Federation of European Private Port Operators

FEPORT

Ms Cecilia Eckelmann-Battistello

1/14 Federation of European Private Port Operators

Position paper on the proposal for a directive on market access to port services: Need for a true new starting point: analysis of need, proportionality, subsidiarity and impacts should provide basis for redrafting

Competition is generally ruling the European port market. Efficiency is one of the key instruments to face competition. The members of Feport, the private port operators are in the frontline of competition and are in the everyday business of enhancing efficiency as their operational reply to the competitive environment in which they have to set their mark or consolidate a position. It goes without saying that for this reason Feport favours any initiatives, which help them further enhance and reinforce efficiency. For the same reason Feport rejects the present text of the proposed directive on market access to port services. The present text does not contribute to efficiency, nor to enhancing competition. In the view of Feport the present text has to be modified significantly before it can achieve any of the objectives it sets for itself and is in its present form in fact extremely harmful for the sector in its present form. Nevertheless, since incorporating the same basic values of competition and efficiency Feport and its members are more than willing to offer their expertise in cooperation with the Commission, Parliament, Council and others to try to achieve a text, which can really contribute to further enhancing the European port market.

SETTING THE SCENE: In view of the Lisbon Agenda and subsequent European Councils, Feport recognises the stated intention to have the Commission examine if any structural shortcomings exist in the market functioning of the port sector and to assess if such shortcomings are sufficiently important to develop measures. The vital importance of the sector for the EU economy is within the philosophy of the Lisbon Agenda even an additional plea to carefully analyse the impact of possible community legislation and its dimensions of proportionality and subsidiarity. Notwithstanding these intentions the present proposal does not provide evidence of any structural shortcomings in the market of port handling, nor does it demonstrate the proportionality of the measures suggested, nor the appropriateness of the preference for Community action instead of measures at other levels.

Moreover, 3 years of debate on the first proposal on Market Access to Port Services1 have demonstrated amongst others the wide complexity of the port systems in Europe. It goes without saying that the accession of 7 new port states on May 2004 has even further increased this complexity. Notwithstanding this evolution towards more diversity and the fact that the 2004 proposal on market access to port services is significantly different from the 2001 proposal on the same topic, the present proposal does not provide evidence of any significant re-evaluation of the impact of the suggested framework, nor does it demonstrate for the new port landscape or for the modified proposed legal framework the

1 COM (2001) 35 final

1/14 proportionality of the measures suggested, nor the appropriateness of the preference for Community action instead of measures at other levels.

At 13 October 2004 the Commission launched the new proposal for a directive on market access to port services2. In addition to above concerns, Feport is of the opinion that the proposal does not provide evidence that the proposed legal framework is appropriate and relevant for achieving its own objectives, nor proportional in view of the results envisaged. Moreover, the framework seems not to avoid disproportionate adverse side-effects nor introduces the appropriate level of subsidiarity in its implementation. Finally it seems that the proposed legal framework does not provide sufficient certainty that the administrative burden created is as small as possible or adequately takes into account the legitimate diversity of ports and port systems throughout the EU. Since the impact has not been properly established prior to the proposal published October 13th 2004, Feport is of the opinion that the present proposal cannot guarantee in a sufficient manner that these basic principles of EU legislation have been respected. In our view, this seems also to be the main reason that a number of obvious errors or unproven statements have excessively weakened the Commission’s proposal and potentially even risk to generate effects contrary to the Directive’s own objectives.

WAY FORWARD: Feport is clearly in favour of a liberal and efficient market for port services. In our view however, this liberal and efficient market situation already exists in most European ports. Therefore, in principle Feport sees no immediate need to introduce a new legal EU framework to enhance competition and efficiency while contributing to the development of short sea shipping and intermodality. Nevertheless, in case the Commission proceeds with its intention, Feport definitely requires that the above shortcomings should be remedied and that the final legal framework is demonstrably needed, relevant, proportionate, taking into account subsidiarity aspects, avoiding disproportionate adverse effects and minimising the administrative extra burden.

