Alfons Guinier: Shipping needs a global regime on all fronts

On the occasion of the discussions for the promotion of an comprehensive maritime policy (Blue Paper) by the European Commission, and the action plan which is on the agenda for the coming years, we spoke with the Secretary-General of the European Community Shipowners Associations (ECSA), Alfons Guinier. We met him at the ECSA offices in Brussels at the end of November.

Alfons Guinier, Markos Kantzios.Interview: Markos Kantzios economic outlook January 2008

In an interview to Outlook, Mr Guinier highlights the international character of shipping and its importance to global trade and to the European economy, indicating that regional and unilateral measures do not help shipping. As he says, competition is not so much within Europe, but mostly outside it. He also confirms that shipping plays a key role within the wider maritime cluster. He points out that shipping as a global industry needs to be governed by global rules, adopted through the International Maritime Organization (IMO) in London and the International Labor Organization (ILO) in Geneva.

ECSA was established in 1963 in Paris. Later, in 1965, it was formally established and registered in Brussels. Alfons Guinier has been Secretary-General since 1992.

Q: Mr Guinier, what is the main purpose of ECSA?

A: The main purpose is to defend and promote the interests of European shipping. i.e. the membership notably the shipowners of the European Union and Norway as an EEA (European Economic Area) member. First interlocutors are the European Institutions, Commission, Member States and the European Parliament, but the global character of shipping also implies global issues. We are not directly interfering in organizations such as the IMO and the ILO, but with the aim to have global legislation we are closely following developments. In this respect we have a very close cooperation with the international shipping associations ICS/ISF. The aim is to have consistency in policy approaches and to avoid duplication. This is achieved in a practical way trough appropriate communication, attending each others meetings and participating in discussions where appropriate such as on the Maritime Labour Convention on which agreement was reached in ILO in February 2006.

Sometimes the views of European shipowners may have a different accent from the views expressed by other non EU associations but in substance the approach is very much in line.

Q: What kind of issues are they dealing with?

A: Actually, we are dealing with a large variety of issues, starting with the competitiveness of European shipping, safety and the environment, ship emissions, port policy, logistics, the promotion of short sea shipping, competition rules, security, ship recycling, maritime external relations, WTO, research and all kinds of legal issues. ECSA is also a recognized social partner together the unions of seafarers (ETF) regularly meeting under the auspices of the European Commission. Most recently a lot of attention has gone to different Commission Communications issued in October 2006 such as the Blue Paper on a future maritime policy for the Union, and Communications on port policy, motorways of the sea, a European maritime transport space without barriers, and logistics. Everything that may be directly or indirectly related to shipping, we are dealing with it.

Q: As regards the new proposals for maritime policy, what are we going to see?

A: First of all we have to explain that the Blue Paper on a future maritime policy for the Union does not only deal with maritime transport. It has adopted a holistic approach aiming at an integrated policy on all maritime issues including the sea as natural element, maritime transport shipbuilding, equipment manufacturing, fishing, ports and all issues related to the maritime cluster.

The Blue paper contains the main elements that were brought forward in a never seen consultation process. The integrated policy that received support from all stakeholders will now be dealt with by Task Force within DG FISH. Most of the issues brought forward in the more than 30 action points will be progressed by the relevant Directorates Generals of the European Commission such as DG TREN, Industry, Environment, and Employment.

The announced Communication on a maritime transport policy 2008-2018 is of course a key action point for the European shipping industry. Attention should in the first instance be given to the competitive position of European shipping in the de facto global market. In this respect it is essential that the present state aid guidelines allowing alleviation of company taxation (tonnage tax) and of employment costs (social security and seafarers’ taxation) should be maintained long term and be applied in a flexible way. As Vice President Barrot said at the Conference on a future maritime policy in Bremen in May 2007 “Europe has a very competitive maritime transport sector and should reinforce its position as a world leader. The global competition is lively not allowing any strategic errors.”

On some other action points of the Blue Paper action is already in process through the different Commission Communications of 18 October 2007. Eye catcher is the Communication on a European port policy. You will recall that two proposals for a Directive on market access to port services were rejected by the European Parliament. This was followed by an active consultation process with stakeholders organized by the Commission to lay down the main principles of a European port policy.

The Commission paper that is the result of this consultation process contains the main elements of a ports policy. As strongly requested by all stakeholders the first priority is the extension of port capacity and hinterland connections. To facilitate this, the Commission is working on guidelines on the applications of existing environment legislation such as the Habitat and Birds Directives, the interpretation of which ahs delayed seriously expansion of different ports.

As far as market access to ports services is concerned the Commission Communication confirms that the Treaty, particularly the so called Freedoms and the Competition Rules, are applicable to all port services including on technical-nautical services. The safety element can be considered but subject to a contestable safety risk assessment.

As I mentioned the Commission Communication contains all elements of an appropriate port policy. These elements should now be applied with an important task for the Commission as guardian of the Treaty.

 

Q: Is there going to be any kind of financing?

A: The Commission Communication stressed that there should be transparency in funding/financing of ports. The Commission will also issue in 2008 State Aid Guidelines on port financing. Part of the financing of ports is to be considered as public good such as basic infrastructure and access to ports. Supra-infrastructure such cranes, terminals and equipment normally used by one operator or supplier is normally financed by the relevant parties, consequently financing of such projects will most probably be considered as state aid on which funding is not allowed.

Q: The maritime community has expressed repeatedly, through its established organs, its concerns about the course of events regarding regional measures encouraged in particular by the European Committee. What is your view on this?

