Considered in Grand Committee
My Lords, these draft regulations will be made under the European Union (Withdrawal) Act 2018 in order to give effect to the Northern Ireland protocol in the withdrawal agreement.
The United Kingdom has already introduced European Union exit legislation on ship recycling. The Ship Recycling (Facilities and Requirements for Hazardous Materials on Ships) (Amendment) (EU Exit) Regulations 2019, approved by your Lordships’ House on 29 January 2019, will come into force at the end of this year. The purpose of these regulations is to ensure that our retained legislation on ship recycling will continue to be legally operable, and to transfer functions from the European Commission to the Secretary of State.
The regulations before the Committee today are necessary to implement the Northern Ireland protocol, which addresses the unique circumstances on the island of Ireland. The Northern Ireland protocol includes provisions in Article 5 which specify that certain provisions of EU law will apply in respect of Northern Ireland. The EU ship recycling regulation is one of the provisions listed in Annexe 2 of the protocol. As a consequence, EU law will affect ship recycling facilities in Northern Ireland.
The EU ship recycling regulation transposed key parts of the Hong Kong convention on recycling of ships into EU law. The provisions apply to ship recycling facilities in the EU and to EU-flagged merchant ships above 500 gross tonnes. They do not apply to military vessels.
The main provisions of the EU regulation have applied from 31 December 2018 and include: rules about the authorisation and permitting of ship recycling facilities; the steps EU and non-EU ship recycling facilities should take if they want to be listed in the EU’s approved list of ship recycling facilities, known as the European list; a requirement that all EU-flagged ships must be recycled at an approved ship recycling facility, according to a certified ship recycling plan; and a requirement that all new EU-flagged ships must carry a valid inventory of hazardous materials. The EU regulation also requires existing EU-flagged ships, as well as non-EU flagged ships calling at European ports, to carry an inventory of hazardous materials by the end of 2020.
The new draft regulations amend the 2019 exit regulations. This in turn amends the retained EU ship recycling regulation and devolved legislation which affects Northern Ireland. I stress at this point that we have consulted Ministers in the Northern Ireland Executive about the changes to the draft regulations, and they have given their consent.
This instrument makes two substantive changes. First, it amends the provisions affecting ship recycling facilities in Northern Ireland to reflect our obligations under the Northern Ireland Protocol. In particular, it prohibits facilities not on the EU’s approved European list from recycling EU-flagged ships, and it requires competent authorities in Northern Ireland to notify the Secretary of State about any change in the authorisation or permitting status of their facilities. It also requires the Secretary of State to notify the European Commission of any such changes.
The impact of the protocol means that the existing arrangements for Northern Ireland facilities will remain the same at the end of the implementation period. Facilities in Northern Ireland will remain listed in Part A of the European list, which covers facilities located in the EU and in the European Economic Area. Secondly, the draft regulations will incorporate changes to reflect the fact that, by the end of this year, existing UK ships and non-UK ships calling at UK ports must carry an inventory of hazardous materials. This is a welcome development, because new ships are already required to carry a certified inventory. Applying this provision to existing ships should result in a more coherent and complete regime for the safe and environmentally sound recycling of ships.
Ensuring the safe and environmentally sound dismantling and recycling of ships at the end of their operational life has been a concern for a number of years. Many ships are currently dismantled on beaches in Asia, with little regard for human safety or protection for the environment. It is important, therefore, that we continue to have an effective ship recycling regime, which protects public health and the environment.
The changes introduced by this instrument will ensure that environmental law continues to function at the end of the transition period and demonstrates that the UK is implementing its commitments under the Northern Ireland protocol. I commend these regulations to the Committee.
The noble Lord, Lord Berkeley, has withdrawn, so the next speaker is the noble Lord, Lord Bradshaw.
My Lords, I do not believe that this measure should take us very long. The dismantling of old ships is an extremely hazardous process and, as the Minister just said, very detrimental to the health of those involved. By the time ships are old enough to be broken up, however, they have probably dropped away from the register of the most compliant countries and from the register of companies that have strong trade union representatives to enforce compliance with the standards.
I do not wish to delay in any way what is proposed. I understand that in Northern Ireland people cannot set up ship-breaking facilities that would in any way offend against health and safety or other laws that pertain to ship owning. I give these regulations my support. I do not believe that it is necessary that we should leave the European Union—we have said so many times—but I cannot find anything to which I object in the regulations.
My Lords, neither ship recycling nor Northern Ireland are my territory, though church is sometimes seen as an ark to gather people safely and hazardous materials are a concern for us all. It is important for Northern Ireland to thrive as best it can within the new political arrangements that are still unfolding. The purpose of this SI is clear and not controversial; it is to the benefit of one shipyard in Northern Ireland. The EU has developed a good scheme for overseeing this process and I am sure we will be glad to continue to use it.
I was very struck by the statement that an impact assessment has not been prepared for this SI, because there are no significant impacts—well, yes and no. Yes, in the narrow confines of the SI; no, because it all depends on what is being measured. Shipping is a key part of the transport carbon footprint—not just marine diesel, although, heaven knows, agreements about that internationally are hard enough to get. More and more, we are looking at the whole life cycle of manufacture, use and disposal, as the Minister pointed out in her introduction.