Consequently, in view of the present legislative phase of the proposed directive, Feport expresses its hope that for the sake of a sound legal debate Commission, Council and Parliament will take all necessary steps to first improve the basis of the legal action (impact, need, proportionality, subsidiarity) in order to provide the necessary elements for a sufficiently documented and knowledgeable debate. It is in this context that Feport welcomes the Parliamentary initiative to organise a public hearing on the proposed Directive and its underlying principles, while only considering this a necessary first step. We definitely hope that this will form a true new starting point to examine all basic questions even including the need for measures, their nature and level of implementation. We hope that also the Commission will be open to such a basic debate and consequent viewpoints, even when this might result in significant modifications of its present proposal.

Positions announced by certain stakeholders, comments from MEPs or Member States already indicate that significant modifications of the present text are considered necessary by many and upon scrutiny usually for valid reasons. Hereafter, Feport expands on its previous position paper to indicate why the members of Feport, the private terminal operators, consider the present proposal not to be adequate.

Feport is at all times prepared to expand on a topic when necessary.

2 COM (2004) 654 final

1/14 Legal certainty: Unilateral termination Terminal operators have received leases, concessions or ownership under existing applicable law. It seems therefore quite surprising that such legitimate operators suddenly would run the risk of having to see their facility re-tendered either within 36 months after entry into force of the directive or at any later date when limitations appear.

Feport emphasises the fact that present operators have obtained their leases within the legal framework in force when obtaining the lease. Consequently, there seems no reason to contest that the basic legal principle of ‘acting in good faith and full legitimacy’ applies. Such leases, licenses etc constitute legitimate authorisations (ref. also grandfather rights).

Breaking up contracts, with huge investments behind, definitely requires a more profound motivation. If there is no evidence of any illegal activities (e.g. fraud), or if there is no extensively documented overriding public interest, it seems impossible in normal contract, lease and property law to break up unilaterally a contract, which is the basic consequence of the mandatory re-tendering in case a limitation arises, or when competent authority, new or existing service providers so request.

In the opinion of Feport, if illegal activities can be demonstrated in single contracts, this does not require a EU legal framework, since such situations will be highly exceptional or even non-existing. The present proposal does also not contain the elements to prove an overriding public interest, and certainly not an overriding public interest on EU-wide scale, sufficient to allow to even consider re-tendering of only part of the existing contracts. In any small expropriation or unilateral contract termination situation initiated by the public hand, more evidence is required to demonstrate an overriding public interest than is contained in this proposal which by all means impacts on the entire port sector in all relevant EU member states.

Fixed durations: Fixed durations for lease contracts are to be imposed by the proposed directive. As far as contracts concluded after entry into force are concerned, this may seem a legally acceptable situation, since conditions were publicly known beforehand (as is actually also incorporated in European Court of Justice rulings already requiring tendering of new facilities). Whereas however contracts concluded before entry into force are affected, once again this provides for a legally unacceptable situation of unilateral modification of contract conditions. The contracts have been obtained in legitimate way according to law in force at that time. In case conditions, such as length of a lease, are modified, not only compensation should be calculated for the damages incurred. First and foremost the legitimacy of such unilateral contract termination should be adequately demonstrated.

Compensation: The proposed directive limits compensation to material issues. However, clearly, a business is not only composed of material issues. Several immaterial aspects, such as licenses, goodwill, clientele, logistic and software networks, image, entrepreneurial initiative and many more make part of a business case. When taking over a dentist or a notary usually more is paid for the clientele and image aspects (the commercial portfolio) than for the remaining depreciated assets. Feport does not see why this would be different for a million euro business in which client basis, logistics and software networks, licenses, image etc belong to the most prominent aspects of the competitive pressure on port operators. In fact a new operator is in the position to take over an existing, operational area including even client

1/14 relations. It seems absolutely incomprehensible and beyond reason why such legitimate investments of many years should not be compensated by the party taking over the lease. Under the present proposal conditions, it might even turn out to be cheaper to press for tendering and try to take over a leased area instead of acquiring in the normal public market the company operating the area.

One might also question who, in the line of the proposed directive, should be held accountable to pay for termination fines or costs of existing contracts with service providers of all kinds of the legitimate operator who loses its right to operate. Such contracts may include term contracts with rail, truck, barge or inland terminal operators, as well as services of a more general nature.

