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3 MEPC 61 agreed to the re-establishment of the intersessional CorrespondenceGroup on Ship Recycling Guidelines, under the coordination of Japan and approved theterms of reference for the group as follows:

"On the basis of the outcome of MEPC 61, the report of the working group

(MEPC 61/WP.9) and document MEPC 61/INF.8, the correspondence group on shiprecycling guidelines is instructed to:

.1 further develop the draft text of the "guidelines for safe and environmentallysound ship recycling" based on the text contained in annex 1 to documentMEPC 61/WP.9, with the view to the adoption of the guidelines atMEPC 62;

.2 further develop the draft text of the "guidelines for the development of theShip Recycling Plan" based on the structure contained in annex 2 todocument MEPC 61/WP.9, with the view to the adoption of the guidelines atMEPC 62;

.3 further develop the draft text of the "guidelines for the authorization of ShipRecycling Facilities", using as basis the text contained in documentMEPC 61/3/1 and taking into account the comments by the working groupcontained in annex 3 to document MEPC 61/WP.9, with the view toadoption of the guidelines at MEPC 62; and

.4 report the outcome of its deliberations to MEPC 62."

PROCESS OF THE CORRESPONDENCE GROUP

4 The group agreed a time schedule for its work, making its deliberation fromNovember 2010 to March 2011 (refer to annex 1). Participation in the group was open to alldelegations (Governments and organizations) that could provide the necessary expertise ona timely basis or which had a particular interest in the issue.

5 The correspondence group had participants consisting of the following MemberStates:

ARGENTINABAHAMASBANGLADESHBELGIUMBRAZIL

CANADACHINACYPRUSDENMARKFINLANDFRANCEGERMANYINDIAIRAN (ISLAMIC REPUBLIC OF)ITALYJAPANLIBERIA

MALTAMARSHALL ISLANDS

MEXICONETHERLANDSNIGERIANORWAYPAKISTAN

PANAMAPOLANDPORTUGALREPUBLIC OF KOREARUSSIAN FEDERATIONSAINT KITTS AND NEVISSAUDI ARABIASINGAPORESPAINSWEDENTURKEYUKRAINE

UNITED KINGDOMUNITED STATES

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SUMMARY OF DISCUSSION IN THE GROUP ON MAJOR POINTS OF CONSIDERATION AS WELL AS THEOUTSTANDING ISSUES THAT WOULD NECESSITATE FURTHER DISCUSSION AT MEPC62

Introductory section

10 There were views that the structure of section 1, which is the introductory part of theAuthorization Guidelines, should be aligned with the other guidelines, i.e. Guidelines for Safeand Environmentally Sound Ship Recycling ("Facility Guidelines") and Guidelines for thedevelopment of the Ship Recycling Plan ("SRP Guidelines"). The text has been modifiedaccordingly.

The definition and use of the term "Duly-made"

11 It may be recalled that there was a definition of the term "Duly-made" (section 2.3)and a section in which the term is used (section 4.1) in the original draft presented inMEPC 61 (MEPC 61/3/1). As regards these sections, it was pointed out that the meaning ofthe term "Duly-made" was unclear.

12 An attempt was made to clarify the meaning of the term "Duly-made", amending itsdefinition in section 2.3, annex 2 to this document. In essence, this term would mean thatthe application by a Ship Recycling Facility for the DASR satisfies, at least, thedocumentation requirements, pending further scrutiny into the substance of the applicationby the Competent Authority.

13 While there was some support for this concept, the necessity of introducing such aconcept in section 4 as one of procedural steps has not been entirely shared by the groupyet.

Clarification of the term "Recognized Organization"

14 There were views that the expression "the Competent Authority(ies) and/orRecognized Organization", which we could find in a number of sections in the early draft ofthese guidelines, should be avoided, as the term "Recognized Organization" may lead to aconfusion that this is the Recognized Organization for the flag State Administration.

15 It is recognized that the Convention already uses the term "RecognizedOrganization" in the context of the Competent Authority of a recycling State, as well as in thecontext of the Administration of a flag State. However, for the simplicity of the text of theseguidelines, and in order to avoid any confusion, it was suggested to add a generaldescription clause in section 3 which clarifies that the Competent Authority(ies) may entrust

the authorization of Ship Recycling Facilities to a Recognized Organization, in accordancewith regulation 16.2 of the Convention, and that the extent of such delegated authorizationvaries according to each Party while the responsibility rests upon the Competent Authority.This new clause also clarifies that, depending upon the extent of the delegated authority fromthe Competent Authority to the Recognized Organization, the term "Competent Authority" inthese guidelines would be interpreted as either "Competent Authority" or "RecognizedOrganization"; in this way, the expressions in these guidelines would be simplified.

