Ports &TerminalsJune 2013EUROPEAN COMMISSION’SREVIEW OF EUROPEANPORTS POLICYEurope is highly dependant on its ports tofacilitate trade, both internationally andwithin the Internal Market. It is expected thatports will play a significant role in supportingeconomic recovery across Europe inthe coming years. However, EuropeanCommission (the Commission) statisticshave revealed a number of concerns overthe ability of ports to meet increasingmarket demands. In 2011, EU ports handledaround 3.7 billion tonnes of cargo and theCommission has predicted that by 2030 thisfigure will have doubled, making expansionand development an imperative.The Commission has recently published its newregulatory initiative, following on from its 2007Communication on European Ports Policy. 1The initiative supplements existing Policy andcomprises a legislative proposal (the Regulation)and a parallel Communication. The Regulationwill seek to establish a framework on marketaccess to port services and establish greaterfinancial autonomy and transparency across319 trans-European network (TEN-T) ports.The Communication introduces ‘soft measures’through eight EU actions. These relate tomeasures such as the strengthening of theTEN-T network to identify priority investmentsunder the “Connecting Europe Facility”, thesupport of administrative simplification in ports,the clarification of EU State aid rules and thepromotion of the European Social Dialogue.Both the Regulation and Communication highlighta number of key challenges that the Commissionhopes to address. Broadly speaking, thesechallenges fall into two categories; currentsub-optimal port operations and port governanceissues.The Commission hopes to address the currentstructural performance gap that exists withinEurope’s port network. The efficiency between EUports varies considerably, resulting in congestion,longer sea and land trips, greater emissions,and added costs for shippers, operators andconsumers. This is particularly problematic in1 COM(2007)616.
the context of increasing demandsfrom the shipping sector, both interms of technological and logisticalrequirements. The initiative is intendedto help port operators upgrade theirservices and facilities, and to give themgreater financial autonomy in creatinga sustainable and competitive portnetwork in the long-term.In terms of port governance, the majorconcern is that of unfair competitionthrough restrictive practices, marketentry barriers, and the lack oftransparency in the use of publicfunds. In particular, the Regulationincludes new rules to preventpossible price abuses by operatorswith exclusive rights. By ensuringan open, competitive environment,the Commission ultimately hopes topromote better, more reliable servicesand a more transparent financialframework, in turn attracting greaterprivate investment.Regulation ProposalsTo address these concerns, theRegulation introduces new rules onthe way EU ports will be operated interms of services, governance andoverall supervision, representing a shifttowards greater transparency andconsumer-focus. The key elements ofthe proposed Regulation are set outbelow.Funding and State aidA major concern of stakeholders hasbeen the financial transparency andautonomy of European ports. Whilemany ports in continental Europeare owned by public bodies and/orprivate undertakings, some states,such as the UK, operate largelyprivately funded ports. This disparity inownership models has led to concernsover the distortion of competition,through public funding practicesof port infrastructures. While theCommission Communication expresslyBy ensuring an open, competitive environment, theCommission ultimately hopes to promote better, more reliableservices and a more transparent financial framework, in turnattracting greater private investment.ELIZA PETRITSI“recognises and respects” this diversityof ownership, it highlights the needfor transparency where public fundingoperates unfairly.In addressing these concerns, theRegulation introduces measures topromote a ‘level playing field’.It requires that managing bodies inreceipt of public funding ensure thatsystems are in place for transparentaccounting, to evidence the effectiveand appropriate use of state funds.The Regulation also introducescontrols on the allocation of publicservice obligations (PSO). New rulesallow Member States to designatecompetent authorities to imposePSOs, but require that obligations mustbe clearly defined, transparent, nondiscriminatoryand verifiable, relatingonly to the availability, accessibility orthe affordability of the port service.In parallel to these measures, theCommunication creates a specificaction to modernise State aid rulesacross all economic sectors. By theend of 2013, the Commission willclarify the rules relating, in particular,to the financing of infrastructures.Transparent open procedures toselect providers of port servicesThe Regulation proposes freedom toprovide port services and imposes anumber of controls on the way portmanaging bodies designate providersof these services. Managing bodieswill now only be permitted to imposecertain minimum requirements on theproviders of port services, such asprofessional qualifications, equipment,safety and security specifications, andenvironmental requirements. Theserequirements must be objective andproportionate, and must not implicitlyimpose market barriers.Managing bodies must further justifyany limitation on the number of serviceproviders, either through formallydocumented space constraints or,in the case of an imposed PSO, onthe basis of a clear, publicly availableintention, published in advance.Freedom to levy chargesIn addition to the controls placedon managing bodies, they will nowbe granted the freedom to levyinfrastructure charges. In conferringthis power, Brussels recognises thatports themselves are best placed toidentify user needs and determine02 Ports & Terminals
Lawyers for international commerceHOLMAN FENWICK WILLAN LLPFriary Court, 65 Crutched FriarsLondon EC3N 2AET: +44 (0)20 7264 8000F: +44 (0)20 7264 8888hfw.com© 2013 Holman Fenwick Willan LLP. All rights reservedWhilst every care has been taken to ensure the accuracy of this information at the time of publication, the information is intended as guidance only. It should not be considered as legal advice.Holman Fenwick Willan LLP is the Data Controller for any data that it holds about you. To correct your personal details or change your mailing preferences please contact Craig Martinon +44 (0)20 7264 8109 or email email@example.com