MARITIME TRANSPORT (16106/05)
Letter from Rt Hon Ian McCartney MP, Minister
for Trade, Investment and Foreign Affairs, Department of Trade
and Industry/Foreign and Commonwealth Office to the Chairman
Thank you for your letter of 19 July 2006,[35]
responding to Malcolm Wicks' of 12 July. You asked to be kept
informed of any developments in relation to the proposed Commission
guidelines for the shipping industry.
Before I turn to the guidelines, I would like
to thank you and your Committee for its very prompt action in
raising the scrutiny reserve on this dossier in July. In the event,
completely unexpectedly, other member states were unable to
clear it in time, but we were very grateful for your efficiency.
However, the proposal to repeal Regulation 4056/86 was unanimously
adopted at the Competitiveness Council on 25 September. This repeal
will take effect in October 2008.
I am pleased to report that the Commission has
now published the "Issues" paper it promised that sets
out some of the questions that will need to be resolved in preparing
guidelines for the shipping industry, a copy of which is attached
(not printed). My Department, together with DfT and OFT, have
met the Chamber of Shipping and the Freight Transport Association
to hear their views.
Any regime to replace the repealed block exemption
needs to be compliant with EU Competition Law. With this in mind
we are considering the proposal of the European Liner Affairs
Association and generally agree with the view of the Commission
set out in the Issues paper. The industry is highly concentrated
with high barriers to entry and a history of collusion. The Commission
therefore need to ensure that any proposals from the industry
do not have the effect of encouraging collusion. Discussion continues
between the Commission and the stakeholders, and we understand
that the shipping lines and their customers, the shippers, are
also now working more closely than previously to develop proposals
acceptable to all, a development that we welcome.
You asked in your earlier letter how competition
issues might arise in tramp shipping. Work on the part of the
guidelines that will cover the tramp sector is at a much earlier
stage, given that until now the Commission has not been responsible
for competition law in this area (it has been solely the responsibility
of National Competition Authorities). However one area where it
is possible that competition issues may arise is in the way that
the tramp sector uses "pools". A "pool" is
a collection of similar vessels, under different ownership, but
which are operated under a single administration, with profits
allocated under a pre-arranged mechanism. The purpose of the pool
is to allow mainly small operators to provide a service to major
customers. However, evidence to date suggests that the market
works well and there have been no cases investigated by OFT (indeed
we are aware of only one case among all EU Member States). The
Commission are undertaking a fact-finding exercise with the tramp
industry at present and the results are likely towards the end
of the year. We expect a draft outline of the guidelines, covering
the whole shipping industry early next year.
The Commission envisages adoption of draft guidelines
next year. The final version of the guidelines will be issued
before the end of the transitional period for liner conferences,
which expires in October 2008.
6 November 2006
Letter from the Chairman to Rt Hon Ian
McCartney MP
Thank you for your letter of 6 November 2006,
which Sub-Committee B considered at its meeting on 27 November.
We were grateful to you for enclosing the Commission's
"issues paper" and join you in welcoming the fact that
stakeholders and the Commission are now "working more closely
than previously to develop a proposal acceptable to all".
Furthermore we would be grateful to you for
a copy of the Commission's draft guidelines for the shipping industry
when they are available.
29 November 2006
35 Correspondence with Ministers, 40th Report of Session
2006-07, HL Paper 187, p 119. Back
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