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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 834-iii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE ENVIRONMENT, FOOD AND RURAL AFFAIRS COMMITTEE
DISMANTLING DEFUNCT SHIPS IN THE UK
Wednesday 21 July 2004 BARONESS YOUNG OF OLD SCONE, MR DAVID JORDAN and MR ROY WATKINSON MR ELLIOTT MORLEY, MP, and MS SUE ELLIS Evidence heard in Public Questions 187 - 280
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Environment, Food and Rural Affairs Committee on Wednesday 21 July 2004 Members present Mr Michael Jack, in the Chair Mr Mark Lazarowicz Mr David Lepper Mr Austin Mitchell Diana Organ Alan Simpson ________________ Memorandum submitted by The Environment Agency Examination of Witnesses Witnesses: Baroness Young of Old Scone, a Member of the House of Lords, Chief Executive, Mr David Jordan, Deputy Director of Operations and Mr Roy Watkinson, Hazardous Waste Policy Manager, Environment Agency, examined. Q187 Chairman: Good afternoon, ladies and gentlemen. My apologies that we are a little late on parade. It was entirely my fault, due to the fact that I was in the Defence statement with strong constituency interest. My apologies for keeping you waiting. We are doing our inquiry into defunct ships. Baroness Young, you are well-known to us in terms of the Environment Agency, welcome again. You have brought Mr Jordan, your Director of operations, with you and Mr Watkinson, whose face is familiar, but what title do you presently have, Mr Watkinson? Mr Watkinson: I am called the Hazardous Waste Policy Manager. Q188 Chairman: I want to start off with one short simple question to you. I am sure you will have read the report dated 30th April by Mr John Ballard, formerly of Defra. I wanted you to (a) confirm that you have read it and (b) do you agree with its contents, findings and recommendations? Baroness Young of Old Scone: First of all, just for the record, could I say that David Jordan is the Deputy Director of Operations. I would hate to promote him, though he deserves it. Q189 Chairman: You are on lower pay grades since you got here! Baroness Young of Old Scone: We do broadly support the John Ballard review. It was very much done in full discussion with all of the interests that he investigated. We have, I think, two areas where we are in further discussion with government. One is some of the issues about the period before we receive a transfrontier ship notification and trying to get pre-work done. We have had to make the point that we will try to do that wherever possible, but if the first thing we know about a transfrontier shipment being notified is the notification on arriving on our desk, there is no legal requirement for a pre-notification period; so that is something that we raised with him. The second area we raised was the issue of how quickly we kept ministers informed, because we certainly had from the middle of the summer discussed the issue with Defra officials and assumed that Defra officials were in the process of keeping ministers informed. We know that they raised it during the early part of the summer with ministers. We assumed that that further information would continue. Those are, I think, the two main issues where we have had further discussions with government. Chairman: That is helpful. Q190 Diana Organ: Obviously you are aware of the fact that there has been quite a lot of discussion and argument about where ships for dismantling should be sent. Part of this hinges on where they come from in the first place. It may be, as you know, with ships having flags that are nothing to do with where they operate, it might be a UK based company that owns them but the ship has never been anywhere near UK waters, it may derive economic benefit in the Pacific, or whatever. The whole issue I would like to look at is how do we decide on what basis and where ships should be sent? Is it right morally, environmentally and from a health and safety point of view that the developed world should be sending ships to be dismantled to the less developed world? Should there be an onus that nations or regions should become self-sufficient? If we are going to say that we are going to make regions or the developed world self-sufficient in its dismantling, how are we going to put that into place and ban ships being dumped in Bangladesh or taken to China for dismantling? Baroness Young of Old Scone: Perhaps I could start and then pass over to Roy Watkinson. Certainly our worry about trying to get regional agreements is that the whole system, as you say, is very complex. Ships are flagged in one country; they may come to port a whole range of countries; they may be re-flagged; they may change flags virtually as they travel round the world; and therefore understanding where the home country or the home region of a ship is is almost impossible. I do not think there is such a concept. Our concern is that if this is going to work it is going to have to work on a global basis: there needs to be an international agreement that is binding on ship owners and dismantlers and there needs to be an international system and network of ship dismantling facilities that do provide the proper standards rather than, either on a UK basis or a Europe basis or on another regional basis, trying to corral these ships, which are actually global players; they are stateless to some extent because they change flags fairly frequently. That is the primary thing we would like to see. The discussions that are currently about to begin between the International Labour Organisation and the International Maritime Organisation and the Basel Convention working group, we believe, is the key to getting a global system. Q191 Diana Organ: So have you had any discussions with, say within the EU, similar agencies in nation states, similar sorts of environmental agencies? Have you been talking to them, saying, "Actually the EU could take a stand. We could make a policy on this and work together and we might pick out certain factors that would be acceptable or not acceptable to us"? Have you done any work on this? Mr Watkinson: Of course, we are the agency and we are not responsible for making the Government policy in this area, but we do, of course, talk to our brother and sister regulators across Europe, and we know that it is of interest, particularly in view of the fact that there has been the recent enlargement of the EU which has meant that there are now more ships, if you like, flagged to the new EU states. So that is something that, for instance, when it comes to the point of acting as a competent authority and where we are working as a competent authority - that is in connection with our transboundary shipments responsibilities - we do, for example, talk quite frequently with them about what kind of wastes are being accepted, the notification process, and so on; but the issue of how it is going to be developed, as I think you rightly said at the outset, into a solution that is going to work probably cannot even work within the EU itself. The EU could provide a bit of leadership in that area if it chose to work as a group on that particular issue and, I believe, through meetings of the working groups of the subsidiary bodies of the Basel Convention, for example, and the IMO, those sorts of discussions are already underway. I think the difficulty is that the outcome is liable to take time because it involves the international negotiation process, there is not a quick fix; but it is clear also from the discussions that have already been held, for example, a few years ago there were no guidelines in place by the IMO on Green Passports, and so on, there were no guidelines in place for the Basel Convention, there were no guidelines in place in relation to labour issues, and all of these have an impact on them. Of course, we are mostly concerned with the Basel Convention. So those things have now happened. It is moving forward with those and turning them into something concrete as an actual, if you like, binding instrument that will be the important thing to achieve. The EU, I think, can help in that if it chose to tackle it. Q192 Diana Organ: Lastly, we came to this inquiry because we started off looking at the situation with ghost ships (which now seem to be called defunct ships) that were going to Hartlepool for dismantling. As the Environment Agency of the United Kingdom, do you have any problems with a company setting up and saying on an environmental basis, "We would like to look at a certain government facility for dismantling large ships"? Baroness Young of Old Scone: We certainly believe that there needs to be a network of facilities available, both in the UK and elsewhere, for the environmentally safe dismantling of ships. There is clearly a business there and we are interested in seeing the recycling of a maximum amount of material from these ships for a useful future purpose and the safe scrapping of the residual amounts that cannot be used as new materials. So that is a really important issue for us. Providing we can have well-conducted sites that are properly licensed and they conduct their business in accord with the domestic waste management licensing provisions and the other provisions that surrounded their business and the transfrontier shipment provisions, which are the arrangements for bringing ships from elsewhere, we believe that is something we want to see. There is a substantial business to be had, I believe, in the future, even with UK based ships, for example ships either owned by government, for example Ministry of Defence ships, or ships in which government plays a role, the trawler decommissioning programme, for example. So even if you took all the commercially available business out of the way, there is still a modest business from government-owned or influenced ships, if I can use that term. So we would like to see a network of facilities, but we would like to see it world-wide, because we believe that wherever a ship goes we would want to see a similar standard of breaking