Maritime Economics Assignment Sample

Introduction To Maritime Economics Assignment

Provide a description of what EU Ship Recycling Regulation (EU SRR) and Hong Kong Convention (HKC) entail and explain these regulations in layman's terms.

EU Ship Recycling Regulation (EU SRR) is adequate regulations promote the sustainable and safe environment in the aspects related to responsible ship recycling practices (Werven, 2022). On the other hand, the Hong Kong Convention (HKC) has also been focusing on the enhancement of different kinds of perspectives such as safe and adequate ship recycling perspectives (Imo.org, 2019). In the respect of ship reglation, in 2020 EU SRR has been enacted through which appropriate targeting to the large sea vessels can be attracted and it is also to be stated that demonstration of appropriate perspectives such as EU SSR needs to focus on the recycled aspects ship under the European perspectives (Dnv, 2020).

It has also been identified that through demonstrating the perspectives related to environmental standards and safety promotion is possible. Furthermore, it is also to be stated Inventory of Hazardous Materials” (IHM) has been implemented by the government in terms of managing the perspectives related to the promotion of safe handling practices under recycling processes (Abs, 2022). EU SRR have also been rigorous standards can also be ensured appropriately. Labour rights and toxic waste management have also been promoted through the EU SSR aspects.

Hong Kong Convention” is an international standard for ship recycling (Classnk, 2022). This framework has been adopted in terms of applying to ships of 500 GT. Perspectives related to the maintenance of IHM has also been ensured through the promotion of adequate ship recycling plan. With the help of this plan, it has also been identified that promoting safety and environmental standards are needed to be promoted through the perspectives related to HKC.

Both regulations have been reflecting on the global movement to the more responsible ship recycling practices (Classnk, 2022). It has also been enhancing the perspectives of the importance of environmental protection and sustainable practices in the maritime sector.

The EU SRR is adopted for ships from European countries and ship regulations have also been promoted under this (Verifavia, 2022). The Hong Kong Convention is related to EU SRR and for that aprorpiater shipping control mechanism can be ensured. The convention has also been requiring ships to have a list of dangerous materials.

The Hong Kong Convention has been allowing countries to adopt adequate measures to promote safe and environmentally sound recycling of ships (Imo.org, 2019). Development of minimising harmful effects on human health and the environment are also required in the shipping control regulations. EU Ship Recycling Regulation” has also been focusing on protecting against the adverse effects of hazardous materials found in ships that enter EU ports.

Therefore, the Directive 2009/16/EC has also been implemented by the government in terms enhancing perspectives related to state control. Therefore, this directive is related to the verification of ship compliance through which port state control (Solakivi et al., 2021). Furthermore, port state control has also been helping to check different kinds of certifications and conducting the different kinds of perspectives related to hazardous materials such as asbestos. The Paris Memorandum of Understanding on Port State Control” has adopted to focus on the inspection related to shipping. On the other hand, it has indicated that EU ports are related to rigorous checks to ensure not carry hazardous materials.

The European Union has been influenced by the Hong Kong Convention's (HKC) standards in terms of shipping regulations (Solakivi et al., 2021). Furthermore, it is also to be stated that the adoption of the EU Ship Recycling Regulation (EU SRR) under Regulation (EU) 1257/2013 has also enhanced the perspectives related to the ship demolition processes. It has also been identified that EU Member States have also been promoting the perspectives related to HKC. Therefore, it has also been fostering its worldwide implementation (Environment.ec, 2023). The EU SRR of 30, 2013 has also been representing the EU's commitment to environmentally friendly and safe ship recycling practices.

Under the South Asian perspectives, it is identified that large vessels have also been creating different kinds of perspectives such as social and environmental perspectives. On the other hand, it is also to be stated that the European Commission in a thematic issue of Science for Environment Policy in June 2016 also needed to be promoted.

