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Maritime regulations |
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By definition, shipping is a highly international industry. This means that all regulations concerning market access, competition rules, safety at sea and environmental or social issues should be based on internationally compatible instruments.
International competition between national merchant fleets is multi-faceted. Apart from the outright flag discrimination that yields artificial market benefits to certain maritime operators, a common means of strengthening the competitive position of national shipowners is for governments to grant direct subsidies. In the long run, such measures are clearly detrimental to the efficiency of the subsidized industry, and thus to trade in general. Shipping companies situated in high-cost countries will have to find other solutions to combat competition from efficient operators, frequently from the Far East, whose trading conditions are more favourable. For example, the EU has adopted a policy which bans direct subsidies, but alleviates the public burdens placed on the shipping industry. This applies mainly to public taxes, which have been reduced not only for seafaring personnel, but also for shipping companies through the so-called tonnage-based income tax system. This facility aims at creating a more stable tax regime for owners than the traditional corporate taxation of profits. In Denmark, a similar regime was adopted in 2002 in order to match the conditions offered to other European owners.
Extensive subsidization of the shipbuilding industry still prevails in certain parts of the world. While the EU has almost discontinued subsidizing the European shipbuilding sector, some countries still build ships that are offered on the world market at prices well below the cost of construction. Such subsidization of the shipbuilding sector leads to an overcapacity of tonnage with consequent distortion of competition for otherwise viable shipping services. The Korean shipbuilding sector is a particular focus of attention, and European shipowners have urged the EU to address this issue in order to secure more market-oriented conditions in the shipbuilding sector. The shipping industry considers it highly satisfactory that in their joint Consultative Shipping Group, Western Europe and Japan are not prepared to consider an application for membership from Korea until these problems in the shipbuilding sector have been solved.
Shipping is a capital-intensive industry, and shipping companies covering a wide geographical area are often forced to cooperate in order to offer customers regular and frequent services. Cooperation between liner companies aimed at rationalizing services and stabilizing freight income is assuming increasing importance. Such cooperation takes various forms, such as conferences, alliances, consortia, joint ventures and pools. Internationally, most governments have recognized that frequent and regular long-distance services can rarely be handled by a single operator. Consequently, anti-trust immunity is granted for many of these cooperation agreements in the shipping sector. Recently, the principal shipping markets, represented by the USA, Japan and the EU, have established a competition policy that allows such maritime cooperation subject to the observance of certain rules and regulations that offer providers and users of maritime services a fair deal. Regrettably, shippers' organizations, particularly in Europe, continue to oppose such initiatives at the risk of jeopardizing the entire international door-to-door liner system.
All maritime regulations must be considered in an international context. Nevertheless, in conjunction with establishing the Single Market in Europe, the EU initially addressed shipping issues from a narrow regional point of view, and continued to do so for a number of years. Numerous inward-looking proposals treated shipping on a par with land-based European industry. The new EU maritime strategy that emerged in the mid-nineties fully recognized the truly international character of shipping, and many pending regulatory proposals from the European Commission were consequently withdrawn.
In many respects this international EU-policy still operates but there are from time to time exeptions that should be avoided. This gives especially for technical regulations but also for attempts to regulate the European shipping market. Shipping in Europe is international transport and completely liberalized. Therefore, attempts to designate and favour individual lines through direct subsidies should be avoided.
The United Nations' Labour Organization, ILO, is changing its structure and priorities. It will be difficult to maintain the special ILO maritime conferences for the sole purpose of adopting conventional labour instruments that deal with detailed technical standards for the maritime sector. The Danish Shipowners' Association proposes that future ILO initiatives aim to set meaningful labour standards for the key conditions of employment contracts, which should then be properly enforced. Such instruments should take the form of codes, guidelines or declarations that concentrate on addressing the rights of seafarers employed on foreign flag vessels.
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