India weighs bilateral ship recycling pact with EU bypassing new global rule

P Manoj Mumbai | Updated on May 07, 2021

European Commission says EU is no longer able to include any ship recycling facilities located in non-OECD countries in the EU list of approved facilities

India is weighing a bilateral agreement with the European Union (EU) that seeks to bypass a new global rule that could hurt India’s plan to double its ship recycling capacity and attract more ships from Europe and Japan for scrapping.

“Efforts will be made to bring more ships to India from Europe and Japan. Recycling capacity of around 4.5 Million Light Displacement Tonnage (LDT) will be doubled by 2024,” Finance Minister Nirmala Sitharaman said in her Budget speech to Parliament on 1 February.

More than 90 of the 120 ship dismantling yards at Alang in Gujarat are certified for compliance with the green recycling standards prescribed by the ‘Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships’ adopted by the International Maritime Organization in 2009.

Some 20 of the HKC compliant yards in Alang have applied for inclusion in the EU list of approved facilities under a separate EU Ship Recycling Regulation (EUSRR) but without success.

The EU has cited lack of hospitals and proper downstream waste management systems at Alang to block approvals.

Basel Ban Amendment

A new rule that came into force in December 2019 has further complicated matters.

The ‘Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal’ which entered into force in May 1992 has set rules for the international movement of hazardous wastes and for their environmentally sound management. India is a signatory to the Basel Convention.

The Basel Convention treats ships as hazardous wastes due to the many toxics embedded within their structure.

In March 1994, the member states of the Basel Convention adopted its ‘Ban Amendment’, prohibiting the export of hazardous wastes from OECD to no-OECD countries and the amendment took effect 25 years later from December 5, 2019.

“After the Basel Ban Amendment entered into force in December 2019, the European Commission has pointed out that the EU is no longer able to include any ship recycling facilities located in non-OECD countries in the EU list of approved facilities under the EU Ship Recycling Regulation (EUSRR),” said Sotiris Raptis, Director, Maritime Safety and Environment at Brussels-based European Community Shipowners Associations or ECSA.

“The conclusion of a bilateral agreement between the EU and India would enable the EU to include Indian ship recycling facilities in the EU list provided they fulfil the criteria of the EUSRR,” he added.

The 43 ship recycling yards, mostly in Turkey, approved by the EU so far, have a capacity to recycle 657,00 LDT compared to the 2.5 million LDT that was deemed necessary when the EUSRR was finalised.

“We should not try to limit access of EU shipowners to recycling facilities outside the EU. Its an illusion to think that all EU-controlled or EU-flagged vessels can be recycled in Europe,” said Martin Dorsman, Secretary General of ECSA.

Acknowledging the proposal from the EU shipowners on a bilateral agreement, N Ashok Kumar, Adviser, Industry and Engineering, Embassy of India to the EU, said that the “bilateral mechanism is yet to be concretised”.

“The stakeholder consultations on this are over in India and once the pandemic situation is over, we are expecting some kind of a communication sooner from the Indian side to the EU,” Kumar said.

Simon Bergulf, Director for Regulatory Affairs at Danish shipping giant A P Moller-Maersk Group said that India’s plan to double the ship recycling capacity “hinges on the ability to get onto the EU list of approved yards to get ships that are EU flagged and to get better prices for steel”.

‘Auditing system needed’

In 2016, Maersk began engaging with yards in Alang to raise their standards, which led many recyclers to voluntarily upgrade to IMO’s Hong Kong Convention, which was ratified by India in 2019.

“Between 2019 and now, lot of yards in Alang have tried to get onto the EU list, two of them are actually of EU standards for everything happening on the yard,” Bergulf said.

While stating that the EU auditing system was “good”, Bergulf said:”We need to end the double standards in auditing. It just does not make sense that an EU yard can be put on the EU list without any type of auditing. We need to have an auditing system that are the same inside and outside of the EU,” he said.

Bergulf was critical of the frequent shifting of the goal post for approval purposes.

“Each time the yards are close to getting onto the EU list, we get a new thing. That is the perception we have in India. The latest example is the Basel Ban Amendment. That is not better regulation. Its not how it works. Its very defeatist,” he added.

Green groups have opposed the move to circumvent the Basel Convention’s Ban Amendment through a bilateral agreement between India and EU.

“The Basel Convention does not allow exemptions, and bilateral agreements can only be entered if they provide stronger protections. The use of such a bilateral agreement to circumvent the Basel Ban Amendment is thus illegal,” said Ingvild Jenssen, Founder & Executive Director, NGO Shipbreaking Platform, a Brussels-based coalition campaigning for clean and safe ship recycling across the globe.

Published on May 07, 2021

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