Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) on a Community fleet capacity policy to promote inland waterway transport'
Date: 1998-12-02
Institutions: European Economic and Social Committee
Subjects: ESC opinion, inland waterway fleet, inland waterway shipping, inland waterway transport

15.2.1999

EN

Official Journal of the European Communities

C 40/47

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation
(EC) on a Community fleet capacity policy to promote inland waterway transport’ (1)

(1999/C 40/15)

On 23 October 1998 the Council decided to consult the Economic and Social Committee,
under Article 75 of the Treaty establishing the European Communities, on the above-mentioned
proposal.

On 14 October 1998 the ESC Bureau made the Section for Transport, Energy, Infrastructure
and the Information Society responsible for preparing the Committee’s work on the subject.

At its 359th plenary session held on 2 and 3 December 1998 (meeting of 2 December) the
Economic and Social Committee, in view of the urgency of the matter, appointed Mr Ghigonis
rapporteur-general and adopted the following opinion by 102 votes to one.

1. Content of the proposal

1.1. Outline

Council Regulation (EEC) No 1101/89 (2) pro-
1.1.1.
vided for structural improvements in inland waterway
fleets operating on the interlocking networks of Austria,
Belgium, France, Germany, Luxembourg and the
Netherlands. This regulation sought to reduce overcapa-
city in the fleets via vessel-scrapping schemes coordinated
at Community
level. Council Regulation (EC)
No 844/94 (3) extended these arrangements until 28 April
1999 (4).

1.1.2.
Under the ‘old for new’ rule, the commissioning
of new vessels is contingent (a) on the scrapping of
existing capacity under a ratio determined by the
Commission, or (b) on payment of a special levy; the
Commission is proposing that this rule be retained. The
different ratios applicable at present in the various
segments of the market will continue to apply, but they
must be phased out by 28 April 2004.

1.1.3.
After this, the scheme is to become a standby
mechanism, which can be reactivated only in the event
of a serious market disturbance.

1.1.4.
The scrapping funds set up in the participating
Member States are to be retained as ‘Community Fleets
Coordination and Promotion Funds’. Each of these must
have a reserve fund comprising the surplus from the
structural improvement schemes which are to run until

(1) OJ C 320, 17.10.1998, p. 4.
(2) OJ L 116, 28.4.1989, p. 25; ESC opinion — OJ C 318,

12.12.1989, p. 58.

(3) OJ L 98, 16.4.1994; two ESC opinions — OJ C 127,

7.5.1994, p.19 and OJ C 301, 13.11.1995, p. 20.

(4) See the ESC Opinion on support: measures for inland
waterway transport — OJ C 39, 12.2.1996, p. 96 and its
own-initiative Opinion on inland waterway transport —
OJ C 393, 31.12.1994.

28 April 1999 and the special levies collected under the
‘old for new’ rule; scrapping premiums will be paid
from this fund in the event of a market disturbance.

1.1.5. Member States can introduce social measures
to assist workers leaving the industry and to promote
company mergers, acquisition of vocational qualifi-
cations by operators and the adaptation of vessels to
technical progress.

1.1.6.
1999.

The regulation is to enter into force on 29 April

1.2. Background

1.2.1.
In order to assess the relevance and likely
impact of the draft regulation, it is necessary to highlight
its economic, legal and business background.

1.2.2. On the economic front, experience has shown
that structural overcapacity — largely the result of the
long life of inland waterway vessels (30 to 40 years) and
reflected by a growing gap between costs and freight
levels — is liable to destroy the real potential of this
transport mode.

In other words, the advantages which might
1.2.2.1.
initially accrue to waterway transport users from con-
stantly falling freight levels very quickly become major
handicaps as carriers are unable to harness new invest-
ments and to properly maintain existing vessels.

1.2.2.2. Overall, the upshot would inevitably be a
marked decline in the quality of waterway transport
supply, and competition between transport modes would
be confined to road and rail.

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1.2.3.
In legal terms, the Council has drawn con-
clusions from the economic situation outlined above
and, since 1989, has adopted a series of regulations and
directives forming a set of measures designed:

— to implement a capacity-related structural improve-
ment programme designed to keep inland waterway
transport economically viable and to secure its
long-term future and

— to back up this structural improvement programme
by a regulatory policy under the ‘old for new’ scheme
established by Council Regulation No 1101/89 (1)
and extended to 28 April 1999 by Council Regulation
No 844/94 (2) .

1.2.3.1.
Since no further scrapping programmes are
in the pipeline and the run-up to a fully liberalized
market from 1 January 2000, the present draft regulation
seeks to safeguard policy achievements secured since
1989 by pursuing an adapted form of the ‘old for new’
regulatory mechanism on the understanding that after a
period of maximum five years, this arrangement will be
applicable only in the event of serious disruption of the
market.

1.2.4. On the business side, it should be noted that
the two European shippers’ associations, the ESO and
the IUIN, have in principle endorsed this draft regulation
without reservation.

In this context, it must be borne in mind that
1.2.4.1.
the European shipping profession has devoted more
than ECU 150 million to trimming overcapacity in
its fleet and that, sensibly, it means to consolidate
achievements in this area by retaining a mechanism for
gearing supply patterns to market developments.

