Industry bodies call for swift ratification of Hong Kong Convention

Asia Shipowners Association (ASA)

A gathering of leading international shipowners have signalled the urgent necessity of bringing the Hong Kong International Convention for the Safe and Environmentally-Sound Recycling of Ships, 2009 into force.

The announcement was made as the International Recycling Association urged China to reverse its decision to exclude foreign-owned ships from its ship scrapping facilities

Highlighting the expected increase in demand for ship recycling in 2018, particularly in the tanker sector, and after reviewing the increasing need to expand the number of Hong Kong Convention compliant ship recycling facilities around the world, the joint industry meeting in Hong Kong on 14 May, agreed that the entry into force of the Hong Kong Convention was critical.

To be able to bring the Hong Kong Convention into force however, it is essential that the ship recycling States commit to improving the standards of ship recycling and ratify the the Convention. In this regard, the participating associations agreed to:

Encourage member associations to approach their respective governments to hasten the process of ratification of Hong Kong Convention;

Encourage national associations to request their respective governments to include ratification of the Hong Kong Convention as an agenda item when having an opportunity to talk with officials of the ship recycling states;

Encourage all ship recycling States to ratify the Hong Kong Convention; and,

Encourage IMO and its member States to establish a team for early enactment of 
the Hong Kong Convention under IMO, which would act as a focal point for activities of the concerned stakeholders including governments, recyclers, workers, shipowners and observer organizations.

Hong Kong and China as major ship registries, and China with many ship recycling facilities, are especially encouraged to ratify the Hong Kong Convention as soon as possible as this will significantly speed up ratification.

Impatient with the glacial progression of the Convention towards in force status, the European Commission’s European Ship Recycling Regulation will enter into force on 31 December 2018. The gathering of industry associations noted that there is expected to be a lack of facilities on the EU List when the Regulation enters into force, as well as the absence of non-EU ship recycling yards in the EU List. Part of the task of the associations will be to urge the European Commission to include facilities outside Europe on the EU List.

In order for the Hong Kong Convention to enter into force 15 States, representing 40% of world merchant shipping by gross tonnage, combined maximum annual ship recycling volume not less than 3% of their combined tonnage. Currently six nations have signed up to the Convention, representing 20.8m gt.

In related news, the International Ship Recyclers Association has urged China to rethink its decision to ban foreign-owned vessels from using China’s ship recycling yards.

“The announcement to stop importing recycle ships in China could close some of the best recycling facilities in the world that match the Hong Kong Convention and the EU ship recycling regulation requirements. Since the IMO started to discuss Ship Recycling regulations, a number of Chinese Ship Recycling Facilities has upgraded and invested in their facilities enormously. This made these yards the first in the world to recycle ships at the highest standards available on Health, Safety and Environment,” the ISRA said.

In 2017, China scrapped 2.29m gt of ships, some 11% of 20.7m gt recycled globally that year.

“The method of Ship Recycling in China reduced the total amount of waste and transformed it in recovered reusable materials in an environmentally sound manner. The records in China have shown that ship recycling can be an environmental sound and safe industry

“The Chinese yards has been a prime example for other yards around the world, to improve and invest.

“If the announcement of the central government in China is activated the result is that well over 2.5m tons of high standard capacity is taken out of the global market and can be seen as a major step back in the global development towards environmental and human safe ship recycling,” the ISRA concluded.

One broker told hongkongmaritimehub that scrapping in China’s green yards had been fairly moribund as only those few shipowners who had come under pressure from stakeholders or customers with an environmental agenda were taking the China option.

Meanwhile pressure on shipowners to scrap at recycling yards which are Hong Kong Convention compliant has gone up a notch with the intervention of institutional investors.

Norway’s $1trn Oil Fund, a leader in ethical investing, in February sold its stake in four firms because they scrap on the beach.

Three of the firms excluded by Norway’s fund – Taiwan’s Evergreen Marine, Precious Shipping and Thoresen Thai Agencies (TTA) of Thailand – say they have been unfairly singled out. The fourth, Korea Line, declined to comment.

Norwegian life insurer KLP soon followed, selling shares in the one of the four it owned and blacklisting the other three, Reuters reported on 14 May.

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