and total volume in gross tonnage. 

Table 19: The world fleet of large vessels covered by the Hong Kong Convention (500 GT and above) 
by type - number of ships and total volume in GT 

Total Number of Ships 

Total Volume (GT) 

All 

EU flagged 

All 

EU flagged 

Bulkers 

Containers 

Gas Carriers 

General Cargo 

Offshore 

Other Tankers 

EN 

778

954

178

294 470 965 

31 929 263

158 589 939 

39 732 381

49 119 204 

6 034 917

1 245

56 592 532 

5 913 765

511

30

34 637 567 

2 299 465

791 068 

79 449

8 571

4 882

1 524

12 172

4 575

248

102 

   EN 

 
 
 
 
  
  
 
  
  
Passenger Ships (cruise ships,ferries) 

Ro-Ro Ships 

Service Ships 

Specialised Cargo Ships 

Tankers (oil,chemical) 

Tugs 

Navy Ships 

Recreational Boats 

Grand Total 

959

3 890

1 098

2 285

12 742

766

160

438

178

93

17 326 379 

3 481 945

59 706 547 

95 008

1 021

3 595 384 

17 756 592

228

120

1 651

107

34

14 858 202 

298 188 122 

674 967

991 710

766 137 

55 962 046

4 133 251 

629 142 

141 469

414 845

54 310

7 128

993 404 439  165 507 822

The Table 19 shows EU flagged ships account of approximately 17% of all large vessels covered 
by the Hong Kong Convention (measures by GT). The highest is for Ro-Ro Ships, Containers and 
Passenger Ships. The lowest share is for Offshore, Specialised Cargo Ships and Other Tankers. 

Table  20:  Projected  future  volumes  of  dismantling  of  vessels  not  covered  by  the  Hong  Kong 
Convention (500 GT and below) by flag state and year of scrap - number of ships and total volume in 
GT 

Total Number of 
Ships 

Total Volume (GT) 

Year 

All 

EU flagged

All 

2011 
2012 
2013 
2014 
2015 
2016 
2017 
2018 
2019 
2020 
2021 
2022 
2023 
2024 
2025 

Grand Total 

2 011
1 455
1 104
878
720
635
598
585
588
600
620
641
653
658
653
12 399

307
216
158
120
94
80
73
69
67
65
64
63
62
61
61
1 560

514 857
373 967
285 719
229 057
189 562
168 639
159 937
157 069
158 539
162 182
168 274
174 158
177 682
179 225
177 931
3 276 798

EU 
flagged 

69 906 
49 645 
36 891 
28 739 
23 036 
19 927 
18 403 
17 662 
17 377 
17 140 
16 912 
16 724 
16 603 
16 597 
16 841 
382 403 

Average 
year 

per 

827

104

218 453

25 494 

The Table 20 shows that dismantling volumes in 2011 to 2013 are high compared to the average 
volume per year from 2011 to 2025. This reflects the fact that the average age of small vessels is 
high.  More  than  35%  are  31  years  or  older.  This  means  that  there  is  a  large  backlog  of  small 
vessels  for  dismantling  if  the  assumed  expected  lifetimes  holds  true.  The  approach  applied 
consequently project that the old vessels will be dismantled in the first years to come. 

EN 

103 

   EN 

 
 
  
 
However, it should be stressed that if the expected lifetimes do not hold true for the small vessels 
then there might not be a backlog. In this case, the estimated average volume of 220,000 GT (or 
825 ships) per year is a better estimate of the expected volume of dismantling of small vessels. 

The table also shows that the EU share of the future expected dismantling volumes are in line with 
the estimated share of ships flying EU flags. 

The  table  below  shows  the  projected  future  volumes  of  dismantling  of  vessels  covered  by  the 
Hong Kong Convention by year of scrap in terms of number of ships and total volume in GT as 
the total of all ship types. 

Table 21: Projected future volumes of dismantling of vessels covered by the Hong Kong Convention 
(500 GT and above) by flag state and year of scrap - number of ships and total volume in GT 

Total Number of 
Ships 

Total Volume (GT) 

Year 

All 

EU flagged 

All 

EU flagged 

2011 
2012 
2013 
2014 
2015 
2016 
2017 
2018 
2019 
2020 
2021 
2022 
2023 
2024 
2025 

2 432 
1 976 
1 716 
1 510 
1 331 
1 203 
1 131 
1 076 
1 042 
1 036 
1 055 
1 080 
1 098 
1 115 
1 138 

185
147
126
112
100
95
94
97
102
108
115
124
131
139
153

Grand Total 

19 939 

1 828

16 797 322
15 299 574
14 815 968
14 262 342
13 719 386
13 436 167
13 594 890
13 925 593
14 524 801
15 500 369
16 952 215
18 616 769
19 826 292
21 055 142
22 572 195

244 899 
025

1 226 626 
1 120 831 
1 092 456 
1 059 575 
1 025 190 
1 022 313 
1 097 820 
1 215 671 
1 390 370 
1 627 742 
1 954 519 
2 356 147 
2 662 886 
3 020 968 
3 523 800 

25 396 914 

Average 
year 

per 

1 329 

122

16 326 602

1 693 128 

The  Table  21  shows  that  on  average  1325  vessels  accounting  to  16,3  million  GT  will  be 
dismantling  per  year  in  the  period  from  2011  to  2025.  The  EU  flagged  ships  only  account  of 
approximately 10% of the expected average volume  in the period even through they account of 
17%  of  the  world  fleet  of  large  vessels.  This  is  due  to  the  fact  that  the  EU  flagged  vessels  are 
much  younger  than  the  average  vessels.  The  vast  majority  of  EU  flagged  vessels  are  below  15 
years. 

Overall,  the  average  age  of  large  vessels  is  much  lower  than  the  average  age  of  small  vessels  - 
especially the large vessels. Consequently, the backlog volume of large vessels for dismantling is 
not as high as for small vessels.  

The table also shows that the total dismantling volume will increase steadily from 2020 to 2025. 
This reflects the fact more approximately 80% of the vessels (measured in GT) are under 20 years 
old. A large proportion of these vessels are expected to be dismantled 10 to 15 years from today. 

EN 

104 

   EN 

 
  
 
Age profile of the fleet  

Figure  6:  Age  profiles  of  the  world  fleet  and  of  the  fleet  registered  under  EU  flags  (percentages 
expressed in Gross Tonnage)  

70%

60%

50%

40%

30%

20%

10%

0%

0 - 9
YEARS

10 - 14
YEARS

15 - 19
YEARS

20 - 22
YEARS

23 - 25 
YEARS

26 - 28
YEARS

29 - 30
YEARS

31+
YEARS

World fleet

Fleet under EU flag

Figure 7: Age profile of EU flagged ships in 2010 (Gross Tonnage) 23 

60 000 000

50 000 000

40 000 000

30 000 000

20 000 000

10 000 000

0

31+ Years
29 - 30 YEARS
26 - 28 YEARS
23 - 25  YEARS
20 - 22 YEARS
15 - 19 YEARS
10 - 14 YEARS
0 - 9 YEARS

Bulkers

Containers

Gas Carriers

General Cargo

Offshore
Other Tankers

Ro-Ro Ships
Recreational Boats
Specialised Cargo Ships
Service Ships
Tankers (oil,chemical)
Passenger Ships (cruise ships,ferries)

Navy Ships
Tugs

EN 

105 

   EN 

 
 
Evolution of the world fleet: comparison between the number of new ships delivered 
and the number of number of ships dismantled from 2004 to 2009. 

Figure 8: Increasing capacity of the world fleet 2004-2009 (in GT)139.  

4 000

3 500

3 000

2 500

2 000

1 500

1 000

500

0

New ships 
and ship 
dismantled 

2004

2005

2006

2007

2008

2009

ship dismantled

new ships

world fleet

104 000

102 000

100 000

98 000

96 000

94 000

92 000

90 000

88 000

86 000

84 000

82 000

Wolrd fleet

139 

Sources: The Shipbuilders' Association of Japan, Shipbuilding Statistics, March 2011 and IHS Fairplay.  

EN 

106 

   EN 

 
 
 
                                                 
Annex IX: Options rejected after a first screening.  

Options already rejected in the previous impact assessment: 

Some  options  proposed  by  stakeholders  had  already  been  discarded  in  the  impact  assessment 
supporting  the  EU  Strategy  on  better  ship  dismantling  for  their  lack  of  effectiveness.  They  have 
therefore not been further assessed in this impact assessment:  

•  Complementing  the  Waste  Shipment  Regulation  by  introducing  a  stricter  pre-

cleaning obligation for EU-flagged ships, 

•  Complementing the Waste Shipment Regulation by introducing a ban on beaching 

for EU-flagged ships, 

•  Option for a purely voluntary approach.  

Options rejected after a first screening of the options:  

Extending  the  provisions  of  the  Hong  Kong  Convention  to small  ships  in  the  short 
term. 

The majority of stakeholders agree that extending the scope to ships of less than 500 GT is 
unlikely  to  have  a  noticeable  effect  on  the  recycling  habits  of  the  EU’s  smallest  vessels  as 
these are already recycled under acceptable conditions in Europe. If the scope is extended to 
such ships, this is seen as a mid-term measure.  

Such vessels are mostly pilotage ships and offshore supply vessels. Additional requirements 
would disadvantage them in terms of international competition or would be an incentive for 
them to register under non EU-flags. The potential impact of such an extension would most 
likely  fall  on  fishing  vessels  and  smaller  coastal  vessels.  It  would  lead  to  additional 
administrative  costs  for  owners  of  smaller  fishing  vessels  without  clear  environmental  gain. 
Should the scope be extended, a lower limit would need to be set for vessels such as yachts, 
pleasure crafts and canoes. Another proposed solution is to develop a less stringent system for 
these ships e.g. one that does not include a certification system. 

The dismantling of these small ships is not considered as creating significant negative impacts 
on human health and on the environment since they are dismantled within the EU. Imposing 
additional requirements on them would on the other hand create negative economic impacts 
and administrative burden. This option has therefore been rejected after a first pre-screening.  

Ensuring sustainable funding.  

The  Communication  proposing  an  EU  strategy  on  ship  dismantling,  proposed  to  assess  the 
feasibility of establishing a "ship dismantling fund". Setting up a mandatory fund was seen as 
a  possible  option  to  be  put  in  place  in  the  future,  if  the  implementation  of  the  Hong  Kong 
Convention and the reactions by market participants do not deliver the desired results. 

At international level, the option of setting up a fund at international level was discussed but 
not further pursued during the negotiations of the Hong Kong Convention.  

The International Maritime Organization established instead in May 2006 a multi-donor trust 
fund, the International Ship Recycling Trust (ISRT) Fund as a dedicated source of financial 

EN 

107 

   EN 

 
 
support  for  technical  co-operation  activities  on  ship  recycling  and,  in  particular,  for 
encouraging developing nations towards safe and environmentally sound management of ship 
recycling.  

It was envisaged that the resources of the ISRT Fund will be used for the development and 
implementation of technical co-operation activities directly related to the enhancement of safe 
and environmentally sound ship recycling capacity in developing countries, thereby providing 
a financial mechanism to support national initiatives with respect to legal, administrative and 
operational matters aimed at strengthening their capacity for safe and environmentally sound 
ship recycling. 

A study was undertaken on behalf of the Commission to assess the feasibility of setting up a 
mandatory EU ship dismantling fund which could further on be turned into global fund.  

Three  scenarios  were  assessed:  an  up  front  environmental  charge  for  new  built  vessels,  a 
recurrent tax on shipping and a revolving fund based on recurrent charges on ships calling at 
EU  ports.  The  latest  was  supported  as  the  preferred  option  and  the  study  provided  further 
information  about  the  funding  requirements  and  charge  per  call  at  EU  ports.  Calculations 
were  conducted  regarding  the  funding  requirements  (115  million  €),  the  size  of  the  charge 
which  would  heave  to  be  paid  by  shipowners  when  calling  at  EU  ports  (0.03  /GT)  which 
would represent between 7 and 10 % of the port fees.  

A  majority  of  stakeholders  (ship  owners,  Member  States,  some  NGOs)  expressed  their 
scepticisms with regard to the general idea of an EU fund either because they emphasized the 
need  for  global  action  for  a  global  problem  or  because  they  consider  that  this  would  go 
against  the  "polluter-pays"  principle.  The  idea  of  setting  up  an  EU  fund  was,  in  particular, 
strongly opposed by shipowners. Others NGOs believed that a fund combined with mandatory 
regulations,  would  provide  ship  breakers  and  ship  breaking  countries  worldwide  with  real 
incentive to invest in best practice facilities.  

This  feasibility  study  was  not  intended  to  provide  a  fully  developed  proposal  for  a  ship 
dismantling fund and information is lacking notably regarding the administrative burden that 
it would entail. The currently available information is not sufficient regarding the economic, 
social and environmental impacts of setting up a mandatory fund at EU level to allow for a 
complete assessment of these impacts. The option has therefore not been further considered in 
this impact assessment.  