2. General comments

2.1.
The Economic and Social Committee, reiterating
comments made in previous opinions, including that of
26 January 1994 (3), considers that balanced operation
is crucial to the inland waterway market and that this is
contingent on a policy to control the capacity of
Community fleets.

2.2.
In this field, the Committee feels that substantial
progress has been made under the various structural
improvement schemes implemented since the adoption
of the Council Regulation of 27 April 1989 (4). These
have resulted in a significant cutback in structural
overcapacity, without blocking productive investments
or curbing improvements in productivity. It would be
desirable to measure the real effects of this reduction of
capacity in relation to trends in transport demand.

The Economic and Social Committee takes the

2.3.
view that:

— this overall improvement in the supply of inland
waterway transport could not have been achieved
without the introduction and application of the ‘old
for new’ rule;

— consolidating previous achievements hinges on the
retention of this rule, although its provisions are to
be adapted to keep them in step with overall market
developments and with developments in each market
segment (dry cargo, liquid cargo and pusher craft).

Subject to the specific comments below, the
2.4.
Economic and Social Committee therefore endorses the
draft Council regulation. This regulation:

— lays down mandatory conditions for bringing new
vessels into service for a period of five years from
28 April 1999,

— provides for the reactivation of the ‘old for new’ rule
or for other improvement measures after that date
in the event of serious disturbance of the market as
defined in Article 7 of Directive 96/75/EC (5) , and

— establishes Community Fleets Coordination and

Promotion Funds.

3. Specific comments

3.1.
The Economic and Social Committee has reser-
vations about the merit of certain exemptions from the
proposed regulation, as set out in Article 2(2)(a) and
(b).

This would involve exemptions for:

a) vessels operating exclusively on national waterways
not linked to other waterways in the Community
(e.g. the Po and Adour);

(1) OJ L 116, 28.4.1989, p. 25; ESC opinion — OJ C 318,

12.12.1989, p. 58.

(2) OJ L 98, 16.4.1994; two ESC opinions — OJ C 127,

7.5.1994, p.19 and OJ C 301, 13.11.1995, p. 20.

(3) Structural improvements in inland waterway transport,

OJ C 127, 7.5 1994.

(4) OJ L 116, 28.4.1989.
(5) Council Directive 96/75/EC of 19 November 1996 on the
systems of chartering and pricing in waterway transport
in the Community, OJ L 304, 27.11.1996.

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b) vessels where dimensions confine them to certain
national waterways (e.g. the Seine and Rhone).

3.1.1.
highlight a certain contradiction between:

The Committee feels that such exemptions

— the view — shared by the Committee — that fleet
capacity regulation measures have to cover the
broadest possible swathe of the Community’s water-
ways, above all the Rhine area and

— the absence of any capacity control on closed
micro-markets where the risks and adverse impact
of overcapacity are, by definition, much greater.

3.1.2. Moreover, the Committee notes that exemp-
tions of this kind may lead to distortions in treatment
between

— undertakings operating vessels on the Community
network which, by transferring one or more vessels
fulfilling the exemption criteria under Article 2(2)(a)
and (b), would not have to pay any special levy
under the ‘old for new’ rule, despite the resultant
overcapacity on the waterways concerned, and

— undertakings whose vessels fulfil the exemption
criteria under (a) and (b) and which would have to
pay a special levy in keeping with the ratios and
rates in force on the Community network when they
were transferred there.

mechanism to cover the legal possibility for countries
affected by these exemptions to establish a national ‘old
for new’ rule applicable to their own waterways.

3.1.4.
Consequently, the Economic and Social Com-
mittee feels that Community capacity policy must take
precedence over the unwarranted exemptions set out
under Article 2(2)(a) and (b).

3.2.
The Economic and Social Committee shares the
goal of phasing out the ratios applicable under the ‘old
for new’ rule within five years starting on 28 April 1999.
However, the Committee would stress that this can be
no more than a publicly-stated objective, and certainly
not a requirement, as the wording of Article 4(2) of the
draft regulation appears to suggest.

3.2.1.
In point of fact, the Committee feels that such
an interpretation would be untenable in the event of a
serious disturbance of the market within the meaning
of Article 7 of Directive 96/75/EC (1) during, and
particularly towards the end of this transitional period,
which would warrant the retention and indeed the
tightening of the ratios in force at that time.

3.2.2.
To do this, the Economic and Social Committee
believes it desirable that the Commission, assisted by
experts, should constantly observe market develop-
ments.

3.3.
In order to ensure that the measures set out in
the draft regulation operate smoothly and effectively,
the Economic and Social Committee would stress the
need to include the Swiss fleet from the outset.

3.1.3. Not least in the light of the full liberalization
of the market on 1 January 2000, the Committee is
concerned that the draft Regulation has no formal

(1) Council Directive 96/75/EC of 19 November 1996 on the
systems of chartering and pricing in waterway transport
in the Community, OJ L 304, 27.11.1996.

Brussels, 2 December 1998.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI