No C 171/34 Official  Journal  of the European  Communities 9. 7. 79 
Directive  and  Articles  53  to 57  of the  draft  Fifth 
Directive  on  the  structure  of societes  anonymes  (1), 
which  give  detailed  criteria  for  the  independence  of 
auditors.  In view  of this  connection  the  Committee considers  that  either  the two  Draft  Directives  should  be 
adopted  together  or the  provisions  of the  Draft  Fifth 
Directive  should  be incorporated  in the  Draft  Eighth 
Directive. 
Done  at Brussels,  4 April  1979. 
The Chairman 
of the Economic  and  Social  Committee 
Fabrizia  BADUEL  GLORIOSO 
OJ No C 131,  13. 12. 1972. 
Opinion  on the problems  currently  facing  Community  shipping  policy,  particularly  maritime 
safety,  the  growing  importance  of the  new  shipping  nations,  the  development  of flags  of 
convenience  and  the discrimination  against  certain  flags 
The opinion  of the Committee  is not  based  on any  text. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 155th  plenary  session  held  on 1 and  2 February  1978,  the  Committee,  acting  on a 
proposal  from  the Bureau,  decided  to deliver  an opinion  on the abovementioned  subject  on 
its own  initiative. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at its 167th 
plenary  session,  held  in Brussels  on 4 and  5 April  1979. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to Articles  15 and  20 (fourth  paragraph) 
of the rules  of Procedure, 
Having  regard  to the  decision  of the  Economic  and 
Social  Committee  at its plenary  session  of 1 and  2 
February  1978,  following  a proposal  from  its Bureau,  to 
deliver  an opinion  in the abovementioned  subject, Having  regard  to the  overall  report  submitted  by the 
rapporteur,  Mr  Rouzier,  and  the  individual  reports 
submitted  by the  co-rapporteurs,  Mr  Hennig  (1), Mr 
Kenna  (2) and  Mr Massabieaux  (3), 
Having  regard  to its discussions  at its 167th  plenary 
session,  held  on 4 and  5 April  1979  (meeting  of 4 April 
1979), 
Whereas  in recent  decades  the  volume  of world  trade, 
has practically  doubled,  increasing  by 86 7 % between 
Having  regard  to the  opinion  issued  by the  Section  for 
Transport  and  Communications  at its 125th  meeting, 
held  on 14 March  1979, (2) 
(3) Flags  of Convenience. 
Flag  Discrimination-
Role  of the New  Shipping  Nations. 
9. 7. 79 Official  Journal  of the European  Communities No C 171/35 
1965  and  1975,  for  example;  whereas  there  was  an 
even  greater  growth  of 129-5  % in world  tonnage 
between  1965  and  1975; 
Whereas  fleets  have  been  constantly  expanded  to cater 
for cyclical  peaks  in demand;  whereas  there  has  also 
been  a regular  need  to build  new  vessels  for  new  or 
specialized  transport  operations  in order  to satisfy  the 
demand  for greater  efficiency  and  advanced  technology; 
whereas  shipping  companies  find  it necessary  to 
regularly  adapt  their  fleets  to new  requirements  and 
maintain  their  capacity  in this  way,  while  extra  capacity 
is also  being  brought  onto  the  market  by new  shipping 
nations,  especially  in the  Third  World  and  Eastern 
Europe,  motivated  by  foreign  policy,  currency  and 
economic  considerations; 
Whereas  there  is thus  at present  overcapacity  in 
shipping,  with  not  only  ultra-modern  vessels  but  also 
dilapidated,  obsolete  and  even  unseaworthy  vessels  all 
engaged  in intensive  competition  with  each  other; 
whereas  this  overcapacity  is also  due  to the  stagnation 
of world  seaborne  trade,  coupled  with  the  fact  that 
shipowners  greatly  overestimated  the  demand  for  sea 
transport; 
Whereas  as a result  of this  competition  European 
shipping  companies  have  been  compelled  more  and 
more  in recent  times  to lay up vessels  or put  them  under 
foreign  flags  or to charter  vessels  under  flags  of 
convenience,  in the  hope  that  they  will  be able  to 
remain  in business  by reducing  their  operating  costs 
(labour  costs,  taxes  and  other  charges); 
Whereas,  as regards  not  only  safety  at sea  but  also 
employment  and  social  provisions,  the  expatriation  of 
vessels  is very  disadvantageous  to Community  seafarers: 
more  often  than  not  they  come  under  a less  favourable 
social  security  system  in force  in the  new  country  of 
registration: 
Whereas  there  is no disputing  the fact  that  if Member 
States  do not  want  to lose  their  economic  independence, 
and if they  desire  to keep  control  over  their  own  means 
of transport  and  maintain  jobs,  they  must  under  all 
