Proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 3577/92 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage)
Date: 1998-04-29
Institutions: European Commission
Subjects: carriage of goods, common transport policy, ferryboat, freedom to provide services, maritime cabotage, maritime transport

COMMISSION OF THE EUROPEAN  COMMUNITIES 

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Brussels, 29.04.1998 
COM(1998) 251  final 

98/0158 (SYN) 
98/0159 (SYN) 

COMMUNICATION 

on a common policy on manning of regular passenger and 
ferry  services operating in and between Member  States 

Proposal for a 
COUNCIL REGULATION  (EC) 

amending Council Regulation (EEC) No 3577/92 applying the principle of 
freedom to provide services to maritime transport within Member  States 
(maritime cabotage) 

Proposal for a 
COUNCIL  DIRECTIVE 

on manning conditions for regular passenger and ferry  services 
operating between Member  States 

(presented by the Commission) 

COMMUNICATION 

on a common policy on manning of regular passenger and 
ferry services operating in and between Member  States 

1. 

1. 

INTRODUCTION 

1. 

The objectives  of the common  maritime  policy  cover  a variety  of  issues which  are 
interrelated.  These are: to ensure the consumers  of shipping  services  a wide choice 
of competitive  services, to enhance the quality  and  safety  of  shipping, to  foster  the 
economic  development  of  Community  shipping  and  of  the  related  cluster  of 
maritime  industries,  to  promote  the  employment  of  well-trained  Community 
seafarers  and,  more  generally,  to  foster  the  further  development  of  maritime 
know-how  in  the  Community.  Reference  should  also  be  made  to  Article  2  of  the 
Treaty, which explicitly mentions the promotion  of a high level of employment and 
of social protection as being a task of the Community. 

On  several  of  these  points  good  progress  has  been  made.  For  example,  the 
continuous  striving  for  freedom  of  access  to  shipping  markets  across  the  world 
and ongoing  efforts  to  raise  quality  standards  in  the  appropriate  international 
fora, has  ensured 
the  availability  of  a  wide  range  of  highly  competitive 
shipping services.  However,  the  situation  is  less  satisfactory  as  regards  the 
employment  of  Community  seafarers.  Over  the  last  decades  the  employment  trend 
has gone down continuously, as a result of flagging  out, replacement of Community 
crew  by  cheaper 
labour-saving 
rationalization measures. 

third  countries,  and  technical 

labour  from 

2. 

In  December  1996  under  the  auspices  of  the  Commission  an  international 
conference  was organized  in Dublin  to discuss the theme: "The  European  seafarer, 
an  endangered  species?".  As  the  conference  showed,  there  is  indeed  reason  for 
serious  concern.  Not  only  has  the  number  of  Community  seafarers  sharply 
decreased, but  the average age of Community  seafarers  is now well over 40 and the 
inflow  of  young  cadets  is  not  sufficient  to  replace  those  leaving  the  trade.  To 
illustrate  the  point:  between  1985  and  1995  the  number  of  Community  nationals 
employed  on  Community  flagged  vessels  went  down  from  206 000  to  129 000 
(-37%),  while  the  number  of  non-Community  nationals  went  up  from  29 000  to 
33 000 (+14%)1. It was further  found  that  51%  of the employment  loss was caused 
by  flagging  out.  Until  now  the  cargo-ships  sector  has  been  the  sector  mainly 
affected  by  the  abovementioned  trend.  However,  the  trend  could  spread  to  the 
passenger-ferry  sector  if  no  countermeasures  were  taken  (see  further  points  4,  16, 
17 and 18). 

Source: TECNECON, August  1996, "Study on maritime professions  in the European  Union". 

2 

3. 

The  Commission's  Maritime  Strategy  Paper  of  19962  identified  the  need  to  put 
greater  emphasis  on the promotion  of  the  employment  of  Community  seafarers  in 
connection with the improvement  of the competitiveness  of Community  flags. The 
comments  received  on  the  paper  were  generally  positive  and  subsequently  the 
Commission  undertook  to revise the State aid guidelines  for  maritime  shipping3 as 
a  first  concrete  measure  underpinning  this  policy.  The  creation  of  a  level  playing 
field was seen as the best way to stop flagging  out. This means that Member States 
should be allowed  to offer  shipowners  under their  flag  fiscal  and  labour  conditions 
which  are (as  far  as possible)  comparable  to those that  can  be obtained  elsewhere. 
Now,  nine  months  after  the  publication  of  the  revised  guidelines,  a  process  of 
convergence  in •Member  States '  policies  can  be  observed.  Most  Member  States 
have  introduced  or proposed  measures  going  in this direction  and the  first  positive 
effects  on  the  competitive  position  of  Community  registers  and  Community 
seafarers have been reported, in particular as regards ocean-going shipping. 

4.  As  a  mxi  step  il\Q "home  market"  of  the  Community  seafarers  and  more  in 
the  market  of  regular  passenger  sen/ices  within  and  between 
particular 
Member States, requires  special  attention.  The  abovementioned  study  on maritime 
professions  in  the  Community,  of  August  1996.  indicated  that  almost  50%  of  all 
Member  States'  seafaring  personnel  (cabin  crew  and  catering  staff  included)  is 
employed  on  such  passenger  vessels.  Regular  passenger  services  are  an  important 
source  of  employment  both  in  Southen:  and  Northern  Europe.  In  both  cases  the 
market  is  served  by  operators  established  in  the  Community.  However,  there  are 
differences  in market structure. In Southern  Europe, the centre of gravity lies within 
island  passenger  cabotage  services  (cabotage  means  carriage  of  passengers  or 
goods  by  sea between  two porte  situated  within  one and  the  same Member  State). 
Regular  passenger  services between  Member  States  are restricted  to  a few  lines of 
which  Greece-Italy  and  Corsica-Italy  are  the  most  important.  In Northern  Europe, 
domestic  passenger  services  are  important  in  Denmark  and  the  UK  in  particular, 
but the bulk of regular passenger transport  is in traffic  between Member States. 