EN 

108 

   EN 

 
Annex X: Estimate of impacts if the EU legislation is not modified and the Hong Kong 
Convention does not enter into force before 2030. 

General consideration. 

The  assessment  is  based  on  the  volumes  of  EU  flagged  ships  subject  to  the  Hong  Kong 
Convention  (above  500  GT).  Under  this  scenario,  the  current  legislation  at  European  and 
international level would remain unchanged.  

Taking  no  additional  action  at  EU  level  would  mean  that, until  the  Hong  Kong  Convention 
enters  into  force  and  transposed  by  Member  States,  the  current  trends  in  ship  dismantling 
would continue unabated.  

Since  the  Waste  Shipment  Regulation  would  continue  to  be  applicable,  end  of  life  ships 
would continue to be required to be dismantled in the OECD while the recycling capacity will 
remain insufficient in this geographic area. As explained in the impact assessment, this is one 
of  the  drivers  for  the  non-compliance  with  the  current  legislation.  The  ship  dismantling 
locations would remain the same as of today and only very limited is foreseen to take place in 
the sub-standards facilities located in South Asia which would not be encouraged to reach the 
Hong  Kong  Convention's  levels  in  terms  of  protection  of  the  human  health  and  of  the 
environment. 

Some Member States and some recycling countries would ratify the Hong Kong Convention 
but  the  entry  into  force  provisions  of  the  Hong  Kong  Convention  would  not  be  met  before 
2030.  

Dismantling locations and volumes (million LDT) 

2015 

2020 

2025 

2030 

EU facilities 

AAA
AA
A
Substandard facilities not meeting Convention's 
criteria

Non EU OECD facilities  

AAA
AA
A
Substandard facilities not meeting Convention's 
criteria

Other facilities  

AAA
AA
Upgraded India
Upgraded Pakistan + Bangladesh
Substandard India
Substandard Pakistan + Bangladesh

0,0009 
0,0129 
0 

0,0010 
0,0147 
0 

0,0009 
0,0133 
0 

0,0011 
0,0163 
0 

0 

0 

0 

0 

0 
0 
0,0737 

0 
0 
0,0838 

0 
0 
0,0760 

0 
0 
0,0929 

0 

1 

2 

3 

0 
0,3244 
0,0000 
0,0000 
0 
1 

0 
0,3688 
0,0000 
0,0000 
1 
1 

0 
0,3347 
0,0000 
0,0000 
0 
1 

0 
0,4091 
0,0000 
0,0000 
1 
1 

Environmental impacts:  

EN 

109 

   EN 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
The  environmental  concerns  of  non-environmentally  sound  ship  dismantling  are  primarily 
related to the harmful substances in the ships and the lack of containment of these during the 
dismantling processes, storage and transport, which allows the toxic compounds to enter the 
environment. 

Generation of non hazardous waste:  

Below is shown the amount of materials generated from dismantling of EU-ships in the period 
2015  -  2030.  The  amounts  are  calculated  by  multiplying  the  predicted  dismantling  amounts 
(LDT) within the different countries with the base data set on different material amounts per 
LDT within ships. The calculations and the detailed results of the analyses can be found in the 
study supporting the Impact Assessment12.  

The following table presents the amounts of non-hazardous waste generated from recycling of 
EU flagged ships for the period 2015-2030. 

Table 22: Amounts of non hazardous waste generated from recycling of merchant EU-ships 

Non-hazardous waste (tons) 

Steel
Copper
Non-ferrous metals

2015 
1 080 400 
146 
116 800 

2020 
1 228 400 
166 
132 800 

2025 
1 114 792 
151 
120 518 

2030 
1 362 728 
184 
147 322 

Generation of hazardous waste:  

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 850/2004140, 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  782/2003141  and  for  the  production  and  use  of  ozone-depleting 
substances  through  Regulation  (EC)  No  2037/2000142.  Similarly,  prohibitions  with  certain 
exemptions  exist  in  the  EU  for  perfluorooctane  sulfonates  (PFOS)  as  from  June  2008  by 
virtue  of  Directive  2006/122/EC143  and  for  trichlorobenzene  (TCB)  since  June  2007  on 
account of Directive 2005/59/EC. 

Treatment of hazardous-waste:  

The following table presents the amounts of hazardous waste generated from recycling of EU 
flagged  ships  for  the  period  2015-2030.  The  total  amount  is  split  between  the  amounts 
managed according to and not according to environmental sound procedures. 

140 

141 

142 

143 

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.  

EN 

110 

   EN 

 
                                                 
The table below presents the amount of hazardous materials generated as a result of dismantling 
of EU-ships.  

Hazardous 
waste 

Asbestos 

Units 
t not according to ESM 
t according to ESM 

2015 
175,11 
97,42 

2020 
199,10 
110,76 

2025 
135,52 
75,39 

PCB 

kg not according to ESM 
kg according to ESM 

Heavy metals  

t not according to ESM 
t according to ESM 

0,27 
0,11 

1,82 
8,32 

0,24 
0,10 

2,07 
9,46 

0,16 
0,06 

1,88 
8,58 

2030 
110,44 
61,44 

0,12 
0,05 

2,30 
10,49 

Oil 

Oil sludges 

Tri butyl tin 

Mercury 

Ozone Depleting 
Substances 

t not according to ESM 
t according to ESM 

0,00 
12 277,61 

0,00 
13 959,48 

0,00 
12 668,44 

0,00 
15 485,97 

t not according to ESM 
t according to ESM 

21 620,17 
38 609,63 

24 581,84 
43 898,62 

22 308,40 
39 838,67 

27 269,91 
48 699,01 

t not according to ESM 
t according to ESM 

kg not according to ESM 
kg according to ESM 

18,45 
7,25 

0,42 
0,16 

15,25 
5,99 

0,48 
0,19 

t not according to ESM 
t according to ESM 

22,64 
8,90 

17,16 
6,74 

8,65 
3,40 

0,43 
0,17 

7,79 
3,06 

4,23 
1,66 

0,53 
0,21 

0,00 
0,00 

Total 

not according to ESM 
according to ESM 

21 838,20 
51 009,13 

24 815,43 
57 991,06 

22 462,23 
52 597,55 

27 386,87 
64 258,58 

The continuation of substandard practices of waste management will result in the pollution of 
water,  soil  and  habitats  in  South  Asia  which  would  at  least  remain  unchanged  and  increase 
during peaks of ship scrapping (follow up of shipping crisis and phasing out of single-hull oil 
tankers around 2015).  

The accumulation of hazardous substances in the environment would lead to a further loss of 
biodiversity  and  to  negative  impacts  for  other  economic  sectors  such  as  fisheries,  fish  and 
shrimp farms as well as hatcheries. The costs for the restoration/decontamination of the soil 
which would be required in Bangladesh or Pakistan to allow for any change of the land use 
and to prevent the loss of the pollutants in the event of sea level rise would also increase.  

The  likeliness  of  natural  disasters  might  increase  due  to  the  further  destruction  of  coastal 
mangrove forests in Bangladesh.  

Atmospheric emissions 

The  dismantling  of  EU  flagged  ships  will  lead  to  atmospheric  emissions  of  CO2  and  other 
pollutants. These emissions will result from both the actual dismantling process, e.g. energy 
consumption  for  transportation,  crane  operation  etc.  and  from  the  following  energy 

EN 

111 

   EN 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
consumption  for  reprocessing  the  metals  generated  from  the  dismantling  process.  The 
emissions related to the reprocessing of the metals are the most significant.  

The following table shows the calculated CO2-emissions from recycling of the steel generated 
from dismantling of the EU-flagged vessels. As all steel generated from the ship dismantling 
industry is reused the recycling of metals from the ships replaces the need for production of 
new  steel  from  virgin  ore  material,  which  is  associated  with  considerably  higher  CO2-
emissions.  The  "savings"  in  CO2-emissions  from  generation  of  steel  from  scrap  steel 
compared to from virgin material are also presented in the table. As no detailed information 
on emissions from steel generation within the different countries are available, the calculation 
of emissions are instead based on average emissions factors of CO2 from primary (ore based) 
and secondary (scrap based) production of steel144. 

Table  23:  CO2-emissions  from  recycling  of  steel  generated  from  EU-flagged  ships  including  the 
"savings" in CO2-emissions stemming from use of scrap instead of metal ore for generation of steel 
Reduced use of virgin material 
(tons CO2) 

2 015 
1 105 249 

2 020 
1 256 653 

2 025 
1 140 432 

2 030 
1 394 070 

Direct emissions 
Savings from use of scrap metal 
compared to virgin material 

688 215 

782 491 

710 122 

868 057 

CO2-emissions from transportation of ships to the dismantling facility - the final journey of a 
vessel  to  the  dismantling  facility,  e.g.  from  EU  to  a  ship  dismantling  facility  in  South-East 
Asia - are not accounted for here, as they are deemed negligible because the final journey is 
most often relatively short. For example, the ship owner of a cargo ship will often succeed in 
arranging a last transport of cargo from near his ships present location to a destination close to 
the  dismantling  The  above  figures  of  the  direct  emissions  show  the  emission  of  CO2  as  a 
result of generation of new steel from the steel scrap from the vessels. Recycling of the steel 
from the ships is replacing an amount of metal ore for generation of an equivalent amount of 
the  steel.  Steel  generation  from  metal  ore  is  more  energy  consuming  than  scrap  based  steel 
generation wherefore the recycling of steel results in "savings" of CO2-emissions as indicated 
in the lower row of the table.  

Social impacts:  

EU ship recycling activities 

Employment in the EU recycling sector would remain at the current low level. 

Third countries:  

The high safety hazards and accident rates for workers in South Asian shipbreaking facilities 
would  remain  unchanged  and  increase  in  peak  times,  as  more  inexperienced  labourers  are 
then  employed.  Apart  if  the  Supreme  Court  judgement  is  effectively  implemented,  child 
labour would continue in Bangladesh, with sometimes fatal consequences.  

144 

Data  from  the  Danish  Building  Research  Institute'  PC  tool  (BEAT)  for  performing  environmental 
assessment of products, building elements and buildings 

EN 

112 

   EN 

 
 
                                                 
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)145.  There  is  however  some 
indication that asbestos might continue to be used on board146. 

The  estimated  workload  (man-years)  of  adults  involved  in  dismantling  of  EU-flagged  ships 
including annual numbers of fatalities and non-fatal accidents amongst these is shown in the 
following table for each fifth year in the period 2015 - 2030. 

Table  24:  Workload  (man-years)  of  adults  involved  in  dismantling  of  EU-flagged  ships  including 
numbers of fatalities and incident amongst these 

Labour (Man years) 

Workers load required

Work load EU
Work load outside EU

of which protected workers
of which not protected workers
of which children

2015 
5329 

10 
5318 

2944 
2385 
811 

2020 
6058 

11 
6047 

3347 
2711 
922 

2025 
5498 

10 
5488 

3038 
2460 
837 

2030 
6721 

13 
6708 

3713 
3008 
1023 

Additional  social  impacts  of  the  baseline  scenario  are  the  existence  of  child  labour  in  the 
South-East  Asian  dismantling  facilities.  The  number  of  children  (man-years)  involved  in 
dismantling of the EU-flagged ships are calculated and presented in the table below together 
with estimated numbers of accidents and deaths amongst these147.  

Table  25  :  Children  (man-years)  involved  in  dismantling  of  EU-flagged  ships  including  numbers  of 
fatalities and incident amongst these 
Accidents (number of persons) 

2015 

2025 

2020 

2030 

Adults fatal accidents
Adults - non-fatal accidents
Children - fatal accidents
Children - non-fatal accidents

4 
1345 
1 
148 

5 
1529 
1 
168 

4 
1388 
1 
153 

5 
1697 
1 
187 

Finally  some  studies  and  reports  are  also  addressing  the  poor  working  conditions  of  the 
workers  at  the  ship  dismantling  facilities  and  reports  high  instances  of  sexual  transmitted 
diseases AIDS amongst the labourers.  

145 

146 
147 

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. 
See the article "Netherlands warns IMO of asbestos in newbuildings" in Lloyd's List of 20/07/2010. 
Assuming similar incident rates for children and adults 

EN 

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Economic impacts:  

EU ship recycling activities 

The  competitive  disadvantages  of  EU  recycling  facilities  are  certain  to  continue,  with  the 
large cost and price disparity to Asian facilities allowing them to occupy only niches in the 
market.  

The  revenues  of  EU  shipowners  for  the  sale  of  scrap  ships  would  continue  to  be  high, 
depending on developments on the freight and steel markets.  

Revenues - ship owner (€) 

Total (+/-) 

2015 
376 906 056 

2020 
521 380 813 

2025 
575 672 781 

2030 
856 165 415 

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  Hong  Kong  Convention's  requirements  on  certificates  and  inventories  of 
hazardous materials.  