happening. Q193 Chairman: You are clearly being what I might call very correct in your aspirations, but it is not quite clear to me how you are trying to make those things happen. You referred earlier in your remarks to the joint efforts on the ILO, the IMO and the Basel Convention. Do you actually have any input to their deliberations on trying to move the world agenda forward on the dismantling of ships? Baroness Young of Old Scone: This is a subject where Defra will take the lead and, in fact, Defra will be involved, but my memory is that the Department of Transport are actually the lead in IMO. Mr Watkinson: The Maritime Coastguard Agency, but we support Defra, for example, in relation to the Basel Convention work. Q194 Chairman: Can we dwell on that for a minute, because this adds a new dimension to our considerations? You are saying that part of the Department of Transport is the lead organisation for representing our interests on this through the meeting of those three bodies. Am I right or wrong? Baroness Young of Old Scone: Certainly Defra will be involved with the Basel Convention, but if we do have this joint working group between the ILO, IMO and the Basel Convention, there will be MCA involvement, or Department of Transport involvement on behalf of the marine interests. Q195 Chairman: Can you tell us then if there is any coordinatory body that is currently existing within the United Kingdom Government to pull together the sum total of knowledge on these matters so that all of your expertise is pooled in a single stream of consciousness? Baroness Young of Old Scone: I think probably that is one you should ask the Minister about. Q196 Chairman: I am asking you. If there was a problem, you, I am sure, would be part of it? Baroness Young of Old Scone: I do not think there is a single body, I think this is an example-- Q197 Chairman: So the answer is no? Baroness Young of Old Scone: I think this is an example of an issue which, in common with many issues, are dealt with via a number of government departments and agencies shaking hands. Q198 Chairman: I am trying to establish where you fit into the architecture of this, and the message I am getting is that you think something is happening but you are not directly plugged in either to the Department of Transport, you are, I presume, giving support to Defra? Baroness Young of Old Scone: We will be advising Defra as their agency, but I think the thing that we have to be clear about is what our role is. Our role is not to make policy, our role is as the regulator of the facility and the regimes, the transfrontier shipment regime and the waste management licence regime. Q199 Chairman: You described to Mrs Organ in terms of responding to her questions, very correctly, a number of the key ingredients that make for good dismantling practice and policy. You have said that on the record to us. I was interested to know, as the aware agency, the aware body, on what were the good requirements for ship dismantling, how you were trying to input that to the discussions to which the United Kingdom is a party to the three organisations, Basel, IMO, ILO, which you also mentioned in your evidence. The impression I am getting is that you are not actually plugged into any of that? Baroness Young of Old Scone: We are plugged into the Basel Convention discussions, but Roy will be able to describe in what way. Q200 Chairman: Please do. Mr Watkinson: The way in which we operate, in terms of normal negotiation process, the Basel Convention is that the Agency is asked to give advice and often attends. In fact, I am the person who attends with Defra officials at the official level meetings, and therefore the debate and discussions which go on in relation to ships and all the other matters in relation to the Basel Convention are matters on which we advise the progress of those discussions and therefore become involved in them. Ships is just but one. Of course, there are a number-- Q201 Chairman: Let me just interrupt, because my colleague, Mr Simpson, is going to inquire into the vexed question, "When does a ship become waste?", but Basel deals with waste. Yes? Mr Watkinson: Hazardous and other wastes. Q202 Chairman: So you are not plugged into IMO, which deals with ships. That is the Department of Transport? Mr Watkinson: Yes, that will be a matter for the discussions that are at official level, if you like, and so on, within government. We know that there are discussions, and there have been a number of coordinating meetings, I believe, over the past year or so. Those we are aware of have happened because, of course, they input collectively into the discussions that are held at the working group meetings. Q203 Chairman: So there is collective discussion-making that you are not involved in, but you know it is happening? Mr Watkinson: Sometimes we are involved. Q204 Chairman: Sometimes you are involved. Tell us about this sometimes. You seem a bit reluctant to tell us how you are involved with the Department of Transport. I just want to know who is putting in ideas to develop our position on it. Mr Watkinson: I think the way it works is that we have a strong line, clearly, into Defra; so when we are working, principally we are working with Defra. When there are other discussions in relation to the Department of Transport, and so on, of course we could become part of that as part of our advisory role to Defra; and so when there are meetings I cannot tell you precisely when those meetings have happened. Q205 Chairman: In other words you are not on the invite list. You are not being asked to contribute positively to the Department of Transport, but you are obviously positively contributing to Defra? Baroness Young of Old Scone: I am not sure I would feel sleighted by the Department of Transport. We are the adviser to Defra; Defra liaises with the Department of Transport. If there is a requirement for Defra that they need our advice, they will ask us for it. They are the policy body as part of government; we are the regulator. There are many occasions when we are not intimately involved in policy formation if that is not a subject that needs our specialist advice. Chairman: We will ask the Minister about that, as it clearly causes a little friction. Mr Simpson. Q206 Alan Simpson: I do not know whether your father ever grilled your early boyfriends about whether their intentions were honourable. It always seems a very difficult process to inquire about people's intentions. Some of my friends argue that their intentions were always honourable at the start of the evening, they just changed during the course of it. The European waste disposal framework defines a ship no longer a ship when there is an intention that it becomes waste. I am really puzzled about how we know when that point of intention has been reached, and it seems to me quite important that we have a common take on that, because, without it, I just do not understand when a ship becomes waste and when it is a ship, and clearly the discussions that take place between ministers in terms of transport, environments are faced with the same dilemma. What is your view on when a ship becomes waste? Baroness Young of Old Scone: We share your belief that it is quite difficult. Clearly there are times when intention is in no doubt. For example when the ships came over from America, there was no doubt that they were intended for recovery operations and therefore waste. If the ship had been stripped down to a point where all that remained was a terrible hulk, it would be clear that that was waste. If you are ship operator, if you really would much prefer to sail your ship as a going concern to a country and then declare it as waste once you get there, that means that we will not necessarily know at what point, either before or during the journey, you hatched up that intention in your mind. So I think the intention issue is a very difficult one, unless people declare that intention. Q207 Alan Simpson: Internationally, which is the competent body that would clarify and define that changed position from it being a ship to becoming waste? Baroness Young of Old Scone: Roy, do you want to pontificate about the complexities of international law? Mr Watkinson: It is the Basel Convention which deals with the issues of waste and the transboundary movement of waste, and, in fact, their overall definition, their base definition, similar to that from the Waste Framework Directive in the European Union, is broadly similar. It talks about "intention to dispose", perhaps, rather than "to discard", but the idea is the same. "Required to dispose", "intended to dispose" - they are all similar language, but because, of course, it is an international instrument, it also defers to the waste definitions that are given within the particular parties to the Convention. So if any particular country says, "This is waste as far as we are concerned", of course that has to take priority for that particular country and be respected by the Basel Convention. Q208 Alan Simpson: May I probe you a bit further on that, because I am fairly clear that the Basel Convention applies to the transport of hazardous waste; it is whether it applies to ships that are themselves hazardous waste at the point at which they become waste rather than ships. We have had some people arguing to us that it is not at all clear that the Basel Convention applies to ships themselves? Mr Watkinson: That is a good point, because I think it is very clear that the original basis of the Basel Convention was to deal with the issues of the transboundary movements of waste that came from a land-based arising and were ending up at some other land based point of destination where they are going to be dealt with in an environmentally sound manner; and that was the whole basis on which the Convention was set up. Perhaps over time, in the 15 years since it has been put together, it is starting to show some areas of difficulty where the clarity to determine what is waste is, in fact, quite hard to get. There has been a