5. 

The market  for regular passenger  services  within  and between  Member  States is in 
a number  of respects  different  from  other  sectors  cf  the  maritime  transport  market 
(see points 9,  10 and 20 hereinafter).  This market is served by operators  established 
flags  and 
in  Member  States  using  mainly  ships  under  Member  States' 
predominantly  crewed  by  Member  States1  nationals.  However,  there  are  some 
developments  which  cause  concern  amongst  seafarers  as  regards  their  future 
liberalization  of  island  cabotage  by 
employment  situation.  The  forthcoming 
1 January  1999 is perceived  as  a threat  by  many  seafarers  in  Southern  Europe.  In 
other  market  segments,  ferry  operators  observe  or  anticipate  a  reduction  in  their 
revenues  due to  certain  external  developments  putting  increased  pressure  on  them 
to reduce operating costs. Partial replacement of the existing work force  by cheaper 
labour from  third countries is an option in this context. 

2  COM(96) 81 final "Towards a new maritime strategy",  13.3.1996. 
3  OJC205,  5.7.1997, p. 5. 

The main  purpose  of this  communication  is to  examine  the  labour  situation  in  the 
entire  market  for  regular  passenger  services  between  Member  States'  ports  and  to 
propose  a way  forward  by  means  of  the  two  legislative  proposals  attached  hereto 
bearing  in  mind  that  these  proposals  should  be  in  line  with  the  international 
obligations of the Community. 

2. 

6. 

CABOTAGE 

Council  Regulation  (EEC)  No  3577/92  of  7  December  19924  provides  that  the 
principle  of  freedom  to  provide  services  in  maritime  cabotage  shall  apply  to 
Community  shipowners  (as  defined  in  Article  2(2)  thereof)  who  have  their  ships 
registered  in,  and  flying  the  flag  of  a  Member  State,  provided  that  these  ships 
comply  with  all  conditions  for  carrying  out  cabotage  in  that  Member  State.  The 
Regulation  provides  for  a  step-by-step  liberalization  of  different  segments  of  the 
cabotage market.  Island  cabotage  in  Southern  Europe  - as defined  in Article  6(2) -
shall  be  liberalized  as  from  1 January  1999.  On  manning  of  vessels  carrying  out 
island cabotage, the Regulation in essence provides for the  following: 

Article  3(2): all  matters relating  to manning  shall be the responsibility  of the 
host State; 

Article  3(3):  however,  for  cargo  vessels  over  650  gt  carrying  out  island 
cabotage  consecutive  to  an  international  journey,  all  matters  relating  to 
manning shall be the responsibility of the flag  State (as from  1  January  1999); 

Article  3(4):  the  Commission  shall  submit  a  report  to  the  Council  on  the 
economic  and  social  impact  of  the  liberalization  of  island  cabotage 
(by  1  January  1997)  and  shall  submit  a  proposal  to  the  Council  which  may 
include  adjustments  to  the  manning  nationality  provisions  laid  down  in 
paragraphs  2  and  3  so  that  the  definitive  system  shall  be  approved  by  the 
Council in due time and before  1  January  1999. 

The  aforementioned  report  was  submitted  to  the  Council5  on  17  June  1997.  The 
proposal referred  to in Article 3(4) is attached to this  Communication. 

7. 

Following  the  presentation  of  the  aforementioned  report,  certain  Member  States 
have  suggested  that  the  provisions  of  Article  3(2)  and  (3)  as  mentioned  above, 
should  remain  unchanged  for  an  indefinite  period.  The  Commission  cannot  share 
this  view  for  the  reasons  set  out  below.  In  analysing  the  situation  a  distinction  is 
made  between  island-cargo  trades  (see  point  8)  and  island-passenger  services 
(points 9 to  11). 

4  OJL  364,  12.12.1992, p. 7. 
5  COM(97)  296.  Report 

implementation  of 
Council Regulation  (EEC)  No  3577/92  applying  the  principle  of  freedom  to  provide  services 
to maritime  cabotage  (1995-1996)  and  on  the  economic  and  social  impact  of  the  liberalization  of 
island cabotage. 

the  Council  on 

the  Commission 

from 

the 

to 

4 

As regards cargo cabotage a certain simplification  of the present rules is called  for. 
It  should  be  recalled  that  Article  3(1)  of  Regulation  (EEC)  No  3577/92  provides 
that all matters relating to manning for vessels carrying out mainland cabotage shall 
be  the  responsibility  of  the  State  in  which  the  vessel  is  registered  (flag  State), 
except for ships smaller than 650 gt6 where host State conditions may be applied. 

According  to  Article  3(3),  flag-State  conditions  also  apply  to  cargo  vessels 
in  consecutive7  island-cargo  cabotage  as  from 
over 650  gt  when  engaged 
1 January  1999.  Hence,  the  only  remaining  question  is:  should 
island-cargo 
cabotage  voyages  with  vessels  over  650  gt,  which  do  not  follow  or  precede  an 
international  journey  (and  which  are  presently  subject  to  host-State  conditions), 
continue to be exempted from the normal flag-State  rule? 

