Maritime transport

MARITIME TRANSPORT COMMITTEE - ANNUAL REPORT 1998

 

SECTION I. GENERAL

  • Objectives of the Committee

  • Membership

  • Principal Activities

  • Statistical Annex

SECTION II. ACTIVITIES UNDERTAKEN DURING 1998

  • Competition Policy as it Affects International Maritime Transport

  • Relations with Non-member Economies

  • Treatment of Support Measures

  • Review of the MTC's Common Shipping Principles

  • Safety and the Environment

  • Matters Related to the World Trade Organization (WTO)

  • 1999-2000 Programme of Work for the MTC

SECTION III. SHIPPING RELATIONS AMONG OECD COUNTRIES

  • Australia

  • Canada

  • Germany

  • Ireland

  • Japan

  • Korea

  • Mexico

  • Norway

  • Poland

  • Sweden

  • United Kingdom

  • United States

  • European Community

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.

All 29 members of the OECD are also members of the Maritime Transport Committee, and most participate regularly in its activities.

In 1998 the Committee elected a new Chairman, Mr. Ryoichi Sonoda (Japan). The Chairman, together with a number of Vice-chairmen (Germany, Korea and Norway) constitute the Bureau of the Committee This Bureau is supported by members of the extended Bureau, which comprises Australia, France, Greece, the United Kingdom and the United States; with the rotating seat currently being occupied by Sweden.

France continued to chair the General Working Party of the Maritime Transport Committee which, due to budgetary restraints, met for the last time in September .

The Russian Federation participated in meetings of the Maritime Transport Committee as an observer.

The Committee's principal activities in 1998 were:

  • Endorsement and release of an Action Plan which provides for industry-based initiatives to combat substandard vessels.

  • As part of long-term planning for future negotiations on maritime transport services within the World Trade Organization (WTO), continuation of work on cataloguing existing impediments to maritime and multimodal trade in non-OECD countries.

  • A Workshop with the Dynamic Non-Member Economies (DNMEs) to consider an Understanding on Common Shipping Principles.

  • A review of the Maritime Transport Committee's Common Shipping Policies.

Readers should note that the Statistical Annex which formed part of earlier MTC Annual Reports is now published separately, and will be available towards the middle of 1999 from the OECD's Maritime Transport Web site.

The Committee followed up on its November 1997 report on Workshop with China on Maritime Transport Policies and Practices in 1997 by approving additional work on competition policy as it affects liner shipping. The Committee's work consists of examining the increasingly complex and flexible co-operative arrangements found in international liner shipping and assessing how existing competition policies and regulations are coping with these developments, as well as examining the effects of possible changes to competition laws on shipping lines and their customers.

As part of the OECD's broader "outreach" activities aimed at encouraging dialogue with non-Member economies, the Maritime Transport Committee has undertaken regular consultation with a broad range of non-members since 1991.

DNMEs

During 1998, the Committee held a workshop with the DNMEs which included representatives from Argentina, Brazil, Chile, Hong Kong (China), the Indonesian business sector, Malaysia, Singapore, Chinese Taipei and Thailand.

The principal item on the agenda was the consideration of an Understanding on International Maritime Transport Principles. This Understanding between the MTC and the DNMEs would provide for a series of liberalising principles which would facilitate the freeing up of markets as well as bringing greater certainty and stability to the maritime sector. A similar Understanding has been in place between the MTC and the NIS/CEECs since 1993.

This was the first occasion on which the draft Understanding had been considered by representatives of the MTC and the DNMEs, and the workshop was successful in that it achieved agreement (on an "ad referendum" basis) on all the articles of the Understanding with the exception of one dealing with the commercial presence of foreign operators.

The Workshop decided to continue working on the remaining article out of session and to reconvene at another session in 1999 to finalise the Understanding. Once in place the Understanding would also provide a solid foundation for future discussions on maritime transport services at the World Trade Organization (WTO) as it covers the three pillars of maritime shipping services, maritime auxiliary services and intermodal transport.

China

The Maritime Transport Committee held its first Workshop with China on Maritime Transport Policies and Practices in 1997 . In 1998 the Committee reasserted the importance of future contact with China and endorsed a proposal to hold a renewed dialogue with China during 1999 if possible.

NIS/CEECs

In respect of its continuing dialogue with the New Independent States/Central and Eastern European Countries (NIS/CEECs), the Committee sought advice from those states on whether they were experiencing problems in their implementation of the 1993 Understanding on Common Shipping Principles .

