The HRAS Interview: Denise Krepp U.S. ship recycling lobbyist

denise-kreppHRAS Interview Denise Krepp

Ship Recycling: If the E.U. can do it, why not the U.S.?

U.S. ship recycling lobbyist, Denise Krepp, says the U.S. is keeping a close eye on the progressive steps that the European Union is taking on ship recycling. The attitude of many in the industry is, if the E.U. can do it, why can’t the U.S.?

Krepp, a former U.S. Coast Guard lawyer, is the registered U.S. lobbyist for EMR USA, a U.S. ship recycling company that has facilities in Louisiana and Texas. She spoke to HRAS about legislative developments underway in the U.S.


Why is the U.S. taking an interest in the E.U.’s attempt to ensure that shipowners use ship recycling yards that meet specific standards for worker and environmental protection?

U.S. ship recyclers are encouraging the U.S. government to support the E.U. proposal to charge a fee for all vessels coming into E.U. ports that will be paid back to shipowners if they recycle their vessels in an E.U.-certified facility.

We understand that the E.U. is trying to level the playing field, and if the E.U. does impose a fee on vessels coming into its ports, it will have a ripple effect globally. It will force others to change, which is a positive thing.

The Hong Kong Convention is not really going anywhere, and, in any case, it doesn’t prevent beaching. From the U.S. ship recycling perspective, our companies have invested a lot of money in their facilities because they want to protect the environment and they want to protect workers. If they’re at a gold standard, which they believe they are, why should others be viewed at the same level when they haven’t sunk the same costs in?


U.S. ship recyclers have applied to be certified by the European Union. Is their focus on the E.U. a case of self-interest?

That is part of it. If a U.S. government vessel is to be recycled, then yes, they believe it should be recycled by U.S. workers. A second part, though, is the reason I’ve been advocating in Washington, and that is to remind people that in addition to looking at their carbon footprint, their emissions and their ballast water, they must also remember what happens to their ships at the end of the day.

U.S. workers are heavily regulated by the Occupational Safety and Health Administration and the Environmental Protection Agency. We have safety training. We have safety equipment. We have regulations to make sure that the environment is protected.

We want our vessels to be dismantled in facilities where workers are protected. Facilities in the U.S. have sunk the necessary costs into their business, because they believe it’s important.

When you look to see what’s going on in other places, there’s a stark difference, and we need to recognize that everybody has a role to play in the future of the industry. When I noticed recently that a Norwegian hedge fund was assessing ship recycling standards before making investments, I realized just how closely the non-maritime world is looking at this situation and saying, “We should all be concerned about this.”


What is currently happening to U.S. government vessels that are recycled?

Ship recycling in the U.S. is a mess. The Federal Property and Administrative Service Act of 1949 states that the Maritime Administration (MARAD) should serve as the government’s disposal agent for obsolete government vessels that are over 1,500 gross tons. Sadly, the General Services Administration (GSA) ignores the act and instead auctions off vessels haphazardly.

As a result the U.S. Merchant Marine Academy, the state maritime schools and the thousands of maritime historical organizations throughout the country suffer because, when MARAD disposes of vessels, these entities receive a portion of the proceeds. When GSA usurps the process, none of these educational entities receives the funding for which they are eligible under federal law.


The Ships to Be Recycled in the States (STORIS) Act was introduced in the 2015-2016 cycle of Congress. What does it call for?

The STORIS Act gets its name from the former Coast Guard Cutter Storis, which was dismantled in Mexico in 2013 through a GSA contract, in violation of the current law.

People are frustrated by that. They’re very frustrated by that, so Congress wanted to remind the U.S. government that its vessels should stay in the United States. They wanted to make sure that MARAD, which by law already has the authority to be the disposal agent, is actually the disposal agent, and that other agencies recognize that.

The STORIS Act strengthens oversight of MARAD’s domestic ship recycling program and promotes transparency by requiring reports from the agency and an audit by the Government Accountability Office. MARAD receives millions of dollars in federal funding but currently does not disclose how the money is spent or how the agency awards contracts.

The other interesting part of this legislation is that the government is supposed to come up with a list of vessels that are going to be declaring obsolete. That is expected to include everything from MARAD vessels to vessels owned the National Oceanic and Atmospheric Administration, the Army Corps of Engineers and the Fish and Wildlife Service.

Many government agencies own vessels, and Congress wants to make sure all of these vessels are recycled in the United States. It has directed MARAD to come up with a list, working with all the government agencies, of all the vessels, and then come up with a plan for how all these vessels are going to be disposed of.


Is there any doubt that the Act will be passed?

The National Defense Authorization Act has been passed by Congress every year for over 50 years now, every year. Chairman Thornberry, who’s Chair of House Armed Services, and Chairman McKeon from the Senate have both been very forthright in saying they’re not going to be the ones that don’t pass this legislation. They want the trend to continue.


Parts of the STORIS Act were included in the National Defense Authorization Act for fiscal year 2017. The full bill will be voted on in both the House and the Senate and then passed up to the new President for final authorization. What then?

We were focusing on government vessels this Congress, and then commercial vessels will be the focus for next Congress. The push will be to ensure that any vessel that is financed, subsidized, or chartered by the U.S. government is recycled in the United States.

When I’m talking about chartering, I’m talking about the Department of Defense charters of foreign-build vessels. They reflag them into the U.S. fleet, and then they charter them. In a couple of instances, they have specifically named these vessels after U.S. Medal of Honor recipients, and then they’ve turned around and let them be dismantled in foreign facilities. It’s the position of the U.S. recyclers that if you’re going to name a vessel after a man who has died in service of his country, then the vessel should be recycled by U.S. workers who have made the investment and are keeping the environment clean, not in a foreign facility that’s not operating at the same level.

At present, there are only 83 blue water vessels left sailing under the U.S. flag, of which 60 participate in the Maritime Security Program. Each one of these 60 vessels receives $3.1 million per year to participate, so the argument is that if the U.S. government is giving a vessel owner $3.1 million per year for up to 25 years, then those vessels should be recycled in the U.S.


Does the legislation cover human rights issues?

No, not yet. Not yet, but next Congress we’re going to be talking about it. We’d like to talk about some of the corporate social responsibility issues that have been raised in the E.U.

It’s companies’ corporate social responsibility to make sure that their vessels are dismantled with proper respect for human rights at an environmentally friendly facility. We’ll be saying to Congress and to others, “Well, if the E.U., why can’t the U.S.?”


Can you tell us about EMR’s Brownsville yard located in the poorest county of the U.S.?

Firstly, it’s clean. It’s laid out with concrete; there is no beaching, and the company prides itself on providing a livable wage for its workers. It also makes sure that its workers have what they need to be productive and comfortable. Brownsville, Texas, is really hot, and as one example of the company’s efforts to care for its workers, it has developed an air conditioned suit that workers wear when they are out in the heat of the day.

The company is also very respectful about preserving the history of the naval vessels that it recycles. Parts from some of the ships they are being recycling at present are going to be donated to museums.

Additionally, in the United States, we have a Library of Congress Veterans Oral History Program so that veterans can share their memories about these ships.

When EMR was awarded the contract for recycling the Independence, an aircraft carrier that participated in the Vietnam War, we received an email from a woman who said that three generations of her family had served on the vessel. EMR has planned a ceremony prior to the vessel’s dismantlement that will allow veterans one last look at the ship they served on for so many years.

Thank-you Denise.


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