The  Commission  believes  that  there  is  no  economic  justification  for  a  lasting 
exemption  from  the  flag-State  rules,  for  the  reasons  set  out  in  its  report  of 
17 June  1997  referred  to  above.  Cargo  cabotage  sendees  are  often  earned  out  by 
vessels  which  participate  for  alternating  periods  in  international  and  domestic 
trades.  The  manning  conditions  for  this  type  of  cabotage  should  therefore  not 
deviate  from  the  accepted  practice  in  international  trades,  which  is  that  the 
flag  State  issues  the  safe  manning  certificate  (in  accordance  with  the  provisions 
international  conventions)  and  determines  all  other  matters 
of the  relevant 
relating to manning.  Any  other  approach  would  have  for  effect 
the 
composition  and/or the labour conditions  of the crew  of a vessel  operating  under a 
Member States  flag  would  have  to  be  changed  in  order  to  obtain  access  to 
island-cargo  cabotage.  This is  considered  an  unacceptable  and  unnecessary 
hindrance  to the implementation  of the principle  of  freedom  to provide  services. It 
is  therefore  proposed  to  remove  this  obstacle  by  applying  the  flag-State  rule  as 
already  agreed for  consecutive  island-cargo  and  mainland  cabotage,  to  all  cargo 
cabotage (with vessels over 650 gt). 

that 

The  market  for  regular  passenger  services  in  island  cabotage  is  in  a  number  of 
respects  very  different  from  the  cargo-cabotage  market.  First  of  ail,  there  is  no 
economic  relationship  with  the international  market  in a way that  is comparable to 
the cargo market. It is common that passenger ferries designed to serve a particular 
island  route  remain  on  the  same  route  for  many  years  at  a  time  and  not 
uncommonly  for  their  entire  service  lifetime.  The  crews  serving  on  these  ships 
locally 
effectively 
recruited. 
in  the  area  concerned  and  are  often 
reside 
accordance  with 
All Member States 
Community law)  that  100%  of  the  crew  on  such  services  must  consist  of 
Community  nationals. In addition, Member  States may require, in accordance with 
Council Directive 94/58/EC8 that  a certain percentage  of the crew members  and in 
particular  those  nominated  on  muster  lists  to  assist  passengers  in  emergency 
situations, must  have communication  skills that  are sufficient  for  that  purpose  and 
which may consist, inter alia, in speaking the language or languages appropriate to 
the principal nationalities of passengers carried on a particular route. The fact  that a 

in  Southern  Europe 

require 

(in 

Operations with vessels below  650 gt are considered to be of local importance  only and may  therefore 
continue to be subject to host State manning rules as provided for in Regulation (EEC) No 3577/92 
That means, when the voyage concerned  follows or precedes a voyage to or from  another State. 
OJL319,  12.12.1994, p. 28. 

5 

substantial pari of the crew must be able to  speak the local  language(s)  adds to the 
argument that regular passenger services differ from cargo shipping. 

10.  Secondly,  regular  passenger  services  are  in  general  far  more  labour  intensive  than 
cargo  services.  Therefore,  passenger  services  are  an 
important  source  of 
employment  for  local  seafarers.  In  the  Commission's  report  COM(97) 296  of 
17 June  1997, it was stated that 70% of all employment in island cabotage is related 
to passenger  services. The  labour  intensive  character  of  the  trade  also  implies  that 
competition  conditions  between  operators  using  vessels  under  flags  of  different 
Member States would be more strongly  influenced  by differences  in manning rules. 
In  particular,  it  would  be  perceived  as  unfair  if  local  passenger  ferry  operators 
that  100%  of  the  crew  must  consist  of 
being subject 
Community nationals,  would  have 
to  compete  with  operators  from  other 
Member States  making  use  of  cheap  third-country  labour  as  allowed  by  the 
manning rules of their flag State. 

to  the  requirement 

11. 

In view of the particular characteristics  of the market  for regular passenger  services 
in  island  cabotage,  the  Commission  is  of  the  opinion  that  certain  measures  are 
needed  to  ensure  a level  playing  field  for  operators  from  different  Member  States 
using  vessels  under  different  flags.  In  particular,  it  is  proposed  to  allow  host 
Member  States  to  require  that  all  personnel  employed  on  the  aforementioned 
passenger  vessels  operating  within  their  territory  shall  consist  of  Community 
nationals,  provided  (of  course)  that  this  rule  equally  applies  to  vessels  operating 
under their own national  flag. 

The  proposed  approach  is  based  on  the  principle  that  third-country  seafarers 
employed  in  regular  passenger  services  should  receive  equal  treatment  with 
Community  residents. The application  of this principle  should  also have  a positive 
effect  on  maritime  safety,  considering  the  paramount  importance  of  the  human 
element in safety matters. 

Particular  considerations 
Council Regulation on cabotage 

in  respect  of 

the  attached  proposal 

for  a 

12.  The  application  of  a  100% Community  nationality  requirement  (see  Article  1(2)), 
as is common  practice  in  all  Southern  Member  States, will  offer  conditions  under 
which the principle of freedom  to provide services  can be  fully  implemented  in the 
relevant market. In addition, it is recalled  that the provisions  of Directive  94/58/EC 
allow  host  Member  States  to  require  that  a sufficient  number  of  the  crew  shall  be 
able  to  speak  the  local  language(s).  Any  further  divergence  from  the  usual 
flag-State  manning  principle  would  constitute  an  undue  hindrance 
to  the 
implementation  of  the  principle  of  freedom  to  provide  services.  Therefore,  other 
matters relating to manning  such as the responsibility  for  issuing  the  safe  manning 
certificate  on  the  required  crew  composition 
in  function  of  the  technical 
characteristics  of  the  ship  and  in  accordance  with  the  relevant  international 
conventions, shall remain the competence of the flag State. 