The Russian Federation reported that, in respect of Principle XI, which deals with access to inland waterways, it had not been possible to liberalise the activity fully because of the large number of small river ports which had to be brought up to date. The Committee agreed to extend the transition period in respect of this Principle, on the understanding that the Russian Federation provide regular reports on progress.

At the time of writing, the Committee had not been informed of Ukraine's situation vis-à-vis the Understanding. With respect to Romania, while the Committee understands that the majority of the provisions of the Understanding have been implemented, there are still some issues that need to be clarified.

Full transparency on support measures provided by OECD Member countries is maintained by way of a regularly updated inventory which provides an overview of support machinery in those countries. The Committee decided as the second stage of a wider study on support measures, to categorise the support measures into two manning criteria:

i) flexibility of manning, and
ii) whether low cost manning is possible,

and three fiscal criteria:

i) income tax regimes without possibility of alleviation,
ii) income tax regimes with the possibility of alleviation,
iii) tonnage taxes,

and create a series of matrices from which comparisons could be drawn. This project will be undertaken as funding becomes available. Additional work will also begin in 1999 on establishing which of those support measures could have trade-distorting effects so that these can be further considered.

In 1987 the Maritime Transport Committee defined principles that govern the way in which the industry operates and ensures their enforcement. The principles are based on free access of fleets to international traffic, free and fair competition on shipping markets, lack of discrimination, and priority for multilateral dispute settlement. These principles are contained in the OECD Council Recommendation of 28 September 2000.

The first review of these Common Principles since their inception took place in 1998. The Committee concluded that the Principles have served, and continue to serve, a useful function in providing a solid underpinning of Member countries' liberalisation of shipping policies, in providing a clear benchmark for Member countries of the OECD, and in guiding OECD maritime discussions with third parties. The Committee also commenced consideration of certain additional principles which could be added to reflect recent maritime developments, for example, maritime auxiliary services, multimodal transport, safety and environment issues as they apply to maritime transport and possible actions to combat substandard shipping. Work will continue on these principles in the first half of 1999.

The Committee has, for some time, accorded priority to work on safety and the environment. After having considered the competitive advantages obtained from non-observance of applicable international rules and standards , it went one stage further to examine the role that could be played, directly or indirectly, by maritime transport players other than the shipowner in the shipping market to combat substandard shipping. Industry views were sought.

A discussion paper " Possible Actions to Combat Substandard Shipping by Involving Players other than the Shipowner in the Shipping Market " was released in 1998 and an industry Roundtable was held in September 1998 to discuss the proposals contained in the paper. The Roundtable was attended by government representatives and senior industry persons, who participated in a personal capacity. All representatives recognised that the initiatives proposed in the discussion paper leaned heavily towards industry self-regulation rather than towards additional regulations, and supported this approach.

The outcomes from that Roundtable were consolidated in an Action Plan which has received the endorsement of the Maritime Transport Committee. The Action Plan has the strong support of the International Maritime Organization, which welcomed the OECD initiative as a timely focus on the culture of safety along with its renewed emphasis on effective implementation of existing international regulations. The Action Plan will be progressively implemented in close consultation with relevant industry groups as well as governments of Member countries.

The Committee will establish in early 1999 an Internet page on this Web site which will include links to bodies (such as the International Association of Classification Societies and port state control authorities) that provide relevant, publicly available information related to substandard shipping.

In respect of preparations for the negotiations on maritime transport services, which are due to recommence at the WTO by 2000, the MTC re-affirmed the importance of undertaking further work in order to highlight where problems exist and how to bridge those gaps. In early 1999 the Committee will undertake a preparatory analysis to provide a sound and consistent negotiating base for its members, as well as providing wherever possible a bridge to key non-OECD economies which will participate in these negotiations.

In respect to the 1999-2000 Programme of Work, the Maritime Transport Committee decided to accord high priority to the following activities.

1. Look for practical solutions in areas of conflict in competition policy and law as it applies to international shipping:

  • Examination of co-operative arrangements in liner shipping and to test whether these are covered by national competition policies and laws. Examination of the effects on shipping lines of various degrees of explosure of these co-operative arrangements to competition law. Examination of the desirability of achieving compatibility in their treatment.

2. Aim to define non-distorting policies to strengthen the competitiveness of OECD Member countries' fleets in response to global competition:

  • Analysis of manning levels, wages and employment related conditions on OECD flag vessels.

3. Establish full transparency of support arrangements granted by Member countries as well as selected non-Member countries, to their shipping and shipping related industries:

  • Updating of the inventory of support arrangements on a yearly basis.