Qualifications for the Recognized Organization

16 In section 3 of these guidelines, the views were expressed that it would suffice tosimply state that the Competent Authority should ensure that the Recognized Organization

has the appropriate qualifications; the alternative idea would be to provide for non-exhaustivelists of appropriate qualifications. These options are for further consideration at MEPC 62.

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Environmental Impact Assessment

17 In section 5.3, the original text included guidance on Environmental ImpactAssessment (EIA). There were views that the EIA goes beyond the requirements of theConvention and thus that this part on EIA should be deleted. There was also a view that the

EIA should be limited to new Ship Recycling Facilities. The relevant part in section 5.3 iskept in square brackets for further consideration at MEPC 62.

Reasons for rejecting the application for the DASR by a Ship Recycl ing Facility

18 This is a debate similar to that on section 3: one idea is for a simple version to statethat the Competent Authority should provide the Ship Recycling Facility with the reasons forrejecting the application for the DASR, and the other idea is to provide a list of possiblereasons for rejections.

Treatment of new and not-fully-operational Ship Recycling Facilit ies

19 It was widely recognized that the case of new and not-fully-operational SRF wouldneed to be taken care of, because the scope of site inspection would be limited in case ofsuch SRF. In coping with this situation, the original draft text included the term "InterimDASR". However, in the course of the discussion in the group, it was recognized that theintroduction of such special DASR may go beyond the Convention.

20 For the time being, it is suggested to keep the guidance general, without introducingsuch a new term. The thought is that the issuance of the DASR with certain terms andconditions (such terms and conditions may be necessary in view of the limited scope of theinspection for new and not-fully-operational SRF) would not go beyond the Convention. At alater stage (when a full inspection can be done), the Competent Authority may lift such terms

and conditions, amend the DASR, or withdraw the DASR; these actions are all possible andthey are in the hands of the Competent Authority. This line of thinking is reflected in the lastparagraph of section 7, for further consideration. It also led to the addition of one sentence inthe last line of the chapeau of section 8, regarding the follow-up site inspection as needed,after the DASR is issued.

At taching the SRFP to DASR

21 In section 8.1, it was discussed whether to delete the sentence "this SRFP could beattached to DASR" in the original text. This question should be looked through differentviewpoints.

22 The first viewpoint is to note that we are developing the Authorization Guidelines; bydefinition, the scope of these guidelines is primarily between the Competent Authority andthe Ship Recycling Facility. The SRF itself develops the SRFP, and submit this SRFP as themain application document for the authorization to the Competent Authority. Therefore, theCompetent Authority has the SRFP in its hands. The DASR would be issued by theCompetent Authority to the SRF. It will not bring any added value to the SRF if the SRFPwas attached to the DASR, as the SRFP had been developed by the SRF itself.

23 Attaching the SRFP to DASR would be meaningless in the relation betweenCompetent Authority(ies) and Ship Recycling Facilities, while it is harmless. Thus we shouldnot be concerned whether SRFP is attached to the DASR or not, under the AuthorizationGuidelines.

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24 The question should be looked at from another viewpoint. As pointed out by a groupmember, this question how SRFP should be utilized and made available by attaching itscopy is related to the SRP Guidelines, i.e. its writing style (Option 1: SRP as stand-alonedocument, Option 2: SRP as a shortened document with the references made to SRFP). IfOption 2 is taken, "stakeholders other than SRF and the Competent Authority" would have to

look at SRP + DASR + SRFP together, in order to read and understand the SRP (pleasenote that it has been agreed that the DASR should be attached to the SRP).

25 "Stakeholders other than SRF and the Competent Authority" would primarily meanthe surveyors of the flag State or its Recognized Organization at the time of final survey.

26 This situation would mean that we need to consider, in the context of the SRPGuidelines, (not the Authorization Guidelines), whether SRP+DASR+SRFP should be alltogether for the eyes of Flag State surveyors, if the Option 2 of SRP style is agreed (i.e. SRPutilizes the references to SRFP, so SRP would be only understood by being read togetherwith SRFP).

27 While the discussion is left to the SRP Guidelines, it should be noted that such idea(SRP+DASR+SRFP go together) would have to be reconciled with the past agreement: atMEPC 61, it was agreed to attach DASR, not SRFP, to the SRP (MEPC 61/WP.9). This isbecause the SRFP is quite a bulky and detailed document, and includes a lot of know-howand confidential information of ship recycling; therefore, the DASR would suffice to be lookedtogether with the SRP by the flag State surveyors.

