As any shipowner knows, when a vessel’s revenue earning capacity drops too far there is only one realistic option, which is to sell the vessel for recycling.
Why ship recycling?
Ships are acquired by shipbreakers for their intended resale value, in the form of their machinery, fittings and ferrous and non-ferrous content; however scrapping a ship is highly energy and labour intensive and is only undertaken on a large scale in four countries: namely India, Pakistan, Bangladesh and China.
The impetus for an enforceable international standard
The current principal international regime covering the exporting of waste is the Basel Convention1. This convention provides the framework for the transboundary movement of hazardous wastes and their disposal and all EU member states have ratified it through the EU Waste Shipments Regulation2 (the WSR).
The applicability of the Basel Convention/WSR to the export of end of life ships is, however, a matter that has been of debate.
The Hong Kong Convention3
In response to these concerns the IMO charged the Marine Environment Pollution Committee to develop a more workable legislative framework, leading in May 2009 to the holding of a diplomatic conference in Hong Kong at which 63 States, including the key recycling states, flag states, and as observers the European Commission and important NGOs all participated.
This conference led to the signature of the Hong Kong Convention, which aims for the complete and exclusive ‘marinisation’ of the inspection, survey, permission and policing of the process of the recycling of ships and their disposal: a process which is currently the responsibility of environmental agencies founded on land-based export criteria4.
It will do away with the concept of ‘export and import’ and instead impose responsibility for the surveying and certification of the vessel on the vessel’s flag state obliging it to certify that the ship recycling plan has been duly authorised by the relevant agency in the recycling state5, imposing on such states the responsibility for the licensing of the relevant recycling facilities.
Under the Convention the hazardous materials on a vessel will need to be identified throughout its working life and not just at the time it is scrapped. It also prohibits the installation or use of Hazardous Materials6 on both new and existing ships.
The process of implementation and ratification
The Convention will not take effect until it has received the support of a sufficient number of both high volume, ship operating and ship recycling states.
European Ship Recycling Policy
Following the signature of the Hong Kong convention, the European Commission produced the EU Ship Recycling Regulation7 (the SRR).
The SRR purports to bring into EU law the following principles for ships flying the flag of EU Member States:
- Ships will have to establish and maintain an inventory of hazardous materials (IHM).
- Ships will have to be dismantled “in safe and environmentally sound ship recycling facilities”.
- The amount of hazardous waste on board will have to be minimised and other steps taken to prepare for recycling prior to delivery to a recycling facility.
The ‘European List’ and application
A “European list of ship recycling facilities” that are acceptable will be prepared and all EU flagged ships will have to be recycled in facilities that are on this list.
The SRR has already entered into force but will not be applicable until the earlier of 31 December 2018 and the date which is 6 months after the EU Commission has approved a sufficient number of Ship Recycling Facilities. In April 2016 the European Commission issued ‘Technical Guidance’ for facilities seeking approval.
The effect of the SRR
While the SRR is directed to those ships flying the flag of EU member states, Article 12 will, when it comes into force, require any ship that is present in European waters to have in place a current and compliant IHM.
Where to go from here
There are standard contract forms, in particular the BIMCO ‘Recyclecon’ form, which can accommodate the concerns of the owner in relation to ship recycling. However, ship recycling is for many, an unfamiliar area and the guidance of an experienced professional adviser is recommended.
To help ease the high unemployment levels throughout the continent, organisations need to be innovative and create new commercially viable business opportunities.
eWaste has captured the headlines in recent months and is no doubt an attractive proposition for companies to help stimulate economy growth.
At the recent national consultative conference on electronic and electrical waste (eWaste) management, the Minister of Environmental Affairs, Mrs Edna Molewa reaffirmed Government’s commitment to working with the waste sector in meeting its challenges.
The conference focused on issues around the contextualisation of the eWaste challenges in South Africa, the management of eWaste in Municipalities, eWaste Recycling and Policy and legislative environment. eWaste makes up 5 – 8 percent of municipal solid waste in South Africa and is growing at a rate three times faster than any other form of waste.
Xperien CEO Wale Arewa says the challenge in the proper management of eWaste is a result of a lack of recycling infrastructure, poor legislation and inadequate funding. “The eWaste sector is a catalyst for socio-economic development, it is the source of new businesses and jobs.”
“As part of the overall concern for the environment, the Department of Environmental Affairs has already seen many new job opportunities created in other areas of recycling such as tyres and plastic packaging. Neither of these, however, have the same challenges as those faced by eWaste,” says Arewa.
He says the range of products to be recycled, the diversity of their contents and recoverable components and materials, provide significant challenges and present hazards that need careful management.
Company executives need to consider regulatory compliance, cost and more importantly, the protection of company information. eWaste disposal challenges facing companies in today’s environment include legislative requirements, compliance to Protection of Personal Information Act 2013 (PoPI 2013), the National Environmental Waste Management Act 2008 (NEMWA 2008) and the Consumer Protection Act 68 of 2008 (CPA).
Echoing a warning by the e-Waste Association of South Africa, Arewa says Africa is becoming a dumping ground for America and Europe under the guise of donations. “If we do not manage our eWaste, South Africa could find itself and its people in a high risk health and environmental crisis.”
This is aggravated by low levels of consumer awareness as well as unregulated disposal, collection and recycling eWaste processes, amongst others. Research shows that unrestricted use of the informal sector to handle eWaste can create more problems than it solves. Metals such as lead, mercury, cadmium and arsenic are all present in eWaste. For those workers who spend endless days exposed to dangerous levels of toxic elements with little to no protection, while breaking down electronics by hand, are at huge risk.
“eWaste contains a number of hazardous materials, which if not handled correctly, present huge risks to those who process eWaste as well. That’s why we believe any initiative to boost employment in the field of eWaste needs careful consideration. There is certainly an increase in eWaste disposal compliance awareness, customers realise this importance of choosing the correct partner for eWaste disposal,” he adds.
The United Nations Environment Programme (UNEP) for example forecasts that obsolete computers, both in China and in South Africa, will rise by 500% in 2020 compared to their 2007 levels. Statistics show for instance that developed countries will increase their exports of eWaste into China and Africa by 50-80%.
“The World Bank is one of many international institutions that fully appreciate the importance of evaluating the impact of any initiative,” says Dr Peter Tobin of IACT-Africa, one of the companies helping Xperien explore the implications of the opportunities and threats presented by eWaste.