4. Monitoring shipping related policy developments in Member and non-Member countries:

  • Provision of comparative information on shipping-related policy developments and assessments of qualitative and quantitative developments in Member and non-Member countries.

1. Assist in the elimination of sub-standard shipping by providing support to the International Maritime Organization (IMO), and review and assess the role of the human factor in safety policy:

  • Examination of the issue of potential seafarer shortages and the availability and training of seafarers from various countries.

2. Deepen investigations into non-technical economic aspects and competitive advantages which accrue from non-compliance with international standards:

  • Collection and analysis of information regarding the eventual cost advantages to shipowners from partial or total non-compliance with the various international rules and regulations regarding pollution prevention.

1. Enhancing the Dialogue with Non-member Economies

a. Promote shipping principles acceptable to all main players in the field of maritime transport, with the aim of achieving a level playing field, mainly by encouraging the compatibility and transparency of shipping policies:

  • Finalisation of the Understanding on Common Shipping Policies with the DNMEs.

  • Continuation of the existing dialogue with the NIS/CEECs, especially to foster the greatest possible adherence to the OECD/NIS/CEEC Common Shipping Policies.

  • Monitoring of shipping developments in China and preparation for a second meeting.

  • Initiation of contact with India and some selected African countries.

  • Initiation of discussions with other selected non-Member countries as part of preparations for the resumption of negotiations on maritime transport services at the WTO.

b. Preparation for discussions on maritime transport services at the WTO:

  • Provision of background information and analysis to facilitate negotiations on maritime transport services when these recommence at the WTO.

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 the developments that took place in the maritime sector during 1998.

Privatisation. ANL Limited (previously the Australian National Line) has been largely privatised by the Commonwealth Government during 1998 and 1999. At the time of writing (4 February 1999), three of the five business units of the company have been sold to commercial operators, and negotiations are proceeding for the sale of the remaining two businesses.

The Commonwealth Government believed that continued government ownership of ANL Limited was inappropriate, and that the sales of its operating units provide these businesses with the best prospects of ongoing viability.

The Liner Division, which comprised the major part of the company, was sold to CGM and will operate under the name ANL Container Line Pty Limited.

Shipping Reform. In December 1998, the Minister for Transport and Regional Services, the Hon. John Anderson MP, established the Shipping Reform Working Group, including representatives of industry, to advise him on options for strengthening the competitiveness of Australian shipping. The Working Group is to report to the Minister in the first half of 1999. The Working Group is to:

  • assess progress in implementing the recommendations contained in the 1997 report of the Shipping Reform Group;

  • assess the benefit to the economy of the Australian shipping industry;

  • develop measures for monitoring labour and efficiency reforms; and

  • examine fiscal support to the shipping industries of other OECD countries and fiscal support provided to other Australian industries.

Review of the Navigation Act. In December 1997 the Government decided to undertake a two-stage review of the Navigation Act 1912, which regulates many aspects of Australian shipping. The first stage was completed during 1998. It resulted in draft legislation to remove employment-related provisions in the Act that are inconsistent with the concept of company employment and other features of modern workplace relations legislation. The draft legislation includes repeal of provisions dealing with:

  • prohibition on demanding or receiving fees for the supply of seamen;

  • prohibition on using the crew of a ship engaged in overseas voyages for handling cargo or ballast while the ship is in an Australian port;

  • requirements to enter into a prescribed form of articles of agreement covering conditions of employment; certain procedures for the discharge of seamen from service on a ship and methods for paying their wages; and

  • the Marine Council, which has the powers to investigate standards of ships' accommodation and provisions and the suitability of seafarers for duty at sea.

Legislative backing for employment arrangements made between seafarers and their employers is now available through the Workplace Relations Act 1996. This Act provides greater flexibility for employment arrangements to be determined at the enterprise/company level in a manner that suits the business of individual employers.

The second stage of the review will involve a comprehensive examination of remaining parts of the Act. This stage of the review will be based on national competition policy principles and will focus on those parts of the legislation that restrict competition or trading opportunities, are anachronistic or redundant or impose costs or confer benefits on business. Regulation of the coasting trade will not be examined in this review, as this is subject to separate scrutiny by the Shipping Reform Working Group (see above). The second stage of the review is expected to be completed in 1999.

The Canada Marine Act. The new Act was passed by Parliament on 11 June 1998, and is being implemented to achieve the objectives of the Government's National Marine Policy announced in December 1995. That Policy provides for significant change in management and federal involvement with respect to the St. Lawrence Seaway, Ports and Pilotage in Canada.

