SECTION III. SHIPPING RELATIONS AMONG OECD COUNTRIES
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.
The Slovak Republic became a member of the OECD in December 2000. All
30 Members of the OECD
are also members of the Maritime Transport Committee, and most participate regularly in its activities.
In 2000 Mr. Ryoichi Sonoda (Japan) continued as Chairman and the
remained unchanged. However, in January 2001 the MTC elected a new Chairman, Mr. Bruce Carlton (United States) and three Vice-Chairmen (Australia, Korea and the Netherlands) and they constitute the Bureau of the Committee. This Bureau is supported by members of the extended Bureau, which comprises Canada, Denmark, Greece, Japan, and the United Kingdom
The Russian Federation participated in the work of the Maritime Transport Committee in its capacity as observer.
The Committee's principal activities in 2000 and early 2001 were:
Adoption of amendments to the MTC Common Shipping Principles
Consideration of regulatory reform in the maritime sector
Investigation into cargo liability regimes
The costs to users of substandard shipping
Relations with Non-member Economies
Technical work in preparation for the resumption of the WTO negotiations
Readers should note that, due to the varying availability of data, the Statistical Annex is published separately, and will be available towards the middle of 2001 from this site under the heading "
At the end of 2000, the OECD Council formally adopted the MTC's proposed amendments to its
Common Principles on Shipping Policy
. The Committee initiated a review of its
in 1998, and in 1999 agreed upon three additional principles covering: i) access to and use of maritime auxiliary services; ii) access to, use and provision of multimodal transport services and iii) measures related to safety, the environment and substandard shipping.
In May 2000 the MTC held a
with the OECD Committee for Law and Policy, to consider the findings of a discussion paper prepared as part of this examination. The Workshop was attended by maritime regulators, competition authorities, shipowners and shippers, who exchanged views on the report, in particular on the section that dealt with competition policy aspects of regulatory reform.
At the end of the Workshop, the Chairman advised that the OECD would undertake further work on the positive and negative effects of common pricing, and the impact of discussion and stabilisation agreements on shippers and shipowners. This will include an assessment of the effects of the removal of anti-trust immunities. A further Workshop was foreshadowed to be held towards the end of 2001 to consider the outcome of that work.
In 2000 the MTC sought to identify those elements of existing cargo liability regimes for which there is no general agreement, and to attempt to find workable formulations that would be broadly acceptable to all parties. Work was undertaken by a consultant to identify key elements in existing cargo liability regimes (principally the Hague-Visby and the Hamburg Rules).
, and its recommendations, was considered by government and industry at a Workshop on 25-26 January 2001. The Workshop represented an effort to bring some additional clarity as to which steps may be taken in order to bring about a new regime that may be more widely acceptable to both governments and industry.
As the Workshop was an avenue to establish whether there might be some common policy ground or convergence which may offer an avenue to a future diplomatic conference to resolve some of these hitherto divisive issues, participants were invited to participate and speak in a personal capacity. It was made clear during the Workshop that the outputs from the Workshop would not necessarily reflect the views of either the MTC's member governments nor of the industry representatives, and would not be binding on any party.
offer some guidance as to the policies that may be necessary to maximise the formulation of a more comprehensive, and generally acceptable, form of cargo liability regime. If nothing else, they may offer guidance on alternative texts that may be available in order in the end to arrive at acceptable compromise solutions.
The elimination of substandard shipping and the promotion of quality shipping feature as a high priority in the programme of work of the Maritime Transport Committee. The Committee has over recent years worked alongside the IMO to give political support to that organisation's efforts towards full compliance with accepted international rules and standards by all parties concerned.
The Committee has advocated greater self-regulation by industry and has sought to stimulate the maritime industry to actively participate in the campaign against sub-standard shipping through an
, which essentially encourages greater awareness, industry self-regulation and freer exchange of information.
However the MTC has experienced a lack of enthusiasm on the behalf of the industry in carrying forward some of the initiatives in this Action Plan. This has led the Committee to go one step further by assessing whether individuals in the industry face real costs if they deal with substandard shipping, or whether through insurance or other arrangements these costs are diluted and spread widely throughout the industry and/or community.
concluded that the majority of parties that are directly involved in the use of substandard shipping do not apparently incur significant costs that they need to bear themselves, principally because of cover provided by the insurance industry. The Committee decided that comments on the report would be invited from the industry and governments, and the report and comments would be forwarded to the IMO in support of its work.
