The Hong Kong Convention Is Here, But Compliance Alone Will Not Save It

 

Three months after the Hong Kong Convention (HKC) came into force, the ship recycling industry looks much the same. The yards remain busy, the paperwork continues to grow, and the sweeping reform promised by the Convention has yet to take shape.

This slow start is no surprise. The industry had more than a decade to prepare. Many shipowners, some had already aligned with the European Union Ship Recycling Regulation (EU SRR), which set stricter standards and effectively pushed global compliance years in advance.

Since 2020, most trading vessels have carried an approved and regularly updated Inventory of Hazardous Materials (IHM). The discipline of maintaining one is now routine, so the HKC’s arrival has been more of a formalization than a transformation.

The real driver of progress has not been regulation but finance. Banks and investors, through Environmental, Social, and Governance (ESG) conditions, began requiring HKC-level standards as a prerequisite for lending. The industry did not wait for the IMO. The finance sector enforced compliance long before the Convention did.

That top-down pressure has raised awareness but not necessarily changed behavior. Compliance has become the expected minimum, not a marker of excellence.

The HKC does, however, change the landscape for shipowners. While it provides a long-awaited global framework for safe and sustainable recycling, ambiguity remains, particularly where end-of-life vessels are still treated as hazardous waste under the Basel Convention. In such cases, owners must meet both HKC and Basel obligations, creating overlapping legal and logistical challenges.

Relying on intermediaries is no longer enough. Shipowners must now take ownership of compliance, ensuring IHMs and recycling plans are accurate, auditable, and aligned with both frameworks. Outsourcing risk will no longer cut it. Compliance now demands active engagement, transparency, and informed decisions from the first voyage to the final one.

Across the vessel inspections Idwal has conducted since enforcement began, the change is subtle but clear. Owners are asking tougher questions, seeking verification that paperwork reflects reality. It is a small but positive sign that the Convention is beginning to influence conduct, not just administration.

Yet a new bottleneck is forming. Only a limited number of yards hold HKC certification, and many are already at capacity. Achieving and maintaining certification requires heavy investment and time, creating a two-tier market between compliant and non-compliant facilities. Owners with aging fleets should plan early as those who don’t may find compliant slots gone when they need them most.

The success of the HKC will depend less on its text and more on how it is enforced. Under the EU SRR, port state control made the difference. European authorities detained ships for IHM deficiencies, and similar action should now follow as HKC enforcement matures. Without random checks, firm penalties, and transparency, the Convention risks becoming a paper exercise. The industry does not need more certification. It needs accountability.

Passing an audit is not proof of compliance. True conformity requires independent verification, randomized inspections, and evidence that documentation matches the vessel’s physical state. From Idwal’s global inspection data, discrepancies between declared and observed hazardous materials remain common. That gap between paper and practice can only be closed by impartial, third-party inspection. Without it, the HKC’s promise of safe and sustainable recycling will remain unfulfilled.

Technology can help. Data-driven vessel inspection tools and shared verification frameworks bring transparency at scale and give owners the insight they need to demonstrate compliance with confidence. These tools should no longer be optional, they should define the standard.

The Hong Kong Convention has taken more than a decade to reach this point. Its credibility will depend on whether the industry treats compliance as a living standard rather than a filing exercise. Independent verification and transparent oversight are the only paths to meaningful progress.

Ensuring that HKC compliance is meaningful, and not just a matter of paperwork, requires independent verification, rigorous inspections, and ongoing oversight. Conducting inspections at multiple stages of a vessel’s lifecycle is essential to maintaining consistent compliance. Randomized inspections are particularly effective in ensuring that standards are upheld continuously, not just for scheduled audits, a challenge familiar across many areas of maritime regulation.

Tracking and analyzing deficiencies across fleets also provides valuable insight into recurring compliance issues, enabling shipowners and managers to take proactive corrective action. Integrating independent inspection and audit throughout the vessel’s operational life, not just at the end, ensures that documentation aligns with physical evidence, including IHMs, hazardous material plans, and supporting records.

Digital, data-driven reporting enhances this process by allowing for transparent tracking of findings, trend analysis, and risk-based decision-making. Alongside these technical measures, owners and managers must establish robust compliance management systems and provide ongoing training to crews and shore-based teams to sustain regulatory awareness.

By combining independent verification, data-led oversight, and strong management practices, shipowners and managers can ensure that HKC compliance is credible, auditable, and effective.

Three months in, the world has enough declarations. What it needs now is verification.

And what about the effect market conditions will have on physical recycling? Well, if recycling market rates remain low, the trend of shipowners selling or life extending older vessels rather than recycling them is likely to continue. Instead of heading straight for dismantling, some older ships may find renewed trade in domestic or regional trades, giving owners a chance to extend operational life and generate additional income before final disposal or generate a sale income above recycling rates.

Strategically, this environment underscores the need for fleet-level oversight, proactive condition monitoring, and data-driven decision-making.

Stephen Grist is Technical Manager at Idwal.