One impact of Covid-19 is an increase in the scrappage of car carriers, ore carriers and cruise ships. There are jobs here—more importantly there is the need to raise our ambition with regard to environmental legislation brought across from the EU. Here is a wonderful opportunity to set out our ambition for a circular economy. I hope that, come January, our sights might be raised to meet that sort of ambition. That said, the SI does not really pose a problem, but it is an opportunity to set out more of the goals that I think lie ahead of us in relation to our environmental responsibilities.
I thank the Minister for her explanation of the content and purpose of these draft regulations, which contain provisions that allow for Northern Ireland’s position post Brexit and the potentially divergent regulations on ship recycling that result.
The existing EU regulation on ship recycling, which seeks to ensure that ships flagged in EU countries are recycled only at well-regulated facilities, irrespective of where they are located, is, as the Minister said, one of the provisions listed in the protocol on Ireland/Northern Ireland in the withdrawal agreement. As a result, the EU regulation will continue to apply in Northern Ireland as it has effect in EU law, rather than the retained version which applies to the rest of the UK, without any further provision being made.
The existing EU regulation enabled the European Commission to set up a list of approved recycling facilities at which ships may be recycled. Part A of the list covers ship recycling facilities in a member state and Part B such facilities located in a third country. As I understand it, 41 ship recycling facilities are shown on the EU list, of which nine are non-EU facilities. There have been up to four UK ship recycling facilities in Part A of the list at any one time. However, the listing of the three facilities located on the UK mainland will now become void, but the ship recycling facility in Northern Ireland will continue to be listed under Part A of the European list. The three ship recycling facilities on the UK mainland will need to reapply for inclusion in Part B of the European list, as a non-EU third country if they want to continue recycling EU-flagged ships from next year.
The UK Government will be required to set out a list of UK ship recycling facilities and only those on the list can be used for UK ship recycling in Northern Ireland. The ship recycling facilities in Northern Ireland will need to be on the United Kingdom list before they can recycle any UK-flagged ships. The EU and UK list of approved ship recycling facilities can overlap, depending on the separate decisions of the EU Commission and the UK Government.
The draft instrument is intended to ensure that the legal framework relating to ship recycling remains legally operable, with particular regard to the protocol once the implementation period under which the UK continues to be subject to EU rules comes to an end as from the beginning of next year. As the Minister said, the draft instrument also takes account of the need under present EU regulations for existing ships to carry an inventory of hazardous materials before the end of this year. This now becomes part of retained EU law.
I have just a few questions. Where are the present UK mainland and Northern Ireland existing approved ship recycling facilities? Will the existing three UK mainland facilities be reapplying for inclusion on Part B of the European list and, if so, is there any reason to believe that they might not be accepted? Will the Northern Ireland ship recycling facility be on the UK list? Finally, is bringing into force the terms and requirements of this draft regulation likely to have any impact on jobs and workload at any of the existing UK-approved ship recycling facilities?
My Lords, I thank all noble Lords for their contributions to today’s very short debate. These regulations are fairly simple, but a number of good questions have been raised that I would like to go into in a little more detail, if I can.
On the practical implications in Northern Ireland, which were mentioned by the noble Lord, Lord Rosser, although the right reverend Prelate claimed not to be an expert, it is quite useful to understand what will change in Northern Ireland, because, basically, nothing will change. The permitting regime will stay the same after the implementation period as it is now, and the competent authorities will stay the same. Each devolved Administration will continue to use their own competent authorities to approve and permit their facilities—that will happen in each region of the country.
The main difference worth emphasising is that facilities in Northern Ireland will get some benefit from this because, as noble Lords have pointed out, they will join the Part A of the European list until their permit expires. When their permit expires, it will probably be quicker and easier for them to reapply if they decide to remain on the list. Facilities in the rest of the UK will be treated as non-EU/EEA facilities and will be removed from the list. However, it is true that the three facilities that will be removed from the list can reapply to join, and they would do so under Part B. We know that that process is under way. Over time, we would expect the two lists to remain fairly closely aligned, because the standards will start off the same.
We have been in conversation with the three facilities that will need to join Part B, and we have also had reassurance from the European Commission that it will be sympathetic. For example, we have asked it to waive the non-mandatory elements of the application process for these three recycling facilities, which are: Able UK in Middlesbrough; Swansea Drydocks; and Dales Marine Services, near Edinburgh. If the Commission waives the non-mandatory elements, we expect that this will accelerate the process and, once on the European list, all UK facilities would be treated equally. However, I reiterate that this relates to a relatively small proportion of a shipyard’s business.
The right reverend Prelate talked about the coverage of the impact assessment. Of course, he has been in the House long enough to know that the impact assessment covers only the regulations that we are looking at, but he is right that the marine industry as a whole has a significant impact on carbon emissions, which we need to take incredibly seriously. I am sure that the right reverend Prelate has been hanging on the Prime Minister’s every word today as he outlined our 10-point plan, which includes £20 million for marine decarbonisation. That will be a really good springboard to try to look at what will work for marine. We recognise that there is an issue that we need to address. There is a longer-term strategy, Maritime 2050, which looks at the sector going out many decades, but we recognise that, ahead of COP 26, there is a lot that we can do. I know that the maritime sector is keen to play its part in decarbonisation, and I am very interested in looking at the various technologies that might be forthcoming that will help to decarbonise the sector as a whole.
However, on the basis of what I have said, I hope that noble Lords will feel able to agree to these regulations.
The Grand Committee stands adjourned until 3.45 pm. I remind Members to sanitise their desks and chairs before leaving the Room.