The cases where DASR should be amended, suspended or withdrawn

28 There was a view that, if the Competent Authority(ies) has informationdemonstrating that the Ship Recycling Facility no longer complies with the SRFP, the

Competent Authority(ies) should withdraw the DASR and issue a new DASR. The other viewwas that small procedural changes from the SRFP would not necessarily lead to the DASRamendment, suspension or withdrawal.

29 The draft text is based on the latter view, for further consideration, taking intoaccount the following analysis:

The SRFP is the application document for the DASR issuance. It is basically aself-declaration by the SRF of its intended ship recycling practices, and itscontents do not constitute the "requirements", nor include the "terms andconditions". The "requirements" are in the Convention, and the "terms andconditions" are in the DASR.

It is inevitable that the actual situation at the Ship Recycling Facility wouldslightly change, as time passes, from the description given in the SRFP. TheSRFP could be quite bulky and may contain detailed information on shiprecycling practices. For example, section 3.3.4.6 of the Facility Guidelinesstates that "The SRFP should include procedures for testing and inspections ofropes, chains, slings, and hooks, chain-falls, and hoisting and haulingequipment"; The SRFP may indicate the testing and inspection frequency.Even if the SRF changes such inspection timing and frequency, this would notmean that the SRF no longer complies with the Convention, and this would notaffect the terms and conditions included in the DASR. If such small changes inship recycling practices were to lead to amending the SRFP and to there-issuance/amendment of DASR, the Competent Authority would be inundatedby such applications. It would be more realistic approach to list representative

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cases which may trigger the DASR amendment procedure, such as thedeviation of ship recycling practices that affect the contents of DASR, insection 8.2.

ACTION REQUESTED OF THE COMMITTEE

30 The Committee is invited to:

.1 note the progress made by the correspondence group;

.2 agree in general to the developed draft of the Guidelines for theauthorization of Ship Recycling Facilities (annex 2 to this document); and

.3 with a view to the finalization of the Guidelines for the authorization of ShipRecycling Facilities, establish a working group to consider and determinethe outstanding issues discussed in this report, as well as any remainingmatters arising from the draft text of the Guidelines.

***

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ANNEX 1

TIME SCHEDULE OF THE CORRESPONDENCE GROUP

Round 1

22 November (SRP Guidelines)26 November (Authorization Guidelines)

3 December (Facility Guidelines)1st calling for comments

7 January 2011Deadline for response to

1st calling

Round 2

15 February 2011 2nd calling for comments

8 March 2011Deadline for response to

2nd calling

Preparation ofthe draft CG

report forMEPC 62

30 March 2011Final calling for comments

on the draft CG report

5 Apri l 2011Deadline for response to

the draft CG report

Submission 8 April 2011CG report to be submitted

to IMO

***

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ANNEX 2

DRAFT GUIDELINES FOR THE AUTHORIZATION OF SHIP RECYCLING FACILITIES

TABLE OF CONTENTS

1 INTRODUCTION

1.1 Objective of the guidelines1.2 Approach of the guidelines1.1 Background1.2 Scope

2 DEFINITIONS

3 IDENTIFICATION OF COMPETENT AUTHORITY(IES) RESPONSIBLE FOR THEAUTHORIZATION

4 THE APPLICATION FOR AUTHORIZATION

4.1 General

5 NECESSARY DOCUMENTATION FOR THE DASR AUTHORIZATION

5.1 General

5.2 Hazardous Material management5.3 Other requirements

6 VERIFICATION OF DOCUMENTATION

7 SITE INSPECTION

8 ISSUANCE, AMENDMENT, SUSPENSION, WITHDRAWAL AND RENEWAL OFTHE DASR

8.1 Issuance8.2 Amendment

8.3 Suspension8.4 Withdrawal8.5 Renewal

9 VALIDITY

10 COMMUNICATION OF INFORMATION

10.1 Recognized Organizations10.2 Violations and sanctions

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1 INTRODUCTION

1.1 Objective of the guidelines

These guidelines provide recommendations for a Party to establish mechanisms for theauthorization of Ship Recycling Facilities in accordance with the requirements of theHong Kong International Convention for the Safe and Environmentally Sound Recycling ofShips, 2009 (hereafter referred to as "the Convention").

These guidelines should be primarily used by the Competent Authority(ies) and theorganizations recognized by it. The guidelines may also be useful for Ship RecyclingFacilities in preparing for the authorization process.

1.2 Approach of the guidelines

Article 6 and regulation 16 of the Convention require Ship Recycling Facilities that recycleships to which the Convention applies or ships treated similarly pursuant to Article 3.4 of theConvention be authorized taking into account the guidelines developed by the Organization.

