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Ship scrapping & EWSR

A few months ago, the Rotterdam District Court fined a Director of a shipping company for breaching the European Waste Shipment Regulations when scrapping its vessels. The interesting bit was that, although two vessels were sent for demolition, the Court held that the EWSR regulation was breached for only one of the vessels.

Company’s board made a decision to scrap two old EU flagged vessels sometime in Jan 2015. The technical department made enquiries on the legislative requirements for scrapping and was informed that since the ship is considered as a waste, notification documents will have to be submitted and necessary approvals taken as per EWSR (known as EVOA in Netherlands) when waste is exported from EU to outside EU. They were also informed that EVOA would not apply if the ships were sent for scrap from outside the EU. Both the vessels continued trading for a few more months before heading to an approved yard in Turkey. The scrap voyage for the first vessel was from Lebanon to Turkey, and for the second, Tunisia to Turkey. As per the owners, the vessels were trading, and they could be declared as ‘waste’ only when the vessels went to the scrap yard. Moreover, their last voyage started outside the EU and therefore the scrapping of these vessels is outside the scope of EWSR/EVOA.

The Court first clarified at what moment can a vessel be deemed ‘waste’ within the meaning of the regulations – when the decision is taken by an owner to scrap a vessel, or several months later when the scrap sale takes place and she actually go to the demolition yard? The court went with the former. Mere intent by the owners was enough, as per the wording of EWSR.  

The Court then considered the timing of the decision. The first vessel was in EU when the decision was taken in Jan’15 by the company’s board to demolish the vessel sometime later that year. EWSR was breached as the company had not notified the authorities and taken necessary permissions.

As for the second vessel, the company had not decided whether to sell her in the second-hand market or to demolish until the very last minute. When the decision to demolish her was taken (sometime in April), she was outside the EU. EWSR therefore did not apply in this case.

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