2007 Ports Policy Communication
Following the withdrawal in 2006 of the second Directive proposal on market access to port services, the European Commission organised a wide-ranging consultation of stakeholders and Member States through a series of workshops and two conferences. On 18 October 2007, this consultation round led to a Communication from the Commission on a European Ports Policy (EPP-002 and EPP-003). The Communication focused on seven themes:
- Future port development
- Financing, transparency and port dues
- Port Concessions and Nautical Services
- Environmental regulations
- Dialogue between ports and cities
- Labour conditions
In the Communication, several policy initiatives were announced, a number of which ended up in concrete initiatives or policy actions. The following sub-sections summarise the main provisions and elaborate progress made on the various action points.
In 2010, the Commission held a mid-term review of the Trans-European Transport Network (TEN-T). This review consisted of an evaluation of the conditions and needs of the connections between seaports and the hinterland, and the impact on the balanced network of cargo flows. On 30 March 2011, the European Commission proposed a review of the TEN-T policy (see chapter 11).
Guidelines concerning state aid to seaports
The European Commission recognised that important tasks are better accomplished if port authorities can work with a certain degree of autonomy. Particularly financial autonomy was seen as a prerequisite for an effective allocation of investments and ultimately for the development of ports. In certain markets a strong level of competition exists not only between, but also within ports. This calls for a level playing field in terms of public funding. State aid guidelines would help achieving this.
In 2010, the responsibility of drawing up these guidelines was transferred from the Directorate General for Mobility and Transportation to the Directorate General for Competition. DG Competition ordered an external study on financing and charging in the port sector. This study was finalised in summer 2012, but, so far, the results were not published. Given that DG Competition is currently focusing on the overall modernisation of its State Aid rules, it is very unlikely that sector-specific guidelines for ports will emerge in the near future.
Simultaneously, the European Parliament requested an external study to compare public financing of ports in northern Europe and in southern Europe. Countries such as Belgium, Germany, France, The Netherlands and the United Kingdom are part of the first group, whereas Greece, Italy, Slovenia and Spain are classified in the second group. This study – ‘State Aids to EU ports’ - was published in December 2011. It has the following recommendations: (a) There are problems with the existing rules for the review of State Aid for the infrastructure and/or superstructure of European seaports. (b) It is necessary to amend the rules on review, or to establish guidelines in order to set up adequate rules (c). Probably there are no other options that could improve the coherence and effectiveness of European competition policy as regards financing infrastructure and/or superstructure of seaports.
In spring 2012, a report was published by the European Court of Auditors on ‘Using of structural and cohesion funds to co-finance transport infrastructures in seaports: an effective instrument?’ The Court analysed 27 port projects in France, Spain, Italy and Greece. Total investment: over 1.700 million euros, of which over 725 million euros is co-financed through EU funds. Only 11 projects proved to be effective. The Court made a number of recommendations to the European Commission and to the managing authorities.
Even though state aid guidelines for ports do not exist, the Commission examined the financing of a number of individual projects and their compliance with EU Treaty rules on State Aid. Test-cases are for example the financing of Flemish seaports, the construction of Maasvlakte II, the construction of JadeWeser port close to Wilhelmshaven and projects in the ports of Piraeus and Ventspils. Throughout these cases one notices a clear evolution in thinking. Before a distinction between general and commercial infrastructure was made, but now the latter cases consider public funding of any type of infrastructure a priori as a form of State aid that would have to be notified.
Application of the Transparency Directive on ports
The Ports Policy Communication announced measures to extend the scope of the Transparency Directive to all commercial ports, regardless their size. Concrete measures have, however, not yet been taken.
Transparency of port charges
The European Commission promoted more transparency on the components of port charges and on the link between these charges and the relevant costs. In its Communication, the Commission announced assistance in the dissemination of best practices on transparency on port charges. The Commission added that port charges could include incentives to promote the use of less polluting ships.
In an infringement procedure against Italy, the European Commission confirmed that differentiation of port dues according to the ships’ origin/destination is against Regulation 4055/86. The announced best practices on transparency of port dues have however not yet been compiled, nor widely disseminated. In the meantime and in the context of the World Ports Climate Initiative, seaports have developed an Environmental Ship Index on their own. Based on this index less polluting ships may enjoy certain incentives in ports.
