Memorandum by The Bristol Port Company
MAJOR CONSTRAINTS PLACED ON UK PORTS BY EC
The Bristol Port Company is a major UK port.
It is one of the county's foremost car importers, the biggest
dry bulk handler in the South of England (with 30 per cent of
the total UK capacity for handling animal feedstuffs) and it is
also the South West UK regional distribution centre for refined
petroleum products. Since The Bristol Port Company was privatised
in 1991, throughput has increased from 3.4m tonnes to 9.6m tonnes
in 2000. With £300m of investment the port has attracted
significant new business and has created new business opportunities
for existing customers. A total of nearly 3,000 jobs exist within
the revitalised port areas.
The Bristol Port Company is a member of the
United Kingdom Major Ports Group (UKMPG) and endorses fully their
submission to this inquiry. In addition, we welcome the opportunity
to provide directly our own evidence, which relates specifically
to the problems currently facing UK ports with respect to European
regulations (the Habitats Directive and the proposed Access to
Ports Services Directive) and their potential damage to the competitive
position of UK ports in comparison to their European counterparts.
It is now over five years since the UK conservation
bodies selected their first lists of recommended Special Areas
of Conservation (SAC) as part of UK Government's implementation
of the EC Habitats Directive. Considerable areas of coastal waters
and estuaries around the UK coast have now been selected for designation
and protection in a series of marine SAC sites. In the UK, operational
areas within or adjacent to a number of ports are proposed for
designation. In a few estuaries, including the Severn and Humber
Estuary, the proposed SAC designation covers the entire estuary
site, including the main navigation channels of the major ports
within them, Bristol, Grimsby and Immingham and Hull.
The Habitats Directive introduces more stringent
management and control of both operations/activities and projects/plans
in SACs in order to protect habitats and species in these sites.
The UK port industry, including the Bristol Port Company, supports
the environmental principals of the maintenance of biodiversity
and promotion of sustainability, and fully recognises its responsibility
to safeguard the environment. However, in order to achieve the
Government's commitment to the concept of sustainable development
a balance must inevitably be struck between the needs of economic
development and conservation requirements. We believe that it
is clear that the implementation of the Habitats Directive in
the UK has shifted this balance too far in the favour of conservation.
As a consequence of this considerable doubt must exist as to the
future growth of any major ports located within or near designated
Because of this major concern, the Bristol Port
Company has over the past five years expended considerable effort
and resources in addressing major problems relating to the implementation
of the Habitats Directive.
One of these major problems is the perception
by considerable parts of the UK port industry that there is a
flawed and unaccountable process for the selection of SACs in
the UK. This is illustrated by the absence of any adequate scientific
justification for the proposed designation of the Severn Estuary
as a SAC, in particular with regard to the subtidal habitats.
Our scientific advice is that the Severn Estuary is intrinsically
non-conservable on the grounds of its highly dynamic and impoverished
nature. Substantial areas of the subtidal zone of the Severn Estuary
are in fact barren and may not meet the criterion of being habitat
at all, including the sand substrates of the navigation channels
and deep water approaches. In general, the habitats and species
in the estuary are not unusual or special, but are simply stressed
examples of communities found in better condition, abundance and
diversity elsewhere. English Nature seeks to conserve the site
because it is so bad. When considering the limited resources available
to conserve the UK's important marine environment, it is folly
that a large proportion will be spent in attempting to conserve
an ecologically poor and essentially unconservable site.
Two further problems of great concern to the
Bristol Port Company and, we believe, the UK port industry in
general, are discussed in turn below, namely:
(1) The socio-economic consequences of the
designation of SAC's.
(2) The lack of a level playing field in
Europe for port operators due to differences in the application
of the EC Habitats Directive between the UK and other Member States.
The Socio-Economic Consequences of the Designation
The Habitats Directive introduces major barriers
to development in SAC's in the form of additional and more stringent
requirements for environmental assessment. Consequently the likelihood
of gaining approval for any new developments in the vicinity of
proposed SACs is reduced substantially. Irrespective of the scale
of a proposed project, the new assessment process results in considerable
delays in the timescales normally required to obtain consents
and approvals, and introduces major uncertainty over a port's
ability to deliver a project to potential users.
Any such customer faced, not only with very
large mitigation, compensation and monitoring costs, but also
with no guarantee that project approval will be obtained within
a reasonable period of time, will therefore be likely to look
elsewhere. Hence there is a sharp increase in the likelihood of
relative decline in the ability of these UK ports to sustain and
attract new markets. We believe that trade and investment will
be lost to other UK or to Continental ports not so affected.
