Merchant Shipping and Other Transport (Environmental Protection) (Amendment) (EU Exit) Regulations 2018

Wednesday 23rd January 2019 Grand Committee

Considered in Grand Committee

19:27

Moved by

[Baroness Sugg]

That the Grand Committee do consider the Merchant Shipping and Other Transport (Environmental Protection) (Amendment) (EU Exit) Regulations 2018.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, as well as speaking to these regulations, if it is convenient I will speak also to the draft Ship Recycling (Facilities and Requirements for Hazardous Materials on Ships) (Amendment) (EU Exit) Regulations 2019. The regulations are made, for the most part, under the EU withdrawal Act. The Act retains EU-derived legislation in UK law. It also makes provision in Section 8 to correct deficiencies in such EU-derived legislation that arise from the UK leaving the EU.

There are some changes made under Section 2(2) of the European Communities Act. These update references to an EU directive on sulphur emissions from ships and correct an out-of-date reference to the EEA agreement in the Transport and Works Act 1992.

Turning to the regulations themselves, both make changes to ensure that legislation on environmental pollution continues to work after we leave the European Union. The environmental protection regulation makes changes in three areas of legislation on transport and the environment—specifically to legislation on air pollution controlling sulphur dioxide emissions from ships; legislation on substances used to prevent the fouling of ships’ hulls, and transport and works legislation in relation to environmental impact assessment.

The amendments in these regulations are technical. There are no policy changes, and there is no reduction in the environmental standards or, indeed, the obligations to which the UK is currently subject. The regulations will change references to “Member State” and “the Commission” to “Secretary of State” or “the United Kingdom” where appropriate. The regulations change definitions and other wording to reflect the UK’s position outside the EU.

I turn to the control of sulphur emissions from ships. Noble Lords will be aware of the importance of action on air pollution. The UK supports the IMO’s new global limit for sulphur emissions from ships, which comes into force on 1 January 2020. The UK has recently published a clean air strategy, which aims to cut pollutant emissions in half by 2030 and my department has also established the Clean Maritime Council, where key stakeholders are encouraging the development of green technology. We are planning to publish a clean maritime plan this spring, which aims to reduce both pollutant and greenhouse gases from shipping.

These regulations make changes to The Merchant Shipping (Prevention of Air Pollution from Ships) Regulations 2008 and Commission Implementing Decision 2015/253. The changes are made only to ensure that the legislation remains operable, and the regulations will ensure that the UK continues to recognise methods of abating emissions of airborne pollutants that are approved by EU member states. They also ensure that recreational and pleasure craft will continue to benefit from certain exemptions in respect of diesel engines.

19:30

The regulations remove a requirement to report to the European Commission, which would be redundant as it only applies to EU member states. Instead, there is a new requirement on the Secretary of State to publish an annual report on compliance with sulphur standards for marine fuels. We have removed references to SafeSeaNet, a database operated by the European Maritime Safety Agency. However, even in a no-deal situation, the UK will continue to provide and receive information on ships that are not complying with IMO air pollution rules. We will receive that information through our participation in the Paris Memorandum of Understanding on Port State Control.

The second area of legislation which these regulations change is in relation to the ban on the use of certain harmful chemical compounds—known as organotins—from use in ships’ anti-fouling systems. Anti-fouling paints and coatings, which inhibit the attachment of unwanted organisms to ships’ hulls, improve the fuel efficiency of ships, but the organotin compounds in some anti-fouling products have been shown to be very damaging to marine life. They have been banned under international and EU legislation.

The regulations before the Committee make changes to three pieces of legislation on anti-fouling substances: The Merchant Shipping (Anti-Fouling Systems) Regulations 2009—SI 2009/2796; EC Regulation 782/2003 on the prohibition of organotin compounds on ships; and Commission Regulation (EC) No. 536/2008. As well as correcting deficiencies such as references to member states, the regulations transfer Commission powers to amend references to international law on governing the use of anti-fouling systems to the Secretary of State.

