House of Commons - Transport

Select Committee on Transport Ninth Report

Annex 1: Schedule of Comments

Clauses	Original Text	Change/Comment	Source
	PART 1 PILOTAGE
1	Competent harbour authorities	"…the test that leads to CHA status being removed should be that a safety assessment shows that there is no need for a pilotage service rather than that the harbour authority finds it irksome to provide one."	Chamber of Shipping, DMNB 09, para 15	A CHA would need to consult with any harbour users, consider risk assessments of any existing or future needs, and any other factors that led to their decision. The Department proposes to provide guidance on the process, content and nature of an application. There will need to be a form of verification as to whether pilotage remains a requirement in any given situation so that the Secretary of State may be satisfied that it is appropriate for the CHA to relinquish its powers.
2, 8 and 17	Occupational qualifications	"UKMPG questions whether this statutory provision is really necessary at this stage though we are prepared to accept it if it is clearly recognized to be a last resort power which would only be used should industry fail to adopt non legislative standards."	UK Major Ports Group (UKMPG), DMNB 02, Section 3(d); British Ports Association (BPA), DMNB 01, para 3(e)	National Occupational Standards (NOS), upon which qualifications will be based , have been developed with the cooperation of industry. Our preference is that industry should adopt NOS voluntarily. Statutory provision will only be introduced in the event that the voluntary approach fails.
		"… it is deeply disappointing that the draft Bill proposes that this regulation-making power should only be used if the industry continues to fail to adopt non-legislative standards."	Nautilus, DMNB 06, para 3.1.4; Honourable Company of Master Mariners, DMNB 11, para 2.11.3.1.5	The Ports Policy Review, having carefully considering all representations and recommendations, concluded that that the present framework remains broadly correct; but that there is scope to improve non-statutory mechanisms. Accordingly we consider that industry will wish to introduce effective occupational standards without the need for legislation. Should this not happen then the legislative reserve power would be used.
2	Qualifications required by pilots
2 (3A)	Qualification regulations
2 (3B)	Section 3A: supplemental
3 to 5	Pilotage provisions	"… these are all sensible proposals, deregulatory in nature, but should be matters for individual harbours and not public legislation of this type."	BPA, DMNB 01, para 3(c); UKMPG, DMNB 02, Section 3(b)	While Competent Harbour Authorities have a duty to determine whether pilotage is required, and if so whether it should be compulsory, the overall pilotage framework should continue to be determined at national level. Since clauses 3 to 5 involve amendment to existing general legislation, then amendments to that general legislation can only be achieved through further legislation.
3	Pilotage notification
4	Exemption certificates: grant	UKMPG has "concerns about the proposal to remove the current restriction confining the holding of PECs to masters and first mates. This would place the responsibility for establishing the underlying competency of the applicant on the harbour authority rather than relying on the well established system of internationally recognised systems of competency and the International Safety Management (ISM) Code."	UKMPG, DMNB 02, Section 3(b); UK Maritime Pilots Association (UKMPA), DMNB 10, paras 5 and 8.	No changes are proposed to the level of skill, local knowledge and experience required of an applicant for a PEC. The CHA may require applicants to produce the Maritime and Coastguard Agency's Certificate of Competency (or its equivalent) when applying.
		"... it is entirely appropriate that PECs are limited to masters and chief mates, since pilotage by its nature requires experience, skills and professional judgement that are far less likely to be found among lower ranks. The attempt to justify the removal of the restrictions on the grounds that 'the term first mate is gradually ceasing to be used' is groundless. .... it will increase the pressure on seafarers to conduct their own pilotage, rather than having the work done by dedicated marine pilots. ... it could encourage the use of 'rent a PEC' as in the case of the Ursine and Pride of Bruges."	Nautilus, DMNB 06, Section 3.1.2; UKMPA, DMNB 10, paras 5 and 6.	A competent harbour authority has to be satisfied (by examination or by reference to such other requirements as it may reasonably impose) that the skill, experience and local knowledge of the applicant are sufficient for him to be capable of piloting the ship in its harbour. The guidance issued by the MCA - MIN 307(M) (this guidance will be added to the Port Marine Safety Code Guide to Good Practice (8.4.14) at the next revision) - addresses the question of the assessment of skill; a mariner's level of skill is, in principle, confirmed by his Certificate of Competency.
				It is accepted that the circumstances relating to the issuing and use of a PEC aboard the ro-ro vessel Ursine were the result of an error of judgement by the competent harbour authority that occurred under the existing regulatory framework. The proposals in the draft Marine Navigation Bill will not encourage a repeat of this practice. The draft Bill proposes to amend the Pilotage Act 1987 to provide that the master of a ship must ensure that the relevant competent harbour authority is notified before the ship is navigated in an area for which a pilotage direction is in force. That notification will state that the ship will be piloted by a specified person in accordance with a pilotage exemption certificate, which is valid for that ship, issued by the authority.
