Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the accelerated phasing-in of double hull or equivalent design standards for single hull oil tankers

LEGISLATIVE PROPOSAL III

EXPLANATORY MEMORANDUM

GENERAL INTRODUCTION

1. Actual situation and problems:

The major consequences of accidental oil spills caused by oil tankers, as recently demonstrated with the structural failure of the ERIKA off the French coast, remain an issue of major concern for the European Commission.

In a follow-up to the pollution accidents with the oil tankers "Aegean Sea" off la Coruña in December 1992 and the "Braer" off the Shetland Islands in January 1993, the Commission issued its Communication "a common policy on safe seas" [1]. This communication took stock of the existing situation with regard to maritime safety and the prevention of pollution of the marine environment. It underlined in particular the request of the extraordinary Council on Environment and Transport of 25 January 1993 to support the action in the International Maritime Organisation (IMO) on the reduction of the safety gap between new and existing ships by upgrading and/or phasing-out existing ships, built to earlier standards, after a reasonable period of operation. This request stressed the need of paying particular attention to oil tankers not meeting the international standards on segregated ballast tanks and their protective location as laid down in the International Convention for the Prevention of Pollution from Ships, 1973 and the Protocol of 1978 related thereto (MARPOL 73/78).

[1] COM(93)66 final of 24.02.1993

A first, regional decision concerning the phasing-out of single hull oil tankers was taken in 1990 by the United States, when they promulgated the Oil Pollution Act (OPA 90) in which double hull requirements both for new and existing tank vessels have been established. The application of the OPA 90 double hull requirement to existing tank vessels is dependent on the age, the size in gross tons and hull configuration of the vessel. Basically two main categories can be distinguished.

The first category of tankers will not be allowed under OPA 90 to operate in US waters after 1 January 2010 unless they comply with the double hull requirements. This category includes all existing single hull oil tankers above 5000 GT without double bottom or double sides. In the period from 2005 to 2010, such single hull oil tankers will not be longer allowed to operate in US waters when they reach an age of 25 years, or 23 years for tankers above 30000 GT, unless they comply with the double hull requirements.

The second category of tankers will not be allowed under OPA 90 to operate in US waters after 1 January 2015 unless they comply with the double hull requirements. This category includes existing single hull oil tankers above 5000 GT fitted with double bottom or double sides, and all existing single hull oil tankers below 5000 GT. In the 10 years preceding the deadline of 2015, tankers above 5000 GT are phased out when they reach the age of 30 years, and 28 years for tankers above 30000 GT. For tankers below 5000 GT, no phasing-out age limits are specified.

Faced with the unilateral decision by the USA, the IMO had to take action to also reduce at international level the safety gap between new and existing oil tankers, resulting in July 1993 in the entry into force of important amendments to the MARPOL 73/78 Convention. More rigorous measures concerning the design and construction standards for new and existing oil tankers were included in these amendments. These design and construction standards aimed at providing a better protection against oil pollution in the event of collision or stranding. They require that oil tankers delivered on or after 6 July 1996 comply with the double hull or equivalent design requirements laid down in Regulation 13F of Annex I of the MARPOL 73/78 Convention.

In addition, the amendments to the MARPOL 73/78 Convention included also a phasing-in scheme for single hull oil tankers above 20000 tons deadweight, delivered before 6 July 1996. According to Regulation 13G, such tankers have to comply with the double hull or equivalent design standards of Regulation 13F of Annex I of the MARPOL 73/78 Convention not later than 25 years, or in some cases 30 years, after their date of delivery. As a consequence, existing single hull oil tankers that do not meet the requirements concerning segregated ballast tanks and their protective location will, at international level, no longer be allowed to operate beyond 2007, or in some cases 2012, unless they comply with the double hull or equivalent design requirements of Regulation 13F of Annex I of the MARPOL 73/78 Convention. For existing single hull oil tankers complying with these requirements on segregated ballast tanks and their protective location this deadline will be reached at the latest in 2026.

The differences in age limits and end-dates between the OPA 90 phasing-out scheme and the one established at international level through the amendments to the MARPOL 73/78 Convention will, from 2005 onwards, have as a consequence that single hull oil tankers not longer allowed to operate in US waters because of their age, may shift their trading patterns to other regions in the world, including the European Union, and continue operating until they have to comply with the double hull requirements in accordance with the age limits provided for in the MARPOL 73/78 Convention. This changing trading patterns will result into a situation where the oldest single hull oil tankers which under the MARPOL 73/78 Convention are allowed to continue operating, will become more dominantly present in the oil trades to and from and within the European Union.

A study on the environmental impact of single hull oil tankers carried out in 1999 for the Commission services addressed the effects of OPA 90 on the tanker fleet operating outside the USA. The study's estimations show that during the period 2000 to 2025 on average 15% of the crude oil tankers will be banned from US waters but still allowed to operate under the MARPOL 73/78 Convention. It also noted that there will be in 2010 a distinct maximum in the number of crude oil tankers of less than 20000 tons DWT banned from the USA, due to the end date limit of 2010 in OPA 90. For crude oil tankers in excess of this size the maximum increase in numbers diverted to Europe will be reached in 2015. The study estimates further that OPA 90 will have less pronounced effects for oil product tankers. For oil products tankers in the 5000 to 30000 tons deadweight category, the maximum of diverted ships will be reached in 2015, whilst for the larger size category this maximum will be reached in 2005.

2. Proposed action at Community level:

The Commission is of the opinion that the situation described above should give rise to concern, since accident statistics reveal increasing accident rates for older ships. An appropriate Community response to this situation is considered necessary, in particular in view of the nearing of the year 2005, the first important cut-off date under OPA 90 at which certain single hull oil tankers will be banned from US waters. In order to avoid that such tankers start or continue trading to European ports, an accelerated application in the Community of the phasing-in scheme of the double hull or equivalent design requirements of Regulation 13 F of Annex I of MARPOL 73/78 is proposed. This accelerated phasing-in scheme has to be aligned with the age limits and end-date limits provided for in OPA 90, to avoid that oil tankers banned from the US under the OPA 90 regime, could shift their trading patterns to Europe.

As regards to size and hull configuration criteria, the proposal maintains the distinction made in the MARPOL 73/78 Convention between three main categories. Category 1: so-called "pre-MARPOL" single hull oil tankers, being crude oil tankers of 20000 tons deadweight and above and oil product carriers of 30000 tons deadweight and above having no segregated ballast tanks in protective locations (SBT/PL). Category 2 is including "MARPOL" single hull tankers, being of the same size as category 1, but which are equipped with SBT/PL. Category 3 contains single hull oil tankers below the size limits of categories 1 and 2, delivered before 6 July 1996, and therefore not subject to the phasing-in scheme for the double hull requirements laid down in Regulation 13G of Annex I of MARPOL 73/78.

The Commission proposes the following approach for each of these categories.

For category 1 the proposal envisages to lower the age limits of 25 or 30 years provided for in the MARPOL 73/78 Convention to one single age limit of 23 years. Since these single hull oil tankers were delivered before the date the SBT/PL requirements of MARPOL 73/78 started to apply (1982), a final deadline in 2005 is specified to prevent that they would continue operating beyond the proposed age limit of 23 years. In addition, the waiver possibility provided for in Regulation I/13G(7) of Annex I of MARPOL 73/78 to accept other structural or operational arrangements, such as hydrostatic balanced loading, as an alternative to the double hull requirements, should not be allowed. This limitation is necessary to avoid that tankers that have reached their age limit can continue operating beyond this age limit by using other arrangements than the double hull or equivalent design configuration.