Administrative  burden  for  EU  Member  States  will  continue  to  be  limited  as  the  existing 
legislation will continue to be largely circumvented.  

The  supply  of  steel  scrap  and  used  ship  equipment  for  the  South  Asian  economies  of  third 
countries,  the  revenues  of  shipbreaking  yard  owners  and  the  job  opportunities  for  workers 
would stay at the current level or increase in peak times. The social costs associated with fatal 
and non fatal injuries of workers will remain important.  

Social costs (€) 

Total 

2015 

2020 

2025 

2030 

6 101 348

8 440 102

9 318 979 

13 859 588

Local  fishing  and  agriculture  would  continue  to  lose  in  quality  and  quantity,  especially  in 
Bangladesh. 

EN 

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Annex XI: Estimate of impacts for option A (baseline option).  

General consideration. 

The  assessment  is  based  on  the  volumes  of  EU  flagged  ships  subject  to  the  Hong  Kong 
Convention  (above  500  GT).  Under  this  scenario,  the  current  legislation  at  European  and 
would remain unchanged.  

The EU Member States are expected to ratify the Hong Kong Convention which is expected 
to  enter  into  force  in  2020.  All  recycling  countries  where  there  are  currently  substandard 
facilities are expected to have upgraded them so as to be able to reach the minimum quality 
criteria (A level) of this Convention.  

The  Hong  Kong  Convention  contains  separate  deadlines  for  compliance  with  the  various 
requirements  -  for  instance  5  years  after  entry  into  force  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 2025. 

Taking  no  additional  action  at  EU  level  would  mean  that, until  the  Hong  Kong  Convention 
enters  into  force  and  transposed  by  Member  States,  the  current  trends  in  ship  dismantling 
would continue unabated.  

Since  the  Waste  Shipment  Regulation  would  continue  to  be  applicable,  end  of  life  ships 
would continue to be required to be dismantled in the OECD while the recycling capacity will 
remain insufficient in this geographic area. Continuing circumvention of the Waste Shipment 
Regulation is therefore expected.  

The dismantling locations and volumes are indicated in the table below.  

Dismantling locations and volumes (million LDT) 

EU facilities 

AAA
AA
A
Substandard facilities not meeting Convention's criteria

0,0009  
0,0129  
0 
0 

0,0010  
0,0147  
0 
0 

0,0009  
0,0133  
0 
0 

0,0011  
0,0163  
0 
0 

2015 

2020 

2025 

2030 

Non EU OECD facilities  

AAA
AA
A
Substandard facilities not meeting Convention's criteria

Other facilities  

AAA
AA
Upgraded India
Upgraded Pakistan + Bangladesh
Substandard India
Substandard Pakistan + Bangladesh

0 
0 
0,07  
0 

0 
0,32  
-  
0 
0,44  
0,61  

0 
0 
0,08  

0 
0,37  
0,50  
0,69  
-  
-  

0 
0 
0,08  

0 
0,33  
0,45  
0,63  
-  
-  

0 
0 
0,09  

0 
0,41  
0,56  
0,77  
-  
-  

In  the  short  term  (2015),  all  the  impacts  will  be  similar  than  in  the  scenario  presented  in 
Annex X.  

EN 

115 

   EN 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
In the medium and long term, the impacts will be the following:  

Environmental impacts:  

The main environmental concerns of the current ship dismantling are primarily related to the 
harmful substances in the ships and the lack of containment of these during the dismantling 
processes, storage and transport, which allows the toxic compounds to enter the environment. 

Generation of non-hazardous waste:  

The  generation  of  non-hazardous  waste  will  not  be  affected  by  the  entry  into  force  of  the 
Hong Kong Convention. It can be found in Table 22. 

Generation  of  hazardous  waste  (prohibition  to  use  certain  hazardous  material  on  board 
ships):  

The  Hong  Kong  Convention's  prohibition  to  use  certain  hazardous  material  on  board  ships 
will be the first to be applicable. It is however expected to have limited impacts in the time 
frame  considered.  The  Hong  Kong  Convention  prohibits  the  use  of  certain  hazardous 
materials  (asbestos,  ozone-depleting  substances,  PCBs  and  organotin  compounds)  on  ships 
directly after its entry into force. 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). 

This  prohibition  will  indeed  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 Hong 
Kong  Convention.  The  number  of  such  countries  is  not  likely  to  be  very  high.  For  ozone-
depleting  substances  the  Hong  Kong  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  only  minor 
substantial improvements for the environment during the operating life of ships.  

The obligation to carry an Inventory of Hazardous Materials (IHM) would in parallel become 
applicable for new ships which are 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. 

Treatment of hazardous waste (requirements for ship recycling facilities):  

The Hong Kong Convention148 contains in its Annex a broad set of requirements for ships and 
ship recycling facilities. The leading principle is that ships flying the flag of one Party to the 
Convention can only be recycled in facilities located in another Party to the Convention.  

The  Convention  requires  ship  dismantling  facilities  to  be  authorised.  This  mandatory 
authorisation  is  to  be  given  after  inspection  by  the  Party  or  a  responsible  organisation  to 
facilities managed in compliance with the national implementation of the Convention and its 
Guidelines.  

148 

A detailed presentation of the structure of the Hong Kong Convention is provided for in Annex IV. 

EN 

116 

   EN 

 
                                                 
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 possibilities for the facilities, the shipowners and other stakeholders to assess and follow 
the performance of the ship dismantling facilities are prepared for in the Convention, which 
states that a facility must have: "A system for (regular) monitoring of the performance of the 
ship  recycling  operations".  The  issue  of  monitoring  of  the  facilities  is  addressed  in  the 
guidelines  supporting  the  Hong  Kong  Convention  dealing  specifically  with  the  Recycling 
Facility Management Plan. This plan has to be prepared by the dismantling facility to specify 
the manner in which each ship will be recycled, depending on its particulars and its inventory.  

The  new  elements  of  the  Convention  for  operators,  including  the  Recycling  Facility 
Management  Plan,  could  improve  compliance  of an  operator  with  environmental  and  safety 
rules,  as  it  is  supposed  to  be  ship  specific  and  be  based  on  details  on  the  specific  hazards 
related to dismantling of that ship, e.g. IHM data as incorporated in the Ship Recycling Plan.  

Impacts on EU facilities 

The  requirement  for  ship  dismantling  facilities  to  obtain  a  permit  from  the  competent 
authority is already covered under national legislation in EU 27 transposing EU legislation. A 
recycling facility management plan does not however exist as a legal obligation under existing 
national or EU law. 

As  strict  requirements  for  water  protection  and  waste  management  are  already  in  place  for 
dismantling  facilities  in  EU  27,  transposition  of  the  specific  Convention  requirement  would 
not substantially alter the environmental conditions for these facilities in the EU.  

The only new element of the Convention for EU operators is the requirement of a Recycling 
Facility  Management  Plan,  insofar  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. 

Impacts on third countries:  

The Convention's requirements for ship recycling facilities will become applicable when the 
Convention will enter into force.  

The  ship  recycling  facilities  located  in  Turkey  and  Chine  are  already  managed  in  a  manner 
which is considered as meeting the requirements of the Hong Kong Convention.  

In  South  Asia,  since  the  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 
guidelines supporting the Hong Kong Convention149. 

In the case of India, the Convention apparently has some anticipatory effects on account of a 
Supreme  Court  decision  of  September  2007  which  obliged  shipbreaking  facilities  to  meet 
certain  environmental  and  safety  requirements  modelled  on  the  draft  Convention.  India's 

149 

The complete list of the guidelines can be found in Annex IV. 

EN 

117 

   EN 

 
                                                 
government is of the opinion that the industry in Alang complies today already with 90% of 
the Convention requirements150.  

India has already improved the management of its facilities and is expected to be able to meet 
the  Convention's  requirements  by  2015  if  necessary.  Operators  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.  In 
addition,  it  should  be  ensured  that  the  capacity  of  the  only  existing  landfill  for  hazardous 
waste is extended.  

Pakistan  and  Bangladesh  will  have  to  invest  and  develop  infrastructure  (in  particular  to 
manage  the  hazardous  waste)  and  are  not  expected  to  meet  the  requirements  of  the 
Convention before 2020.  

The  study  from  the  World  Bank  about  ship  dismantling  in  Pakistan  and  Bangladesh30,  lists 
and  quantify  the  actions  and  investments151  needed  in  order  to  ensure  compliance  with  the 
Hong Kong Convention within 10 years. These investments would cover the costs of setting 
up of hazardous waste treatment facilities, waste reception facilities in ports, access roads and 
infrastructure,  of  developing  laboratory  facilities  for  environmental  monitoring,  technical 
training  programmes  for  occupational  safety  and  health,  health  care,  management  of 
hazardous  waste,  investment  in  on-site  equipment  (weighbridge,  impermeable  surfaces, 
drainage, hazardous waste storage).  

The  higher  range  of  the  total  investments  costs  have  been  evaluated  at  53.5  millions  $  in 
Bangladesh, and 43 millions in Pakistan. The World Bank had estimated the price per LDT 
based  on  the  respective  volumes  dismantled  by  the  two  countries.  But  in  2010,  Pakistan 
recycled 81% of the volume of ships dismantled in Bangladesh. The investments needs will 
be  higher  in  Bangladesh  but  the  country  is  expected  to  recycle  more  ships  than  Pakistan. 
Taking  these  elements  into  account,  the  average  costs  of  the  measures  necessary  to  achieve 
compliance has been estimated at 10 $ (7 €) per LDT for both countries.  

The  same  study  showed  that  facilities  located  in  Bangladesh  are  curently  making  a  profit 
estimated  at  62  $  (44,6  €)  per  LDT  while  in  Paki stan,  the  profit  is  only  of  11  $  (7,9  €)  per 
LDT.  The  facilities  located  in  Bangladesh  could  therefore  easily  make  the  necessary 
improvements  to  be  able  to  meet  the  Hong  Kong  Convention's  within  10  years  while  this 
might be slightly more difficult to remain competitive for Pakistan.  

Actions  to  help  these  countries  have  already  been  undertaken  with  the  organisation  by  the 
Secreteriat of the Basel Convention of a Ship Recycling Technology & Knowledge Transfer 
Workshop in Turkey for Pakistanis authorities and recyclers. More than 5 millions dollars of 
bilateral aid will be provided to Bangladesh in order to improve the current situation.  

Impacts in terms of environmentally sound management of the hazardous waste generated by 
EU flagged ships:  

150 

151 

EN 

Gujarat  Maritime  Board,  presentation  to  IMO  National  Workshop  on  the  IMO  Ship  Recycling 
Convention, Mumbai, 8-10 January 2008. 

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The  table  below  presents  the  amount  of  hazardous  materials  generated  as  a  result  of 
dismantling of EU-ships. The total amount of materials is split between the amounts managed 
in environmentally sound manner (ESM) or those which are not.  

Table 26: Amounts of hazardous waste generated from dismantling of EU-flagged ships split between 
amounts managed in environmentally sound manner (ESM) or those which are not. 
Hazardous 
waste 

2030 

2025 

Asbestos 

Units 
t not according to ESM 
t according to ESM 

2015 
175,11  
97,42  

2020 
108,45  
201,42  

PCB  kg not according to ESM  0,27  
0,11  
kg according to ESM 

Heavy metals  

t not according to ESM 
t according to ESM 

1,82  
8,32  

0,16  
0,18  

2,07  
9,46  

73,81  
137,09  

60,15  
111,72  

0,10  
0,12  

1,88  
8,58  

0,08  
0,09  

2,30  
10,49  

Oil 

t not according to ESM 
t according to ESM 

-  
12 277,61  

-  
13 959,48  

-  
12 668,44  

-  
15 485,97  

Oil sludges 

t not according to ESM 
t according to ESM 

21 620,17  
38 609,63  

13 274,19  
55 206,27  

12 046,53  
50 100,54  

14 725,75  
61 243,17  

Tri butyl tin 

t not according to ESM 
t according to ESM 

18,45  
7,25  

Mercury  kg not according to ESM  0,42  
0,16  

kg according to ESM 

15,25  
5,99  

0,23  
0,43  

8,65  
3,40  

0,21  
0,39  

4,23  
1,66  

0,26  
0,48  

Ozone 
Depleting 
Substances 

t not according to ESM 
t according to ESM 

22,64  
8,90  

11,69  
12,21  

5,30  
5,54  

-  
-  

Total 

not according to ESM 
according to ESM 

21 838,20  
51 009,13  

13 411,66  
69 394,83  

12 136,18  
62 923,59  

14 792,43  
76 853,02  

Atmospheric emissions: 

End of life ships going for dismantling are expected to continue to load goods for their final 
voyage before going for dismantling. The atmospheric emissions would therefore mainly be 
linked with recycling of steel and therefore be similar to the baseline scenario (see Table 23).  

