Scrap Island is made up of the wrecked remains of hundreds of abandoned ships. It is connected to Water 7 by a large stone bridge. It is featured prominently in Franky's flashbacks. It was where he built his Battle Frankies. In fact, it was the place where the company Tom's Workers often built its ships.
During the Aqua Laguna, the Going Merry washed up here. Iceburg, at the request of the ship, made what repairs he could do. When the next wave came, the ship was washed back into the water.
In the aftermath of Enies Lobby, Franky began the construction of the new ship for the Straw Hat Pirates. Like all his other ships, it was built on Scrap Island.
Finally, it was the scene of the departure from Water 7. In the short chase, Garp hurled several cannon balls, a few of which crashed into the island, before the Straw Hats escaped using their ship's Coup de Burst.