legal working group of the Basel Convention that itself has made the point that a ship (as it has discussed these issues) can be both a waste and a ship at the same time. That does not actually get to the point about being able to use the Basel Convention properly and enforceably for the purposes of transboundary movements, for the reasons, I think, that have already become clear from discussions you have already had, that a ship may arise as waste with that intention to discard somewhere on the high seas. Therefore we do not have the certainty of having the land-based competent authority (if it were to be, for example, a UK ship, the Environment Agency) perhaps having an interest in that. There is no way in which we could start the process and the paperwork, notifications, guarantees, and so on, that are required to make all that happen. We are simply not in that position. Q209 Alan Simpson: We have been trying to look at parallels in other aspects of waste that could be applied here, and, even given the complexities about change of decision on the high seas and change of flagging and everything, is there anything akin to - I know this is a different approach taken by the rest of our EU partners - the final disposal of cars where basically the end of life disposal is the responsibility of the manufacturer? Do you feel that there are points towards which governments can gravitate in terms of saying, not only, "When does this become waste", but, "Who is responsible for that"? Baroness Young of Old Scone: Certainly at the moment I think it would be quite difficult to make the primary producer of the ship responsible, because they are very long-lived - some of the American vessels are extremely long-lived - and so the chain from primary producer to the point of disposal would be a very tenuous one to keep going over a very long number of years; so I am not sure that the parallel with cars is a good one. At the moment the end owner is responsible for disposal, but, of course, there may well be a number of transactions late on in the life of a ship as it moves through various processes and eventually goes for scrapping. Each of these cases has really got to be assessed on its own merits, because it depends on the country that it is in what the definition of hazardous waste or waste will be and taken within the Basel definition of waste and the domestic definition of waste. So it is going to be a case by case decision in each case, and that is why I think that we are very keen to see this international agreement that would ensure that we perhaps could get some common definitions that would allow those decisions to be more standard across the world; but I think domestic legislation in each country will always have to be built into the international agreements because that is the way in which the domestic regulator, like ourselves, can actually manage and implement the waste management requirements of that particular country. Q210 Chairman: Can I ask a technical question before I bring David in? In paragraph 3.1 in your evidence you mentioned the EU Waste Framework Directive. Does that only apply to vessels that are going to be dismantled within the European Union or vessels that are flagged within the European Union? Baroness Young of Old Scone: Paragraph? Q211 Chairman: 3.1 on page two: "Status of ships as waste"? Baroness Young of Old Scone: I think the difficulty that there is about saying whether a ship is a UK ship or a European Union ship or an anywhere else ship is the point that Roy outlined, and that is, though it may be flagged in a particular country, it may then be consigned as waste in a different country, or it may be re-flagged. Q212 Chairman: Just focus on the detail of the framework directive. What is it supposed to do? In other words, it translates, as I understand it, the terms of the Basel Convention into European law. Is that correct? Baroness Young of Old Scone: The EU Waste Framework Directive does not transfer the requirements of the Basel Convention into European law, the Waste Shipments Regulations transfer the Basel Convention, or at least the OECD decision, I think, rather than the Basel Convention. Mr Watkinson: If I may, you are dealing with more than one thing. You have got the Waste Framework Directive, which provides, if you like, the European implementation of the part of the Basel Convention that looks at what is the definition of "waste" and says whatever your definition of waste is, but it is, broadly speaking, similar to this intention to discard issue that we have just discussed. Then, once you have got, if you like, your local definition, you have identified what it is that is subject to control as waste, then you have the shipments regulation, the EU regulation, which says this is how you control the movements of wastes as they move between countries, depending on whether they are hazardous or not, because you have hazardous waste and you have non-hazardous waste but obviously have different control systems when they are moving transboundary. Q213 Chairman: I think I derive from that that the central question is, "When does a ship become waste?" In other words, we come back to where we started. Once you have identified the waste, then we have got plenty of rules to deal with how you move it around, where you put it, how you take it to pieces and what you do with it afterwards, but we are still struggling to find anything that enables us quite to define the difference between ships and waste, unless it is obviously a hulk? Baroness Young of Old Scon: It depends entirely on the definition in European law, in the transposition in European law, on the definition of discarding, and it is a vexed definition right across the waste range. Chairman: Let me just ask you, from your experience of dealing with global environmental issues is there some other parallel activity where an international agreement has been concluded that works where everybody says, "We recognise the problem and we all agree to play by the rules"? If you cannot answer that now, do let me know because it is quite central to our inquiries, and I do not want to keep David out. Mr Lepper: I think, on reflection, what I was going to ask follows on from Austin's line of questioning. Chairman: Mr Mitchell, would you like to take up the line of questioning? Q214 Mr Mitchell: It was put to us earlier at the initial inquiry that here could be a profitable line of business for UK plc to provide jobs. I think Mr Mandelson said it; so it must be true. I just wondered if it is possible to develop a scrapping business like this, a British knackers' yard, which will provide jobs and employment? Would you really want to put your hand on your heart and say you would want it? Baroness Young of Old Scone: I certainly think we would want it for UK and European business where we are not anticipating long distance transport of ships, providing there is a proper process for the transfrontier shipment provisions to be adhered to and proper facilities well run within the UK: because for the most part, if we go back to the particular circumstances of Hartlepool, the point we made throughout was that these ships really posed very little risk to the environment throughout their transport and subsequent storage at Hartlepool, and so for a process that was petty low-risk environmentally and offered economic benefit locally, it seemed to me and it seemed to us that that was not something that we should object to. It had value to it for local people in Hartlepool; and we still believe that. Clearly, if the UK was going to become the ship-breaking capital of the world, one would have to ask whether that was a sensible proposition, and that is why we are looking for a network of similar facilities globally, so that as far as possible there are local yards for scrapping operations that should not undertake long journeys, for example if they are old and passed it and not likely to be able to take to the high seas for any length of time, but equally well, that is why I think the requirements of global trade have to be taken into account. For some of these operations the next use of the material is going to be located, for example, in the developing world, where much of our white goods are currently manufactured; so there is a need for secondary materials, for recycled materials, to be used in those manufacturing processes and we would not want to see some sort of artificial constraint, I think, put on where breaking is best carried out, because it may well be that breaking is best carried out globally in proximity to the next use of the feed stock. So those were the arguments we would use. The important thing for us is to make sure that, wherever the facilities are, they are well environmentally managed and that in the transfrontier shipment process there is not a risk to the environment. Those have got to be the two requirements for us. Q215 Mr Mitchell: It was also put to us that while we were making a mess of this particular instance, the Dutch were developing such a business. I do not know whether it was true, but that was put us. Are our environmental restraints and controls more restricted than theirs or are they par for the European course? Baroness Young of Old Scone: Obviously European legislation is standard and, indeed, in the case of the TFS requirements, we are looking at international instruments like OECD and Basel, so there is a broad commonality, though obviously individual Member States interpret it in different ways. I would say in this circumstance that the problem that meant that it could not go through smoothly was that there were a whole variety of small difficulties and errors on the part of pretty well all of the organisations involved which, in combination and put under a very strong spotlight by the process that Friends of the Earth adopted and other public interest groups in order to highlight the global issue, meant that any wart at all in the process was put under heavy scrutiny; and the net result of a number of small warts was