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Recycling yards face compliance costs as Hong Kong convention ratified

27 June 2023
Ship recycling yard in Bangladesh. Credit: PHP

Liberia’s ratification of the International Maritime Organization’s (IMO) Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) was announced on 26 June and kicks off a process that will see the convention enter into force in 2025. However, recycling yards face their own two year journey to reach compliance, as well as the looming challenge of regional regulation in the form of the EU’s Ship Recycling Regulation.

Mohammed Zahirul Islam, managing director at PHP— the first shipyard to become HKC compliant in 2017— told ICS that the journey to compliance was a five-year, multi-stage process for PHP. “We started in 2015 and by 2017 we were able to be compliant across the first half of the yard – around 100,000 tonnes in capacity,” said Zahirul. The second phase began in 2018 and was completed in January 2020, bringing total compliant capacity at PHP to 150,000 tonnes.

ClassNK Corporate Officer Abdul Rahim told ICS that the certification process usually takes one to two years from initial document review through to the onsite inspection; ClassNK has issued statements of HKC compliance to 57 yards globally, 3 in Bangladesh.

Zahirul said the decision to undertake the $10m investment to reach HKC standards was spurred by talk at international conferences of yards in Bangladesh harming their workers and the environment, and a will to correct that reputation. PHP has statements of compliance from multiple classification societies and some shipowners choose to go further in their due diligence. NYK has a full time representative at PHP to look at every block and ensure that operations are HKC compliant, said Zahirul.

Allowing third party representatives on site to verify PHP’s recycling methods is a statement of confidence, he added: “This is a strong message to ship owners that Bangladesh is a responsible destination for ship recycling.”

With vessels already received from NYK and MOL, Zahirul expects more Japanese owners to recycle vessels at the yard.

Bangladesh ratified HKC on 13 June 2023, and Liberia followed close behind on 26 June. The ratifications now meet the threshold for entry into force; 15 IMO member states representing 40% of merchant shipping by gross tonnage need to sign up to the convention, with a combined annual ship recycling capacity no less than 3% of their combined tonnage. Entry into force will come 24 months after.

“HKC ratification is a blessing for all stakeholders in this field,” Mehrul Karim, Ceo Kabir Ship Recycling told ICS. “Ultimately the workers’ life standards, the environment, and future generations will benefit from this.”

Zahirul said, after waiting 15 years, the final ratification is a “historic moment for ship recycling and shipping world”. He added: “It will be historic in the sense that the HKC will make sure shipowners and ship recyclers all have responsibilities and each will have different roles to play so that recycling takes place, sustainably and responsibly. I’m very happy that Bangladesh took the initiative to ratify HKC this year and will pave the way for recycling in the world to be more responsible and sustainable. I am excited about the prospect and hope other regulations in place right now will be null and void once the HKC comes into force.”

Rahim said that shipping companies will need to “understand and appropriately respond to specific requirements throughout the ship lifecycle” and that the “ratification of HKC will be a huge boost to the shipping community to go for responsible recycling”

PHP looked into complying with the EU’s Ship Recycling Regulation but judged the regulation’s rules as unachievable, even for the best recycling yards in India and Pakistan. The losers in the current situation are European shipowners, said Zahirul.

Commenting on the announcement of Bangladesh’s and Liberia’s ratification of HKC, John Stawpert, Senior Manager (Environment and Trade) of the International Chamber of Shipping, said: “This marks a sea change for this global industry and confirms that in the near future shipowners will be confident that their vessels will find a safe and environmentally sound destination for recycling. The importance of the Convention entering into force, and what it means for ship recycling worldwide cannot be underestimated”.

ICS has recently published the First Edition of its Ship Recycling Guide.