The Government of India in October, 2020 notified the ‘Directorate General of Shipping’ as the National Authority for Recycling of Ships. This means that the Directorate General of Shipping has been designated by the Government of India under Section 3 of the Recycling of Ships Act, 2019 to administer, supervise and monitor all activities relating to ship recycling in India. The Directorate General of Shipping will also be the final authority for various approvals required by the ship-recycling yard owners and state governments. National Authority for Recycling of Ships will be set up in Gandhinagar, the capital of the state of Gujarat in India. This choice of location appears to be strategic as it will significantly benefit the ship recycling yard owners situated in Alang, Gujarat, which is the world’s largest ship-breaking yard.
Ship breaking is mainly performed in four states of India namely Gujarat, West Bengal, Kerala and Maharashtra. The available ship breaking capacity in India is approximately 4.5 million Light Displacement Tonnage (LDT). The ship breaking process is hazardous since end-of-life vessels contain toxic materials such as polychlorinated biphenyl, polyaromatic hydrocarbons, asbestos, polyvinyl chloride, tin, lead, heavy metals and several other substances. Unregulated ship recycling may result in release of toxic materials into the local environment which has damaging consequence on local communities, wildlife and agricultural practices. However, recycling of a ship enables re-use of valuable materials and contributes towards establishing a circular economy. Therefore, there has been a need to establish a framework for recycling of ships in India.
India is one of the world’s largest ship recycling countries which has acceded to the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (“Convention”). This Convention aims at ensuring that recycling of ships that have reached the end of their operational lives do not pose any unnecessary risk to human health and safety or to the environment. Last year Government of India enacted the Recycling of Ships Act, 2019 (“Act”). The preamble of this Act mentions that it is an Act to provide for the regulation of recycling of ships by setting certain standards and laying down the statutory mechanism for enforcement of such standards and related matters.
The Act imposes a statutory duty on ship recyclers to ensure safe and environmentally sound removal and management of hazardous materials from a ship. It further imposes an obligation on a ship recycler to ensure that there is no damage caused to the environment in any form due to the recycling activities at the ship recycling facility. This statute has a dedicated chapter on penalty for contravention of the provisions of this Act or rules or regulations made thereunder. It is estimated that the enactment of this Act will double ship recycling volume by 2024.
Ship-breaking Code (Revised), 2013 (“Code”) was notified by the Government of India to regulate recycling of ships in India. This Code has a dedicated chapter on the ship recycling process. The Code further mandates ship recyclers to ensure compliance with certain environmental laws. The Ministry of Shipping, Government of India has constituted a Ship Breaking Scrap Committee (“Committee”) under the Chairmanship of Joint Secretary (Shipping) to streamline various measures relating to modernization / upgradation of ship breaking yards, implementation of the Code and administration of ship breaking scrap development fund. One of the terms of reference of this Committee is to ensure effective action against hazardous waste and adherence to Central Pollution Control Board (CPCB) guidelines.
Even though the profile of India’s ship recycling industry has improved after India acceded to the Convention and enacted the Act, environmental impact of ship recycling is still a cause of significant concern for the country. In addition to persuading the industry that sustainable recycling of ships make business sense, both the national and sub-national governments must work towards rationalising regulatory permissions involved in ship recycling, provide support for upgradation of ship recycling facilities and formulate multi-sectoral policy to promote best practices.
Contributed by: Nawneet Vibhaw, Partner; Ashutosh Senger, Associate
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