that the whole thing had to go back to the drawing board. Q216 Mr Mitchell: That is a Butler report kind of verdict, is it not? But, it was a mess, and you must have made a contribution, as the Environment Agency, to that mess. The ships were allowed over, then they were told they could not be scrapped, then we were told they were going back and they did not go back. Who was largely responsible? What responsibility do you accept for that mess? Baroness Young of Old Scone: I think we were very clear and open in our 'Lessons Learnt' report as to where we felt the process had not gone well, but it was very much a combination of small administrative errors by a whole range of organisations that produced the ultimate outcome; and the point that we made also in our report was that at no stage was the environment at risk. So the case that was very much put in the public domain, which was that this was a huge risk to the British public and was a big environmental threat, was not the case. This was a series of administrative difficulties that resulted in the case having to go back to the first stage, including, may I say, the fact that the prime responsibility lies with the operator, the receiver of the waste, to get his permissions in place, and the permissions were not in place. We tried hard to be helpful to the process because we had assessed that the environmental risk was not a huge one, and in the process of being helpful, because of the scrutiny that whole process was put under by the Friend of the Earth spotlight, we had to withdraw our helpfulness, as it were, at a later stage because we had not behaved entirely absolutely rigidly to the letter of every single stage of the TFS waste management licensing requirement. Q217 Mr Mitchell: How would you do it differently if the problems were to come up tomorrow? Baroness Young of Old Scone: We have in our report indicated how we would do it differently, and to some extent you have got to raise just the question, in terms of how we are going to do it differently, about whether that is a good thing or a bad thing. We are certainly going to have to be absolutely rigorous about transfrontier shipment and particularly where ships are concerned in the future. Whereas in the past if there was a small administrative change to be made in a waste management licence we would grant the transfrontier shipment at the end of the 30-day period which we are allowed for assessment, on the basis that a small administrative change in the waste management licence is capable of happening post that, now we will be absolutely clear that we will require the operator to demonstrate to us that his permissions are all in place, and particularly we will make an absolute requirement that the waste management licence is absolutely fit for purpose under the TFS proposition before we will grant the TFS licence. So that could result in us having to turn down a number of TFS applications because we simply cannot get to that point within the 30-day period. Q218 Mr Mitchell: Just to round it off, that is for new applications, but what happens to the vessels currently at Hartlepool? Baroness Young of Old Scone: Clearly they are there, so there is not necessarily a transportation issue, but obviously Able UK is seeking a new waste management licence, a new planning application, new FEPA licenses (Food and Environmental Protection Act licences), and I am sure there are others, new agreements with the Health and Safety Executive and a new appropriate assessment under the Habitats Regulations. Once all of those are in place, we believe that the ships can then go ahead to be safely dismantled. Q219 Mr Mitchell: It is a pretty high mountain climb, is it not? Baroness Young of Old Scone: I do not think it is a high mountain to climb. It is complicated, but many of those activities that take place, particularly on coastal areas, are subject to quite a wide variety of legal requirements and therefore they are quite complicated. Q220 Mr Mitchell: What happens to the other vessels currently in the US that we were hoping to get? Baroness Young of Old Scone: At the moment the vessels in the US are currently subject to a legal process and therefore they are not able to be released by the American authorities, and that legal hearing has now been deferred until August. Mr Jordan: I think from August. Baroness Young of Old Scone: Thereafter the American authorities have assured us that there would be no intention to send further ships until such time as there was a proper licensed facility in the UK, and at that stage there would have to be a reapplication for a transfrontier shipment provision because the timescale for which the transfrontier shipment authorisation exists has expired. Q221 Alan Simpson: Is it your understanding that such shipments will or will not be legal under the Stockholm Convention, because in respect of shipments of PCBs I had thought that the Stockholm Convention was going to make such transfrontier shipments illegal? Mr Watkinson: The Stockholm Convention is about dealing mainly with pesticides and PCBs and removal and destruction of stock piles. There is a part that deals with PCBs as waste and their destruction, irreversible transformation, but in relation to how they may be moved transboundary, it is still envisaged that because Stockholm and other UN conventions like the Basel Convention recognise that the Basel Convention is there to deal with transboundary issues, so the implementation of that still recognises the fact that PCBs, for example, can move transboundary where it is associated, as would be the case with these ships, as part of the shipment that is for recovery. We know that there are other issues in relation to movements of waste for recovery, for disposal, sorry, in relation to the UK plan for the management of wastes. We do not normally accept wastes for disposal or export waste for disposal, but as this is a movement, if it is subject to the TFS, for recovery, contamination like that will be covered through the normal process, the movement of POPS(?) and the implementation of the Stockholm Convention does not have a significant bearing on it. Q222 Alan Simpson: You used the word "recovery", and that has also been used to us by the dismantlers. They say that the vast majority of vessels are not hazardous waste and they contain items that will be recycled. Would the Agency take a different view just in respect of what remains, not in non-recycle terms, of the hazardous waste and whether that should be returned to the country of origin in the way that Stockholm would appear to suggest, that they need to be managed within the home country? Mr Watkinson: The Basel Convention, for example, envisages the minimisation of waste and dealing with wastes for disposal as close as possible to the point of arising, and that is a general principle that flows through into other environmental legislation. The idea of returning it back to another place could also bring in issues of whether or not that was an environmentally sensible thing, to send waste on double journeys. It would perhaps seem more practical to recognise that there is contamination of wastes for recovery and you really need to have the facilities for dealing with the products that are separated from the recoverable waste in an environmentally sound way as well; and that is already envisaged and incorporated in the Waste Shipments Regulations. You have to take account of that. There is a special case of something that is called 'sham recovery', where you are looking at an issue where you are trying to, or somebody is trying to actually get away, if you like, with disposal under the guise of recovery. That is something that we can object to and we can prevent through the shipments regulation process, when we are able to apply it. Q223 Mr Lepper: Everybody at the time seems to have been a bit taken by surprise by what happened last year with the ships coming over from the States, but something that Tony Juniper of Friends of the Earth suggested to us last week was that there had been a very distinctive change in policy on the part of the US Government. Whereas the previous administration under President Clinton had a policy of disposal of ships within the US itself, there was a change of policy on the part of the Bush Government which made it likely that they would be sending ships elsewhere for disposal. Was that something that had been flagged up by you to the UK Government or had the UK Government asked you for any advice on that policy change on the part of the United States? Baroness Young of Old Scone: I am afraid US policy is not really an issue that we would normally expect to be involved in. Q224 Mr Lepper: No, I can understand that, but the context in which it was put to us was that the Government of the US had instigated a change of policy. One would have thought that maybe there might have been some request for advice from our Government to you or to some other agency of what the implications of that might be? Baroness Young of Old Scone: It is not an issue that, as far as I am aware, we had raised. Mr Watkinson: My recollection, and it has to be just a recollection, of that process was that during the previous administration there was an embargo that was in place at one time for the export of ships for scrapping, but that embargo was time-limited, it had simply lapsed, and that gave them the further opportunity to consider what they might wish to do with the ageing fleet that they wished to get rid of, and that led to the process which ended up with the ships coming here. Q225 Mr Lepper: It is only a tiny point, but have you any idea when that embargo lapsed? Mr Watkinson: I am afraid I cannot remember. Q226 Mr Lepper: It is not within your remit to have that information. I thought you might know. Thank you. In all of this complicated process what has become clear, I think, and you have said it in your memorandum to us, is that the interaction between waste management regimes, pollution prevention and control regimes are