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Niko Wijnolst
Conference
Chairman
STATEMENT
1:
The
ship recycling market is a certain growth market. At the end of the decade
(2010) some 4.000 ships with an aggregate gross tonnage of 24 million should
be recycled every year. These figures warrant a structural approach to the
ship recycling issue by the maritime industry as a whole and the
International Maritime Organisation in particular. Background:
the future ship recycling market
The world fleet plays a crucial role in the
world economy. World trade growth has fuelled this growth and at the same
time shipping has facilitated it. The impressive increase of the world fleet during
the second half of the last century is shown in Figure 1 in number of ships and gross tonnage over the period
1948 – 2000 [source: ISL, Shipping Statistics Yearbook 2000]. The world fleet consisted in 2000
of almost 89.000 vessels over 100 gt with an aggregate gross tonnage of 554
million.
The useful trading life of a ship
is limited to 25-30 years, which means that every year a 3.5 to 4 per cent
share of the world fleet has to be scrapped or better, recycled. The average
scrapping age of 26.5 years in 1998 is in line with this technical
replacement ratio. Based on the assumption that every
year 4 per cent of the ships has to be scrapped, the annual number of ships
should be around 3,000. The fact that in the industry statistics show much
lower numbers is caused by the fact that demolition of many small ships
(>100gt) is not reported. The growth of the world fleet
corresponds with the growth of seaborne trade and the world economy. The past
half century has demonstrated – with the exception of oil tanker shipping –
that the shipping sector is likely to continue to grow also in the new
millennium. Therefore the number of ships and the tonnage which will have to
be scrapped, will increase gradually as well to 4000 per annum by the year
2010 with an aggregate gross tonnage of 24 million. STATEMENT
2:
There
is a need for an international Ship Recycling Industry Charter in which
guidelines for ship recycling yards are formulated as well as guidelines for
shipowners in order to make the ship recycling industry an environmental
friendly process and a healthy and safe working environment. Background:
the ship recycling industry The ship recycling industry has
been – historically speaking – a footlose industry. It has in the past moved
from Europe to the Far East, in particular to Taiwan, from where it moved on
to the current four foremost shipbreaking nations: India, Bangladesh,
Pakistan and China. These four countries handle an estimated 85 per cent of
the world scrap tonnage in terms of light ship weight. The rationale for the these
countries to be involved in ship recycling is more or less identical. They
all have the need for employment for the masses and they cannot afford major
investments; they all can recycle (re-roll) most of the steel of the ships
and use it in the construction industry; they all have a very well developed
market for all the machinery and equipment on board ships. The situation in China is a bit
different since the methods used in shipbreaking are much more capital
intensive while China attempts to introduce a higher technological level of
ship demolition. The problems arising within the
major ship recycling nations are concentrated around three themes: environment,
occupational health, and safety at the workplace. These issues are important
but in principle relatively easy to solve, although at a cost. The
competitive nature of the industry does not result in gross margins for the
shipbreakers that facilitate the investment in the necessary systems,
training, and equipment. However, relatively minor investments are required
to help solve the major bottlenecks in these countries. The ship recycling industry is
concentrated in a very limited number of countries and their level and state
of economic development makes it an activity that suits their needs
perfectly. The problems that the industry faces can be solved with some
organisation and money. There is a need for international
guidelines to define criteria for the recycling of ships in a responsible way
by the ship recycling yards around the world in order to create a level
playing field. At the same time shipowners should be required to prepare
their ships for recycling once they are sold for demolition. STATEMENT
3:
Since
all international maritime rules and regulations in the world have been
issued by the IMO, it is logical to have new rules and regulations for the
ship recycling industry also developed by this organisation. It remains to be
seen whether this should take the form of a new Ship Recycling Convention, or
a less formal Ship Recycling Industry Charter. Background:
Stakeholders and regulatory framework There exist no international rules
and regulations for the ship recycling industry. Ship recycling is currently
the domain of the national regulatory bodies in each country. This is rather
odd since the rest of the life cycle of ships – design, construct and build,
operation and maintenance – is very well regulated at a world level. The question of setting up a
regulatory framework raises the issues of who should be responsible for what
and under which umbrella should everything come together? The stakeholders are
shipbreakers/recyclers, shipbuilders, marine equipment suppliers, shipowners,
classification societies and their trade organisations, port states, flag
states, and environmental orgnisations. The regulatory bodies involved are
the IMO, ILO, UNEP, and their national equivalents, as well as a number of
