Examination of Witnesses (Questions 120-138)
14 JULY 2004
MR MARK
STRUTT AND
MR SIMON
REDDY
Q120 Chairman: But not necessarily scrapped.
Could they be sold to somebody else?
Mr Reddy: They may well be scrapped.
I had understood that they were looking . . . I am sorry, they
could be sold. I had understood they were looking at being scrapped.
I guess the point we are trying to make here it is about putting
your best foot forward. It is about the UK Government making a
commitment to say, "We are not going to have a situation
whereby British war ships are scrapped under these conditions
in India." We cannot have a situation where British war ships
are sent to India, run up on the beach and scrapped under these
conditions. We need to take responsibility for our ships and for
our waste, and if the UK Government could seize that initiative
and take that forward we could have a situation where other European
countries also make similar commitments. The French Government
got themselves into all sorts of trouble before Christmas 2003
because they had a similar situation with one of their war ships.
They had sold it to a Spanish company—this was the aircraft
carrier Clemençeau—they sold it to a Spanish company
which had pocketed the £2 million, or £3 million—well,
they sold it to them for £3 million—they put £2
million in their pocket and sold it on to a yard in Turkey to
do the job for £1 million because Turkey does not employ
the same health and safety standards so the asbestos could be
removed more cheaply. Then they ended up realising this was happening,
I think, at some stage when the ship was halfway through the Mediterranean
cancelling the contract and calling it back. So I think there
is an opportunity here for European countries to start with their
military vessels because they are the ones they have complete
control over, the governments can decide what happens to those
vessels and then we can look at ways that the European Union as
a block can address the issue of, say, commercial shipping vessels,
which is a more difficult situation to address and far more complex,
but it is one that I think can be addressed.
Q121 Mr Mitchell: There is going to have
to be a new form of protection. We are going to try and reverse
the normal flow. We get jobs migrating to Eastern Europe or low-cost
countries, China or wherever, the manufacturers say, "We
cannot argue with costs. We need to go there and outsource from
there to cut down costs." You have got Patricia Hewitt saying
sending jobs from Grimsby to call-centres in Bangladesh is good
economics and good for the economy, besides she cannot stop it,
and yet we have got you saying we should not export dirty jobs,
we should keep them in this country?
Mr Strutt: We have already—
Q122 Mr Mitchell: I think people more
people are sitting in call-centres than chop up ships?
Mr Strutt: We have already the
Basel Convention, which is designed to prevent hazardous wastes
being exported to developing countries. That could be considered
as protectionism for jobs. There are no doubt jobs in hazardous
waste, but there is a principle here of jobs at what price? I
do not think "jobs at any price" is a valid principle.
Ships clearly contain hazardous waste, and there is wide agreement
now among signatories to the Basel Convention, of which the UK
is one, that ships would fall under the Basel Convention and do
fall under the Basel Convention. The problems lie more with a
question of practice and how you implement this issue, the practicalities
around flags of convenience, etcetera. I think the principle of
not exporting hazardous wastes is one that holds, that we have
signed up to and is not about protectionism in the way that you
suggest.
Q123 Mr Mitchell: It seems paradoxical
to keep the mucky jobs or try and get them back and let the clean
jobs go?
Mr Reddy: I do not think we can
get into an argument over what the Government does with its jobs
in call-centres and whether people support that or not, but in
this instance of ships for me it is a question responsibility.
We have a responsibility to deal with the waste that we have created
and not export it somewhere else, and we should live up to that
responsibility.
Q124 Mr Mitchell: Why do you say it is
unacceptable to import for demolition/destruction ships from non-EU
OECD countries? Why is that unacceptable?
Mr Reddy: I am sorry, from other
OECD countries.
Q125 Mr Mitchell: Yes; that are not in
the EU. You say it unacceptable to import ships from OECD counties
outside Europe. Why?
Mr Reddy: Because we also support
the proximity principle that countries or regions should be responsible
for their waste.
Q126 Mr Mitchell: So it would be okay
for EU countries?
Mr Reddy: We have a trade agreement
with the EU. We would not have any option. We could not legally
with commercial vessels, we could with military vessels, but with
commercial vessels we could not have a protectionist approach
regarding UK vessels. The way we envisage it—
Q127 Mr Mitchell: So the principle of
"each destroys their own ships" would not apply within
the EU?