Moreover, if durations are lower than what was originally contained in the lease contract existing prior to entry into force of the new directive, compensation should not only account for material or immaterial assets, but also for lost income. This principle should apply when existing contracts are within the first 36 months after entry into force, or upon subsequent limitations, as well as to cases in which the maximal allowable duration is lower than the duration in an existing lease contract. If an existing contract foresees duration of 50 years and sees its maximal duration shortened to 36 years as a consequence of this directive, compensation should be foreseen for the lost 14 years of revenue earning. In normal expropriation or unilateral contract termination law this very principle applies. In regular business we also find the same principle when trading takes into account current market value (ref. stock value of oil companies taking into account demonstrated reserves).

Entrepreneurial risk: Since the proposal foresees in the possibility that existing leases have to be tendered on simple request of the competent authority, existing or new service providers, also entrepreneurial initiative risks to be unfairly treated. In the present legal framework, an entrepreneur who identified a market opportunity and took the commercial risk to invest and develop this opportunity into a success, now risks to see his effort, once successful, being put to tender on request of a less daring competitor, who initially failed to identify the opportunity or did not wish to invest in developing it in the start-up phase. Feport is of the opinion that a legal framework should not intervene in the market in such a way that risk-taking investors have no longer legal certainty on the development perspectives of their risk investment, not because of legitimate market forces but because of administrative powers allowing their competitors to simply ask for mandatory tendering. In our opinion, legislation should never be intended to give new comers an unfair edge over existing operators. If such conditions are created by new legislation, it seems clear that risk investment will get largely discouraged.

Conclusion: In the view of Feport, in case of existing contracts, it should only be considerable to apply the directive to such situations in which case-by-case illegal irregularities can irrevocably be identified or if and only when a local situation provides the necessary elements to identify a situation of overriding public interest. Therefore Feport considers that existing contracts concluded before entry into force of the proposed directive should basically be exempted from the generic field of application of this directive (ref. also grandfather rights). This will not only create more clarity in the area of legal certainty, but also in the field of legitimate compensations to be paid. It would also be more in line with other EU legislation, in which existing operations remain generally in force untouched.3

3 98/30/EC concerning common rules for the internal market in natural gas.

1/14 A compensation regime should be clearly stated in the directive. It seems contradictory to the directive’s objectives (enhancement of a level playing field) to leave such a source of potential competitive distortions to the discretion of individual member states’ assessments, instead of detailing on a proper EU system. It would also seem appropriate to emphasize speed and transparency in any appeal procedures. It seems only logical that legal recourse will be more often rule than exception in this field of the directive.

Competitive issues: Interport competition: Feport sees no evidence in the present proposal that competition would be insufficient in the European port landscape. In certain cases, competition exists within a single port; so- called intra-port competition, in other cases however competition is primarily focussed between ports, inter-port competition. The Commission proposal emphasises beyond our understanding the need for maximal intra-port competition. Feport however continues to not understand why competition between ports would seem to be insufficient to provide an adequate competitive environment and efficiency in European port handling, as the Commission presumes. In an international competitive market (including non EU-ports, e.g. in the Mediterranean), as is the case for cargo handling and was also further intensified by the European single market, there is no factual reason why inter-port competition should be considered inferior to intra-port competition. - The ease by which shipping lines and shippers change ports of call, as demonstrated by a myriad of examples; clearly demonstrate that inter-port competition may be considered as a major if not the main competitive driver and already sufficiently efficient in keeping competitive pressure on the European cargo handling sector in ports. - The high efficiency is demonstrated by the low handling charges in European ports. These charges only amount to half of Asian prices and one third of American Terminal Handling Charges (THC). Such efficiency is in the first instance created by competitive pressure, explaining the price differences between Europe, Asia and North America. Moreover significant economies of scale and scope have supported the beneficial development of the European port environment. Consequently, it rather surprises Feport that in this proposed Directive the Commission seems to undervalue the power of inter-port competition and seems to ignore modern economies of scale aspects in order to favour a rather strange concept of artificial maximisation of providers in every single port. In the opinion of Feport such reasoning seems to bypass the needs of modern capital-intensive port operations and therefore rather threatens the efficiency of European port operations instead of enhancing them. Vice versa, we also note that in view of intensive inter-port competition the necessary economies of scale often require a minimum size, thus de facto limiting the number of viable operators.