These guidelines provided for guidance, which is considered to be useful in establishing theauthorization scheme of Ship Recycling Facilities, that consists of: necessary documentation,verification of documentation, site inspection, voluntary audit scheme, specific proceduralaction of issuing, amending, suspending, withdrawing and renewing the Document ofAuthorization to undertake Ship Recycling (DASR), validity of DASR and communication ofinformation, and monitoring of the activities of the Ship Recycling Facility.

2 DEFINITIONS

The terms used in these guidelines have the same meaning as those defined in theConvention and for the purpose of these guidelines, the following definitions apply.

2.1 "Recognized Organization" means an organization recognized by the CompetentAuthority(ies) in accordance with regulation 16.2 and regulation 16.3 of the Convention, whoundertakes relevant tasks on behalf of the Competent Authority(ies).

2.2 "Determination" means the process by which the Competent Authority(ies) decideswhether or not to issue, amend, suspend, withdraw or renew a DASR to the Ship RecyclingFacility.

[2.3 "Duly-made" means the condition that the application for the DASR by the ShipRecycling Facility satisfies the documentation requirements that the application accompaniesthe Ship Recycling Facility Plan (SRFP, hereafter) that covers all the elements in Appendix 1of the Facility Guidelines, as well as the other supporting documents such as documentationand certification required by any applicable national legislation.]

3 IDENTIFICATION OF COMPETENT AUTHORITY(IES) RESPONSIBLE FOR THEAUTHORIZATION

According to the Convention, the Party shall identify the Competent Authority(ies)

responsible for authorizing Ship Recycling Facilities within its jurisdiction. The CompetentAuthority(ies) should identify a single point of contact to act as central communicating

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partner for Competent Authority(ies), administrations and Ship Recycling Facilities. TheCompetent Authority(ies) may entrust the authorization of Ship Recycling Facilities toRecognized Organizations (regulation 16.2). The Party should determine to what extent itdelegates the authorization of the Ship Recycling Facility to the Recognized Organization,and if the Party delegates some part (or all) of the authority to the Recognized Organization,

it shall notify the Organization of the specific responsibilities and conditions of the authoritydelegated to the Recognized Organizations, for circulation to Parties (regulation 16.3).Therefore, the extent of the authority delegated to the Recognized Organization variesdepending on each Party's decision. In every case, the Competent Authority retains fullresponsibility for the authorization (regulation 16.3).

Hereafter in these guidelines, the term "Competent Authority(ies)" should be interpreted as"Competent Authority(ies)" or "Recognized Organization", depending upon the extent whichthe authority is delegated to the Recognized Organization in each Party.

Recognized Organizations should be working in harmony with the Competent Authority whileundertaking those responsibilities entrusted to them on behalf of the CompetentAuthority(ies).

[Option A: The qualifications of Recognized Organizations should include but may not belimited to:

.1 being quality assured and certified in compliance with an internationalrecognized standard and at all time maintain all requirements to which suchcertification is subject;

.2 demonstrating the understanding of all aspects of the Convention; i.e. itspurpose, Party obligations and rights, and technical requirements;

.3 demonstrating relevant capability and sufficient capacity with respect toundertaking the procedures for authorization as laid down in the Conventionand in these guidelines. This includes resources as well as in-depthexperience and knowledge in the following fields:

safety management-risk identification, risk reducing measuresincluding operational ones as well as provision of personal protectionmeasures;

health management-health issues identification including paramedicalissues as well as long term health monitoring;

waste management including hazardous waste management;

incident emergency preparedness and response management; and

environmental aspects;

.4 having established a comprehensive plan for authorization and follow-upinspections during the period to which the authorization is valid.]

[Option B: The Competent Authority(ies) should ensure that the Recognized Organization

has the appropriate qualifications and expertise to conduct the tasks delegated to it.]

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In case the Recognized Organization is delegated for the authorization of Ship RecyclingFacilities, a system for tracking the flow of information between the Recognized Organizationand the Competent Authority(ies) should be established.

The Competent Authority(ies) should establish a system/systems for the evaluation, control

and auditing of the Recognized Organization.

4 THE APPLICATION FOR AUTHORIZATION

4.1 General

The Ship Recycling Facility should submit an application for an authorization to conduct shiprecycling to the Competent Authority(ies). [The formal application will need to have acompleted SRFP.] The Ship Recycling Facility and Competent Authority(ies) may holdpre-application discussions before the formal application.

The Competent Authority(ies) should be aware of requirements and obligations outside thescope of the Convention, but which are established under regional and/or national law andregulations which are applicable to Ship Recycling Facilities operating under its jurisdiction.