		"… any PEC [should] only be issued to a Navigation Officer holding a class 1 or class 2 certificate of competency for the class of vessel piloted. This gives greater flexibility than at present based on a consistent qualification."	Honourable Company of Master Mariners, DMNB 11, para 2.9.3.1.3	A competent harbour authority has to be satisfied (by examination or by reference to such other requirements as it may reasonably impose) that the skill, experience and local knowledge of the applicant are sufficient for him to be capable of piloting the ship in its harbour. The guidance issued by the MCA - MIN 307(M) (this guidance will be added to the Port Marine Safety Code Guide to Good Practice (8.4.14) at the next revision) - addresses the question of the assessment of skill; a mariner's level of skill is, in principle, confirmed by his Certificate of Competency.
5	Exemption certificates: suspension and revocation
5 (8A)	Pilotage exemption certificates: suspension and revocation	"Depriving a ship's officer of his PEC, and thus part of his livelihood, without giving him and opportunity to answer any allegations is objectionable. … the provision (in case 4 of that clause) for a CHA to deprive him of his PEC in the event that someone else has used it, without his knowledge ... offends against a basic principle of justice."	Chamber of Shipping, DMNB 09, para 13	It is proposed that a CHA may by written notice suspend or revoke a PEC in the event the pilotage was carried out by a person who was neither an authorised pilot nor acting in accordance with a PEC. Before a CHA suspends a PEC it would have to take all reasonable steps to ensure that it is the proper course of action, since they may be obliging the shipping operator to take a pilot during the period of suspension. If there is doubt as to the circumstances then the CHA will not suspend the PEC. It is a matter of ship management that the PEC holder on board will be available to navigate the vessel when the ship enters waters where pilotage is compulsory. If the PEC holder actively avoids being on the bridge then it is right that his PEC can be suspended.
5 (8B)	Section 8A: supplementary	"… the provision allowing (but not requiring) a harbour authority to make a compensation payment where a certificate has been wrongly suspended needs to be expressed in clear terms so there is clarity about the extent of liability."	UKMPG, DMNB 02, Section 3(b)	This provision relates to the ability of the CHA to pay compensation, but does not govern whether and to what extent any compensation may be payable. It is considered that a discretionary power is appropriate here because if the circumstances are such that compensation is appropriate then the CHAs should have the power to make compensation payments. It is probable that the extent of compensation would be related to costs of providing a pilot during the voyages that are made while the suspension is in force.
		"Whilst the principle of compensation in the event of wrongful suspension of a certificate is correct, Nautilus is concerned at the potential for this to act as a disincentive to rightful suspension. It is therefore important to make some distinction between the penalty for a company as opposed to the potential suspension of a PEC holder."	Nautilus, DMNB 06, Section 3.1.2	It is proposed that a CHA may by written notice suspend or revoke a PEC in the event the pilotage was carried out by a person who was neither an authorised pilot nor acting in accordance with a PEC. The maximum period for which a PEC may be suspended is 28 days (extendable by a further 28 days where necessary). Before a CHA suspends, in the interests of safety, a PEC it will take all reasonable steps to ensure that it is the proper course of action, since they will be obliging the shipping operator to take a pilot during the period of suspension and may be liable for compensation should the suspension prove unfounded.
		"A CHA should be required to compensate the PEC holder and his employer for direct and consequential losses suffered as a result of its wrongful action; and should further be liable to a penalty in the event of abusive action, such as repeated wrongful suspensions."	Chamber of Shipping, DMNB 09, para 14	This provision relates to the ability of the CHA to pay compensation, but does not govern whether and to what extent any compensation may be payable. It is considered that a discretionary power is appropriate here because if liability is found to exist, then CHAs should have the power to pay it according to the particular circumstances of the case. Before a CHA suspends a PEC, in the interests of safety, it would take all reasonable steps to ensure that it is the proper course of action, since they would be obliging the shipping operator to take a pilot during the period of suspension and may be liable for compensation should the suspension prove unfounded. In the absence of evidence of wrongful action in relation to existing powers to revoke or suspend we have no reason to expect it to be an issue in the future. We consider that the courts have enough powers in judicial review proceedings to deal with the issue appropriately.

	PART 2 HARBOUR AUTHORITIES
6	Directions by harbour authority
6 (40A)	Directions	"...we suggest that automatically conferring the power on all commercial ports would be a more efficient legal route and save administrative cost for ports and the Department."	UKMPG, DMNB 02, para 3(a); Chamber of Shipping, DMNB 09, para 4	Automatically conferring the power on all commercial ports would confer on those ports who already have powers to give 'general directions' a second similar power, with potential for confusion as to the scope and application. Our ports policy has adopted the approach that responsibility for port management generally and port marine safety specifically is appropriately devolved to the relevant harbour authority.
		"... the proposed section 40A to be inserted into the Harbours Act 1964 by clause 6 of the Bill should be amended so that general directions can only be given in the interests of facilitating navigation or otherwise in the interests of port or marine safety and not for other purposes."	Royal Yachting Association (RYA), DMNB 08, para 32	The purpose of harbour directions is to enable harbour authorities to promote the ease, convenience or safety of navigation. Given the requirements for consultation, we do not consider it necessary to have such a limitation.