However, if the proposed designation covers
a port's main navigation channel, the severity of the problem
is increased. This is because an affected port's ability to deepen
its approaches and main navigation channels to match the demand
of international trading markets for increasingly larger vessels
will be restricted severely. Large scale deepening of port approaches
to accept large vessels is occurring throughout Europe and the
world. UK Ports must be able to respond to similar demands in
order to physically accept these larger vessels in the future
in order to maintain their competitive position.
In summary, if the potential consequences of
SAC designation outlined above are not properly acknowledged UK
ports affected risk losing development opportunities and long-term
trade to other European countries, with clear adverse affects
on the UK port industry and consequently regional and national
We therefore seek support from the Government
to promote a more balanced approach to sustainable development
in all areas of special economic importance.
Lack of a level playing field in Europe for port
operators due to differences in the application of the EC Habitats
The less stringent application of this Directive
by other Member States is a major and overriding concern. The
Bristol Port Company has undertaken an investigation of SAC designation
elsewhere in Europe, collecting information on SAC selection in
the vicinity of competitor ports. This has been done in consultation
with, and in some cases visits to, EU Government Departments,
Nature Conservation Agencies and Port Authorities. The results
of this investigation are presented in the enclosed report using
a series of maps and correspondence. This evidence shows clearly
that other Member States are apply the Habitats Directive differently
to estuaries containing their major ports than in the UK.
The following is a synopsis of the evidence
in the enclose report, the key finding of which include the following:
No major European ports have been
found in the Atlantic-biogeographic region outside the UK whose
port operational areas or port approach channels have been proposed
for designation under the Habitats Directive.
Other Member States, including Denmark,
Germany, Netherlands, Belgium, France and Ireland, are only partially
designating their estuary sites as SAC's and are excluding the
navigation channels leading to their major ports. (this is in
sharp contrast to the approach taken in the UK where there is
a blanket designation of the entire estuary system includes the
navigation channels of any major ports within them).
These marked discrepancies in approach to the
implementation of the Directive between the UK and other Member
States potentially leaves all UK ports so affected at a serious
competitive disadvantage, in particular the Severn and Humber
Estuary ports whose navigation channels are included in the possible
As outlined in the previous section, the overwhelming
reason for this major competitive disadvantage is the perception
by any would be developer that proposed port developments in an
SAC will inevitably require an additional environmental assessment
process that will span a considerable number of years, with no
ability to judge the likelihood of a successful outcome. In such
circumstances of delay and uncertainty he would, at an early stage,
seek alternative locations not encumbered by SAC designation or
where a balance between economic and conservation requirements
had been found in the pre-designation process. Our evidence demonstrates
that the latter situation only occurs in port areas and navigational
approaches in continental Europe.
Little or no justification was obtained from
other Member States documenting the reasons why navigation channels
and other operational areas have not been designated as protected
areas. There is some evidence of certain Member States taking
account of economic, social and cultural considerations in the
site selection process and such details are submitted as an appendix
to the enclosed report. Following the recent ECJ ruling, we now
know that to do so would be an improper interpretation of the
Other Member States may have not designated
parts of estuary sites, namely navigation channels, on scientific
grounds. However, it seems highly improbable that out of all the
European estuaries continuing major ports only two UK estuaries
with major ports should qualify for total designation for estuary
habitat on the grounds of their ecological merit. In the minds
of most people (port customers, would be developers and the general
public) SAC designation carries the implication of very high ecological
worth. Therefore it could be perceived that in the UK those navigation
channels in designated areas are ecologically important and in
continental Europe they are not (because none are designated).
Perversely, it is generally acknowledged that
regularly maintained shipping channels are ecologically degraded
and cannot therefore be important for the diversity and abundance
of wildlife. Thus, if other Member States have justified the exclusion
of the deep channels on scientific grounds an equally powerful
case exists in the Severn and Humber Estuary for similar exclusions.
In those Member States where the economic importance
of ports is institutionalised in the federal and regional government
fabric the exclusion of port channels will be seen as a clear
demonstration of the fundamental importance of ports. Hence, whether
port areas and channels are excluded on the basis of scientific
and/or economic considerations is irrelevant, the perception will
exist that such ports are more open for development as opposed
to a port whose approach channel is designated.
Furthermore, if a Member State has acknowledged
the importance of the port industry at the site selection stage,
they are likely to take a similar line when determining development
applicationsfor example by taking a more balanced and supportive
line when assessing applications stating reasons of over-riding
public interest. A port which can give assurances that their government
understands and is sympathetic to the position of the port industry
is more attractive to the developer than a port which can give
no such assurances.
In summary, it is clear that either the UK is
gold-plating the requirements of the Habitats Directive or that
other European countries are not applying the Directive correctly.