The EU SRR has also been aligning with the structure, concepts and definitions of the HKC. Therefore, it has also been observed that the safety and environmental standards under different countries are also needed to be promoted (Environment.ec, 2023). One of the significant aspects of the EU SRR is the installation of hazardous materials such as asbestos or ozone-depleting substances on ships. It has also been helping to promote the perspectives related to new ships under the EU flag. It has an Inventory of Hazardous Materials” onboard through which appropriate shipping environment can also be promoted. From December 31, 2020, the requirement has been including all existing ships under EU flags and non-EU flagged ships visiting EU ports or anchorages. On the other hand, the EU SRR is an EU adaptation of the HKC with additional provisions has been ensuring higher safety and environmental standards in ship recycling.

The EU Ship Recycling Regulation (EU SRR) has also been promoting standard for ship recycling facilities. It has also been including adherence to stringent environmental and safety protocols. Article 15 has also been promoting the aspects related to the requirements to ship recycling facilities located in non-EU countries (Environment.ec, 2023).

It has also been promoted that they meet the same high standards as those within the EU. On the other hand, Article 16 has been focusing on the establishment and regular updating of the European List of ship recycling facilities. EU has promoted different kinds of perspectives related to the enhancement of regulation under EU SRR. The provisions have also been collectively ensuring that ship recycling within the EU or in non-EU countries. It has also been related to the promotion of rigorous standards for environmental protection and worker safety.

Ships have registered under EU flags at the end of their operational lives are required to be recycled at facilities listed on the EU's approved list. This regulation has also been aligning under the standards set by the Hong Kong Convention. It has also been imposing higher safety and environmental requirements.

Key enhancements have been including adequate toxic waste management protocols and the enforcement of labor rights. The regulation has also excluded the beaching method for ship dismantling and it is also under practices with significant environmental and safety concerns. Moreover, the EU SRR subjects have also listed recycling facilities to increase oversight. Independent third parties have the authority to lodge complaints if they suspect non-compliance with the regulation's standards. The additional layer of scrutiny has also been ensuring greater adherence to safety and environmental norms.

Implications of Hagia Sophia Navigation's Demolition Program Under EU Regulations

Describe and explain the immediate implications for Hagia Sophia Navigation's demolition program, outlining what the company is allowed and not allowed to do, considering EU regulations and jurisprudence.

Recycling Facilities and Restrictions

Since December 2018, EU-flagged ships must be recycled in facilities included on the European List of ship recycling facilities. These facilities, located in both EU and non-EU countries, comply with strict requirements related to worker safety and environmental protection. This list is regularly updated to add or remove facilities, and national authorities inform the European Commission about compliant facilities in their territories. For non-EU facilities to be included in the list, they must submit an application to the Commission and meet the EU SRR standards. However, as of the latest updates, no facilities in India, China, or other South East Asian countries have been formally added to the list (Bimco.org, 2022). This limitation, particularly for larger vessels, constrains the options available for shipowners looking to recycle their vessels.

Inventory of Hazardous Materials (IHM)

A key requirement of the EU SRR is for all EU-flagged ships, as well as non-EU flagged ships calling at EU ports and anchorages, to have an on-board inventory of hazardous materials by December 31, 2020. This inventory details hazardous substances present on the ship, essential for safe and environmentally sound recycling (Bimco.org, 2022). The COVID-19 pandemic posed challenges for shipowners in finalizing the required IHM before the deadline. Recognizing these difficulties, BIMCO and other shipping organizations have addressed a letter to the EU Commission, outlining these challenges and requesting a time-limited implementation or grace period for the IHM process.

Market Impact and Compliance Challenges

The EU SRR enhances the Hong Kong Convention requirements but sets additional safety and environmental standards, including labor rights and the prohibition of the beaching method for ship dismantling. Compliance with these enhanced standards requires significant adjustments from shipowners. The regulation has impacted global trade and the ship recycling market (Bovenizer, 2023). The COVID-19 pandemic is further complicated compliance, leading to earlier-than-expected selling off of ships for dismantling. This situation highlights the dynamic nature of the shipping industry and the need for adaptive strategies to comply with evolving regulations.

For each vessel earmarked for demolition, indicate under EU SRR and HKC where the ship can and cannot be demolished.