13.  The terms and conditions of employment  (e.g. rates of pay, overtime rates, working 
time, annual holidays, etc.) of Community  seafarers  working  on board  ships  under 
Member  States  flags  are normally  laid  down  by  collective  bargaining  agreements 
and/or legal provisions  of the flag  State. It could be construed  to be contrary  to the 
6 

principle  of  freedom  to  provide  services  to  require  that  the  terms  and  conditions 
of employment  of  the  crew  would  have  to  be  changed  and  brought  in  line  with 
the corresponding  provisions  applying  in  the  host  State  if  a  vessel  under  a 
Member States'  flag  were  used  for  a  certain  period  for  the  provision  of  regular 
passenger-cabotage  services  in  another  Member  State  (host  State).  However,  in 
order to avoid  any risk of social dumping the proposed  revised  text  of Article  3(3) 
(see attached proposal  for  a Council  Regulation)  of Regulation  (EEC)  No  3577/92 
provides  that,  where  host  States  allow  third-country  nationals  to  be  employed  on 
vessels  providing  regular passenger  sendees,  the host  State  shall  require  that  such 
seafarers  shall be treated  for the purpose of terms and conditions  of employment as 
residents of the Member State in which the vessel is registered.  In this context, it is 
recalled  that  Article  1  of  Regulation  (EEC)  No  3577/92  guarantees  freedom  to 
provide services to Community  shipowners  who have their  ships registered  in, and 
fly the flag of a Member State. 

14.  The main differences  between cargo and passenger  services, which justify  a special 
treatment  for  the  latter  are,  as  set  out  before,  (a)  the  fact  that  there  is  hardly  any 
relationship  with  the  international  market  in  domestic  regular  passenger  services 
and  (b)  that  passenger  services  are  more  labour  intensive  and  therefore  the 
competition  conditions  are  more  strongly  influenced  by  differences  in  labour 
conditions.  To  a very  large  extent  these  characteristics  also  apply  to  the  so-called 
scheduled  cabotage  cruise  services  (i.e. cruise  vessels  which  operate  for  the  whole 
season  according  to  a  fixed  pattern  between  ports  of  one  and  the  same 
Member State). The attached cabotage proposal  therefore  includes these services in 
the same category as regular passenger and ferry services. 

3. 

REGULAR 
MEMBER  STATES 

PASSENGER  AND 

FERRY 

SERVICES  BETWEEN 

15.  Unlike  cabotage,  there  is  no  flag  requirement  for  the  provision  of  maritime 
transport  services between Member  States. Council Regulation  (EEC) No 4055/869 
of  22  December  1986  provides  that  all  Community  established  carriers10  may 
provide  such  services  irrespective  of  whether  they  operate  under  Community  or 
third-country  flags.  As regards  the particular  market  for  regular  passenger  services 
between  Member  States,  the  situation  is,  however,  that  these  services  are  mainly 
carried  out by  ships  under Member  States'  flags  and  are predominantly  crewed  by 
residents  of  those  States.  As  stated  before,  these  services  are  a  major  source  of 
employment  for Community  seafarers. 

16.  Over  recent  years,  a  few  cases  have  occurred  where  operators  began  regular 
passenger-ferry  services  using  third-country  labour  in  direct  competition  with 
Community-crewed  ferries.  These  attempts  resulted  in  strong  trade  union  action. 
Similar situations could, however, arise again in the  future. 

9  OJ L 368, 31.12.1986, p. 1. 
10 

Including  nationals/shipping  companies  established  outside the Community  controlled  by nationals of 
a Member State, if their vessels are registered in that Member  State in accordance with its legislation, 

7 

17.  Other  cases  have  been  reported  of  Community  carriers  who  have  partly  replaced 
Community  crew  by  third-country  nationals  over  the  last  years.  According  to  the 
information  at  the  disposal  of  the  Commission,  some  600  to  700  third-country 
nationals  (±  3%  of  the  relevant  work  force)  are  presently  employed  as  crew 
members  on  regular  passenger  ferry  services  operating  between  Member  States. 
The  vessels  concerned  are  operating  under  flags  of  four  different  Member  States. 
The  terms  and  conditions  of  employment  of  these  crew  members  are  diverse.  For 
example, it appears that one of these four  Member States requires that third-country 
nationals employed  on its intra-Community  ferries  shall be offered  the same labour 
conditions  as  its  own  nationals.  For  the  other  three  Member  States,  it  has  been 
confirmed  that third-country  crew  are employed  on conditions  less  favourable  than 
those applicable to their own nationals. 

There  is  currently  no  Community  rule  in  force  which  could  bring  about  a  certain 
degree of harmonization  in cases such as those described above. 

18.  As  stated  before,  the  competition  conditions  in  the  labour-intensive  market  for 
regular  maritime-passenger  services  is  strongly  influenced  by  the  crews'  labour 
conditions.  There  are  external  factors  (e.g.  abolition  of  duty  free,  completion  of 
certain  fixed  links)  which  give reason  to  believe  that  the pressure  on  operators  in 
this market  to reduce  costs may  increase  in the years to  come. If  certain  operators 
can  reduce  their  costs  by  replacing  Community  crew  by  third-country  crew 
employed  at  less  favourable  conditions,  their  competitors  will  probably  have  to 
follow.  There  is a danger of a negative  spiral  of erosion  of working  conditions  for 
all  crew,  resulting  in  considerable  loss  of  employment  for  Community  seafarers. 
Such  an  evolution  would  be  contrary  to  the  objectives  of  the  common  maritime 
policy.  In  this  light,  the  Commission  considers  that  certain  rules  should  be 
introduced  to  ensure  the  proper  functioning  of  the  internal  market  and  to  avoid 
disruption through social dumping. 

19.  The proposal  for a Council Directive attached  to this Communication  addresses the 
labour  conditions  of  third-country  nationals  employed  on  ships  used  for  the 
provision  of  regular  passenger  and  ferry  services  between  Member  States  and 
establishes  the  principle  that  such  workers  should  benefit  from  terms  and 
conditions of employment which are comparable to those applicable to  Community 
citizens working in that trade by defining  a certain minimum  level. 