For category 2 the proposal specifies compliance with the double hull or equivalent design requirements not later than when they reach the age of 28 years or on 1 January 2010, whichever of these dates comes first.

Finally for category 3, the Commission proposes to introduce an age limit of 25 years when the tankers are not equipped with SBT/PL and 30 years when they are, combined with an end date limit of 1 January 2015 beyond which no single hull oil tanker of that category will be allowed to trade to European ports.

Since this proposal for an accelerated phasing-in scheme at Community level is aligned with the age and end-date limits in OPA 90, single hull oil tankers banned from US waters will not be able to shift their trading patterns to Europe.

By applying the same end-date limits as in OPA 90, the EU system will result into a considerable shorter phasing-in period, having an important, but at this stage not quantified in detail, impact on the rate at which single hull oil tankers will have to be replaced by double hull tonnage. First estimates, based on available statistics on the composition of the world tanker fleet today, indicate that the impact for categories 2 and 3 will be considerable.

Category 2 contains today about 2000 single hull ships (worldwide). In addition, 1000 double hulled tankers are available in this size category. In the proposed EU system, about 70% of these 2000 ships will have to be phased out on age limit (28 years) before 2010, and about 30% of them (+/- 600 ships) on deadline in 2010.

Category 3 totals today about 3000 single hull tankers. In this size category only 300 double hull tankers are available today, due to the lack of any age or deadline limit in the MARPOL 73/78 Convention for replacing the existing single hulls by double hulls. The proposed EU system, combining age limits (25 or 30 years) with the deadline of 2015, will have the following impact: 70% (+/- 2000 ships) will have to be phased out before 2015 on age limit, whilst the remainder 30% (+/- 1000 ships) will have to be phased out on deadline in 2015. In view of the large number of ships that will have to be phased out on deadline in 2010 and 2015, the continuity of oil supply and distribution in Europe could be temporary disturbed if there were no sufficient double hull tonnage. However it is recognised between the major shipbuilding associations (AWES in Europe, SAJ in Japan and KSA in South Korea) that for the foreseeable future supply of merchant vessels will exceed demand. Today this excess capacity is estimated to be ca. 3-4 Mio cgt, which if it were used for the construction of double hull tankers, would represent ca. 10,42-13,89 million tons deadweight and be able to cope with the increased demand arising from this proposal.

The attached proposal provides that compliance with the accelerated phasing-in of the double hull or equivalent design standards for single hull oil tankers should be imposed to oil tankers of 600 tons deadweight and above, flying the flag of a Member State and as a condition for access to EU ports, irrespective of the flag the ships fly.

3. Accompanying measures:

As an accompanying measure to the phasing-in of the double hull or equivalent design standards for single hull oil tankers, a system of financial incentives and disincentives is proposed to encourage the trade of double hull oil tankers to and from and between ports in the Community, and to discourage the trade of single hull oil tankers. This system should be based upon the principles established in Council Regulation (EC) No 2978/94 of 21 November 1994 on the implementation of IMO Resolution A.747(18) on the application of tonnage measurement of ballast spaces in segregated ballast oil tankers [2] (SBT Regulation). These principles foresee the application of reduced port and pilotage dues for the most environmentally friendly oil tankers as opposed to those offering less protection against oil pollution.

[2] OJ L 319, 12.121994, p. 1.

However, the SBT Regulation does not take into account the higher level of protection against accidental oil pollution that double hull oil tankers offer as compared to single hull oil tankers, and does not differentiate between double hull oil tankers and single hull oil tankers with regard to the reduction of port and pilotage dues. Moreover, in view of the proposed deadline of 2005 for single hull oil tankers not complying with the requirements of MARPOL 73/78 on segregated ballast tanks and their protective location, there are no justified reasons to maintain any longer the differential financial treatment system the SBT Regulation provides between such oil tankers and tankers that do comply with the SBT/PL requirements of MARPOL 73/78.

The attached proposal therefore foresees revoking the SBT Regulation and to incorporate a new financial incentive system that during the period of the accelerated phasing-in scheme encourages the operation of oil tankers complying with the double hull or equivalent design requirements and to discourage the operation of oil tankers not complying yet with these requirements. This new system should be a combined system providing a reduction on port and pilotage dues for oil tankers complying with the double hull or equivalent design standards and applying a surcharge on the port and pilotage dues for oil tankers not yet complying with these standards.

In establishing this combined incentive/disincentive system, a fair balance should be aimed at to avoid loss of revenues for the providers of port and pilotage services and to avoid that such losses would be at the detriment of the quality of these services or need to be compensated by raising port and pilotage dues for ships unconnected with the transport of oil and oil products. In view of the progressive increase of the number of double hull or equivalent design oil tankers and the decrease of the number of single hull oil tankers over the period of the envisaged accelerated phasing-in scheme, the balance in revenues for port and pilotage service providers has to be achieved by making the reduction on port and pilotage dues for double hull or equivalent design oil tankers regressive with their age and the surcharge on port and pilotage dues for single hull oil tankers progressive with the ship's age.

The percentages of these reductions and surcharges laid down in the proposal should be adaptable through Comitology procedure to take account of the rate at which single hull oil tankers are replaced by double hull tonnage may change over the period of the accelerated phasing in. Finally the proposal provides that the differential charging will cease to be applied when the accelerated-phasing in scheme for the double hull or equivalent design standards has been fully accomplished.

A second accompanying measure provided for in the proposal is to notify to the IMO the Community legislation on the accelerated phasing-in of the double hull or equivalent design standards for single hull oil tankers, once it is adopted. Such a notification would comply with the provisions of Article 211 of UNCLOS. Paragraph 3 of UNCLOS article 211 provides the right to coastal states for imposing particular requirements as a condition for the entry of foreign vessels into their ports or internal waters or for a call at their off-shore terminals. It stipulates further that due publicity to such requirements shall be given and that they shall be communicated to the competent international organisation and that this communication should mention the States which are applying the same requirements in the context of a co-operative arrangements.

JUSTIFICATION FOR A REGULATION

4. a) What are the objectives of the envisaged action in relation to the obligations of the Community and what is the Community dimension of the problem (for instance how many Member States are involved and what is the present solution)-

The Treaty provides for the establishment of a common transport policy and the measures envisaged to implement such a policy include measures to improve safety in maritime transport as foreseen in Article 80 (2).

To this end, the main objective of the envisaged action is to implement in the Community, in a harmonised way, an accelerated phasing-in of the double hull or equivalent design standards of the MARPOL 73/78 Convention for single hull oil tankers. A harmonised and advanced implementation at Community level of these standards is considered necessary to ensure that oil tankers trading to and from and between ports of the Member States comply as quickly as possible with the double hull or equivalent design standards in order to reduce the risks of accidental oil pollution and its consequences in European waters.

Although not all Member States are concerned with the conditions of access for oil tankers due to their lack of coastline and ports, the Regulation will affect all Member States to a certain extent, since all Member States may have oil tankers flying their flag.