6 (40B)	Procedure	The "proposed section 40B to be inserted into the Harbour Act 1964 by clause 6 of the draft Bill [should be] replaced with provisions allowing for independent adjudication in cases of dispute"	Royal Yachting Association, DMNB 08, para 33; Chichester Harbour Conservancy, DMNB 12	Many harbour authorities already have the power to give general directions by means of private Act or local legislation. It is generally a requirement for these harbour authorities to consult with harbour users. The proposed power in the draft Bill to give harbour directions is intended to enable those harbour authorities who do not already have such power a means, following consultation with representatives of users of the harbour to better regulate, for marine safety purposes, any vessel or vessels within, entering or leaving the harbour. The Government is not persuaded that the additional cost, and potential delay involved with the provision for independent adjudication would contribute to marine safety.
6 (40C)	Enforcement	"The targeting and proposed level of fine is a cause for deep concern... In many cases it is totally inappropriate to single out a ship's master for failure to follow directions, but more realistically to include owners, managers and other parties with direct responsibility for ship operations within the scope of the penalties. The fine level is grossly disproportionate for an individual, notably when compared with the proposed similar scale for corporate bodies set out elsewhere in the draft bill. The proposed penalty for bodies corporate is more of an incentive not to comply."	Nautilus, DMNB 06, Section 3.1	The master is responsible at all times for the conduct of the vessel. The level of sanction matches that already available to harbour authorities who have been given the power to give general directions. However the level of sanction is a matter on which we are prepared to consider views from stakeholders. We will be taking into account all stakeholders' views.
6 (40D)	Supplemental
7	Safety Directions
7 (40E)	Directions	"... the proposed penalty of £2,500 is woefully inadequate for a corporate body (particularly when the same scale of penalty is proposed for individual shipmasters who fail to follow directions) and it will not act as a disincentive to operating a port in an unsafe manner."	Nautilus, DMNB 06, Section 3.1.3; Honourable Company of Master Mariners, DMNB 11, para 2.10.3.1.4	While the draft Marine Navigation Bill has made proposals as to the level of sanction, it is a matter on which we are prepared to consider views from stakeholders. We will be taking into account all stakeholders' views.
		"… there should also be a general provision to enable the exclusion of a vessel, or vessels, of a particular flag or company (as is the case in civil aviation) in order to ensure the safety of a port and other users."	Nautilus, DMNB 06, Section 3.1.5	Our policy is that ports have been created to serve a public interest, and there is a public right to use the harbour. Generally there is also a public right of navigation in harbour waters. It would not therefore be appropriate to provide for the exclusion of a vessel or vessels. There are certain circumstances where vessels can be excluded but these circumstances are strictly limited.
7 (40F)	Devolution
8	Qualifications required by harbour masters	See Cl 2 above
8 (42A)	Qualification regulations	"... while there is a degree of similarity between the qualifications required to run a major port and overseeing the Broads navigation, clearly there is a difference in scale and nature and it is argued that the "qualification regulations" proposed in the Draft Bill will need to be able to accommodate those different requirements."	The Broads Authority, DMNB 05, Section 5; The Chichester Harbour Conservancy, DMNB 12	The draft Marine Navigation Bill contains a power for the Secretary of State to introduce regulations concerning qualifications. The Government plans to make use of this regulation making power only if industry is unable to agree and introduce the necessary qualifications. The differences of scale and nature are recognised, as are the common harbour management principles. It is also recognised that marine professionals may wish to move from port to port and their qualifications should enable them to take port management positions at other harbours. Harbour authorities would also be able to require qualifications in addition to those based on National Occupational Standards.
8 (42B)	Section 42A: supplemental
9	Closure orders
9 (17A)	Power to make order	"… the Secretary of State should have powers to close a port not only in circumstances where a harbour authority is not existent but also where it is unwilling to implement safety measures."	Nautilus, DMNB 06, Section 3.1.5	There is no intention to close a harbour that is viable but which is being run unsafely. The draft Marine Navigation Bill has a power enabling the Secretary of State to give directions to a harbour authority in this event. A harbour closure order is intended for use only where all other options have been exhausted; for example where it has silted up.
		"… the power should be limited so that it can be used only when there is no current or foreseeable demand for the port from ships, and not simply when the harbour authority no longer wishes to maintain it and prefers to sell it for redevelopment."	Chamber of Shipping, DMNB 09, para 17	We are concerned not to fetter the Secretary of State's discretion. However any current or foreseeable demand will certainly be one of the criteria that the Secretary of State would take into account when considering any application for an order.
9 (17B)	Content of order
9 (17C)	Property
9 (17D)	Procedure
9 (17E)	Devolution
9 (17F)	Supplemental

	PART 3 LOCAL LIGHTHOUSE AUTHORITIES
10	Information	… it is important that the GLAs have the necessary powers to be effective in superintending the maintenance of [AtoNs] by local lighthouse authorities (LLAs). A requirement on LLAs to provide the GLA with performance reports and other information on their aids would appear to be a basic foundation for that superintendence role.	Chamber of Shipping , DMNB 09, para 23	We welcome the support for this provision in the draft Bill to strengthen the GLAs' existing powers to ensure LLAs' compliance in maintaining local aids to navigation.