Mr Reddy: It would not apply within
where we signed the trading agreement, and also it would not be
practical. You have to remember that a lot of flag states—for
instance, Mongolia is a flag state despite the fact it is 2,000
miles from the sea; Mongolia, therefore, would not be in a position
to scrap its own vessels. There are going to be situations where
you have to take a practical approach to this, but what we do
recognise is that there are instances where regions could develop
state of the art ship-breaking facilities, and we would see a
region being North America, a region being South America, a region
being Europe, etcetera, etcetera, and so that regions should take
responsibility collectively for the waste that they produce.
Q128 Mr Mitchell: So you would not object
to Britain being Europe's knackers' yard?
Mr Reddy: Well, the Netherlands
is already forging ahead with Start. What is theirs called?
Mr Strutt: Theirs is called Stop
actually.
Mr Reddy: Theirs is called Stop
actually and ours is called Start. They are already looking at
doing a deal with P&O Nedlloyd, I believe, for a state of
the art ship-breaking facility in the Netherlands; so I do not
think we would be the only one in Europe. The reality is that
there are an awful lot of ships within Europe, both registered
and as military vessels, that will need to be decommissioned,
and this is especially so given the single hull tanker ruling
and the massive increase in ships that need to be decommissioned.
Q129 Mr Mitchell: Is this principle exclusive—that
every country should deal with its own waste? If safety and environmental
standards in third-world countries, third-world ship-building/breaking
yards, if they can be brought up to acceptable standards, would
you still object to UK ships going there?
Mr Strutt: Yes, we would. The
point of the "proximity principle" and "polluter
pays principle" is to discourage the use of hazardous materials.
We do not object to ships going from the UK to developing countries,
we object to ships that contain hazardous wastes; and it is very
difficult, as a point was made earlier, to remove those hazardous
wastes and very expensive to remove them, before the ship goes.
So we do not have a problem with ship-breaking itself, it is the
export of the hazardous waste problem from one country, the producer,
to another country. So in actual fact what you are doing is externalising
the costs involving in that hazardous waste to somewhere where
it is cheaper, and that is really why we want that to stop. I
think the regional thing is a pragmatic thing. In an ideal world
every individual company that produced hazardous waste would be
responsible for doing it. That is not workable. The next best
thing may be for every country to deal with it, but in today's
world that probably not workable also, but it certainly is workable
on a regional level; and we need the regulations to ensure—we
have the Basel Convention—we need regions like the European
Union to enforce the letter and the spirit of the Basel Convention
and not allow ships to be a disguise, if you like, for these hazardous
wastes.
Q130 Mr Mitchell: What proportion of
ships do contain hazardous waste?
Mr Strutt: Virtually all ships
that are reaching their breaking age now contain hazardous waste.
Q131 Mr Mitchell: The next generation
will not?
Mr Strutt: The next generation
will not contain PCBs and asbestos, but there are other hazards
that will be in them. Tributal tin is something that is only slowly
being phased out, and there are others, like bromonated flame
retardants, for example, that are being introduced, and there
is no reason to not to introduce them because at the moment there
is no disincentive not to use hazardous materials.
Q132 Mr Mitchell: The great majority
of ships now for demolition should not be sent to developing countries?
Mr Strutt: Yes, virtually.
Q133 Mr Mitchell: Finally, it is going
to be pretty difficult to enforce this "treat your own waste
policy" given the fact that UK owners can re-flag and can
transfer to flags of convenience, re-register vessels anywhere
and can do it at any stage in the ship's life, so there is an
incentive to do it as it comes to retirement?
Mr Reddy: This is why we want
to start with the military vessels. We want to get countries to
set the agenda, to show the initiative, and then we need to look
at ways within initially the European community then wider on
a global scale as to how can address what is an age-old question
regarding flags of convenience. There is no immediate answer to
the problem of flags of convenience, but we do feel that if countries
were to take an initiative with their own Government-owned vessels
then we can push this forward. Also in terms of the larger companies
that do have a very identifiable public name, etcetera, such as
P&O Nedlloyd, I mean you are saying that they do not want
to be associated with the types of activities that are going on
in Alang, which is why they are also in discussions in the Netherlands
with creating a ship-breaking facility there. I think that once
you start that process and you get that interest moving, you actually
will find we do get some movement with a lot of companies there
and hopefully then, instead of being the majority situation now
where the majority end up on the beaches inland of Alang and Bangladesh,
etcetera, etcetera, we can work towards it being a minority and
being very much looked upon as not the right thing to do.