Social impacts:  

Impacts in the EU 

In  principle,  no  impacts  of  the  Hong  Kong  Convention  is  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. 

EN 

119 

   EN 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
  
  
  
 
The new surveys and certificates would have a limited job effect particularly for classification 
societies.  In  order  to  deal  with  the  approximately  54,000  ships  of  the  world  fleet  (of  which 
about 7,000 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. 

Impacts in third countries:  

For  the  same  reasons  as  for  the  EU  installations,  limited  positive  impacts  are  expected  in 
facilities in other OECD countries (including Turkey) and China. 

In  the  other  Asian  ship  dismantling  countries,  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 
facilities favour implementation deficits.  

Structures of organised crime which are reported to exist 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.  

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 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 shipowners and flag states 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.  

For  the  baseline  scenario  the  estimated  workload  (man-years)  of  adults  involved  in 
dismantling  of  EU-flagged  ships  including  annual  numbers  of  fatalities  and  non-fatal 
accidents amongst these is shown in the following table for each fifth year in the period 2015 
- 2030.  

Table  27:  Workload  (man-years)  of  adults  involved  in  dismantling  of  EU-flagged  ships  including 
numbers of fatalities and incident amongst these 
Labour (Man years) 

2015 
5329 

2020 
6058 

2025 
5498 

2030 
6721 

Workers load required 

Work load EU 
Work load outside EU 

of which protected workers 
of which not protected workers 

10 
5318 

2944 
2385 

11 
6047 

6058 
0 

10 
5488 

5498 
0 

13 
6708 

6721 
0 

EN 

120 

   EN 

 
 
 
 
 
 
 
 
 
 
 
of which children 

811 

0 

0 

0 

Additional  social  impacts  of  the  baseline  scenario  are  the  existence  of  child  labour  in  the 
South-East  Asian  dismantling  facilities.  The  number  of  children  (man-years)  involved  in 
dismantling of the EU-flagged ships are calculated and presented in the table below together 
with estimated numbers of accidents and deaths amongst these152. The entry into force of the 
Hong  Kong  Convention  will  imply  that  all  workers  are  protected  and  that  child  labour  is 
effectively  prohibited  thereby  diminishing  the  number  of  accidents  for  adult  workers  and 
stopping them for children workers.  

In  Bangladesh,  the  Supreme  Court  has  required  improvements  in  the  industry  including  the 
prohibition  for  child  labour.  This  judgment  is  unfortunately  not  available  in  writing  and  it 
remains to be seen how far it will be implemented in practice.  

Table  28  :  Children  (man-years)  involved  in  dismantling  of  EU-flagged  ships  including  numbers  of 
fatalities and incident amongst these 
Accidents (number of persons) 

2015 
4 
1345 
1 
148 

2020 
2 
1106 
0 
0 

2025 
2 
1004 
0 
0 

2030 
3 
1227 
0 
0 

Adults fatal accidents 
Adults - non-fatal accidents 
Children - fatal accidents 
Children - non-fatal accidents 

Economic impacts:  

EU ship recycling facilities 

The competitive disadvantages of EU recycling facilities in relation to facilities 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  facilities  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. Administration costs to Member States in relation to Convention requirements for EU 
recycling facilities are very limited and are left out of the analyses. 

Administrative burden for EU Member States  

The competent authorities of the flag states will need to conduct surveys on board ships and to 
issue certificates. All these administrative costs are reflected in the table below.  

EU shipowners  

Shipowners  would  be  required  to  develop,  maintain  and  renew  Inventories  of  Hazardous 
Materials  during  the  life  span  of  their  ships  as  well  as  prior  to  dismantling.  They  will  also 

152 

Assuming similar incident rates for children and adults 

EN 

121 

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have  to  undertake  surveys  in  order  to  receive  the  necessary  certifications  from  their  flag 
states. Detailed information about these costs is provided in the table below.  

In  order  to  meet  the  Hong  Kong  Convention,  sub-standard  ship  dismantling  facilities  will 
have  to invest  in infrastructures, protective  equipments, trainings.  This translates  into  a loss 
for  the  ship  owner,  which  is  realised  when  he  sells  the  ship  for  dismantling,  as  the  price 
obtained  will  be  correspondingly  lower  to  cover  up  for  the  increased  costs.  In  general  only 
costs  for  upgrade  of  existing  South-Asian  facilities  from  a  non-compliant  to  a  compliant 
Convention facility level are included in the analyses (including increased waste management 
costs).  

Considering  a  life  span  of  30  years,  a  visible  impact  on  transport  and  consumer  prices  is 
unlikely. 

The  total  costs  related  to  the  establishment  and  the  update  of  the  inventory  of  hazardous 
materials  (including  the  update  prior  to  dismantling)  as  well  as  the  costs  for  obtaining  the 
necessary certificates from the flag state administration would indeed be of 14 200 € for new 
ships and of 18 000 € for existing ships.  

Considering a ship of 9 220 LDT (the average LDT of large EU flagged dismantled in 2009), 
this would represent respectively 1,54 and 1,96 € pe r LDT. Considering also that the costs for 
improving  recycling  facilities  in  order  to  comply  with  the  Hong  Kong  Convention  will  be 
passed over the ship owners, the total costs for shipowners would respectively be of 11,54 and 
11,96  €  per  LDT.  In  June  2011,  the  average  dismantling  prices  offered  by  ship  recycling 
facilities was comprised between 450(China) and 525 (Bangladesh) €/LDT. 

EN 

122 

   EN 

 
Costs 

Preparing 
the 
Inventory of hazardous materials  

renewing 

and 

Who is 
affected 

Shipowner 

• 

the 

International 
Obtaining 
Certificate  on  the  Inventory  of 
Hazardous Materials  

Shipowner 

Administrative costs in relation to 
the  checking  of  the  existence  and 
the  correctness  of  the  certificates 
as part of flag state control.  

Shipowner 

• 

• 

• 

• 

• 

Administrative costs in relation to 
the  checking  of  the  existence  and 
the  correctness  of  the  certificates 
as part of flag state control.  

EU  Member 
States  

• 

Unit cost1 

For  merchant  ships:  1.830  euro 
for  new  ships,  9.505  euro  for 
existing ships and 318 euro each 
five years for renewal 

For  navy  ships  21.133  euro  per 
ship 

2.956 € for new-ship and 2.519 € 
for existing ship  

Recertification  each  five  years: 
1.680 €/ship  

Cost  for  having  the  certificates 
checked.  

First  five  years  271.024  €/year 
and  later  542.073  €/year  (total 
for Europe)153 

for 

checking 

Cost 
the 
certificates.  271.024€/year  (total 
for Europe) 

inventory  of 
the 
Update  of 
hazardous  materials  just  before 
dismantling (ship owners) 

Shipowner 

769 € per ship 

Ready  to  recycle  certificate  (ship 
owners) 

Shipowner 

• 

• 

First five years 3.360 €/ship 153 

Later 6.719 €/ship  

Dismantling 
more 
environmentally  sound  and  safe 
recycling facilities 

in 

Shipowner 

Income from selling to an: 

• 

• 

• 

existing  beaching 
in 
India,  Bangladesh  or  Pakistan: 
218 €/LDT  

facility 

upgraded  beaching  facility 
India: 212 €/LDT  

in 

upgraded  beaching  facility 

in 

153 

Costs  increase  after  five  years  as  existing  ships  must  then  also  certify  for  the  materials  in  Table 
B/Appendix II 

EN 

123 

   EN 

 
                                                 
Bangladesh  or  Pakistan:  211 
€/LDT  

landing  facility  in  Turkey:  184 
€/LDT  

berthing  facility  in  China:  170 
€/LDT  

EU  slipway/dock  facility:  82 
€/LDT 

€/ship  calling  European 

32,5 
ports in administration 

• 

• 

• 

• 

Administrative costs related to the 
checking  of  the  existence  and  the 
correctness of the inventories. 

EU Member 
States 

Taking  into  account  the  costs  indicated  in  the  table  below,  the  costs  related  to  the 
implementation  of  the  Hong  Kong  Convention  requirements  for  the  period  2020-2030  have 
been  estimated.  The  costs  that  fall  on  the  ships  owners  and  those  which  fall  on  the  public 
authorities have been distinguished.  

Table 29 presents the total cost for the ships owners in the base line scenario with entry into 
force by 2020. As it can be seen, the ships owners would begin experiencing increasing costs 
as from 2020 where the requirements become binding. Also, the revenues are affected as they 
decline as a result of lower prices paid for ships to be dismantled. 

Table 29: Cost and revenues for the ship owners in € 
 Costs and revenues for 
ship owners (€) 
Costs 

2015 

2020 

2025 

2030 

Inventories new ships 
Inventories existing ships 
Certificates 
Ready 
certificate 

for 

recycling 

checking 

Costs 
certificates 

for 

Revenues 

0 
0 
0 

0 

0 

465 195 
0 
751 430 

513 636 
106 690 059 
52 095 411 

763 902 
2 220 031 
11 728 464 

1 009 243 

2 020 865 

3 005 517 

417 229 

1 015 293 

1 235 259 

Selling ships for recycling 

Total (+/-) 

376 906 056 
376 906 056 

510 178 469 
507 535 372 

563 303 925 
400 968 662 

837 769 918 
818 816 746 

In  Table  30  the  administrative  costs  for  the  public  authorities  are  shown.  The  table  clearly 
illustrates  that  these  administrative  costs  increase  substantially  once  the  requirements  also 
come to cover existing ships. 

Table 30: Administrative cost for Member states authorities in € 
Administrative costs - 
Member States ( ) 
Additional  controls 
Ports 

2015

the 

in 

2020

0
0
0

19 112
417 229
436 341

2025 

2030

906 816 
507 623 
1 414 439 

1 300 974
617 601
1 918 575

Certificates 
Total 

EN 

124 

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Non-action by the EU is, in addition, expected create additional administrative and legal costs 
for industry due to the diverging national legislation and implementation by Member States. 
Especially delays and different timelines in the introduction of the Inventories of Hazardous 
Materials might lead to incoherent control standards and an uneven playing field for shipping 
companies and facilitiesin different parts of the EU. This could results in unsound competition 
amongst  Member  States  in  favour  of  the  flags  of  Member  States  which  would  not  have 
ratified the Hong Kong Convention.  

Third countries:  

As explained above, significant investments will be necessary in Pakistan and Bangladesh in 
order to meet the Hong Kong Convention's requirements.  

Less accidents (both fatal and non fatal) are expected in the dismantling facilities due to the 
improvement of the working practices. This will result in decreasing social costs.  

Table 31 : Social costs in € - accidents and deaths 

Social costs (€) 
Total 

2015 
6 101 348

2020 

2025 

2030 

3 788 139

4 182 602 

6 220 546

Other impacts 

The  Hong  Kong  Convention  potentially  raises  problems  of  capacity.  If  54,000  larger  ships 
worldwide have to be surveyed and certified within a few years, a shortage of qualified staff 
in classification societies is probable. 

EN 

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Annex XII: Option B. 

General considerations (and assumptions)  

The  assessment  is  based  on  the  volumes  of  EU  flagged  ships  subject  to  the  Hong  Kong 
Convention (above 500 GT).  

Under this scenario, some requirements of the Hong Kong Convention would be transposed in 
2013  in  the  current  Waste  Shipment  Regulation  as  well  an  invitation  for  the  EU  Member 
States to ratify the Hong Kong Convention by 2020.  

All recycling countries where  there  are currently substandard facilities are expected to have 
upgraded  them  so  as  to  be  able  to  reach  the  minimum  quality  criteria  (A  level)  of  the 
Convention by 2020. 

Since  the  Waste  Shipment  Regulation  will  continue  to  constitute  the  core  of  the  control 
mechanism covering end-of-life ships, the prohibition to dismantle EU flagged ships outside 
the OECD would be maintained.  

As explained in the Impact Assessment, the dismantling capacity within this geographic zone 
would  not  be  sufficient  to  treat  all  EU-flagged  ships.  In  this  therefore  foreseeable  that  even 
responsible shipowners would continue to send their ships for dismantling outside the OECD. 

The assessment of the quantitative impacts of this scenario is based on the assumption that the 
Waste  Shipment  Regulation  complemented  by  key  requirements  of  the  Hong  Kong 
Convention  would  continue  to  be  largely  circumvented.  The  dismantling  locations  would 
therefore be the following.  