Nothing in the Convention or these guidelines precludes a Party from supplementing therequirements of the Convention by technical standards, codes of practice and/or guidelinesthat might take into account technological developments, advanced practice, norms andstandards in order to further reduce risks for occupational health and safety, and risks forenvironment and other adverse effects related to ship recycling, and using suchsupplementary requirements for the authorization of the Ship Recycling Facility.

The Ship Recycling Facility makes the formal application (ensuring the application is

complete [and Duly-made]). The onus is on the Ship Recycling Facility to assess the effectsof his operation and to demonstrate how to manage ship recycling operations to meet therequirements of the Convention and of relevant national/regional law.

The Competent Authority(ies) may ask for additional documentation for the authorization ofthe Ship Recycling Facility, in line with the national legislation. Ship Recycling Facility maydraw upon or attach other sources of information in their application, and indeed areencouraged to make use of existing information where it fits the purpose.

[When the Competent Authority(ies) is of the opinion that an application is not Duly-made,they should return it. As a matter of good practice, Competent Authority(ies) should alwaysinform to the applicant in writing why they consider that an application was not Duly-made

and what action the Ship Recycling Facility can take to make the application acceptable.

Once the Competent Authority(ies) has concluded that the application is Duly-made, theyshould acknowledge this to the Ship Recycling Facility by a letter or e-mail and furtherprocess the application (Determination phase). Even when the Competent Authority(ies)concludes that an application is Duly-made, it may still require the Ship Recycling Facility tosubmit additional information.]

5 NECESSARY DOCUMENTATION FOR THE DASR AUTHORIZATION

5.1 General

The SRFP which is described in the Facility Guidelines (as required by regulation 18) shallbe used as the main document for the issuance of DASR.

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Any other documentation and/or certification required by any applicable international/nationallegislation, including those related to ship recycling activity, should be submitted with theapplication.

The Competent Authority(ies) should ensure that the Ship Recycling Facility has a

management system in place and in its documentation with the appropriate procedures andtechniques, aiming to protect the environment and human health without posing anyunacceptable risks. The Competent Authority(ies) should check whether the SRFP includesthe policy, plans, systems and identifications, etc., as set out in regulation 18 in the Annex ofthe convention.

5.2 Hazardous Material management

The Competent Authority(ies) should check that the Ship Recycling Facility has established,implemented and maintain procedures for environmentally sound management of HazardousMaterials and wastes.

The Competent Authority(ies) should check that the Ship Recycling Facility has proceduresto ensure that all Hazardous Materials detailed in the Inventory of Hazardous Materials areidentified, labelled, packaged, and removed to the maximum extent possible prior to cuttingby properly trained and equipped workers, stored and transported to waste managementfacilities by licensed vehicles.

The Competent Authority(ies) should check that the Ship Recycling Facility has establishedprocedures to send all Hazardous Materials and wastes to licensed recycling, recovery ordisposal sites prior to issuance of DASR.

The Competent Authority(ies) should ensure that the Ship Recycling Facility has established

procedures for all wastes generated by the recycling activity which shall be kept separatefrom recyclable materials and equipment, and labelled and stored, under conditions that donot pose a risk to the workers, human health, or the environment.

5.3 Other requirements

The Ship Recycling Facility should undertake all necessary steps to fulfil the requirements ofall relevant applicable international/national legislation.

The Ship Recycling Facility should make sure that the planned and conducted activities arewithin limitations set out in applicable domestic laws and regulations related to land usewhere the Ship Recycling Facility is located and operating.

[The Competent Authority(ies) may require an Environmental Impact Assessment (EIA) fromShip Recycling Facilities. In case of this, the following guidance is to be considered.

An Environmental Impact Assessment (EIA) may be conducted to assess the potentialenvironmental impacts from the facility as basis for the identification and prioritization of thefacility's environmental aspects. In case a new Ship Recycling Facility is planned, thisassessment should allow to determine whether or not the location is appropriate and suitablefor ship recycling activities. If the actual project involves a site already occupied by eithership recycling or similar activities, the EIA should include an assessment of theenvironmental condition of the location. The EIA should be executed in a planning stage andshould be initiated as early as possible.

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The EIA especially assesses whether the Ship Recycling Facility has adverse effects on thefollowing and whether these effects are within acceptable limits as defined by applicableinternational and/or national legislation that includes, but not limited to:

the flora and fauna of that specific area;

the hydrogeology;

the surface and ground water;

the soil structure;

the historical, cultural, social and economical values; and

the quality of air.

The assessment on the environmental effects should focus particularly on the significantenvironmental effects of releases. The assessment should identify and quantify possiblereleases of polluting substances into any media. It should also quantify their effects. Mostattention should be paid to large-scale releases and releases of the more hazardouspollutants. These are likely to have most significant effects. Conversely, any releases atlevel so low that they are unlikely to have any serious effects need not to be assessed.However, as this is just indicative, consideration should be given to other substancescapable of causing pollution in the same way.

The environmental assessment should pay special attention to:

.1 consumption and nature of raw materials:

Consideration should be given to options that use fewer resources or thosethat use materials that are less likely to produce hazards or pollution risks;

.2 waste issues:[TO BE DEVELOPED ];

.3 Accidents:Consideration should be given to the environmental hazards posed bypossible accidents and their associated risks. This should include thepracticality of measures to reduce risks and hazards and to respond to anyaccidents; and

.4 site restoration:Consideration should be given to whether options risk polluting the site.This should include planning ahead for decommissioning and restoring thesite upon closure.

In some cases, a judgment will need to be made about the relative significance of a differentenvironmental effect, sometimes in different media. In comparing these, certain basicparameters may help to reach a conclusion. For example, long-term, irreversible effects areworse than short-term reversible ones, if all other factors such as immediate severity areequal.]

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6 VERIFICATION OF DOCUMENTATION

The application, including its documentation, should be assessed and verified by theCompetent Authority(ies). The assessment and verification should be concluded within areasonable time frame, if possible within a period of 3 months.

This assessment and verification should include a site inspection which is described insection 7, after the review and evaluation of the documentation.

[Option A: The application may be rejected, if it is found to be incomplete, inconsistent or innon-compliance with the requirements of the Convention and/or with the procedures forauthorization defined by the Competent Authority(ies) with respect to, but not limited to, thefollowing:

.1 documentation;

.2 scope of authorization:

ship size;

ship type;

area, type and nature of the operations;

waste management including details on removal, storage and disposalof Hazardous Materials and wastes;

emergency preparedness;

training;

occupational Health and Safety;

environmental protection measures;

subcontractor management; and

validity of other permissions/authorizations.]

[Option B: When the application is rejected, the Competent Authority(ies) should provide tothe Ship Recycling Facility the reason for the rejection.]

7 SITE INSPECTION

Site inspections should be conducted at Ship Recycling Facilities. The CompetentAuthority(ies) is responsible for planning and undertaking the site inspection.

The main purpose of the site inspection is to validate the consistency between thedocumentation and the actual arrangements, as well as operations of the Ship RecyclingFacility. The inspector should produce an inspection report. [Consistency between thereport, the application, the requirements of the Convention and the relevant international

and/or national laws and regulations are prerequisites for the issuance of a DASR.]

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The first site inspection should be announced in advance to the Ship Recycling Facility, inorder to ensure that it will be possible to meet with all relevant persons.

During and following the site inspection, sufficient and necessary information should beprovided by the Ship Recycling Facility in advance. Security [and Safety] issue(s) should be

considered and sufficient precautions should be undertaken throughout the site inspectionincluding personal protection.

The inspection should address the functionality of arrangements established with focuson safety and environmental protection, handling of all materials including hazardouswastes and debris. This inspection should include situations at which the Ship RecyclingFacility is utilized at its maximum capacity, taking into account full employment includingsub-contractors and operation of the facility.

The site inspection should verify the existence and full implementation of the SRFP. Thisshould include verification:

.1 that the SRFP is available to all personnel at the Ship Recycling Facility;

.2 that knowledge of the SRFP exists, as appropriate, amongst management,Competent person and workers according to their designated tasks, rolesand responsibilities, including special duties like first aid servants, firefighters and others. This should be done by interviews of all categories ofpersonnel and supervision of drills if appropriate;

.3 of the implementation of the objectives of the SRFP by assessingimplementation of operational procedures in:

ship preparation processes;

monitoring of safe-for-entry and safe-for-hot work conditions;

deconstruction processes;

hot work processes;

Hazardous Materials and wastes management (protective measures,removal/transport/storage and disposal); and

emergency preparedness.

The site inspection should identify procedures and routines for:

.1 the development and use of the Ship Recycling Plan;

.2 the acceptance of ships taking into account relevant requirements and therequired certificates;

.3 procedures for incident reporting and follow-up; and

.4 operations in a safe and environmentally sound manner, in accordance with

the regulations of the Convention.

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The site inspection should verify the availability, size, restrictions and the general setup ofthe Ship Recycling Facility according to the application. Any arrangements established forthe purpose of facilitating the recycling process should be described in the inspection report.Any limitation related to the operation of the Ship Recycling Facility should be listed in thereport.

