Developments in Other Intergovernmental Organisations
SECTION II. ACTIVITIES UNDERTAKEN DURING 1996
Competition Policy as it Affects International Maritime Transport
Relations with non-member Economies
Treatment of Support Measures
Safety and the Environment
Matters Related to the World Trade Organization (WTO)
1997/1998 Programme of Work for the MTC
SECTION III. SHIPPING RELATIONS AMONG OECD COUNTRIES
Observer Delegation from the Russian Federation
The Maritime Transport Committee (MTC) serves as a unique forum for the discussion of a broad range of economic and political maritime issues. Prime objectives to be pursued by the MTC are: to improve the convergence of shipping policies among Member and non-member countries, to foster further liberalisation, to strengthen the competitiveness of Member country fleets and to provide political support to the promotion of maritime safety and the protection of the marine environment.
During 1996 the Committee focused on issues such as liberalisation of shipping, competition polices, support measures, dialogue with non-member countries and maritime safety and the environment.
All members of the OECD are also members of the Maritime Transport Committee, and most participate regularly in its activities. Hungary, Korea and Poland were admitted to membership of the OECD during 1996, and would therefore attend future meetings of the Committee as full members.
The Committee's Chairman, Mr Diamantis Manos (Greece), together with a number of Vice Chairmen (France, Germany and Norway) constitute the Bureau of the Committee. This bureau is supported by members of the extended Bureau, which comprises Australia, Japan, the United Kingdom and the United States.
France continued to chair the General Working Party of the Maritime Transport Committee. During 1996, the Russian Federation attended meetings of the Maritime Transport Committee as an observer delegation. Hungary, Korea and Poland also participated as observers prior to their formal admittance to the OECD.
The Committee's principal activities in 1996 were:
commencement of work on a project to consider the desirability of promoting the compatibility of competition policy as it applies to maritime transport;
publication of a major report on the competitive advantages obtained by shipowners who do not observe international safety rules;
production of an Inventory of Support Measures provided by Member and selected non-member countries to international shipping;
commencement of long-term planning for future negotiations on maritime transport services within the World Trade Organization (WTO); and
a further round of discussions with Dynamic non-member Economies (DNMEs) at a Workshop held in March 1996.
Readers should note that the
which formed part of earlier MTC Annual Reports is now published separately, and is available from the OECD Maritime Transport Web Site.
In considering its work on Competition Policy as it affects maritime transport, the MTC identified the promotion of compatibility of competition policy and law as its principal objective. In promoting this objective the Committee decided to consider a number of specific elements:
i) what are the public interests in competition rules applied to maritime transport; ii) where do the problems exist and how could practical solutions be achieved; and iii) possible future developments in international liner shipping.
In addressing these elements, the Committee covered economic efficiency, transparency, legal certainty, international compatibility, and the monitoring/analysis of structural changes in the liner market (such as strategic alliances and the emergence of mega-carriers). A report on this work was expected to be completed in 1997.
As part of the OECD's broader "outreach" activities aimed at encouraging dialogue with non-member economies, the MTC has undertaken regular consultation with a broad range of non-members since 1991.
During 1996, the Committee held a Workshop with the DNMEs which included representatives from Argentina, Brazil, Chile, Hong Kong (China), the Indonesian business and academic sectors, Korea, Malaysia, Singapore, and Chinese Taipei. Of these, the three Latin American and the Indonesian delegations attended a Workshop for the first time.
The Workshop examined in depth the emergence of "strategic alliances", and participants emphasised the risk of overcapacity, which could be encouraged by investments in these alliances. Participants also stressed the problems created by the continued existence of barriers to the development of land carriage activities prior to, or following, ocean shipping in multimodal transport. However, participants agreed that port-to-port shipping had been extensively liberalised.
Exchanges of views on the main principles of maritime transport policy revealed much common ground on such fundamental issues as:
the promotion of free access to international maritime trade;
the respect of the principle of free and fair competition on a commercial basis;
the promotion of maritime safety and the protection of the marine environment;
the need to prevent the operation of sub-standard vessels and to improve training of sea-going personnel; and
the promotion of modern business technologies such as Electronic Data Interchange (EDI).
Participants at the Workshop also discussed the issue of concluding a more formal understanding between OECD Member countries and the DNMEs, and it was agreed that a further exchange of views was necessary before the proposal could progress.
