News item 13, May 2019 ECSA visit to Indian Ship Recycling Facilities

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ECSA VISIT TO INDIAN SHIP RECYCLING FACILITIES

ALANG-SOSIYA, 25 – 27 FEBRUARY 2019 ECSA REPORT

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©ECSA

April 2019
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Contents

List of abbreviations ……………………………………………………………………………….3

1. 2.

3.

Executive summary ………………………………………………………………………..4 Background information …………………………………………………………………..5 The IMO Hong Kong Convention…………………………………………………….5 The EU Ship Recycling Regulation and technical guidance note ………………6 ECSA visit: purpose and outcome ……………………………………………………….9 Visit purpose ……………………………………………………………………………9 Outcome of the visit to Alang-Sosyia ……………………………………………. 10 Overall progress…………………………………………………………………10 Waste handling and downstream waste management …………………..12 Medical health care & labour housing colony ………………………………13 Outcome of the visit to the steel industry in Bhavnagar-Shihor ……………. 14 The sustainable development of the wider region……………………………..16 The EU SRR as a catalyst for sustainable development in Alang ……………16 Practical challenges……………………………………………………………………….18 Conclusions ………………………………………………………………………………..20 Annex 1: programme ……………………………………………………………………………23

4. 5.

2.1. 2.2.

3.1. 3.2.

3.2.1. 3.2.2. 3.2.3.

3.3. 3.4. 3.5.

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List of abbreviations

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AASSRGWA ACM
CSR
ECSA

EU SRR GEPIL GMB GPCB HKC

IHM UNCLOS PPE
SRF SRIA TSDF

Alang Sosiya Ship Recycling General Workers’ Union Asbestos Containing Materials
Corporate Social Responsibility
European Community Shipowners’ Associations
European Regulation on ship recycling (No. 1257/2013) Gujarat Environment Protection & Infrastructure Ltd (India) Gujarat Maritime Board (India)

Gujarat Pollution Control Board (India)

International Convention for the Safe and Environmentally Sound Recycling of Ships (2009)

Inventory of Hazardous Materials
United Nations Convention of the Safety of Lives at Sea Personal Protective Equipment
Ship Recycling Facility
Ship Recycling Industries Association (India)
Hazardous waste Treatment, Storage and Disposal Facilities

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1. Executive summary

The aim of the visit was to create a better understanding of the possible threats to and opportunities for the (Indian) ship recycling industry and the (European) shipping industry. The challenges stem from recent European and International legal developments.

At the same time, participants were invited to witness the progress made on the ground at the ship recycling facilities and to see how safe and environmentally sound recycling operations can take place sustainably in intertidal zones in India. To further fully understand the impact of the ship recycling industry on the sustainable development of the region as a whole, part of the visit was dedicated to the downstream waste management and the steel making industry as well, as inseparable parts of a sustainable circular economy.

The underlining idea was that if Indian facilities meet the requirements of the European Ship Recycling Regulation 1257/2013 (EU SRR), they should be eligible for inclusion in the EU list of ship recycling facilities. This inclusion would then in turn facilitate the further upgrading of a sustainable ship recycling industry worldwide and facilitate prompt ratification of the IMO Hong Kong Convention (HKC).

Since 2016, many facilities have received statements of compliance with HKC and the EU SRR by Classification Societies and have applied to be included in the EU list. With this aim, those facilities have started to implement new procedures and management systems that would overcome and offset anticipated temporary financial losses. The latter could however be mitigated by the steady flow of end of life ships, and responsible involvement of both shipowners and cash buyers must therefore be part of the solution.

Therefore, the major stakeholders that can impact the final outcome of the current legal processes at the European and the international level are the European competent legislators, the (European) shipping industry and the (Indian) ship recycling industry, each to a greater or lesser extent.

The EU Ship Recycling Regulation can only fully meet its aim to facilitate the Hong Kong Convention within the EU and in third countries provided it is inclusive. If facilities in third countries comply to the legal requirements of the EU Ship Recycling Regulation, their inclusion will facilitate the third country government to ban substandard ship recycling practices and ratify the Hong Kong Convention, providing a global solution and level playing field to an industry operating internationally.

The entire visit was marked by the willingness of the side of the ship recycling facilities, the Ship Recycling Industries Association (India) SRIA and the authorities, namely the Gujarat Maritime Board (GMB), to transparently demonstrate and critically discuss the actual state of play towards healthy, safe and environmentally sound recycling operations in Alang-Sosiya.

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2. Background information

2.1. The IMO Hong Kong Convention

The 2009 International Convention for the Safe and Environmentally Sound Recycling of Ships, also known as the ‘Hong Kong Convention’ (HKC), was adopted in 2009. Itprovides a meaningful system of workable and enforceable regulations with the ultimate goal of lifting the level of sustainability of recycling facilities on a global scale to the benefit of all parties involved. The HKC places clear and pertinent obligations on all parties concerned – shipowners, recycling facilities, flag states, port states as well as recycling states – to ensure that end-of-life ships do not pose any unnecessary risks to human health, safety and the environment during their life-time and when being recycled.

The underlying principle when developing the HKC was the real and urgent need to address the poor working conditions, the lack of training and the environmental degradation in substandard ship recycling facilities worldwide. To achieve this, the HKC set itself as the global standard below which no single recycling facility would fall, provided that the right mind set, investment and training was provided.