Transparency for port services provided in ports and concessions
If a Member State awards a concession for providing a service, the authorities of that Member State are bound to act transparently. The intention to award a concession has to be made public adequately, the procedure has to be done fairly and on a non-discriminatory basis, and it must be ready for inspection at any time. According to its Ports Policy Communication, the European Commission considers this procedure also to be obligatory in case of the award of port sites for providing services in the field of cargo handling. In agreement with their development policy and commercial strategies, port authorities are allowed to set up selection criteria. The European obligations only apply when the working of the internal market is under jeopardy. The duration of the concession should not limit free competition, but has to be long enough as to give the opportunity to the investor to earn his investment back with a reasonable margin. Renewing a concession is considered a new concession. The European Commission feels that more explanation of the already existing rules is needed in the field of employees rights when the concession passes on to another company.
The European Commission confirmed in its Communication that the principle of freedom of establishment is also valid for technical-nautical services (pilotage, towage, mooring). Lawful monopolies for technical-nautical services are only justifiable if they are necessary and proportional for providing the relevant service. In those cases a transparent procedure should be implemented for the selection of the service provider. Exclusive rights may not be extended for excessive periods of time.
On 21 December 2011, the European Commission proposed a ‘procurement package’, which consisted of an amendment of Directives 2004/18/EC and 2004/17/EC and a new Directive proposal on the award of concession contracts (EPP-006 en EPP-007). The scope of this new Directive contains the entire market, including 'Activities relating to the exploitation of a geographical area for the purpose of the provision of airports and maritime or inland ports or other terminal facilities to carriers by air, sea or inland waterway'. Now that the proposal has been introduced, Council and Parliament have to decide on it. By September 2012, the first reading procedure had not been finished yet. However, by then it became clear that the proposed Concessions Directive does not intend to include the leasing of sites. In order to achieve a level playing field, it is important that both private land lease and public domain contracts are excluded. Amendments in this sense were tabled. Independent from the process on the Directive, the Commission nevertheless sent on 21 June 2012 a reasoned opinion to Lithuania for maintaining a priority right for cargo-handling operators renewing their port land lease contract upon its expiry. The Commission asked Lithuania to abolish the priority right for leasing public port land. This underlines the fact that, regardless of the scope of the concessions Directive, the issuing of port land to terminal operators is subject to Treaty rules.
Guidelines on the application of European environmental law to port development
When expanding the capacity of ports, deepening maritime access routes and/or improving hinterland connections, it is important to take account of European environmental laws. When executing big construction projects in ports, involved parties often remain in legal uncertainty about the implementation of the Habitats and Birds Directives. To remedy this uncertainty, the European Commission announced to publish guidelines on the application of European environmental laws in relation to port development. In 2011, two documents were published: (a) the Commission staff working document ‘integrating biodiversity and nature protection into port development’ and (b) Guidelines on the implementation of the Birds and Habitats Directives in estuaries and coastal zones with particular attention to port development and dredging (EPP-004).
Together, these documents form the so-called Estuary Guidance. The European Sea Port Organisation (ESPO) has made crucial contributions to the creation of this guidance. Although the Estuary Guidance is a 'Staff Working Document', which means the text is legally non-binding, it represents the official position of the Commission. It is especially interesting for those authorities who are responsible for the implementation of the European ecological legislation (Birds and Habitats Directives, Natura 2000).
The general outline of the guidance can be summarised as follows: ensure that you have an integrated approach, take measures in advance, assume the 'building with nature' concept, do not apply the precautionary principle too stringently and keep space for the development of economic activities. ('yes, if' approach instead of 'no, unless')
Moreover, rules on port reception facilities for ship-generated waste and cargo residues are being improved and measures are taken to reduce air, water and soil pollution in and around ports. Directive 2000/59/EC on port reception facilities for ship-generated waste and cargo residues is being reviewed (see chapter 34).
Modernisation of the port sector
The European Commission intended to take action to modernise the operations of the port sector. New systems, developed for port safety and security, such as SafeSeaNet, AIS (Automatic Identification System), LRIT (Long-range Identification and Tracking), coupled with modern telecommunication systems will become mandatory in the near future. These systems can improve the relationship between ship and shore (see chapter 10). The port sector in general will gain from these developments. In 2010, the European Commission organised a consultation on an 'e-maritime' policy. Such a policy would dramatically simplify administrative formalities in ports. Moreover, the European Commission announced that it would financially support research on how to modernise port infrastructure and port operations.