There was general agreement that workshops on maritime transport policies and practices were an appropriate forum for the exchange of views and experience between the major players in international shipping, and that, in the present climate of globalisation and growing interdependence of national economies, it was particularly desirable that they should take place.
Following the Workshop, the MTC agreed to take the initiative to engage China, as a major and growing participant in international shipping, in dialogue during 1997.
In respect of its continuing dialogue with the Newly Independent States/Central and Eastern European Countries (NIS/CEECs), the Committee, while noting that very few problems had arisen, agreed to monitor regularly the implementation of the 1993 Understanding on Common Shipping Principles between members of the OECD and the NIS/CEECs. In view of the Committee's tight meeting schedule it was considered that it might be appropriate to review any problems, as well as progress in the effective implementation of the Principles, for which a transitional period had been agreed, through the written procedure and to meet with the NIS/CEECs at a future date if required.
The Committee completed preliminary work on an Inventory on Support Measures and Arrangements provided to International Shipping. This Inventory, which covers OECD Member countries, contains information on measures of assistance granted to alleviate employment costs, as well as assistance granted to shipping companies and those who own and control vessels. Delegations have been invited to continue to provide updated information on these measures to ensure that the Inventory is kept up to date.
This report, which is intended to support the efforts of the International Maritime Organization (IMO) in combating sub-standard shipping, found that, despite extensive international safety regulations, it was still possible for shipowners to avoid compliance with those regulations, and that there were substantial economic benefits available to them for so doing. As well as quantifying these benefits, the report also discussed some possible solutions to the problem.
The OECD has released the report for general distribution and it is available from the Organisation or from the above link.
The Committee noted with regret the failure of the WTO's Negotiating Group on Maritime Transport Services (NGMTS) to reach agreement on shipping. There was agreement that, as the MTC was the only international forum where economic and political aspects of shipping could be considered, it should use the time between 1996 and 2000 (when negotiations will resume in the WTO) efficiently.
The Committee decide to explore an alternative, pragmatic, shipping-oriented approach to the liberalisation of maritime transport, and to engage non-OECD countries in concrete discussions when negotiations resume in the year 2000. The Committee asked for the preparation of a questionnaire to enable an analysis of problems experienced in selected non-member countries, and to assess their relative importance.
During the year the Committee formally consulted with the Business Industry Advisory Council (BIAC) and the Trade Union Advisory Council (TUAC), on a range of matters including competition policy, the MTC's Programme of Work, and relations with non-member economies. These consultations occur at regular intervals to ensure that various groups are made aware of the others activities.
The approved 1997/1998 Programme of Work for the Maritime Transport Committee contains these principal elements:
Look for practical solutions in areas of conflict in competition policy and law as it applies to international liner shipping.
Aim to define non-distorting policies to strengthen the competitiveness of OECD Member countries' fleets in response to global competition.
Establish full transparency of support arrangements granted by Member countries as well as selected non-member countries, to their shipping and shipping related industries.
Review the Common Shipping Principles agreed to in 1987, and examine, in view of existing shipping policy practices, the possibility of further promoting these Principles.
Assist in the elimination of sub-standard shipping by providing support to the IMO, and review and assess the role of the human factor in safety policy.
Deepen investigations into non-technical economic aspects and competitive advantages which accrue from non-compliance with international standards.
Promote shipping principles acceptable to all the main players in the field of maritime transport and broaden the dialogue to include South American countries, China, India, and, if possible, selected African countries.
Provide the Committee with information and analysis on developments in other international organisations, notably the WTO.
Provide as background to the Committee's projects an economic analysis of the impact of the deregulatory process in Member countries on the shipping industry, and the interaction between shipping and the choice of industrial location.
Monitor the equilibrium in the supply and demand for tonnage, and assess developments in both the bulk and liner industries.
Note: This Section reflects developments in the maritime sector as reported to the Committee by Members of the MTC, and does not purport to be a comprehensive record of all developments which took place in the maritime sector during 1996.
The principal developments in the maritime sector have been:
The Australian National Line (ANL). The new Australian government is committed to the sale of ANL. The ANL Board has provided a report on the restructuring and strategic options which the government will consider before making a decision on the timing and process of a sale.