An  important  consideration  is  that  seafaring  personnel  employed  on  board  ships 
providing  regular  passenger  services  between  two  ports  in  the  Community  are 
effectively  residing in the Community,  since they  stay within the boundaries  of the 
single market  for their  entire contract period.  In most  cases  seafaring  personnel  on 
such passenger  ferries  sleep on board  during  the weeks  that  they  are on duty  only; 
during  off-duty  periods  they  reside  on  shore  in  one  of  the  host  Member  States.  It 
is therefore  not  surprising  that  at present  at least  one of  the  Member  States  applies 
the  rule  than  non-Community  nationals  shall  be  treated  as  a  resident  of  the  State 
when  being  employed  on  its  intra-Community  ferries.  It  is  common  practice  that 
Member States'  rules  on  liability  to  income  tax,  social  contributions,  minimum 
rates of pay, minimum paid holidays, etc. are applicable to all residents of the State. 
The rule proposed  in  Article  2 of the  attached  proposal  for  a Council  Directive  is 
closely aligned to this principle. 

is  also  made 

this  context,  reference 

to  Directive  96/71/EC11  of  the 
In 
European Parliament  and  of  the  Council  of  16  December  1996  concerning  the 
posting of workers  in the framework  of the provision  of  services. The checking of 
the  compatibility  of  the  proposal  with  the  international  obligations  of  the 
Community  or its Member  States and in particular with the UN Convention  on the 
Law of the Sea, with OECD and WTO, has been carried out with special attention. 

The establishment  of a level of labour conditions based  on European  standards  for 
all  crew  members  should  also  have  a  positive  effect  on  maritime  safety  as 
mentioned in point  11. 

20.  The  question  can  be  asked  whether 

the  proposal 

the  scope  of 

for  a 
Council Directive should be extended to also cover other maritime services, such as 
regular  cargo  services  between  Community  ports  and  cruises.  The  answer  to  this 
question must be negative  since the situation  is not comparable. Cargo  services are 
not  particularly  labour  intensive  and  cargo  services  between  Community  ports 
(e.g. container  feeder  services) are much more interlinked  with the global  maritime 
services  network  than  regular  passenger-ferry  services.  The  latter  point  is  also 
applicable  to  international  cruises.  Vessels  used  for  international  cruise  sendees 
normally  move with  seasons to different  parts of the world.  Crews  of  such  vessels 
cannot be considered as effectively  residing in the Community. 

21.  Particular  considerations 

in  respect  of  the  attached  proposal 

for  a 

Council Directive 

Explanatory comments by Article: 

Article 1 

the 

shipowners 
Paragraph  2  covers 
established outside  the  State  who  nevertheless  have  their  vessels  registered  in 
the  State  and  fly  its  flag.  The  proposed  wording  is  similar  to  the  one  used  in 
Council Regulation (EEC) No 4055/86 (see Article  1(2) thereof). 

so-called  Greek  particularity, 

i.e. 

Paragraph  3 specifies  that  the  labour  conditions  of Member  States'  seafarers  shall 
not be  affected. 

Article 2 

Third-country nationals employed  on board  ships under Member  States'  flags  shall 
be treated in a similar way as residents of Member  States employed  on board  these 
ships  (flag-State  conditions).  In  the  case  of  ferries  under  third-country  flags,  the 
labour  conditions  of  such  crew  members  shall  be  in  line  with  those  applicable  to 
residents  of  Member  States  in  the  Member  State  with  which  the  service  is  most 
closely  connected  (host  State)12.  The  way  the  operator  of  a  regular  passenger 
service between two Member States has set up his business shall normally settle the 
question  of  to  which  of  these  host  States  his  business  is  most  closely  linked. 

H  OJL  18, 21.1.1997, p. 1. 
12  See Rome Convention of  1980, OJ C 27, 26.1.1998. 

Important factors to be taken into account are: the place from which the operation is 
effectively  managed  and  the  place  where  non-Community  crew  members  stay 
during off-duty  periods. 

Article 3 

Paragraph  1 allows  for  a derogation  from  the principle  established  in Article  2  for 
third-country  workers who stay  for  an insignificant  short period  in the Community. 
Paragraph  2 allows  for  flexibility  in case  for  example of a ferry  with  crew  that  has 
to be chartered in to compensate for an acute shortage of capacity due to  unforeseen 
circumstances.  Such  a  situation  may  for  instance  occur  where  a  ferry  has  been 
involved  in  a  serious  accident.  The  Member  States  concerned  shall  ensure  a 
normalization of the situation within a reasonable period. 

Article 4 

Active  cooperation  between  the  competent  authorities  of  the  Member  States  and 
with  the  Commission  will  be  required  to  ensure  a  proper  application  of  the 
provisions of this Directive. 

22.  Justification  for a Council  Directive 

14(a) What  are  the  objectives  of  the  envisaged  action  proposal  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 
which is the solution so far)? 

The  objectives  of  the  Community  are  to  ensure  fair  competition  conditions/level 
playing  field  for  all  providers  of  regular  passenger-ferry  services  between 
Member States  and  to  protect  the  employment  of  Community  seafarers  by 
guaranteeing  that  the  terms  and  conditions  of  employment  of  all  seafaring 
personnel  in  this  trade  will  be  in  line  with  the  level  of  the  standards  generally 
applicable in the Community. The proposal  is based on Article 84(2) of the Treaty. 

The  great  majority  of  Member  States  (13  out  of  15)  have  maritime  ports  and  are 
connected with other Member States by means of regular passenger-ferry services. 