Each of these initiatives instils commercial discipline in Canada's marine services, thereby making it easier for service providers to operate according to business principles and be more responsive to stakeholder needs. In addition, it enables them to adapt to fast-changing market conditions and paves the way for efficiency gains necessary for them and their users to remain competitive in the global economy.

St. Lawrence Seaway. To increase efficiency, cut costs, and bring commercial discipline to the seaway, the Government of Canada continued pursuing commercialisation of the Great Lakes-St. Lawrence Seaway system. These operations were transferred to a not-for-profit corporation on 1 October 1998, in accordance with agreements signed between the Crown and the not-for-profit corporation that will operate and maintain the Seaway navigational assets for the next ten years. A new Crown corporation was established to manage, operate and maintain non-navigational assets that were retained by the Government.

Ports. Efforts are under way to establish eighteen (18) initial Canada Port Authorities by issuing them Letters Patent of incorporation during the first half of 1999. The 18 ports include Vancouver, Montreal, Halifax, and other ports of national significance. Port users will have a role in nominating the board members who direct the port authorities' operations.
Pilotage. Changes to the Pilotage Act were introduced which should improve the efficiency and financial stability of the four Pilotage Authorities. In addition, a forward-looking review of the pilotage system, including the certification process, training and licensing of pilots, compulsory pilotage areas, and dispute resolution, was initiated by the Canadian Transportation Agency.

Reform of the Canada Shipping Act (CSA). The Act deals with the activities of foreign ships in Canadian waters and Canadian ships in all waters. The government has pledged to modernise the Act through completing a large-scale reform. General principles for modernising the Act include simplifying the legislative and regulatory framework, and replacing outdated terminology. The reform of the CSA is being done in two tracks due to its size and complexity. The first track resulted in Bill C-15 which received Royal Assent on 11 June 1998. It included the revision of Part 1 (Ownership and Registration) and the addition of a new General Part. A simultaneous second track was given Cabinet approval. A second and final Bill, to replace the existing CSA; is anticipated to be introduced before Parliament early in 1999. This Bill will overhaul and reorganise the remaining sections of the Act.

Amendments to the Canada Shipping Act. Canada acceded on 29 May 1998 to the 1992 Protocols to the 1969 Convention on Civil Liability for Oil Pollution Damage and to the 1971 Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage.

Shipping Conferences Exemption Act, 1987 (SCEA). In light of recent developments on the world shipping scene, Transport Canada will undertake a review of its Shipping Conferences Exemption Act to determine if it might require any amendments.
Policy approval was given to develop a Marine Liabilities Act in order to adopt a new regime of shipowners' liability to passengers and a new regime for apportioning liability. It will also consolidate existing marine liability regimes into a single Act and provide a logical framework for related subjects such as fatal accidents. Legislation is expected to be introduced in Parliament in 1999.

Port state control. On 25 March 1998, Canada participated with over 30 nations in the signing of a Joint Ministerial Declaration on Port State Control. Ministers and representatives from member states of the Paris and Tokyo MOU, the European Community, and some international organisations, including the IMO, met in Vancouver on 24/25 March 1998, to discuss, within the context of Port State control, how best to eliminate sub-standard shipping.

The Declaration contains recommendations to increase enforcement measures and to harmonise procedures for inspecting, detaining and reporting substandard vessels. This international collaboration demonstrates a shared commitment to safer ships and cleaner seas, and acceptable working and living conditions on board ships.

Canada is a signatory to both the Tokyo and Paris Memoranda of Understanding on Port State Control. Canada became the first non-European signatory of the Paris MOU in May 1994. The Tokyo Memorandum, which covers Asia-Pacific States, was signed by Canada in December 1993. Canada and Russia are the only countries that are signatories to both memoranda.

Shipping Reform Programme. The Federal government attaches great importance to the preservation of its merchant fleet under German flag and to the competitiveness of German shipping enterprises in the coastal region. However, the measures applied to reach that goal have so far not been able to stop the shrinking tonnage of the fleet and the outsourcing of shipping companies. A Shipping Reform Programme has been put in place which aims to improve the competitive conditions for vessels operating under German flag in international trades and to strengthen the competitive position of shipping companies in Germany. The reform, which follows policies already implemented in other European countries and those proposed by the European Commission, addresses three major problem areas:

Financial aid. Direct financial contributions will no longer be paid. Instead, two kinds of tax incentives will be available for shipowners with their place of business in Germany, operating their own or chartered vessels under German register. In addition to the traditional method of taxation, on the basis of actual profits, shipowners can chose to be taxed on the basis of the gross tonnage of each vessel (the tonnage tax). In addition a new regulation on seafarers, income tax has also been introduced whereby 40 per cent of the income tax to be paid by the crew may be withheld by shipowners operating vessels under German flag.