The Australian Shipping Reform Initiatives. The Government is terminating the International Shipping (Australian Resident Seafarers) Grants and the Ships (Capital Grants) schemes. The Minister for Transport and Regional Development has established an industry consultative body, the Shipping Reform Group, to provide advice on the removal of cabotage and the establishment of a second register and any future measures to improve the competitiveness of Australian shipping.
Industry Review of Marine Cargo Liability. The Cargo Liability Working Group, representing the major interests involved, was set up to examine Australia's cargo liability provisions. The Working Group developed a package of changes which will enhance the protection offered to shippers and remove from the Carriage of Goods by Sea Act 1991 the automatic trigger mechanism which could have brought the Hamburg Rules into force for Australia on 1 November 1996.
Liner cargo shipping. In 1996 the Treasurer released the Productivity Commission's stocktaking report on microeconomic reform. Among other things, the Report recommends that Part X of the Trade Practices Act 1974 be repealed. While a review of Part X has been scheduled for 1998/99, this could be brought forward.
Asia-Pacific Maritime Safety Agencies Forum. The Australian Maritime Safety Authority initiated and hosted the inaugural Asia-Pacific Maritime Safety Agencies Forum. The agencies agreed that mutual understanding and co-operation on a regional basis will significantly enhance the promotion of maritime safety and the protection of the environment.
National Transport Interface Committee. The Australian Government is establishing an independent National Transport Interface Committee to ensure that the interface between transport modes is addressed to overcome any systemic breakdowns in the handling of goods between transport modes.
Stevedoring. The Government is committed to introducing substantial industrial reforms. These include voluntary unionism, reinstating the secondary boycott provisions in the Trade Practices Act and limiting the right to strike during the term of Workplace Agreements. The Australian Workplace Relations Bill, introduced into Federal Parliament in May 1996, will provide a framework for achieving greater labour flexibility and productivity at the ports and increased competition in stevedoring services.
Maritime Enterprise Bargaining Agreements. In April 1996, P&O Ports, a major stevedoring company, commenced a six-month trial at Port Botany of a Productivity Employment Proposal (PEP), a productivity agreement P&O Ports reached with the Maritime Union of Australia under existing industrial relations legislation. The agreement aims to raise crane rates from the current level of 20 Teus to about 27 Teus per hour.
Port Authorities. In privatising port services to increase productivity and lower costs, the Federal Government assists the states to identify non-core functions of port authorities and encourages them to privatise these functions where there is a public benefit. Victoria is the only state that has committed itself to the privatisation of its ports. The New South Wales, Queensland and South Australian Governments have corporatised their port authorities. The Fremantle Port Authority announced a comprehensive plan to streamline its operations and the Tasmanian government is divesting its port authorities of non-commercial regulatory and Community Service Obligation functions.
National Competition Principles. The application of these principles to port authorities will also be a boost to improving productivity on the waterfront. These principles provide for state enterprises such as port authorities to be subject to the Trade Practices Act, which prohibits anti-competitive behaviour.
Canada Marine Act. In December 1995, Canada announced a comprehensive national marine policy that deals with ports, the Great Lakes - St Lawrence Seaway system, ferry and pilotage services. The strategy was designed to increase efficiency in the maritime sector, cut costs and allow for greater user input in decision making, and to ensure that business principles are applied to the development and operation of transportation infrastructure and services. A new Canada Marine Act was introduced in Parliament in June 1996 to implement these changes. The principal elements of the new policy were:
ports would be commercialised, and ports essential to international and national trade would become Canada Port Authorities run by representatives nominated by user groups and governments; and
the Great Lakes-St. Lawrence system would be commercialised, with the objective of locks and channels of the Canadian St Lawrence Seaway Authority being operated and maintained by a non-profit private sector corporation.
In addition, pilotage services were to continue to be organised regionally, and be managed by the four Pilotage authorities. The government would no longer cover operating deficits and the process for appeal of new pilotage rates would be streamlined.
Marine Services Fee. The Canadian Coast Guard also developed a strategy to meet its expenditure reduction obligations to deliver its services in a more effective and efficient manner, and ensure that users pay a greater portion of the services they receive. Its strategy includes both cost reductions and cost recovery. On the cost recovery side, a new fee structure was put in place to recover from the commercial shipping industry some of the cost of providing aids to navigation services.
