Hong Kong Convention
The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) is the international standard for recycling of commercial vessels developed by the IMO. The HKC is a reaction to the growing concern about safety, health, the environment and welfare in key ship recycling countries.
The HKC defines requirements for every vessel being recycled and stipulates having: an Inventory of Hazardous Materials (IHM), a plan for Ship Recycling Facilities (SRFP) which prescribes standard processes needed to ensure safe and environmentally friendly recycling and a Ship Recycling Plan (SRP) that factors for the IHM and SRFP.
When in force the HKC will apply to all vessels above 500 GT including newbuildings flying the flag of a party to the Convention. It is a compromise between commercial reality and ideal practice – it does not prohibit beaching or landing methods which have been the subject of criticism for some time. The HKC provides a great opportunity to equal worldwide standards for Ship Recycling and to provide a level playing field for all stakeholders.
Although the HKC has not entered into force yet, many recycling facilities have adopted or are in the process of adopting standards as described by the Convention and are applying for Statements of Compliance. These statements are issued by various classification societies based on their understanding and interpretation of the Convention. As such, in the same way as for ISO certificates, not all statements can be understood to have the same meaning and only expert advice ensures that unique considerations and demands can be taken care of properly.
What do shipowners need?
– IHM (Inventory of Hazardous Materials): Part I (Structure & Equipment), Part II (Operative Wastes) and Part III (Stores)
– International Ready for Recycling Certificate issued by the Flag state (IRRC)
What do Yards need?
– Statement of Compliance to the standards of the Convention: Ship Recycling Faclility Plan (SRFP)
– Ship Recycling Plan for the ships received for recycling (SRP)
– DASR from the competent authorities (Document of Authorization to conduct Ship Recycling).
When will the Convention enter into force?
24 months after:
- Ratification by at least 15 states
- The combined merchant fleet of the ratifying states constitutes not less than 40% of the world’s merchant shipping gross tonnage
- The combined maximum annual ship recycling volume of the ratifying states during the preceding 10 years constitutes not less than 3% of the gross tonnage of their combined merchant shipping.
The first condition is fulfilled, 15 States have ratified the HKC: Belgium, Denmark, Estonia, France, Germany, Japan, Malta, Netherlands, Norway, Panama, Republic of the Congo, Serbia, Turkey, Ghana and India.
These 15 States represent roughly 30% of the world’s merchant shipping gross tonnage, meaning the second condition is met by 75%.
Another hurdle (third condition) that needs to be finally cleared is recycling capacity. Turkey and India have ratified the Convention as major recycling destinations, but in order to enter into force Bangladesh also needs to ratify the Convention in order to satisfy its capacity requirements, since we are roughly at 85% recycling capacity. Either China (8.2 mil GT), Pakistan (5.8 GT) or Bangladesh (10 mil GT) as major recycling locations have to ratify the convention and add the required capacity accordingly.
Expected Entry into Force:
We expect the regulation to enter into force in 4-5 years once the necessary hinterland waste management infrastructure has been established in Bangladesh and authorities have implemented relevant standards and processes. The Ministry of Industries of Bangladesh has declared its intention to ratify the convention by 2023. The Convention would enter into force 24 months after all conditions are met.
Basel Convention (IMO)
Entering into force in 1992, the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (Basel Convention) has been signed and ratified by 184 states. The United States have signed the Convention but not ratified it. The goal of the Convention is to reduce movements of hazardous waste between nations and especially between OECD and non-OECD countries.
Furthermore the Convention intends to assist less developed countries in environmentally friendly management of hazardous and other waste they produce. According to the Convention the amount of toxic waste should be minimized and recycled as closely as possible to the source of origination.
A waste falls under the scope of the Convention if it has hazardous characteristics as defined by the Convention, such as being explosive, flammable, toxic, or corrosive. Waste can also be classified as hazardous if it is defined as a hazardous waste under the laws of either the exporting country or the importing country. Strangely, a ship is considered hazardous waste as soon as the decision to recycle it has been taken, even if all required certificates are valid and it is properly manned.