Moreover the Commission seems to contradict in this proposal other Commission work being done on the relevant market. In the competition cases concerning Hutchison/RCPM/ECT, Maersk/ECT, ECT/P&O Nedlloyd/Euromax and PSA/Hessenatie/Noordnatie the Commission looked indeed into larger areas including several ports to identify if dominant position would be obtained and competition distorted. In these cases inter-port competition was clearly identified and used as a basis for analysis.

Finally we also note that in the history of European anti-trust policy there has been no single case in which one or more of the large European port operators was accused of competition- distorting activities.

1/14 So in conclusion it seems that the sector is already efficient (annual decrease of operating costs 2.5-3%) and open to severe competition. There seems no reason to assume that an economically inefficient market exists in the present port environment. If the Commission has knowledge of exceptions to this reality, we can only presume that such situations are exceptional in the European port landscape and wonder if measures focussed on these perceived exceptions should take the form and level of a Community wide legislative framework. Feport on its behalf is definitely of the opinion that the potential impact on all existing European handling authorisations of the present proposal is beyond reasonable proportionality to tackle isolated exceptions, if any at all important enough to talk about a ‘structural shortcoming in the functioning of the European port market’. Moreover we wonder what the impact of such dogmatic intra-port competition principle will be on investment efficiencies. Last but not least, Feport sees no logic in turning upside down the presently already strong competitive situation in Europe’s ports in an attempt to introduce additional competitors within every single port’s boundaries. Such policy not only ignores competition between European ports, but in doing so it will also generate serious adverse effects undermining normal efficient market functioning while impacting unnecessarily and beyond any economic rationale upon existing operators. Next to the overall legal unacceptability, Feport sees no market reason whatsoever to support the need for re-tendering of existing operators for which competition (within and between ports) is clearly already paramount.

Intermodal logistic Chains: From many Commission policy documents, including the White Paper on Transport Policy, it is clear that the Commission recognises the intermodal chain as being the decisive factor in transport choices.

In the opinion of Feport, the impact generated by the breaking up of existing logistic solutions when expelling existent operators to the benefit of newcomers will be one of cost and price increases as well as a substantial loss of quality in the complex logistic chains. Likely, damages will have to be paid. Feport wonders how long it will take new operators to re- establish efficient logistic networks. History has already shown that it often took years to achieve a really efficient situation and the new legislation does not provide any relevant element to make such process more efficient or rapid in the future. Unfair competition: In the opinion of Feport, due to the way the present proposal is conceived, there is an undeniable risk to stimulate unfair competition. At least the proposal, without intending to, creates in its present form the means to this end.

When an authorisation was not granted according to the rules in the proposed Article 8, not only the competent authority, but also any existing or new service provider seems to be allowed to request to have the procedure in Article 8 to be applied. This seems to imply the risk that a current competitor or a newcomer will be allowed to seek to tender for the facility of an already existing operator (for whom Article 8 was not yet applied). In market terms this could easily create the possibility for a competitor (existing or new) to only follow the development of a market opportunity elaborated by his colleague, and as soon as it looks promising enough to ask for the successful operation to be tendered. If the competitor (newcomer-existing) wins the tender he only has to compensate for the material residual value of the equipment and not for the market risk and client establishment costs the original entrepreneur had to bear. Moreover this situation becomes even more explicit when terminals run at full capacity, operating efficiently and using assets at their fullest. In the present, intra- port oriented proposal this beneficial position might be ‘punished’ as it would seemingly only take a new or existing competitor to raise the question of tendering and thus start the ball rolling. In the present market reality however, it would be more logical that a newcomer or

1/14 existing competitor has to seek capacity in a neighbouring port, which can cover many countries, or even in a neighbouring underused terminal in the same port, and try to offer a better logistic solution from where capacity is available.

The proposed Directive indicates, in its Article 9 that “in case of a limitation of the number of providers the competent authority must allow the highest number of providers appropriate under the circumstances”. Being rather vague as a clause “appropriate under the circumstances”, such clause does not answer what will happen when for instance 2 or 3 operators (A,B and C) are already active in a given port and a limitation occurs. Article 10 indicates that ‘all’ existing service facilities have to be tendered. In such a case the present proposal text gives rather the impression that it would be a waste of time for A, B or C to tender since outsider D will be preferred anyway as only he will be in the position to increase or maintain the number of providers active in the port. Clearly this would be a real example of unfair competition and restriction of access to a port market. And in case of an insider to start of with the tendering request, one might theoretically end up with C,B,A instead of A,B,C, without any value added. Similarly when the facility of A is highly efficient and seeks expansion, it can hardly be considered to tender for C’s underused facility, since that would mean in our ABC port a reduction of providers to A and B.