Manning requirements. The existing strict regulations will be made more flexible. The main change in the regulation relates to nationality. While the captain, as in the past, has to be a German citizen, now only one or two nautical or technical officers of German or European nationality will be required to form part of the crew, depending on the size of the vessel.
Safety standards. In the past German shipowners had to comply with Germany's high national safety standards. Now these have been brought into line with those contained in international regulations put in place by the IMO and the EU.

The Irish authorities have brought in a special IR£5,000 income tax allowance for seafarers (working aboard vessels registered in the European Union that trade internationally) under the Irish tax code as a means of reducing EU seafarer labour costs. To qualify for the allowance seafarers must be absent from the State for at least 169 days a year.

The Irish authorities have also amended their Foreign Earnings Deduction Scheme to allow time spent by seafarers visiting a United Kingdom port in the course of an international voyage to count as time spent abroad for the purposes of accumulating 14 day blocks under the scheme.

Amendment of the Maritime Transportation Law. In the field of international maritime transport, conferences and other agreements among shipping lines have been exempted from the Anti-trust Law in Japan as they have been in other OECD Member countries. In order to further promote fair and free competition among carriers, as well as to secure a stable supply of ocean-going shipping services as a basis for sound development of international trade, the Japanese Government decided in March 1998 to review the current exemption system and to propose amending the Maritime Transportation Law.

The amendment, details of which are yet to be finalised, will establish an examination procedure which enables the Ministry of Transport (MOT) to execute correcting measures against individual conferences which are deemed unduly restrictive of competition.

Agreement on the Prior Consultation System. On 28 October 1997, the Japan Foreign Steamship Association (JFSA), the Japan Harbor Transportation Association (JHTA), the Japan Shipowners' Port Council (JSPC) and the Ministry of Transport (MOT) reached an agreement (four-party agreement), which provides improvements of the prior consultation system such as transparent and simplified procedures. Moreover, the JFSA, the JSPC and the MOT reached another agreement (three-party agreement), which refers to the creation and operation of the alternative system to the present prior consultation system.

FMC Sanctions. The Federal Maritime Commission (FMC) alleged that the prior consultation system for harbour transport services in Japan created conditions unfavourable to US shipping carriers and Workshop with China on Maritime Transport Policies and Practices in 1997 . In response to the Agreement on the Prior Consultation System, the FMC decided to suspend the sanctions. Japan has repeatedly requested the United States to withdraw the FMC's unilateral sanctions completely through various channels, including the consultations based on the Treaty of Friendship, Commerce and Navigation between Japan and the United States alleging that FMC's sanctions contradict the provisions of the Treaty.

Liberalisation and Deregulation of the Shipping Industry. The Korean government is pursuing ambitious deregulation policies in all sectors. Far-reaching revisions in the Maritime Transport Act have been attempted and will start to be enforced in 1999. Some of the measures that promote the commercial autonomy of shipping companies reflected in the revised Act are as follows: restrictions on the ocean-going shipping business will be eliminated; vessel registration procedures and conditions will be greatly relaxed; the freight filing system for ocean-going liner shipping business will be eliminated; and the system that prohibited large shippers from engaging in cargo transport business will be eliminated.

In the past, foreigners were only allowed to participate in ocean-going shipping business in the form of joint ventures within a 50 per cent share. However, from 1 January 1999, foreigners will be free to participate in Korea's ocean-going shipping business in the form of mergers and acquisitions or establishing new businesses. With the revision of the Maritime Transport Act, which will be enforced in 1999, foreigners will be able to establish branches freely (in the past they required approval) and register their vessels in Korea. The current vessel registration conditions, which are quite strict, will be greatly relaxed so that foreigners that establish an entity in Korea can own/register Korean vessels, regardless of the nationality of the representative or executives.

Commitments made prior to joining the OECD. The designated cargo system which obligates the use of national flag vessels in transporting bulk cargo was to be completely eliminated at the end of the year. This was a commitment made by the Korean government in 1996 during Korea's negotiation for OECD membership. The seven items in the designated cargo list had been gradually eliminated and only three items remained (liquefied gas, iron ore, coal) and would be eliminated at the end of 1998.