circumstances  have  a merchant  fleet  of their  own  at 
their  disposal;  whereas  the Community  should  therefore 
find suitable  economic,  social  or technical  means  of 
eliminating  distortions  of competition; Whereas  the  problem  of  safety  at sea  is being 
exacerbated  by the  steady  growth  in the  number  of 
ships,  especially  on difficult  routes  (e.g.  the  English 
Channel  and  the  Strait  of Malacca),  as well  as by the 
introduction  into  service  of gigantic  vessels  (mammoth 
tankers)  and  the  use  of minimum  and/or  unqualified 
crews,  particularly  on flag  of convenience  vessels; 
Whereas  the  Community  cannot  remain  indifferent  in 
the face  of the  regularly  occurring  disasters  which  do 
permanent  damage  to its  natural  environment  and 
which  oblige  it to spend  vast  sums  on removing  oil 
slicks  from  its coasts  and  coastal  waters; 
Whereas  the  Member  States,  having  regard  to the 
objectives  of the  Treaty  by  which  they  are  bound, 
should  play  a leading  role  in furthering  economic  and 
social  progress  in the  world;  whereas,  using  all the 
means  at their  disposal,  they  should  therefore  work 
both  at international  level  and  within  the Community  to 
put an end  to dangerous  technical  shortcomings  and 
inhuman  conditions  on board  all ships,  regardless  of the 
flag they  fly; 
Whereas  the coastal  Member  States,  which  boast  some  of 
the most  important  ports  in the world  should  regard  it 
as their  right  and  their  duty  to take  regulative  action  by 
exercising  their  policing  powers  in respect  of vessels 
loading  and  unloading  and  sailing  in their  territorial 
waters;  whereas  maritime  law  has  remained  too  long 
within  the  sphere  of public  international  law  and  has 
been  left  to the flag  States,  some  of which  have  always 
been  satisfied  with  a minimum  of mandatory  rules, 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 82 votes  to 2, with  15 abstentions: 
1. General  comments 
1.1. Even  a limited  examination  of the highly  complex 
issues  involved  in sea transport  shows  how  difficult  it is 
to remedy  all the ills described. 
There  are  three  major  categories  of problems  facing 
shipping  companies,  workers  in the shipping  sector  and 
the environment  affected  by shipping  disasters: 
— safety  at sea, 
No C 171/36 Official  Journal  of the European  Communities 9. 7. 79 
— vessels  that  are  sub-standard  from  the  economic, 
social  and  technical  points  of view 
— the  threat  to Community  shipping  companies' 
survival  and  the  implications  as  regards  the 
economic  independence  of a foreign-trade-oriented 
Community  in the important  transport  sector. 
1.2. From  the point  of view  of legal  competence,  the 
steps  which  can  be  taken  towards  solving  these 
problems  can  be divided  into  two  groups: 
— measures  which  the  Community  can  take  by itself 
for its own  territory: 
— measures  which  it can  influence  or help  to shape  in 
association  with  other  States  and/or  within  the 
framework  of international  organizations. 
1.3. No  matter  where  these  measures  are taken,  there 
can be no doubt  that  the Community  must: 
— seek  with  all the means  at its disposal  to ensure  the 
maximum  degree  of safety  as far as human  beings, 
the environment  and  equipment  are concerned,  and 
— ward  off  the  threat  to Community  shipowners' 
survival  which  is being  posed  by  intolerable 
distortions  of competiton. 
This  dual  principle  forms  the  basis  for  the  measures 
proposed  in the next  chapter. 
2. Concrete  proposals 
2.1. Adoption  of  Community  legal  instruments  with  a 
view to immediate  intervention 
2.1.1.  International  action  already  embarked  on 
With  regard  to international  action  already  embarked 
on, the Community  should,  by means  of Directives,  call 
upon  the  Member  States  not  only  to ratify  without 
delay  all  the  international  conventions  and 
recommendations  on social  and  technical  matters  drawn 
up by international  bodies  (such  as the ILO  and  IMCO) 
(Cf. Appendix  4 to the Hennig  report)  but  also  to take 
the steps  necessary  for their  application,  regardless  of 
whether  they  have  been  ratified  by enough  States  or not. 2.1.2.  These  Council  Directives  could  be supplemented 
by other  instruments  reinforcing  the provisions  of the 
abovementioned  conventions  and  recommendations; 
where  necessary,  the Council  could  ask the Commission 
to find  appropriate,  effective  solutions  to problems  that 
arise. 