very complicated. I think that was in your written memorandum to us: "...complicated, can be confusing for operators wishing to dismantle a ship. The practical implications of the regimes can also be challenging for regulators. Clear guidance should be made available that explains the regimes and provides guidance on the interface". Commonsense would say there ought to be a smooth inter-relationship between issues of waste management and pollution prevention and control, but that is not so? Baroness Young of Old Scone: Have you got a reference that we can see perhaps the context. Q227 Mr Lepper: Yes, paragraph 5.1, 5.2. Baroness Young of Old Scone: I think the point we were making there was not necessarily just the relationship between waste management licensing and PPC but also the other regulations that surrounded this activity, including the planning permissions, the Habitats Directive requirements and the licences that need to be got from other regulators, particularly the Health and Safety Executive and Defra. It is quite a complicated regime, as the Chairman said, and one of the propositions that we made in our report that was also in the John Ballard report was that there needed to be information provided that would help operators through that rather complicated regime in a simple way. My understanding is that that is something Defra are going to coordinate and we will be happy to play our part in, but it will involve all of the regulators, all of the regimes, that they may be subject to. We should say, however, that, even with that help and guidance, we will need to make sure that operators understand that we cannot, none of the regulators can, reassure them that they have covered all the angles. They still have the prime responsibility of ensuring that all the permissions that they require are in place, because it is not possible for any regulator to anticipate, in the local circumstances that an individual operator is operating, whether there may be some other piece of legislation that his process would require to be covered by. It is complicated, but these are big businesses involved in substantial financial transactions and therefore we believe that they need proper legal support and advice to take them through that. Q228 Mr Lepper: So guidance should be provided and, from what you say, Defra is in the process of doing something about providing that guidance? Baroness Young of Old Scone: They certainly have made that commitment, or at least the Ballard report proposed that. We have not yet seen the Defra response to the Ballard report other than the very initial response, and I would assume that in the Minister's response to the Ballard report we will see what Defra are planning to do. Q229 Mr Lepper: Even with that, have I got it right, the companies involved are still going to need the lawyers? Baroness Young of Old Scone: I am afraid so. At the end of the day the buck stops with the company, as, indeed, it would do for any operator. Q230 Mr Lepper: Is that an unsatisfactory situation as far as the general public is concerned? Baroness Young of Old Scone: I think the regulators are there to assure the general public that the interests of that particular regulator, the responsibility to that particular regulator, are being carried out. We are able to assure the public, for example, that the environmental conditions are being met, but there is no single regulator able to say every single position that you might require has been met, because no regulator covers the whole panoply. So, in common with any business in conducting its operations, they need to be sure that they have got the best legal advice to make sure they are doing the right thing by all possible regulatory requirements. Q231 Mr Lepper: So even with the guidance, when it emerges eventually, we could still look forward to further Hartlepools, unforeseen challenges to particular enterprises could well arise? Baroness Young of Old Scone: I hope that if Defra does decide it is going to coordinate the guidance, because I think it was a good recommendation, that we can all provide good information that will help companies coordinate and find their way through the different requirements, but I do not think we could ever rule out that there may be some particular circumstance in some particular location that a company simply does not have on its radar or does not properly move forward fast enough. Q232 Chairman: One final question. Have you upgraded the way in which you conduct Defra on these issues. I was intrigued by the Delphic phrase in Mr Ballard's report in paragraph 27, page nine, where he says, "There was a recognition with the Agency that this application was novel and that in consequence the Department should be kept informed of progress." He goes on to say, "But the level at which contact was maintained reduced the opportunity to consider the potential political resonances that might arise". Have you reduced the potential for this resonation and made certain that Defra are better connected to you on these matters? Baroness Young of Old Scone: Defra were connected to us in that our transfrontier policy people had alerted Defra to this and, indeed, Defra had briefed the Minister, I think, in June. Q233 Chairman: It says here, "It is perhaps not surprising that the subsequent note put forward by Defra officials in July was low-key for information only." I presume that everything has gone up a notch after all this in your Agency, has it? Baroness Young of Old Scone: We have a process whereby if local staff, policy staff or process staff are concerned about the political ramifications, novelty or uniqueness of a particular situation that they will raise that up their managerial line. Q234 Chairman: What, because Mr Ballard says it was not seen within the Agency as having the potential it had to attract attention"? Baroness Young of Old Scone: To be frank, I do not think it did. We assessed the environmental impact and environmental risk and came to the conclusion that this was not going to be a huge environmental risk. I personally looked at the case in June, asked a number of questions about it and reassured myself that the environmental risks had been covered off by the process, and we did inform Defra and Defra ministers were informed. So I think the fact that we continued to move them through the process only really started to - the degree of public concern and anxiety about it only then arose at a later stage when it became clear that Friends of the Earth were using this particular instance as an example of a global issue that they believe needs to be addressed, and that is what NGOs do and it is a global issue that needs to be addressed. So the spotlight very much came on this particular case at a time subsequent to that. I think one of the other issues in John Ballard's report that we have debated further with him and have written to the Minister is the question of at what point subsequent to that we alerted Defra and the Minister about our concerns about the Waste Management Licence, and there is a point in the Ballard report that indicates that they feel we should have done that at the beginning of October. If my memory is correct, the process that we went through at that stage was that we examined all of our processes and our documentation and our licenses, anticipating the Friends of the Earth legal challenge which they had indicated they were going to undertake. So, inevitably, as soon as we realised there might be a legal challenge, we went back and looked right across all the documentation, and it was only after, I think, two or three weeks of lawyers crawling all over the documentation that we came to the conclusion that the Waste Management Licence, in fact, was technically flawed and that we would therefore have to go back and ask the Agency for a new Waste Management License, and as soon as we realised that and as soon as we had talked to lawyers about that, we then informed Defra. So it is one of the areas, as I indicated earlier, that we are perhaps less content with, the Ballard report, the issue of keeping Defra ministers informed. We believe that we informed Defra ministers at each stage when we really had concerns. Where there were no concerns, we did not inform Defra ministers because it did not seem appropriate. Chairman: Thank you very much indeed. That has been extremely helpful and again our apologies, and mine specifically, for the lateness of our start. Memorandum submitted by Department for the Environment, Food and Rural Affairs Examination of Witnesses Witnesses: Mr Elliott Morley, a Member of the House, Minister for Environment and Agri-Environment, and Ms Sue Ellis, Head of Waste Management Division, Department for the Environment, Food and Rural Affairs, examined Q235 Chairman: Minister, you are most welcome. Again, one of our most regular attendees; indeed some people think you are a member of the Committee, but we are having to disabuse them of that particular fact. Nevertheless you are extremely welcome. You have brought Sue Ellis, I know, with you. Perhaps Miss Ellis would identify what she does? Ms Elliott: Yes, I am Head of the Waste Management Division in Defra. Q236 Chairman: Obviously we have the two key players as far as this is concerned. Can I ask you at the outset, Minister, who is in charge in the United Kingdom Government of determining and enacting policy as far as the dismantling of ships is concerned? Mr Morley: May I say, it is always nice to attend the Committee, Chairman, and it is nice to follow up on this because it has been a very useful exercise, I think, the way the Committee is structured in terms of looking at the key issues surrounding this and the wider ones; indeed I can see where your question is leaning on this. In terms of dismantling ships, it is primarily a market-led situation in relation to the development of the facilities within the UK. That, of course, is subject to the regulations which are laid down domestically in relation to our own regulations, most particularly the