Amendments to the Canada Shipping Act. The Transport Minister announced in September 1996 the introduction of a Bill to amend the Canada Shipping Act which was expected to become law by the end of the year. The purpose of this Bill was to implement the provisions of the 1976 Convention on Limitation of Liability for Maritime Claims and its 1996 Protocol. It also was to implement the provisions of the 1992 Protocols to the 1969 Convention on Civil Liability for Oil Pollution Damage and the 1971 Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage.
New Shipping Act. The Ministry of Transport has prepared the draft of a new Shipping Act. The draft contains provisions with respect to the commitment to international conventions to which the Czech Republic is a contracting state, notably those pertaining to the International Convention on Standards for Training, Certification and Watchkeeping for Seafarers (STCW), 1995.
Private ownership. The Czech Republic has one private shipowner operating in shipping, the Czech Ocean Shipping Joint Stock Co. (COS) whose headquarters are situated in Prague. The company's activities centre on foreign business.
Ratification of Conventions. The 1992 protocols to the CLC Convention (the International Convention on Civil Liability for Oil Pollution Damage) and the FUND Convention (the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage) were ratified by Finland in November 1995 and will enter into force in November 1996. Finland has also ratified the 1952 Arrest convention and it will enter into force in June 1996.
The Finnish Shipping Policy Programme for 1994-96 is currently being revised. The main objectives are to increase the share of Finnish tonnage in maritime transport, create employment for Finnish seafarers and to enhance ice-strengthened tonnage.
The Act on the List of Merchant Vessels in International Trade has stopped the flagging out of Finnish flag vessels. Negotiations at government level have started on the reform of tax legislation on shipping to encourage vessel acquisition, and bareboat chartering from abroad to fly the Finnish flag.
The Act on Ship Safety Control entered into force on 1 March 1996 and the Decree on Shipowner Safety Management System entered into force on 1 July 1996. The ISM code was put into effect by these provisions and by an amendment to the Maritime Code. The system applies to Finnish passenger vessels in international traffic as of 1 July 1996, to Finnish and such foreign oil, gas, chemical and product tankers which are used in Finnish domestic traffic and to vessels carrying solid cargoes in bulk as of 1 November 1996, and to other vessels in 1998 and 2002. Passenger lists, also in respect of foreign passenger vessels operating to Finland, were introduced as of 1 March 1996.
Regional agreement of stability requirements. Finland has participated in negotiations on the Regional Agreement of stability requirements for ro-ro passenger vessels. Preparations for signing this agreement and for amendments to the Finnish legislation have started.
Joint ownership of vessel shares. France's main shipping policy development was the adoption of the Act and Decree, on 5 July and 23 September 1996 respectively, relating to joint ownership of vessel shares. Investors (physical and legal persons) may henceforth deduct the total amount of the investment from their revenue or their taxable income under the following conditions:
i) the eligible vessels are new or second-hand cargo vessels, and providing that they have the potential to remain in operation for at least eight years;
ii) at least 20 per cent of the joint ownership is held by companies whose principal activity relates to the ownership, the fitting-out or the operation of vessels and which do not benefit from the tax deductions;
iii) the vessel is held in joint ownership and under French flag for at least four years; and
iv) the investment is approved by the Finance Ministry after assessment by the Ministry of Maritime Affairs and the Shipbuilding Ministry.
[Note: France has since advised that this mechanism was abolished by the 1998 Finance Act, and that a new mechanism was under consideration.]
In December 1996, the German Parliament passed an alteration of the tax regulations concerning depreciation for trade vessels. For shipbuilding contracts concluded from 25 April 1997 special depreciation will no longer be granted. In addition, the offset of losses was reduced from 125 per cent to 100 per cent.
The deletion of the special depreciation occurred in the first instance within the scope of budget consolidation. In addition, the measure is aimed at balancing the container market.
Hungary became a Member of the OECD in 1996.
Review of Hungarian shipping legislation. The Government is currently reviewing its inland waterway policy. The Ministry of Water Transport is preparing new Hungarian shipping legislation, expected to be passed by the Parliament in 1997. This will create a transport system which will be in conformity with environmental requirements, compatible with the European inland water systems (especially with those of the member countries of the EU, and the European East-West main transport corridors) and harmonised with the domestic transport system.