Furthermore, the MTC agreed to focus its attention on providing sound policy and economic analysis of ways to address the circumstances that reduce industry incentives to participate directly in the elimination of substandard shipping. In this context the Committee agreed that one area of investigation could be the role of the insurance industry, looking at, inter alia, current practices on the provision of insurance cover to vessels that may be substandard.
The Committee also agreed to develop the concept of incentives for responsible shipowners and other parties in order to encourage them to attain higher standards, and to be able to better combat the non-market competition of operators and users of substandard shipping. Work on the above mentioned issues will constitute the basis of a policy statement on substandard shipping. It is hoped that such a statement could be agreed upon at the October 2001 meeting of the MTC.
The Committee reaffirmed the importance it attaches to the
, which aims to develop and maintain contact with non-OECD economies.
The MTC has concluded Understandings on Maritime Principles with both the
, and has held successful Workshops with
. The Committee aims to build upon the existing dialogue with non-members through frequent exchanges of information on shipping issues.
The MTC extended invitations to Egypt, India, Israel, the Philippines, and South Africa, as important non-OECD maritime economies, to join future discussions.
The MTC is undertaking a
range of technical work
in preparation for the possible resumption of negotiations on maritime transport services at the
World Trade Organization
(WTO). First, an initial assessment was made of the importance of multi-modal transport in order to establish a case (for the benefit of trade negotiators) for including multi-modal transport services as an integral part of the negotiations on maritime transport services. The Committee actively sought to involve key industry stakeholders in the preparation of the analysis, but met with limited response. However, if detailed information becomes available from industry, further work could be undertaken on appraising maritime negotiators of the importance of including multi-modal logistic services in those negotiations.
Progress was also made on the elaboration of country profiles outlining general characteristics of maritime service markets and highlighting restrictive trade practices.
The Committee decided in 2000 to enhance co-operation with industry through regular half-day seminars on topics specified by the maritime industry.
The Committee had a very useful exchange of views with industry representatives at a seminar in January 2001 organised by the Business Industry Advisory Committee (BIAC) on how information and communication technology can be used to improve door-to-door transport chains. The Committee welcomed the opportunity to learn more about present day practices and possible future developments in this area, as well as the opportunity of being exposed to issues of importance to industry.
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 2000.
Trade Practices Act 1974: On 23 December 1999 the Government announced its decision to retain Part X as recommended by the Productivity Commission, but with some additional amendments to improve the application of competition policy to international liner cargo shipping. Details of the enquiry and the final report can be found on the
Productivity Commission's website
The Trade Practices Amendment (International Liner Cargo Shipping) Bill 2000 received Royal Assent on 5 October. These amendments, apart from amendments concerning inwards liner shipping conferences, came into force on 2 November 2000. The amendments concerning inwards liner shipping conferences will come into force on 2 March 2001.
Review of the Navigation Act: The review commenced in 1998-99. The first stage, examining employment arrangements of seafarers, was completed in 1998. A Bill to implement this phase was passed by the House of Representatives in March 1999, but extensively amended by the Senate in March 2000. Further action on the Bill will be considered in the context of the Government's decision on the second stage of the Navigation Act's review (see next paragraph).
The second stage examined remaining aspects of the Act, except Part VI dealing with the coastal trade. Coastal trade issues were reviewed in the report of the Shipping Reform Group. The final report was completed in June 2000.
Great Barrier Reef Review. In November 2000 the Australian Government established a Strategic Review of Great Barrier Reef Ship Safety and Pollution Prevention Measures in November 2000. The Review is being co-ordinated by the Australian Maritime Safety Authority (AMSA).
The Review will examine measures to promote ship safety and pollution prevention in the waters of the Great Barrier Reef. In particular, the Review is required to recommend the most appropriate way of extending compulsory pilotage within the Great Barrier Reef region. The Review will consult with interested parties including the maritime industry, indigenous communities, environmental groups, and relevant Federal and State Departments and agencies.
Details about the terms of reference for the Review and the discussion paper of the issues can be found on the
AMSA Web site
. The final report of the Review is due to be delivered to the Minister by 29 June 2001.
