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Federation of European Private Port Operators FEPORT

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Federation of European Private Port Operators FEPORT 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
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