waste licence, of course, having that, and, of course, the ships themselves are subject to a range of international treaties, the OECD rules, which I know that you are familiar with, which follow on from the Basel agreement. So there is a range of particular issues. There is no kind of government department in charge of the scrapping of ships, if that is what you are hinting at. You will be aware that-- Q237 Chairman: Shall I rephrase my question? Mr Morley: Yes; okay. Q238 Chairman: It is quite clear that in terms of the candidate before us, he understands the issues, he ticks the boxes in knowing what the policy areas are that we are going to question you on, but my simple question was: who is in charge in the UK Government of policy on the dismantling of ships? In other words, you have quite rightly identified many of the areas which policy is required for, but who is in charge? Who is in charge? Who is the dismantler, or dismantlers, as the case may be? Mr Morley: I think, because there are a number of key issues and conventions here, the responsibility in terms of policy is probably shared between ourselves and the Department of Transport. I was going to go on to say-- Q239 Chairman: Probably. Probably or it is? Mr Morley: It is shared between ourselves. Q240 Chairman: It is. Good. Mr Morley: Between ourselves and the Department of transport. It is one of the issues that we are, of course, dealing with in this strategy paper that we are producing in relation to the recycling of ships in the UK. Q241 Chairman: Before we get on to the strategy paper, because that sounds very interesting, in fact I want to come on to deal with some of those issues, you have identified that Defra and the Department of Transport have policy input, but is there therefore some mechanism for interlinking you and the Department of Transport on this, because our previous witnesses indicated that the Department of Transport made input to the International Marine Organisation's deliberations in which, in terms of trying to find global solutions, they are a key player? Mr Morley: Yes. Q242 Chairman: You, on the other hand, have a finger in all the other pies? Mr Morley: We do. Q243 Chairman: But, given the interaction, as again your opening remarks indicated, between the domestic situation, the European situation and the international situation, there does seem to be a need for some coordinatory mechanism. If so, what is it? Mr Morley: We do, of course, talk to the Department of Transport on this. There is a joint working group which is in the process of being set up with the IMO and also involves the International Labour Organisation, I think. Ms Elliott: The ILO? Mr Morley: The IMO and the ILO, and that will be the Department of Transport lead. Because it is an international body, we have to be nominated as a country onto the working group, although we are very optimistic there is a very good chance that the UK will be nominated onto the working group. Q244 Chairman: Coming back to the fact that all of the key environmental issues which are raised by this subject come within the purview and expertise of your department and, indeed, the Environment Agency, which is the creature of your department-- Mr Morley: It is. Q245 Chairman: --where does the Department of Transport then draw its expertise in terms of input to these international discussions and also in the determination of the policy which you wish to follow: because, almost in a circular way, what happens with IMO, ILO, Basel discussions feeds back, from what we can see, to the European Union to the national situation? Mr Morley: Sure. Q246 Chairman: So how do you interact with the Department of Transport? Mr Morley: We obviously have regular contact with the Department of Transport in relation to the formulation of these policies. Ms Ellis: The Department of Transport is the government's representative at IMO. They draw on the expertise of the Marine and Coastguard Agency in much the same way as we provide the representative for the Basel Convention. We draw on the technical expertise and guidance of the Environment Agency. We do work very closely with the Department of Transport and also the MCA. We are in frequent informal and informal contact. Q247 Chairman: If I were to turn up on the doorstep of the Marine and Coastguard Agency and say to them, "Please tell me what your policy is about the disposal of ships and the substances that are in them and their handling at an international level", would I get from them the same statement as if I had come along to you and asked the same question? For example, we talked about PCBs. Would I get the same message from MCA as I would from you if I were to come and ask the question? Ms Ellis: In so far as it is governed by other international conventions, the UK government has a consistent line that it is developed between departments. Q248 Chairman: What I am getting at is that at this international level, in the discussions we have had, it is clear that for example at the moment there is guidance issued by the IMO about good practice in ship dismantling. From what you have just told me, the input for determining that good practice guidance must have come from information flowing up the transport route. Mr Morley: Yes. Q249 Chairman: What I am interested to know, given that part of that good practice relates to the sound environmental disposal of dangerous substances commensurate with the various conventions that have been agreed to, given that the content of those conventions is of a strongly environmental nature in terms of implications, is do you have any input as the key environment part of government to shaping MCA policy before they troop off to wherever to discuss these international matters? Ms Ellis: Yes, we certainly discussed with the Department of Transport and the MCA the environmental aspects before they went off and represented the UK government view. Mr Morley: As indeed we are now as part of the formulation of the strategy on ship recycling. Q250 Chairman: I come back to the question: who is in charge of determining the policy or do we still have two distinct parts of government with different responsibilities? Is anybody in charge? Mr Morley: There are distinct responsibilities with different departments but we are taking the lead on pulling this together through the Strategy Paper which is underway at the present time. Q251 Chairman: Mr Ballard, I gather, has retired from your Department now but he wrote a very helpful report on many matters. In paragraph eight, page 13, he says, "An early statement by government of its policy for recycling ships will provide a valuable backdrop against which regional and local plans can be developed and individual regulators can consider specific proposals." Would you like to make a statement on that? Mr Morley: Yes. The situation is that the last time I came before the Committee I did announce that we were going to start a process of developing a strategy in relation to recycling ships. That is underway at the present time and the terms of reference will be published in September. Those terms of reference are being drawn up between ourselves and the Department of Transport so there is inter-government consultation at the moment. Before we start the process, we will be clear amongst ourselves about what the terms of reference will be in relation to a government strategy. Q252 Chairman: Mr Ballard in his summary document of his report on page four, paragraph four, lists a whole series of questions that should be addressed. Will they be addressed by your strategy? Mr Morley: They will be part of it. I cannot remember every single question at the moment but if I recall I think nearly all of those will be part of the strategy. Q253 Chairman: One of the concerns we have had before us in terms of where do ships end up is the appalling conditions that some of them are dismantled in in places like Bangladesh and India. Do you condone this kind of trans-frontier movement of ships to be dismantled in wholly inadequate circumstances and do you think there should be international action to prevent that, possibly going as far as a ban if it were to be deemed that people are at risk and environmental damage could be done because of substandard dismantling procedures? Mr Morley: I do not think that anyone should have to work in substandard working conditions and I do not think that any country should allow activities which damage and pollute the environment. I do think that companies have a responsibility generally in relation to where they place contracts and what actions they take in terms of taking those particular issues into consideration. One way of tackling this is to have tighter international regulations. The body for that is the IMO, though the EU may have a role in relation to the attitude of Member States. I also think that we should be working with developing countries, helping them in terms of the process of governance in dealing with some of these environmental, social and economic problems. Q254 Chairman: Is the United Kingdom involved in any bilateral discussions with either Bangladesh, India or even possibly China on these matters outwith the international bodies to which you have just referred? Mr Morley: Most of the discussions that we have are through the international organisations and bodies, including the UN. There are regular bilateral discussions with these countries but of course they are led by the Foreign Office. Q255 Chairman: Do you ever ask the Foreign Office to put on the agenda concerns about the dismantling of ships? Do you feel Britain should be taking a lead in trying to move this agenda forward because these international meetings seem to go on for ever and ever. Mr Morley: Sadly, it is a slow process. However, it is worth what can be a frustrating process in terms of time because in the end you get an international agreement and that can be very effective. The UK is taking the lead in the sense that we have put ourselves forward as a member of the IMO, the joint