2.1.3.  The  Community  should  adopt  Regulations 
harmonizing  the  living  and  working  conditions  of 
seafarers  on vessels  flying  Member  State  flags. 
It goes  without  saying  that  these  Regulations  must  set 
out from  the principles  laid  down  in Articles  2, 117, 
118 and  119  of the  EEC  Treaty  (which  provide  for 
non-discrimination  and  harmonization  coupled  with 
progress)  and  must  also  be based  on the  international 
instruments  of the ILO  (including  Convention  No 111) 
and IMCO. 
The ad hoc merchant  shipping  committee  set up in 1973 
should  be given  official  status  and  strengthened  so that 
it can assist  the Commission  in the preparation  of these 
Regulations. 
2.1.4.  The  Community  must  make  every  effort,  in 
concert  with  the relevant  contracting  parties,  to ensure 
— by amending  the  definition  of 'national  shipping 
line',  if need  be — that  liner  conference  trade  is in fact 
shared  on the  basis  of the  40 : 40 : 20 principle 
advocated  by the new  shipping  nations. 
2.2. Supplementary  deterrent  action 
In order  to strengthen  existing  Community  legal 
instruments  and  to remedy  the  shortcomings  that  still 
exist,  particularly  in the  areas  of maritime  safety  and 
living  and  working  conditions  (problems  to which  the 
Community  is very  much  alive),  it is necessary  to 
implement  supplementary  provisions  in the  form  of 
Regulations  and/or  Directives  and  in particular  the 
following: 
2.2.1.  Legislation  establishing  really  effective 
procedures  for  supervising  observance  of Community 
legal  instruments.  In  particular,  there  should  be 
legislation  providing  for the establishment,  and  defining 
the mode  of operation,  of a Community  inspection 
force  in the  ports  and  territorial  waters  of the 
Community  and  in the  major  international  seaways 
under  Community  jurisidiction. 
Since  it is desirable  to  extend  this  inspection, 
multilateral  agreements  should  be concluded  as quickly 
as possible  with  the non-member  countries  concerned. 
9. 7. 79 Official  Journal  of the European  Communities No C 171/37 
2.2.2.  Legislation  laying  down  the technical  and  social 
criteria  which  vessels  must  meet  on pain  of being 
refused  access  to Community  ports,  whatever  the legal 
status  of the latter  (autonomous  port,  free  port,  etc.). 
In order  to ensure  that  this  legislation  is applied  in 
uniform  fashion  in all the Member  States,  a Community 
technical  inspection  system  should  be introduced.  This 
task of technical  inspection  could  be delegated  to the 
shipping  inspectorates  of the individual  Member  States 
or similar  services  approved  by  the  Community 
authorities;  where  necessary,  these  services  should  be 
strengthened  or set up where  they  do not yet exist. 
These  services  would  notify  the Community  authorities 
of the infringements  established  and  the action  taken.  In 
the light  of these  reports,  the  Community  authorities 
could,  where  necessary,  draw  up additional  legislation 
to intensify  inspection  and/or  tighten  up Community 
requirements  in this  area. 
2.2.3.  Legislation  penalizing  non-observance  of the 
Community  legal  instruments  in force  and  providing: 
— for  the setting-up  of an effective  inspection  service 
with  real  powers  to take  action  in the  various 
Community  ports; 
— for  deterrent  sanctions,  such  as a ban  on entry  to 
Community  ports,  seizure  of the vessel  and/or  fines 
depending  on the infringements  established; 
— that  any  non-conforming  vessel  entering  a 
Community  port  must,  in addition  to the  fines 
incurred,  be  detained  there  until  proof  of 
conformity  with  Community  requirements  can  be 
produced,  if necessary  after  repairs  or alterations 
effected  on the  spot,  i. e. at a shipyard  near  the 
Community  port  in question. 
2.2.4.  Legislation  laying  down  that,  in the event  of an 
infringement  of the  social  provisions,  wages  and  any 
other  allowances  must  be paid  to the crew  under  the 
supervision  of a body  approved  by the  Community 
authorities,  at a place  determined  by that  body. 
2.2.5.  Legislation  laying  down  the  requirements  as 
regards  qualifications  and  the  conditions  for  the 
mutual  recognition  of officers'  and  crews'  certificates 
(Community  certificates,  Community  approval). 