All sites relevant for established procedures, methods, arrangements and facilities for theremoval, storage, processing (incineration, reclamation, specific treatment), transport anddisposal of Hazardous Materials and wastes should be inspected. The inspection shouldverify that the Ship Recycling Facility is designed and constructed to manage the HazardousMaterials/wastes that are contained in their application.

In cases where the Ship Recycling Facility is engaging one or more contractors by means ofsub-contracting for any kind of related activities, like the removal and/or storage and/ortransportation and/or disposal of Hazardous Materials [or for any services], these contractorsshould be subject to the same assessments as if the Ship Recycling Facility itself wasundertaking these activities, and the responsibility of such activities should be assumed bythe Ship Recycling Facility.

Furthermore, the site inspection should include a practical test for assessing theimplementation of measures for emergency preparedness and response. This may involvean unannounced complete evacuation of the Ship Recycling Facility or a similar proceduredescribed in the plans for emergency, preparedness and response.

[After the site visit, the Competent Authority(ies) should process or store the inspection dataand their findings as to the compliance of the Ship Recycling Facility with the aboverequirements, an evaluation thereof and a conclusion on whether any further action should

follow. This report is properly recorded in writing and maintained in a readily accessibledatabase. The Ship Recycling Facility should be informed, by a letter or e-mail, of theconclusion. The additional information can be requested of the Ship Recycling Facility basedon the result of the site inspection, as needed.]

[The Competent Authority(ies) should have procedures identified for providing the detailedinformation and analysis of the authorization process to the Ship Recycling Facility.]

The information gathered during the inspection should flow back to the CompetentAuthority(ies) in order to allow them to take it into account when issuing the authorization.

The supplement to the DASR (Appendix 5 to the Annex to the Convention) may be used asguidance for the planning of site inspections.

[If the Ship Recycling Facility is under construction or not fully operational, the site inspectionshould be implemented on the basis of the best available resources and efforts, and theCompetent Authority may issue DASR subject to certain terms and conditions asappropriate. In such a case, the additional site inspection should be conducted after the ShipRecycling Facility becomes fully operational. According to the results of the additional siteinspection, the Competent Authority may suspend, amend, or withdraw DASR.]

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8 ISSUANCE, AMENDMENT, SUSPENSION, WITHDRAWAL AND RENEWAL OFTHE DASR

As stated in regulation 16.5, The Party shall identify the terms for which the authorization willbe issued, withdrawn, suspended, amended and renewed.

Each Party shall establish a mechanism for ensuring the establishment and effective use ofinspection, monitoring and enforcement provisions, including powers of entry and sampling.Such a mechanism may include an audit scheme to be carried out by the CompetentAuthority(ies) or an organization recognized by the Party (regulation 15.3). If the Partyestablish the audit scheme based on the national law and regulations, the Party should makeavailable relevant information on the audit scheme in advance, including but not limited to:

the frequency of the audit: it should be set at least once in a mid of validityperiod of DASR; and

the process of the audit, such as the submission of written reports by the ShipRecycling Facility of the summarized ship recycling activities, the interviews tothe representatives or managers of the Ship Recycling Facility and the siteinspections.

[The Competent Authority(ies) should establish procedures for conducting follow-on siteinspections at the Ship Recycling Facility as needed, after the DASR is issued.]

8.1 Issuance

The Competent Authority should issue a DASR to the Ship Recycling Facility if the documentverification and the site inspection were appropriate and successful.

The DASR should not be issued until all required documentation has been received and thesuccessful completion of the site inspection.

A supplement to DASR (Appendix 5 of the Annex to the Convention) shall be permanentlyattached to the DASR. Most of the information required for this supplement is available inthe SRFP, as described in the Facility Guidelines.

The DASR should be available at the Ship Recycling Facility at all times.

8.2 Amendment

The Competent Authority(ies) may amend the DASR as appropriate. [The amendmentprocedure may be initiated by the Competent Authority(ies), however, the Ship RecyclingFacility may also apply for the DASR amendment. In any case, the] procedures regardingany amendments of DASR should be initiated by letter. For amendments, the CompetentAuthority(ies) may require a site inspection to verify compliance with the Convention before itamends the DASR. In all cases, the Ship Recycling Facility should provide the CompetentAuthority(ies) with appropriate documentation and updates to the SRFP.

