The European Union has recently, innovatively, regulated the legislation concerning the recycling of ships of less than 500 gross tonnage and flying the flag of a Member State1.

Such rule not only applies to the dismantling phase but also introduces a legislation that will certainly affect the entire maritime industry.

This Regulation has the main purpose to facilitate and speed up the ratification of the Hong Kong International Convention of 2009. Indeed, such convention, which was adopted on 15 May 2009 under the auspices of the IMO, will enter into force only after the ratification by at least fifteen States having particular requirements.

The aim of the Community legislator is certainly that to reduce disparities in the dismantling procedures among operators in the Member States of the Union and those in other countries such as India, Pakistan and Bangladesh, which, as is well known, use methods that are detrimental to the environment, polluting and dangerous for the health of workers, obviously at lower costs.

According to the European Parliament, in 2009 more than 90% of the ships flying the EU flag was dismantled  mainly  in  countries  that,  like  those mentioned above, do not guarantee procedures that are consistent with the standards in force in the Union while the dismantling of ships at word level has increased by six times in the period from 2007 to 2009, thus becoming more and more an economic phenomena that cannot be ignored.

As usual upon improving the standards of  a specific industry, the rule implies certain  costs and charges for ship owners but  it  represents  at the same time an opportunity of growth for an industry that sees Italy and  Europe  penalized  by the dumping so far permitted by the non-­‐ observance of elementary safety  and environmental  management  rules.

As concerns ship owners, the Regulation defines a first level of preventive protection  in Article 5, which basically provides:

  1. the prohibition  or restriction  to  use on ships  specific hazardous substances such as,  by   way     of   example,    asbestos, substances that  deplete the ozone layer and PCB;
  2. the  obligation  to   keep   on   board   an inventory    of    hazardous     materials containing:   (a)   a    list    of    hazardous materials  present  in  the  structure   or equipment of every ship (such as, by way of   example, the substances under the above   paragraph, certain heavy metals, radioactive       substances      and      flame retardants);  (b)  a   list of  operationally generated waste; (c) a list  of the stores present on board.

Subsequently, when preparing a ship for recycling, ship owners shall, among other things:

  1. notify    in    writing    the    relevant administration of the intention to recycle the  ship, providing it with the inventory and all ship-­‐relevant information (Article 6, par. 1);
  2. ensure that the ship is only recycled at recycling facilities that are included in a specific European list as better explained below (Article 6, par. 2, lett. a);
  3. provide   the   selected   recycling   facility with    all   the   necessary   data   for   the development of the ship recycling plan to be    submitted for     approval    to    the administration  (Article  6,  par.  2,  lett.  c and Article 7);
  4. obtain a  ready  for  recycling  certificate issued   by the administration or by a recognised  organisation authorised by it (Article 6, par. 2, lett. c and Article 9, par. 9).

Furthermore, surveys of ships shall be carried out by the  administration  or  by  a  recognised organisation authorised by it in order to check the compliance with certain requirements  imposed by the Regulation (Article 8). Such surveys shall be carried out for the entire life-­‐cycle of ships starting from the date they are put into service until the time of their recycling, while for existing ships the initial survey shall be conducted by 31.12.2020.

Such rules may represent a cost for ship owners, but a new season is opening for yards that will start with the setting up of a European list of authorised recycling facilities, which will be managed by the European Commission, also via the web, by 31 December 2016.

However, it should be possible for recycling facilities to obtain the authorisation to be included in the European list provided for by the Regulation already from 31 December 2014, when the relevant provisions will become applicable.

Ship recycling facilities shall meet several requirements that are set out in Article 13 of the Regulation, among which:

  1. the obtainment of a specific authorisation by the competent national authority that, for  recycling    facilities   located   in   the Union, shall be  granted for a maximum period of five years pursuant to Article 14 of the Regulation;
  2. the  use  of  built  structures,  so   as   to exclude   the  possibility  that  ships  are stranded on beaches and dismantled there (as it still happens, to say nothing of the rights of workers and environment);
  3. the observance of systems, procedures and  techniques that allow the protection of human   health and safety  and  the prevention of pollution;
  4. the development of the ship recycling facility    plan and of a plan for the management of emergencies.

Moreover, according to Article 15 of the Regulation, recycling facilities may be located also outside the territory of the European Union. However, in such event, in addition to the application of all the requirements necessary for the authorisation of facilities located in the Union:

  1. the inclusion in the European list shall be subject to a preliminary site inspection by an independent verifier;
  2. the facility shall be subject to a mid-­‐term review  to confirm the compliance  with the requirements;
  3. the   European   Commission    shall    be entitled to carry out, at any time, site and facility      inspections      to      verify      the compliance         with        the        aforesaid requirements.

As far as timing is concerned, most of the provisions of the Regulation shall apply from 31 December 2018 or the earlier date (anyway after 31 December 2015) that shall be communicated by the European Commission in case specific annual ship recycling outputs are reached.