Finally, the regulations also introduce technical changes to the environmental impact assessment provisions of the Transport and Works Act and procedural rules. They will allow the UK to continue to take a co-ordinated and streamlined approach to producing an environmental impact assessment. For example, they will, as now, avoid the need for certain information to be collected twice. The Welsh Government have been consulted on the changes to these provisions and given their approval for these regulations to be laid. These changes update references to an EU directive on sulphur emissions from ships and correct an out-of-date reference to the EEA agreement in the Transport and Works Act 1992.

I turn now to the ship recycling regulations. 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.

EU Regulation 1257/2013 transposed key parts of the Hong Kong convention on recycling of ships into EU law. The main provisions of the regulations have applied from 31 December 2018—so only very recently—and include requiring EU-flagged ships to be recycled at an approved ship recycling facility, and new EU-flagged ships to carry a valid inventory of hazardous materials. The provisions apply to ship recycling facilities in the EU, and to EU-flagged ships above 500 gross tonnes.

These regulations will ensure that the legal framework for ship recycling remains legally operable when the UK leaves the EU. They will do this by making amendments to EU Regulation 1257/2013 on ship recycling, and to three Commission implementing decisions. The regulations also amend SI 2015/430, the 2015 UK ship recycling regulations. Finally, they amend Northern Ireland legislation on ship recycling facilities and waste management licensing. The draft regulations address a number of deficiencies arising from EU exit which would hinder the operation of the UK ship recycling regime.

The current EU regulation establishes a “European list” of approved recycling facilities which all EU-flagged ships, including UK ships, must use when they need to be dismantled and recycled. When we are no longer in the EU, without a deal we will have no influence on who is included and removed from the European list. This instrument will require UK-flagged ships to use an approved ship recycling facility on a new “United Kingdom list”. This list will replace the European list for UK-flagged ships, and the Secretary of State will have the power to add facilities to or remove them from the list in the future. The UK list will include all recycling facilities that are on the European list when we leave the EU.

The regulations will set up a new procedure for ship recycling facilities to apply for inclusion on the UK list. They will also allow the Secretary of State to change legislation in line with international requirements—for instance, when the Hong Kong convention on ship recycling comes into force.

On the inventory of hazardous materials, ships typically contain quantities of hazardous materials, and the EU Ship Recycling Regulation requires new ships to carry a list of those hazardous materials from the beginning of this year. Existing ships also need to carry a list from 31 December 2020. However, the EU withdrawal Act retains in UK law only EU measures that are in force on the day we leave the EU. This means that the requirement in the EU regulation for existing ships—that is, from 31 December 2020—to carry a valid inventory will not be retained after we leave the EU.

The Government will look to implement this requirement at the earliest opportunity. As my officials confirmed to the Secondary Legislation Scrutiny Committee, ships will still need an inventory before they can obtain a “ready for recycling” certificate, which is required when a ship is sent for recycling. Furthermore, ships calling at EU ports will continue to need to carry an inventory after the measure comes into force in the rest of the EU in 2020.

As with other exit legislation, the regulations will change references to “Member State” and “the Commission” to “Secretary of State” or “the United Kingdom” where appropriate. The regulations change definitions and other wording to reflect the UK’s position outside the EU and the EEA, and the requirement to make reports to the Commission is removed. The regulations will allow the Secretary of State to amend various documents, including those required when a facility outside the UK applies for inclusion on the UK list.

This instrument applies to waste management, which is a transferred matter for Northern Ireland under the Northern Ireland Act 1998. Although the Government are committed to restoring devolution in Northern Ireland, in consultation with Northern Ireland departments the Government have included provisions in these regulations in relation to waste management legislation that applies in Northern Ireland.

These provisions relate to land-based waste permits for ship recycling facilities, and they update the legislative references from “the European List” to “the United Kingdom List”. This is required to maintain UK-wide consistency, enabling the inclusion of Northern Ireland in the post-Brexit UK list regime.

The changes made in both the environmental protection SI and the ship recycling SI ensure that environmental law continues to function after we leave the European Union. That will enable the UK to continue to comply with its international obligations as established by the International Maritime Organization and maintain the highest environmental and safety standards. I beg to move.