working group, so that we can be part of shaping and reforming the international rules in relation to recycling ships. We are very keen to play our role internationally in this. Q256 Chairman: Do you think that there ought to be an international agreement that flag states effectively should be self-sufficient in terms of ship dismantling capacity? In other words, instead of the pass the parcel game around the world according to where you can get the best price for the scrapped vessel, there should be something which enables people to say, "It is one of our ships; we have a responsibility. Therefore, yes, we will have a dismantling operation in our country" or, in the context of the European Union, within the Union's boundaries? Mr Morley: In an ideal world, the answer to that would be yes but we do not live in an ideal world. One of the biggest merchant fleets is Liberian and I do not think Liberia has very good facilities in relation to recycling ships. Q257 Chairman: You put your finger on it: the ability of people to hop over almost any national boundary restriction by virtue of the fact that a ship is a highly mobile and valuable object whilst it is trading and indeed at the point when it becomes scrap. What one thing would you like to put your finger on to say, given your understanding and recognition of this problem, what Britain is doing to try and move forward a meaningful international conclusion to discussions to improve the way in which ship dismantling is carried out? Mr Morley: There is more than one thing. There is a number of fronts that you have to advance this on. We have mentioned the IMO and the joint working group which we are very actively engaged in. As a Member State, as part of our analysis of what we are working on in relation to ship recycling, what is quite interesting is that the number of ships which reach the end of their life under the UK flag are quite limited because the tendency of the UK and a number of other G8 countries is that ships tend to be sold on to other countries before they reach the end of their working life. The number of ships which remain under the UK flag to the very end of their working life is quite surprisingly limited. They tend to be state owned, such as naval vessels or a range of research vessels or fishing vessels. We do have to approach this on the basis of international agreements and there are arguments about when a ship is waste and when it is not. I fear we are only going to resolve that in the international forum. Chairman: We will come on to some of those points, particularly in the light of the Secretary of State for Defence's statement which might have created a rather bigger market. Q258 Alan Simpson: Both the Environment Agency and Greenpeace have called for an international agreement on dismantling of ships. Do you want to give us your reaction to that? Mr Morley: I think that would be very desirable. We do have the OECD agreements. The OECD agreements, which most industrial countries including the US are party to, do lay down certain standards in relation to the disposal of ships under the flag control of the parties. Of course, not all countries are members of the OECD so an international agreement would clearly be an advantage. Q259 Alan Simpson: Through which body would you expect such an agreement to be formulated and made to stick? Mr Morley: It would have to be a UN body because it is the only body that covers internationally the widest range of countries. The IMO itself is a UN body so I think the UN would have to pursue this. Q260 Alan Simpson: In so far as (a) you welcome it and (b) you would support it, since we have a voice on the IMO, can you give the Committee an indication of whether that is a proposition that the UK government are likely to be piloting in the IMO? Someone has to start the process. Mr Morley: You are absolutely right. We are trying to lead by example in terms of the disposal of ships under our direct control. We would certainly only want those ships to be recycled in facilities that have the proper standards. It is important but it is more important I think to use our influence and resources working through the IMO and the joint working group in terms of getting an international agreement. We have a lot of experience of this. We have a lot of influence in relation to these bodies. That is why we are keen to be members of this working group and we are keen to do whatever we can to play a leading role in this. Q261 Alan Simpson: Is it workable, if it comes through? Mr Morley: I think it is workable because UN agreements by and large do work. By and large, people do abide by them. Of course, you can get countries which can refuse to ratify or can ignore them, although it does tend to be the exception rather than the rule. Q262 Diana Organ: We have talked with the Environment Agency and a little earlier on you talked about the difficulties and confusion about the international laws that apply to ships. There is the fact that they move around and they do not necessarily go anywhere near the countries that they are flagged under. On the basis of that, when do you think a ship stops becoming a ship and starts to become waste? Mr Morley: That has been the source of some very long arguments already. I would have thought a ship stops becoming a ship when it reaches the end of its working life, where it is no longer functioning as a ship, and that its final voyage is to be recycled, not as part of its working life. I can see right away there are people who would quibble with some of those definitions but I am sure it gives an indication of how potentially difficult it is. There are some countries that would argue that ships are not waste and do not become waste. Q263 Diana Organ: Given that you have said there will be some countries that will argue about at which point it is, the intention of the owner about the journey, whether it is a real journey or a journey to go as waste, and you have talked about the only way to do it being through the joint working group and to have a global United Nations approach, how much consensus is there so far about that very point? Mr Morley: I cannot comment internationally because the contact I have had with other countries is relatively limited. I have a good idea of the view of the EU because there have been initial discussions in the EU and it was discussed very briefly at the last Environment Council when I was there. There is certainly strong support in the EU for this approach. There is no doubt about that. Given that the EU supports it and that the US and the OECD are already signatories to a convention, that includes a very large part of the world that owns large scale shipping fleets, but we will have to pursue this through the international conventions. The Basel Convention itself was a UN convention and we are parties to that. The Basel Convention will be part of the joint working group with the IMO and the ILO. We think that is the most effective way forward and I repeat that we are very keen to play an active role in this. We are already engaged in the process. Q264 Diana Organ: When you say you are keen to play an active role and you are already engaged in the process, how many meetings or how much time as Defra had, either yourself as the Minister or Defra officials, with the working group? Mr Morley: The working group is not actually set up yet and it is not likely to be set up until February. The members of the working group have not even been appointed yet. We do not know for certain whether we will be one of the countries who will be appointed to the working group, although we hope that we will be. That will be decided in September and the working group will start work in February. Q265 Diana Organ: If UK Defra is appointed into the working group, would you expect as a Minister to take an active role in that? Mr Morley: I would certainly take an active involvement in terms of following the progress but it is not a ministerial group. It is a technical working group. Q266 Diana Organ: Lastly, I wonder if you could say a word or two about waste regulations in ships. Should they apply to the whole vessels or do you think that just those materials that should be disposed of should be covered rather than those that should be recycled? Mr Morley: It can be argued that there are regulations now which apply to some components in ships in relation to asbestos, for example. Turkey, until recently, had very strict regulations on the importation of asbestos and we have very strict regulations in relation to the control of asbestos. There is also the Stockholm Agreement, although it is not really in relation to the movement of components of ships but it certainly applies to the disposal of components and of PCBs within them. There already are a number of regulations which apply to hazardous waste within ships but you are into quite a complex argument again: when is a ship a ship and when is it waste? What is clear is that once you start to dismantle it there are regulations on how you deal with the different components. Q267 Chairman: You have answered a question that arose in paragraph 17 of your evidence where you said, "The UK hopes to be actively involved in the work of this group." It is to have another meeting and you do not know whether you are on the group. I understand the words you have used there but the analysis that we have received about what is going on in places like Bangladesh and India and possibly to a lesser extent in China does suggest an element of urgency here about sorting these matters out. The normal timescale for international agreements, as your evidence has indicated, is quite long. If one took, for example, the agenda of the G8 key players in the world, has any effort been made at least in principle to get a fast tracking of this agreed amongst the key maritime nations and particularly the members of the G8 where more intimate discussions can take place to try and say we have to sort this thing out now rather than just let it role on, because all the problems