Memorandum submitted by Friends of the
Earth
DISMANTLING OF DEFUNCT SHIPS IN THE UK
Friends of the Earth is pleased to present written
evidence to this inquiry.
1. Friends of the Earth in England, Wales
and Northern Ireland (Friends of the Earth EWNI) is a member of
Friends of the Earth International, which is the largest grassroots
federation of environmental groups in the World. Friends of the
Earth International has member groups in 68 countries most of
which are in the developing World.
2. Friends of the Earth EWNI has 200 voluntary
local groups and we work with a number of other community groups.
3. Our policy work is therefore informed
by an international and a local perspective. This enables us to
fully understand the disproportionate environmental damage caused
in developing countries and within some communities within our
own countries. It is this that leads us to fight for environmental
justice.
4. Our evidence will first consider developments
since the last EFRA Committee inquiry into this issue and then
go on to address the questions raised within the press notice
for this inquiry.
DEVELOPMENTS SINCE
THE LAST
EFRA INQUIRY INTO
THE "GHOST
FLEET ISSUE"
5. Since November (when Friends of the Earth
last gave written evidence to the Committee), Friends of the Earth
has won its High Court Case against the Environment Agency and
Able UK. Our contention that the Environment Agency had acted
unlawfully in varying Able UK's Waste Management Licence was accepted
by the Court. The Court, like Friends of the Earth, expressed
concern at the absence of environmental impact assessments in
relation to the proposed project.
6. In another related case, taken by local
residents, the High Court ruled that Able UK's planning permission
did not allow it to scrap ships. This has resulted in Able UK
preparing a new application for planning permission for its dry
dock. Irrespective of the result of this High Court case Hartlepool
Borough Council were of the view that Able UK's other planning
permission (for constructing the dry dock) was no longer extant
and that Able UK would have had to apply for new permissions requiring
environmental impact assessment.
7. Friends of the Earth wishes to highlight
the fact that had it not taken the actions it did to bring these
matters to the attention of the Courts and to the attention of
the public (who were then sufficiently informed to take matters
to the Courts themselves) then the project of scrapping the US
ghost ships would have proceeded on an entirely unlawful basis
and without consideration of the environmental impacts of doing
so.
8. Able UK are also part way through applying
for the licences they need for their landfill site and the licences
they need under the Food and Environment Protection Act 1985.
9. Following these cases we understand that
Able UK are now carrying out thorough investigations into the
possible impacts of constructing and operating its dry dock facility
on the internationally important wildlife sites adjacent to the
site as part of its work to secure various permissions. Friends
of the Earth welcomes these investigations. Since the outset of
this issue we have stressed the need to carry out such investigations
if the integrity of Europe's wildlife sites it to be maintained
and EU Habitats legislation complied with. We have also said on
numerous occasions that should Able UK successfully demonstrate
that it can build and operate a dry dock scrapping facility without
damaging the protected wildlife sites or the wider environment
then Friends of the Earth could not reasonably object to the development.
We are pleased to know that the Environment Agency and the Council
will consult widely on the applications as they arise.
10. Friends of the Earth, together with
colleagues in other environmental organisations, has also met
with Elliot Morley, Minister for the Environment, to press the
need for a UK Strategy on ship recycling. We have followed this
up by meeting with his officials and have also discussed the issue
of ship scrapping at length with European Commission officials.
Friends of the Earth and other environmental groups have a goal
of ensuring self-sufficiency in ship-scrapping within developed
countries and the end to the appalling practice of exporting ships
for breaking up on the beaches in developing countries.
11. We understand that Able UK's permissions,
if obtained, are unlikely to be granted until September at the
earliest, largely as a result of needing to carry out proper investigations.
It strikes us that had Able UK begun the process of carrying out
investigations and seeking appropriate permissions before they
signed their contract with the US Marine Administration and before
they imported the US vessels they may now be in a position to
import the ships and begin dismantling. Instead they chose to
ignore warnings last July that their planning permission may not
be extant and that further environmental investigations would
be needed. The fact that the planning permission was considered
to be lapsed was brought to the attention of the company and the
regulators in meetings as early as July 2003.
12. We have welcomed the DEFRA review and
Environment Agency review which has indicated a number of lessons
need to be learnt. We have expressed a willingness to work with
the Environment Agency on this.
13. To conclude this section, we are now
in a situation where proper environmental investigations are being
carried out into the development of Able UK's facility, the local
community will be involved in decision-making, the Government
is beginning the process of developing a strategy for ship recycling
and DEFRA and the regulators are learning lessons to prevent future
incidents of this nature. These are significant improvements that
have resulted from the campaigns and legal work on the ghost fleet
issue. As Mr Justice Sullivan said in his third ruling on the
ghost fleet cases:
"It is a matter of concern that it took
the intervention of third parties, these Claimants [local residents]
and FOE, to expose serious deficiencies in the decision making
processes of the public authorities (including the Agency) that
were responsible for environmental protection . . . They have
in effect discharged an environmental protection function which
the Agency failed to discharge."
SHIP RECYCLING
14. Through conversations with European
Commission officials we were made aware of a recent comprehensive
report on this issue [Commission of the European Communities,
Technological and Economic Feasibility Study of Ship Scrapping
in Europe, Report No 2000-3527, December 2001]. It found that:
— The majority of vessel scrapping
activity relates to merchant vessels (conventional ship scrapping)
and that currently this is undertaken almost exclusively outside
of Europe in India, Bangladesh, and Pakistan and increasingly
in China. That much of this scrapping is non-compliant with EU
health, safety and environmental legislation and objectives.