EU SRR Compliance for EU-Flagged Vessels

For vessels flying an EU flag, the EU SRR has also been promoting that they must be recycled. It has also facilitated the aspects related to being listed on the European List of approved ship recycling facilities (Bovenizer, 2023). These facilities adhere to high standards of safety and environmental protection. This means that any facility not on this list in regions that traditionally dominate the ship recycling industry such as South Asia has also been permissible for the recycling of these vessels. The EU SRR's stringent requirements ensure that the demolition of ships does not adversely affect the environment or the safety and health of workers.

Flexibility for Non-EU Flagged Vessels and HKC Considerations

Non-EU flagged vessels have more flexibility in choosing a recycling facility. However, these vessels should be recycled at facilities that adhere to the standards set by the HKC. The HKC has been promoting international standards for safe and environmentally friendly ship recycling (Bovenizer, 2023). Therefore, it has also been including the requirement for an Inventory of Hazardous Materials (IHM) and a Ship Recycling Plan for each vessel. Facilities have also been complying with these standards that are generally not recommended for ship recycling.

Specific Guidelines for Each Vessel

For Hagia Sophia Navigation's specific fleet, the demolition strategy must be tailored to each vessel's characteristics, such as its flag and current location (HISTORY.COM , 2018). The company must ensure that EU-flagged or those vessels currently in EU waters adhere to the EU SRR, while considering the HKC guidelines for other vessels. This adherence not only ensures compliance with regulations but also aligns with global efforts towards sustainable and responsible ship recycling practices.

PEST analysis

Regulatory changes have also been imposing different kinds of challenges. It is also identified that international conventions such as the EU SRR and HKC has been impacting ship recycling practices (Dnv, 2023). On the other hand, geopolitical shifts and trade policies have also been influencing the global shipping routes. On the other hand, it has also been impacting shipping perspectives through which ships can be demolished.

The shipping industry has also been affecting ship values and the cost-effectiveness of demolition. Scrap metal prices have also been fluctuating significantly and through the economic issues shipping perspectives cannot be promoted. Global economic such as fuel costs and shipping demand have also been impacting the perspectives related to ship demolition. Public perception and CSR initiatives have also been promoting environmental sustainability and labor practices in the ship recycling industry (Okumus et al., 2023). The company has also been promoting perspectives related to social expectations to maintain a positive public image and adhere to ethical standards. Technological advancements have also been helping in terms of ships to obsolete more quickly (Mckinsey, 2022). Furthermore, it has also been influencing the timing of demolition. On the other hand, developments in recycling technology have also been affecting the efficiency and environmental impact of ship recycling processes.

Risk Assessment

It is to be stated that through focusing on the shipping rates and demolition prices have been creating different kinds of aspects. On the other hand, it has also been identified that economic issues in a country such as India, Pakistan and other perspectives exchage rates have been created to conduct business with other countries. Furthermore, it has also been demonstrated that ship demolition perspectives have also been affecting the decision-making perspectives of the shipping industry (Okumus et al., 2023).

Furthermore, it is also to be stated that managing the perspectives related to operational efficiency has also been managing the fleet's age (Pinchemel et al., 2022). It has also been promoted that fast-paced technological changes in the shipping industry have been promoting different kinds of challenges. Public and stakeholder perceptions of the company's recycling practices have substantial implications for its reputation.

Furthermore, it is also to be stated that enhancement of the CSR and ethical perspectives under the framework has also been promoting strategic planning (Fatima and Elbanna, 2022). Furthermore, it is also to be stated that environmental considerations are increasingly paramount and it has also been standards and regulations in minimisiing the ecological aspects related to ship demolition and recycling.

References

Abs (2022). What is Inventory of Hazardous Materials? [online] ABS Group. Available at: https://www.abs-group.com/Knowledge-Center/Insights/What-is-Inventory-of-Hazardous-Materials/ [Accessed 21 Dec. 2023].

Bimco.org (2022). EU ship recycling rules can affect non-EU flags. [online] www.bimco.org. Available at: https://www.bimco.org/news/environment-protection/20190329-eu-ship-recycling-rules-can-affect-non-eu-flags [Accessed 21 Dec. 2023].