5. b) Is the envisaged action solely the responsibility of the Community or is the responsibility shared with the Member States-

It is a responsibility shared between the Community and the Member States.

6. c) What is the most efficient solution taking into account the resources of the Community and the Member States-

In view of the internal market dimension of maritime transport, an action at Community level is the only possible way to ensure that the same level of safety and marine pollution prevention is guaranteed by oil tankers trading to and from and between European ports, while reducing the risks of distortion of competition between ports due to the application of divergent principles for charging port and pilotage dues.

7. d) What is the concrete added value of the action envisaged by the Community and what would be the cost of inaction-

The Community has a major interest in ensuring that the transport by sea of oil and oil products necessary for its economy is carried out in the safest and most environmentally friendly way, to avoid the detrimental consequences of oil pollution. A harmonised action is necessary to avoid distortion of competition between oil tankers already complying with the latest international requirements concerning accidental oil pollution prevention and those tankers, which do not do so yet. These standards have been internationally agreed but the relevant international Convention in which they are embedded does not ensure for their harmonised and simultaneous application. Their implementation in the Community can only be assured through the establishment of an enforceable and harmonised Community framework.

The cost of inaction would be that the rate of pollution accidents and the seriousness of their consequences caused by the structural failure or damage of single hull oil tankers would remain unacceptably high. Furthermore, if no harmonised and accelerated phasing-in of the double hull or equivalent design standards for these oil tankers is established within the Community, the risk of substandard and over-aged oil tanker tonnage shifting its trade patterns from areas such as the United States, where stricter safety policies are applied, to Europe cannot be deterred.

Also, inaction could entail a risk of distortion of competition between ports through the application of diverging criteria for charging port and pilotage dues to oil tankers, without giving due consideration to the enhanced protection against accidental oil pollution double hull or equivalent designs are offering as opposed to single hull oil tankers.

8. e) What forms of actions are available to the Community- (recommendation, financial assistance, regulation, mutual recognition)

Since the internationally agreed requirements for single hull oil tankers to comply with the double hull or equivalent design standards are providing to a large extent freedom of interpretation and application to the flag State administration and also exclude a considerable number of existing oil tankers from their scope of application, they are not enforceable in a unified and harmonised way ensuring a fast replacement of all single hull oil tankers by double hull oil tankers. In addition, the possibilities for waivers leading to a lack of or a divergence in implementing these international standards could result in a distortion of competition. Hence it is necessary to ensure a harmonised and accelerated application of these internationally agreed standards, in the form of a Regulation.

9. f) Is uniform legislation necessary or does a Directive setting the general objectives and leaving the execution to the Member States suffice-

Uniform legislation in the form of a regulation is necessary for the reasons set out above. In accordance with the principle of proportionality, the proposed Regulation will establish at Community level the age and dates at which single hull oil tankers have to comply with the internationally agreed double hull or equivalent design standards, as well as a uniform approach for a differential charging system for port and pilotage dues to be applied to single and double hull oil tankers visiting European ports.

The actual differential charging system for port and pilotage dues embedded in Council Regulation (EC) No 2978/94 of 21 November 1994 on the implementation of IMO Resolution A.747(18) on the application of tonnage measurement of ballast spaces in segregated ballast oil tankers [3] cannot longer be continued since it makes no distinction between single hull and double hull oil tankers having both segregated ballast tanks. The most appropriate approach is to revoke this Regulation and replace it by a new one, in which also the accelerated phasing-in scheme is incorporated and linked with a new differential charging system. Acting by way of a Directive would, in addition, require for an additional period for transposing its provisions in the national legislation of the Member States, resulting in a further delay for implementing the accelerated phasing-in scheme.

[3] OJ L 319, 12.12.1994, p.1.

CONTENT OF THE REGULATION

10. The proposed Regulation specifies the age limits and end-dates by which single hull oil tankers have to comply with the double hull or equivalent design requirements of Regulation 13F of Annex I of the MARPOL 73/78 Convention. The age limits proposed are either lower than the ones specified in Regulation 13G of Annex I of MARPOL 73/78 or apply to categories of tankers which because of their size are not covered by that Regulation. The end-date limits specified aim at avoiding that single hull oil tankers can continue or start trading to European ports after the end-date limits beyond which they are not longer allowed to operate in the waters falling under the jurisdiction of the United Sates. Compliance of these requirements will be imposed as a condition of access to ports of the Member States for all oil tankers of 600 tons deadweight and above, irrespective of the flag they fly. Further, all oil tankers of that size category, flying the flag of a Member State will have to comply with the accelerated phasing-in scheme of the double hull or equivalent design standards.

11. In addition, and as a complementary measure, the proposal foresees the replacement of the actual differential charging system for port and pilotage dues as laid down in Council Regulation (EC) No 2978/94. The existing system has to be abolished, since it does not provide for a differentiation in the charging of port and pilotage dues between single hull and double hull oil tankers both equipped with segregated ballast tanks. Moreover, the accelerated phasing-in system will lead to the disappearance of single hull oil tankers without segregated ballast tanks as soon as in 2005, and therefore there will be no reasons to prolong the actual system beyond that date. The new financial system for differential charging of port and pilotage dues proposed foresees a reduction of these dues for double hull oil tankers, but the reduction should be regressive with the ship's age. For single hull oil tankers a surcharge on the dues is applied, progressive with ship's age. The proposal specifies that this differential charging system should cease to be applied, once the phasing-in of the double hull or equivalent design standards for single hull oil tankers is fully accomplished.

12. Finally, the proposed Regulation provides for its notification to IMO, once it has been adopted. The purpose of this notification is to inform the international maritime community about the new rules of play in the Community for trading with oil tankers to and from and between ports of the Member States.

13. The proposal provides also for a mandate to the Commission, subject to Comitology, for amending the Regulation to take account of amendments to the relevant international instruments, as well as for adjusting the percentages of the reductions and surcharges in the differential charging system, to take account of possible fluctuations in the rate at which the replacement of single hull tonnage by double tonnage is taking place over the phasing-in period.

SPECIAL CONSIDERATIONS

Article 1

The purpose of the Regulation: to raise the safety and pollution prevention standards for oil tankers operating to and from and between ports of the Member States to reduce the risks of accidental oil pollution due to collision or grounding.

The way to achieve this objective is through accelerating the timing by which single hull oil tankers have to comply with the double hull or equivalent design standards of Regulation 13F of Annex I of MARPOL 73/78. As an accompanying measure the Regulation also provides fore a differential charging system for port and pilotage dues between single hull and double hull or equivalent design tankers.

Article 2

This Article defines the scope of application of the Regulation. It covers all oil tankers of 600 tons deadweight and above, irrespective of the flag they fly, when calling at Community ports and all oil tankers of that size flying the flag of a Member State.

Article 3

This Article contains the definitions of the key concepts of the Regulation, which are mainly derived from the relevant definitions in the International Convention for the Prevention of Pollution from Ships (MARPOL 73/78).

Article 4

Article 4 lays down the age limits and date limits by which single hull oil tankers have to comply with the double hull or equivalent design standards of the MARPOL 73/78 Convention. Depending on the size and configuration of the tankers, the age limits vary between 23 to 30 years and the end-date limits between 2005 and 2015. In addition, paragraph 2 of this article specifies that for the purpose of complying with this article, the waiver possibility provided for in Regulation 13G(7) of Annex I of MARPOL 73/78 to accept other structural or operational arrangements as alternatives for compliance with the double hull or equivalent design requirements of Regulation 13F of Annex I of MARPOL 73/78, shall not be accepted.