Member  States'  rules  on  the  working  conditions  of  third-country  nationals 
employed  on  ferries  operating  between  Member  States  are  diverse.  A  common 
solution  applicable  to  all  operators  on  the  relevant  market  can  only  be  brought 
about by Community action. 

15(b) Is  the  envisaged  action  solely  the  responsibility  of  the  Community  or  a 

responsibility shared with the Member States? 

The  envisaged  action  does  not 
the Community. 

relate 

to  an  exclusive  competence  of 

10 

16(c) What  is  the  most  efficient  solution  taking  into  account  the  resources  of 

the Community  and  of the Member  States ? 

In view of the internal  market dimension  of maritime passenger  transport,  the most 
efficient  solution  is  to  enact  common  requirements  at  Community  level  for  the 
treatment  of  third-country  crews  on  board  vessels  carrying  oat  regular  passenger 
and ferry services between Member States. 

17(d) What  is  the  concrete  added  value  of  the  action  envisaged  by  the 

Commission  and what would be the cost of  inaction? 

Inaction  would  allow  ferry  operators providing  regular  passenger  services  between 
Member States to replace Community  seafarers  by cheap third-country  labour. This 
would  result  in  a  distortion  of  competition  conditions  between  operators  in  the 
relevant market. It would  also lead to a constant  erosion  of labour conditions  of the 
seafarers  in general  and considerable  loss of employment  for  Community  seafarers 
in the long run. 

To  counteract  and  prevent  this  negative  evolution  is  the  added  value  of  the 
proposed common action. 

18(e) What 

forms 

of 

action 

are 

available 

to 

the  Community? 

(recommendation,  financial  assistance, regulation,  mutual  recognition) 

Legislative action is the only form  of action  available to the Community  which can 
bring about the envisaged  effect. 

19(f)  Is  uniform  legislation  necessary  or  does  a  Directive  setting  the  general 
objectives  and  leaving the execution  to the Member  States  suffice? 

In accordance with the proportionality  principle, a Directive will be  sufficient  as it 
will establish  common requirements  for  all  operators  on the relevant  market  while 
leaving the choice of practical  and technical procedures  for their implementation  to 
each Member State. 

11 

98/0158 (SYN) 

Proposal for a 
COUNCIL REGULATION  (EC) 

amending Council Regulation (EEC) No 3577/92 applying the principle of 
freedom to provide services to maritime transport within Member States 
(maritime cabotage) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community  and  in  particular 
Article 84(2) thereof, 

Having regard to the proposal from  the Commission13, 

Having regard to the opinion of the Economic and Social Committee14, 

Acting  in  accordance  with  the  procedure  laid  down  in  Article  189c  of  the  Treaty  in 
cooperation with the European Parliament15, 

Whereas  Council  Regulation  (EEC)  No  3 577/9216  lays  down  the  principle  that  the 
implementation  of  the  freedom  to  provide  services  is  not  necessarily  to  be  applied  in 
a uniform  way  for  all  services  concerned,  regard  being  had  to  the  nature  of  certain 
specific  services; 

Whereas  Article  3 of  that  Regulation,  therefore,  establishes  different  manning  rules  for 
mainland  and island cabotage and imposes the obligation  on the Commission  to submit a 
proposal to the Council, on the basis of a report on the economic  and social  impact of the 
liberalization  of  island  cabotage,  which  may  include  adjustments  to  the  manning 
nationality  provisions  laid  down  in  that  Article,  so  that  the  definitive  system  may  be 
approved by the Council before  1  January  1999; 

Whereas the abovementioned  report was submitted by the Commission to the Council on 
17 June  1997; whereas it follows from the research carried out that the present rule which 
provides, in respect  of island  cabotage, that  ail  matters  related  to  manning  are to be the 
responsibility  of  the  host  State,  constitutes  an  unnecessary  hindrance  to  the  proper 
functioning  of the single market; 

Whereas the cargo-cabotage sector is closely interlinked with the international market  for 
maritime  shipping;  whereas  no  compelling  economic  arguments  have  been  found  to 
justify  a permanent  departure from the usual flag-State conditions,  except  in the case of 
services of merely local importance; 

13 
14 
15 
16  OJL  364,  12.12.1992, p. 7. 

12 

Whereas the promotion of employment within the Community  is one of the objectives  of 
the Treaty; 

Whereas  the  particular  characteristics  of  the  sector  for  regular  passenger  and  ferry 
sendees would justify  certain  special provisions  to counteract  any possible  disruption  of 
competitive  conditions  through  the  use  of  third-country  crews  paid  at  the  wage-level  of 
their  country  of  origin;  whereas  the  same  arguments  are  applicable  to  the  sector  of 
scheduled cabotage-cruise services; 

Whereas  it  is  appropriate  to  require  that  third-country  nationals  employed  within  the 
abovementioned  sectors shall riot be treated less favourably  than Community residents; 

Whereas Regulation (EC) No 3577/92 should therefore be amended  accordingly, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Article 3 of Regulation (EEC) No 3577/92 is hereby replaced by the  following: 

"Article 3 

1. 

2. 

For  vessels  carrying  out  cabotage  services  other  than  those  referred 
to  in 
paragraph 2, all matters relating to manning  shall be the responsibility  of the  State 
in which  the  vessel  is registered  (flag  State),  except  for  ships  smaller  than  650  gt, 
where  the  conditions  in  force  in  the  State  in  which  the  vessel  is  performing  its 
services (host State) may be applied. 

For  vessels  carrying  out  regular  passenger  and  ferry  services,  including  mixed 
passenger/cargo  services  and  scheduled  cruise  services,  the  rules  concerning  the 
required proportion of Community nationals in the crew (namely  all staff  employed 
on  board)  as  in  force  in  the  host  State  shall  apply.  All  other  matters  relating  to 
manning shall be the responsibility of the flag State. 