NGO’s. STATEMENT
4:
Elements
of a Ship Recycling Convention of Industry Charter should be: 4.1
All
ships should be recycled at the end of their trading life and this should be
done in a responsible way; 4.2
Implementation
of the Convention or Industry Charter will require a tight control system; 4.3 A register of ships that are and
will be recycled has to be created; 4.4
The
management of the Ship Recycling Register could be delegated to flag states
as well as classification societies; 4.5
Ship
recycling requires a process and quality definition on which acceptable
international standards for ship recycling yards and shipowners can be based; 4.6
A
Ship Recycling Code should be created on which basis a certificate of
approval for ship recyclers around the world can be based; 4.7
The
Code should draw up standards and measures which should be executed by the
shipowner before a ship arrives at the shiprecycling yard; 4.8
The
Industry Working Party on Ship Recycling under the secretariat of the International
Chamber of Shipping, has drawn up a draft Code of Practice on Ship Recycling,
which could form the basis for such a Code; 4.9
In order to create an objective instrument which measures the extent of hazardous material on board a ship for the
regulator, shipowner and ship recycler, it is necessary to establish a
materials passport or better, a materials certificate for each (new) ship. 4.10
The implementation of the Ship Recycling Convention or Industry Charter will
require a major one time effort and funds. The creation of a structure to
raise the neceassry funds from the maritime stakeholders is required. Background:
Ship Recycling Convention or Industry Charter Major changes in regulations of
ship design and operation have in the past often been triggered by serious
problems or disasters, such as the overloading of ships which lead to the
Load Line Convention, the Titanic tragedy which lead a couple of years later
to the SOLAS Convention or more recently the pollution of the marine
environment caused by shipping which lead to the MARPOL Convention. It is therefore logical that the
last part of the life cycle of a ship – the disposal and recycling – which is
currently percieved by many as a major problem, will be regulated by a new
Convention or at least a tightly controlled Industry Charter. Given the
diverse and sometimes complex aspects of ship recycling it is probably
justified to make a new convention and not extend for example the Marpol
Convention with yet another addendum. What should be regulated in a new
convention or industry charter? Basic
Principle of the Convention or Industry Charter The replacement of 4,000 ships per
annum with an aggregate gross tonnage of 24 million by the year 2010, may
result in a littering of the oceans, beaches, rivers and ports if these ships
are not recycled in a responsible way. Currently the shipowner has no
formal obligation to recycle his ship, let alone in a responsible way.
Therefore the basic principle that should be addressed in a convention or
industry charter is that all ships
should be recycled at the end of their trading life and that this should be
done in a responsible way. The shipowners have an obligation
when they cease operations with a ship, to have it recycled. The ship can not
remain idle in a fjord, port, river or beach and gradually waste away and
pollute the environment. The Convention or Industry Charter takes away the
freedom of owners to do as they please with a ship at the end of the life
cycle. Implementation
of the Convention or Industry Charter will require a tight control system,
for which an extension of the IMO’s current ship registration system could be
used. Ship
Recycling Register The Ship Recycling Convention or
Industry Charter will require a good reporting system from flag states as
well as classification societies regarding ships that cease their operations
and should be recycled. The flag state should notify the owner of his
obligation to recycle his ship within a certain period and the flag state
should also look after the actual execution of the recycling obligation by
the owner. The flag state should inform the IMO of the obligation to recycle
the ship within a certain time frame. This means that IMO should set up a register of ships that are and will be
recycled. This Ship Recycling Register could take the form of a publicly
accessible database. The public nature of the Register makes it possible for
all stakeholders to obtain information and this may create a powerful
feedback loop in the maritime world and the recycling industry. In fact, the Register will form an
essential part of a worldwide bookkeeping system. This is necessary since
today their exists a huge discrepancy between the reported number of ships
that are recycled and the actual number of ships that cease operations and
may have been scrapped unnoticed or that are dumped somewhere by the owner.
The latter is particularly the case with smaller ships. The
management of the Ship Recycling Register can be delegated to flag states as
well as classification societies. A clear definition should be
adopted of “cease operations”, as shipping has known prolonged periods of lay
ups of ships, which of course do not fall within this criterion. It could for
example be phrased that a ship of over 25 years, that has not operated for
more than a year and has lost the
certificates, is considered to be ready for recycling. Ship
Recycling Code Ship
recycling requires a process and quality definition on which acceptable
international standards for ship recycling yards and shipowners can be based.
