Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council on market access to port services (COM(2004) 654 final — 2004/0240 (COD))
Date: 2005-07-13
Institutions: European Economic and Social Committee
Subjects: common ports policy, competition policy, freedom to provide services, harbour installation, liberalisation of the market, market access, port administration

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5.2.17
urgently adopt measures ensuring sustainable devel-
opment in the outermost regions, particularly in the fields of
protection of biodiversity, the Natura 2000 network and waste
management;

5.2.18
be imaginative when establishing specific mechan-
isms and procedures for the outermost regions, to ensure that
the benefits of the single market do not pass them by, e.g.
encouraging the use of renewable energies and access to broad-
band networks;

Brussels, 13 July 2005.

5.2.19
special
economic development;

ensure that the outermost regions continue to enjoy
their

tax arrangements, as these are essential

for

5.2.20
envisage the active participation of the outermost
regions in the negotiation of the EU-ACP economic partnership
agreements (EPAs),
facilitating the creation of a permanent
channel
for ongoing dialogue between regional — and/or
national — authorities and regional bodies with which the EU
is negotiating the EPAs, in order to make the agreements more
effective, compatible and consistent.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

Opinion of the European Economic and Social Committee on the Proposal for a Directive of the
European Parliament and of the Council on market access to port services

(COM(2004) 654 final — 2004/0240 (COD))

(2005/C 294/06)

On 2 December 2004 the Council decided to consult the European Economic and Social Committee,
under Article 80(2) 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 19 May 2005. The rapporteur was
Mr Retureau.

At its 419th plenary session of 13 and 14 July 2005 (meeting of 13 July), the European Economic and
Social Committee adopted the following opinion by 91 votes to 49 with 17 abstentions.

1. Introduction

Following the Green Paper on seaports and maritime
1.1
the White Paper on a
infrastructure of 1997, and whilst
in its drafting phase, the
common transport policy was still
Commission,
in its first proposal for a Directive on market
access to port services in 2001, reiterated that the key elements
of the Ports' package were as follows:

— integration of maritime transport in the TEN-T category;

— regulation of access to port services;

1.2
The objectives of the Ports' package were extensively
developed in the first proposal for a Directive on the second
key issue of market access (1), which was finally rejected after a
third reading in Parliament.

The Commission, exercising its prerogative as the only
1.3
institution with the right of initiative, has now returned to the
issue with a new proposal for a Directive on market access to
port services (2).
the Commission asserted its
conviction that, under the Treaty, it has the right and duty to
legislate in this matter.

In so doing,

1.4
It affirms at the outset that the philosophy, general prin-
ciples and objectives outlined in its 2001 Communication
remain unchanged. However, specific proposed amendments
were taken into account because they enhanced the original
proposal.

— public financing for seaports and port infrastructure.

(1) COM(2001) 35 final.
(2) COM(2004) 654 final, published on 13 October 2004

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1.5
It is appropriate to recall some of the main causes of
contention that had obstructed the first proposal before exam-
ining the nature and scope of the amendments introduced by
the new proposal for a Directive.

— The very need for such a Directive was challenged.

— As far back as 1997, the Green Paper had been criticised by
the Committee (3) because the proposal failed to take real
account of the social dimension of the port sector. The
2001 Proposal for a Directive was also criticised on the
same grounds.

— Security and environmental protection requirements, as
well as the concept of public service (Article 86 TEC) had
not been adequately addressed.

— Pilotage should be excluded from its scope (the Parliament
rapporteur had also recommended excluding handling.
However, this point did not obtain a majority in the EP
committee).

— Self-handling,

in its principle and scope, and handling,
because for technical reasons it requires a minimum of two
providers per port, gave rise to considerable criticism, and
even caused a European dockers' strike.

— The durations of authorisations gave rise to lengthy debate,
as did compensation for earlier providers by new ones. The
aim was to avoid a downturn in investment even towards
the end of authorisation, and to safeguard the financial
interests of service providers.

— Opening the sector to the greatest possible number of
service providers gave rise to criticism on the grounds of
financial efficiency and return of investment,
in keeping
with the real size of the market and other considerations,
including compliance with port development strategies and
specialisations.

2. The Commission's new proposal for a Directive

2.1
The proposal under consideration includes a well-argued
explanatory memorandum and a long list of recitals. The
it has retained the initial 2001
Commission confirms that
proposal, whilst
taking into consideration its own 2002
amended proposal, the common position of the Council and
the texts resulting from conciliation proceedings after the Euro-
pean Parliament's second Reading.

