Why and how EU can facilitate the Hong Kong Convention London, 10 May 2019 Martin Dorsman Secretary General

Why & how the EU can facilitate the Hong Kong Convention The aim (art 1) of the EU SRR HKC as the only international available legislation Sustainable development of the ship recycling industry

1. What is in the EU SRR ? Preamble 5: This Regulation is aimed at facilitating early ratification of the HKC both within the Union and in third countries by applying proportionate controls to ships and ship recycling facilities on the basis of that convention  Article 1 - Aim: The Regulation also aims to facilitate the ratification of the HKC Article 30 – Review: The EU Commission shall review the SRR no later than 18 months prior to the date of entry into force of the HKC …….. This review shall consider the inclusion of SRF authorized under HKC in the European list to avoid duplication of work and administrative burden Accompanying the legislative proposal by EU COM (2012): It is expected that Indian facilities will be able to comply to EU SRR by 2015 Objective of EU SRR is to reduce the negative impact of ship recycling, especially in South Asia, without creating unnecessary economic burdens

… and what is not in the EU SRR ? It does not aim to regulate the EU ship recycling industry more than what HKC will impose anyway. It is not in the aims of the EU SRR that it should create new capacity for EU facilities. The EU SRR does not try to deprive EU facilities of currently existing and available capacity either. From the legal text of the EU SRR it is clear how far the EU commitment should go to truly facilitate HKC ratifications: EU list can be a catalyst In particular in those regions where majority of ship recycling is taking place today and improvement was needed the most. Any new requirements that will apply to EU SRF are those of the HKC / EU SRF will have access to the same vessels that were recycled yesterday. The EU SRR does not try to change previous/current market conditions. When HKC was adopted, positive developments to meet HKC requirements started in South Asia, no changes in EU facilities. This shows that EU SRFs have not shown much interest in recycling sea going vessels previously. If this would have been their niche market, one would expect that they would have taken interst in HKC. While Indian Facilities started developing SRFP, SRP, … started to cooperate with Class societies, EU SRFs did not (yet) took any interest in developing these procedures

2. The HKC as thé way forward Only a way forward through HKC makes sense for (EU) shipping. After Chinese ban on the import of end-of-life ships, 91.6 % of tonnage globally is recycled in South Asia (2018). To compare, the recycled tonnage in the EU is around 0.5% of the tonnage recycled in the world. The negative impact to the EU flagged fleet would be tremendous, should they only have access to a market of 0.5 % (+ Turkey 4%). Shipping needs to be regulated at the global level Global level playing field Ships operate all over the world, any EU list therefore needs to contain facilities all over the globe Basel Convention has not succeeded in changing current substandard practices EU acknowledged this previously (2012 and before) EU WSR was adjusted to exclude EU flagged ships EU: equivalent level of control between HKC and BC

3. Sustainable development in all EU policies Sustainable development can safeguard the positive economic impact of an industry to a developing country while ensuring that this growth goes hand in hand with social and ecological improvements. EU supports developing nations outside the EU to follow UN sustainable development goas as defined by the UN. And in ship recycling? Support should be evident, given: The increasing demand for steel in developing countries like India, the EU being the largest exporter in the world of scrap steel The economic importance of the ship recycling industry for the wider region, whole industries have developed around the ship recycling industries And finally and most importantly, the fact that the need for social and ecological improvement is/was the highest in that region of the world where the majority of the ships are being recycled.

Thank You.