To date ten countries have ratified the Convention (Belgium, Denmark, France, Japan, the Netherlands, Norway, Panama, the Republic of the Congo, the Republic of Serbia and Turkey). These States represent around 23,16 % of the gross tonnage of the world’s merchant shipping. The combined annual ship recycling volume of the contracting states during the preceding 10 years is around 0,6 % of the merchant shipping tonnage of the same states.

For the Convention to enter into force, ratification by 15 States is necessary, representing 40 % of world merchant shipping by gross tonnage and a combined maximum annual ship recycling volume not less than 3 % of their combined tonnage. Based on the latest publication by IHS Ltd for the fleet and recycling volumes in 20181, this means:

  • –  15 States;
  • –  whose fleets amount to at least 533.457.349 GT (i.e. 40 % of the 2018 world fleetof 1.333.643.373 GT); and
  • –  whose recycling facilities’ combined maximum annual ship recycling volume is16.003.720 GT or more (i.e. 3 % of the condition on the Contracted tonnage of 53.457.349 GT).

    Satisfying the first two conditions is not an obstacle to the entry-into-force of the HKC. The critical issue will be to meet the third condition. This requires that the combined maximum annual ship recycling volume in the preceding 10 years is not less than 3 % of the contracting tonnage. The maximum annual tonnage is assessed for each of the

    1 Calculations and table by Dr Nikos Mikelis – based on data provided by IHS Global Ldt

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countries that have ratified HKC by assigning to that country the maximum gross tonnage that was recycled in a single year during the 10 most recent years2.

Table 1: recycling capacity – Dr Mikelis – data from IHS Global Ldt, World Casualty Statistics

To secure the circa 16 million GT of recycling capacity there is no doubt that India and China hold the key, as can be seen from the current official data above. Interestingly, the whole of the European Union (including France, Belgium and Denmark, as well as the UK) this year adds to just 223.394 GT, which is just 0,57 % of the world’s capacity.

Worthwhile mentioning as well is that, although the Hong Kong Convention has not yet entered into force, voluntary compliance to it can be achieved by ship recycling facilities through obtaining a statement of compliance from an independent classification society. Many non-EU facilities have already undertaken these efforts, while it seems that EU ship recycling facilities have not yet taken any interest in the process.

2.2. The EU Ship Recycling Regulation and technical guidance note

In 2013, the European Union adopted the EU Ship Recycling Regulation (EU SRR), which broadly reflects the main provisions of the HKC. The EU SRR foresees in an EU approved list of recycling facilities where EU-flagged vessels will have to be recycled. The EU list could play a strategic role in motivating ship recycling facilities all over the world to become compliant with the HKC requirements, ahead of the entry into force of the HKC.

In order to incentivise each and every ship recycling facility situated outside the European Union to be -voluntary- compliant with the EU SRR and, therefore, the Hong Kong Convention, an open and inclusive process is required.

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2 This method was borrowed from OECD where it was used to calculate shipbuilding capacity, while accounting of dormant capacity

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Picture 1: operating from built structures

Today, the EU list contains only ship recycling facilities located in the EU, Norway, Turkey and the United States. Two Indian facilities are in the process of inspection and evaluation while more inspections to other Indian facilities are planned to take place in 2019.

The EU SRR itself does not a priori preclude facilities that operate in intertidal zones from being eligible for inclusion on the EU list. The interpretation developed by the EU Commission however, via the Technical Guidance Note, makes any sustainable ship’s dismantling operations in intertidal zones technically challenging. The note

states for instance that any contact between hazardous waste (e.g. blocks and cut parts of the ship’ structure) and water/non-impermeable floors has to be completely avoided during the recycling process. One could even question whether these technical requirements can be met by ship recycling facilities using the so-called ‘alongside method’ or the ‘landing method’ in non-intertidal zones. Reference can here be made e.g to the question on What is meant by ‘impermeable floors’ and ‘built structures’.

While in the meantime the Indian ship recycling facilities have showcased that they can avoid the actual contact of blocks with the intertidal zone and thus can operate from built structures, the next challenge presented to the Indian ship recycling facilities by the EU inspection team is how they can ensure sufficient and adequate medical care for the workers (being interpreted as the availability of a hospital in the vicinity of the ship recycling area).

This way, the non-legally-binding technical guidance note interprets the EU SRR in a far-reaching and more stringent manner than the EU SRR. This may discourage the ship recycling facilities in third countries to further apply for inclusion in the EU List. Especially those ship recycling facilities in India that have engaged already in establishing standards equivalent to HKC and who are receiving statements of compliance from other classification societies than the one acting on behalf of the EU Commission.

However, a pragmatic approach during the auditing process under the EU SRR would give those facilities certified by classification societies against EU SRR compliance a fair opportunity to be included in the European List. Today a handful of facilities In India have already been stated in compliance to the HKC and the EU SRR by independent Classification societies.

This restrictive interpretation by the EU Commission and as such by the one classification society acting on behalf of the EU Commission may eventually make it very difficult for EU flagged vessels to comply with the EU SRR, as adequate capacity is not be available on the EU list. Not only in terms of volume, but especially in terms of the size of ships enabled to be recycled and the geographical spread of compliant

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