The reasons for a European initiative are essentially the

2.2
following:

— the Treaty's four fundamental freedoms;

— the Council's demands;

— growing needs in the transport sector (2001 White Paper)
and the need to shift a substantial proportion of
this
growth to the maritime sector;

— the need to complete the internal market and create condi-
tions for transparent competition within and between ports,
based on harmonised rules;

— generating employment and respecting workers'

social

rights.

2.3
Nevertheless, the original philosophy and principles as
well as a considerable number of points have not changed
since the original 2001 proposal.

2.4 More specifically, the changes do not affect:

— the scope of application;

— criteria for granting authorisations;

— pilotage, which is considered as a commercial service;

— transparent accounting for the managing body of the port
(this issue, unlike the others, was not challenged and is
already covered by a directive on financial transparency and
State aid guidelines).

The main new elements included in the new Commis-

2.5
sion proposal are:

— self-handling for cargo and passenger operations may be
provided using the land-based personnel of the self-handler,
and, under certain conditions, the seafaring crew;

— authorisations

for

and self-handling
service providers
become mandatory. Current providers must obtain new
authorisation within a ‘reasonable timeframe’
to achieve
compliance with the rules of the Directive, while taking
the current
the legitimate expectations of
account of
services providers up to a maximum of 12 months after the
latest possible date for transposition of the Directive;

— the general principle is to create access to the broadly
defined port services, for the greatest possible number of
service providers, with limitation of numbers being the
exception (Article 9);

— the duration of authorisations is finally adjusted according
to the level of
investments to be made by the service
provider and the rules governing the depreciation of immo-
vable or movable property;

(3) EESC opinion on the Green Paper

from the Commission on
Seaports and Maritime Infrastructure, OJ C 407 of 28.12.1998 p.
92.

— the matter of competition between ports is covered by the
Commission's Directive on financial transparency (Article
16) and the Directive on State aid guidelines (Article 17).

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3. Preliminary comments

lation (participation, consultation,
impact assessments). The
second proposal follows swiftly on the first, without sufficient
preparatory work.

3.1
A number of seaports are owned and/or managed by
the public authorities (municipalities and other local or regional
authorities, public bodies etc.). Their managing bodies are
therefore partly or entirely subject to public accountancy rules,
and carry out cost accounting. Seaports' practices and accounts
should be submitted to their national competition authorities
and, if need be, to their regional or national audit offices. The
to the
reports of
Commission's DG Competition.

these supervisory bodies should be sent

3.2
In recent years, most new Member States, as well as the
old Member States, have adopted seaport privatisation policies.
Many ports are now public limited liability companies.

3.3
Europe's most important ports open onto the North Sea
and the English Channel. The cargo tonnage and number of
containers handled varies widely according to the geographical
location of ports in various European seas. The scope of the
draft directive includes ports handling cargo tonnages ranging
from 1.5 million to tens or hundreds of millions, and in some
ports (Rotterdam or Antwerp,
for instance) the number of
containers handled runs into several million. The EESC believes
that applying uniform rules to ports that vary considerably in
terms of size, type of activity, ownership and management,
may fail
the
affected ports. Competition amongst ports is long-standing.
Account should be taken of subsidiarity and proportionality
considerations.

to match the realities and effective needs of

3.4 Many ports provide their own infrastructure and basic
services for maritime traffic. They do not feel that their respon-
sibilities should be restricted to the administration and mainte-
nance of maritime, land and port space, and the quays. The
provision of certain services may reflect general interest exigen-
cies, or the port authority's efforts to achieve overall financial
balance, or even a profit to be distributed amongst the share-
holders of privately owned ports. Preventing ‘cross subsidies’
would weaken the capacity for port investment.

The EESC regrets that important developments since the
3.5
Green Paper and the first Ports' package have not been taken
into consideration and would urge the Commission to review
its proposal in the light of an objective impact assessment that
takes account of prevailing realities in European ports and their
incontrovertible competitive edge on the international market.
The EESC notes that, at the EESC hearing held on 31 January
2005,
the Commission stated that such a study would be
published towards the end of June 2005. The EESC believes
that, in the absence of a relevant Social Dialogue Committee,
the social partners should also be consulted. The proposal
should undergo considerable revision in order
to ensure
compliance with standard procedures for best practice in legis-

A port is a complex logistical platform that is connected
3.6
to a hinterland that may vary considerably in geographical and
economic terms on a regional, national or international scale,
and inland waterway, rail, road, pipeline and coastal shipping
networks. It must develop strategies that are consistent with
the development of the geographical area whose economy it
fuels, its employment pool, and emerging or evolving economic
in favouring intermodality that
needs. The EESC believes
enhances maritime
in particular. As
currently worded, the arrangements outlined in the proposal
for a Directive do not explicitly address this imperative.

transport,

cabotage

The role of commercial ports, be they specialised or
3.7
multipurpose, public or private, is not restricted to providing
the essential services (means of access, docks, quays and land
space) of a multimodal platform. The role they play in spatial
infrastructure
organisation and division and providing for
development must also be rewarded economically. Finally, they
must compensate for the possible shortcomings of private
operators in certain areas to ensure that the platform remains
functional.