The net effect of this obvious disparity of approach between the
UK and other Member States is the lack of a level playing field
for port operators and the consequential loss of the competitive
position of the affected UK ports compared with their European
We therefore seek support from the Government
to ensure parity of treatment for UK port operators with our competitor
ports in the near Continent.
Proposed EC Directive on Access to Port Services
The Commission proposes to publish a draft Directive
on access to port services in the near future. The proposed Directive
would make it a requirement that there should be (artificially)
enforced competition in the provision of commercial port services
in order to reduce the costs to users. These services inter alia
pilotage, towage, mooring and cargo handling. The latter is of
the greatest significance in that it is the most capital intensive
of the services.
The draft of the Directive requires that where
the number of service providers in a port is limited for any reason
(eg size, geography) and the port is already the service provider
then it must submit itself to an authorisation procedure conducted
by an independent competent authority. Under transitional rules
this procedure distinguishes between situations where a service
provider (ie the port) has made significant investment into moveable
or immovable assets. This is an important distinction as it is
often the case that larger investments are also immovable (such
as the £300m investment at Bristol). Moreover, the draft
Directive rules that where the (present) authorisation was not
granted in accordance with this Directive (hardly possible) and
in the case where there is only a sole service provider a new
authorisation procedure must be carried out within five years.
Stated simply the above means those privatised
ports which provide an integrated service including cargo handling
(there are many in the UK) will, after five years, have to submit
to a tendering procedure which could require them to handover
their assets to a third party. In these circumstances the latter
would bear no commercial risk as that will have been borne earlier
by the present provider ie the port. This is an extraordinary
and extremely unfair position for the many ports which have led
the privatisation and investment process in the UK during the
We believe, therefore, that such a Directive
is inappropriate for the UK port industry and will be extremely
damaging. Further reasons for this include the following:
(a) Extant UK legislation already permits
written objections to be made against the level of dues charged
to port users (Harbours Act, 1964).
(b) The European Treaty already contains
provisions designed to deal with anti-competitive practices, abuse
of dominant position or illegal state aids. To the extent that
there is a problem in some European ports the remedies to deal
with this already exist. The proposed directive is therefore unnecessary.
(c) The UK, because of its long coastline,
has more ports than any other European country. There is thus
ample competition between UK ports which ensures that the monopoly
profits which the Commission are concerned about do not arise
in this country.
(d) UK ports receive no significant financial
support from central or local Government. The Commission's concern
with public subsidies does not therefore arise here.
(e) UK ports are much smaller than the major
continental ports. These latter ports are typically organised
on the "landlord" basis whereby the state/federal government
provides the infrastructure (dredging, breakwaters etc) but cargo
handling is provided by independent private operators who enjoy
leases or concessions from the port authority. The patter in the
UK is very uneven, but a number of major ports, such as Felixstowe,
Bristol and the Forth have deliberately chosen to offer an integrated
service, with some or all port services under their direct control,
in the belief that this is the best way to offer customers an
(f) If services, such as cargo handling,
were required to be offered to competitive tender this would tend
to encourage greater use of poorly trained or casual staff and
consequential reduction in safety standards. Following the repeal
of the Dock Labour Scheme most dockworkers now enjoy full time
pensionable employment. Competitive tendering would be a retrograde
(g) Although our main concern is with cargo
handling, there would be particular problems with pilotage, In
the UK the provision of pilotage services is the responsibility
of a port, and it forms part of the port's total safety management
system, an approach endorsed in the Government's recent Port Marine
Safety Code. If ports were required to offer concessions for the
provision of pilotage there would be a tendency to try to cut
costs, which could detract from safety.
(h) The proposal for an independent body
to supervise the award of concessions is bureaucratic and inappropriate
for privately owned ports.
(i) Privatised and modernised ports are now
highly mechanised and labour efficient. Thus the requirement of
the Directive to tender separately for the handling of each different
cargo type would mean, for example at Bristol, the splitting of
the stevedoring workforce in to six separately managed companies,
with consequently increased total workforce number and corresponding
decrease in manpower and cost efficiency.
(j) The City of London's financial market
views the UK port sector as under-performing in terms of return
on investment. This seemingly indicates that the present level
of costs in the industry is not excessive.
(k) The "integrated" ports have
made significant investment in facilities. If they were to be
deprived of the use of these facilities they would look to the
Government for substantial compensation. Depending on the length
of the concessions further future investment almost certainly
will be jeopardised.
We support fully the concept of free and full
open competition but on the basis that all ports operate on a
level playing field. Because of the major structural differences
between UK and continental ports, a "one size fits all"
Directive such as is proposed will inevitably have substantial
adverse effects on UK ports. Moreover, because of the significant
threat to future investment noted above this would also damage
the UK economy.
We therefore seek support of the Government
to ensure that the draft Directive is either withdrawn or heavily
modified to reduce its adverse effects.