New E.U. Port Services Regulation Draws Criticism

Port of Rotterdam

Published Mar 8, 2016 5:48 PM by The Maritime Executive

Draft rules designed to boost the efficiency and cut the cost of services supplied at E.U. maritime ports, such as mooring and towage, were voted by the European Parliament on Tuesday. 

Ensuring transparency in the setting of fees for using port services and infrastructure, and in any public funding that ports receive, should help to prevent price abuse and market distortions and thus boost trade, Members of the European Parliament (MEPs) say. 

The E.U. Commission’s initial proposal for the Port Services Regulation would have made free market access the general principle for the supply of port services, but MEPs insist that “a single system is not be appropriate, as the E.U. port system includes many different models for the organization of port services.” They therefore amended the proposal so that “existing port management models established at national level can be maintained.”

“We have been able to dismiss the forced free market access to port services. Especially for safety and security concerns, ports must be able to decide on the organization of port services,” said rapporteur Knut Fleckenstein. “For the first time in the course of the long discussions on the port package, we have the ports, the terminal operators and the unions on board,” he said.

Shipowners Disappointed

Overall, European shipowners are disappointed with the text, says the European Community Shipowners’ Associations. The text which was supposed to address a long-standing request from port users to ensure that the freedom to provide services, one of the cornerstones of the Treaty of the European Union, also applies to ports. 

Shipowners are puzzled by the fact that the chapter on the organisation of ports still remains an empty box, with some of the most essential port services having been excluded.

Patrick Verhoeven, ECSA Secretary General, said: “I can only emphasize what we have been stating for many years: shipowners still face restrictive practices and legal obstacles in many port service markets. This has repercussions on various elements such as viability and efficiency of short sea shipping. Whilst the initial proposal of the Commission lacked in ambition, the text has now been weakened further and is even introducing additional restrictions.”

The proposal also covers financial transparency and foresees mechanisms for consultation of users and stakeholders. “Despite the fact that these elements are certainly a step in the right direction, the text that is on the table remains unsatisfactory and leaves a lot to be desired. We therefore urge co-legislators to heed our call and improve it after the vote and during the upcoming trilogue negotiations,” said Verhoeven.

The Danish Shipowners’ Association says that while the regulation’s initial purpose was to liberalize ports throughout Europe, it has been watered down by the Parliament and will – at best – do nothing more than maintaining status quo.

It is now the third attempt of the Commission to liberalize ports services, and the discussions on this sensitive topic have lasted for over a decade, said the Association in a statement. From a shipowners’ point of view, this file will unfortunately have little to no impact on the market access to port services. The ports will have to be transparent in terms of public subsidiaries, but they will not be obligated to liberalize port services. Consequently, shipowners will still face restrictive practices and legal obstacles in many port service markets in Europe.

There are, moreover, a few critical elements in the report which will have to be addressed in the trialogue meetings between the Commission, the Council and the European Parliament before final adoption. One is the specific reference to the challenge of the increasing size of the vessels.

“Basically, the decision of investing in larger tonnage is and should remain a commercial one. The text included in the Parliament’s report therefore takes an overly simplistic view of the issue. It is crucial for the Danish Shipowners’ Association that this rhetoric does not result in political decisions to further protect the ports and hamper the shipowners’ access to port services”, says Simon Bergulf, Director E.U. Affairs for the Danish Shipowners’ Association.

U.K. Ports Concerned

Andrew Moffat, British Ports Association Chairman and Port of Tyne chief executive, said: “Privately funded ports will be undermined by the proposed European Commission Port Services Regulations. Under the current proposals there is uncertainty and more clarity is needed about how this regulation will add value to European ports.

Humber Port Director Simon Bird has also voiced objections. The regulation is particularly concerning to the British because 75 percent of ports are privatized. This contrasts with other parts of Europe where 80 percent are in local authority control – including Rotterdam and Antwerp.

Private entities may lose freedom to set port charges, with a national supervisory body given the power, ultimately overseen by the European Commission. This could mean regular services would have to be put out to tender, with more than one provider required – inflating costs.

Next Steps

The file will now enter the trialogue discussions and a first meeting among the Member States is scheduled for March 23, 2016.