[Baroness Randerson (LD)]

My Lords, we have been getting on rather swimmingly with these SIs, but I regret to say that I have rather more to say about these two, particularly the ship recycling regulations.

I start with the environmental protection SI. This is a very important piece of regulation because of the extremely high levels of air pollution from shipping. It deals with the sulphur content of fuels and anti-fouling systems, which can also be seriously environmentally damaging. It also deals with the frequency of sampling and the reporting procedures.

There is a complex description of the legal application of these powers. I am concerned that there might be a danger of the constituent Administrations of the UK getting out of step and of ship operators getting confused if the requirements vary between the UK countries in a way that they do not at the moment because of the streamlined EU system. Therefore, there is a concern that, once we leave the EU, the legislation will diverge.

Paragraph 7.3 of the Explanatory Memorandum says that where a UK project might have a significant environmental effect on an EU member state, we will continue to consult that country before granting permission. Can I please have clarification from the Minister that the consultation will be with the individual EU country and not with the European Commission?

Paragraph 7.6 refers to removing redundant references to EU databases and, specifically, SafeSeaNet, which we will no longer have access to, while ensuring that its role is replicated in the UK. How do we replicate it if we do not have access to it? How can you replicate it when we do not have access to the database? What are we replacing it with and what are the resource implications of doing that work ourselves and simply repeating what the EU is already doing? The Explanatory Memorandum states that the Welsh Government were consulted, but what about the other devolved Administrations, because some, but not all, of the provisions in the SI apply to them?

Underlying all this is the fact that we are leaving the world-leading standards set by the EU and a new limit will come into force in 2020—the Minister referred to that. It will apply to ships using the North Sea and the Channel. Will that still apply to us after we leave the EU—do the Government intend that it should apply to us? Crucially, what will happen about the Irish Sea? As I understand it, it does not apply at the moment in the Irish Sea. Will the Irish Sea be subject to the new limits? Obviously, it is a sensitive area where ships from Northern Ireland and the Republic of Ireland are sailing in effectively the same waters. Will they be subject to a different regulatory regime?

Turning to ship recycling, the EU regulation that the SI deals with is the basis for improving environmental and safety standards for recycling EU-flagged ships and has led to the creation of an approved European list. This is a very important SI, because the facilities on the list can be anywhere in the world. There are seriously environmentally damaging ship-recycling facilities in some parts of the world. The procedures they use are unsafe, with a major impact on human health. Inspecting and approving them to create a European list is an onerous and complex business with a massive cost. Are the Government seriously saying that we will repeat that inspection process, with all the onerous and costly implications?

The EU regulation also restricts what hazardous materials—for example, asbestos and PCBs—can be installed on ships and ensures that they have an inventory of such materials. The UK’s MCA, Health and Safety Executive and the Environmental Protection Agency deal with the country concerned about this. As usual in this legislation, the status quo will continue to apply at first, but this SI is different from the others we have considered this afternoon. This is not just the usual expensive mirroring of what already exists in the EU. It will be very expensive, but it is not a mirroring.

This is more than just establishing a procedure for updating, although that it is important, because this is an area where standards change and, fortunately, standards have been rising. Paragraph 7.3 of the Explanatory Memorandum specifically says that, although:

“Initially, the UK list will be similar”,


in the name of giving,

“UK flagged ships the widest choice … It establishes a new procedure allowing ship recycling facilities worldwide to apply for inclusion”.

So it is clear; there is planned divergence here and absolutely no guarantee on maintenance of standards. This is one of the first glimmers of what some hardline Brexiteers have been urging: a new world where standards are lower, and costs are lower as a result.

19:45

There is another thing that concerns me about this regulation: paragraph 6.3 of the EM points out that it will create a gap around the requirement for ships to carry a valid inventory of hazardous materials. It says that primary legislation is being explored on this, but will we have it by 29 March? If not, when might we get it?

Paragraph 7.5 of the EM raises a serious issue about the Northern Ireland statute book. The EM was clearly written—as, therefore, was the SI—a very long time ago, because it says:

“With exit day less than one year away”—

if only. This has been sitting around on the shelves gathering dust for a long time. But even having been written all those months ago, it says that,

“the window to prepare Northern Ireland’s statute book … is narrowing”.