Article 5

This article establishes the differential charging system for port and pilotage dues between single hull and double hull or equivalent design tankers, based upon the application of a reduction of these dues for double hull or equivalent design tankers, which is regressive with the age of the ship. For single hull oil tankers, not yet complying with the double hull or equivalent design standards, a surcharge on the port and pilotage dues has to be applied which is progressive with the ship's age. Where charging systems for port and pilotage dues are based upon another criterion than deadweight, they have to ensure that at least the same percentage for the reductions and surcharges is applied as in the system based upon deadweight. Finally, the article specifies that the differential charging system shall cease to be applied once the accelerated phasing-in of the double hull or equivalent design standards has been fully accomplished.

Article 6

Article 6 provides for the notification to IMO of the adoption of this Regulation. This notification aims at providing the international maritime community with information on the new rules of play for trading with oil tankers to and from and between ports of the Community.

The United Nations Convention on the Law of the Sea (UNCLOS) provides in its Article 211, concerning pollution from vessels, the right to coastal states to impose particular requirements as a condition for the entry of foreign vessels into their ports or internal waters or for a call at their off-shore terminals. It stipulates further that due publicity to such requirements shall be given and that they shall be communicated to the competent international organisation and that this communication should mention the States which are applying the same requirements in the context of a co-operative arrangements. The notification to the IMO of the adoption of this Regulation aims at meeting this provision of UNCLOS.

Article 7

Article 7 contains provisions on monitoring and reporting on the implementation of the Regulation. It provides that Member States regularly verify that port and pilotage authorities correctly apply the differential charging system for port and pilotage dues as provided for in Article 5. Member States are required to report annually to the Commission on the results of their verification, and this within 4 months after each year upon which is reported.

Article 8

The establishment of a regulatory Committee is incorporated in this article, including also a reference to the procedures of article 5 of Council Decision 1999/468/EC [4], in accordance with which it has to act. The article also fixes the period for the Council to act in accordance with the provisions of paragraph 6 of that article to 3 months.

[4] Council Decision of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission, OJ L 184 , 17.07.1999, p. 23.

Article 9

This Article provides the right for the Commission to amend the Regulation and its Annex, in accordance with the procedure laid down in Article 8, to update the references to the relevant Regulations of MARPOL 73/78 in line with any subsequent amendments that may be adopted to these Regulations.

It also provides under the same procedure for the adjustment of the percentage of reductions and surcharges on port and pilotage dues to be applied, to take into account variations in the rate at which the replacement of single hull oil tankers by double hull or equivalent design tankers will take place during the phasing-in period.

Article 10

In view of the new differential charging system for port and pilotage dues established in Article 5, the existing differential charging system laid down in Council Regulation (EC) No 2978/94 has to be abolished. The existing system provides for differential port and pilotage dues between oil tankers equipped with segregated ballast tanks in protective locations (SBT/PL) and those without. However, by using only the SBT/PL criterion, it does not provide for any differentiation between single hull and double hull or equivalent design tankers.

Articles 11 and 12

No comments

Annex

The annex to the regulation specifies the percentages of the reductions and surcharges on port and pilotage dues to be applied in function of the ship's age.

2000/0067 (COD)

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the accelerated phasing-in of double hull or equivalent design requirements for single hull oil tankers

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 80 (2) thereof,

Having regard to the proposal from the Commission [5],

[5] OJ C [...], [...], p. [...].

Having regard to the opinion of the Economic and Social Committee [6],

[6] OJ C [...], [...], p. [...].

Having regard to the opinion of the Committee of the Regions [7],

[7] OJ C [...], [...], p. [...].

Acting in accordance with the procedure laid down in Article 251 of the Treaty [8],

[8] OJ C [...], [...], p. [...].

Whereas:

(1) within the framework of the common transport policy further measures must be taken to enhance safety and prevent pollution in maritime transport ;

(2) the Community is seriously concerned by the shipping accidents involving oil tankers and the associated pollution of its coast-lines and harm to its fauna and flora and other maritime resources;

(3) the Commission underlined in its Communication "a common policy on safe seas" [9] the request of the extraordinary Council on Environment and Transport of 25 January 1993 to support the action in the International Maritime Organisation (IMO) on the reduction of the safety gap between new and existing ships by upgrading and/or phasing-out existing ships, built to earlier standards, after a reasonable period of operation, paying particular attention to oil tankers not meeting the amendments of the International Convention for the Prevention of Pollution from Ships, 1973 and the Protocol of 1978 related thereto (MARPOL 73/78) which entered into force in 1982;

[9] COM(93)66 final of 24.02.1993.

(4) the European Parliament in its Resolution on a common policy on safe seas [10] welcomed the Commission Communication and called in particular for action to be taken to improve tanker safety standards;

[10] OJ C 91, 28.031994, p.301.

(5) the Council, by its Resolution of 8 June 1993 [11], fully supported the objectives of the Commission Communication;

[11] OJ C 271, 07.10.1993, p.1.

(6) at international level, the International Maritime Organisation has established in the International Convention for the Prevention of Pollution from Ships, 1973 and the Protocol of 1978 related thereto (MARPOL 73/78) internationally agreed pollution prevention rules affecting the design and operation of oil tankers;

(7) important amendments to the MARPOL 73/78 Convention containing more rigorous measures concerning the design and construction standards for oil tankers have been adopted by the IMO on 6 March 1992, which entered into force on 6 July 1993. These measures impose double hull or equivalent design requirements for oil tankers delivered on or after 6 July 1996 aimed at preventing oil pollution in the event of collision or stranding. Within these amendments a phasing-in scheme for single hull oil tankers delivered before that date took effect from 6 July 1995 onwards requiring such tankers to comply with the double hull or equivalent design standards not later than 25 years and in some cases 30 years after their date of delivery. As a consequence of these measures existing single hull oil tankers not complying with the requirements of MARPOL 73/78 concerning segregated ballast tanks and their protective location will no longer, at international level, be allowed to operate beyond 2007, and in some case 2012, unless they comply with the double hull or equivalent design requirements of Regulation 13F of Annex I of MARPOL 73/78. For existing single hull oil tankers that do comply with the requirements of MARPOL 73/78 on segregated ballast tanks and their protective location this deadline will be reached at the latest in 2026;

(8) prior to the adoption of these amendments to MARPOL 73/78, the United States already adopted in 1990 the Oil Pollution Act establishing double hull requirements both for new and existing tank vessels. These requirements provide that after 1 January 2010 single hull oil tankers without double bottom or double sides will not be allowed to operate to and from US ports unless they comply with the double hull requirements. In addition, in the period preceding this final deadline such single hull oil tankers will not be longer allowed to operate to and from US ports from 2005 onwards when they reach an age of 25 years, and in some cases 23 years, unless they comply with the double hull requirements. For single hull oil tankers fitted with double bottom or double sides this final deadline is fixed on 1 January 2015 and the ship's age limit in the preceding period between 2005 and 2015 is 30 years and in some cases 28 years;