To our feeling such absurd situations, which definitely might occur, are not at all intended by the Commission and are in fact in clear contradiction with the objectives of the proposed Directive. It seems obvious that in an intensively competitive market individual competing operators should not have the power to decide when a situation becomes limited and that the intra-port situation is not the appropriate basis to decide upon limitations. Moreover it seems that existing operators should have equal chances to newcomers in tendering procedures.

More technically speaking, the proposed text of the directive is slightly ambiguous as far as the use of capacity as a criterion to limit access to newcomers in a port is concerned. In some articles, such as in the definition section, the impression is created that available space may be an irrevocable argument to legitimately refuse newcomers. In other sections of the text, the impression is created that exactly because of the lack of space a situation can easily become limited. Clarification is definitely needed on the exact legal value in the proposed legal framework of space/capacity restrictions as a legitimate reason to restrict access to a port. Conclusion: In line with the intended objectives of the proposed directive in an already highly competitive market facing capacity restrictions, it would be more logical: - If existing or new competitors were not to be able to obtain competitive edges over existing legitimate operators because of new legal administrative conditions; - If a potential service provider or a neutral competent authority has to demonstrate that a limitation has indeed the effect of unduly restricting effective competition within the relevant market, taking into account the myriad of competing oprts and logistic networks serving the same market. Such principles would be in line with other relevant EU legislation, e.g. the birds and the habitats directive, the EIA directive, as well as past competition and dominant position cases in the port area.

Durations: The generic determination of durations contains several risks, which apparently go unnoticed in the present text of the proposed directive. Basically, even irrespective of compensation issues, shorter durations generally limit the period for depreciation of investments. Shorter depreciation or earn-back periods result in higher unit costs and thus prices. In general principle this goes contrary to one of the main objectives of the directive. For this and other

1/14 reasons, Feport does not understand why the Commission unilaterally reduces again durations from what was agreed in conciliation, practically the third reading of the previous proposal.

Moreover, any generic limitation in time provides for arbitrary end dates applying to all (future) authorisations. In the present proposal prolongation options are even predominantly discarded. If an operator-client relationship would result in an additional big investment in the latter half of the proposed duration periods this would bring about only two options. First option: the investment does not take place, because the remaining duration does not allow for an efficient pricing. Second option: If such an investment takes place within the last 10 years, the operator is allowed to ask for a re-tender. Even if an operator would take the option to re- tender, this would imply that an operator having say 10 clients on a indivisible facility has to face re-tendering of the entire facility because of an additional investment for one client. And a client has to face possible change of operator because the existing operator is not willing to invest without tender to prolong the depreciation lifetime of the investment. Irrespective of the fact that this may bring about severe transition costs, it seems disproportionate that a client who requires an additional investment for one of his business lines has to fear change of operator for all lines he treats with this operator on the same indivisible facility. Both situations demonstrate a significant loss of flexibility and efficiency of European port operations. And actually, a situation like this limits considerably the competitive possibilities of the existing provider during the last half/third of his allowable duration. An existing operator can no longer offer economically and the legal/administrative duration end date unfairly benefits newcomers. It is not understood by Feport how such consequences can be intended by the proposed directive, since the objectives of the directive point in the opposite direction.

Running a modern, highly efficient facility also requires a lot of ongoing investment in capacity modifications/extensions, technical progress, intelligent site management, innovative handling technologies and the like. Such continuous and ongoing investment is initiated in order to face efficiently competitive pressure and market requirements. Fixed durations and arbitrary end dates interfere directly with such desirable market behaviour and will basically frustrate proactive behaviour of this kind. It goes without saying that the introduction of fixed end dates therefore goes against the Directive’s own objectives of efficiency, competitiveness and market performance.

State Aid and transparency: Both state aid and transparency rules have been recurrent requests from the private sector operators represented by Feport. If anything is considered to be relevant to further enhancing and improving the competitive environment it are exactly these aspects which should be best dealt with at European level.