Dismantling locations and volumes (million LDT) 

2015 

2020 

2025 

2030 

EU facilities 

AAA 0,000869 0,000988  0,000896  0,001096
AA 0,012933 0,014704  0,013344  0,016312

A
Substandard facilities not meeting Convention's 
criteria

Non EU OECD facilities  

AAA
AA
A
Substandard facilities not meeting Convention's 
criteria

Other facilities  

AAA

0 

0 

0 
0 

0 

0 

0 
0 

0 

0 

0 
0 

0 

0 

0 
0 

0,07367  0,083762  0,076015  0,092921

0 

0 

1 

0 

2 

0 

3 

0 

Upgraded India
Upgraded Pakistan + Bangladesh
Substandard India

0 
0 
0,44023 
Substandard Pakistan + Bangladesh 0,607936

AA 0,324361 0,368794  0,334686  0,409122
0,500535  0,454243  0,55527 
0,691215  0,627288  0,766801
0 
0 

0 
0 

0 
0 

EN 

126 

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Impacts  

Taking  into  account  the  continued  circumvention  of  the  legislation  driven  by  the  lack  of 
legally  available  dismantling  capacity,  the  environmental  and  social  impacts  of  this  option 
will be similar to the baseline scenario (option A) as well as the social costs.  

An  early  implementation  of  the  key  elements  of  the  Hong  Kong  Convention  at  EU  level 
would  create  additional  costs  for  ship  owners  as  it  obliges  them  to  pay  for  surveys  and 
certificates  some  years  in  advance.  Early  movers  might,  however,  benefit  from  avoiding 
bottlenecks  of  survey  and  certification  capacity  and  being  able  to  use  certificates  as  a 
marketing argument.  

Costs  and  revenues  -  ship 
owner (€) 

Costs (€) 

Inventories new ships 
Inventories existing ships 
Certificates 
Ready for recycling certificate 

Costs for checking certificates 

Revenues 

Selling ships for recycling 

Total (+/-) 

2015 

2020 

2025 

2030 

336289,4814 
0 
543208,583 

465 195 
74 951 663 
36 597 952 

513 636 
1 547 425 
8 175 073 

763 902 
2 220 031 
11 728 464 

729581,3727 

1 830 276 

2 020 865 

3 005 517 

342 932 

834 496 

1 015 293 

1 235 259 

376 906 056 
374 954 045 

510 178 469 
395 498 886 

563 303 925 
550 031 634 

837 769 918 
818 816 746 

Similarly  to  shipowners,  EU  Member  States  would  have  to  face  additional  administrative 
costs in advance.  

Administrative costs - 
Member States ( ) 
Additional controls in the Ports 

Certificates 

Total 

2015

2020

2025 

2030

13 498
342 932
356 430

637 054
417 229
1 054 283

906 816 
507 623 
1 414 439 

1 300 974
617 601
1 918 575

Additional risk of non-compliance and reflagging. 

The  Hong  Kong  Convention  introduces  an  obligation  for  shipowners  to  inform  their  flag 
states  in  writing  of  their  intention  to  discard  their  ships.  With  this  written  proof  of  the 
intention  to  discard  ships,  EU  Member  States  will  have,  according  to  the  Waste  Shipment 
Regulation,  to  ensure  that  these  ships  have  to  be  dismantled  within  the  OECD.  Otherwise, 
there might be a clear risk to be faced by numerous infringement procedures to be launched 
by the Commission.  

Shipowners  as  well  as  EU  Member  States  (as  flagged  states)  considered  that  the  proposal 
from  the  Commission  to  include  elements  of  two  different  control  systems  for  ships  (one 
coming from the Hong Kong Convention and one from the Basel Convention) would be very 
confusing  and  administratively  burdensome.  It  would  not  send  a  strong  political  message 
toward EU's commitment to support the entry into force of the Hong Kong Convention. The 

EN 

127 

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ability of the EU to convince other countries to ratify the Hong Kong Convention would be 
strongly reduced.  

The most probable scenario is therefore that EU shipowners would change flag in order to be 
allowed to dismantle their ships outside the EU. This would in turn have an impact of the EU 
Member States' importance for the fulfilment of the entry into force requirements of the Hong 
Kong Convention and might therefore postpone or deter its entry into force.  

Should EU shipowners decide to massively change their flags to non-EU flags, it is expected 
that the amount hazardous waste not treated in an environmentally sound manner (ESM) will 
increase. As shown in Figure 4, the proportion of non-EU flagged ships going to substandard 
facilities  located  in  Pakistan  and  Bangladesh  is  indeed  higher  than  the  proportion  of  EU 
flagged ships.  

EN 

128 

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Annex XIII: Option C 

General considerations and assumptions:  

The  assessment  is  based  on  the  volumes  of  EU  flagged  ships  subject  to  the  Hong  Kong 
Convention (above 500 GT).  

Under  this  scenario,  ships  which  are  covered  by  the  Hong  Kong  Convention  would  be 
excluded  from  the  scope  of  the  Waste  Shipment  Regulation.  The  transposition  of  the  Hong 
Kong Convention will be left entirely to European Member States.  

Since  they  will  not  be  subject  to  the  requirements  of  the  Waste  Shipment  Regulation,  ships 
will be able to be legally dismantled worldwide prior to the entry into force of the Hong Kong 
Convention.  For  this  reason,  it  is  assumed  that  50  %  of  the  volume  of  ships  currently 
dismantled  in  the  EU,  in  Turkey  and  in  China  will  be  dismantled  in  India,  China  and 
Bangladesh prior to the entry into force of the Convention.  

Since substandard facilities will receive legally more EU flagged ships, they are expected to 
delay their investments in order to upgrade their facilities. All recycling countries where there 
are  currently  substandard  facilities  are  expected  to  have  upgraded  them  so  as  to  be  able  to 
reach the minimum quality criteria (A level) of the Convention by 2025 only. 

In  order  to  remain  competitive  and  avoid  reflagging  to  other  flags  (both  EU  and  non  EU 
ones), it is expected that the rate of ratification will be notably different amongst EU Member 
States.  

The Hong Kong Convention would in this scenario not enter into force before 2025. 

The dismantling locations and volumes of EU flagged ships are therefore expected to be the 
following.  

Dismantling locations and volumes 
(million LDT) 
EU facilities 

AAA
AA
A
Substandard facilities not meeting 
Convention's criteria

Non EU OECD facilities  

AAA
AA
A
Substandard facilities not meeting 
Convention's criteria

Other facilities  

2015 

2020 

2025 

2030 

0,00043435 
0,00646634 
0 

0,00049385  0,000896353  0,001095707
0,00735214  0,013344359  0,016312218
0 

0 

0 

0 

0 

0 

0 

0 
0 
0,03683507 

0 
0 

0 
0 
0,04188097  0,076015242  0,092921448

0 
0 

0 

1 

2 

3 

AAA
AA
Upgraded India
Upgraded Pakistan + Bangladesh

0 
0,16218045 
0 
0 

0 

0 
0,18439695  0,334686106  0,40912213 
0,454243368  0,555269582
0,627288461  0,766800852

0 
0 

0 

Substandard India 0,526714732 0,598867435

0 

0 

EN 

129 

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Substandard Pakistan + Bangladesh 0,727367963

0,82700741 

0 

0 

Environmental impacts:  

Generation of waste and waste management: 

The generation of non hazardous will be the same as for option A and can be found in Table 22.  

The amount of hazardous waste generated are similar than in option A but less hazardous waste 
will  be  managed  in  an  environmentally  sound  manner.  The  situation  will  be  particularly 
problematic  before  2025  since  nothing  would  prevent  the  ships  of  EU  Member  States  which 
would not have ratified nor implemented the Hong Kong Convention to dismantle their ships in 
substandard facilities.  

Hazardous waste 

Asbestos 

Units 
t not according to ESM 
t according to ESM 

2015 
209,52 
63,02 

2020 
238,22 
71,65 

2025 
73,81 
137,09 

2030 
60,15 
111,72 

PCB 

kg not according to ESM 
kg according to ESM 

Heavy metals 

t not according to ESM 
t according to ESM 

Oil 

t not according to ESM 

0,33 
0,05 

2,18 
7,96 

0,00 

0,29 
0,05 

2,48 
9,05 

0,00 

0,10 
0,12 

1,88 
8,58 

0,00 

t according to ESM 

12 277,62 

13 959,48 

12 668,44 

Oil sludges 

t not according to ESM 

25 867,55 

29 411,05 

12 046,53 

t according to ESM 

34 362,28 

39 069,44 

50 100,54 

Tri butyl tin 

t not according to ESM 
t according to ESM 

Mercury 

kg not according to ESM 
kg according to ESM 

Ozone Depleting 
Substances 

t not according to ESM 
t according to ESM 

22,07 
3,62 

0,50 
0,08 

27,09 
4,45 

18,25 
3,00 

0,57 
0,09 

20,53 
3,37 

8,65 
3,40 

0,21 
0,39 

5,30 
5,54 

not according to ESM 

26 128,40 

29 690,52 

12 136,18 

Total 

according to ESM 

46 718,94 

53 115,99 

62 923,59 

Atmospheric emissions 

0,08 
0,09 

2,30 
10,49 

0,00 
15 
485,97 

14 
725,75 
61 
243,17 

4,23 
1,66 

0,26 
0,48 

0,00 
0,00 

14 
792,43 
76 
853,02 

The atmospheric emissions will be the same as the ones in option A and can be found in Table 
23.  

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   EN 

 
  
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Social impacts:  

This option will have negative impacts on the number of employment opportunities in the EU 
in  the  period  2012-2025.  The  number  of  jobs  will  increase  globally  as  ship  dismantling  is 
expected to take place in labour intensive countries.  

Labour (Man years) 

Workers load required 

Work load EU 
Work load outside EU 

of which protected workers 
of which not protected 
workers 
of which children 

2015 
5986 

5 
5981 

3133 

2853 
970 

2020 
6806 

6 
6800 

3562 

3244 
1103 

2025 
5498 

10 
5488 

2030 
6721 

13 
6708 

5498 

6721 

0 
0 

0 
0 

However the working conditions in these countries will also lead to an increased number of 
both fatal and non-fatal accidents will be particularly negative prior to the entry into force of 
the Hong Kong Convention. 

Accidents (number of 
persons) 

Adults fatal accidents 
Adults - non-fatal 
accidents 
Children - fatal accidents 
Children - non-fatal 
accidents 

2015 

5 

1530 
1 

177 

2020 

5 

1739 
1 

201 

2025 

2 

1004 
0 

0 

2030 

3 

1227 
0 

0 

Economic impacts:  

This  option  would  be  particularly  beneficial  for  EU  shipowners  prior  to  2025  since  they 
would be able to sell their ships to the substandard facilities which offer the best prices as they 
do not protect the environment and the human health.  

Shipowners  and  Member  States  will  be  faced  with  increasing  costs  when  the  Hong  Kong 
Convention will enter into force in 2025.  

Costs  and  revenues  -  ship 
owner (€) 

Costs (€) 
Inventories new ships 
Inventories existing ships 
Certificates 
Ready for recycling certificate 

Costs for checking certificates 

Revenues 
Selling ships for recycling 

2015 

2020 

2025 

2030 

0 
0 
0 

0 

0 

0 
0 
0 

0 

0 

513 636 
0 
829 677 

763 902 
153 064 130 
74 739 286 

1 114 336 

3 005 517 

507 623 

1 235 259 

389 446 323 

538 727 985 

563 303 925 

837 769 918 

EN 

131 

   EN 

 
  
  
  
  
  
  
  
  
  
  
 
 
  
  
  
  
  
  
  
  
Total (+/-) 

389 446 323 

538 727 985 

560 338 652 

604 961 824 

Administrative costs - 
Member States (€
Additional controls in the Ports 

 ) 

Certificates 

Total 

2015

2020

2025 

2030

0
0
0

0
0
0

27 204 
507 623 
534 827 

1 300 974
617 601
1 918 575

Since  fatal  and  non-fatal  accidents  will  be  important  prior  to  2015,  this  option  will  have 
particularly high social costs.  

Social costs (€) 
Total 

2015 

7 071 139

2020 
9 781 632

2025 
4 182 602 

2030 
6 220 546

EN 

132 

   EN 

 
 
 
 
Annex XIV: Option D 

Assumptions:  

The  assessment  is  based  on  the  volumes  of  EU  flagged  ships  subject  to  the  Hong  Kong 
Convention (above 500 GT).  

Under  this  scenario,  ships  which  are  covered  by  the  Hong  Kong  Convention  would  be 
excluded from the scope of the Waste Shipment Regulation. These ships will be covered by a 
specific Regulation (Ship Recycling Regulation) transposing the Hong Kong Convention. 

The  Hong  Kong  Convention  is  expected  to  enter  into  force  in  2020.  Indian  facilities  are 
expected to be able to be upgraded so as to meet the Convention's standards by 2015 while 
installations  in  Pakistan  and  Bangladesh  would  not  be  able  to  do  so  before  2020.  The 
maximum volume of EU flagged ships to be dismantled in the period 2012-2030 will be of 
1,88  million  LDT.  The  Chinese  facilities  alone  treated  2,83  millions  LDT  in  2009.  The 
recycling  capacity  available  in  the  EU,  Turkey,  China  and  upgrade  Indian  facilities  will  be 
largely sufficient to treat all EU flagged ships.  

