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statutes failed to take into consideration the

realities of responsible recycling.

Unlike foreign shipbreaking

operations,

domestic recyclers are required to adhere to strict environmental and worker safety regulations enforced by the EPA and the Occupational Safety and Health Administration

(OSHA);

these

regulations

ensure

the

internalization of ship recycling costs. However, the high levels of contaminants, mixed with the volatility of commodity prices, make domestic recycling primarily a service industry rather than always a source of profit through commodity sales.

From 1997 to 1998, MARAD sold 10 vessels to domestic recyclers at an average cost of $4.60 per ton paid by the recycling company. In 1999 a total of 12 vessels were sold for an average 27 cents per ton, and three vessels were sold for $10 each. This was a stark difference from the sales revenue generated prior to 1994 when MARAD externalized costs to the environment and the impoverished foreign work force in South Asia. From 1987 to 1994, MARAD sold 130 ships for export and disposal at an average cost of $108/ton, netting approximately $80 million during this period.144

As MARAD struggled to reduce the obsolete fleet, they pled poverty without aggressively seeking appropriations from Congress to deal with the mounting crisis, and they failed to meet the disposal mandate in 2001. Congress then issued a new deadline by including a statute in the National Defense Authorization Act of 2001 and mandated vessels be disposed of in a timely manner and extended the disposal deadline to September 30, 2006. Accompanying the new disposal mandate, Congress for the first time appropriated funds under the Department of Defense Appropriations Act of 2001(Public Law 106-259) to pay for the accelerated

Testimony of the Honorable William G. Schubert, Administrator, U.S. Maritime Administration; h t t p : / / w w w . g l o b a l s e c u r i t y . o r g / m i l i t a r y / l i b r a r y / c o n g r e s s / 2 0 0 3 _ h r / 30707-schubert.htm 144 0

ALTERNATIVES TO OCEAN DUMPING

domestic scrapping services of vessels in worst condition.

MARAD now had a budget of $10 million and a first priority to respond to emergency hull deterioration and oil leakage from the James River Reserve Fleet (JRRF), which previously required the emergency removal of fuel on three vessels at a cost of over $2.4 million. However, the funds were not sufficient as it was estimated to cost $15 million to remove fuel from weakened vessels in the obsolete JRRF alone.146 145

With increasing pressure placed on MARAD to dispose of the vessels in a timely manner to

meet

the

September

2006

deadline,

the

government once again began to look favorably toward export. In December 2002, Public Law 107-314 established the Pilot Program on Export of Obsolete Vessels for Dismantlement and Recycling to be carried out in 2003 for up to four vessels. Initially MARAD organized various missions to explore export options, including trips to China, United Kingdom and Mexico. The Basel Action Network (BAN) began raising alarm over the possibility that the U.S. government may attempt to export ships in violation of TSCA and the Basel Convention.

While only 4 vessels were mandated by Congress under the Pilot Program, MARAD awarded a $17.8 million contract to Able UK, an overseas company in Teeside, England, for the export and dismantling of 13 vessels (and two additional vessels were awarded in this contract

for reuse).147 rulemaking

Instead of going through a proper

proceeding

to

allow

for

an

exemption to the TSCA PCB export ban, EPA

was

simply willing to

grant

MARAD

an

exemption

from

TSCA

via

enforcement

Report to Congress on the Progress of the Vessel Disposal Program, US Department of Transportation, Maritime Administration, 2001 145

IBID. Report to Congress on the Progress of the Vessel Disposal Program, US Department of Transportation, Maritime Administration, 2005 146 147

BASEL ACTION NETWORK

49

2011

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