Reform of the Canada Shipping Act: Bill C-15, an Act to Amend the Canada Shipping Act (Track I), was passed on June 11, 1998. On 25 February, 2000, certain provisions of this Act dealing with ship ownership, registration, and mortgages came into force. The Act constituted Track I of the complete modernization of the Canada Shipping Act (CSA) which is being done in two parts. The CSA is the principal legislation governing the operation of Canadian vessels, as well as the operation of foreign vessels, in waters under Canada's jurisdiction, as well as Canadian vessels anywhere in the world. In addition to modernizing shipping legislation in Canada, the Act promotes safety and economic performance of the marine industry.
On 8 June, 2000, the Transport Minister introduced Bill C-35 (Canada Shipping Act, 2000) into Parliament. It addressed a wide range of topics including marine safety issues, environmental pollution prevention, and other maritime matters. The initiative is Track II of the overhaul of the Canada Shipping Act undertaken to simplify the Act and make better use of regulations, standards incorporated by reference in the Act, or through the use of administrative guidelines as was done with the new Ship Registration and Tonnage Regulations. The Bill died when the federal election was called in the autumn of 2000. It is anticipated that it will be reintroduced in the new Parliament early in 2001. Further information concerning marine safety legislation can be found at the following address:
Marine Liability Act: On 2 March, 2000, the Transport Minister introduced Bill S-17, the Marine Liability Act. The Bill combined existing and new marine liability regulations into a single framework for claims related to personal injuries, fatalities, pollution and property damage. The Bill would have adopted a new regime of shipowner's liability to passengers and a new regime for apportioning liability. It also would have consolidated existing marine liability regimes into a single Act. If passed it would have provided a uniform method for establishing liability balancing the interests of shipowners and passengers and applicable to all incidents governed by Canadian maritime law. The Bill died when the federal election was called in the autumn of 2000, but has since been reintroduced in Parliament on 31 January, 2001.
Delegation to Classification Society: An agreement was reached in early December 2000 with one of the world's major ship classification societies, Lloyd's Register of Shipping. The agreement allows the organization to carry out marine safety inspections and issue statutory certificates ' indicating compliance with Canadian regulations and, where appropriate, international agreements ' on behalf of the Government of Canada under the Canada Shipping Act. The option of having Lloyd's conduct statutory inspections is being phased in. Initially, the option is available to bulk cargo vessels operating on the Great Lakes. Transport Canada maintains an active oversight role through safety audits of ships and companies that participate in the program. Provided results are satisfactory, the program could be expanded to other dry cargo vessels, tankers, tug boats, fishing vessels and passenger ships. Transport Canada is having discussions on similar agreements with other major international ship classification societies active in Canada.
Sustainable Development: Transport Canada's first Sustainable Development Strategy (SDS) was tabled in Parliament in 1997. In order to assist in the preparation of the Department's second SDS, the Department issued a Discussion Paper entitled "Towards Sustainable Transportation". The Paper was designed to achieve the following objectives:
Provide an assessment of the Department's first Sustainable Development Strategy;
Identify the key sustainable development issues facing Transport Canada and the transport sector; and
Propose a number of challenges the Department should address, and suggest actions or commitments that could be undertaken.
A series of public consultation sessions was held to gain input on the Discussion Paper. The Department's second SDS was subsequently prepared for tabling in Parliament in 2000 but due to the fall federal election tabling was postponed until early 2001.
Proposed Programme. The Finnish government has declared its intention to draw up a programme to improve the competitive position of Finnish merchant vessels.
On 21 June 2000, the Cabinet Committee on Economic Policy adopted measures to ensure the competitive position of Finnish merchant vessels. As a result of this, from 1 July 2000 the parallel register subsidy with regard to cargo vessels has been extended to cover, in addition to amounts equivalent to sailors' taxes withheld in advance and social security fees paid by the employer, also those parts of the sailors' pension insurance premiums that are fully paid by the employer as well as certain social insurance fees.
Tonnage tax. Finland is also planning to apply tonnage tax to shipping companies. This means that companies would be exempted from company taxes and, instead, would pay tonnage tax according to the cargo-carrying capacity of the vessel. Details of this legislation are now being discussed with the Ministry of Finance, which is responsible for its preparation.
Manning costs. In the passenger vessel sector, employer and employee organisations have agreed to reduce manning costs on Finnish passenger vessels by 10 to 15 per cent. This brings manning costs to the same level as those of Swedish passenger vessels. However, Sweden plans to include passenger vessels in their subsidy system either from the beginning of 2002 or already from 1 July 2001. The Finnish government is paying close attention to the situation, because the Swedish decision will have a major impact on any Finnish measures in this sector.