Bovenizer, N. (2023). New regulations to allow more yards to recycle EU vessels. [online] Ship Technology. Available at: https://www.ship-technology.com/news/regulations-more-yards-recycle-eu-vessels/ [Accessed 21 Dec. 2023].

Classnk (2022). Ship Recycling Convention (the Hong Kong Convention) | ClassNK - English. [online] www.classnk.or.jp. Available at: https://www.classnk.or.jp/hp/en/activities/statutory/shiprecycle/index.html.

Dnv (2020). EU Ship Recycling Regulation – clarifications on IHM. [online] DNV. Available at: https://www.dnv.com/news/eu-ship-recycling-regulation-further-clarifications-on-ihm-169372 [Accessed 22 Dec. 2023].

Dnv (2023). Hong Kong Recycling Convention ratified, entering into force in 2025. [online] DNV. Available at: https://www.dnv.com/news/hong-kong-recycling-convention-ratified-entering-into-force-in-2025-245173.

Environment.ec (2023). Ships. [online] environment.ec.europa.eu. Available at: https://environment.ec.europa.eu/topics/waste-and-recycling/ships_en [Accessed 22 Dec. 2023].

Fatima, T. and Elbanna, S. (2022). Corporate Social Responsibility (CSR) Implementation: a Review and a Research Agenda Towards an Integrative Framework. Journal of Business Ethics, [online] 1(2), pp.105–121. doi:https://doi.org/10.1007/s10551-022-05047-8.

HISTORY.COM (2018). Hagia sophia. [online] History.com. Available at: https://www.history.com/topics/middle-ages/hagia-sophia [Accessed 22 Dec. 2023].

Imo.org (2019). The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships. [online] Imo.org. Available at: https://www.imo.org/en/about/Conventions/pages/the-hong-kong-international-convention-for-the-safe-and-environmentally-sound-recycling-of-ships.aspx#:~:text=The%20Hong%20Kong%20Convention%20is [Accessed 21 Dec. 2023].

Mckinsey (2022). Will ‘ship, then fix’ become obsolete in the next normal? | McKinsey. [online] www.mckinsey.com. Available at: https://www.mckinsey.com/capabilities/operations/our-insights/will-ship-then-fix-become-obsolete-in-the-next-normal [Accessed 21 Dec. 2023].

Okumus, D., Gunbeyaz, S.A., Kurt, R.E. and Turan, O. (2023). Towards a circular maritime industry: Identifying strategy and technology solutions. Journal of Cleaner Production, 382, p.134935. doi:https://doi.org/10.1016/j.jclepro.2022.134935.

Pinchemel, A., Caetano, M., Rossi, R.M. and Silva, M.A. (2022). Airline’s business performance indicators and their impact on operational efficiency. BBR. Brazilian Business Review, [online] 19(6), pp.642–665. Available at: https://www.redalyc.org/journal/1230/123075330004/html/.

Solakivi, T., Kiiski, T., Kuusinen, T. and Ojala, L. (2021). The European Ship Recycling Regulation and its market implications: Ship-recycling capacity and market potential. Journal of Cleaner Production, 294, p.126235. doi:https://doi.org/10.1016/j.jclepro.2021.126235.

Verifavia (2022). Shipping Monitoring, Reporting and Verification Regulation 2015/757 The EU Ship Recycling Regulation (EU SRR) Carbon Emissions - Verifavia Shipping. [online] www.verifavia-shipping.com. Available at: https://www.verifavia-shipping.com/shipping-carbon-emissions-verification/shipping-mrv-regulation-the-eu-ship-recycling-regulation-eu-srr-171.php#:~:text=The%20EU%20SRR%20and%20the [Accessed 21 Dec. 2023].

Werven, B. van (2022). (PDF) European Ship Recycling Regulation: can we make a difference towards safe and environmentally sound practices? [online] ResearchGate. Available at: https://www.researchgate.net/publication/336369265_European_Ship_Recycling_Regulation_can_we_make_a_difference_towards_safe_and_environmentally_sound_practices.