3.8
Their development projects and specialisations must be
from restricted space and material
respected. Quite apart
constraints on access, it should be made possible to limit the
number of service providers to ensure financial efficiency and
feasibility for
safety, port
service providers, operational
management, environmental and social guarantees, and job
security. This essentially depends upon subsidiarity. Further-
more, exacerbated competition could lead to a dispersal of
resources and skills that would be detrimental to the users'
interests.

The Committee acknowledges that

3.9
the Commission's
new proposal grants port authorities greater flexibility in estab-
lishing maximum numbers for operators per category of
service provided, depending on the port's character and local
conditions.

3.10
Concessions and licenses granted by the competent
authority to service providers or commercial agreements
between the competent authority and service providers must be
concluded for a period which is in relation to the type and
scale of the investments made by service providers, allowing a
normal period for amortisation and return on capital invest-
ment (for instance, 10 years, in case of no significant invest-
ments; 15 years, in case of significant investments in movable
assets and training; and 45 years in case of significant invest-
ments in immovable assets and comparable movable assets).

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3.11
The rights and operating conditions of port manage-
ment bodies which have concluded lease agreements on the
port area and have received authorisation to provide port
services cannot be changed after the Directive enters into force,
as this would amount to the port authorities cancelling the
contract, which could entail the State's liability.

3.12
The Committee notes that changes relative to handling
and pilotage do not fulfil the expectations already expressed by
the Committee, several States, and Parliament (4).

to lead to more accidents. Although the proposal for a Direc-
tive is claimed to have a social dimension, its provisions would
in fact appear to constitute a rejection of the expectations of
dockers, who are worried about exchanging recognised and
qualified jobs with negotiated salaries for job insecurity and
individual employment contracts, entailing loss of social or pay
guarantees in a context of forced competition amongst hand-
lers. Self-handling would result in additional tasks for seafaring
crews and greater exposure to accident risk, while crews are
often reduced to a minimum. Furthermore, it would result in
additional responsibilities and obligations for captains.

traffic and/or diversification of services.

3.13
As the Commission points out, the number of jobs is
not linked to the number of service providers but to the port's
real
Increasing the
number of service providers will not create more employment.
Only an increase in traffic and the introduction of non-tradi-
tional services will generate employment.

3.14
The provisions concerning handling and self-handling,
relevant to motorways of the sea and cabotage in the internal
market, could pose a fundamental threat to collective agree-
ments in most countries, since they might sometimes be
considered as contrary to Community competition law within
the framework of the proposal for a Directive, whilst perfectly
tenable under national and international social and labour legis-
lation. The Court of Justice recognises that respecting collective
agreements could restrict the application of competition law.
At international level, many EU Member States have ratified the
ILO's maritime conventions on port handling services, working
conditions and crew safety. The EESC notes that the Commis-
sion's provisions do not take into consideration these provi-
sions negotiated in a tripartite framework.

3.15
The Committee values the strong competition in the
services market and the quality, safety and continuity of port
handling services.
If, however, port handling services were
allowed to engage in self-handling, this would create unequal
conditions of competition between the existing port handling
operators and self-handling operators. The port handling opera-
tors have established themselves in ports through privatisation
or competition and have invested in superstructure and infra-
structure. Self-handling operators, on the other hand, can enter
the port services market without any competition or invest-
ment commitments and, in contrast to the handlers, can use
infrastructure created by others free of charge and have no
time constraints on their operations. There is a heightened risk
of accidents in ports and so higher safety-at-work levels need
to be respected and monitored. Allowing self-handling is likely

The Committee considers that pilotage cannot simply
3.16
be classified as a commercial service. It requires complex tech-
nical skills, and local knowledge that, in many cases, is continu-
ally changing, which are implemented in order to ensure the
safety of transport, the surrounding population, and the envir-
onment, depending on the goods transported. It is therefore a
service of general interest that is not essentially of a commercial
nature, even though it
is sometimes entrusted to private
companies under the supervision of port authorities. As such,
it should be excluded from the Directive's scope. This does not
prevent ports from continuing to grant pilotage authorisation
to captains who have enough experience and local knowledge
to pilot their vessels to the quay without assistance. However,
it should be borne in mind that many vessels carry substances
that are dangerous to other vessels, equipment, port workers
and the local population.