(9) it can be expected that the differences between the international regime and the one established by the United States concerning age limits and end-date limits for the application of the double hull requirements to existing single hull oil tankers will result, from 2005 onwards, that single hull oil tankers not longer allowed to operate to and from US ports because of their age, and particularly after the end-date limits of 2010 and 2015, will shift their trading patterns to other regions in the world, including the European Union, and continue operating until they have to comply with the double hull requirements in accordance with the age limits provided for in the MARPOL 73/78 Convention;

(10) comparison of tanker age and accident statistics show increasing accident rates for older ships. It has been internationally agreed that the adoption of the 1992 amendments to MARPOL 73/78 requiring the application of the double hull or equivalent design standards to existing single hull oil tankers when they reach a certain age will provide these tankers with a higher degree of protection against accidental oil pollution in the event of collision or stranding;

(11) it is in the interest of the Community to adopt measures to avoid that single hull oil tankers that due to their advanced age, or after the end-date limits, are no longer allowed under the Oil Pollution Act 1990 to operate to and from US ports, will start or continue operating to and from European ports and thereby maintain or increase the risk of accidental oil pollution in European waters;

(12) these measures should be based upon the principles of the MARPOL 73/78 Convention that existing single hull oil tankers have to comply with the double hull or equivalent design requirements not later than when they reach a certain age. The age limits in these measures should be aligned with those of the Oil Pollution Act 1990 and for that purpose an accelerated phasing in of the double hull or equivalent design standards of MARPOL 73/78 should be established for existing single hull oil tankers by lowering the age limit and specifying end-date limits in line with those of the Oil Pollution Act 1990, beyond which these ships have to comply with these standards as a condition for entering into a port or the internal waters of a Member State of the Community;

(13) the requirements of Regulation 13G of Annex I of MARPOL 73/78 for existing single hull oil tankers to comply with the double hull or equivalent design standards apply only to crude oil tankers of 20000 tons deadweight and above and to product carriers of 30000 tons deadweight and above. The double hull or equivalent design requirements of Regulation 13F of Annex I of MARPOL 73/78 apply to oil tankers of 600 tons deadweight and above delivered after 6 July 1996. This difference in size limits in the scope leaves the category of single hull crude oil tankers delivered before 6 July 1996 and having a deadweight between 600 and 20000 tons deadweight as well as product carriers delivered before 6 July 1996 with a deadweight between 600 and 30000 tons unaffected. In view of the importance of this lower tonnage category of oil tankers for the intra-Community trade similar measures should be adopted to ensure that these tankers will also have to comply with the double hull or equivalent design standards of MARPOL 73/78. For that purpose a phasing-in of the double hull or equivalent design standards of MARPOL 73/78 should be established for this category of single hull oil tankers as a condition for entering into a port or the internal waters of a Member State of the Community;

(14) the European Parliament, in its Resolution on the oil slick off the French coast adopted on 20 January 2000 [12], welcomed any efforts by the Commission to bring forward the date by which oil tankers will all be obliged to have a double-hull construction;

[12] OJ C [...], [...], p. [...].

(15) the accelerated phasing in of the double hull or equivalent design requirements for single hull oil tankers should be accompanied by complementary measures aimed at encouraging the trading with double hull or equivalent design oil tankers in advance of the accelerated phasing-in scheme. These complementary measures should consist of providing financial incentives for double hull or equivalent design oil tankers and disincentives for single hull oil tankers operating to or from ports of the Member States in the Community;

(16) these complementary measures should be based upon the principles established in Council Regulation (EC) No 2978/94 of 21 November 1994 on the implementation of IMO Resolution A.747(18) on the application of tonnage measurement of ballast spaces in segregated ballast oil tankers [13]. These principles foresee the application of reduced port and pilotage dues for the most environmentally friendly oil tankers as opposed to those offering less protection against oil pollution;

[13] OJ L 319, 12.12.1994, p.1.

(17) Council Regulation (EC) No 2978/94 does not take into account the higher level of protection against accidental oil pollution offered by double hull or equivalent design oil tankers as compared to single hull oil tankers. Therefore the Regulation does not differentiate between double hull oil tankers and single hull oil tankers fitted with segregated ballast tanks with regard to the reduction of port and pilotage dues;

(18) in view of the nearing deadline for single hull oil tankers not complying with the requirements of MARPOL 73/78 on segregated ballast tanks and their protective location there are no reasons to maintain any longer the differential charging system Council Regulation (EC) No 2978/94 provides between such oil tankers and tankers that comply with the requirements of MARPOL 73/78 on segregated ballast tanks and their protective location;

(19) in view of aiming at promoting the trading to European ports of double hull or equivalent design oil tankers, the financial incentive system of Council Regulation (EC) No 2978/94 should be replaced by a system that during the period of the accelerated phasing-in scheme encourages the operation of oil tankers complying with the double hull or equivalent design requirements and discourages the operation of oil tankers not complying yet with these requirements. For that purpose Council Regulation (EC) No 2978/94 should be repealed;

(20) the financial incentives for oil tankers complying with the double hull or equivalent design standards and financial disincentives for oil tankers not yet complying with these standards should be based upon a combined system providing a reduction of port and pilotage dues for oil tankers complying with the double hull or equivalent design standards and applying a surcharge on the port and pilotage dues for oil tankers not yet complying with these standards;

(21) Port and pilotage dues should be proportionate with the services rendered and be calculated in a non-discriminatory manner.

(22) this combined system of reductions and surcharges on port and pilotage dues should be balanced to avoid loss of revenues for the providers of port and pilotage services and to avoid that such losses would be at the detriment of the quality of these services or need to be compensated by raising port and pilotage dues for ships unconnected with the transport of oil and oil products;

(23) in view of the progressive increase of the number of double hull or equivalent design oil tankers and the decrease of the number of single hull oil tankers over the period of the accelerated phasing in scheme the balance in revenues for port and pilotage service providers should be achieved by making the reduction on port and pilotage dues for double hull or equivalent design oil tankers regressive with their age and the surcharge on port and pilotage dues for single hull oil tankers progressive with the ship's age. This differential charging system should cease to be applied when the replacement of single hull oil tankers by double hull or equivalent design oil tankers has been fully accomplished;

(24) since the measures necessary for the implementation of this Regulation are measures of general scope within the meaning of Article 2 of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission [14], they should be adopted by use of the regulatory procedure provided for in Article 5 of that Decision;

[14] O.J. L 184, 17.07.99, p.23

(25) certain provisions of this Regulation containing references to the regulations of the MARPOL 73/78 Convention may be amended by the Commission, assisted by the Committee, to bring them in line with amendments to these regulations adopted or entered into force. Also the percentages of the reductions and surcharges on port and pilotage dues in the Annex may be amended by that Committee to ensure that the revenues for port and pilotage service providers are kept in balance in view of the pace and extent at which single hull oil tankers are replaced by double hull or equivalent design oil tankers during the phasing-in period;

HAVE ADOPTED THIS REGULATION:

Article 1

Purpose

The purpose of this Regulation is to establish:

- an accelerated phasing-in scheme for the application of the double hull or equivalent design requirements of the MARPOL 73/78 Convention to single hull oil tankers, and

- a system of financial incentives and disincentives, providing for a reduction on port and pilotage dues for oil tankers complying with the double hull or equivalent design standards and a surcharge on these dues for oil tankers not yet complying with these standards.

