Select Committee on European Scrutiny Twenty-Eighth Report






COM(01) 35




SEC(01) 234




COM(02) 101


Commission Communication: Reinforcing quality service in sea ports: A key for European transport. Draft Directive on market access to port services.


Commission staff working document on public financing and charging practices in the Community sea port sector.



Amended proposal for a draft Directive on market access to port services.

Legal base:

Article 80(2) EU; co-decision; qualified majority voting


Deposited in Parliament:

(c) 21 March 2002


Transport, Local Government and the Regions

Basis of consideration:

EM of 26 March 2002

Previous Committee Report:

(a) and (b) HC 152-vii (2001-02), paragraph 7 (21 November 2001)

To be discussed in Council:

Date not set

Committee's assessment:

Politically important

Committee's decision:

(a) and (b) Cleared

(c) Not cleared; further information requested




  2.1  In February 2001 the Commission issued a Communication on sea ports, including a proposal for a Directive on market access to port services (e.g. pilotage, towing and mooring). This was accompanied by a staff working document on public financing and charging practices in the EU sea port sector. When we considered the documents, in November, we decided to keep them under scrutiny until we had information about the results of the consultation the Government was planning to undertake, and a copy of the Regulatory Impact Assessment.

  2.2  The Parliamentary Under-Secretary of State at the Department for Transport, Local Government and the Regions (Mr David Jamieson) has now deposited an amended version of the draft Directive, together with an Explanatory Memorandum.

Document (c): the amended draft Directive

  2.3  The amended proposal includes a number of the amendments proposed by the European Parliament. According to the Commission's explanatory memorandum, these amendments emphasise "the importance of maritime safety, environmental responsibilities, social elements; clarify certain aspects of the selection procedure, self-handling as well as the neutrality of the body responsible for the selection of service providers."

  2.4  The Minister's Explanatory Memorandum explains that the Commission's amendments cover the following elements of the proposal:

"—  The scope is extended to include waterway access to ports;

The definition of 'port system' is modified to cover two or more ports in the same area and managed by a single managing body;

The criteria for the granting of authorisations are expanded;

Service providers' own personnel would be employed under conditions set by the competent authority;

The number of service providers may be limited not only for reasons of space or capacity but also in accordance with environmental regulations or maritime traffic-related safety;

Self-handlers may use their own personnel and equipment, subject to the same authorisation criteria as other comparable service providers;

A new requirement is introduced under which compensation for immovable assets may be paid to an outgoing service provider by their successor."

  2.5  Apart from the extension to waterway access, the scope of the proposal is unchanged. It applies to all commercial port services including pilotage, towage, mooring, cargo handling, storage, cargo consolidation and passenger services. All EU ports open to general commercial traffic handling an average of over 3 million tonnes and/or 500,000 passenger movements in the past three years are covered.

  2.6  The Commission specifies the European Parliament amendments which it cannot accept. These include amendments about transparency of financial relations between Member States and ports, and about the interpretation of the Treaty's state aid rules. The Commission considers that these are essentially concerned with competition between ports rather than freedom to provide port services. However, it undertakes to do more work on the issues.

The Government's view

  2.7  The Minister tells us:

"The main thrust of the proposed Directive is towards liberalisation of access to ports for service providers. The Government supports the broad principles of market liberalisation, but is concerned that proposals on port services should be realistic and proportionate, recognising the diversity of the industry and the competition that already exists, particularly between UK and other European ports.

"The Commission's amendments are relatively modest, and, in the Government's view, do not take sufficient account of the variety of arrangements for port organisation and operation in Member States. The Government would therefore wish to see the scope for further amendments explored on a number of issues, including:

—   models other than the landlord and tenant structure with tendered concessions;

—  the particular circumstances of vertically integrated ports and of dedicated terminals;

—  the special circumstances of ports and ferry services in peripheral areas;

—  inter-port competition as the relevant market in which some ports and service providers operate;

—  state aids and cost recovery from users;

—  the justification for introducing a 'competent authority' into existing commercial tendering processes;

—  the implications for job security, safety, and training, taking account of the potential for increased use of casual labour."

  2.8  With regard to the consultation exercise, the Minister reports as follows:

"In March 2001, the then Department of Environment, Transport and the Regions issued a consultation paper on the Communication and draft Directive. Some 60 responses were received from a wide range of organisations and individuals. Of these approximately 65% opposed the Directive, with around 25% in favour. Many port authorities believe that the Directive is unnecessary and that it does not take account of the structure of the UK market, which has vigorous competition and no public subsidy.

"The [Department of Transport, Local Government and the Regions] has held a series of meetings with representatives of the UK ports sector, port users and other interests, to discuss the issues that the proposed Directive raises. Further consultations are taking place on the Commission's amended proposal, but it is already clear that the amendments have not fully met the concerns of the UK ports industry. The representatives of the UK ports labour force also remain vehemently opposed to the Directive. Port user organisations including shippers remain broadly in favour of the proposals, maintaining that the Directive will assist them in EU markets."

  2.9  The Minister tells us that the amended proposal does not significantly alter the potential financial implications of the measure. Additional regulatory burdens and costs would be imposed both on Government and on industry by the procedures for tendering and selection of service providers, and by the arrangements for competent authorities. The establishment and management of an appeals process would also involve costs. It is not yet possible to assess the significance of these costs.

  2.10  The Minister informs us that the Barcelona European Council called for this measure to be adopted by December 2002.


  2.11  We thank the Minister for his Explanatory Memorandum, and for reporting on the results of the consultation exercise. Although he does not mention a Regulatory Impact Assessment, we presume that his Department still intends to produce one, and repeat our request for a copy as soon as it is available.

  2.12  We note that the Government is seeking further amendments on a number of fronts. We ask the Minister to keep us informed of the progress of negotiations. Meanwhile, we clear documents (a) and (b), but keep document (c) under scrutiny until there is more certainty about the provisions of the draft Directive and its related costs .


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