3.  Where  host  States  allow  third-country  nationals  to  be  employed  on  board  ships 
carrying  out cabotage  services  as referred  to in paragraph  2, they  shall require that 
those  crew  members  shall  be  treated  in  the  terms  and  conditions  of  their 
employment  as residents  of  the Member  State being  the  flag  State.  The host  State 
shall  apply  its  own terms  and  conditions  of  employment  to third-country  seafarers 
on board its national vessels carrying out such services. 

4.  Member  States'  measures  implementing  the  provisions  of  this  Article  shall  be 

notified  to the Commission  in accordance with Article 9." 

13 

Article 2 

This  Regulation  shall  enter  into  force  on  the  twentieth  day  following  that  of  its 
publication in the Official Journal of the European  Communities. 

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

Done at Brussels, 

For the Council 
The President 

14 

98/0159 (SYN) 

Proposal for a 
COUNCIL  DIRECTIVE 

on manning conditions for regular passenger and ferry  services 
operating between Member States 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 84(2) thereof, 

Having regard to the proposal from the Commission17, 

Having regard to the opinion of the Economic and Social Committee18, 

Acting  in  accordance  with  the  procedure  laid  down  in  Article  189c  of  the  Treaty,  in 
cooperation with the European  Parliament19, 

Whereas  Council  Regulation  (EEC)  No  4055/86  of  22  December  1986  applying  the 
principle  of  freedom  to  provide  services  to  maritime  transport  between  Member  States 
and  between  Member  States  and  third  countries20,  as  amended  by  Regulation  (EEC) 
No 3573/9021, has rendered all the Treaty rules governing the freedom to provide services 
applicable to the sphere of maritime transport between Member States; 

Whereas  manning  conditions  for  the provision  of services  in regular  passenger  and  ferry 
sendees  betv/een  Member  States  are  normally  the  responsibility  of  the  State  of 
registration  of  the  vessel  (the  "flag  State");  whereas  the  Rome  Convention  on  the  law 
for  other  arrangements;  whereas 
applicable 
Community  interests  and  the interests  of Member  States betv/een  whose  territories  such 
sendees are provided also have to be taken into account; 

to  contractual  obligations22  allows 

Whereas  the  principle  that  shipping  companies  established  outside  the  Community 
should not receive more  favourable  treatment than  shipping companies  established  in the 
territory of a Member State should be upheld; 

Whereas the special characteristics  of the market  for regular passenger  and  ferry  services 
between  Member  States  call  for  measures  to  ensure  the  proper  functioning  of  the 
single market by guaranteeing  that  the terms  and conditions  of employment  of  seafaring 

OJL  378, 31.12.1986, p. 1. 
21  OJL  353, 17.12.1990,p. 16. 
22  OJ L 266, 9.10.1980, p.  1; consolidated version: OJ C 27, 26.1.1998, p. 34. 

15 

personnel  will  be  in  line  with  the  level  of  social  standards  generally  applicable  in 
the Community; 

Whereas,  in  accordance  with  the principles  of subsidiarity  and proportionality  as set  out 
in Article 3b of the Treaty, the objectives  of the proposed  measures, namely  to lay down 
rules on the working  conditions  of third-country  nationals  employed  on ferries  operating 
between  Member  States,  cannot  be  sufficiently  achieved  by  the  Member  States  and  can 
therefore, by reason of scale and  effects  of the provisions required, be better  achieved by 
the  Commiriity; whereas  this  Directive  confines  itself  to the  minimum  required  in  order 
to achieve those objectives  and does not go beyond what is necessary for that purpose; 

Whereas  it  is  appropriate  to  require  that  third-country  nationals  employed  within  the 
abovementioned  sectors shall not be treated  less favourably  than Community residents; 

Whereas  it  is  appropriate  that  Member  States  may  provide  for  a  derogation  from 
the obligation  to  treat  third-country  seafarers  as  Community  residents  on  regular 
passenger  and  ferry  services  between  Member  States  for  labour  contracts  of  an 
extremely short  duration  or  in  the  event  of  an  acute  shortage  of  ferry  capacity  due  to 
unforeseen  circumstances; 

Whereas  competent  bodies  in different  Member  States  should  cooperate  with  each  other 
in the application of this Directive; 

Whereas  each Member  State should  determine the penalties  to be  impposed  in the event 
of a breach of the provisions adopted for the implementation of this Directive, 

HAS ADOPTED THIS DIRECTIVE: 

Article 1 

1. 

2. 

3. 

4. 

This Directive shall apply to nationals of Member States and to shipping companies 
established  in  a Member  State which  provide regular passenger  and  ferry  services, 
including  mixed  passenger/cargo  services,  between  ports  situated  in  different 
Member States. 

The  provisions  of  this  Directive  shall  also  apply  to  nationals  of  a  Member  State 
established  outside  the  Community  and  to  shipping  companies  established  outside 
the  Community  and  controlled  by  nationals  of  a  Member  State,  providing  the 
services referred  to in paragraph  1, if their vessels are registered,  and fly  its flag, in 
that Member State in accordance with its legislation; 

This Directive  shall  apply  to  the  extent  that  the nationals  and  shipping  companies 
referred  to  in  paragraphs  1  and  2  employ  third-country  nationals  on  board  the 
vessels used for the services referred  to under paragraph  1. 

Shipping  companies  established  outside  the  Community,  other  than  those  referred 
to  in paragraph  2, shall  not  be  given  more  favourable  treatment  than  the  nationals 
and shipping companies referred  to in paragraphs  1  and 2. 

16 

Article 2 

1.  Member  States  shall  ensure  that,  whatever  the  law  applicable  to  the  employment 
relationship,  the  nationals  and  shipping  companies  referred  to  in  Article  1(1) and 
(2),  operating  regular  passenger  and  ferry  services  between  Member  States  shall 
guarantee third-country  nationals  employed  on board  ships used  for  such  services, 
the terms and conditions of employment as laid down 

(a) 

by law, regulation or administrative provision, and/or 

(b)  by  collective  agreements  or  arbitration  awards  which  have  been  declared 
universally  applicable  in  so  far  as  they  apply  to  the  activities  referred  to  in 
Article 1(1), 

which  are  applicable  to  the  residents  of  the  Member  State  of  registration  of 
the vessel. 

2. 

If the vessel  used  is not registered  in a Member  State, the terms  and conditions of 
employment  referred  to in paragraph  1 shall be those  applicable  to the residents of 
one  of  the  Member  States  between  whose  ports  the  senice  is  provided  and  with 
which  the  service  has  the  closest  connection.  The  closest  connection  shall  be 
determined  on the basis of the place from which the service is effectively  managed 
and of the place of residence of the seafarers  concerned. 

3. 

The terms and conditions of employment referred  to in paragraph  1 shall cover the 
following matters: 

(a)  maximum work periods and minimum rest periods; 

(b)  minimum annual paid holiday; 

(c) 

the minimum rates of pay, including overtime rates; 

(d)  health, safety  and hygiene at work; 

(e) 

protective  measures  with  regard  to  the  terms  and  conditions  of  employment 
of pregnant women or women who have recently given birth, of children and 
of young people; 

(f) 

equality  of  treatment  for  men  and  women  and  other  provisions  on 
non-di scrimination; 

(g)  measures  for  the  repatriation  of  seafarers  and  the  payment  of  outstanding 
insolvency  of 

the  event  of 

the 

in 

salary  and  social  contributions 
their employer. 

4. 

5. 

Paragraphs  1 and  2  shall  not  prevent  the  application  of  terms  and  conditions  of 
employment which are more favourable  to workers. 

Collective  agreements  or  arbitration  awards  which  have been  declared  universally 
applicable  means  those  which  are  to  be  observed  by  all  shipping  companies 
concerned at national level. 

17 

In the absence of a system  for declaring collective agreements or arbitration  awards 
to be universally applicable, Member States shall base themselves on: 

(a) 

(b) 

collective  agreements or arbitration  awards which  are generally  applicable to 
all shipping companies as referred  to in Article  1(1) and (2), and/or 

collective  agreements which have been  concluded  by the most  representative 
employers' and labour organizations in the relevant market at national level. 

The  second  subparagraph  shall  be  subject  to  the  condition  that  the  application  of 
those  agreements  or  awards  to  the  shipping  companies  referred  to  in  Article  1(1) 
and (2) ensures equality of treatment on matters listed in paragraph  3 of this Article 
between all shipping companies concerned. 

Article 3 

1.  Member States may, after  consulting employers and labour, and in accordance with 
the  traditions  and  practices  of  each  Member  State,  decide  not  to  apply  the 
provisions of points (b) and (c) of Article 2(3), when the length of the employment 
period  of the third-country  nationals  concerned  does not  exceed  one month  within 
any  12-month period. 

2.  Member States may  grant  for  a period  of two months  a derogation from points (b) 
and (c) of Article 2(3), to a provider of services as referred  to under Article  1(1) for 
vessels chartered-in to compensate for an acute shortage of capacity on a ferry route 
which  has  arisen  owing  to  unforeseen  circumstances.  For  derogations  exceeding 
two months, prior authorization by the Commission shall be required. 

3.  Member States shall inform  the Commission without delay of derogations pursuant 

to paragraph 2 and of the circumstances on which they are based. 

Article 4 

1. 

For the purpose of implementing this Directive, Member States shall, in accordance 
with  national  legislation  and/or  practice,  designate  one  or  more  liaison  offices  or 
one or more competent national bodies. 

2.  Member  States  shall  make  provisions  for  cooperation  between  the  public 
authorities  which,  under  national  legislation,  are  responsible  for  monitoring  the 
terms and conditions of employment referred  to in Article 2. 

Mutual administrative assistance shall be provided free of charge. 

3. 

Each  Member  State  shall  notify  the other  Member  States  and  the  Commission  of 
the liaison offices  and/or competent bodies referred to in paragraph  1. 

18 

Article 5 

Member  States  shall  determine  the penalties  applicable  to  infringements  of  the  national 
provisions  implementing  this  Directive  and  shall  take  all  measures  necessary  to  ensure 
that  those  provisions  are  enforced.  The  penalties  thus  laid  down  shall  be  effective, 
proportionate  and  dissuasive.  Member  States  shall  notify 
the  provisions  to  the 
Commission  by  the  date  mentioned  in  Article  6  and  shall  notify  it  of  any  subsequent 
amendments to them without delay. 

Article 6 

Member  States shall  adopt the laws, regulations  and administrative provisions  necessary 
to comply with this Directive by 30 June  1999 at the latest. They  shall  forthwith  inform 
the Commission thereof. 

They shall apply those provisions with effect from [1 January 2000]. 

When  Member  States  adopt  these  provisions,  these  shall  contain  a  reference  to  this 
Directive or shall be accompanied by such reference at the time of their official  publication. 
The procedure for such reference shall be adopted by Member States. 

Article 7 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Communities. 

This Directive is addressed to the Member States. 

Article 8 

Done at Brussels, 

For the Council 
The President 

19 

ISSN 0254-1475 

COM(98) 251 final 

DOCUMENTS 

EN 

07  06  01  10 

Catalogue  number  :  CB-GO-98-287-EN-C 

ISBN 92-78-35506-2 

Office  for Official  Publications of the European  Communities 

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