11	Control	The proposal to give directions to Local Lighthouse Authorities (LLAs), which in most cases are ports, raises the issue of powers of LLAs to themselves give directions to third parties which very often have prime responsibility; the proposals do not address this.	British Ports Association, DMNB 01, para 3(g)	We have noted the comments and will take them into consideration together with other responses to the consultation exercise on this issue following the end of the consultation period.
		Nautilus UK supports the principles behind these proposals, given the safety-critical nature of aids to navigation. However, we believe that this is another case in which the proposed maximum level of the fine is totally inadequate.	Nautilus UK, DMNB 06, para 3.2.2	We welcome the support for these proposals. We will review the adequacy of the maximum fine levels after consideration of all the comments.
		We … support the proposals which would make it an offence, either to fail to provide the information the GLAs require to carry out their management and inspection function, or to fail to comply without good reason with a direction to deploy or repair an aid to navigation. We would issue a direction … only after the relevant Local Lighthouse Authority had been given reasonable opportunity to deploy or repair the aid to navigation or make representations to us.	General Lighthouse Authorities for the British Isles, DMNB 07, para 11	We welcome the GLAs' support for this provision in the draft Bill and their confirmation that they would only issue a direction to the LLAs to deploy or repair an aid to navigation, which would require the Secretary of State's consent, after a reasonable opportunity had been given to the LLAs to do so.
		The consultation document seeks the views of stakeholders on extending these provisions to operators of offshore installations and renewable energy devices … Whilst we would support this proposal, we would encourage the Government to extend the provisions to all providers of third party aids to navigation.	General Lighthouse Authorities for the British Isles, DMNB 07, para 12	We have noted the comments and will take them into consideration together with other responses to the consultation exercise on this issue following the end of the consultation period.
		… the Chamber of Shipping has been advocating the introduction of penalty regime that both deterred LLAs from failing to comply with their duties and enabled the GLA to recover the additional costs of pursuing defaulters. The regime proposed, in providing for fines to be payable to the Crown according to the standard scale, would not meet these objectives. It neither enables the GLA to recover its additional costs nor does it enable the fine to reflect the cost of the safety risk that was left uncovered. In the Chamber of Shipping's view, the penalty should be in the form of a charge payable to the GLA, comprising its additional costs and a deterrent element reflecting the severity of the safety risk left uncovered and its duration.	Chamber of Shipping , DMNB 09, para 24	The objective of this measure is not primarily to raise money for the Exchequer or any other organisation but to impress upon the responsible authorities the need to have systems that will ensure the maintenance of their aids to navigation in a fully functional state so that the necessity of prosecution or financial penalties does not arise.
		The Conservancy supports the principle of this measure but considers that it needs to give additional powers to LLAs in order to implement it. A common problem faced by LLAs is getting third parties (Local Authorities, British Telecom, electricity companies, private marinas and others) to maintain aids to navigation that were required when the works were licensed. Many of the works may be defunct and the agency responsible for the works may have no interest or incentive to maintain the aid to navigation marking it and therefore cease to do so. LLAs do not have the powers to enforce against third parties and it would be unreasonable to give enforcement powers to GLAs against LLAs without giving similar powers to LLAs to enforce against third parties.	Chichester Harbour Conservancy, DMNB 12	We have noted the comments and will take them into consideration together with other responses to the consultation exercise on this issue following the end of the consultation period.

	PART 4 GENERAL LIGHTHOUSE AUTHORITIES	It is disappointing that an opportunity has not been taken to carry out a major rationalization of the … GLAs to consolidate them into one.	Independent Light Dues Forum (ILDF), DMNB 03, para 6	We do not believe that consolidating the three GLAs into one Authority would offer major savings even if the political difficulties of splitting the all Ireland body, the Commissioners of Irish Lights, from Trinity House and the Northern Lighthouse Board could be overcome. The GLAs already benefit from the many benefits of an integrated lights service including the operation of the GLA fleet and co-operation in a range of support functions including insurance and legal matters, research and development, engineering and information technology - all producing cost saving benefits for the General Lighthouse Fund. The GLAs will continue to focus on achieving more efficient operations within their current structures to control costs.
		Given the adverse impact of light dues on the competitive position of large ships calling at UK ports, it is clear that the current system discriminates against those ships calling at ports in England or Wales. There is a surplus of revenue in England and Wales derived from the collection of light dues. There is a very substantial deficit in Scotland and in Ireland.	Independent Light Dues Forum (ILDF), DMNB 03, para 9	We have no evidence that substantiates a claim that light dues costs make the use of UK ports uncompetitive and are driving vessels into mainland European ports. The shipping industry continues to call upon the Government to expand port capacity for the provision of larger vessels which suggests that UK ports remain an attractive option for commercial operators. In 2003 the Department commissioned an economic review of the effects of light dues costs. The review concluded that light dues had negligible effects on the UK economy and vessel trading patterns in the UK.
		The [efficiency and cost] savings … result from the rapid advances in technology and the automation of navigational aids, not from any real improvements in reducing the overhead cost structures of the GLAs.	Independent Light Dues Forum (ILDF), DMNB 03, para 11	While major efficiency gains have been achieved as a result of modern technology, the GLAs have been proactive in focusing on reducing overhead costs where they can. In recent years, the GLA fleet has been reduced from 9 to 5 vessels and the number of depot sites from 8 to 4. These reductions have been significant, ensuring that light dues remain at their lowest levels for years - last increased in 1993 and reduced in 1997, 2000, 2004 and 2006.