Q134 Alan Simpson: I do not have a problem
at all about idea that we should be responsible for clearing up
our own mess and responsible for our own waste. I am just puzzled
on a couple of things. First, can you tell me what is it in law
that defines when a ship becomes a UK ship and when it ceases
to be a UK ship?
Mr Reddy: It is not easy.
Mr Strutt: The problem is the
law does not define that adequately or transparently at the moment.
Alan Simpson: Because this has to be
the issue. Your example about military vessels—that works
tolerably well if the UK Government holds the ownership of that
vessel for the entirety of its life, but, if there is another
purchaser for use of that vessel, at what point do we be held
responsible, when do we cease to be responsible? That is the difficult
area, I think, for us as a committee to try to identify how you
can effectively impose a UK line?
Q135 Chairman: Going back to this point:
when does a ship become waste?
Mr Reddy: On the latter point,
I think there is a situation now with an aircraft carrier that
we sold to Chile, and I think that is heading for the beaches
in Alang, but this came up again in conversation with Adam Ingram
when myself and Peter Mandelson and the GMB went to discuss this
issue; and we would say that a British war ship where the majority
of it working life has been served in the British Navy, then we
should take responsibility for that; and the contract basis by
which we sell it to another country should include, in some way,
what we would say a "cradle to the grave costing" for
it then to be decommissioned back in the UK, and at the end of
its working life, whichever country we sold it to, then they have
to understand it then has to be brought back to the UK and scrapped
in the UK.
Q136 Alan Simpson: Okay, that leads into
the next question?
Mr Reddy: When is a ship a ship
and when is it waste?
Q137 Alan Simpson: Let me roll this one
in as well. When we were in Brussels[9]
one of the things that came out to us about the difference between
the UK's position and that of our European partners in terms of
the disposal of cars is that almost everywhere else has accepted
a remit that says that at the end of line for a vehicle's life
it has to be returned to the manufacturer. Would that be the sort
of equivalence that you would welcome in terms of an approach
to international responsibility for disposal?
Mr Reddy: Yes, we would say probably,
if it was not the manufacturer certainly returned to the—well,
in the case of war ships, yes, it would be the manufacturer, the
UK, the people that ordered it, in relation to commercial ships
maybe you would have to look at the country receiving the lion's
share of the economic benefit during the life of that ship. The
problem you have is that there is a situation whereby companies
will buy a ship, they will operate it for 30 years, it will then
reach the end of its life on their flag simply because it would
be so decrepit that they could not keep it on the flag that they
wanted to keep it on, they would then sell it off to a flag of
convenience, or another company that would then flag it with a
flag of convenience state who would run it under completely illegal
conditions with crews that did not have certain certificates or
qualifications and zero health and safety, and then, when it was
literally almost at sinking point, they would send it off to India;
and that is something we have to address. You will always have
a situation where you can sell a ship on. There has to be a mechanism
where, and I do not have all the answers but for me it seems to
make sense that the company or the organisation or the country
that derived the most benefit from that vessel should take a share,
or a sizeable share in ensuring that that vessel is disposed of
correctly.
Q138 Joan Ruddock: I believe the US ships
that were brought to the UK to the shipyard were actually towed.
What are the economics of saying that hazardous materials should
be taken out of ships, say in the UK, and then the ship could
be taken to a third country for breaking up and recycling? Is
that a feasible option? I appreciate some things could come out;
some things might be so fundamental to the ability of the ship
to make its own passage that they could not come out?
Mr Reddy: One argument there is
if you took out all the PCB wiring and you took out all of the
asbestos before you delivered it somewhere, it then becomes a
fire risk, it then becomes an issue as to whether it is actually
safe to have it at sea.
Mr Strutt: Technically you could
remove everything, but then you would have to tow the ships over
perhaps on a platform for support. It is also a question of economics.
Is it economically feasible to do that? It seems to me that it
is not a pragmatic solution to the problem.
Chairman: Gentlemen, thank you very much
indeed. I think we are all getting very good at analysing the
problem; I think we are still grappling with what might end up
as solutions to it. Nevertheless, I am grateful to you for your
contributions today, for your written evidence and for the other
material that you very kindly provided. You said you wanted to
put in some additional information. We will be delighted to circulate
that, together with an appropriate commentary, to members of the
Committee. Thank you very much indeed for coming.
9 The Committee visited the European Commission in
Brussels July 2004. Back
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