Ship Recycling 2.0: Unlocking the Game-Changing Potential of HKC
The Hong Kong Convention, set to take effect in 2025, marks a pivotal moment for the ship recycling industry. In a recent interview, Gard’s Special Adviser, Kim Jefferies, discussed the implications of the convention with Herman Steen, a Partner at Wikborg Rein, shedding light on how it will reshape ship recycling practices globally.
The International Maritime Organization (IMO) adopted the Hong Kong Convention in 2009, with the enforcement scheduled for June 25, 2025. This move comes two years after Liberia and Bangladesh’s accession triggered the entry into force mechanism. The primary goal of the convention is to ensure safe and environmentally sound ship recycling, addressing concerns about hazardous practices, especially in South Asia.
Alang’s Commitment to Environmental and Safety Standards:
Alang’s decision to adopt the HKC reflects a proactive approach to addressing environmental and safety concerns associated with ship-breaking activities. The ship-breaking industry has often faced scrutiny for its impact on the environment and the well-being of workers. By aligning with the HKC, Alang demonstrates its dedication to improving practices and ensuring a sustainable and responsible approach to ship recycling.
Steen explained that the Hong Kong Convention adopts a comprehensive cradle-to-grave approach. It applies to ships flagged in contracting states, necessitating them to carry an Inventory of Hazardous Materials (IHM) and allowing recycling only at authorized facilities. The convention also covers recycling facilities in contracting states, requiring them to be authorized by national authorities and submit a Ship Recycling Facility Plan (SRFP) and a Ship-Specific Recycling Plan (SRP) for each project. National authorities will be responsible for ensuring compliance with convention requirements.
Currently, 22 contracting states, representing approximately 80% of the ship recycling market, including Bangladesh, India, and Turkey, have ratified the convention.
However, recognizing the slow pace of international conventions, the European Union (EU) developed its ship recycling regime in 2013, aligning with the Hong Kong Convention but imposing stricter regulations. EU/EEA flagged vessels can only be recycled at EU Commission-approved facilities listed on the European List. These regulations also introduce additional waste management and safety requirements. Steen highlighted that these stringent EU requirements will persist even after the Hong Kong Convention comes into force, as it sets minimum standards, allowing regional regulations to go beyond them.
Norway, while not an EU member, has implemented the EU Ship Recycling Regulation domestically, requiring Norwegian flagged vessels to be recycled in European List-approved facilities. Steen referenced a case involving the “Tide Carrier,” where the owner faced criminal conviction for attempting to recycle a Comoros-flagged vessel in Pakistan. This legal action was based on Norwegian regulations that incorporate the EU Waste Shipment Regulation, implementing the Basel Convention and Basel Ban Amendment. The Basel Convention controls the international movement of hazardous waste, and the Basel Ban Amendment prohibits exports to non-OECD states. The “Tide Carrier” case resulted in strict enforcement, with the owner sentenced to six months in prison.
Steen addressed concerns about non-EU vessels and their potential recycling in countries like India and Bangladesh, which have ratified the Hong Kong Convention but are not OECD countries. He explained that the general view, including that of the EU, suggests that the Basel Ban Amendment wouldn’t prevent the export of vessels from OECD or EU/EEA countries to compliant yards in non-OECD countries, as long as these yards adhere to the Hong Kong Convention or are on the European List.
Pakistan, a significant player in ship recycling, has not ratified the Hong Kong Convention. Steen expressed optimism that Pakistan might join, given the increasing global adherence to the convention. With 22 contracting states, representing 80% of the market, including India and Bangladesh, leading the way, standards have risen significantly in these countries. Whether Pakistan joins will depend on its belief in achieving compliance by the convention’s enforcement date and the potential impact of natural disasters and foreign currency shortages on its recycling market share.
Looking ahead, Steen believes the Hong Kong Convention’s entry into force will be a game-changer, marking a significant milestone for international regulations aimed at safe and sustainable ship recycling. While acknowledging the EU’s role in accelerating the adoption of the convention and related Basel regulations, Steen emphasized the need for global regulations to address global challenges. The convention represents a commitment by the international community to responsible ship dismantling practices, setting binding minimum standards applicable to recycling yards in most countries facing significant recycling-related issues.