Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 40-59)



  40. On safety?
  (Mr Elsner) We have a whole body of safety rules which are European rules. As you know, they are European rules made mandatory by the European Union relying essentially maybe 99 per cent on IMO rules. Yes, they are very much concerned with safety, especially as a result of some of the unfortunate accidents that we have witnessed over recent years. We have a whole list. If I may just remind you of one of the very latest developments, it is the abolition of single-hull tankers.


  41. As you said, these are IMO standards.
  (Mr Elsner) They are technically IMO standards which, because the IMO is not a body which can enforce the rules itself, in order to become valid and be respected have to have the legal standing of a legal obligation. That was done by the European Union. They are technically the same but now they are legally binding on the Member States, on the shipping companies, etcetera.

  42. There is a cross-reference in this Directive to the necessity for—
  (Mr Elsner) No, this is separate.

  43. Port authorities to apply the standards which you tell us are in this.
  (Mr Elsner) That is right; that is a separate exercise. We have a number of them: port state control is a very important issue.

  Chairman: Yes, this Committee has done a lot of work on that.

Chris Grayling

  44. Forgive me for being direct with you but in the past few weeks we have had in front of this Committee a number of examples of cases where the Commission has had an involvement where it seemed inappropriate to us that that should be the case. Why is it necessary for your department to be seeking to have a European-wide involvement in this area? Why do we need a Directive? What is the purpose? What benefit does it bring?
  (Mr Elsner) The benefit is that we try to establish a system which combines and marries the existing legal obligations and rights with the specificities of the port sector.

  45. I understand what you say about the system, but why?
  (Mr Elsner) Because otherwise ports today would not in specific situations know how to handle a specific request. They would either say yes, or no, which they have been doing for years and there was probably nothing wrong with that, but it does not set out the clear rules which ought to be followed.

  46. Surely in a free market, which we want to have, in a dynamic free market across Europe, it does not need pan-European administration to say "You must do it this way"?
  (Mr Elsner) But we do not have a dynamic free market in port services. A number of countries have no rules at all as to which company and under what conditions would be allowed to operate in a port. Decisions there are taken behind closed doors.


  47. But you would not say that was the case in the United Kingdom.
  (Mr Elsner) I did not say that; no.

  48. You accept that there are very fundamental differences and that competition exists between ports in the United Kingdom. There is absolutely no bar to anyone having access.
  (Mr Elsner) There is competition between UK ports, there is competition between German ports, there is competition between Italian ports, there is competition between all the ports everywhere.

  49. So there can be no distortion of trade between the United Kingdom and other countries which could not be dealt with by free access to British ports.
  (Mr Elsner) This is a different issue. The issue is if a company that is competent wants to operate in a port—I cannot name names outside the UK—nobody is in a position to tell this company what it can do. If you want to invest in container terminals in a number of major European ports, you are not allowed to do so; you are simply not allowed to do so. That is not right. When you ask under what conditions you can operate if you are competent, and many companies are very competent and you would not wish to argue about that, there is simply no answer because there are no clear rules. There is no transparency, there is no fairness in the distribution of licences. Licences are distributed in many, many cases behind closed doors.

  50. But not in the United Kingdom.
  (Mr Elsner) No.

Chris Grayling

  51. But the risk is what we see as a result of this, and you see it in so many examples of regulation, that what you actually do is impose burdens and difficulties on the decent performers and the people who were not playing by the rules in the first place and did not provide that access will carry on doing what they have always done. The reaction you are getting from the ports sector in this country is that it is wrong for them and it will cause them difficulties.
  (Mr Elsner) I know.

  52. You are saying that the ports sector in this country is not the problem, so why try to do something which imposes regulations on our ports sector?
  (Mr Elsner) First of all, if you create rules for the whole of Europe, you cannot simply make an exemption for one country. That is the first difficulty. If there are serious problems in a majority of countries, then these are grounds for trying to do something about it, all the more so since we all know that in the future we have to have better port services in order to address the problems.


  53. But you have no problems with British port services, nor do you think that there is a lack of competition in British ports.
  (Mr Elsner) I do not want to go into detail about British ports. I visited a number of ports and together we assessed the specific situation in those ports. I have not seen them all and I know that there is concern about one or two or maybe one major UK port about the possibility of service providers offering their services.

  54. Could you name the name? In the House of Commons we do like evidence.
  (Mr Elsner) Yes. I can say that it has been brought to our attention that in the port of Felixstowe, which is a privately owned port, it is impossible for a competent independent service provider to offer its services.

Chris Grayling

  55. But that service provider is free to offer those services at any one of a dozen ports up the east coast of England.
  (Mr Elsner) No, because the ports are owned by others and they may or may not allow this service provider in them; they may or may not.

  56. There are some ports where a new entrant can enter and some ports where they cannot.
  (Mr Elsner) That is right.

  57. Because an operator may own a whole port.
  (Mr Elsner) This is an argument which was put forward quite often and has been discussed thoroughly with Member States most recently and the scenario which was always put forward was to say that if I cannot operate in port A then I should go to port B or port C. What if port B and port C, as would be the case in a number of areas in Europe today, would equally say you cannot operate in my port? What do you do then?


  58. With respect, do not write a Directive which has the effect of a law and which can be imposed upon Member States on the assumption that if something does not happen, something else might. Frankly that is an extremely dangerous way to frame legislation.
  (Mr Elsner) No, we have written this Directive because in the majority of countries in the European Union, in a very substantial number of ports, there are very bad rules, if rules at all, with regard to market access for port service providers.

  Chairman: You have not done very well at demonstrating that.

Chris Grayling

  59. How do you sort those problems out without causing problems for those parts of the European Union which are doing just fine? That is my challenge to you. Almost invariably when you impose rules and regulations in this way we in this country have a sometimes unfortunate habit of imposing the rules, gold-plating them, trying to play by the rule book. Many other countries do not. All that will happen is that if you force a Directive onto our ports sector that they do not want, they will administer the rules, they will take the pain and those ports who are trying to tackle the problem in other parts of the EU will stick two fingers up and ignore you.
  (Mr Elsner) I would not agree with that; simply saying that one or maybe two Member States respect the rules and the other Member States do not respect the rules. Statisticians would show you that this is not the case. Be that as it may, we have structured our Directive in such a way as to take into account the specificities of ports—whether they are private or not does not matter—which already allow port service providers access to the port. This is why as the text stands today the bulk of the rules will not apply to those ports, and many of them are UK ports, where if a competent service provider who wants to put up his money would be allowed in the port. This is why we have drafted it the way we have drafted it. We could have drafted it differently.


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