The objectives of this legislation are:
i) to help to integrate the Danube waterway with the EU water transport system;
ii) to help a well-balanced development of the country's regions, by establishing medium-sized modern public ports with their basic infrastructure along the Danube in regions where no ports exist fitting into the network of the national logistics centres, and by revitalising the shipping of the Tisza-basin, including the ferries;
iii) to protect human life and the natural environment by increasing the participation of water transport, and combined modes of transport, in the overall transport regime, and
iv) to operate water transport in an efficient way and in conformity with the market. There are at present no laws or regulations giving preference to Hungarian ships and there are no tax or other state facilities granted to shipping.
FMC proposed rule. The Japanese Government is considering how to respond to the Federal Maritime Commission's (FMC) proposed rule that would apply sanctions against Japanese liner operators. The FMC alleges that the prior consultation system by the Japan Harbour Transportation Association (JHTA) in Japanese ports is discriminatory to US carriers, even though they are treated equally to Japanese carriers.
The Japanese International Shipping Scheme. Since 1985, the number of Japanese registered ocean-going vessels and Japanese ocean crews has been reduced to approximately one-fifth of their former level principally owing to the sharp appreciation of the yen following the Plaza Accord in 1985. Newly introduced measures in response to the situation (e.g. the Japanese International Shipping Scheme) are included under the 1996 Amendment to the Maritime Transport Law of 1949, which was implemented in October 1996.
According to the Amendment, before flagging-out any Japanese-registered vessel, a Japanese shipowner is required to file, in advance with the Minister of Transport, those that are categorised as "International Ships". The Minister is authorised, where necessary, to issue a recommendation to stop flagging-out in certain cases. The Government also provides shipowners with special taxation treatment to encourage the acquisition and maintenance of an "International Ship".
Korea became a Member of the OECD in 1996.
Commitments made prior to joining the OECD. In November 1995, Korea made a commitment to gradually abolish the Designated Cargo System, eliminating 4 items (raw material for fertilisers, grain, petrochemicals, crude oil) by the end of 1996, and the remaining three items (coal, liquefied gas, iron ore) by the end of 1998. In order to carry out the commitment, the Korea government is currently in the process of revising the Enforcement Ordinance of the Shipping Industry Promotion Act to eliminate four items from the Designated Cargo list. The revision is scheduled to be completed within this year. The remaining three items will be eliminated from the list by the end of 1998 through the same process. Accordingly, the Designated Cargo System will be abolished in January 1999.
Ministry of Maritime Affairs and Fisheries. The Korean government established the Ministry of Maritime Affairs and Fisheries (MOMAF) which integrates the Korea Maritime and Port Administration, the Fisheries Administration, the National Maritime Police Administration and other marine-related agencies. This will ensure a more efficient strategic planning and implementation of marine policies.
Easing of regulations on shipping companies. The Korean government is currently in the process of easing regulations on Korean shipping companies by lowering taxes levied to the level of those imposed in other shipping countries. It is expected that duties on vessel purchases will be eliminated from January 1997. Long-term plans include reviewing the introduction of the Second Registry System as part of broader measures to prevent Korean vessels from being flagged out.
The Vessel Safety Act has been revised so that bottom inspections of vessels over 20 years of age are conducted every year, rather than the previous practice of twice every five years. All foreign tankers more than 20 years old must have been inspected within one year prior to calling at Korean ports.
Berthing facilities. Korean public and private capital totalling US$11.7 billion will be invested by 1997 to construct berthing facilities at Pusang and Kwangyang ports, and US$ 69.1 billion for facilities at Kaduk Island near Pusan Port.
Norwegian shipping policies were substantially modified by Parliament during 1996, including a very substantial change in the tax regime for international shipping. The new regime provides for a tonnage tax which is comparable to arrangements in the Netherlands.
Tax incentives. To stimulate employment of seamen who have ties with Norway, the Norwegian tax reimbursement scheme will be continued and extended to include a larger part of the NIS fleet. The financial support for 1996 was NKr 339 million. The Government also proposed that depreciation rates for ships registered in the NIS should be increased from 20 to 23 per cent. In addition, it proposed that the Corporate Taxation Act be amended so that the rules concerning Norwegian-controlled foreign companies would not apply until the company had been under Norwegian control for two years, instead of one year as required previously. The amendments would only apply to those cases where Norwegian interests own between 40 and 60 per cent of the shares in the company.