		… this draft Bill is an opportunity to end the costly anomaly of the Irish Subsidy … the rate of UK light dues is higher than would otherwise be the case, and the rate of light dues in the Republic of Ireland is correspondingly lower. This subsidy of a public service … in another Country is not only anachronistic, but it also constitutes a heavy financial burden on the GLF and an unfair burden on UK shipping. We suggest the draft Bill should propose an amendment to Article 211 of the 1995 Merchant Shipping Act, removing the obligation on the Secretary of State, and the GLF, to pay for the provision of navigational aids in the Republic of Ireland …	Independent Light Dues Forum (ILDF), DMNB 03, para 17	The Government accepts the need to review and update arrangements for funding of Irish Lights. But the issues are complex and it is not a simple matter of legislating so that each State funds aids to navigation in their own territories. We take account of the benefits of an integrated system for the whole of the British Isles. Separate systems in the Republic of Ireland and in the UK would be likely to cost more. We have gathered evidence, published in March 2008, in the Evidence Report by Penny Brooke on the costs of aids to navigation in Northern Ireland and in the Republic. Constructive talks based on that report are now in progress between officials from the two countries' Transport Departments with the aim of reaching a new lasting funding agreement for the provision of Irish Lights. It is too early to say when an agreement will be reached.
		The GLAs welcome and support the provisions in the draft Bill, which clarify and provide further versatility to, the powers they already have under the 1995 Act which, for a variety of reasons, now require updating.	General Lighthouse Authorities for the British Isles, DMNB 07, para 7	We welcome the support for provisions in the draft Bill.
12	Areas	The extension of the powers to the GLAs outside the current 12 mile nautical limit can be seen to regularize a practice which has been operationally applied for many years. We would ask if the £1.5 million costs already being incurred are charged to the GLF as seems implied? If so, was this ever a legitimate or legal charge to the GLF? This clause seems to be a measure designed to ensure that the GLF bears the costs of maintaining navigational aids far beyond the current 12 mile limit for marking wrecks in international waters thus relieving the Government of the responsibility. Its cost impact is uncertain.	Independent Light Dues Forum (ILDF), DMNB 03, para 12	It is important to establish beyond any doubt the area within which GLAs may maintain aids to navigation and mark and disperse wrecks outside territorial waters, work that they have done for over 200 years for the benefit of the mariner. They currently carry out this work where necessary in the interests of safety of navigation under the powers granted by section 253 of the Merchant Shipping Act 1995 which relates to the waters around the United Kingdom or any of the adjacent seas or islands. Unrecoverable costs incurred through exercising this power may be charged to the GLF. The GLAs spend approximately 2% of fleet time in servicing aids to navigation outside territorial waters.
		Nautilus UK considers it to be entirely appropriate for GLAs to be given powers outside the 12nm limit, and believes that this should be extended to the median line of the UKCS. Such a proposal reflects the realities of maritime operations and the potential need to respond to incidents outside the territorial sea limit.	Nautilus UK, DMNB 06, para 3.2	We welcome the support for this provision which covers the extension referred to in the comments by Nautilus UK.
		The GLAs are required to perform their statutory role and duties beyond the 12 nautical mile limit of territorial waters ... There would consequently be serious implications for the safety of the mariner and the environment if aids to navigation provision and wreck marking and dispersal were restricted to territorial waters ... The GLAs welcome this clarification of their geographic responsibilities.	General Lighthouse Authorities for the British Isles, DMNB 07, para 8	We welcome the GLAs' support for this provision that defines the GLAs' geographical areas of operation.
		There is obvious merit in clarifying (as per clause 12) that the GLAs do have powers to maintain those of their aids to navigation that are situated outside the 12 mile limit of UK territorial waters. A question nonetheless arises as to how any new work undertaken by the GLAs beyond the 12 mile limit, for example activities pursuant to the Wreck Removal Convention should be funded.	Chamber of Shipping, DMNB 09, para 18	The GLAs already carry out functions outside the 12 nautical mile limit, such as the marking of the traffic separation zone in the English Channel. These are currently financed from the General Lighthouse Fund and no change is envisaged to these arrangements. The GLAs have the expertise in marking wrecks and accordingly the provisions implementing the Convention give them that role within the UK Convention area. However the legislation will allow for the MCA or other authorities to do this work. Owners of ships of 300 or more gross tonnage calling at a UK port or terminal will have to have wreck removal insurance. Failure to insure will be an offence under new section 255L. It is therefore considered that there should be no increase in light dues caused by the Convention.
13	Commercial activities	We agree that the GLAs represent an asset which should be used in the most efficient and cost effective way, but it is important that the GLAs demonstrate that in taking on this work they are doing so on a commercial basis and do not use their GLF funded activities to subsidise their costs.	British Ports Association, DMNB 01, para 3(g)	All agreements and expenditure incurred by the GLAs in connection with this work will be subject to the approval of the Secretary of State. An analysis of the risks, economic factors and benefits to the General Lighthouse Fund will be undertaken for each project to ensure the GLAs do not exceed their statutory authority.
