Maersk outlines legal strategy for Hong Kong Convention compliance

"A lot of focus has been within the last couple of years on the overlap between the Basel and Hong Kong Conventions," said AP Møller-Maersk senior advisor for public and regulatory affairs, energy transition and international legal affairs Jesper Fanø . "In that interim time, there has been a lot of work at IMO, and I think what has happened at IMO hasn’t gotten enough attention."

Mr Fanø emphasised IMO has adopted a guidance document clearly stating the Hong Kong Convention should take precedence if a state has ratified both. While acknowledging the current disparity in signatories between the two conventions, with Basel having substantially more parties, Mr Fanø suggested this gap would narrow. "We are all well aware the Basel Convention has many more signatories to it than the Hong Kong Convention, but that is likely to change in the coming period due to more focus on ship recycling, due to the Hong Kong Convention entering into force," he stated.

Crucially, Maersk’s analysis indicates global unanimity on the Hong Kong Convention may not be necessary for effective compliance. "If the IMO guidance document stands, then the most important thing is which states are ratifying the Hong Kong Convention. Is it the state the ship hails from, comes from, and is it the state in which the vessel is being recycled? That is the main focus."

Nevertheless, Mr Fanø acknowledged potential challenges in jurisdictions that have not ratified the Hong Kong Convention, particularly those that might categorise end-of-life vessels as waste. "What about states who don’t ratify the Hong Kong Convention, who deem a ship on its last voyage as being floating waste? And what if that ship passes through waters of that said state? Will they then enforce it? Will they then sanction it?" he asked.

This creates a potentially problematic situation for flag states implementing both agreements. "You cannot have maritime authorities going out and enforcing the Hong Kong Convention, and then at the same time have environmental authorities that deem it a violation of the Basel Convention if a ship passes through on its final voyage. Those things do not correlate," Mr Fanø observed.

He predicted clearer domestic alignment would emerge as port state control authorities implement concentrated inspection campaigns for Hong Kong Convention compliance.

While the shipping industry has focused on Article 11 of the Basel Convention as a potential pathway to resolving these conflicts, Mr Fanø emphasised Maersk’s preference for the Lex Specialis principle of international law. "We see the Lex Specialis principle in international law as being the key to unlocking this overlapping problem between Basel and Hong Kong," he stated.

This legal doctrine, which prioritises specialised agreements over general ones when both might apply, forms a cornerstone of Maersk’s compliance approach. "The fact that Basel has 192 signatories to it does not mean the Lex Specialis principle doesn’t apply. It does, meaning the Basel Convention doesn’t regulate ship recycling," Mr Fanø concluded.

Maersk’s operational strategy will consequently involve comprehensive due diligence focused on the entire voyage path of vessels destined for recycling. "We’ll be mindful of where a ship sails from, of course, where it sails to, and which states it passes through on the way," Mr Fanø explained, adding EU-flagged vessels face the additional requirements of the EU Ship Recycling Regulation.