— An increase in no./ tonnage of vessels
requiring scrapping is predicted over a 15 year timescale from
2001-15 and that the dominant component of this comes from the
merchant ship fleet in which the predicted average annual volumes
for Europe are:
— 107-247 ships.
— 4.3-11.1 million dry weight tonnes.
— 2.9-7.4 million GT.
— 0.86-1.48 million tonnes steel.
— That is not considered practicable
to upgrade the existing facilities outside Europe to achieve compliance
and the concept of pre-processing within Europe (or within other
OECD member states) to achieve a sterile (or neutral) ship prior
to dismantling is not considered to be either economically or
technically viable.
— It suggested that based on projected
volumes, a single, high volume, fast turnaround facility is proposed,
comprising a dock large enough to serve vessels up to 400,000
dry weight tonnes.
— That an economic analysis has demonstrated
that the end-of-life value of the vessels will be heavily dependent
upon the costs of separation and dismantling, such costs being
in turn primarily influenced by the prime employment cost of labour.
It suggests that a "break-even" point falls somewhere
in the range of US$10-15/hr. That employment costs in most Eastern
European and FSU countries fall in the range US$1-5/hr whereas
in Western European countries employment costs fall in $15-30/hr
range and that therefore economic viability will therefore be
greatest in the lower cost economy countries of Eastern Europe
and the FSU and it is likely that the labour costs applicable
within Western European countries would result in a negative ship
end-of-life value.
— That at present only Poland and Ukraine
have significant sized docks that could accommodate the majority
of cargo carrying ships in the world fleet but the dock in Poland
is in current shipbuilding use [at the time of writing the report]
and whilst shipyard activity in the Ukraine is generally fairly
low [at the time of writing the report] the situation regarding
social and environmental compliance is uncertain.
15. These findings pose significant questions:
— If ship-owners are paid by ship-scrappers
in developing countries what incentive is there to encourage them
to pay for scrapping their ships in more socially and environmentally
acceptable ways?
— What controls could the EU or UK
Government put in place to prevent UK or EU vessels being exported
to developing countries for scrapping?
16. Friends of the Earth suggests that legislation
requiring companies to report on social and environmental impacts
would be one useful incentive—as proposed in the recent
Performance of Companies and Government Departments (Reporting)
Bill. A further and more powerful incentive would be making companies
liable for social and environmental activities overseas and providing
affected communities with rights of redress in the UK courts.
This is a proposal of the Corporate Responsibility Coalition,
of which Friends of the Earth is a part. The Coalition is calling
for:
— Mandatory Reporting: Companies shall
report against a comprehensive set of key social, environmental
and economic performance indicators with which they can benchmark
(and ultimately better manage) their operations and performance—here
in the UK and abroad.
— Directors' Duties: Expanding current
directors' duties to include a specific duty of care for both
society and the environment, in addition to their current financial
duty to shareholders.
— Foreign Direct Liability: To enable
affected communities abroad to seek damages in the UK for human
rights and environmental abuses committed by UK companies or their
overseas subsidiaries.
17. Currently negotiations are underway
on amending the Waste Shipment Regulations. The Commission proposed
that the regulations make it illegal to import or export wastes
containing certain levels (to be determined) of PCBs (or other
Stockholm Convention chemicals). They would do this by treating
wastes containing these chemicals in the same way regardless of
whether the wastes were intended for recycling or recovery. In
practice this would prevent the import or export of vessels such
as the US Navel vessels (assuming that the threshold adopted for
the PCB limit were 50 ppm, which is the norm for controlling PCB
contaminated wastes). The exception to the import ban would be
from countries with no facilities to treat or destroy PCBs safely
(in reality only some developing countries). The Irish Presidency
of the EU is hoping to get political agreement on these regulations
at the end of June Council of Ministers. However the regulations
are not expected to enter force until mid-2005. These regulations,
if agreed as proposed by the Commission, will provide some incentive
but companies will still easily be able to sell their boats to
third parties to avoid these controls. There is no easy answer
in identifying a clear legal sanction to prevent companies avoiding
their environmental and social obligations in this area. International
action on corporate accountability is needed and indeed was promised
at the World Summit in Johannesburg.
18. The European Commission report strongly
suggest that large-scale ship-scrapping facilities in Western
Europe will not be economically viable because the bulk of the
ships, which are corporate owned not Government owned, will go
to developing countries or at best Eastern European countries
or countries of the former Soviet Union. The UK Government can
assist the viability of UK facilities through ensuring that Government
owned ships are scrapped in the UK. However whether this is likely
to make scrapping facilities financially viable is open to question.
CONCLUSIONS
19. The US naval ghost fleet issue has driven
up the political agenda an important social and environmental
issue that had hitherto being largely ignored. The development
of environmentally sound scraping facilities in the EU is required.
They should be developed following appropriate environmental investigations.
The development of EU legislation on PCBs is to be welcomed, however
if the UK Government want to prevent the export of ships to scrapping
on beaches in developing countries they will also need to introduce
corporate accountability legislation in the UK, the EU and work
to its introduction at a United Nations level.
Friends of the Earth
May 2004
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