		[The GLAs commercial activities to date do] not seem to demonstrate much commercial benefit, and they certainly exposed the GLA's to commercial risk … we do not believe that these powers should be granted to the GLA's given the current governance arrangements and we do not believe that the Government is the best organization to assess the commercial viability of proposals submitted by individual GLA's. It is time that the users be given an opportunity to exert much more influence over the functions, efficiencies targets and costs of the GLA if they are to remain the financial providers. We would suggest that the Lights Finance Committee be completely reconstituted to accept much greater independent user representation and be given the powers to vet all commercial investment proposals to ensure that they are going to lead to profits, nor losses. The final appeal to the SOS could remain.	Independent Light Dues Forum (ILDF), DMNB 03, para 13	The GLAs' commercial work is increasing and the proposed powers in the draft Bill would allow the GLAs to generate more income for the General Lighthouse Fund which contributes towards maintaining light dues rates at the lowest level possible. Rates were cut by 10% in 2006 and were held at this level in 2007 and again in 2008; in real terms, light dues are almost half of what they were at their height in the early 1990s. The Lights Advisory Committee (LAC), the Secretary of State's advisors on lights and navigation issues that includes representatives from the shipping industry with commercial expertise, is closely involved in the GLAs' annual corporate planning process that sets out the GLAs' targets and expenditure proposals. The LAC is also represented on the Lights Finance Committee that looks in detail at the investment performance of the General Lighthouse Fund and ensures that light dues payers receive value for money.
		… it is appropriate for GLAs to be able to conduct commercial work, particularly given the expertise of the three constituent bodies and the knowledge and skills that can be utilised to the benefit of other organisations, such as ports and harbour authorities, with respect to navigational aids.	Nautilus UK, DMNB 06, para 3.2	The GLAs are recognised internationally as experts in their field and their expertise and skills are a resource that should be utilised fully to benefit and generate income for the General Lighthouse Fund. This provision aims to achieve that objective.
		The GLAs welcome this additional clarity as to how their assets and expertise can be used to maximise returns on the investments made and related commercial benefits.	General Lighthouse Authorities for the British Isles, DMNB 07, para 17	We welcome the GLAs' support for this provision in the draft Bill.
		Investing in new assets specifically to enable a GLA to exploit spare capacity that would otherwise lie inert is a natural progression, although it gives rise to obvious questions about the taking of investment risks with money that is held in trust after for the purpose of maintaining UK aids to navigation or, potentially, about fair competition. The proposal that each venture would require the consent of the Secretary of State appears to provide for sound governance, on the assumption that he would (as usual) consult with his appointed advisors on the Lights Advisory Committee before granting any consent.	Chamber of Shipping , DMNB 09, para 21	The Secretary of State values the expertise and advice of the Lights Advisory Committee on lights and navigational issues. We would appreciate and welcome the recommendations of the Committee on projects submitted for the approval.
14	General Lighthouse Fund: pensions	UKMPG supports in principle the proposed modernization of the GLA pension arrangements so that they are more in line with those which apply generally in the UK economy. However we would be concerned if changes to the funding of deficits in the schemes added to user costs in such a way that this discouraged shipping from using UK ports in favour of continental ports where similar charges are not applied.	UK Major Ports Group (UKMPG), DMNB 02, para 3(e)	The provisions in the draft Bill would permit the establishment of a fully funded pension scheme that would be protected from other GLA liabilities and would not add to user costs. The new powers would also permit the more efficient management of the GLF and it is expected that the pensions liability would reduce in the longer term.
		the provisions … are a cause for great concern. We have argued for many years that the GLF carried too large a reserve to warrant paying for such unforeseen contingencies as a national dock strike, but it was never intended that the reserves be used for pension fund liabilities. The GLA's have had pension arrangements for the most part mirroring those of the Government's civil service. ... It has been assumed that the contingent liability for any pension deficit would be met by Government without any further call on the GLF. The proposed "letter of comfort" from Treasury to the Department for Transport does not provide that security. In addition, it is clear that the path is being cleared to permit long term pension liabilities to be funded through the GLF. We have no idea what this might mean in terms of future liabilities to be imposed on light due payers but we are warned that "short term costs" will increase. This is an entirely unsatisfactory situation and is a further example of "taxation without representation". The GLF should not be used by the GLA's or the Government as a convenient "piggy bank", to fund all costs and contingencies which arise. The time has come for a change in the constitutional structure of the GLA's to permit external scrutiny and control. Otherwise, let funding become a general charge on taxation, a situation which applies to most European maritime nations.	Independent Light Dues Forum (ILDF), DMNB 03, para 15	The GLF reserve is maintained at the level that we believe is necessary to meet potential liabilities and fluctuations in investment income. At present, under the terms of the letter of comfort provided in respect of the security of the GLAs' pensions, the pensions liability would fall on the Exchequer if the GLF is unable to meet the liability. The powers in the draft Bill would enable the ring-fencing of part of the General Lighthouse Fund, including employees' contributions for the payment of pensions.