Dialogue between ports and cities
Ports and cities are mutually dependent. The relation between both has to be guided by a long-term vision and planning. The initiatives to improve the ports image should be left to the regions and Member States. However, the European Commission will examine how it can contribute to the improvement of the ports image and what can be done to have a better integration between ports and “their?? adjacent city. In this context, the European Commission has declared 20 May as European Maritime Day.
The European Commission has advocated dialogue between all the different stakeholders as the appropriate tool to create a better understanding between different parties. According to the Commission, such a stakeholders dialogue can even play a special and powerful role in the creation of more and better jobs in the port sector. Concretely, the European Commission announced that it would (a) encourage the creation of an European Social Sector Committee (b) propose a mutual recognised framework on the training of port labour (c) keep a vigilant eye on the proper application of work safety and healthcare rules in the port sector. It took until 2011 before a formal declaration of social partners to set up a European social dialogue came forward. The kick-off meeting still has to be organised. On the other two points, no specific initiatives were taken.
More recently, on 27 September 2012 the Commission sent a reasoned opinion to Spain for obliging cargo-handling companies in several Spanish ports to financially participate in the capital of private companies managing the provision of dockers and not to allow them to resort to the market to employ their staff, unless the workforce proposed by this private company is not suitable or not sufficient. Cargo-handling providers from other Member States wishing to establish themselves in Spain might be discouraged from doing so because of the barrier this provision raises on the market for cargo-handling services. This is the second stage in the infringement procedure. If Spain fails to react satisfactorily, the Commission may refer the matter to the EU Court of Justice.
Resolution of the European Parliament
In 2008, the European Parliament issued an own-initiative resolution on the Commission’s Ports Policy Communication. In general terms, the Parliament supported the objectives and approach of the Communication (EPP-005).
Review of the 2007 Communication and possible future measures
On 8 September 2011, the European Commissioner of Transport announced a review of the current policy framework for ports, to improve the competitive edge of European seaports and to release their growth potential. Aim is to focus on reduction of administrative burdens, improve transparency of port finance and further liberalise of the port service market. The review is based on a number of studies, including a major business survey that was held among port stakeholders in summer 2012, and a specific assessment of dock labour regimes. A major stakeholder conference was held on 25-26 September 2012 in Brussels where preliminary results of these studies were presented. Specific workshops were held on concessions, TEN-T, administrative facilitation, port services and port performance. The conference was not conclusive. Although the first results of the business survey indicated that 70 to 80% of stakeholders do not see any major challenges for port services in Europe, it is unlikely that this means that the Commission will take no action in this field. A particular reason for coming forward with a legislative proposal is the lack of a solid legal basis to act case-by-case against violations of the freedom to provide services that is guaranteed through the Treaty. It is argued that for maritime transport and aviation, secondary legislation would be needed A second round of consultation is planned for autumn 2012, wherein the Commission will clarify its objectives and outline the policy options at hand. The outcome of the review is expected for spring 2013 and will in any case consist of a new Ports Policy Communication, possibly accompanied by one or more specific (legislative) proposals and/or instruments. The Commission however refuses to refer to a ‘thirds ports package’.
The pending review in any case does not prevent the Commission from pursuing individual cases. Reference is made to the decision on the prolongation of lease contracts in the port of Klaipéda and the Spanish port labour case, which were both mentioned above. Both cases are however based on the freedom of establishment, not on freedom to provide services, which may be a further indication that secondary legislation in this field may be unavoidable.
Some relevant documents:
EPP-008: Results of the 2012 business survey on port services (PWC/NEA)
EPP-007: Commission staff working document. Impact assessment of the initiative on concessions accompanying the document “Proposal for a Directive of the European Parliament and the Council on the award of concession contracts?? (European Commission)
EPP-006: Proposal for a Directive of the European Parliament and the Council on the award of concession contracts (European Commission)
EPP-005: European Parliament resolution on 4 September 2008 on European ports policy (European Parliament)
EPP-004: Guidance Document. The implementation of the Birds and Habitats Directives in the estuaries and coastal zones with particular attention to port development and dredging (European Commission)
EPP-003: Accompanying document to Communication on a European Ports Policy - Full Impact Assessment (European Commission)
EPP-002: Accompanying document to Communication on a European Ports Policy - Summary Impact Assessment (European Commission)
EPP-001: Communication on a European Ports Policy (European Commission)