The Shipping Industry Promotion Act. This Act was enacted to promote development of the national fleet for the purpose of securing stable transport capacity for Korea's trade cargo and was to be repealed at the end of 1998. As a result, the legal basis for direct government support to national shipping companies, including subsidies, would no longer exist. Proposals to revise the Maritime Transport Act and the Ship's Act and to repeal the Shipping Industry Promotion Act (which streamline liberalisation and deregulation in the shipping industry, including eliminating the designated cargo system) were submitted to the National Assembly in December 1998. However, due to internal reasons within the National Assembly, the proposals have not yet been approved and are still pending deliberation. The proposals are expected to pass the National Assembly and be enforced during the first half of 1999.

The International Vessel Register System. This second register was introduced in Korea as a result of the enactment of the International Vessel Register Act in July 1997. The implementation of the system started in March 1998. Accordingly, ocean-going vessels that are registered under the International Vessel Register System will have more flexibility in hiring foreign seafarers and enjoy tax benefits.

Port privatisation. As part of its port privatisation policy, Korea has introduced, and is implementing, the Workshop with China on Maritime Transport Policies and Practices in 1997 . Eight major trade ports, including Pusan Port, Inchon Port, and Ulsan Port have introduced the TOC system. Four other ports, including Mokpo Port and Donghae Port, are expected to introduce the system as soon as conditions are appropriate.

Korea is trying to establish a two-port system by developing Pusan Port and Kwangyang Port as the logistic centre of Northeast Asia in the 21st century. To achieve this plan, construction on phase one of the project (four berths to accommodate 50 000 ton vessels, handling 960 000 TEU annually) at Kwangyang Port was completed in December 1997, and operations have begun. By the year 2001, construction of eight berths in phase two will be completed. Seven berths at Pusan Port were added in 1997 and the second phase of the project includes the completion by the year 2001 of a container terminal with 24 berths.

The opening of international markets. In the case of Mexican shipping companies, this has allowed the establishment of alliances such as the merger of Mexican Maritime Transportation (TMM) with American President Lines in the container trade with Asia; as well as the concession of the Northwest Railway to the Mexican Railway Transportation Group, branch office of TMM, linked to Kansas City Southern Industries.

TMM and CP Ships created a joint company in July 1998. These two leaders in container maritime transport agreed to form, on an equal basis, a company that includes the container transport business of TMM, Lykes Lines and Ivaran Lines. It has the capacity to move one million containers (20 TEUS), which places the company among the 15 largest in the world. It is located in Tampa, Florida.

Trade with China. Mexico subscribed in 1984 to a Co-operation Agreement to Facilitate Maritime Traffic with China which requires both parties to adopt appropriate measures to facilitate and spur sea transport, docking, loading, unloading and stowage, piloting and towing, in order to avert unnecessary delays, and within their possibilities to enhance and simplify customs procedures and other current permits in ports, which have worked, so far without any trouble.

Tax reimbursement scheme. This scheme for seafarers has been reduced in scope by a decision of Parliament taking effect from the second half of 1998. The percentage of gross salary which is reimbursed has been reduced from 20 to 12 per cent. In addition, the catering personnel on ferries in the NOR register and seafarers on board shuttle tankers in the NOR register have been exempted from the scheme. As a consequence of these adjustments, the allocated amount for the tax reimbursement scheme was reduced from NOK 251 million for the first half of 1998 to NOK 164.1 million in the second half of 1998.

The national shipping policy document. This document was elaborated in order to harmonise Polish rules and regulations with European Union acquis communautaires. It was presented during Poland/EU pre-accession talks (screening).

Reform of the shipping sector. The main problem of the Polish shipping sector is the poor economic condition of shipping companies. The sector is state-owned. In view of the urgent need to adjust this sector in the face of international competitiveness, the Ministry of Transport and Maritime Economy adopted a draft package of measures and instruments aimed at pushing ownership transformation and providing public aid and support in line with EU document Community Guidelines on State Aid to Maritime Transport - 97/C 205/05. This package, called "The National Shipping Policy -- Objectives and Guidelines", is to be endorsed by the Polish Government in 1999.

Agreements. Poland initialled draft agreements on co-operation in maritime transport with South Africa and Morocco. Poland also signed with Cyprus a protocol to the existing agreement on co-operation in maritime transport.

Ports. As a result of the implementation of a new Law on Seaports and Harbours, new port tariffs are in force in the seaports of Szczecin-Swinoujscie and Gdansk.

Support measures. Swedish flag vessels have long experienced problems in competing against other flags. Support has been given to shipowners but this has not been enough to hinder out-flagging. During the last two years, 35 Swedish vessels were flagged out to other registries, leaving about 200 vessels in the Swedish register.