Article 2

Scope

This Regulation shall apply to all oil tankers of 600 tons deadweight and above,

- when entering into a port or the internal waters of a Member State, irrespective of their flag, or

- flying the flag of a Member State.

Article 3

Definitions

For the purpose of this Regulation,

(1) "MARPOL 73/78" shall mean the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto together with the amendments thereto, in force;

(2) "oil tanker" shall mean an oil tanker as defined in Regulation 1 (4) of Annex I of MARPOL 73/78;

(3) "deadweight (DW)" shall mean deadweight as defined in Regulation 1 (22) of Annex I of MARPOL 73/78;

(4) "new oil tanker" shall mean a new oil tanker as defined in Regulation 1 (26) of Annex I of MARPOL 73/78;

(5) "crude oil tanker" shall mean a crude oil tanker as defined in Regulation 1 (29) of Annex I of MARPOL 73/78;

(6) "product carrier" shall mean a product carrier as defined in Regulation 1 (30) of Annex I of MARPOL 73/78;

(7) "single hull oil tanker" shall mean an oil tanker not meeting the double hull or equivalent design requirements of Regulation 13F of Annex I of MARPOL 73/78;

(8) "double hull oil tanker" shall mean an oil tanker meeting the double hull or equivalent design requirements of Regulation 13F of Annex I of MARPOL 73/78;

(9) "age" shall mean the age of a ship, expressed in number of years after the date of its delivery;

(10) "port and harbour authority" shall mean a public or private person which charges fees to ships for providing facilities and services to shipping;

(11) "pilotage authority" shall mean a public or private person entitled to render pilotage services to shipping;

Article 4

Compliance with the double hull or equivalent design requirements by single hull oil tankers

1. Member States shall not allow single hull oil tankers to enter into their ports or internal waters after the earliest of the dates specified hereafter, unless such tankers comply not later than the earliest of those dates with the double hull or equivalent design requirements of Regulation 13F of Annex I of MARPOL 73/78:

(1) for crude oil tankers of 20000 tons deadweight and above and product carriers of 30000 tons deadweight and above not meeting the requirements for a new oil tanker in Regulations 13, 13B, 13E and 18(4) of Annex I of MARPOL 73/78: when they reach the age of 23 years or 1 June 2005.

(2) for crude oil tankers of 20000 tons deadweight and above and product carriers of 30000 tons deadweight and above meeting the requirements for a new oil tanker in Regulations 13, 13B, 13E and 18(4) of Annex I of MARPOL 73/78: when they reach the age of 28 years or 1 January 2010.

(3) for crude oil tankers of 600 tons deadweight and above but less than 20000 tons and product carriers of 600 tons deadweight and above but less than 30000 tons not meeting the requirements for a new oil tanker in Regulations 13, 13B, 13E and 18(4) of Annex I of MARPOL 73/78: when they reach the age of 25 years or 1 January 2015.

(4) for crude oil tankers of 600 tons deadweight and above but less than 20000 tons and product carriers of 600 tons deadweight and above but less than 30000 tons meeting the requirements for a new oil tanker in Regulations 13, 13B, 13E and 18(4) of Annex I of MARPOL 73/78: when they reach the age of 30 years or 1 January 2015.

2. Other structural or operational arrangements such as hydrostatically balanced loading as referred to in Regulation 13G(7) of Annex I of MARPOL 73/78 shall not be accepted as alternatives for compliance with the requirements of paragraph 1.

Article 5

Differential charging of port and pilotage dues for double hull and single hull oil tankers

1. Member States shall ensure that port and harbour authorities and pilotage authorities, when charging port and pilotage dues to oil tankers, apply a differential charging system to the effect that:

- the fees for double hull oil tankers are at least reduced with the percentages mentioned in the Annex in comparison with the fees applied to single hull oil tankers of the same deadweight having an age of less than 5 years, and

- the fees for single hull oil tankers are at least increased with the percentages mentioned in the Annex in comparison with the fees applied to single hull oil tankers of the same deadweight having an age of less than 5 years.

2. Where the fees for port and pilotage dues are charged on another basis than deadweight, Member States shall ensure that the charging system applied by port and harbour authorities and pilotage authorities provides at least the same percentages of reduction in fees for double hull oil tankers and increase in fees for single hull oil tankers as mentioned in paragraph 1.

3. The differential charging system for port and pilotage dues shall cease to apply on the latest of the dates referred to in Article 4.

Article 6

Notification to the IMO

The Presidency of the Council and the Commission shall inform the International Maritime Organisation of the adoption of this Regulation, whereby reference shall be made to article 211, paragraph 3 of the United Nations Convention on the Law of the Sea.

Article 7

Monitoring and reporting

1. Member States shall regularly verify that port and harbour authorities and pilotage authorities apply correctly the differential charging system specified in article 5.

2. The Member States shall send to the Commission annually a report on the results of this verification, including breaches committed by their port and harbour authorities and pilotage authorities. The report shall be provided at the latest by 30 April of the year following the year upon which it reports.

Article 8

Committee procedure

1. The Commission shall be assisted by the committee instituted by Article 12, paragraph 1, of Council Directive 93/75/EEC [15].

[15] Council Directive concerning minimum requirements for vessels bound for or leaving Community ports and carrying dangerous or polluting goods, OJ L 247, 5.10.1993, p. 19.

2. Where reference is made to this paragraph, the regulatory procedure laid down in Article 5 of Council Decision 1999/468/EC shall apply, in compliance with Article 7(3) and Article 8 thereof.

3. The period provided for in Article 5(6) of Decision 1999/468/EC shall be three months.

Article 9

Amendment procedure

1. The references in the Articles to the regulations of Annex I of MARPOL 73/78 may be amended, in accordance with the procedure laid down in Article 8, in order to bring them in line with amendments to these regulations adopted by the IMO.

2. The percentages for the reductions and surcharges of the differential charging system for port and pilotage dues in the Annex may be amended in accordance with the procedure laid down in Article 8, to take account of the pace and extent of the replacement of single hull oil tankers by double hull oil tankers during the phasing in period.

Article 10

Repeal of Council Regulation (EC) No 2978/94

Council Regulation (EC) No 2978/94 of 21 November 1994 on the implementation of IMO Resolution A.747(18) on the application of tonnage measurement of ballast spaces in segregated ballast oil tankers [16] is repealed as from [12 months after the entry into force of this Regulation].

[16] OJ L 319, 12.12.1994, p. 1.

Article 11

Implementation

1. Member States shall, in due time, but before the date of application referred to in Article 12, adopt such laws, regulations or administrative provisions as may be necessary for the implementation of this Regulation.

2. When Member States adopt measures as referred to in paragraph 1, they shall contain a reference to this Regulation or shall be accompanied by such reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.

3. The Member States shall immediately communicate to the Commission all provisions of domestic law which they adopt in the field governed by this Regulation. The Commission shall inform the other Member States thereof.

Article 12

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Communities. It shall be applicable on [12 months after its entry into force date].

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament For the Council

The President The President

ANNEX

Differential charging of port and pilotage dues for double hull or equivalent design oil tankers and single hull oil tankers

Minimum percentages of reductions and surcharges to be applied as referred to in Article 5.

