The Hong Kong Convention versus The Basel Convention – which one is going to give in?

As keen readers of the Nordisk Circular will be aware (see the September 2023 Edition), the Hong Kong Convention for Safe and Environmentally Friendly Recycling of Ships (the “HKC”) will (finally) enter into force on 26 June 2025. One might think that this will not cause any issues with the already existing framework that may apply to ships destined for recycling, including the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal in force since 1992 (the “Basel Convention”).

Currently however, there is a lack of interplay between the HKC and the Basel Convention which in our view must be resolved before the entry into force of the HKC. Should this not be resolved, there is a risk that a vessel being sold in compliance with the HKC, may be a breach of the Basel Convention.

The problem is that the Basel Convention and the Basel Ban Amendment (2019) simply ban the export of hazardous waste from a Basel Ban Amendment ratifying state to a non-OECD[1] country. In line with long-standing case law, it is suggested that a vessel that is heading for the recycling yard is regarded as waste, and the export to a non-OECD country will in these circumstances be prohibited. Any violation of this prohibition may in several jurisdictions expose the exporter, which is typically the owner of the vessel, to criminal liability.

The inconsistency must be understood against the background of the Basel Convention having a general applicability to any sort of waste, whilst the HKC is shipping specific and applies to ships and ship recycling facilities.

The consequence of this lack of interplay is that although a vessel has undergone the required preparations to be recycled in accordance with the HKC, the export of the same vessel from a jurisdiction that has ratified the Basel Convention and the Basel Ban Amendment may be regarded as a breach of the Basel Convention and the Basel Ban Amendment, which may lead to both (i) the vessel being detained and (ii) the owners of the same vessel being subject to penal sanctions.

In our view, this is far from satisfactory and creates a real risk of undermining the compliance with the HKC. If shipowners that are recycling vessels in accordance with the HKC run the risk of being prosecuted for a violation of the Basel Convention for the same sale, there is a genuine concern that this may reduce the willingness to choose to recycle in accordance with the HKC.

Nordisk shares the view put forward by Bangladesh, India, Norway, Pakistan, ICS and BIMCO on 25 January 2024, expressing the need for legal clarity and certainty so to ensure that operating in compliance with the HKC will not be sanctioned as a violation of the Basel Convention.[2]

This issue is not new, and the EU had to deal with the same problem when deciding how the EU Waste Shipment Regulation (“WSR”) and the EU Ship Recycling Regulation (“SRR”) were to work together. The EU solved this by specifying that the WSR shall not apply to any vessels that are in the process of being recycled in accordance with the SRR. The WSR is based on the Basel Convention, whilst the SRR is based on the Hong Kong Convention – perhaps there is room for some inspiration from the EU’s solution?

The Nordisk Recycling Team has extensive knowledge of recycling issues and are prepared to assist members with queries that should arise.

Nordisk Recycling Team:

Mats E. Sæther (msaether@nordisk.no)
Olav Eriksen (oeriksen@nordisk.no)
Ola Granhus Mediås (omedias@nordisk.no)
Mina Walen Simensen (msimensen@nordisk.no)

[1] The Organisation for Economic Co-operation and Development – Countries – OECD

[2] See more in the following article from BIMCO: https://www.bimco.org/news/priority-news/20240215-submission-81-15-5