3.17
The Committee notes that ports fall within the relevant
State's sphere of sovereign powers, which the Directive must
not encroach upon. Certain functions (supporting the fight
against
terrorism, organised crime and irregular migration,
which often entails costs and investments that are borne by the
port) may be delegated to the port authority.

3.18
The new provisions concerning authorisation are self-
evident, sensible measures even though local conditions and
specificities must be taken into account when establishing the
specifications. The need to apply principles of transparency and
separate accounts to seaports cannot be called into question.
The Committee acknowledges the need to respect
them in
compliance with the Transparency Directive.

(4) EESC opinion on the Proposal for a Directive of the European
Parliament and of the Council on market access to port services, OJ
C 48 of 21.2.2002 p. 122.

3.19
The requirements to be met by port-service providers
to get their licences extended after eight, 12 or 30 years should
be spelt out in the Directive.

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3.20
Finally, it would appear that the key objective of this
proposal is to lower the cost of port services. However, the
Committee believes that compliance with safety and environ-
mental standards, as well as social rights, are equally important
criteria for ensuring efficient port systems, in the interest of the
economics of transport, and safe and reliable services.

3.21
The great diversity of national or local contexts, rules
and practices, and of the obligations of managing bodies and
public authorities, means that any rules to be implemented
must take full account of each port's specific characteristics.
Every port has adapted itself over many years and operates in
conditions favourable to it in its national context. Any attempt
to unify operating conditions could have adverse effects on
port activities and their efficiency.

3.22
The Committee believes that applying subsidiarity to
the proposed legislation and ensuring coherence of port devel-
opment policies at a local level is preferable to the uniform
provisions outlined in this proposal for a Directive. There are
extensive differences in size and type of ports. Excessive
competition amongst service providers at a specific port could
result in over-investment and waste, not to mention a dete-
rioration of social conditions.

3.23
In line with the principles of subsidiarity and propor-
tionality, national antitrust regulatory bodies and auditing insti-
tutions could have the authority to intervene if the port autho-
rities concentrated port services under their own control
in
cases where no economic benefit or public service requirement
can justify such a practice; or they failed to comply with the
principles of transparency or with accountancy rules. Thus
Community intervention on competition or State aid could be
more
for
instance, if the national competition authorities and the rele-
vant regional or national audit offices did not effectively fulfil
their role in enforcing existing Community legislation.

concentrated on exceptional

effectively

cases:

Brussels, 13 July 2005

The matter of shifting part of the cost of certain access
3.24
and operational
improvements (dredging, or construction of
channels and docks) to local or national taxpayers is raised by
the existing Commission case-law on State aid.

3.25
Local communities should only be taxed in the general
interest and not to lower the costs of (national or international)
seaport users alone, and primarily for major ones. Services of
general interest should be governed by democracy and not by
the market.

4. Conclusions

A far less detailed framework directive providing suffi-
4.1
cient scope for subsidiarity would appear preferable to the
present draft directive. It should be sufficient to refer to the
applicability of legislation relevant to transparency or public
procurement without entering into the details of their applica-
tion to port services. A Community framework should not
encroach upon the port management's prerogative to safeguard
the general interest entrusted to its authority.

4.1.1
Such a framework directive should not in any way
affect the rights and obligations of Member States vis-à-vis their
legislation on social and labour issues, public health, the envir-
onment, security, public order, or services of general interest. It
should not affect collective agreements that comply with
It should also take account of the
applicable national
Member States' international obligations, for instance, the ILO
Maritime Conventions.

law.

4.1.2
The EESC cannot but regret the fact that the draft
directive lacks an impact assessment, which runs counter to the
commitment to legislate better undertaken by the Commission
since its White Paper on governance. All draft
legislation
subject to the co-decision procedure should include an impact
assessment and information on consultations held with social
partners.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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APPENDIX

to the opinion of the European Economic and Social Committee

The following amendments, which received more than a quarter of the votes cast, were rejected in the debate:

Point 1.5

Amend as follows:

‘It is appropriate to recall some of the main causes of contention for the European Economic and Social Committee
that had obstructed in the first proposal before examining the nature and scope of the amendments introduced by
the new proposal for a Directive.’

Reason

In the interests of clarity it should be made quite clear who felt there were causes of contention in the first proposal.
This is not clear from the subsequent paragraphs, which mention the Council and the European Parliament.