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FINANCIAL STATEMENT

1. Title of operation

Proposal for a Regulation of the European Parliament and of the Council on the accelerated phasing-in of double hull or equivalent design standards for single hull oil tankers

2. Budget heading(s) involved

Part A (see § 10)

Part B (see § 7) - budget-heading B2-702 : Preparation, evaluation and promotion of transport safety

3. Legal basis

Safety in maritime transport: Article 80(2) of the Treaty

4. Description of operation

4.1 General objective

Protecting the marine environment from accidental oil pollution caused by oil tankers through an accelerated phasing-in of double hull or equivalent design standards for single hull oil tankers.

4.2 Period covered and arrangements for renewal

Indefinite

5. Classification of expenditure or revenue

5.1 Non-compulsory expenditure

5.2 differentiated appropriations

5.3 Type of revenue involved: none

6. Type of expenditure or revenue

Operational and administrative expenses for the follow-up and monitoring of the implementation of the Regulation.

The operational expenses are to cover the holding once a year of meetings with experts of the industry involved and the carrying out every third year of an assessment study on the impact, implementation and effectiveness of the measure. The appropriations for these operational expenses are detailed in table 7.2. and will be covered by budget heading B2-702

The administrative expenses are to cover the holding once a year of a meeting of the regulatory Committee to be established under the proposed Community measure. Details of the associated costs are specified in table 10.3.

7. Financial impact

7.1 Method of calculating total cost of operation (relation between individual and total costs)

The total cost of operation is calculated by totalling the individual costs on a yearly basis, starting with the year n at which the proposed Community measure will have entered into force (see table 7.2).

These individual costs consist of a yearly returning amount of 5.000 EUR for organising once a year a 1 day meeting with experts of the industry involved. In addition, every third year, the Commission services intend to contract an assessment study on the impact, implementation and effectiveness of the measures adopted. This regular assessment of the measure over the entire phasing-in period is necessary for the Commission to be able to propose under Comitology procedure eventually necessary amendments to the accompanying incentive/disincentive system for the acceleration of the phasing-in of double hull or equivalent design standards in the Community. The cost for such an assessment study is estimated to be 100.000 EUR.

It is envisaged that the commitment and payment appropriations for each of the individual costs will be made in the same year (see table 7.3)

7.2 Operational expenditure for studies, experts etc. included in Part B of the budget

Commitment appropriations EUR million (at current prices)

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7.3 Schedule of commitment and payment appropriations

EUR million

8. Fraud prevention measures

- Control of adherence to the procedures for inviting Member States' experts to the Regulatory Committee meetings.

9. Elements of cost-effectiveness analysis

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9.1 Specific and quantified objectives; target population

- Specific objectives: links with general objective

Establishment of an accelerated phasing-in scheme for single hull oil tankers to comply with the double hull or equivalent design standards of the International Convention for the Prevention of Pollution from Ships (MARPOL 73/78).

- Target population: distinguish for any individual objectives; indicate the end-beneficiaries of the Community's financial contribution and the intermediaries involved.

No financial contribution is provided for in this proposal.

The differential charging system proposed for port and pilotage dues is balanced by compensating the reduction in dues awarded to double hull tankers by surcharges on dues to be paid by single hull oil tankers.

9.2 Grounds for the operation

- Need for Community financial aid, with particular regard for the principle of subsidiarity.

No Community financial aid is foreseen in this proposal.

- Choice of ways and means

* advantages over possible alternatives (comparative advantages)

The advantage of establishing at Community level an accelerated phasing-in of the double hull or equivalent design standards to single hull oil tankers, compared to individual action by Member States will be that distortion of competition and divergence in safety levels can be avoided. It will also ensure that all oil tankers trading to the European Union will have to comply with one common set of standards and procedures to be respected in all ports established in the Community, providing more clarity and ensuring a uniform treatment.

* explanatory reference to similar Community or national operations

There are no similar Community or national operations to be referred to in this context.

* spin-off and multiplier effects expected

The spin-off and multiplier effects expected are that the Community framework could be recognised world-wide and serve as a trigger for action at international level to phase out single hull oil tankers more expeditiously than provided now under MARPOL 73/78.

- Main factors of uncertainty which could affect the specific results of the operation

The main factor of uncertainty is the rate at which single hull oil tankers will be replaced by double hull oil tankers over the phasing-in period. The proposal therefore foresees the possibility to adapt, through Comitology procedure, the percentages of reductions and surcharges to be applied in the differential charging system for port and pilotage dues, in order to ensure that revenues for providers of port and pilotage services can be kept in equilibrium, and to avoid that compensation for loss in revenues is made by reducing the quality of these services or by raising port and pilotage dues for ships unconnected with the transport of oil or oil products.

9.3 Monitoring and evaluation of the operation

- Performance indicators selected

* output indicators (measurement of resources employed)

The output indicators will be provided by Member States when reporting on the implementation of the Regulation's provisions at national level, and more in particular on the application of the differential charging systems for port and pilotage dues.

* impact indicators (measurement of performance against objectives)

As impact indicators the above reporting by Member States should be considered, together with port State control data, in particular concerning deficiencies and detentions reported on oil tankers. Also the number and extent of accidental oil pollution due to structural damage or failure of oil tankers, will be an indicator for the impact of the proposed measure. Further, article 7 of the draft proposal requires reporting by the Member States on the application of the differential charging system.

- Details and frequency of planned evaluations

The frequency at which evaluations are planned is annual. These evaluations will be done by Member States and will consist of reporting on the implementation of the differential charging system for port and pilotage dues in the navigable waters and ports in their territory.

- Assessment of the results obtained (where the operation is to be continued or renewed)

The information contained in the Member States' reports will be used for the assessment of the need for adjusting the percentages for reductions and surcharging in the differential charging system. For that purpose an evaluation study in the 3rd year, i.e. after each 2nd reporting year, is budgeted (see table 7.3).

10. Administrative expenditure (Section III, Part A of the budget)

10.1 Effect on the number of posts

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10.3 Increase in other administrative expenditure as a result of the operation

EUR

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The above expenditure set out under heading A 7 will be covered by credits within DG TREN global envelope.

IMPACT ASSESSMENT FORM THE IMPACT OF THE PROPOSAL ON BUSINESS WITH SPECIAL REFERENCE TO SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs)

Title of proposal

Proposal for a Regulation of the European Parliament and of the Council on the accelerated phasing-in of double hull or equivalent design standards for single hull oil tankers

Document reference number

COM(....)......final of

The proposal

1. Taking account of the principle of subsidiarity, why is Community legislation necessary in this area and what are its main aims-

The Treaty provides for the establishment of a common transport policy and the measures envisaged to implement such a policy include measures to improve safety in maritime transport as foreseen in Article 80 (2) read in conjunction with Article 71 (1) (c).

To this end, the main objective of the envisaged action is to apply in the Community, in a harmonised way, an accelerated phasing-in scheme for single hull oil tankers to comply with the double hull or equivalent design standards of the International Convention on the Prevention of Pollution from Ships (MARPOL 73/78). A harmonised and accelerated implementation at Community level of these international standards is necessary to reduce considerably the risks and consequences of accidental oil pollution in case of collision or grounding of these types of ships. It is also necessary to avoid that distortion of competition between ports is created due to the application of divergent charging systems for port and pilotage dues for single hull and double hull or equivalent design oil tankers.

