Application of the SR Regulation
The SR Regulation applies mainly to EU Flagged Ships and, with a lesser intensity, to any vessel calling at a port or anchorage of an EU Member State. The EU Regulator has therefore gone beyond its own physical borders by imposing its own requirements also to vessels flying a non-EU Flag.
As standard practice within the international community the SR Regulation does not apply to i) warships ii) ships below 500GT and iii) Non-commercial government vessels.
Coming into Force of the SR Regulation
Some articles, mainly relating to the implementation of the Inventory of Hazardous Material (“IHM”) are already in force. As from 31.12.2020 the obligation to carry on board an IHM would also apply to non-EU Flags calling at a port or anchorage of an EU Port.
The SR Regulation will become fully applicable by the end of 2017 when the minimum threshold of Ship Recycling Facilities authorised by the European Commission should be reached or by the 31.12.2018. From this moment onwards any European Flagged vessel shall be recycled within such approved facilities and according with the parameters outlined by the SR Regulation.
Purpose of the SR Regulation
History of the SR Regulation is pretty much tied to the Hong Kong Convention (“HKC”). In fact if one had to compare the SR Regulation to the HKC, one would easily fall under the impression that the former is a paraphrased version of the latter. This is (almost) the case as the intention of the EU lawmaker is simply that of rendering effective, through concrete and applicable measures, the values and principles of the HKC. In fact the main problem with the HKC lies with its entry into force which, unfortunately, is not set to happen any time soon in view of the minimum number of ratifications required. The HKC is at the forefront of ship recycling and has set the minimum highest standards in such field. For this reason the EU has decided to go one step further through the SR Regulation (which is applicable in its entirety throughout the whole EU) by imposing a number of its provisions also to non-European ships.
What’s happening right now in the EU
Currently, ship recycling is governed by the EU Waste Regulations (the “Waste Regulation”). The Waste Regulation is itself drafted on the bases of the Convention on Transboundary Movement of Waste (“The Basel Convention”) . The main issue concerning the Waste Regulation is that it addresses waste in general not taking in consideration the peculiarities of ships, hence making the Waste Regulation a very weak instrument. A container full of disposable material (i.e. electronic appliances etc) cannot be treated au pair of a ship containing a variety of hazardous materials, manned by human beings and possibly attached by a number of claims, liens and several other encumbrances. Negative repercussions are felt by practitioners upon application of the regulation (i.e. over bureaucratic notification systems in place) which renders abidance to such provisions cumbersome and not practical in a scenario where the prices of raw material to be obtained from the recycling phase remains extremely volatile.
The Waste Regulation has gone even further by allowing the owner of any asset defined as waste (including ships) leaving or transiting an EU port to be treated within an OECD or an EFTA country also party to the Basel Convention .
Challenges of the SR Regulations
The main challenges of the SR Regulation are two:
i) Costs linked to treatment of vessels in accordance with the SR Regulation within EU approved recycling facilities; and
ii) Flagging out of vessels for purposes of ship recycling in an attempt by practitioners to avoid the imposition of its provisions.
The ultimate aim of the European Union is not the imposition of obligations and additional costs on Ship-owners simply to sustain its authoritative role but the protection of the environment through the creation of a safer working environment within such industry and a safer and more environmental friendly ship recycling industry.
The EU is well aware that it will not be able to reach such objectives simply by imposing such requirements within the small European Market only. In fact the number of yards all over the world adopting practices in compliance with the HKC and the SR Regulation is on the increase. The number of applications received from non-EU recycling facilities is a tangible proof of this.
It is clear that EU’s real ambition is a 180 degree twist of the main players’ approach and attitude towards ship recycling, instilling strong values and principles in this regard through the imposition of clear procedures. The intention of the EU is clearly that of eradicating bad practices in this field in order to avoid such images as those of a giant container carrier beached on a south Asian bay with fluids dumped into the sea and naked handed workers cutting same into pieces.
What if such goals are not reached? The EU in this case must be brave enough and trigger Article 29 of the SR Regulation.