The  Hong  Kong  Convention  requires  that  waste  resulting  from  the  recycling  of  a  ship  be 
transferred only to waste facilities authorised to deal with its treatment and disposal in a safe 
and environmentally sound manner and requires that waste management and disposal sites are 
identified for this purpose. Like the Basel Convention, the Hong Kong Convention does not 
establish any system of control for such waste in the recycling state once it leaves the Ship 
Recycling Facility.  

Similarly  to  what  has  been  done  with  the  Waste  Shipment  Regulation,  the  Ship  Recycling 
Regulation will complement the requirements of the Hong Kong Convention so as to ensure 
that  all  the  waste  produced  in  the  ship  recycling  facilities  are  treated  in  an  environmentally 
sound manner not only in the dismantling facility but also in other facilities which can be used 
for  further  processing  or  disposing  the  waste.  Specific  criteria  have  been  developed  in  this 
respect in on study undertaken by the Commission125.  

The dismantling volumes and locations are the following ones:  

Dismantling locations and volumes (million LDT) 

2015 

2020 

2025 

2030 

EU facilities 

AAA
AA
A
Substandard facilities not meeting Convention's 
criteria

Non EU OECD facilities  

AAA
AA
A
Substandard facilities not meeting Convention's 
criteria

Other facilities  

AAA

133 

0,0009 
0,0129 
0 

0,0010 
0,0147 
0 

0,0009 
0,0133 
0 

0,0011 
0,0163 
0 

0 

0 

0 

0 

0 
0 
0,0737 

0 
0 
0,0838 

0 
0 
0,0760 

0 
0 
0,0929 

0 

0 

1 

0 

2 

0 

3 

0 

   EN 

EN 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
AA
Upgraded India
Upgraded Pakistan + Bangladesh
Substandard India
Substandard Pakistan + Bangladesh

0,3244 
1,0482 
0,0000 
0 
0 

0,3688 
0,5005 
0,6912 
0 
0 

0,3347 
0,4542 
0,6273 
0 
0 

0,4091 
0,5553 
0,7668 
0 
0 

Overall,  it  is  expected  that  there  would  be  positive  environmental,  social  and  economic 
impacts  of  implementing  the  Hong  Kong  Convention into  EU legislation. In  particular with 
respect to the baseline option, the following positive impacts are to be expected: 

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

ports and facilities,  

•  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 Hong Kong Convention into EU law are dealt below.  

An EU Ship Recycling Regulation that transposes the Hong Kong Convention 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 annulled.  

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  2008/98/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  Regulation  to  implement  the  Hong  Kong 
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; 

EN 

134 

   EN 

 
  
  
  
  
  
 
•  Reporting  requirements  for  shipowners  and  recycling  facilities  which  would  replace  the 
existing  requirements  of  the  EC  Waste  Shipment  Regulation  for  notification  and  prior 
informed consent. 

As  requested  by  the  Impact  Assessment  Board  when  assessing  the  Impact  Assessment 
supporting  the  EU  strategy  on  better  ship  dismantling,  a  detailed  comparison  of  the  legal 
provisions  of  the  Hong  Kong  Convention  and  of  the  existing  EU  legislation  has  been 
undertaken in one specific study154. This study identified the gaps on inconsistencies between 
the existing EU legislation and the Convention and proposed draft legal provisions to address 
them. Regarding ships, the Ship Recycling Convention would, in particular, need to: 

- adjust some definitions and introduce new definitions, 

- introduce into EU legislation requirements linked with the establishment, maintenance and 
survey  of  the  inventory  of  hazardous  materials  as  well  as  with  the  obligation  to  obtain 
certificates,  

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  Hong  Kong  Convention  (see  above  in 
Annex XI).  

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 as well as the drivers for reflagging between Member States. It 
would  also  increase  the  effectiveness  of  EU  controls  in  ports  and  facilities  which  in  turn 
benefits  health  and  safety  of  seafarers  and  workers.  This  effect  could  be  strengthened  by 
incorporating references to the guidelines supporting the Hong Kong Convention into the set 
of binding rules. 

Requirements for ship recycling facilities 

The  Convention  requirements  for  ship  recycling  facilities  have  been  outlined  (see  above  in 
Annex  XI).  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  2008/98/EC  on  waste.  A  recycling  facility  management  plan  does  not  exist  as  a 
legal obligation under EU 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  Ship  Recycling  Regulation 
would  therefore  not  introduce  new  elements  -  apart  from  the  management  plan  -  but  rather 
clarify  the  legal  situation,  further  specify  the  requirements  applicable  to  ship  dismantling 
facilities (a Regulation contains more precise requirements that a Directive).  

154 

Milieu/COWI  for  DG  Environment  "  Study  in  relation  to  options  for  new  initiatives  regarding 
dismantling  of  ships  "  Final  report  of  October  2009:  published  on  the  Commission  website  at 
http://ec.europa.eu/environment/waste/ships/index.htm  

EN 

135 

   EN 

 
                                                 
EU  rules  on  the  Recycling  Facility  Management  Plan  would  cause  no  additional 
administrative  costs  in  relation  to  the  baseline  scenario  but  could  reduce  such  costs  by 
preventing different standards in Member States. 

Information duties of recycling states 

The Hong Kong Convention requires flag states to report annually the list of ships which have 
received  an  International  Ready  for  Recycling  Certificate  and  the  location  of  the  Ship 
Recycling Facility.  

It requires 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  the  implementation  the  EU 
legislation 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).  However  in  the  short  term,  since  the  recycling  facilities  would  not  yet  be  legally 
required  to  report  about  their  authorized  facilities,  EU  Member  States  would  have  to  verify 
that the expected dismantling  facility will be able to reach the levels of protection provided 
for by the Hong Kong Convention when conducting the final survey prior to dismantling.  

In addition, recycling facilities will be required under the 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. 

Environmental impacts:  

Generation of waste and waste management: 

The generation of non hazardous waste for option D is similar to the generation for option A 
and can be found in Table 22.  

The  same  amount  of  hazardous  waste  is  generated  than  in  the  baseline  scenario  (Option  A) 
but more hazardous waste will be managed in an environmentally sound manner. 

Hazardous 
waste 

Asbestos 

Units 
t not according to ESM 
t according to ESM 

2015 
24,46 
248,08 

2020 
108,45 
201,42 

2025 
73,81 
137,09 

2030 
60,15 
111,72 

EN 

136 

   EN 

 
PCB 

kg not according to ESM 
kg according to ESM 

Heavy metals  

t not according to ESM 
t according to ESM 

0,14 
0,24 

1,82 
8,32 

0,16 
0,18 

2,07 
9,46 

0,10 
0,12 

1,88 
8,58 

0,08 
0,09 

2,30 
10,49 

Oil 

Oil sludges 

Tri butyl tin 

Mercury 

Ozone Depleting 
Substances 

t not according to ESM 
t according to ESM 

0,00 
12 277,61 

0,00 
13 959,48 

0,00 
12 668,44 

0,00 
15 485,97 

t not according to ESM 
t according to ESM 

5 405,04 
54 824,76 

13 274,19 
55 206,27 

12 046,53 
50 100,54 

14 725,75 
61 243,17 

t not according to ESM 
t according to ESM 

kg not according to ESM 
kg according to ESM 

18,45 
7,25 

0,05 
0,53 

15,25 
5,99 

0,23 
0,43 

t not according to ESM 
t according to ESM 

11,32 
20,22 

11,69 
12,21 

8,65 
3,40 

0,21 
0,39 

5,30 
5,54 

4,23 
1,66 

0,26 
0,48 

0,00 
0,00 

Total 

not according to ESM 
according to ESM 

5 461,09 
67 386,24 

13 411,66 
69 394,83 

12 136,18 
62 923,59 

14 792,43 
76 853,02 

Atmospheric emissions 

The atmospheric emissions will be the same as the ones in option A and can be found in Table 
23.  

Social impacts:  

The social impacts on the EU will be similar to the ones in the baseline scenario.  

The social impacts in third countries will be lower than in the baseline scenario in the short 
term since ships would only be dismantled in facilities which are not employing children or 
unprotected workers. There would be a clear incentive for the substandard facilities located in 
Pakistan and in Bangladesh India to invest in order to meet the Convention's requirements as 
soon as possible.  

Labour (Man years) 

Workers load required 

Work load EU 
Work load outside EU 

of which protected workers 
of which not protected workers 
of which children 

2015 
5329 

10 
5318 

5329 
0 
0 

2025 
5498 

10 
5488 

5498 
0 
0 

2030 
6721 

13 
6708 

6721 
0 
0 

2020 
6058 

11 
6047 

6058 
0 
0 

137 

EN 

   EN 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
The  number  of  accidents  (both  fatal  and  non  fatal)  of  children  workers  would  decrease  by 
2013 onwards. The number of accidents of adult workers will decrease in the short term but is 
expected  to  increase  in  the  medium  and  long  term.  Upgraded  facilities  in  Pakistan  and 
Bangladesh  are  indeed  expected  to  continue  to  be  more  dangerous  than  facilities  located  in 
China and in the OECD.  

Accidents (number of 
persons) 

Adults fatal accidents 
Adults - non-fatal accidents 
Children - fatal accidents 
Children - non-fatal accidents 

2015 

2 
973 
0 
0 

2020 

2 
1106 
0 
0 

2025 

2 
1004 
0 
0 

2030 

3 
1227 
0 
0 

Economic impacts:  

As for option B, ship owners and Member States would be faced with additional costs linked 
with the implementation of the requirements of the Hong Kong Convention more rapidly than 
in the baseline scenario. 

Costs  and  revenues 
owner (€) 

-  ship 

Costs (€) 
Inventories new ships 
Inventories existing ships 
Certificates 
Ready for recycling certificate 
Costs for checking certificates 
Revenues 
Selling ships for recycling 
Total (+/-) 

Administrative costs - Member 
States ( ) 
Additional controls in the Ports 
Certificates 
Total 

2015 

2020 

2025 

2030 

336 289 
0 
543 209 
729 581 
342 932 

465 195 
74 951 663 
36 597 952 
1 830 276 
834 496 

513 636 
1 547 425 
8 175 073 
2 020 865 
1 015 293 

763 902 
2 220 031 
11 728 464 
3 005 517 
1 235 259 

369 346 348 
367 394 337 

510 178 469 
395 498 886 

563 303 925 
550 031 634 

837 769 918 
818 816 746 

2015
13 498
342 932
356 430

2020
637 054
417 229
1 054 283

2025 
906 816 
507 623 
1 414 439 

2030
1 300 974
617 601
1 918 575

Since  there  would  be  less  fatal  and  non-fatal  accidents  from  2013  onwards,  the  social  costs 
are expected to decrease.  

Social costs (€) 
Total 

2015 
2 799 730

2020 
3 788 139

2025 
4 182 602 

2030 
6 220 546

EN 

138 

   EN 

 
 
  
  
  
  
  
  
  
  
 
 
 
Annex XV: Option E1  

This option would consist in completing the option D by covering also the EU governmental 
vessels  including  navy  vessels  in  the  specific  Regulation  transposing  the  Hong  Kong 
Convention. 

The  expected  volume  of  government  vessels  including  navy  ships  until  2030  has  been 
estimated at 0,4 million tons per year.  

Maintaining the "business as usual" situation for these ships until 2030 would mean that all 
the  ships  are  dismantled  within  the  EU  (0,2  million  tons  per  year  will  be  treated  in  AA 
facilities  and  the  rest  in  AAA  facilities)  while  the  current  prohibition  to  export  these  ships 
outside the OECD will be maintained. This option can therefore not be compared directly to 
the baseline scenario (option A) since this scenario excludes EU governmental vessels from 
its scope.  

Including these ships under the scope of the specific Regulation transposing the Hong Kong 
Convention  will  imply  that  these  ships  would  be  allowed  to  be  dismantled  in  facilities 
compliant with the Hong Kong Convention worldwide. The volume of these ships dismantled 
in the EU and in the OECD is expected to decrease significantly. It is however not expected to 
see all these ships being dismantled outside the OECD notably to protect certain technologies. 

The  stakeholders  expressed  differing  views  as  regards  the  extension  of  the  Convention 
requirements to warships and other government vessels on non-commercial service. Including 
such vessels in the scope of an EU regulation, provided that they are allowed to use certified 
facilities in third countries, would increase the demand for clean recycling and contribute to 
the improvement of recycling conditions in these countries. Others argued that all military and 
government vessels should be dismantled within the EU as it could make the existence of EU 
dismantling facilities more economically sustainable. It was also pointed out that these vessels 
would automatically follow the requirements for clean dismantling without necessarily being 
specifically covered by the requirements. However, many stakeholders believed that specific 
inclusion  of  these  vessels  would  serve  as  a means  of  demonstrating  the  commitment  of  EU 
Member  States  in  fully  implementing  the  Convention  requirements  and  ensuring  that  they 
build  a  level  of  expertise  on  the  issue  from  a  shipping  and  recycling  perspective.  Inclusion 
would  avoid  possible  discrimination  between  private  and  State-owned  vessels  and 
consequently contribute to a better image of public authorities that should play an exemplary 
role by ensuring clean dismantling of their vessels. 

Like for option D, the Hong Kong Convention is expected to enter into force in 2020. Indian 
facilities are expected to be able to be upgraded so as to meet the Convention's standards by 
2015 while installations in Pakistan and Bangladesh would not be able to do so before 2020.  

Dismantling locations and volumes of 
governmental vessels (million LDT) 
EU facilities 

AAA
AA
A
Substandard facilities not meeting Convention's 
criteria

Non EU OECD facilities  

AAA

139 

2015 

2020 

2025 

2030 

0,0000 
0,0004 
0 

0,0000 
0,0004 
0 

0,0000 
0,0004 
0 

0,0000 
0,0004 
0 

0 

0 

0 

0 

0 

0 

0 

0 

   EN 

EN 

 
  
  
  
  
  
  
  
  
AA
A
Substandard facilities not meeting Convention's 
criteria

0 
0,0020 

0 
0,0020 

0 
0,0020 

0 
0,0020 

0 

1 

2 

3 

Other facilities  

AAA
AA
Upgraded India
Upgraded Pakistan + Bangladesh
Substandard India
Substandard Pakistan + Bangladesh

0 
0,0089 
0,0287 
0,0000 
0 
0 

0 
0,0089 
0,0121 
0,0167 
0 
0 

0 
0,0089 
0,0121 
0,0167 
0 
0 

0 
0,0089 
0,0121 
0,0167 
0 
0 

Environmental impacts:  

The dismantling of EU governmental vessels including navy vessels will produce an average 
of almost 33 000 tons of non-hazardous waste during the period 2010-2030. 

Generation of waste and waste management: 

Non-hazardous waste (tons) 
Steel 
Copper 
Non-ferrous metals 

Total  

Yearly average (2010-2030) 

29 600 
4 
3 200 

32 804 

The  global  volume  of  navy  and  governmental  vessels  is  limited  but  these  ships  usually 
contain larger quantities of hazardous waste than commercial vessels.  

Hazardous waste 

Asbestos 

PCB 

Heavy metals  

Oil 

Oil sludges 

Tri butyl tin 

Units 
t not according to ESM 
t according to ESM 

kg not according to ESM 
kg according to ESM 

t not according to ESM 
t according to ESM 

2015 
0,67 
6,80 

0,00 
0,01 

0,05 
0,23 

2020 
2,61 
4,85 

0,00 
0,00 

0,05 
0,23 

2025 
1,96 
3,64 

0,00 
0,00 

0,05 
0,23 

2030 
1,31 
2,43 

0,00 
0,00 

0,05 
0,23 

t not according to ESM 
t according to ESM 

0,00 
336,37 

0,00 
336,37 

0,00 
336,37 

0,00 
336,37 

t not according to ESM 
t according to ESM 

148,08 
1 502,05 

319,86 
1 330,27 

319,86 
1 330,27 

319,86 
1 330,27 

t not according to ESM 
t according to ESM 

0,51 
0,20 

0,00 

0,37 
0,14 

0,01 

0,23 
0,09 

0,01 

0,09 
0,04 

0,01 

Mercury 

kg not according to ESM 

EN 

140 

   EN 

 
  
  
  
  
  
  
  
  
  
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
kg according to ESM 

0,01 

0,01 

0,01 

0,01 

Ozone Depleting 
Substances 

t not according to ESM 
t according to ESM 

0,31 
0,55 

0,28 
0,29 

0,14 
0,15 

0,00 
0,00 

Total 

not according to ESM 
according to ESM 

149,62 
1 846,20 

323,17 
1 672,16 

322,24 
1 670,75 

321,31 
1 669,34 

Atmospheric emissions 

The redirection of EU Member States navy and government owned vessels from EU recycling 
facilities to upgraded Asian facilities would further result in an extra CO2-emission from the 
extra transport of these ships the long way from EU waters to the Asian ship recycling facility 
and transportation of the steel the opposite direction.  

The extra CO2-emissions from sailing the EU Member State navy and government vessels to 
Asia for recycling and afterwards sailing the resulting steel the opposite way is estimated at 
26,9 tons CO2/year, based on the following estimates: 

• 

• 

• 

• 

Average of 25 ships transported per year, 

Emission from navy vessels and government owned ships: 124,3 g CO2 ship/nautical 
mile  (assuming  these  ships  are  equal  to  smaller  complex  ships  like  refrigerated 
cargo; average size of 9.850 GT, 155 

Steel returned to Europe in three shipments in bulk carriers with an emission of 7,6 g 
CO2 ship/nautical mile (assuming bulk dry carriers; average size of 81.519 GT,156  

The sailing distance, e.g. London - Alang, is 8.540 nautical miles (average distance 
of route via the Suez Channel and around the Cape)157. 

Social impacts:  

Labour (Man years) 

Workers load required 

Work load EU 
Work load outside EU 

of which protected workers 
of which not protected workers 
of which children 

2015 
146 

0 
146 

146 
0 
0 

2020 
146 

0 
146 

146 
0 
0 

2025 
146 

0 
146 

146 
0 
0 

2030 
146 

0 
146 

146 
0 
0 

155 

156 

157 

Greenhouse  Gas  Emissions  for  Shipping  and  Implementation  Guidance  for  the  Marine  Fuel  Sulphur 
Directive.  CE  Delft,  Germanischer  Lloyd,  Marintek  and  Det  Norske  Veritas.  December  2006. 
Publication No. 06.4103.6) 
Greenhouse  Gas  Emissions  for  Shipping  and  Implementation  Guidance  for  the  Marine  Fuel  Sulphur 
Directive.  CE  Delft,  Germanischer  Lloyd,  Marintek  and  Det  Norske  Veritas.  December  2006. 
Publication No. 06.4103.6). 
COWI/DHI DG ENV 2007 study. Ship Dismantling and Pre-cleaning of Ships, June 2007 

EN 

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Accidents (number of persons) 

2015 

2020 

2025 

2030 

Adults fatal accidents 
Adults - non-fatal accidents 
Children - fatal accidents 
Children - non-fatal accidents 

0 
27 
0 
0 

0 
27 
0 
0 

0 
27 
0 
0 

0 
27 
0 
0 

Economic impacts:  

Member States would be affected as ship owners as well as flag states.  

Member  States  acting  as  ship  owners  would  be  subject  to  the  obligation  to  establish  and 
maintain  inventories  of  hazardous  materials  and  to  obtain  the  necessary  certification.  As 
shown in Annex XII,  the  cost  of  establishing an Inventory of Hazardous Material would be 
significantly  higher  than  in  the  case  of  commercial  vessels  as  navy  vessels  usually contains 
more hazardous waste. On the other hand, Member States would also be allowed to send their 
ships  for  dismantling  outside  the  OECD  thus  benefiting  from  lower  labour  costs  and  best 
prices for getting their ships dismantled.  

The  administrative  burden  would  be  less  important  for  Member  States  as  flag  states.  Navy 
vessels have indeed specific immunities which imply that they are not subject to the Port State 
Control requirements.  

Costs  and  revenues  -  ship  owner 
(€) 

Costs (€) 
Inventories for ships 
Certificates 
Ready for recycling certificate 
Revenues 
Selling ships for recycling 
Total (+/-) 

2015 

2020 

2025 

2030 

58 143 
28 175 
509 362 

70 740 
29 212 
619 717 

86 065 
23 703 
801 373 

104 712 
28 839 
974 992 

10 119 078 
9 523 398 

12 293 457 
11 573 789 

14 956 870 
14 045 729 

18 197 320 
17 088 777 

Social costs (€) 
Total 

2015 

2020 

76 705

91 280

2025 
111 057

2030 
135 117 

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Annex XVI: Option E2 

The  assessment  is  based  on  the  volumes  of  EU  flagged  ships  subject  to  the  Hong  Kong 
Convention (above 500 GT).  

This option would consist in strengthening the option D by requiring that all ship dismantling 
facilities  should  have  impacts  on  human  health  and  on  the  environment  comparable  to  the 
European ones. This implies that ships would be allowed to be dismantled in the EU, in China 
and in Turkey (investments would be needed for the facilities of this country so as to reach 
EU standards by 2015).  

2015 

2020 

2025 

2030 

0,0009 
0,0129 
0 

0,0010 
0,0147 
0 

0,0009 
0,0133 
0 

0 

0 

0 

0 

0 

0 

AA 0,08376194 0,07601524  0,09292145

0,0000 

0,0000 

0,0000 

0,0011 
0,0163 
0 

0 

0 
0 
0,0000 

0 

1 

2 

3 

0 
1,3725 
0,0000 
0,0000 
0 
0 

0 
1,5605 
0,0000 
0,0000 
0 
0 

0 
1,4162 
0,0000 
0,0000 
0 
0 

0 
1,7312 
0,0000 
0,0000 
0 
0 

Dismantling locations and volumes (million 
LDT) 
EU facilities 

AAA
AA
A
Substandard facilities not meeting Convention's 
criteria

Non EU OECD facilities  

AAA

A
Substandard facilities not meeting Convention's 
criteria

Other facilities  

AAA
AA
Upgraded India
Upgraded Pakistan + Bangladesh
Substandard India
Substandard Pakistan + Bangladesh

Environmental impacts:  

Generation of waste and waste management: 

The generation of non hazardous will be the same as for option A and can be found in Table 
22.  

The  amount  of  hazardous  waste  generated  are  similar  than  in  option  A  but  less  hazardous 
waste will be managed in an environmentally sound manner. 

Hazardous 
waste 

Asbestos 

Units 
t not according to ESM 
t according to ESM 

PCB 

kg not according to ESM 
kg according to ESM 

2015 
0,00 
272,53 

0,00 
0,38 

2020 
0,00 
309,87 

0,00 
0,34 

2025 
0,00 
210,91 

0,00 
0,22 

2030 
0,00 
171,88 

0,00 
0,17 

EN 

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Heavy metals  

t not according to ESM 
t according to ESM 

0,00 
10,14 

0,00 
11,53 

0,00 
10,46 

0,00 
12,79 

Oil 

Oil sludges 

Tri butyl tin 

Mercury 

Ozone Depleting 
Substances 

t not according to ESM 
t according to ESM 

0,00 
12 277,61 

0,00 
13 959,48 

0,00 
12 668,44 

0,00 
15 485,97 

t not according to ESM 
t according to ESM 

0,00 
60 229,81 

0,00 
68 480,46 

0,00 
62 147,07 

0,00 
75 968,92 

t not according to ESM 
t according to ESM 

kg not according to ESM 
kg according to ESM 

0,00 
25,70 

0,00 
0,58 

0,00 
21,25 

0,00 
0,66 

0,00 
12,05 

0,00 
0,60 

t not according to ESM 
t according to ESM 

0,00 
31,54 

0,00 
23,90 

0,00 
10,85 

0,00 
5,89 

0,00 
0,74 

0,00 
0,00 

Total 

not according to ESM 
according to ESM 

0,00 
72 847,33 

0,00 
82 806,49 

0,00 
75 059,78 

0,00 
91 645,45 

Atmospheric emissions 

The atmospheric emissions will be the same as the ones in option A and can be found in Table 
23.  

Other environmental impacts 

Social impacts:  

Labour (Man years) 

Workers load required 

Work load EU 
Work load outside EU 

of which protected workers 
of which not protected workers 
of which children 

2015 
2006 

10 
1996 

2006 
0 
0 

2020 
2281 

11 
2269 

2281 
0 
0 

2025 
2070 

10 
2059 

2070 
0 
0 

2030 
2530 

13 
2517 

2530 
0 
0 

Accidents (number of 
persons) 

2015 

2020 

2025 

2030 

Adults fatal accidents 
Adults - non-fatal accidents 
Children - fatal accidents 
Children - non-fatal accidents 

1 
240 
0 
0 

1 
273 
0 
0 

1 
248 
0 
0 

1 
303 
0 
0 

Economic impacts:  

EN 

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As for option D, option E2 would imply an early implementation of the Convention rules at 
EU  level  for  ships  flying  EU  flags.  It  would  create  additional  costs  for  ship  owners  and 
administration in the short and medium term.  

Option E2 would have a significant impact on the revenues of the shipowners since their ships 
would only be allowed to be dismantling in facilities equivalent to the EU ones.  