in Bangladesh, India and China remain untouched. Mr Morley: The answer is I am not sure what has been discussed within the G8. It is something that I can certainly try to find out for you. What I do know is that there are a number of British based companies who take the issue of dismantling ships very seriously even if they are not in the UK and, in some cases, allocate staff to oversee the process to ensure standards are being maintained. BP is one, I think, and they deserve great credit for that. I also know that there are British based companies who are working in partnership with yards in countries like Turkey, which is an OECD country, and they are seeking contracts within the UK. Presumably, they know the kind of standards that we apply here and the kind of standards that we want to see applied. I am not sure at the moment that there exist connections with the more notorious areas such as Bangladesh. I know that there has been this connection with China and I am not quite sure whether China's standards are quite in the same category. I also know that there has been some discussion by other EU companies about working with developing countries in terms of raising standards there so that they have proper standards but still have the income in relation to the industry. I think that is very much in its early days. Q268 Mr Mitchell: Would you prefer it to be handled on a European basis? Is it conceivable to handle this on a European basis? Mr Morley: Yes, I would prefer that. There are European yards that can recycle ships, although they are very limited, as I am sure you are aware as a Committee from your discussions. You will also know that I feel the proposed facility at Hartlepool by Able UK, if they meet the required standards of planning, of environmental impact assessment and permitting, would be of great benefit both to that local community in terms of jobs and long term investment as well as the UK, as well as giving us a good facility within this country. Q269 Mr Mitchell: Are we not in a sense competitors? I understood from some of your earlier evidence that the Dutch have taken a lead in developing this and because of the stalemate at Able UK were now going to capture the business. Is this a crude, nationalistic view? Mr Morley: It is a fair point. It is a competitive business. It is true that the Dutch are proposing to build a facility almost identical to what is being proposed at Hartlepool. Of course, they will be aiming for a very similar market, including I understand the James Rivers Fleet. Q270 Mr Mitchell: They will not have to put up with all the nervous nannying that came from Defra and from the Environment Agency and almost everybody involved in the fiasco. Mr Morley: To be fair to the Environment Agency, they followed the process as they saw it. There were unknowns. You know the history to all this. As far as we in Defra are concerned, what we are concerned to see is the best environmental outcome to all this. There is also the wider issue in relation to the international strategy, in relation to dealing with ships properly and safely and facilities within our own country which this incident has highlighted and we are trying to address. Q271 Mr Mitchell: Would you like to see UK ships scrapped in the UK? Mr Morley: Yes, I would, as a first choice. Absolutely. Q272 Mr Mitchell: That would start presumably with ships where the government has control or influence? Mr Morley: Certainly I have been in correspondence with the MoD following my appearance with the Committee. I have received letters from the MoD explaining what they are doing with ships which have reached the ends of their lives. They have said that they have made a specific point of going out to UK seeking interests. It makes it very clear that: "ADM has confirmed that our intention has been to stimulate interest in breaking ships in the UK by seeking bids for Intrepid from UK yards and recyclers. Over 30 UK companies are invited to tender but so far only two have viewed the ship at Portsmouth." You can take the horse to water but you cannot make it drink. We have to do our best to encourage UK involvement and UK tendering but in the end if you cannot get an adequate tender you have to look at other tenderers who can do the work properly and safely and they may not be UK based. Q273 Alan Simpson: I am intrigued because when we had evidence from Able UK they were saying to the Committee how difficult they had found it getting access to tenders for disposal of UK ships. There may in the first instance be a communications problem that we need to address. You mentioned the Stockholm Convention and it seems to me that one of the implications of that for our own ships is that we have to do more than seek to encourage an expression of interest. We will have a direct responsibility under that Convention to ensure that we take responsibility for the dismantling of our own vessels and the non-exporting of PCBs that are on those vessels. Is it worth going back to the MoD and exploring with them the obligations that will come with the Stockholm Convention? Mr Morley: I am not sure that the obligations as you put them are the ones which apply to ships in the Stockholm Convention. The Stockholm Convention is primarily aimed at the movement of PCBs internationally which are liquid PCBs, pesticides, a range of chemicals. The PCBs in ships tend to be in things like cabling. My understanding, because I have been discussing this, is that the Stockholm Convention does not apply to the movement of ships for recycling. Q274 Alan Simpson: I accept the broad brush nature of that point but in respect of the PCBs in vessels I thought Stockholm was quite clear. The idea of saying, "We are just exporting the vessel but not the PCBs in it" just does not sound particularly convincing. Mr Morley: It is because the Convention is aimed more at the chemical side, when PCBs are trace elements within components, within ships. Ms Ellis: Some of the misunderstanding around this is because there was a Commission proposal during discussions and negotiations on the Shipment Regulation which did provide for some additional controls on waste covered by the POTs regulation which would have affected waste coming into and leaving the Community. During negotiations in Council Member States agreed to delete that particular provision so there was a proposal on the table at one stage during the negotiations but Member States did not sign up to that in Council and I think that is where some of the confusion is arising. Q275 Chairman: You mentioned "in September". You would not like to tempt us somewhere between the first and the end of the month as to when this strategy is going to appear, apart from giving us the Delphic, ministerial reply? Mr Morley: That is when we will publish the terms of reference as part of the consultation. Ms Ellis: I would not like to put my money on it. Early or late September at the moment, but it will be September. Q276 Chairman: You are going to miss out the two weeks when Parliament is back? Ms Ellis: That would be very unparliamentary. Mr Morley: We will not be slipping it out, Chairman. We will make sure people are well aware of it. Q277 Chairman: The reason I ask is: is it going to be one of those documents where there are, like Heinz Variety, 57 different questions that you think ought to be asked answered and you invite views; or are you going to lay down a definitive, clear policy? For example, going back to Mr Ballard's report in paragraph 34 on page 11, he makes some interesting observations about the role of planning policy and a specific comment on PPG10. He concludes his observations by saying, "Planning policy is not however the right place to set out government policy on whether there is a need in the first place and on the network of facilities it thinks will be required to satisfy that need." Are you going to include in this strategy some definitive statement so that people know where the government stands on these key issues and then, with the plethora of expertise out there, invite people to comment and add to it; or is it going to be one of these endless documents with umpteen questions where we are still no wiser as to where the government is but people will be happy to send you even more views for you to digest? Mr Morley: It has not been published yet. It is still under development and in a sense I am just giving you an opinion, but I would not object to making it clear what the government's preferences are, what we would like to see in terms of our own country and internationally. I have no objection to laying that out clearly within the document. There are questions though that we want to consult people on. Planning is a very good example and I think John Ballard is probably right in what he says. There is PPG10; there is also PPG1 at the present time. There are real issues in relation to the planning process of large scale installations, not just ship recycling, but there is a read across on this. Q278 Chairman: You would like it to be specific. Are you going to get your way or is that down to the Secretary of State? Mr Morley: The Secretary of State takes the final accountability but perhaps you should wait and see for the shape and the format. I always, as you know, listen very carefully to the views of this Committee and I do try to respond to them. Q279 Chairman: If this is about the equivalent of being at the forthcoming attractions section of the cinema, we have reached that at the end of the inquiry rather than the beginning but if it means we are going to get some definitive answers to questions I think that would be good. I think it will be incumbent on the Committee to try and complete its report before you write your strategy document. Mr Morley: That would be helpful, yes. Q280 Chairman: May I thank you both for your answers and for the candour particularly of your last comments? I wish you well for a rest during August so your batteries can be recharged for when next you come to see us. Mr Morley: And you, Chairman. |