Ship registration. According to an amendment to the Maritime Code, which entered into force on 1 January 2000, EU nationals, as well as nationals of countries parties to the EEA Agreement, can register their ships with the Finnish ships register provided that the requirement of 60 per cent ownership is fulfilled.
Amendment of the Port Transport Business Law. The Ministry of Transport submitted a bill to amend a portion of the Port Transport Business Law in February 2000, which passed the National Diet on May 11, and was enforced on 1 November. Throughout the various reforms triggered by this revision of the law, it is believed that deregulation, starting at the twelve major container ports in Japan, will create a competitive environment among the industry. It is also expected that this will enhance the service levels provided by the industry to their customers. For further information:
Shipping Industry Review. On 31 August 2000, the Minister of Transport, Hon Mark Gosche, announced the formation of a Shipping Industry Review, a short-term inquiry into the future of the New Zealand shipping industry. This action was in response to concerns about the sustained decline in the New Zealand flag fleet and New Zealand operated fleet over a number of years. The Review was chaired by a former Chairman of the Maritime Safety Authority and was comprised of a cross-section of industry representatives.
The Review had an objective of making strategic recommendations to the Government on what measures could be taken to increase New Zealand's participation in shipping and maritime service provision.
The Review reported its findings to the Minister of Transport in mid-December 2000. The Government will be considering the recommendations of the Review during the first half of 2001.
Two of the central aims of the Government's shipping policy are to encourage UK ship registration and to promote the employment and training of British seafarers. The Government aims to develop a shipping environment in which UK shipping companies will be encouraged to develop their shipping operations and register their vessels in the UK, and to develop the UK's maritime skills base by employing and training increasing numbers of British seafarers.
To help achieve this, the UK Government introduced a tonnage tax regime as part of the Finance Act 2000. Companies have until 27 July 2001 to opt into the tax. A key feature of the tonnage tax, unique to the UK, is the minimum training obligation. By the end of 2000, 17 companies had applied to DETR for approval of their training commitment, the first step in entering the tonnage tax regime. This equates to over 200 training places.
Through its work in IMO and the EU, and its support for the Quality Shipping Campaign, the United Kingdom continues to play an active role in international efforts to advance maritime safety and environmental protection. In particular, it has been working to encourage all parties in what might be called the 'responsibility chain' to accept that they have an important part to play.
One of the concrete initiatives to emerge from the Campaign has been EQUASIS ' an on-line database that gives charterers and others in the maritime industry access to safety-related information on the quality of the world's merchant fleet. The UK has offered to provide financial support for EQUASIS and is a member of its Supervisory Committee.
The UK (along with Denmark and the Netherlands) has played a leading role in IMO to amend the MARPOL Convention to accelerate the phasing-in of double hull tankers on a global basis. It has also worked closely with other EU Member States to bring forward a number of safety measures (e.g., on Port State Control and Classification Societies) following the loss of the Erika in December 1999.
Ocean Shipping Reform Act. On 23 January 2001 the Federal Maritime Commission announced the issuance of a Notice of Inquiry ("NOI") seeking information and comments from interested parties regarding the impact of the Ocean Shipping Reform Act of 1998 ("OSRA") on all sectors of the international liner transportation system. The analysis and evaluation of comments received will be incorporated into the Commission's ongoing OSRA Impact Study, which is scheduled to be released this summer. The two year study will examine several key areas including (1) service contracting under OSRA, (2) the activities of carrier agreements, (3) the impact of OSRA on ocean transportation intermediaries, shippers' associations, and other affected parties, and (4) tariff accessibility and accuracy. An
was issued on June 22, 2000.
Quality shipping. On 25 September 2000, the US Coast Guard announced a new program called
to reward high-quality foreign ships and to provide incentives to others to improve.
On 6 March 2000, the
U.S. Supreme Court
issued a ruling on the INTERTANKO challenge against rules enacted by the State of Washington on oil spill protection. The court held that the comprehensive federal regulations on oil tankers pre-empted Washington state regulations on general navigation watch procedures, crew English language skills and training, and maritime casualty reporting. The Supreme Court returned the case to the lower courts to determine whether federal regulation also pre-empted the other Washington state regulations. Recalling that the United States Government did not participate in the case until appeal, the Supreme Court suggested the lower courts to account for the international interests at stake.