Safety and environmental protection. Because of the growing number of sub-standard ships calling at Norwegian ports in recent years, an inter-ministerial working group was appointed to consider the problems such ships cause for the Norwegian authorities. Various recommendations made by the group, including a clearer demarcation of the responsibilities of shipping agents, would be followed up.
Poland became a Member of the OECD in 1996.
Polish transport policy. The Polish government has adopted an important document on the development of the Polish transportation system, including main goals up to 2000-2005. It includes as a specific component all principles of maritime policy, as well as possible measures for achieving the intended aims.
Regarding maritime transport, the government stressed that this sector of Polish transport fulfilled fundamental requirements necessary for integration with the European Union (EU). The Polish shipping industry has already fully developed harmonisation of legal regulation based on EU, UNCTAD, IMO and OECD standards.
Bill on ports and sea harbour. The main target of the Bill is to separate the management of port activities from operational services. It makes the Port Authority responsible for development and maintenance of port infrastructure as well as keeping navigation and safety systems on a proper level.
All commercial, handling, storing and other services and facilities should be delivered by private and independent companies. The same Bill also secures a stable and long-term basis for self-financing of Port Authorities as all port dues collected by Port Authorities become their untaxed incomes.
Upgrading of the international competitiveness of Polish maritime transport. This government programme introduced several support measures for Polish shipping companies, including tax, customs, depreciation and other instruments in order to improve their competitiveness. The programme serves to achieve the restructuring, commercialisation and future privatisation of shipping companies.
The Swedish Government presented the following proposals to the Parliament during 1996.
Common strategy to reduce air polluting emissions. This proposal is based on a Tripartite Agreement between the Swedish Maritime Administration, the Swedish Ports and Stevedores Association and the Swedish Shipowners Association. The Parties agreed in April 1996 on a common strategy to reduce air polluting emissions from maritime transport by 75 per cent before 2005. In order to stimulate the use of clean technologies on board, a model for differentiated shipping dues is under development. Dues from the most polluting ships will, according to this system, subsidise the dues of less polluting vessels. According to the Agreement, the Swedish ports will join the system on a voluntary basis in order to provide for stimulation of new technology by application of differential port fees. Swedish ports are not state-owned, and are free to set fees in accordance with environmental standards.
Support measures. Concerning the prolongation of support measures, i.e. repayment of seamen's taxes and certain coverage for social fees, the Government proposes a new definition to cover those entitled to receive support. The Government considers that the measures should be more flexible and competitive, and should cover Swedish flagged ships in foreign trade. Passenger ships would not as a rule be covered by the legislation.
One of the United Kingdom's key objectives from changes to its maritime regulation is to promote an efficient and competitive British shipping industry - for importers and exporters - while maintaining and improving the level of marine safety, and minimising the risk of pollution of the marine environment by ships.
Support measures. The United Kingdom does not favour financial support for shipping and has only a limited package of positive measures aimed at improving the competitiveness of British shipping. This includes assistance towards officer training. It has also simplified the registration law, and from August 1995 has liberalised officer nationality requirements on British ships. The UK government has also introduced roll-over relief on capital allowance balancing charges (an amendment to the latter, providing group relief, is subject to clearance from the European Commission).
Safety and environmental protection. In its commitment to deter sub-standard shipping from using UK waters, as well as to ensure that any sub-standard ships are quickly identified and efficiently dealt with, the UK's Marine Safety Agency has in recent years achieved or bettered the EC Directive on port state control. While the EC sets an inspection target of 25 per cent of foreign flagged vessels, during 1996/97 the Marine Safety Agency has an inspection target of 25-30 per cent.
The United Kingdom is firmly committed to improving pollution prevention from shipping. In January 1996 Lord Goschen, the UK Minister for Shipping, announced 18 measures to reduce discharges of waste from ships. These measures include improvement of the provision and use of port waste reception facilities, the tightening of regulations on legal discharge from ships, and the improved enforcement of waste regulations. These measures build on recommendations by an inquiry into pollution from shipping by Lord Donaldson of Lymington, of which 70 have been implemented either in part or in full. A Bill was introduced into the UK Parliament in October 1996 to implement the recommendations which require legislation.
The United States has recently introduced the following legislative changes.
Support Measures. In October, the President signed into law the Maritime Security Act creating a ten-year, US$1 billion programme, providing payments to owners and operators of US vessels, in return for a commitment to provide sealift support in time of war or national emergency.