The Swedish Parliament has from time to time prolonged support measures such as repayment of seamen's taxes and some coverage of social fees. Payment can be made to a Swedish applicant who has seamen employed on board Swedish ships. The ships must be used in international traffic of importance for Swedish foreign trade. In principle, no support will be paid for crews on passenger ships or oil platforms. A further prerequisite for support is that provision for trainees is made onboard.

For the period 1999-2001, Parliament decided in December 1998 on a rise in the coverage of social fees from SEK 45 000 to SEK 58 000 per seafarer and year. This will also be applied for temporary less than six months employees who are not citizens of the EU and EFTA countries. Concerned parties on the labour market have agreed on terms and conditions for those employees.

The UK's maritime administration. The administration has been reorganised. The Shipping and Ports Directorate sets the policy framework and is part of the Department of Environment, Transport and the Regions (DETR). DETR was formed in June 1997 when the former Departments of the Environment and Transport were merged. At the operational level, DETR's policies on marine safety, search andrescue, and preventing andresponding to pollution from ships have, since 1 April 1998, been implemented by the Maritime and Coastguard Agency (MCA). The new agency results from the merger of the former Marine Safety Agency (MSA) and the Coastguard Agency (TCA) and should improve the co-ordination and delivery of services. The Department's Marine Accident Investigation Branch (MAIB) investigates accidents involving UK vessels and any vessel in UK waters.

Support measures. The United Kingdom maintains a limited package of positive measures aimed at improving the competitiveness of British shipping. The Government's shipping paper, "British Shipping: Charting a New Course", which was published on 16 December 1998, sets out a long-term and integrated strategy for revitalising Britain's shipping industry. Its 33 inter-related actions are designed to develop the United Kingdom's maritime skills, secure British seafaring employment, enhance the United Kingdom's attractiveness to shipping enterprises and gain safety and environmental benefits.

Training. The Government introduced from 1 April 1998 a new Merchant Navy training scheme - Support for Maritime Training (SMarT) - to improve the delivery of training support by integrating the existing Government Assistance for Training (GAFT) and Development of Certificated Seafarers (DOCS) schemes into a new modular training scheme to operate under a single contract and budget.

Safety. The United Kingdom is monitoring ferries operating to and from UK ports to ensure compliance with the timetable for implementing the higher standards specified in the Stockholm Agreement. It has also worked within the European Community (EC) on the introduction of further measures to improve control over the operation of such vessels. All UK-registered ships which were required to comply with the International Safety Management (ISM) Code by 1 July 1998 did so. The EC Directive on port state control has recently been amended to ensure that vessels which are inspected in an EU port and found not to have valid ISM Code certification on board will be detained.

Environmental Protection. Lord Donaldson was appointed on 16 July 1997 to carry out an independent review of marine salvage and intervention operations following the grounding of the tanker Sea Empress in February 1996. He submitted his report on 20 November 1998. It is expected that his report will be published at the end of February 1999.

Legislation. The United Kingdom has passed legislation permitting ratification of the 1996 Protocol to amend the 1976 Convention on Limitation of Liability for Maritime Claims (LLMC). In order to ensure that the same limits apply to all relevant claims considered by courts in the United Kingdom, as a first step the United Kingdom has denounced the 1976 Convention. Ratification of the 1996 Protocol will follow early in 1999.

The 1996 Protocol allows claims arising from the death of, or injury to, passengers to be exempted from limitation under the revised LLMC Convention. The United Kingdom's implementing legislation will give effect to this exemption. The United Kingdom is also taking steps to increase the limits of liability in respect of such claims in the context of the 1974 Athens Convention.

Ocean Shipping Reform Act. The Ocean Shipping Reform Act became law in October 1998 and will bring a number of changes to the Shipping Act of 1984 as of 1 May 1999. Carriers and conferences will no longer have to file their rates with the FMC but will have to make them available to the public electronically. One or more shippers will be able to negotiate confidential service contracts with shipping lines and conferences but not with NVOCCs. Service contracts must still be filed with the FMC but fewer of the terms will be made public. Similarly situated shippers no longer have the automatic right to the same service contract terms. Conferences may no longer prohibit or limit service contracts. The Federal Maritime Commission is preparing implementing regulations for public comment.

Safety and Environmental Protection. As of 16 September 1998, vessels of at least 500 gross tons that carry more than 12 passengers, tankers, bulk freight vessels and high-speed cargo vessels of at least 500 gross tons, must provide their ISM Code certification status 24 hours before entering a US port. Compliance by foreign-registry ships will be through port state control inspections. If a vessel without ISM Code certification is found in a US port, it will be detained, its cargo operations will be restricted, civil penalty action will be taken and its country of registry and classification society will be notified.

