Conditions for operating ship-breaking facility

Our company needs to learn about the conditions for used ship-breaking facility and the procedures for obtaining the license for legally doing this business. Thank you.

FDVN’s Opinions:

1. Conditions for operating ship-breaking facility

According to Article 7 of Decree No. 82/2019/NĐ-CP dated November 12, 2019 on the import and breaking of used ships, requirements to be satisfied to put a ship-breaking facility into operation are as follows:

1. It must have wharfs and navigational channels published;

2. It must meet environmental protection requirements for ship-breaking facilities;

3. It must have personnel and procedures for control of hazards and harmful factors, and the plan for handling serious technical incidents threatening occupational safety and health;

4. It must meet fire prevention and control requirements and have a firefighting plan.

Besides, according to Article 4 of this Decree, enterprises importing and breaking used ships shall comply with the following rules:

1. The import and breaking of used ships must comply with regulations on maritime safety, maritime security, occupational safety, prevention and control of fire and explosion; do not pose any unnecessary risks to human health and the environment.

2. Used ships shall be only demolished at ship-breaking facilities that have been put into operation in accordance with law regulations.

3. The used ship which is imported for breaking must be sent to the ship-breaking facility within 30 days from the date of completion of customs procedures and 90 days from the date on which the ship arrived at the first port of Vietnam. Ship-breaking operations must be completed within a maximum period of 180 days from the date of commencement of ship-breaking.   

4. Enterprises that import of used ships and/or carry out ship-breaking operations shall purchase and fulfill obligations under environmental damage insurance policies for the import and breaking of used ships in accordance with law regulations.

2. Procedures for making decision to put a ship-breaking yard into operation

It is stipulated in Article 9 of Decree No. 82/2019/NĐ-CP dated November 12, 2019 on the import and breaking of used ships that the procedures for making decision to put a ship-breaking yard into operation are:

The application consists of:

The owner of the ship-breaking facility shall submit an application for an approval to put the ship-breaking facility into operation directly, by post, via the web portal or in other appropriate form to Vietnam Maritime Administration.

An application for approval to put the ship-breaking facility into operation includes:

• The application form for approval to put the ship-breaking facility into operation (01 copy);
• The Decision on approval for the environmental impact assessment report which is enclosed with the environmental impact assessment report made by the owner of the ship-breaking facility (01 certified true copy or 01 copy enclosed with its original for verification purpose);
• The environmental management system manual which must meet TCVN ISO 14001 (01 certified true copy or 01 copy enclosed with its original for verification purpose);
• The as-built dossier of facilities and technical infrastructure serving environmental protection purposes (originals or certified true copies);
• The procedure for control of hazards and harmful factors and the plan for handling serious technical incidents threatening occupational safety and health (originals or certified true copies);
• The written approval for the fire prevention and fighting plan given by the fire police department (01 certified true copy or 01 copy enclosed with its original for verification purpose).

Process for receiving and processing applications:

• Vietnam Maritime Administration shall receive application and provide instructions for applicant to modify the application if it is invalid in accordance with regulations herein. 
• Within 03 business days from the receipt of sufficient and valid application, Vietnam Maritime Administration shall appraise the received application and submit the report on application appraisal to the Ministry of Transport.  During the appraisal, Vietnam Maritime Administration shall carry out surveys, verification of the received information and data on facilities of the ship-breaking facility;
• Within 02 business days from the receipt of the request from the Vietnam Maritime Administration, Ministry of Transport shall promulgate a decision to put the ship-breaking facility into operation. If an application is refused, a written notification in which reasons for refusal must be indicated shall be issued to the applicant.

In conclusion, based on the above law provisions, your enterprise can apply directly to the Vietnam Maritime Administration or send the application via post system, electronic portal, or by other suitable means to propose to put the ship demolition facility into operation. After receiving the decision to commission a ship-breaking facility issued by the Ministry of Transport, your enterprise can be legally operated in this business line.

Bùi Trần Thùy Vy – FDVN Law Firm

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