Recognition of Foreign Classification Societies and Equipment Approval. The Coast Guard Regulatory Reform Act of 1996 allows a foreign classification society to inspect, certify and provide related services to US vessels, to the extent that the American Bureau of Shipping may perform the same services for ships documented in the country where the classification society has its headquarters.
Intermodal Safe Container Act of 1992. The law requires shippers of containers with a gross weight exceeding 10 000 pounds to supply a certification of weight and description of the contents to the first carrier of an intermodal movement. The Department of Transportation has delayed implementation until 2 January 1997.
Recent regulatory actions
JHTA. The Federal Maritime Commission (FMC) has issued a proposed rule that would apply sanctions against Japanese liner operators in response to the restrictions and requirements involving the use of Japanese ports applied by the Japanese Harbour Transportation Association (JHTA). This action follows an FMC enquiry into Japanese port practices.
Information on Carrier Agreements. The FMC is continuing the implementation of its new information collection rules for ocean carrier agreements. New "information form" requirements for new agreements took effect 19 April 1996. New periodic reporting requirements have also been established.
Illegal Rebating. In August, the Federal Maritime Commission expanded the geographic scope of the investigation started in 1994 into illegal rebating. The FMC has indications of increasing malpractice in a number of trades.
Maritime Strategy. In March 1996 the European Commission (EC) adopted a communication entitled "Towards a New Maritime Strategy", which outlined a new policy in this area and called for comments from interested parties.
The Agreement between the European Union and the Republic of Korea, which includes a significant article on maritime transport, was signed on 4 November 1996.
Proposal for a Council Directive on safety rules and standards for passenger ships. In February 1996 the EC adopted a proposal for a Council Directive on safety rules and standards for ships. This proposal is designed to establish harmonised safety requirements for passenger ships and high-speed passenger craft engaged on domestic voyages, and plying to and from ports of the European Union. It will aim to ensure that an equivalent high level of safety for passenger ships engaged on international voyages will be applied.
Proposal for a Council Directive on marine equipment. The Council adopted a common position by defining a legal framework which will make it possible to improve the safety level of marine equipment.
Proposal for a Council Directive on the minimum level of training for seafarers. This Council Directive is based on the international training requirements of the STCW Convention 1978, and provides for its future amendment in the light of the adoption by the IMO of any new instruments or protocols to the Convention.
Trans-Atlantic Conference Agreement (TACA). There was a major development in the consideration by the EC of the continued immunity of the TACA from exposure to EC anti-competition legislation.
In May 1996, the Commission adopted a "statement of objections" which envisages that it would adopt a decision addressing the following four restrictions of competition:
a) the price agreement relating to maritime transport;
b) the price agreement relating to inland transport services supplied within the territory of the Community;
c) the agreement between the parties of the TACA as to the terms and conditions on, and under which, they may enter into service contracts with shippers; and
d) the agreement between the parties to the TACA relating to the fixing of maximum levels of freight forwarder compensation.
In each of these instances the Commission proposed to withdraw the group exemption.
The Commission also proposed to find that the TACA parties are in a joint dominant position and that they abused that joint dominant position by altering the competitive structure of the market and by imposing restrictions on the availability of service contracts.
Legislative developments. The Russian Federation became a member of the Paris Memorandum on Understanding on Port State Control on 1 January 1996. It is expected to sign the CEC Memorandum on Baltic Ports in November 1996. The new Merchant Shipping Code is nearly completed. An English version of Port Dues and Charges has been published. The Russian Federation signed a shipping agreement with Albania on 19 September 1996.
Port facilities. A decision was taken in 1996 to start the construction of a terminal for export of Russian coal, with the capacity to handle 8 million tonnes per year, as a part of a new port complex in Luzhskayua Guba on the Baltic Sea. In addition, construction of a new petroleum export port will commence in 1997, with participation by foreign investors. The capacity of this port will be 5 million tonnes per year, and will be part of a larger port complex in the region of the city of Primorsk on the Baltic coast. By the end of 1996 a new terminal for car carriers and ro/ro type vessels will commence operations in the port of Novorssiysk. It is being constructed with the financial assistance of foreign investors. Work in this port will also start on increasing capacity of the petroleum berth for deep draft vessels.