China. On 12 August 1988 the FMC opened an investigation into laws, rules, and policies of China that appear to have an adverse impact on US shipping, and may merit further action under Section 19 of the Merchant Marine Act, 1920, or the Foreign Shipping Practices Act of 1988.

Asian Shipowners' Forum. On 29 May 1998, the FMC ordered several US and foreign shipping lines to furnish information and documents about their participation in March 1997 and March 1998 meetings of the Stabilisation of Trade Committee of the Asian Shipowners' Forum. This is to assist the Commission in determining whether the activities engaged in by the Asian Shippers' Forum and the ASF Stabilization Committee are such that they should be required to file an FMC agreement, and their meetings be subject to minutes filing requirements. Second, the Commission is concerned about the possibility that the ASF Stabilization Committee may be serving as an unmonitored forum for discussions and agreements among ocean carriers and carrier groups, concerning collective pricing and/or collective capacity management that could affect the US transpacific trades.

Pacific Cargo Space and Pricing Practices. The FMC opened an investigation on 21 September 1998 into possibly unlawful cargo space allocation and pricing practices involving the eastbound trade from Asia.

Harbor Maintenance Fee. The US Government is preparing a proposal for a harbour services fee to replace the harbour maintenance fee. The proposal will be included in the fiscal year 2000 budget which the government plans to submit to Congress in February 1999.

Tonnage Taxes on Brazilian Shipping. In response to the discriminatory tax and duty preferences for Brazilian imports carried on ships in the REB register, the United States has removed the exemption granted to Brazilian ships from the payment of special tonnage tax and light money.

Asian Longhorn Beetles. The Department of Agriculture announced emergency regulations, effective 17 December 1998, that ban entry into the United States of untreated solid wood packing materials from China, the source of the beetle infestation.

Negotiation of maritime agreements. Following the Recommendations addressed by the Commission in January 1997, on 12 February 1998 the Council of Ministers adopted directives for the negotiation of maritime agreements with China and India.

Entry into force of agreements. The following agreements with third countries, containing substantive provisions on maritime transport, recently entered into force.

  • 1 December 1997: Partnership and Cooperation Agreement between the EU and its Member States and the Russian Federation

  • 1 February 1998: Europe Agreements with Estonia, Latvia and Lithuania

  • 1 March 1998: Partnership and Cooperation Agreement between the EU and its Member States and Ukraine.

Joint venture. On 6 February 1998 the Commission published in the Official Journal a notice of intention to exempt (without conditions attached), in accordance with Article 85(3) of the Treaty, the proposed joint venture between P&O and Stena. Interested parties were invited to send their comments within 30 days from the date of publication of the notice.

P&O and Stena are trying to put some of their assets into a new company which will operate ferries on a limited number of routes (Dover/Calais and Newhaven/Dieppe for passengers, and Dover/Zeebrugge for freight). The parties will continue to operate separately on the Brittany/UK routes and the North Sea routes.

Maritime Safety. Following the line of conduct outlined in its 1997 communication, "Towards a maritime strategy", the Commission concentrated its efforts upon the improvement of the existing legislative framework with a view to intensifying proper actions against sub-standard shipping and promoting the idea of "quality shipping". The latter strives to render all the actors playing a role on the shipping scene more responsible and to initiate self-regulatory codes of behaviour at the shipping industry level. In mid-February 1998 the Commission presented a new proposal for a Council Directive on conditions for the operation of regular ro-ro ferry and high passenger craft services in the Community.

Strengthening of the Port State Control regime. In April 1998, Council Directive 98/25 was adopted to amend Directive 95/21/EC on Port State Control in order to enforce the ISM Code of the IMO within the European Union. Ships for which a Port State Control inspection reveals a lack of ISM certification will be detained and possibly banned from all EU ports.

Green Paper on Ports and Maritime Infrastructure. A Green Paper on Sea Ports and Maritime Infrastructure was adopted by the Commission on 10 December 1997. This Green Paper addresses a wide number of issues related to the port sector, namely, the port element in the multimodal chain, charging and financing of port and maritime infrastructure, port services, safety and environmental issues. The purpose of the paper is to provide a basis for discussion on the port sector which should subsequently lead to the development of a set of coherent policies on individual port issues which should improve the overall performance of the sector.

A conference to discuss the future perspective for European ports took place on 7-8 May 1998 in Barcelona, where all the major players in the sector came together to discuss the paper and the issues raised.

 

 

 

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