Although the present proposal indicates the way forward, Feport is of the opinion that a more speedy development of legislation in these areas is required. Moreover, in the opinion of Feport no market access legislation whatsoever makes sense if state aid rules are lacking. Consequently, Feport supports the view that state aid rules should first be further be developed and approved before proceeding with the present market access directive. Possibly, uniform state aid rules might ultimately eliminate any additional need for a market access legislation.

Self handling: Self handling has as a concept created a lot of controversy. In fact several reasons can be identified for this:

1/14 - A regular operator has been established by means of winning a tender, contract or authorization in the past. A self-handler is granted access to the same infrastructure without any particular effort, simply by way of automatic ‘right’. - A tender winner is limited by several conditions, including durations. In Article 13.3 it is nevertheless stated that a self-handler will operate according to an authorisation, which will remain in force so long as the self-handler complies with the criteria for granting them. - It seems strange that existing operators have to provide training to self-handlers, their competitors. Nevertheless, this is the bearing of what is foreseen in Recital 18. - In practice it is unavoidable that a self-handler’s activity will intervene with the operational planning of the works, as well as with the safety and security dimensions. Within present day’s terminal organisation in for instance a container terminal such interferences are even quite impossible. - The interference of third parties in an operator’s facility will also have consequences on the insurance situation of this operator. In case part of the operator’s equipment is used by the self-handler potential disputes even aggravate and insurance situation will increasingly become complex. We may refer to damage to a quay surface by a self- handler’s equipment or the fracture of a crane’s cable and consequent damage to cargo (and ship), which may be allocated to either lack of maintenance (terminal operator) or abusive operation (self-handler). - At all times, self-handlers have been able to take part in the same publicly available business opportunities. It is not understood why companies, initially not interested in a business case or failing to successfully tender for it, still have to be awarded the chance to operate freely next to those who legitimately have obtained a facility. Moreover, nothing stops a self-handler or any other competitor from trying to acquire an existing operating company or an own operational authorisation. - The proposed text of the directive remains overall silent on the issue of payments by a self-handler for access to public/private infrastructure/equipment.

- Overall terminal efficiency will not benefit from having a client’s land based personnel treating their volume separately, while not only interfering with the operator’s business, but also with its potential economies of scale with other client’s trades. It is widely demonstrated that dedicated terminals have less overall efficiency than multi-user terminals. Moreover, issues such as priority treatments and cargo- espionage become suddenly more relevant in a dedicated terminal. - Efficiency will not be stimulated by having a low number of ship crew, having had already an active sea voyage behind them, handle their cargo with sometimes outdated equipment on a facility which they lack sufficient knowledge of. - Certain innovative concepts such as (semi)-automated container handling concepts are fundamentally called into question if the clause on self-handling comes into force in its present form. - It is not understood why self-handling is considered such a key-element of this proposal. Unions are particularly sensitive to this article, and rightly so. In practice however the effect of this self-handling clause may prove to be rather limited, since operational efficiency and competitiveness are generally not served by it.

In the view of Feport, there is no specific need for a self-handling clause. Exception could, if necessary, be made for seafaring crew on board of ships, where in the first place the master’s authority applies and the vigour of EU law is limited anyway. But overall, Feport asks to avoid unnecessary social unrest of which the costs although directly impacting on Feports’s members seem to go unnoticed by the European legislative authorities.

1/14 Security legislation: In article 2 para 7 it is indicated that Member States may exclude services of which […] the execution must be accompanied by special security measures in accordance with the law, regulations or administrative provisions in force in the Member State concerned […]. Should Feport conclude that all cargo handling to which the EU Regulation transposing the ISPS Code (725/2004) applies may be excluded from the scope of the proposed directive? This Regulation requires exactly that the execution of port services must be accompanied by special security measures in accordance with the ISPS code as included in the Regulation and transposed in national law, regulations and provisions.

Social aspects: In the whereas section, part 13 and in Article 4, reference is made to the intention of the Commission to maintain also with this proposed directive the respect for existing social legislation and training and access to the profession requirements as well as minimal social standards laid down by Community legislation. Notwithstanding that it is not clear what the referred social standards in EU legislation would be, we note that in many cases the intended rules are written down in collective agreements. We are convinced that such rules should apply as much to self-handlers as to regular terminal operators.

