Rare ECJ case rules that debris from a fire on board a ship is excluded from international shipment of waste rules, but leaves important questions unanswered

Rare ECJ case rules that debris from a fire on board a ship is excluded from international shipment of waste rules, but leaves important questions unanswered

in Shipping Law News 26/08/2019

The law on the international shipment of waste is of increasing importance to many global businesses. The Reed Smith Environmental, Health & Safety team regularly handles cases on this subject involving sectors such as oil and gas, mining, consumer electronics, ship recycling and offshore renewables, as well as many others. Case law in this complex area is sparse.

On 16 May 2019, the European Court of Justice (ECJ) gave judgment in a case concerning the status of waste resulting from a fire on board a ship. The case warrants closer attention than its seemingly narrow scope and clear outcome might suggest.

Article 3 of the EU Waste Shipments Regulation 2006 (EU WSR) requires prior written notification and consent before shipments of certain types of waste to another country. Obtaining such consent can be costly and take several months. However, waste that is generated on board a ship is excluded from the Regulation’s notification and consent requirements until it is offloaded for recovery or disposal (article 1(3)(b)). The ECJ had not previously had occasion to interpret article 1 of the EU WSR so the case was a significant opportunity for clarity in this area. Unfortunately, in many ways it was an opportunity missed.

A fire broke out on a container ship travelling from the United States to Belgium. The ship was towed into German waters. Significantly, the ‘waste’ was not offloaded from the ship. However, before they would allow the ship to sail onwards to Romania to discharge the waste, the German authorities required the shipowner to carry out a notification and consent procedure under the EU WSR in respect of the scrap metal and fire-extinguishing water mixed with sludge and cargo residues on the ship. The shipowner challenged the decision in order to try to recover damages for the costs and delay this caused.

The German court referred the case to the ECJ for a preliminary ruling. What is vitally important to a true understanding of the ECJ’s judgment is to appreciate that, technically speaking, the local court only referred to the ECJ the question of whether prior notification and consent should have been obtained by the master of the vessel for the carriage of the fire-debris ‘waste’ from the place on the high seas where the fire damage occurred, to Germany. The ECJ was not asked to, and therefore did not, rule on whether consent was needed for the onwards shipment from Germany to Romania. This fact is not as clear as it could be from the ECJ’s judgment, but the ECJ’s reasoning makes much more sense when viewed in this important light.

The ECJ decided that the material was waste at law since clearly the shipowner intended to discard it. That much is uncontroversial.

It then went on to note that the wording of the exclusion in article 3(1)(b) merely specified the place where the waste must be generated (on board a ship) without laying down specific requirements as to the circumstances in which the waste is generated.

The ECJ ruled that the exclusion under article 1(3)(b) applied to the waste that resulted from the fire, so prior notification and consent should not have been required to ship the ‘waste’ to Germany.

A key part of the ECJ’s limited reasoning was its observation that where waste arises on board a ship as a result of an accident, this is sudden and unforeseeable, and according to the ECJ it would be impossible or very difficult for the person responsible to become acquainted quickly enough with the information required to comply with the EU WSR requirements. This reasoning is pragmatic and sensible in the context of this narrow case of shipment of fire debris from the place of the fire to its first port of calling (Germany). It would have been less easy to apply this rationale alone to the onwards shipment from Germany to Romania, but the ECJ was not asked to, and so did not, rule on that issue.

It is notable that the ECJ stressed the suddenness and unforeseeability of the waste generation (by fire). If, as the ECJ also expressly found, article 3(1)(b) is entirely non-prescriptive as to how the waste is generated as long as it is generated on board, this reference to the unforeseeability of the waste generation is arguably superfluous and only introduces uncertainty for the future as to whether suddenness and unforeseeability are actually relevant tests at all and, if they are, whether they are satisfied in other cases.

Perhaps of most interest is the fact that the ECJ advocate-general, in his opinion on the case to the ECJ, stated that, had the question of the onwards shipment of the waste from Germany to Romania needed to be ruled upon, he would have decided that the strict wording of the article 1(3)(b) exclusion – which states that the exclusion applies until the waste is offloaded – would also have meant that prior informed consent was not needed to that further shipment under the EU WSR. His opinion seemed to be that this conclusion was dictated by the wording of the exclusion (and the specific reference to no offloading) even though, clearly, most of the rationale for the ECJ’s narrower ruling would not apply to the second leg of the waste’s journey (the emergency was by then over, there was more time to become acquainted with and follow applicable rules, etc.). However, the advocate-general also appeared to accept that the exclusion in article 1(3)(b) was in this respect out of step with the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal which the EU WSR seeks to implement.

The ECJ also found support for its conclusion on the narrow issue from the context in which article 1(3)(b) appears. Article 1(3)(a), which immediately precedes it, relates to the offloading to shore of waste, including waste water and residues, generated by the normal operation of, inter alia, ships, provided that such waste is subject to the requirements of Marpol 73/78 or other binding international instruments. This contrast to the wording of article 1(3)(b) confirms, according to the ECJ, the fact that the exclusion laid down in article 1(3)(b), which does not so provide, covers waste generated on board a ship irrespective of the circumstances in which it has been generated.

It is a great pity that having raised this point, the ECJ did not add any additional commentary regarding the relationship between articles 1(3)(a) and (b), particularly given the indication from the advocate-general’s opinion as to how the shipment of the waste from Germany to Romania might be treated under the EU WSR and, therefore, the potential importance of exclusion under article 1(3)(b) in future cases.
Source: Reed Smith