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In with the old? The calls for scrapping the ship-scrapping convention

Hoca

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The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 is set to enter into force in June 2025 and deals with the responsible dismantling of shipping vessels. The Convention’s low standards at the time of drafting in 2009 were the result of states’ unwillingness to seriously address planetary and human concerns. The ship recycling industry is still plagued with some of the gravest forms of labour abuse and environmental pollution. Nonetheless, what is needed is not another treaty vis-à-vis states, but instead, stricter company compliance with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles (UNGPs). Shifting focus to corporate responsibility would give room to push for a cradle-to-grave approach, rather than regressing to sub-par standards drafted over a decade ago that will lower the benchmark for all.

The industry at a glance

Shipping vessels have a lifespan of 20-25 years, and their end-of-life value is determined by the amount of steel it is made of. Thus, shipbreaking deals neatly with taking a ship apart for its remaining steel once it is no longer fit for use. Shipping companies can pay to have their ships safely recycled at EU-authorized sites. More commonly, a shipowner will sell a ship to a ‘cash buyer’ who sends the ship to be dismantled with disregard for the safety of people or the environment. The ‘cash buyer’ will foremost consider the price of steel when taking over a ship. The ship recycling industry is consequently closely tied to the fluctuating price of steel. In a popular effort to circumvent stricter control, cash buyers will often use shell companies to register their ships under a flag from a state with minimal regulatory burdens. This practice has become known as ‘flags of convenience’.

Handling hazardous waste

The industry is plagued by grave labour abuse and environmental pollution. The ILO has named shipbreaking as one of the most dangerous occupations in the world. It is along the shores of Bangladesh, precisely in Chattogram, that most ships go at the end of their lives, followed by recycling sites in Alang, India and Gadani, Pakistan. Ships are manually dismantled along tidal beaches, hence why ship breaking is often referred to as ‘beaching’. Workers, as well as children, who make up approximately 13 per cent of the workforce, break apart ships containing poisonous fumes, asbestos and toxic waste by hand (NGO Shipbreaking Platform). In most cases, the ships are not on platforms, thus, workers are not secured from falling from heights. Workers receive inadequate training and insufficient personal protective equipment (PPE), making hot-work particularly precarious. Fatal injuries have resulted from fires and explosions occurring during the process. Without proper infrastructure for waste management, the industry causes harm to the environment, which again causes harm to nearby communities.

The unstructured working conditions mean statistics documenting serious or fatal injuries are lacking, something the Hong Kong Convention aims to address. The informal nature of ship-breaking also leaves workers vulnerable when accidents or injuries do occur since shipyard owners easily evade corporate responsibility. Furthermore, without proper contracts, workers are unable or consistently unsuccessful in organizing. Last September, Human Rights Watch, along with NGO Ship Breaking Platform, published a report titled “Trading Lives for Profit,” where they followed the lives of ship breakers and outlined the various ways workers were put at risk with little to no remedies.

The Convention and its shortcomings

Neatly, one can describe the Hong Kong Convention as dealing with labour issues pertinent to shipbreakers alongside the environmental protections the Convention offers. For instance, clarifying certain terms and underlining the necessity for policies, controls and training relevant to workers. Yet the criticisms lodged against the Convention pertain precisely to the procedural characteristics which overshadow any substantive obligations. For instance, the Annex states “[Authorized facilities] shall establish management systems, procedures and techniques which do not pose health risks to the workers concerned … and to the extent practicable eliminate adverse effects on the environment” (Regulation 20, article 1). This sets the bar pretty low with regard to genuinely improving conditions since the Convention avoids stronger language pertaining to specific targets or prohibitions. The Convention does not, for example, outright ban beaching.

Instead, the Convention stipulates the requirements for certificates, authorizations, and inventories. One issue that has already arisen before the Hong Kong Convention is set to enter into force, is that private certification schemes have issued ‘Hong Kong Convention compliance’ certificates to over 200 facilities, which are largely falling short of ensuring general human rights standards. It is unclear whether these yards will remain ‘authorized’ once the Convention enters into effect, but the sad reality is that they most likely will. Each party to the Convention is responsible for recycling facilities within its own jurisdiction and a disproportionate burden is placed on ship-recycling States for lifting industry standards in their home countries (see report from special rapporteur).

Where safeguards for workers and the environment are touched on in the Convention, this remains vague. The Convention does not make reference to fundamental human rights such as freedom of association and collective bargaining. This oversight cannot be emphasized enough as worker associations are found to be the most effective tool to ensure occupational health and safety for workers. Furthermore, even though there are indicators that show a decline in child labour, the Convention does not set targets or mandatory inspections to uncover illegal child labour. So even though the Convention can be characterized as setting some aspirations to regulate the industry, these remain unspecific with few push-factors to raise industry standards.

Other regulatory frameworks

Besides the Basel Convention, which deals with the transboundary movement of hazardous waste, it is only the EU that has specific legislation regarding ship recycling known as the EU’s Ship Recycling Regulation (SRR). The SRR adopts the Hong Kong Convention in addition to adopting extra measures. This is particularly relevant for Türkiye who dismantles most ships in the EU, however, the regulation applies to all ships flying a flag of an EU country, or vessels inside the EU’s jurisdiction. The regulation permits ships to be recycled at authorized sites either inside or outside the EU. The SRR deviates from the Hong Kong Convention in that it specifies some further waste handling and adds two other hazardous materials to the compulsory inventory of hazardous materials. The EU Commission is tasked with authorizing ship recycling facilities. Although there are several approved facilities in Europe, few are in operation since they are not economically viable. So far, not one recycling facility in Bangladesh, India or Pakistan has been approved by the EU. In part due to the inadequate infrastructure for waste handling and emergency safety measures for workers, such as access to hospitals in case of serious injury. For instance, a Norwegian district court sentenced a ship-owner for breaching waste export regulations when selling the vessel ‘Tide Carrier’ (the Harriet case) to a cash buyer in Pakistan.

Corporate responsibility and soft law instruments

Claims that the Convention’s aims and protections are outdated from the date of drafting ring true and give rise to concerns that companies with low consideration for workers or the environment receive a clean bill of conscience as standards regress. Alone, the Hong Kong Convention cannot tackle the challenges in the ship-breaking sector. This begs the question of whether other instruments are not better avenues to tackle beaching. Soft law instruments could provide a useful foundation to hold corporations accountable without disregarding the State obligations found in the Convention. What’s more, soft law instruments can continue to hold companies answerable regardless of whether they circumvent legal obligations by reflagging.

Under the OECD Guidelines and the UNGPs, companies have a duty to respect human rights in their business operations. Since one can at any time look up marine traffic; this could be a happy story of simple human rights due diligence. More companies are vowing to commit to a cradle-to-grave approach, such as Hyundai Glovis, after a push from financial institutions. This includes expectations from investors, and financiers who have explicit clauses for companies to be compliant with the Convention and avoid beaching. But ship owners are not alone in carrying responsibility. Insurance agents ought not to issue last-voyage insurance for ships destined for beaching (Gard Statement), which was also central to the “Harriet Case”. The inclusion of soft-law instruments allows for multi-stakeholder approaches to tackle the issues related to shipbreaking.

We have seen since the adoption of the UNGPs in 2011, waves of domestic legislation requiring compliance with the OECD Guidelines and the UNGPs. This hardening of soft law confirms that the burdens should be placed on companies to foot the bill of scrapping old ships, instead of these same companies profiting of cash-buyers.​
 
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