Outcome of the vote

For 42

Against 63

Abstentions 3

Point 3.1

Amend as follows:

‘Without prejudice to the European Commission's own powers, seaports' practices and accounts should be submitted …’.

Reason

The proposed procedure may not place any restriction on the existing powers of the Commission.

Outcome of the vote

For 54

Against 71

Abstentions 5

Point 3.1

Move the whole paragraph and place it between the present points 3.17 and 3.18, and re-number the other points in
section 3 accordingly.

Reason

The point is too technical for an opening comment. It would be better to place it with the paragraphs mentioned, which
cover financial matters.

Outcome of the vote

For 50

Against 74

Abstentions 10

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Point 3.4

Delete the final sentence, as follows:

‘Many ports provide their own infrastructure and basic services for maritime traffic. They do not feel that their
responsibilities should be restricted to the administration and maintenance of maritime, land and port space, and
the quays. The provision of certain services may reflect general interest exigencies, or the port authority's efforts to
achieve overall financial balance, or even a profit to be distributed amongst the shareholders of privately owned
ports. Preventing “cross subsidies” would weaken the capacity for port investment.’

Reason

Cross subsidies are not compatible with fair competition between ports. These subsidies obscure cost prices, which have
to be charged at the very least; there is consequently no transparency.

Outcome of the vote

For 61

Against 80

Abstentions 6

Point 3.6

Delete the last two sentences, as follows:

‘A port is a complex logistical platform that is connected to a hinterland that may vary considerably in geographical and
economic terms on a regional, national or international scale, and to land transport networks. It must develop strategies that
are consistent with the development of the geographical area whose economy it fuels, its employment pool, and emerging or evol-
ving economic needs. The EESC believes in favouring intermodality that enhances maritime transport, cabotage in particular. As
currently worded, the arrangements outlined in the proposal for a Directive do not explicitly address this imperative.’

Reason

Most hinterland is not accessible by sea. It is therefore not advisable to give priority to this sector, not to mention
according it absolute priority. A similar plea could be made — with greater justification — on behalf of inland waterway
transport. Furthermore, coastal navigation is promoted in, inter alia, the motorways of the sea programme.

Outcome of the vote

For 59

Against 83

Abstentions 9

Point 3.17

Delete this point.

‘The Committee notes that ports fall within the relevant State's sphere of sovereign powers, which the Directive
must not encroach upon. Certain functions (supporting the fight against terrorism, organised crime and irregular
migration, which often entails costs and investments that are borne by the port) may be delegated to the port
authority’.

Reason

In its proposal, the Commission already states this in so many words. In point 3.17 it is, however, also suggested that,
in the event of the delegation of certain functions, without the payment of compensation by the State, the port is not
obliged to pass on the costs involved to customers, which may give rise to unfair competition with other ports.

Outcome of the vote

For 55

Against 84

Abstentions 13

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Delete points 3.23 and 3.24

3.23 ‘The matter of shifting part of the cost of certain access and operational improvements (dredging, or construc-
tion of channels and docks) to local or national taxpayers is raised by the existing Commission case-law on
State aid.’

3.24 ‘Local communities should only be taxed in the general interest and not to lower the costs of (national or international)
seaport users alone, and primarily for major ones. Services of general interest should be governed by democracy and not
by the market’.

Reason

Costs incurred by port authorities for the benefit of ports must be charged to users or to the port's own stakeholders.
The current text suggests that the general interest can be used as a reason not to do so.

Outcome of the vote

For 55

Against 82

Abstentions 17

Add new point (3.25)

‘To be able to establish whether future port investment is compatible with European law at the beginning of the plan-
ning stage, the Committee calls on the European Commission to supplement its proposal as soon as possible with
proposals for Community guidelines on public funding for ports and the type of funding that is compatible with the
internal market, as discussed at the hearing of 31 January 2005.’

Reason

Self-explanatory.

Outcome of the vote

For 59

Against 85

Abstentions 14

Amend point 4.1 to read as follows:

‘Although the Committee supports the liberalisation of transport-related port services, like other transport services, it
believes that a A far less detailed framework directive providing sufficient scope for subsidiarity would appear be prefer-
able to the present draft directive. It should be sufficient to refer to the applicability of legislation relevant to transpar-
ency or public procurement without entering into the details of their application to port services. A Community frame-
work should not encroach upon the port management's prerogative to safeguard the general interest entrusted to its
authority, but this must not affect fair competition and transparency.’

Reason

There was no disagreement in the study group on this point, and the amendment makes clear the context in which our
comments and conclusions should be read. The general interest must not be an excuse for failing to apply these two
basic principles of the EU.

Outcome of the vote

For 61

Against 86

Abstentions 12