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The ship-breaking industry, which critics say harms the environment and exploits low-paid workers in developing countries, faces tougher controls if plans approved by European lawmakers Thursday come into force.
The European Parliament agreed that all EU-registered ships must go to EU-approved facilities if they are to be broken up for scrap and recycling.
The aim is to "reduce the adverse effects of careless scrapping, such as accidents, injuries or damage to human health or the environment," a summary said on the parliament website.
MEPs however narrowly rejected plans for a recycling fund to provide a financial incentive for the industry to stick to the tougher norms but this issue will be looked at again, it said.
A report drawn up for parliament's environment committee had suggested a levy on any ship using an EU port to finance the fund.
Green MEP Carl Schlyter, who drafted the report, was cited as saying that his colleagues had jeopardised efforts to clean up the industry by failing to back his idea for a support fund.
A "narrow majority succumbed to highly misleading lobbying by the maritime sector, seeking to shirk its responsibilities," he charged after the vote.
Under the new rules, member states would have to ensure that an inventory of hazardous materials is made on each EU ship.
Non-EU ships entering a port or an anchorage of a member state would also have to have such an inventory and penalities could be imposed if it does not match the condition of the vessel.
Owners of EU ships that are sold and sent, within 12 months of the sale, for recycling on a beach or in a facility not on the EU list, would also face sanctions.
The proposal goes forward for discussion with member states.
Ship breaking is now dominated by countries such as India, Pakistan and Bangladesh where massive vessels such as freighters or oil tankers are driven straight onto a beach and cut to pieces by an army of poorly paid workers.
Environmentalists claim the environment is harmed by toxic materials on board and that the workforce is exposed to serious health hazards.