Costs and revenues - ship owner 
(€) 

Costs (€) 

Inventories new ships 
Inventories existing ships 
Certificates 
Ready for recycling certificate 
Costs for checking certificates 

Revenues 

Selling ships for recycling 

Total (+/-) 

Administrative costs - Member 
States (€)  
Additional controls in the Ports 
Certificates 
Total 

2015 

2020 

2025 

2030 

336 289 
0 
543 209 
729 581 
342 932 

465 195 
74 951 663 
36 597 952 
1 830 276 
834 496 

513 636 
1 547 425 
8 175 073 
2 020 865 
1 015 293 

763 902 
2 220 031 
11 728 464 
3 005 517 
1 235 259 

312 508 124 
310 556 113 

432 298 014 
317 618 431 

477 313 691 
464 041 400 

709 881 530 
690 928 357 

2015
13 498
342 932
356 430

2020
637 054
417 229
1 054 283

2025 
906 816 
507 623 
1 414 439 

2030
1 300 974
617 601
1 918 575

Since  the  number  of  accidents  will  be  significantly  reduced,  thereby  limiting  strongly  the 
social costs.  

Social costs (€) 
Total 

2015 

2020 

699 557

967 709

2025 
1 068 478 

2030 
1 589 086

EN 

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Annex XVII: Option E3 list of certified facilities 

General considerations:  

The Communication proposing an EU Strategy on ship dismantling identified that the (at the 
time  draft)  Hong  Kong  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.  It  highlighted  a  potential  weakness  of  the  control 
system  linked  with  existing  governance  problems  in  some  developing  countries  and  the 
limited non-compliance mechanism in the Hong Kong Convention.  
Depending  on  the  final  provisions  on  auditing  and  certification  included  in  the  Hong  Kong 
Convention,  the  Commission  announced  that  it  would  further  assess  the  feasibility  of 
developing a certification and audit scheme for ship recycling facilities worldwide and would 
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 
The Communication also proposed to provide guidance to shipowners with the publication of 
a  list  of  "green"  ship  dismantling  facilities  worldwide  could  fill  remaining  knowledge  gaps 
and provide benchmarks. 
The  Hong  Kong  Convention,  as  adopted,  contains  a  voluntary  audit  mechanism  but  no 
compliance  mechanism  per  se.  According  to  Regulation  15(3),  Parties  have  to  establish  a 
mechanism  for  ensuring  that  Ship  Recycling  Facilities  comply  with  the  requirements  of  the 
Convention  including  the  establishment  and  effective  use  of  inspection,  monitoring  and 
enforcement  provisions,  including  powers  of  entry  and  sampling.  A  Party  can  voluntarily 
decide  to  have  its  mechanism  audited  either  by  its  authorities  (self-audit)  or  by  an 
organization  recognized  by  itself,  taking  into  account  guidelines  developed  by  the 
Organization. The results of these audits should be communicated to the IMO. The existence 
of an audit is positive but does not resolve all the potential concerned related to governance 
concerns  since  the  audit  will  be  voluntary  and  mainly  under  the  control  of  the  recycling 
countries.  

Public consultation and expert workshops: 

Stakeholders were consulted on the possible positive and negative impacts of the introducing 
an EU audit and certification scheme as well as on the organisations and actors which could 
be playing a key role in such scheme. 
In  the  Communication,  the  Commission  referred  to  a  study  undertaken  on  behalf  of  EMSA 
which proposed an EU business-to-business voluntary certification and audit scheme. Several 
stakeholders questioned the effect of a voluntary scheme and argued that the scheme should 
be made mandatory.  
There were diverging views on the criteria which should be used to certify and audit facilities. 
Some  considered  that  this  scheme  should  rely  on  the  requirements  of  the  Hong  Kong 
Convention  only.  Others  proposed  to  introduce  additional  criteria  related  to  transparency, 
human  health  and  the  environment.  The  same  responses  were  received  regarding  the 
establishment of a list of green and safe facilities.  
Almost  all  stakeholders  agreed  that  the  national  authorities  and/or  the  classification 
societies/accreditation  organisations  would  have  a  key  role  to  play  in  such  an  audit  and 
certification scheme. It was suggested that this should be done by an independent supervision 
and control organisation, while the State’s role would be to control implementation. Such an 
organisation  must  be  independent  from  the  construction  and  demolition  sector.  Two  of  the 
stakeholders  specifically  mention  the  European  Maritime  Safety  Organisation  (EMSA)  as 

EN 

146 

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having a key role to play within such system. One stakeholder proposes that local trade unions 
should play a key role in auditing and improving standards and ‘giving voice to workers’. 
At the same time, some stakeholders argued that an EU specific third party certification and 
audit scheme could have a counterproductive effect given some recycling States' insistence on 
sovereignty  rights  during  the  negotiations  of  the  Hong  Kong  Convention.  Finally,  a  few 
stakeholders argue that such EU rules could result in the reflagging of EU ships as a result of 
lack of compliant recycling capacity.  

Ensuring  that  ships  are  going  to  authorized  and  upgraded  facilities  only  in  the  short  and 
medium term.  

As  explained  in  Annex  XIII,  opening  the  possibility  for  ships  to  be  dismantled  worldwide 
prior to the entry into force of the Hong Kong Convention without controlling where they are 
going  would  imply  significant  negative  environmental  and  health  impacts.  This  option 
therefore aims at ensuring that EU ships are directed to facilities which are authorized by their 
authorities  and  able  to  respect  the  requirements  of  the  Hong  Kong  Convention  in  terms  of 
protection of the human health and the environment.  

In  2010,  all  dismantling  facilities  were  closed  in  Bangladesh  because  none  of  them  had 
received  the  necessary  authorization  ("environmental  clearance")  from  the  Ministry  of 
Environment.  Nowadays,  all  recycling  countries  request  their  facilities  to  be  authorized  in 
order to operate.  

However,  as  explained  before,  investments  will  be  needed  in  facilities  located  in  India, 
Pakistan and Bangladesh in order for their facilities to be upgraded so as to be compliant with 
the Hong Kong Convention.  

Improving transparency in the short, medium and long term 

As explained in Annex XIV ship recycling countries which will be Party to the Hong Kong 
Convention will have to provide each year to the Secretariat of the IMO:  

-  a  list  of  the  ship  recycling  facilities  authorized  in  accordance  with  the  Convention  and 
operating under heir jurisdiction,  

- an annual list of the ships recycled within the jurisdiction of that Party,  

- actions taken towards ship recycling facilities under the jurisdiction of that Party.  

This obligation would however only be applicable after the entry into force of the Hong Kong 
Convention.  

Moreover  the  above  mentioned  information  is  limited  and  does  not  provide  for  a  certain 
number of data which are important for shipowners when selecting their dismantling facilities 
as well as for flag state during the final survey before allowing the ship to go for dismantling:  

(a) 

the capability of the ship recycling facility in terms of size of ship (length, breadth, 
lightweight),  

(b) 

the maximum authorized dismantling capacity,  

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(c) 

the  ability  of  the  facility  to  deal  with  hazardous  materials  present  on  bard  ships: 
authorization  to  manage  these  waste,  process  used  in  the  facility  or  in  downstream 
facilities.  

These  elements  would  be  necessary  in  order  to  allow  the  shipowners  to  make  an  informed 
decision  and  to  avoid  problems  at  the  time  of  delivery.  For  example,  if  a  facility  is  not 
authorized to deal with some type of hazardous waste contained in the ship (as reflected in the 
Inventory  of  Hazardous  Materials),  the  ship  will  need  to  be  pre-cleaned  before  being 
delivered to the yard.  

There will not be any additional costs for the recycling facilities to compile this information 
compared  with  the  baseline  scenario  since  they  have  to  be  provided  to  their  competent 
authorities in the document of authorization to conduct ship recycling (see Appendix 5 of the 
Hong Kong Convention).  

They  would  also  be  needed  by  flag  states  when  conducting  their  final  survey  prior  to 
dismantling. During this survey, the flag state will have to verify: 

(1) 

(2) 

that  the  IHM  is  in  accordance  with  the  requirement  of  the  Convention  taking  into 
account the guidelines,  

whether  the  Ship  Recycling  Plan  developed  by  the  Ship  Recycling  Facility 
corresponds  to  the  IHM  and  contains  information  about  safe  for  entry  and  safe  for 
hot work conditions  

(3) 

whether the facility is authorized in accordance with the Convention.  

Taking  into  account  these  comments  and  the  relevant  studies,  the  audit  and  certification 
scheme should:  

• 

• 

• 

• 

• 

158 

159 

Be  mandatory  otherwise  there  would  be  little incentive to use certified and audited 
facilities,  

Involve  third  party  auditing158  while  respecting  sovereignty  rights  as  much  as 
possible,  

Might  include  additional  requirements  compared  to  the  Hong  Kong  Convention 
while ensuring the availability of sufficient recycling capacity,  

Be performance based159 and not procedure  based only so  as  to  secure an  effective 
improvement of the human health and environmental impacts of ship dismantling,  

Improve  transparency  with  the  publication  of  a  list  of  certified  ship  dismantling 
facilities operating worldwide,  

Self-auditing  by  the  facilities  themselves  is  not  considered  as  feasible  at  this  stage  since  ship 
dismantling is a highly competitive market where substandard facilities have a competitive advantage as 
explained in the Impact Assessment.  
Contrary to existing ISO and OHSAS standards. For further explanations, see the COWI/Litehauz study 
for EMSA, ‘Certification of Ship Recycling Facilities’, 2008.  

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• 

Be undertaken by people with a strong expertise on health and the environment and 
about ship recycling practices.  

Introducing  an  obligation  for  EU  flagged  ships  to  be  dismantled  in  a  list  of  audited  and 
certified facilities worldwide only.  

EU flagged ships would be allowed to be dismantled only in a list of audited and certified ship 
dismantling facilities. This list would be compiled by the European Commission and would 
contain the data and information indicated above regarding ship dismantling facilities.  

In order to be added on this list, ship dismantling facilities would have to:  
-  be  audited  by  EU's  recognized  organisations  and  receive  a  "document  of  compliance" 
ensuring  the  facility's  compliance  with  the  requirements  concerning  ship  recycling  facilities 
contained in the Ship Recycling Regulation,  
-  transmit  the  information  requested  by  the  Hong  Kong  Convention  to  the  Commission  as 
well  as  relevant  information  regarding  any  limitation  regarding  the  type  of  ships  and/or 
hazardous materials that they can accept (see above).  
In order to ensure the expertise of the EU recognized organisation about ship recycling, the 
Ship  Recycling  Regulation  would  contain  a  provision  amending  the  Annex  to  the  council 
directive 94/57/EC containing the minimum criteria for recognized organizations in order to 
add  references  to  expertise  on  ship  dismantling  and  its  human  health  and  environmental 
impacts. 

Environmental and social impacts 
The quantitative environmental and social impacts will be similar to the ones of option D. By 
applying this scheme the EU would increase transparency and compliance by providing a tool 
to  monitor  that  the  facilities  to  which  EU-flagged  vessels  are  sent  for  dismantling  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  Hong  Kong  Convention  and  also 
national legislation. Moreover there would be an economical incentive for these facilities to 
be in the scheme so as to be legally authorized to receive EU flagged ships.  
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. 
Significant impacts on the environment and social conditions in the EU are not likely. 

Economic impacts 

All economic impacts but the ones of shipowners will be similar to the ones of option D.  

The additional auditing of performance indicators and the classification would produce costs 
for  recycling  facilities  in  the  range  of  20,000-40,000  €  plus  inte rnal  personnel  costs  of  1-2 
man years (2160-4320 €).  
A study undertaken on behalf of the Commission125 developed a list of criteria based on the 
Hong Kong Convention as well as a first list of 25 facilities with a total dismantling capacity 
of 2,4 million LDT. This capacity will be largely sufficient to treat all EU flagged ships (the 
maximum volume of EU flagged ships to be dismantled in the period 2012-2030  is of 1,88 
million LDT).  

Considering  that  during  the  5  years  during  which  they  will  be  certified,  these  facilities  will 
treat  a  yearly  average  of  1,6  million  LDT  of  EU-flagged  ships.  The  auditing  cost  would 

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represent 0.139 €/LDT so negligible compared to  the current dismantling prices. It is therefore 
not expected to have a noticeable impact on transport costs or on consumers 

Costs  and  revenues  - 
ship owner (€) 

Costs (€) 

for 

Inventories new ships 
Inventories existing ships 
Certificates 
Ready 
certificate 
Costs 
certificates 
Audit and certification 
Revenues 
Selling ships for recycling 
Total (+/-) 

for 

recycling 

checking 

2015 

2020 

2025 

2030 

336 289 
0 
543 209 

729 581 

342 932 
202 210 

465 195 
74 951 663 
36 597 952 

513 636 
1 547 425 
8 175 073 

763 902 
2 220 031 
11 728 464 

1 830 276 

2 020 865 

3 005 517 

834 496 
229 910 

1 015 293 
208 647 

1 235 259 
255 051 

356 838 522 
354 684 301 

510 178 469 
395 268 977 

563 303 925  837 769 918 
549 822 987  549 776 583 

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