		Nautilus UK welcomes the commitment indicated within the consultation document to enable the GLAs to continue to make payments to an external funded pension scheme, such as the MNOPF. We believe it is essential that this facility continues.	Nautilus UK, DMNB 06, para 3.2.1	We welcome the support for the provision in the draft Bill.
		… proposals to move from a 'pay as you go' basis to a funded basis for pensions … might increase the security that members of the pension fund will have, given the lack of legal certainty of the backing from the Department of Transport. This will also enable the fund to be governed by trustees. Nautilus would expect that 50% of these trustees would be member-nominated. However, … Nautilus would oppose any move to close a final salary scheme to new members, and to introduce a defined contribution scheme in its place, as this would reduce the value of members' benefits accrued thereafter. It appears that this is the intention of these proposals.	Nautilus UK, DMNB 06, para 3.2.1	Actuaries have submitted a range of options for pension schemes to the GLAs for consideration. The proposed legislation merely provides the Secretary of State with enabling powers and proposals would be developed in conjunction with the GLAs once the powers are granted. It would be impractical to do this detailed work at this stage. Any proposals for changes to pension schemes will be subject to full consultation with representatives of staff and pensioners. The Department considers that the letter of comfort is sufficient reassurance in practice for pensioners, although the provisions in the Bill would fully regularise the position.
		The GLAs support the proposals in the draft Bill to separate the GLF into two parts …create a separately funded pension scheme … [and] permit … payments [to] be made from the GLF to third party pension funds … The GLAs also support additional, clarifying proposals to enable employees who wish to transfer previously accrued benefits either into the GLF or the new scheme or to transfer accrued benefits out of the Fund or scheme to a new employer, to be able do so.	General Lighthouse Authorities for the British Isles, DMNB 07, para 16	We welcome the GLAs' support for pension proposals in the draft Bill.
		As payers of light dues, shipping companies have been concerned for some time about the uncontrolled extent of the GLAs' pension liabilities. The Chamber of Shipping is also aware, through its involvement in the Lights Advisory Committee, that the inability to hold GLA employees' pension contributions discretely within the General Lighthouse Fund creates difficulties for the management of the fund as a whole. The proposal appears to address both concerns satisfactorily, protecting the interests both of the GLAs' pensioners and employees and of payers of light dues.	Chamber of Shipping , DMNB 09, para 22	We welcome the support of the Chamber of Shipping for this provision in the draft Bill.

	PART 5 WRECKS
15	Wrecks Removal Convention	"Nautilus UK fully endorses these proposals, and believes that ratification, effective implementation and enforcement of the Wrecks Convention should do much to assist in dealing with the problems posed by substandard shipping."	Nautilus UK (DMNB 06)	No comment required
		"The GLAs recognise the importance of this Convention and support the principle that the opportunity of this Bill should be taken to give statutory effect to the Convention's obligations. [...] the GLAs already have duties and powers under the 1995 Act to mark and dispose of wrecks in their areas, which are outside the jurisdiction of local harbour authorities. With this in mind they are concerned to ensure that the Convention is implemented in a way that is, wherever possible, consistent with their existing powers and so as to enable rapid deployment to the scene of a casualty. The GLAs are working with the Department for Transport to seek to ensure that the Convention provisions are given effect to in a way, which guarantees this."	General Lighthouse Authorities(DMNB 07)	We are working with the GLAs to ensure that the Convention is implemented consistently with existing powers where that is possible and consistently with the Convention.
		"The Chamber of Shipping supports the UK's ratification, and proposed use of the opt-in mechanism to apply the provisions to the territorial sea, (as per clause 15) of the Wrecks Removal Convention, which is an integral element of the mosaic of liability arrangements covering international shipping."	Chamber of Shipping (DMNB 09)	We propose to utilise the opt-in to ensure that Territory and Territorial Seas are covered by the scope of the Convention, as well as the Exclusive Economic Zone equivalent area.
15 (255A)	Key concepts
15 (255B)	Wreck reports
15 (255C)	Locating and marking wrecks	"It is undoubtedly logical for the task of marking wrecks to be undertaken by the GLAs, who have the experience and equipment to do it - though questions must arise about the practicalities of marking flotsam - but it is not at all obvious why light dues payers should bear those costs that cannot be recovered from the owner of the wrecked vessel. Most will derive no benefit from the marking, and none will be responsible for those costs. As the assumption of a responsibility for marking wrecks and flotsam is an option of the Crown (by ratifying the Convention), the Chamber of Shipping considers that the Exchequer should bear the costs that arise from exercising that option and should subcontract the work to the GLAs on a normal commercial basis."	Chamber of Shipping (DMNB 09)	All costs would be recoverable as the shipowner has unlimited liability for wreck removal and all associated costs under the Convention and the Bill. Therefore no increase in light dues or burden on the GLF is expected as a consequence of the UK's ratification of the Convention.
