Cash Buyer Speaks Out on Shipbreaking Allegations

Dr Nikos Mikelis, non-executive director of GMS, gives his opinion on the allegations made by the NGO Platform on Shipbreaking regarding the proposed fate of the car carrier Global Spirit:

The article of 4th of June “Will Belgium step up to shipbreaking challenge?” repeats the allegations made by the NGO Platform on Shipbreaking that the car carrier Global Spirit, which is currently in Antwerp loading cars for delivery in West Africa, is about to violate European law and consequently that the ship should be detained by the Belgian authorities. The alleged violation is that, after discharging its cargo in West Africa, the ship will head to the “infamous ship breaking beaches in India” and thus violate the Waste Shipment Regulation of the European Union.

The subject of ship recycling is a particularly complex one and repetition of the usual rhetoric of the NGO Platform does nothing to reflect the reality in today’s ship recycling industry, nor the regulatory situation of this case, nor the seriousness of the case. 

Firstly, looking at the letter of the law, it needs to be pointed out that it is not at all clear-cut whether the alleged situation of the Global Spirit would create a violation of the European Waste Shipment Regulation. The Regulation certainly forbids the export of hazardous waste to non-OECD countries. The Directorate General for the Environment of the European Commission has tried over the years to apply the Regulation also to cases of end-of-life ships, but the only enforceable interpretation of “exporting” a ship (or to use the language of the Regulation “dispatching” a ship) is when a ship, regardless of flag, is sent from a port in the European Union to a non-OECD location for recycling. 

However the Global Spirit, on departing from Europe, is destined to a West African port with a cargo of cars. Whether the ship in this case is being dispatched to West Africa, or as alleged by the NGO to India for recycling, is open to interpretation, and only the interpretation of a court would be final.

Most of the few attempts that have been made over the years to enforce the Waste Shipment Regulation to end-of-life ships have ended costing money to the European taxpayer and embarrassment to the relevant administration. The usual scenario starts with the NGO Platform campaigning for the detention of an end-of-life ship that is due to depart from Europe, and evolves when the authorities of a Member State become convinced to take action. As less than 5 percent of the world’s ship recycling capacity resides in OECD countries and also as the mechanisms of the Waste Shipment Regulation do not address ships, shipping, recycling yards, or any safety issues, it is not surprising that the regulation has not made any impact to ship recycling.
 
The European Commission calculated that in 2009, 91 percent of European end-of-life ships had avoided or evaded the provisions of its Waste Shipment Regulation. Recognizing the need to remove end-of-life ships from the scope of this regulation, in 2011 the Commission announced the development of a new European Regulation to address ship recycling in the period before the entry into force of the Hong Kong Convention, which has been developed by the IMO specifically for the international regulation of the ship recycling industry. The Hong Kong Convention is slowly moving towards its entry into force, while the new European Regulation on Ship Recycling was adopted and entered into force in 2013 and will start applying to European flagged ships in two to three years’ time.

In the middle of these developments, the present actions of the NGO in the case of the Global Spirit come as a stiff reminder to European and non-European countries for the urgent need to ratify the Hong Kong Convention as a matter of priority, so that the recycling of ships can be regulated in a rational and effective manner. 

The bottom line is that European Union countries are forced by activists to enforce an unworkable regulation. Non-European countries end up with the problem that ships flying their flag, when “caught” in European ports, can be forced to abide by requirements that are costly, ineffective and counterproductive. What may not be so clear to your readers is that ships flying non-European Union flags will continue to be subjected to this regime even after the new European Regulation comes into full application. 

Note that none of this serves the stated goals of improving safety and environmental protection in the recycling yards of the developing world.

Dr Mikelis graduated in naval architecture from the University of Newcastle and obtained Master’s and Doctorate degrees from London University. He has worked in ship classification; and then for a shipping company as superintendent, technical manager and then director. In 2006 he joined the IMO, from where he retired at the end of 2012 as Head, Marine Pollution Prevention and Ship Recycling section. Currently he is non-executive director of GMS, the world’s leading cash buyer, and independent consultant.

He has served in senior positions in shipping industry bodies, such as Council Member of Intertanko, Chairman of the Intertanko Safety, Technical & Environmental Committee, member of the Safety of Navigation & Protection of the Marine Environment Committee of the Union of Greek Shipowners, and Chairman of the London Greek Technical Committee of Det norske Veritas. He has written over 50 learned papers and numerous articles in the maritime press and is a freeman of the City of London.