The Community has a major interest in ensuring that the transport of oil and oil products by sea is carried in safe and acceptable conditions, with a minimum risk of oil pollution in case of accidents. A harmonised action is necessary to avoid re-occurrence of important oil pollution of European coasts, fauna and flora and harm to the marine environment, as in the case of the sinking of the oil tanker ERIKA off the French coast in December 1999.

In view of the internal market dimension of maritime transport, an action at Community level is the only possible way to ensure that the same level of protection against oil pollution due to collision or grounding accidents is guaranteed for all oil tankers trading to and from and between European ports, while reducing the risks of distortion of competition between ports due to the application of divergent principles governing the charging of port and pilotage dues for environmentally friendly oil tankers.

The impact on business

2. Who will be affected by the proposal-

- which sectors of business

- which sizes of business (what is the concentration of small and medium-sized firms)

- are there particular geographical areas of the Community where these businesses are found

The business sectors affected by this proposal are shipping companies operating oil tankers trading to and from and between the ports of the European Community for the import and export and distribution of oil and oil products within the Community.

The Regulation addresses all oil tankers above 600 tons deadweight, regardless of their flag, when operating to and from and between ports of the Member States. There is no differentiation between the size of shipping companies operating such oil tankers and the ports receiving them for loading or unloading their cargo, as all sea-borne trade of oil and oil products transported by oil tankers to and from and between Community ports is affected by the Regulation. The total number of oil tankers operating world-wide is estimated to be above 7000. In view of the important share of the EU seaborne imports and exports of oil and oil products, which on average can be estimated to be around one third of the world seaborne trade [17], a considerable part of this oil tanker fleet is calling at Community ports for the loading or unloading of oil and oil products. As to the ports concerned most of them are large ports as are the companies operating the terminals. Indeed many of the oil terminals are the property or are managed by the major oil companies. As regards the operators of the tanker fleet involved, they may be or belong to large companies, but also a large number of mostly smaller sized tankers are operated by small and medium sized enterprises.

[17] See figures on the importance of oil trade for the Community in the Communication to which this proposal is attached.

There is no special geographical area within the Community where these businesses are found: all except the two land-locked Member States have seaports catering for commercial ships. Austria and Luxembourg are thus excluded from applying the provisions of the Regulation related to ports. However, as both these countries are maritime flag States, their ships are affected by it.

The expected reduction in oil pollution accidents with single hull oil tankers will have a beneficial effect for the marine environment and considerably reduce the risk and consequences of European coastlines being heavily polluted due to such accidents and the associated financial, social and industrial costs. It will also avoid disturbance of maritime traffic that may be caused by such accidents and the associated cost and time for salvage of the ships and their cargoes, or in the worst case, for wreck removal and recovery of the polluting cargoes, and the need for carrying accident investigations to establish the causes of the loss.

3. What will business have to do to comply with the proposal-

Oil tanker operating companies and oil loading and unloading ports will have to ensure that single hull oil tankers are gradually replaced by more environmentally friendly double hull or equivalent design tankers, in accordance with the accelerated calendar specified in the proposal, which is based upon a combination of ship's age limits and end-date limits. In addition port and pilotage authorities rendering services to oil tankers will have to apply a differential charging system for port and pilotage dues between single hull and double hull or equivalent design oil tankers.

4. What economic effects is the proposal likely to have-

- on employment

- on investment and the creation of new businesses

- on the competitiveness of businesses

The proposal is expected to have a beneficial effect on employment, since the accelerated replacement of old single hull oil tankers by new double hull tonnage will increase the demand for newbuildings. This is expected to have a positive effect for the shipbuilding industry and the associated marine equipment manufacturing and supply industry. However, it should be noted that due to the large shipbuilding capacity available in the Far East and the fierce and aggressive pricing policy of that industry, the major part of new shipbuilding orders arising from the accelerated phasing-in scheme would not be secured by European shipyards. The positive impact on employment for the European shipbuilding industry may be therefore rather limited. On the other hand, the European marine equipment manufacturers may benefit from this increased demand for newbuildings, as they will receive more orders, also for ships to be built outside the Community. Finally the measure may have a beneficial impact on the employment opportunities for European seafarers. It can be expected that the demand for highly qualified crewmembers may increase due to the replacement of old single hull oil tanker tonnage by new double hull tonnage. As these new ships will be equipped with state of the art equipment, better-qualified crew will be necessary to safely operate them. It can also be expected that owners of new tonnage, as opposed to them operating old and low value tonnage, will prefer to rely upon qualified crew for the operation of their investments.

The accelerated phasing-in of the double hull or equivalent design standards for single hull oil tankers is expected to have a beneficial effect on the competitiveness of quality operators trading with modern and environmentally friendly oil tankers. Today they are suffering from unfair competition by sub-standard operators exploiting sub-standard and over-aged tonnage, which are cutting corners on safety and marine pollution prevention to offer bottom price for the transport of oil and oil products. These low market prices do not allow quality operators to obtain a return on their investments.

5. Does the proposal contain measures to take account of the specific situation of small and medium-sized firms (reduced or different requirements etc)-

For the reasons explained above and for the sake of safety and oil pollution prevention, no distinction is made in the scope of application of this Regulation as regards the size of ships or ports, or companies operating them. Considering that the replacement of single hull oil tonnage by new double hull tonnage is agreed at international level as a measure necessary to reduce the risks of accidental oil pollution, such a distinction is considered not to be necessary nor desirable. On the contrary, making such distinctions would create a two-tier safety regime and would entail risks for distortion of competition.

However, the proposal aims at balancing the revenues of port and pilotage authorities which are rendering services to oil tankers trading to and from and between European ports. This balance will be achieved by compensating the reduction in port and pilotage dues granted to double hull oil tankers with surcharges on port and pilotage dues for single hull oil tankers.

Consultation

6. List the organisations which have been consulted about the proposal and outline their main views.

- European Shippers' Council (ESC)

- Federation of European Private Port Operators (FEPORT)

- European Sea Ports Organisation (ESPO)

- European Community Shipowners' Association (ECSA)

- European Transport Workers' Federation (ETF)

- Committee of EU shipbuilders' associations (CESA)

- Comité européen des Assurances (CEA)

- International Association of Classification Societies (IACS)

- International Group of Protection & Indemnity Clubs

- International Association of Independent Tanker Owners(Intertanko)

- Oil Companies International Marine Forum (OCIMF)

- International Chamber of Shipping (ICS)

- International Underwriters Association (UIA)

Industry and professional organisations have been consulted on the main objectives and principles of the proposal. In general the industry and professional organisations consider the proposed phasing-in scheme as very stringent, whilst appreciating the need for taking measures to enhance considerably the prevention of accidental oil pollution. Some of these organisations have not awaited this proposal to announce that they will take voluntary measures to contribute to this enhancement. All these ideas for voluntary actions by some parts of the maritime industry emerged after the sinking of the ERIKA and aim at providing a reasoned reply to the justified public and political concern about the safety of oil transport by sea. This proposal is considered by the industry as a stringent but unavoidable measure to ensure that a level playing field is created for all players involved, in particular for those which for the time being are not (yet) prepared to commit themselves to similar voluntary actions.