15 (255D)	Removal by owner
15 (255E)	Directions about removal
15 (255F)	Removal in default	"There is [...] no logic for offloading the task of removing wrecks and flotsam to the GLAs, who have no ability to do the work themselves and would therefore have to subcontract it to a specialist salvage contractor. It would appear to be more satisfactory for the Crown to engage specialist contractors directly, in the same way as it does for the four emergency towing vessels that it maintains on standby around the UK to assist ships that are in difficulty and save them from being wrecked. Such an arrangement would also avoid burdening light dues payers with costs which experience has shown can be substantial and for which they are in no way responsible."		Under the Convention it is the shipowner, not the State, who is responsible for wreck removal. Where the owner does not meet the requirements, the State will act. However, the owner would remain liable for all costs of locating, marking and removal under the Convention and Bill. Therefore there should be no increased burden on light dues payers. The GLAs already have wreck removal powers. When they act under the provisions of the Bill, they would be able to recover costs in accordance with the Convention.
15 (255G)	Liability for costs
15 (255H)	Exceptions
15 (255I)	Limitation period
15 (255J)	Expenses of general lighthouse authorities	"We have no comments to make on the proposals regarding the removal of wrecks other than to say that in the event of a failure to recover the costs associated with removing a wreck from the shipowner, the State Party should bear the costs, not the GLF. We are therefore unhappy about the provisions in 255 J, most particularly because it provides an easy fall back solution for GLA's rather than having to pursue a difficult claim."	Independent Light Dues Forum (DMNB 03)	The Convention and Bill impose unlimited liability for wreck removal and all associated costs on the ship owner and require wreck removal insurance for ships of 300 or more gross tonnage. The strict liability and provision for direct action against insurers are expected to ensure that few claims will be difficult to take forward. However, the Bill allows for costs to be paid from the GLF as a fall back solution to ensure that GLAs do not lose out. This provision is likely to be used on the rare occasion when the shipowner has failed in his responsibilities under the Convention and does not maintain sufficient insurance.
		"The Chamber of Shipping [has] grave reservations about the consequences for light dues payers of the proposals for the Crown to offload its most onerous obligations under the Convention on to the GLAs - under the proposed new Sections 255C, 255F, and 255J of the Merchant Shipping Act 1995. It would be iniquitous to require light dues payers, who will all have purchased insurance cover for their own ships (by virtue of calling their calling at UK ports), to meet irrecoverable costs arising in respect of other ships whose owners have chosen to remain uninsured."	Chamber of Shipping (DMNB 09)	The Crown is not looking to offload the responsibility to the GLAs. The Bill provides for the Secretary of State to direct a number of bodies that already have responsibilities in wreck removal to undertake work. The Secretary of State's powers are exercised by SOSREP in such circumstances, as now under Schedule 3A of the Merchant Shipping Act 1995 (inserted by the 2003 Marine Safety Act). In addition to the unlimited liability of all shipowners, owners of ships of 300 or more gross tonnage calling at a UK port or terminal will have to have wreck removal insurance. Failure to insure will be an offence under 255L. It is therefore considered that there should be no increase in light dues caused by the Convention.
		"In the opinion of the Chamber of Shipping, sub-Sections 3-6 of Section 255C and 5-8 of 255F and the whole of Section 255J are objectionable. In the event of their deletion, the residual Sections 255C and 255F would clearly define the Crown's responsibilities under the Convention and enable the Secretary of State to engage whichever specialist contractor was best equipped and able to undertake the marking or removal work required in relation to the wreck."	Chamber of Shipping (DMNB 09)	Sub-sections 3-6 of section 255C and 5-8 of 255F make clear the powers of direction of the Secretary of State, under which the Secretary of State can direct a number of bodies that already have responsibilities in wreck removal to undertake work. This provides a clear link between the relevant body's actions and the Convention provisions to show that the work is in accordance with the Convention and therefore qualifies for reimbursement. However, the Bill will not preclude the Secretary of State from engaging a specialist salvor through the MCA, as already happens. Section 255J allows for costs to be paid from the GLF as a fall back solution to ensure that GLAs do not lose out. This provision is likely to be used on the rare occasion when the shipowner has failed in his responsibilities under the Convention and does not maintain sufficient insurance.
15 (255K)	Wreck removal insurance
15 (255L)	Failure to insure	"[As] it is not aware of any UK ships that are not already insured against costs arising in the event of wreck, the Chamber of Shipping does not expect the ratification to have a material impact on them."	Chamber of Shipping (DMNB 09)	No comment required
15 (255M)	Detention of ships
15 (255N)	Production of certificates
15 (255O)	Issue of certificates
15 (255P)	Cancellation of certificates
15 (255Q)	Third parties' rights against insurers
15 (255R)	Electronic certificates
15 (255S)	Interpretation
15 (255T)	Government ships
15 (255U)	Power to amend
16	Marking wrecks	It is undoubtedly logical for the task of marking wrecks to be undertaken by the GLAs, who have the experience and equipment to do it … but it is not at all obvious why light dues payers should bear those costs that cannot be recovered from the owner of the wrecked vessel.	Chamber of Shipping , DMNB 09, para 27	All costs would be recoverable as the shipowner has unlimited liability for wreck removal and all associated costs under the Wreck Removal Convention and the Bill. Therefore no increase in light dues or burden on the GLF is expected as a consequence of the UK's ratification of the Convention.

	PART 6 MISCELLANEOUS
17	Manning requirements	See Cl 2 above
18	Amendments consequential on sections 1, 2, 6 and 8



© Parliamentary copyright 2008	Prepared 19 July 2008