2.3. Supplementary  financial  action 
2.3.1.  Financial  legislation  providing  for: 
— the  harmonization  of the conditions  governing  the 
granting  of new  building  subsidies  so as to reduce the existing  discrepancies,  which  give  rise  to 
harmful  inequalities;  this  must  not,  however,  mean 
that subsidies  aimed  at maintaining  a given  level  of 
activity  in the industry  become  a permanent  fixture; 
— the  introduction  of scrapping  premiums  for vessels 
flying  a Member  State  flag  that  no longer  conform 
to the  standards,  so as to cover  the  difference 
between  the  price  obtainable  by the  Community 
shipowner  on the  second-hand  market  and  the 
price  offered  by the scrapping  yard. 
These  premiums  could  be divided  into  two  instalments: 
the first  half  would  be paid  immediately  on scrapping; 
the second  half  would  be blocked  for  a maximum 
period  of five  years,  during  which  the  shipowner 
would  have  to order  a new  vessel  from  a Community 
yard  in order  to qualify,  except  where  there  was 
manifest  cyclical  overcapacity.  This  system  could  thus 
be the  beginning  of a solution  to the  crisis  in 
shipbuilding.  The  Committee  would,  however,  give  its 
support  also  to other  measures  that  produce  the same 
results. 
2.3.2.  Legislation  applicable  to insurance  companies 
and governing  in particular  the  conditions  for  the 
insurance  of vessels  meeting  the requirements  imposed 
by Community  legislation. 
3. Community  action  to be envisaged  in the medium 
term 
3.1. At international  level,  the Community  should: 
3.1.1.  adopt  a Community  position  that  would  be 
presented  and  defended  as such  on  behalf  of the 
Member  States  at future  negotiations  in international 
forums; 
3.1.2.  decide  the  action  of  all  kinds  that  the 
Community  could  undertake  at international  level  in 
order  to help  improve  maritime  safety  and  living  and 
working  conditions  on board  vessels  regardless  of their 
flag; 
3.1.3.  incorporate  in all trade  agreements  concluded 
by the Community  or any  of its Member  States  clauses 
requiring  observance  of  Community  maritime 
regulations; 
3.1.4.  conclude  bilateral  or multilateral  agreements 
with  non-member  countries  on  observance  of the 
Community  regulations  in force  and  even  on their 
involvement  in the implementation  of these  regulations. 
No C 171/38 Official  Journal  of the European  Communities 9. 7. 79 
3.2. Internally,  the  Community  should: 4. Conclusions 
3.2.1.  constantly  adapt  technical,  social  and  economic 
standards  to the  economic  and  social  progress  of the 
Community,  with  a view  to making  competition  in the 
maritime  sector  healthier,  improving  the  living  and 
working  conditions  of  crews  and  ensuring  that 
non-member  countries  and,  in particular,  developing 
countries,  engaging  in maritime  activities  can  play  the 
role to which  they  are entitled  — in short,  with  due 
observance  of the  provisions  of the  Preamble  of the 
Treaty; 
3.2.2.  equip  itself  with  efficient  tools  in the economic 
and commercial  spheres  that  will  enable  effective 
support  to be given  to Member-State  shipowners  in the 
face of competition  from  third-country  shipowners 
whose  operations  are facilitated  by manifest  structural 
advantages. 4.1. The  Committee  has  made  an effort  to bring  its 
views  to the  attention  of all the  relevant  authorities 
before  the UNCTAD  conference  to be held  in Manila  in 
May  1979,  which  will  consider  a special  aspect  of the 
problems  described. 
4.2. The  Committee  appeals  to the  Council,  the 
Commission,  the  Member  State  governments  and  all 
national  and  international  decision-making  bodies  to 
ensure  that  work  is speeded  up and  that  the  decisions 
needed  to avert  serious  threats  to the  Community  are 
taken  without  delay. 
Done  at Brussels,  4 April  1979. 
The Chairman 
of the Economic  and  Social  Committee 
Fabrizia  BADUEL  GLORIOSO 
Opinion  on the  proposal  for a research  and  training  programme  (1979  to 1983)  for  the 
European  Atomic  Energy  Community  in the field  of controlled  thermonuclear  Fusion 
The text  referred  to the Committee  has been  published  in Official  Journal  of the European 
Communities  No  C 299  of 13 December  1978,  page  2. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 5 December  1978,  the Council  referred  the abovementioned  proposal  to the Economic 
and Social  Committee  in accordance  with  Article  7 of the Treaty  establishing  the European 
Atomic  Energy  Community. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at its 167th 
plenary  session,  held  in Brussels  on 4 and  5 April  1979. 
The full  text  of the opinion  is as follows: