The recent ship recycling webinar week hosted by Riviera Maritime Media triggered a thought-provoking debate on the best way to increase the wider adoption of more responsible and sustainable ship recycling practices globally
Delegates were asked to vote in a poll for what they believed would best provide for the wider adoption responsible ship recycling from a range of options, with the following outcome. The most votes went to ‘global regulation’ at 44%; in second, ‘additional funding for recycling facilities’ at 28%; joint third and fourth, ‘benchmarking and increased transparency’ with ‘improved standards and best practice’ at 11% and in last place ‘better enforcement of current regulations’ at 6%.
Global regulation is indeed desirable, however to be successful in raising practices widely these regulations require consistent and uniform enforcement. In ship recycling, this responsibility is generally shared between the ship’s flag state at the point of recycling, and the various governments in the ship recycling locations.
The regulatory picture for recycling is further complicated by regional requirements; for example those applied to vessels associated with the EU and EU recycling standards.
Although most industry observers agree that the EU ship recycling requirements contribute meaningfully towards improved recycling standards, they also introduce unintended consequences. Earlier in the webinar week, expert panellists commented on the lack of clarity and challenges of the current legal framework, as this relates to vessels with connections to the EU and the Basel Convention on the export of waste from developed to less developed countries.
The Hong Kong Convention (HKC) is a recognised global standard which has been increasingly adopted by leading ship recycling facilities. It is pleasing to see the number of shipowners electing to engage cash buyers who promote and offer HKC-compliant ship recycling services is increasing. However, an adequate supply of these contracts for vessels to be recycled in HKC-certified facilities is a concern to some, given the price differential and the continued investment required to offer this service more widely. This need for added investment to fund improvements in recycling facilities was recognised by delegates as the second-biggest factor in the poll at 28%.
A ‘level playing field’ is often cited as a prerequisite for the wider adoption of any maritime regulation. To further explore the question on how to support the wider adoption of responsible ship recycling, delegates were asked whether, in their view, it would be possible to create a level playing field globally. It was a close-run thing but in the end the results showed that those who believe a level playing is possible globally only narrowly outweighed the sceptics by a small margin of 10%.
Given the complexity of the stakeholder, regulatory and enforcement environment, the objective of creating a level playing field may no longer be the holy grail. In our daily lives, the speed of information flows and access to data through apps and services continues to accelerate. This same trend and transformation will continue to manifest itself in the maritime industry. To support the ongoing investment required, I would argue that as an industry we need more of the ‘carrot’ while saving the stick for those who attempt to create business advantage by accepting questionable practices. The SSI and Ship Recycling Transparency Initiative are to be commended for creating a platform which showcases and supports improved standards. For more information please visit www.shiprecyclingtransparency.org
Access to finance, cargoes, insurance and future business partners will increasingly be determined by those market participants who are able to better demonstrate and evidence their good performance via ESG reporting and other key metrics. So while the wider adoption of better ship recycling practices may not be best served by the introduction of additional regulations or standards as identified by the poll, they could have a clear role to play in creating benchmarks and metrics.
By increasing the transparency of the responsible recycling choices made by leading stakeholders through better data, reporting and metrics, the ongoing gains made by the industry and alternatives will become more visible. By measuring and benchmarking this in a consistent way over time, what is good for the environment and society will also become good for business. Beyond connecting companies with similar values and policies, this transparent, reliable and validated reporting structure could also provide a consistent and auditable way to assess future grants and incentives.
A great deal of progress has been made in responsible ship recycling practices, however, for this to continue to meet the expectations of the industry and society, increased collaboration and transparency, along with reliable reporting is required to accelerate the adoption of improved ship recycling practices more widely. This valuable service will be to the benefit of society and the environment.
Watch the Ship Recycling Webinar Week webinars in full in our webinar library