Select Committee on Environment, Food and Rural Affairs Minutes of Evidence


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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