In this context we also briefly point to the Commission’s reference to ILO 137. This Convention would put question marks by the social progress achieved in some member states. To indicate the concerns with such a reference, it should be sufficient to point out that ILO 137 dates back to 1973, and actually corresponds to operational situations prevailing in the 1950s.

In an environment of re-tendering rights of existing employees also become relevant. When limiting ourselves to the key items, it seems only to be fair and necessary that a provision would be foreseen to ensure that where, as a result of the procedures of Article 8, an operation is reassigned to a new operator, the new operator must take over responsibility for existing employees, and all their rights, including pension rights.

Practical chaos of re-tendering: Under the terms of the proposed directive, the only authorisations remaining in force are those, which were issued in the framework of a selection process. Consequently, it will be concluded in the interest of a calculable legal situation by most investors and their banks that existing rent and lease contracts have to be terminated and put out to tender as soon as the directive enters into force.

It seems as if the proposal ignores the number of contracts involved. It may however be clear that in practice the simultaneous tendering of existing lease and rent contracts will not only cause a massive administrative burden both to the competent authority and operators but is also likely to result in interruptions in the operations at small or large scale. In view of the size and importance of the port sector it seems not to be excessively cautious to verify the number of contract involved and the impact of the proposed directive on these. Nobody benefits from unforeseen disruptions, how minor they may appear at first glance.

Entry into force of the directive will be followed by transposition into national provisions and law. Eighteen months are foreseen for this period, a period likely to be fully used by many member states. Following this transposition into national law 18 months remain to tender where desired existing authorisations. Since the identification of all major relevant tender requirements (scope of a tender, content, criteria, etc) are reserved for the competent authority to develop, it may be expected to be likely that tender conditions will only be fully developed after adoption into national law of the proposed EU framework. Legal certainty on which

1/14 conditions will apply to the respective tenders will therefore only emanate in the last 18 months before the ‘deadline’. This will no doubt further add to the chaos to be expected when re-tendering.

------Since 1993, the Federation of European Private Port Operators (FEPORT) has been acting as the single representative body of private terminal operators and stevedores located in the seaports of the European Union. Its membership consists of national and regional associations of private port operators representing in total about 800 individual companies. For more information contact Diego Teurelincx, Secretary General at the Feport Secretariat, Treurenberg 6, 1000 Brussels, tel: ++32 (0)2 736 75 52, Fax: ++32 (0)2 732 31 49, email: [email protected].

1/14 Cecilia Eckelmann-Battistello

Born: Vicenza Italy, 13th April 1950

Position: Chairman Contship Italia

Having completed schooling at the age of 18, attended secretarial college and trained as a secretary.

1971 Joined family office furniture company in and appointed Sales Manager.

1973 Joined Contship whose head office was then located in Cadenazzo, Switzerland.

Spent one year in Fos Sur Mer () in Contship office to learn practical side of container shipping business e.g. Documentation, Vessel operation, Inland Distribution and Container Control.

1974 Spent some time in Casablanca, Marocco which was then a major port of Contship. In October 1974 spent time in assisting with setting up of Contship North Europe Office.

1975 Transferred to Contship head Office in Cadenazzo and assumed position in commercial department.

Spent time in Lebanon and Syria where Contship pioneered Container services to those countries as well as to the Arab Emirates.

1977 With the opening up of the Suez Canal, Contship commenced direct services to Arabian Gulf and Indian Sub Continent.

1979 Transferred to Felixstowe with move of Contship Head Office from Switzerland to the U.K.

1982 Set up Contship Eagle Containerline Services from Europe to Australia and from back to Europe.

1985 Appointed Director of Contship Group.

1988 Appointed Managing Director of Contship Containerlines Limited.

1/14 1989 Appointed Chairman (first ever lady) PakistanBangladesh Shipping Conference, oldest shipping conference in the world.

1993 Appointed Deputy Chairman, Contship Containerlines Limited.

1996 Appointed Chairman and Chief Executive Officer of Contship Containerlines Limited.

1998 Resigned from Contship Containerlines due to sale of Contship Italia to CP Ships Group.

Appointed Chairman of United Feeder Services.

2000 Appointed Chairman of Contship Italia and Medcenter Container Terminal, Gioia Tauro.

2003 Appointed Chairman of Cagliari International Container Terminal.

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