After the initial adoption of the Convention, some less developed countries and environmental organizations argued that it did not go far enough. Greenpeace and several European countries such as Denmark also led the way to adoption of an amendment to the Convention in 1995 called the Basel Ban Amendment, which has been accepted by 86 countries and prohibits the export for any reason (including recycling of commercial vessels) from OECD countries to developing countries. The European Union has enforced this ‘Basel Ban’ in its Waste Shipment Regulation (see below), making it legally binding in all member states. Norway and Switzerland have also fully implemented the Basel Ban in their legal systems.
According to Basel Convention the exporting and importing states have to enter into a ‘prior written consent’ before a hazardous waste or ship can be transferred. The exporter in this case is the last port of call, not the flag state or shipowner.
However, the Secretariat of the Basel Convention and EU Commission have also realized that the Basel Convention is circumvented by officially taking the recycling decision in international waters where its rules cannot be enforced. Ships are also likely to be excluded from the scope of the Basel Convention once the HKC enters into force. Adding to the Convention’s ‘redundancy’, EU flagged ships are exempt from the Basel Convention if handled in accordance with the EU SRR.
Generally, EU-flagged ships are now recycled under EU SRR or HKC regulations, otherwise they fall under the Basel Convention, which is far more complicated and time consuming to administer. From a purely legal point of view, the HKC has not entered into force but can be used for applying best practice by non EU-flagged ships and is considered to be in line with the aims and understanding of the international community.
Basel Ban Amendment
On 6th September 2019 Croatia became the 97th country to ratify the 1995 Basel Ban Amendment, enabling the regulation to enter into the full force of international law 90 days later on 5th December 2019.
Under the Ban Amendment, export of hazardous wastes – the definition of which includes obsolete ships – is prohibited from countries of the Organisation of Economic Cooperation and Development (OECD) to non-OECD countries.
The 25 year wait for the amendment’s transposition into law can be attributed to a combination of interpretive uncertainty and organised resistance.
Several key countries have yet to ratify the amendment, among them Canada, Japan, Australia, New Zealand, South Korea, Russia, India, Brazil and Mexico. The United States has yet to ratify the original Basel Convention.
So what does this mean for shipping? For Owners with EU flagged ships, or a non-EU flagged vessel departing an EU port: not very much. The Ban Amendment was enforced within the European Union via the EU Waste Shipment Regulation in 2007.
For Owners with non-EU, OECD member flags that have ratified the Ban Amendment: previously, Owners falling into this category with a ship to demolish in a non-OECD country would have ‘officially’ needed the permission of both the state from which they were ‘exporting’ the vessel and the state into which they were importing the vessel prior to starting the vessel’s final voyage. Under the Ban Amendment, it will now not be possible for a vessel in this situation to be exported to a non-OECD country.
There is a degree of discretion here on the part of the ‘exporting’ state. Historically it has been rare for non-EU states to enforce the Basel Convention – this pattern may continue despite the Ban Amendment. However, as the ship recycling comes under stronger scrutiny, states are turning a blind eye less frequently.
As ever, a non-EU flagged ship whose Owners decide to send it for recycling while it is in international waters is not subject to EU SRR, Basel or Ban regulation – however just as with states, Owners are under increasing pressure from all manner of stakeholders to recycle responsibly.
The EU SRR was adopted by the EU parliament in 2013 and entered into force on December 31st 2018, when EU-approved recycling capacity theoretically reached 2,5 million light displacement tonnes (LDT).
The aim of the EU SRR is to promote an early implementation and ratification of the Hong Kong Convention within the EU and in other countries by making it mandatory for ships calling at EU ports to have a certified IHM on board. EU-flagged vessels must already have an IHM on board and non-EU flagged Vessels calling EU ports by the end of 2020 at the latest. In addition, EU flagged Vessels must be recycled in an EU-approved recycling facility.
Everyone working in the shipping industry knows how easy it is to change a vessel’s flag. Realistically this regulation will lead to a decrease in vessels flying an EU flag. The positive effect of the EU SRR is its de facto promotion of standards defined in the HKC. In addition to the IHM defined in the HKC, the EU SRR requires two more hazardous materials to be listed in IHMs for EU-flagged ships.
List of approved facilities available under:
EU Waste Management Regulation
The European Union Waste Shipment Regulation (EC) No 1013/2006 transposes the Basel Convention and the Basel Ban Amendment into European Union law. It bans all exports of hazardous waste to non-OECD countries and all exports of waste for disposal outside the EU/EFTA.