Minimum standards should be defined for the yards and the shipowners with
respect to environmental treatment of hazardous materials, the health and
welfare of the workers and their safety. It would be advisable to create an Ship Recycling Code on which
basis a certificate of approval for ship recyclers around the world can be
based. Ship recycling yards with such a certificate are allowed to
recycle ships. This certificate could be drawn up with the help of
organisations such as ILO and UNEP and various NGO’s. Another aspect that should become
part of a Ship Recycling Code concerns the preparation of a ship for
recycling by the shipowner. Hazardous materials that are not part of the ship
should be removed. This could be cargo residues but also for example
gasfreeing of tankers for hot work. The
Code should draw up standards and measures which should be executed before a
ship arrives at the yard of the ship recycler. At the same time, there are
materials on board the ship which are difficult to handle and treat in the
ship recycling countries, for example pcb’s. The Code could stipulate that
these materials should be re-exported to a country where the infrastructure exists
to deal with this hazardous material. The
Industry Working Party on Ship Recycling under the secretariat of the
International Chamber of Shipping, has drawn up a draft Code of Practice on
Ship Recycling, which could form the basis for such a Code. The Ship Recycling Code, which
will form an integral part of the Ship Recycling Convention or Industry
Charter can be managed just as the ISM-Code in close cooperation with the
flag states and classification societies. It should be noted that some of
the environmental, health and safety issues at ship recycling yards are
identical to those at regular ship repair yards around the world. The risk is
that when ship recycling yards will fall under a strict ship recycling
regime, ship repair yards will have to follow. Ship
Materials Certificate A ship is a complex system with a
lot of machinery and equipment. More than 99 per cent of the light ship
weight can be recycled without a problem. Only a minor fraction of the ship’s
weight can be termed as hazardous material. This is particularly true for
older ships, built before 1980, when for example asbestos was still applied. In
order to create an objective instrument which measures the extent of the
hazardous material on board a ship for the regulator, shipowner and ship
recycler, it is necessary to establish a materials passport or better, a
materials certificate for each (new) ship. The Ship
Materials Certificate is an integral part of the Ship Recycling Covention and
forms the cornerstone of the Ship Recycling Code. The objective of the materials
certificate is twofold: -
Identify in a manual and on drawings the exact
place and quantity of each material, in particular hazardous materials; each
change due to maintenance, repair and modifications, should be added to the
certificate; -
The materials certificate will become a
standard certificate of the ship’s papers and will be registered with the
flag state. When a ship ceases operations, and will be recycled, the flag
state where the ship is registered will send the certificate to the maritime
administration of the country in which the ship will be recycled. The local
government thus has an independent source of information which it can use to
check the data from the ship recycling yard. It is relatively easy to make a
materials certificate for a newbuilding, as the shipyards have all the
specifications in their databases. For existing ships it is more costly,
since a surveyor has to inspect a ship in great detail. It is therefore recommended to
stipulate in the Ship Recycling Convention or Industry Charter that all old
ships which will be recycled should have a materials certificate made and
registered with their flagstate. Funding
the Ship Recycling Covention The
implementation of the Ship Recycling Convention or Industry Charter will
require a major one time effort and funds of the
IMO and other institutions, as well as a more modest ongoing effort. This is
not budgetted for by these organisations and therefore it is proposed to create a structure to raise the neceassry
funds from the maritime stakeholders. Therefore a last - financial -
paragraph will conclude the Ship Recycling Convention or Industry Charter. Additional funding is necessary
to: - to set up and maintain the Ship
Recycling Register; - to monitor the process of ship
materials certificates for old and new ships; - to monitor the preparation of
ships for recycling by the shipowners; - to inspect and certify ship
recycling yards which are allowed to handle ships that have to be recycled in
a responsible way; - to supervise the logistics and
re-export of hazardous materials that can not be dealt with locally; - to help ship recycling yards
improve the quality of their operations in various ways. In order to fund these activities,
additional resources should be obtained which have to be generated by the
maritime industry as a whole. The first task at hand will be to
calculate the financial needs for these tasks. The second task is to devise a
levy system which does justice to the responsibilities of the shipowners,
shipbuilders and marine equipment suppliers of the existing world fleet and
new buildings. It is advised to create a working
group which proposes a number of systems. The analogies from other industries,
like cars, indicate that (cost) effective solutions are not difficult to
find. Ship
Recycling Convention or Industry Charter structure The structure of the Convention or
Industry Charter is schematically represented below. Ship Recycling Convention or Industry
Charter Basic Principle Ships have to be recycled by the shipowner in a responsible way at the end of their trading
life Four Building Blocks 1.
Ship
Recycling Register 2.
Ship
Recycling Code 3.
Ship
Materials Certificate 4.
Funding
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