Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council on compensation in cases of non-compliance with contractual quality requirements for rail freight services (COM(2004) 144 final — 2004/0050 (COD))
Date: 2005-02-09
Institutions: European Economic and Social Committee
Subjects: competition policy, contract of carriage, freight rate, indemnification, organisation of transport, provision of services, rail transport

8.9.2005

EN

Official Journal of the European Union

C 221/13

Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the
European Parliament and of the Council on compensation in cases of non-compliance with
contractual quality requirements for rail freight services

(COM(2004) 144 final — 2004/0050 (COD))

(2005/C 221/03)

On 28 April 2004 the Council decided to consult the European Economic and Social Committee, under
Article 71 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for
preparing the Committee's work on the subject, adopted its opinion on 17 January 2005. The rapporteur
was Mr Chagas.

At its 414th plenary session (meeting of 9 February 2005) the Committee adopted the following opinion
by 130 votes with 2 abstentions:

1. Introduction

1.2
The first railway package (also called the infrastructure
package) came into force on 15 March 2001 and had to be
It
transposed into national
comprises the following components:

legislation by 15 March 2003.

The present proposal forms part of the third railway
1.1
package, which was adopted by the European Commission on
3 March 2004. The other components are:

— Amendment of Directive 91/440/EEC:

international
final).

rail-passenger

transport

liberalisation of
(COM(2004) 139

— Amendment of Directive 91/440/EEC,

including free
market access for international rail freight on the trans-
European rail freight network by 15 March 2003 and liber-
freight by 15 March
alisation of all
2008 (1).

international

rail

— Proposal for a Regulation of the European Parliament and
of the Council on international rail passengers' rights and
obligations (COM(2004) 143 final).

— Extension of the scope of the Directive on a European
licence for railway undertakings (amendment of Directive
95/18/EC) (2).

— Proposal for a Regulation on compensation and quality
(COM(2004) 144

rail-freight

services

for

requirements
final),

— Harmonisation of the provisions governing the allocation
of railway-infrastructure capacity and the levying of charges
for the use of railway infrastructure and safety certification
(replaces Directive 95/19/EC) (3).

and

— Commission Communication on further integration of the

European rail system (COM(2004) 140 final).

— Commission staff working paper on gradually opening up
for international passenger services by rail

the market
(SEC(2004) 236).

1.3
In October 2003 the European Commission took nine
Member States to the European Court of Justice for failing to
notify the transposition of
railway package into
national law. By May 2004 five countries' notification had still
not been received and two Member States had transposed only
some of the provisions into national law.

the first

(1) Directive 2001/12/EC – OJ L 75 of 15.3.2001, p. 1 – EESC opinion

– OJ C 209 of 22.7.1999, p. 22

(2) Directive 2001/13/EC – OJ L 75 of 15.3.2001, p. 26 – EESC

opinion – OJ C 209 of 22.7.1999, p. 22

(3) Directive 2001/14/EC – OJ L 75 of 15.3.2001, p. 29 – EESC

opinion – OJ C 209 of 22.7.1999, p. 22

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Official Journal of the European Union

8.9.2005

1.4
The second railway package was published in the Offi-
cial Journal of the European Community on 30 April 2004 and
has to be transposed into national law by 30 April 2006. It
comprises the following components:

— Amendment of Directive 91/440/EC: bringing forward free
market access for international rail freight to 1 January
2006 and liberalisation of national rail freight,
including
cabotage, from 1 January 2007 (1).

— Directive on railway safety in the Community (2).

— Regulation establishing a European Railway Agency (3).

— Amendment of the Directives on the interoperability of the
high-speed rail system (96/48/EC) and the conventional rail
system (2001/16/EC) (4).

1.5
The first and second railway packages provided the legal
basis for establishing a single rail-freight market. The measures
encompass market access, the licensing and safety certification
of railway undertakings, access to infrastructure and the calcu-
lation of charges for its use, the creation of a legal framework
for rail safety, and measures for ensuring the technical intero-
perability of the rail system.