Situation which may necessitate the amendment of DASR includes but not limited to:

1. Ship Recycling Facility applies for the DASR amendment, e.g., ShipRecycling Facility invested on its facility and added new capabilities, whichshould be reflected in the DASR (authorization scope is to be enlarged);

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2. DASR amendment is triggered by the reasons in the side of CompetentAuthority (e.g., new domestic regulations are put into effect);

3. DASR amendment is triggered by the investigation conducted by theCompetent Authority(ies) when an accident happens; and

4. DASR amendment is triggered by the deviation of the practice of the ShipRecycling Facility from the SRFP, which affects the contents of the DASR.

8.3 Suspension

The Competent Authority(ies) may suspend the DASR if it has information demonstratingthat the Ship Recycling Facility no longer complies with [the requirements of the Convention,or satisfies the terms and conditions in the DASR]. The Competent Authority(ies) maysuspend the DASR on a temporary basis or for an indefinite period of time, depending on theShip Recycling Facility's return to compliance. During any period of suspension, the ShipRecycling Facility is not authorized to conduct any recycling activities, except as far as theCompetent Authority has specified that the Ship Recycling Facility should continue withcertain activities without negatively affecting protection of human health or the environment.

The Competent Authority(ies) may suspend the DASR in cases where site inspections,conducted as a process of the audit, are restricted by the Ship Recycling Facility without anyjustification.

8.4 Withdrawal

The Competent Authority(ies) may withdraw the DASR if the Competent Authority(ies) hasinformation demonstrating that the Ship Recycling Facility no longer complies with the

requirements of the Convention, or satisfies the terms and conditions in DASR. TheCompetent Authority(ies) should generally reserve withdrawal for cases, in which the ShipRecycling Facility has seriously or repeatedly failed to comply and suspending the DASRdoes not present an adequate remedy. The Competent Authority(ies) can reinstate the ShipRecycling Facility's authorization only after the Ship Recycling Facility has submitted a newapplication to the Competent Authority(ies), demonstrating that the Ship Recycling Facilitycomplies fully with the Convention's requirements and related Guidelines.

Any action or modification taking place at the Ship Recycling Facility that may affect theconditions for which the authorization was granted, should incur a new inspection to beundertaken. If such an inspection reveals that the conditions for the authorization are nolonger in place, the DASR should be withdrawn.

8.5 Renewal

The Competent Authority(ies) may renew the DASR after the Ship Recycling Facility hassubmitted a written request. The Ship Recycling Facility should support any such requestwith revised documents, as appropriate, as prescribed in section 6 above for the ShipRecycling Facility's initial application for authorization. The Competent Authority(ies), at itsdiscretion, may conduct a site inspection before it renews the DASR.

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9 VALIDITY

The DASR shall be issued for a period determined by the Party not exceeding 5 years.

In case where a Ship Recycling Facility changes ownership, the new owner should, within a

reasonable time frame, if possible without exceeding 30 days, notify the CompetentAuthority(ies) of ownership change so that the Competent Authority can amend the DASR toreflect such change. The new owner should verify in writing that it will fully comply with allrequirements, including the SRFP, and the Convention. The new owner should also providesupporting documentation as requested by the Competent Authority(ies). If the ShipRecycling Facility operations are changed and these changes are having an effect on theconditions to which the authorization was granted, the Competent Authority(ies) may amend,suspend or withdraw the DASR and inform the new owner accordingly.

10 COMMUNICATION OF INFORMATION

10.1 Recognized Organizations

[The Party shall notify the Organization of the specific responsibilities and conditions of theauthority delegated to the Recognized Organizations, for circulation to Parties. In everycase, the Competent Authority(ies) retains full responsibility for the authorization issued(regulation 16.3).

The Recognized Organization may be requested to maintain a list of surveyors withadequate expertise for conducting the tasks requested by the Party.

Each Party shall report to the Organization and the Organization shall disseminate, asappropriate a list of the Recognized Organizations and nominated surveyors which are

authorized to act on behalf of that Party in the administration of matters relating to the controlof ship recycling in accordance with the Convention, and the specific responsibilities andconditions of the authority delegated to Recognized Organizations or nominated surveyors(Article 12.3).]

[10.2 Violations and sanctions

If an alleged violation has been identified, the Party shall promptly inform the Party thatreported the alleged violation, as well as the Organization, of any action taken.

If the Party has not taken any action within one year after receiving the information, it shallinform the Party which reported the alleged violation, and the Organization, of the reasons

why no action has been taken.

If a request for an investigation is received from any Party, together with sufficient evidencethat a Ship Recycling Facility is operating, has operated, or is about to operate in violation ofany provision of this Convention, a Party that is receiving the request should investigate theShip Recycling Facility operating under its jurisdiction and make a report. The report of anysuch investigation shall be sent to the Party requesting it, including information on actiontaken or to be taken, if any, and to the Organization for appropriate action.]

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