Although I do not expect the Minister to tackle this issue now, perhaps she could write to me about it. A serious general issue has been raised here: the people of Northern Ireland are in a policy lacuna and have been for years. Nothing happens there to modernise or deal with policy problems. Their hospitals and schools are administered by the Civil Service and they do not have the attention to policy problems that there should be in a properly governed, devolved situation. That is my general concern about what this specific comment raises; it does not relate only to the issue of ship recycling.

One specific question comes to me on this point: will Northern Ireland continue to benefit from remaining a member of the EU list—that is, going back to ship recycling-approved places—in the event of the backstop coming into force? I thought about this for a long time to see whether I had understood it. There is a genuine question mark here. Will the list be different in Northern Ireland if the backstop is in force because we have a no-deal Brexit? After all, why are we looking at all this unless we are considering a no-deal Brexit?

Once again, I did not see any reference to consultation with the Scottish and Welsh Administrations. I would like to know that they have been consulted and informed. I will be grateful for whatever answers the Minister can provide at the moment but I would be happy for her to write to me on other issues.

[Lord Tunnicliffe (Lab)]

My Lords, I thank the Minister for presenting these two SIs. I also thank the noble Baroness, Lady Randerson, for her points. She has stolen most of my best lines and, in light of the hour, I will try not to be too repetitive. I hasten to add that I am very happy to hear all her questions answered but please disassociate me from anything to do with Northern Ireland.

We seem to be in a rather different position here. On virtually everything we have discussed today there has been a pretty sound EU position that we are just trying to transfer across. My sense is that we do not have a pretty sound EU position when it comes to these instruments. Therefore, how we manage the future and how these instruments impact on the future are extremely important.

I will be brief. The first instrument covers sulphur standards, anti-fouling and environmental impact standards. The overwhelming, important one is the issue of sulphur dioxide pollution. I hope the noble Baroness can give some response. It seems to me that it has to be international. When the gas is released, it will go where it goes. Therefore, we need to understand how decisions about the concentration of sulphur in fuels are managed, the areas of the world that are covered and the testing techniques—particularly the position about the Irish Sea, which seems to be an anomaly. There is also the matter of agreeing standardisations for abatement technologies for sulphur dioxide. Once again, those sorts of issues really need international agreement. Can the Minister give me some feel of the situation we will be left in if we leave the EU without an agreement and this instrument becomes applicable?

In passing, I would also like to mention SafeSeaNet. It seemed a wacky sort of title so I googled it. It is clearly a very important facility and without it it is difficult to see how we can discharge the responsibilities we take over, particularly in sulphur standards.

The anti-fouling part of this seems relatively straightforward and I do not have any questions on it. I am not entirely convinced that the environmental impact assessment is a consequence of leaving the EU. It seems to me that the Government are tidying up pieces of domestic legislation and perhaps smuggling it through. I am sure I have misunderstood that but I feel a duty to ask the question.

Finally, the points raised by the noble Baroness, Lady Randerson, on ship recycling are very important. In the past this has been a dreadful area of activity in the world. The EU initiative is a commendable step forward in tidying it up. It is very important to understand how we will be involved in the future. I hope the Minister will be able to assure us that we will go into this new era—if we are forced into it—on the front foot to get these standards improved and, what is more, to continue to participate with other countries to make sure they are international standards so the whole world can share the benefits of proper controls.

[Baroness Sugg]

I thank noble Lords for considering these draft regulations. I will attempt to answer as many questions as I am able to and will follow up in writing if I do not get to any. I absolutely agree with the noble Lord’s point that these environmental measures are needed across international boundaries. That is why we are seeing international action through the IMO, such as the higher global sulphur standard, which comes into force next year. We will continue to play a leading role in the IMO in the development of those environmental measures and also continue to co-operate with other countries on the enforcement of such measures through our membership of the Paris MoU on port state control.

We support the new global limit on the sulphur content of fuel of 0.5% on 1 January 2020. The UK, along with other states, is assisting the IMO to develop best-practice guidelines for ship owners and operators and all suppliers. Since 2015, ships inside the emissions control area—the North Sea and including the English Channel but not the Irish Sea—have been limited to 0.1% sulphur unless they use an exhaust gas cleaning system or alternative fuel. Under our recent clean air strategy, we are considering options for extending that current emission control area in the North Sea to other UK waters such as the Irish Sea. The UK’s position on sulphur standards, and the inspection regime, will not be changed by EU exit. We have committed to taking further action on that in the clean air strategy.

The standards and testing regimes for the future are agreed at the IMO—again, that will not change after we leave the EU. Other organisations such as fuel suppliers and the International Organization for Standardization will be involved in those discussions—as will the UK. There are separate EU targets for the number of ship inspections and fuel samples which member states need to take annually, and which we have retained.

The instrument provides for the continued recognition of the emission abatement methods approved by EU member states, and most equipment is approved at the IMO level. Member states are allowed to trial new and innovative technology which does not have the formal approval of the IMO; in practice, we expect most systems of emission abatement technology to be built to meet the IMO type requirements, which we would follow.

I note the question from the noble Baroness, Lady Randerson, about whether the consultation would be with member states or the Commission. The consultation mentioned in paragraph 7.3 relates to the consultation on the environmental impact of projects being consented under the Transport and Works Act, and I confirm that the requirement, where a project could impact another member state, is to consult with the appropriate authorities and bodies of the individual countries concerned, not the Commission.

On SafeSeaNet, which both the noble Lord and the noble Baroness referred to, we will continue to share data. Through the Paris MoU THETIS system, countries share data from port inspections. Currently, we send data to THETIS through the EMSA SafeSeaNet system. In a no-deal scenario, the MCA will simply send the data directly to the THETIS system. That is why we have removed references to SafeSeaNet from the regulations. We will absolutely continue to share IMO compliance information through THETIS.

The noble Lord referred to environmental impact assessments, which are outside the EU withdrawal Act. I will say a few more words about that in an effort to explain our actions. The two minor amendments being made under powers other than the EU withdrawal Act are under Section 2(2) of the European Communities Act, and the amendment to Section 6(A) of the Transport and Works Act 1992. That updates an out-of-date reference to the EEA agreement, and we need to make that correction now using the power under the ECA Act before it is repealed under the EU withdrawal Act, so these are consequential amendments.

Consultation is slightly different with the Welsh and other devolved Governments. That is because some of the regulations in the environmental protection regulations amend the transport and works legislation. That was originally made in 1992 and is applicable to England and Wales only and operates in areas which are now devolved. As such, we have been required to consult with the Welsh Government. The rest of the instrument is UK-wide but, as I said before, we are in regular contact with the Scottish Government on all SIs, including this one.

On the new UK list for recycling facilities, both the European and the UK list have the same standards on accepting new facilities and have the same criteria for approval. We expect the two lists to remain closely aligned on that. It is possible that new ship recycling standards, if the EU brought them about and the UK wanted to mirror them, could be replicated through the pollution powers in the Merchant Shipping Act.

On the question of Northern Ireland, the legislation does not make any changes in relation to cross-border requirements after we leave the EU and therefore, in a backstop scenario, there would be a UK list rather than the EU list. I believe that the backstop would apply only to the land border in this situation and there would be no impact on operations there.

We think that UK shipyards will continue to be on the European list of ship recycling facilities after we leave the EU. The noble Baroness pointed out that there were other non-EU member states facilities on the list. Turkish and US yards are listed as non-EU recycling facilities.

I think that I have covered most of the points but I will go through my response and the questions raised carefully to make sure that I have covered them all. This SI is intended essentially to ensure that the legislation on environmental protection and ship recycling continues to work effectively from day one of exit, and I hope that it will receive noble Lords’ support.

[Baroness Randerson]

I thank the noble Baroness for her comments. I will read what she has said very carefully but I remain concerned and I think I should warn her that I might raise these issues again when the regulations go before the House for approval.

[Baroness Sugg]

I thank the noble Baroness for her comments. As I said, I will go through the points raised in more detail and will write to her in an attempt to provide reassurance.

Motion agreed.