1.6
This proposal adds to the legal framework already in
place to open up the market through measures to improve the
quality of freight transport.

undertakings to enhance the efficiency of rail freight services.
Its premise is that over time competition will exert a strong
pressure to improve quality, but, in the Commission's view, a
freight market is not
real opening-up of the European rail
happening quickly enough. New entrant railway undertakings
account
in several
for only 3 to 4 % of the market, and,
Member States, there are no competitors.

2.3
The proposed regulation obliges railway undertakings
and customers to stipulate quality requirements in the transport
contracts and, in the case of non-compliance, to make compen-
sation payments. The contractual parties are obliged to agree
on at least the following quality requirements:

— times of hand-over of goods, wagons or trains,

— arrival time and compensation for delays,

— compensation in the event of losses or damage of goods,

— compensation in the event of cancellation of a train by the

railway undertaking or the freight customer,

2. The Commission proposal

— a quality monitoring system.

2.1
The proposal for a regulation on quality in freight trans-
port is intended to improve rail freight transport by means of a
contractual agreement on compensation between railway
undertakings and freight customers. The Commission considers
that the main cause for the modest share of railways in the
increase in freight transport levels and its declining market
share compared with other modes is the lack of quality and
reliability of rail freight transport.

2.2
The Commission expects that the application of the
compensation scheme will provide an incentive to railway

(1) Directive 2004/51/EC – OJ L 164 of 30.4.2004, p. 164 – EESC

opinion – OJ C 61 of 14.3.2003, p. 131

(2) Directive 2004/49/EC – OJ L 164 of 30.4.2004, p. 44 – EESC

opinion – OJ C 61 of 14.3.2003, p. 131

(3) Regulation (EC) No 881/2004 – OJ L 164 of 30.4.2004, p. 1 –

EESC opinion – OJ C 61 of 14.3.2003, p. 131

(4) Directive 2004/50/EC – OJ L 164 of 30.4.2004, p. 114 – EESC

opinion – OJ C 61 of 14.3.2003, p. 131

2.4
The proposed regulation stipulates maximum and
minimum compensation levels in the event of loss, damage,
delay, lack of information about delays, and loss of or damage
to goods due to delay. In the case of damage, for example, it
stipulates an amount of maximum €75 per kilogramme of
gross mass damaged.
In the case of delays of block trains,
compensation is fixed at no less than 5 % and no more than
25 % of the transport price. In the case of lack of information
about delays, compensation is at least 5 % of the transport
price.

2.5
The contractual parties are obliged to stipulate compen-
sations for a train cancellation by the railway undertaking or
the freight customer. They may agree compensation in the case
of a declaration of value of the goods transported or in the case
of a declaration of interest in delivery.

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Official Journal of the European Union

C 221/15

2.6
Liability is excluded in the case of fault of one of the
contractual parties, fault or any other act of a third person,
force majeure or circumstances that could not be avoided and
whose consequences could not be prevented. If compensation
claim arises due to the fault of the infrastructure manager, the
railway undertaking pays and claims the payment back from
the infrastructure manager.

payments via an EU regulation which would be unique for the
railway sector and additional to the already existing interna-
tional Convention COTIF (CIM). For example, Article 11 of
Directive 2001/14/EC provides for bonuses in infrastructure
charges if an undertaking takes steps to help minimise disrup-
tion and improve the performance of the system.

2.7
the
If several railway undertakings are involved, all
undertakings are ‘joint and severally liable’ regardless of the
undertaking under which the delay or damage occurred.

In promoting rail freight transport, it is vital to avoid
3.7
discriminatory treatment of the different competing transport
modes.

3. Remarks on the Commission proposal

3.1
In order to promote a sustainable transport system and
secure a balance between transport modes, as set out in the
White Paper on European Transport Policy for 2010, the Com-
munity has set itself an objective of increasing the share of
freight transport by rail. Improving the quality of service in rail
freight transport is one of many approaches to achieving that
objective and is in principle to be welcomed.

