Documents considered by the Committee on 19 January 2011 - European Scrutiny Committee Contents

5 Carriage of passengers and luggage by sea



COM(10) 686

Amended draft Council Decision concerning the accession of the European Union to the Protocol of 2002 to the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974

Legal baseArticles 100(2) and 218 TFEU; co-decision; QMV
Document originated30 November 2010
Deposited in Parliament13 December 2010
Basis of considerationEM of 5 January 2011
Previous Committee ReportNone
Discussion in CouncilPossibly March 2010
Committee's assessmentPolitically and legally important
Committee's decisionNot cleared; further information requested


5.1 In November 2002 the Athens Protocol was adopted by the International Maritime Organization (IMO) to amend the 1974 Athens Convention relating to the Carriage of Passengers and their Luggage by Sea (to which the UK is a State Party). The Protocol introduces compulsory insurance to cover passengers on ships and raises the limits of liability. It also introduces other mechanisms to assist passengers in obtaining compensation, based on well-accepted principles applied in existing liability and compensation regimes dealing with environmental pollution. These include replacing the fault-based liability system with a strict liability system for shipping related incidents (backed by the compulsory insurance requirement) and introducing the right of direct action against the insurer.

5.2 The Protocol has a provision allowing Regional Economic Integration Organizations, such as the EU, to become Contracting Parties to the Protocol.

5.3 The Protocol has provisions on jurisdiction and the recognition and enforcement of judgements, in respect of which the EU has internal rules under Council Regulation (EC) No 44/2001, thereby giving it an exclusive external competence in respect of at least part of the subject matter of the Protocol.

5.4 In June 2003 the Commission proposed a draft Decision to authorise the (then) Community to become a Party to the Protocol and to make the required declaration of competence in relation to the exclusive competence provisions. In July 2003 a previous Committee cleared that draft Decision from scrutiny.[26]

5.5 Negotiations on the draft Decision were suspended in December 2003 because Spain had questioned the arrangements for communicating with the competent authorities in Gibraltar. This matter was resolved in 2008 when a system of 'post-boxing' was put in place for communications between Spanish and Gibraltar authorities.

5.6 To expedite ratification of the Protocol by the EU and the Member States, Regulation (EC) No 392/2009 was adopted. It extended the requirements of the Protocol, including compulsory insurance requirements for international voyages, to domestic carriage by sea within a single Member State on board ships of a certain category and, if a Member State so decides, to all domestic sea-going voyages and introduced a number of supplementary measures intended to further enhance the provision of compensation to passengers. The Regulation applies from the date of the entry into force of the Athens Convention for the EU, and in any case from no later than 31 December 2012.[27]

The document

5.7 This draft Decision is a revised version of the Commission's 2003 proposal. The amended draft Decision:

  • takes account of the IMO Reservation and Guidelines for Implementation of the Athens Convention adopted by the Legal Committee of the IMO in October 2006, of adoption of Regulation (EC) No 392/2009 and of the Treaty of Lisbon;
  • sets out the basis for the EU's competence in respect of the Athens Convention;
  • authorises the Council to conclude the Protocol on behalf of the EU and defines the basis upon which Member States are able to become Parties to the Protocol in their own right, as regards those areas which are within Member State competence;
  • provides for the EU, at the time of its accession, to make the required declaration to the Secretary-General of the IMO specifying the matters governed by the Protocol, in respect of which competence has been transferred to the EU by its Member States, which are signatories or Parties to the Protocol, and any other relevant restrictions as to the scope of that competence; and
  • contains a provision on timing, which requires Member States to become a Party to the Protocol on 31 December 2011, whilst the preamble indicates that Member States should deposit their instruments of ratification or accession simultaneously.

The Government's view

5.8 The Parliamentary Under-Secretary of State, Department for Transport (Mike Penning) first tells us that Recital 12 and Article 3 of the draft Decision raise subsidiarity issues, as these provisions require Member States to deposit their instruments of accession or ratification on 31 December 2011 and suggest that Member States should deposit such instruments simultaneously. The Minister says that:

  • ratification of or accession to a mixed competence agreement by individual Member States, where they retain competence, is by definition not a matter of EU competence;
  • the Government considers that such matters should not be dealt with in a Council Decision;
  • instead an agreement by Member States to aim at parallel ratification should be dealt with outside the Council, or at most be a matter for a statement in the minutes, so it becomes a political rather than a legal matter;
  • it is unlikely that there will be support to have the matter dealt with outside of the Council;
  • but the Government will press for the wording of Recital 12 and Article 3 to refer to Member States making efforts to deposit their instruments of ratification or accession, rather than being required to deposit them;
  • it would suggest words of exhortation in Article 3 similar to those in respect of the Council Decision 2002/762/EC authorising Member States to become parties to the Bunkers Convention;[28] and
  • if Recital 12 is not amended similarly there will be a further significant delay to entry into force of the Protocol as some Member States (such as those that are land-locked) are unlikely to be in a position to ratify/accede to the Protocol by the end of 2011.

5.9 Turning to the other policy implications of the proposal the Minister says, in relation to timing, that

  • the Government considers that it is important that the EU and its Member States are able to become Party to the Protocol at the end of 2011;
  • to date only four States (Albania, Latvia, St. Kitts and Nevis and the Syrian Arab Republic) have become Party to the Protocol;
  • if another six Member States deposit instruments of ratification or accession on, or before, the end of 2011, the entry into force provisions of the Protocol will be triggered — it enters into force twelve months following the date on which a total of ten States have become Party to it and the Protocol would therefore enter into force at the same time as Regulation (EC) No 392/2009 applied to Member States;
  • this synergy is important — if the EU and its Member States are not able to become Party to the Protocol by the time the Regulation applies, Member States will be required to issue State Certificates, which are identical to those required by the Protocol, even though the UK and the other Member States would not be Party to the Protocol;
  • this would create a risk that EU-flagged vessels calling into non-EU ports might be detained by coastal States' Port State Control Authorities, as the nuances would not be understood;
  • there is also a greater risk that carriers would not be able to obtain insurance to cover the liability because the International Group of P&I Clubs,[29] which provide insurance to the majority of the worlds shipping fleet, have a long standing policy of only providing cover to vessels on the back of international rather than regional or domestic agreements;
  • the Government therefore welcomes the amended draft Decision — it is of the view that entry into force of the Protocol will result in a significant enhancement to the existing liability regime; and
  • the Government is working toward ratification of the Protocol by 31 December 2011.

5.10 The Minister next discusses competences, saying that:

  • the amended draft Decision states that Member States have conferred competences on the EU as regards matters covered by Article 100 TFEU, that is Articles 1 and 1bis, 2(2), 3 to 16 and 18, 20 and 21 of the Athens Convention (as amended by the Protocol) and the provisions of the IMO Guidelines;
  • this competence was exercised by the adoption of Regulation (EC) No 392/2009;
  • the Government agrees with this statement and supports the need for a Council Decision under Article 218 TFEU to authorise the Council to conclude the Protocol on behalf of the EU;
  • Recital 3 of the amended draft Decision prescribes that Member States retain their competence in a number of areas, giving the example of the ability to fix limits of liability higher than those prescribed under the Protocol;
  • in emphasising this area of Member State competence, however, the draft Decision indicates that Member States should act in a coordinated way; and
  • in the Governments opinion that is incorrect — the Decision cannot apply the duty of sincere cooperation under Article 4(3) TEU to areas of non-EU competence and Member States must act in a coordinated way only to the extent that to do otherwise would undermine the EU position.

5.11 In relation to the IMO Reservation and Guidelines for Implementation of the Athens Convention the Minister says that:

  • whilst the Government notes that Article 3 of Regulation (EC) No 392/2009 indicates that the liability regime shall be governed, in part by the provisions of the IMO Guidelines, it is surprised that the Explanatory Memorandum accompanying the amended draft Decision indicates that the EU, rather than its Member States, will make the IMO Reservation, when acceding to the Protocol;
  • in 2006 it was agreed by the IMO's Legal Committee that carriers will be liable for terrorism related incidents to a limit of 250,000 units of account[30] per passenger, subject to an overall limit if $500 million;
  • in response to this the IMO Reservation and Guidelines for Implementation of the Athens Convention was adopted by the Legal Committee and endorsed by the IMO Assembly — the Reservation sets out in detail how Governments are to ratify the Protocol, such that the original provisions of the Protocol will be modified to give effect to this scheme;
  • certain sections of the Reservation, which relate to areas of EU competence, are of specific relevance to Member States, for example section 1.10 to 1.12 of the Reservation would reserve the Government's right to accept and issue insurance certificates — this would appear to be of more relevance to individual Member States than the EU; and
  • detailed consideration of the practicalities of the EU making the IMO Reservation when acceding to the Protocol is therefore required.

5.12 On the legal basis for the Decision the Minister tells us that the Government considers that Article 81 TFEU should be cited additionally, saying that:

  • this is on the grounds that Article 81 relates to judicial cooperation in civil matters and Recital 5 of the draft Decision indicates that Article 10 of the Protocol (which relates to rules on jurisdiction) will take precedence over the relevant internal rules of the EU; and
  • the Government therefore considers that the Protocol to Title V TFEU (on the position of the United Kingdom and Ireland in respect of the area of Freedom, Security and Justice) applies, so that the UK has an option whether to opt in or opt out of the proposal.


5.13 Clearly it is important, in relation to Regulation (EC) No 392/2009, that the EU and Member States accede to the Athens Protocol before 31 December 2011. However before considering this amended draft Decision we should like to hear what progress the Government has made in working group negotiations about:

  • subsidiarity (Recital 12 and Article 3 of the proposal);
  • Recital 3 and Article 4(3) TEU;
  • the question of who should make the IMO Reservation; and
  • the additional legal base (Article 81 TFEU).

5.14 We regard the subsidiarity issue as particularly significant because the duty on the EU and Member States to cooperate in mixed agreements does not, in our view, allow the EU to decide when a Member State must accede to a Treaty—this remains a sovereign matter for the Member States, however, we are not able to issue a Reasoned Opinion under Protocol (No. 2) because, pursuant to Article 218 TFEU, the procedure for the conclusion of an international agreement by the EU is non-legislative, so not a "legislative act". We regard this as an unsatisfactory state of affairs.

26   (24691) 10979/03: see HC 63-xxx (2002-03), chapter 14 (16 July 2003). Back

27   (27323) 6827/06 and (29040) 14302/07: see HC 34-xxxvi (2005-06), chapter 7 (19 July 2006) and HC 16-iv (2007-08), chapter 24 (28 November 2007). Back

28   See  Back

29   See - protection and indemnity clubs are associations of shipowners and charterers, owned and controlled by their members, operating on a non-profit making mutual basis in order to meet losses suffered by each individual member. Back

30   The unit of account in the Protocol is the International Monetary Fund's Standard Drawing Right, which is based on a basket of currencies. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2011
Prepared 7 February 2011