3.2
The Commission proposes a system of incentives under
which the desire to avoid compensation payments is supposed
to boost quality and,
improve punctuality.
in particular,
Usually, operators' first reaction to increased financial risk from
possible compensation payments is to raise prices.

The question arises as to whether the Commission's

3.3
proposed approach is appropriate.

3.4
The scope covers both international and national trans-
port. The Commission itself writes in its explanatory memor-
andum to the proposed regulation that quality contracts are
already in existence mainly in national transport, and less so in
international transport. Elsewhere the Commission notes that
problems chiefly occur if several railway undertakings are
involved, which is the case primarily in international transport.

3.5
The question is whether, given intrusion into the
contractual arrangements of commercial partners (this is not a
question of consumer protection) a more restricted scope
would be more appropriate for international freight transport.

3.6
Consideration should also be given to what positive
incentives are available instead of established compensation

International

3.8
This raises the question of what comparable Community
provisions are in place for air freight transport and road freight
agreements on compensation for
transport.
damage or
rates (the
loss provide for substantially lower
Montreal Convention on air transport for one third of the
maximum amount provided for in the regulation, the Conven-
tion on the Contract for the International Carriage of Goods by
Road [CMR] for one sixth of the maximum amount).

interoperability (TSI)

3.9
The relationship between the quality monitoring system
to be agreed upon by the contractual parties and the technical
specification for
telematic
applications remains unclear. Europe-wide real-time electronic
monitoring of freight movements by rail is covered in the TSI
for freight telematics applications. The harmonised technical
specifications and communication conditions are defined in
this provision. However,
its application and implementation
still require substantial investment and will take many years.

freight

for

Under the proposal, a railway undertaking can claim a
3.10
refund of compensation payments from the infrastructure
manager if the latter has been the cause of delay.

Here again, attempts to circumvent this are likely by
3.11
raising the route price (risk supplements) and incorporating
margins for delay in scheduling. Given limited infrastructure
capacities, this would not be a desirable response. It has already
been seen in the air transport sector since the entry into force
of the directive on passenger compensation. The calculation of
risk will be
infrastructure
considerably complicated for
managers as they do not know, and cannot influence, the value
of the flow of goods and the resultant compensation.

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Official Journal of the European Union

8.9.2005

3.12
It should be borne in mind that the infrastructure in
the new Member States in central and eastern Europe is in a
poorer condition, requiring substantial investment, and that the
compensation obligations in the regulation could cause consid-
erable difficulties.

The proposal

involves considerable effort

3.13
in deter-
mining who is responsible for what, and in compensation
claims by the railway undertaking against the infrastructure
manager. Allocating responsibility will also be onerous if
several railway undertakings are involved.

3.14
The perspective of having to pay high compensations
shall not, as a consequence, lead the railway undertakings to
compromise safety in order to respect delivery terms. Also, it
shall be excluded that railway undertakings put excessive pres-
sure on their employees with the risk to neglect working,
driving and rest time.

3.15
In its opinion on the second railway package, the EESC
has already pointed out that the social conditions in road trans-
port place rail freight transport at a competitive disadvantage.
The consequence of that cannot be to bring working conditions
in rail transport into line with those of the roads and to encou-

Brussels, 9 February 2005.

rage railway undertakings to flout the rules and exert pressure
on the workforce.

4. Conclusions

The EESC welcomes in principle measures to improve

4.1
the quality of rail freight transport.

Positive incentives would be preferable to strict compen-
4.2
sation arrangements,
leading to attempts to circumvent the
rules and spawning a complicated refund system. This applies
particularly to the role of the infrastructure manager.

4.3 Measures to improve the quality of rail freight transport
must not discriminate against other transport modes.

4.4
The EESC asks the Commission to examine the impact
of the measures on undertakings and infrastructure managers
in the new Member States.

4.5
The EESC insists that measures to improve freight trans-
port quality must not result in undertakings trying to circum-
vent the rules at the expense of safety and working conditions.

The President of the

European Economic and Social Committee

Anne-Marie SIGMUND