A: It’s a fair question. One of our main themes, which we constantly repeat wherever we talk, to the Commission, to Member States, to European Parliament, or anywhere in the world, is that shipping is a global business. This implies that shipping needs a global regime on all fronts. There are simple and practical reasons for this:. How can you have normal shipping services if you are subject to completely different rules, for instance, safety and environmental rules in the US, in Europe, in Japan, China, etc. It doesn’t work. This is also valid for ship emissions a topic high on the agenda today. You cannot have a ship burning twenty different fuels.

As I mentioned the message of global regulation instead of regional legislation has been a leitmotiv in our discussions with the European Institutions. It has been taken on board to a large extent. However, for some time the Commission has on the agenda a stronger “status” of the EU in international organizations such as IMO. In this context the Commission has repeatedly asked the Council of Transport Ministers to change the observer status of the Commission into an observer status of the EU.

This is in the first instance a political issue to be decided by Member States since it concerns their field of competence in international Institutions all over. As far as the IMO – being a highly technical body – is concerned there are practical elements that have to be taken into account. The working and the efficiency of the IMO is based on the expertise of the different countries members of IMO. The EU Member States have a high repute on maritime expertise and have been at the basis of many IMO decisions. This expertise should not be endangered by speaking with one voice. On the contrary the expertise and the role of EU Flag States should be constantly enhanced. It should also be avoided that one ends up with block voting in the IMO. Experience has told that this would paralyse the working of this United Nations body.

The global character of shipping has to be taken into account on all fronts particularly safety, environment, security, employment conditions, the competitive position of European shipping etc. This explains that the State Aid Guidelines are aiming at safeguarding the global competitive position of EU shipping.

Q: In 2008, the EU will be implementing regulations on shipping emissions. Could these regulations become a global policy or practice?

A: Ship emissions are high on the agenda on a global basis.

As I already mentioned ship emissions cannot be dealt with on a regional basis for both technical/practical as well as environmental reasons. A global approach with global measures is the only way to have success.

IMO is reviewing the so called MARPOL VI – Annex VI dealing mainly with SOx, NOx and particulates. A Group of experts is analyzing the different options that have been bought forward with the aim to give a set of recommendations in February 2008.

On CO2, that has received most attention recently, IMO should speed up its efforts. The shipping industry is meanwhile looking at different options to further improve the CO2 performance of its services. Recently we have seen that many operators are bringing down the speed of their ships to reduce consumption and the CO2 emissions. Active research projects are investigating technical means on fuel reduction and alternative energy sources. Regulatory measures such a emission trading, on which there is a lot of skepticism on its practical application for international shipping, are being investigated. Within ECSA we have a very active emission Working Group as well as an Expert Group investigating the practical possibilities and implications of emission trading.

Q: There are many maritime nations in the EU, Germany, the Netherlands, Denmark, and Greece, to name a few. How well do they co-operate with one another?

A: Of course there is co-operation. The maritime nations you mentioned have been doing well the last years and have increased their maritime cluster. In this respect it has to be noted that shipping is the core industry of these maritime clusters. At the basis of the success are measures allowed by the State Aid Guidelines which these countries have applied in their own way taking into account their specific position. The clusters have been growing on all fronts: shipping in particular, but also ports, insurance, ship financing, legal services etc.

Belgium is also a good example. Its merchant fleet and the Belgian Flag more or less disappeared in the 90’s. Part of it went to Luxemburg and the other part was flying competitive international economic flags. Following protracted discussions with the Government a tonnage tax system and other measures allowed by the State Aid Guidelines were introduced in 2002. As a consequence the Belgian registered merchant fleet increased from almost nil to 67 ships with more than 7.7 million deadweight. The average age of the fleet is 6.8 years. Another good consequence is the doubling of students at the maritime academy since 2002.

This way a new nucleus of highly skilled seafarers and officers is created. This is also happening in other European countries such as Denmark and Germany. This is important since Europe has a shortage of highly qualified people, particularly technicians, not only in shipping but in most industries.

To attract more young people to a maritime education and career ECSA has together with the Unions (ETF) developed a career mapping exercise indicating all the possibilities for employment in the maritime cluster after having served some years at sea. We hope that our qualified seafarers will stay as long at possible at sea. However, practice has proven that many prefer to shift to a career on the land after some years for a variety of reasons often family reasons. Some of them return to sea after the family has grown up. Important is that we keep maritime expertise in Europe as a backbone for our world trade position.

Q: You said the magic word: “expertise”…

Α: This is not only essential for shipping. Europe can only survive with expertise – and flexibility as well.

Q: Let’s talk some more about the seafarers and the officers. How is the issue dealt with on a European level and what incentives are given to young people?

A: There are many campaigns in different Member States: adverts on television, maritime academy representative visiting schools explaining what shipping is about, what possibilities there are. These efforts are made jointly by the shipowners associations and the National unions of seafarers. Another important factor is of course the cost of employing EU seafarers. Here as well the State Aid Guidelines offer the possibility to alleviate the employment costs of European seafarers through the alleviation of employers and employees taxation of seafarers and the social security costs. These are structural measures improving the competitive position of EU seafarers in the global market.

As a result of the application of such measures the sharp decline of EU seafarers that we experiences in the 80ties and in the beginning of the nineties has been stopped and gradually we see again an increase since the State Aid Guidelines were introduced in 1997.

Q: Some recent regulations are far from giving young people the incentives to work at sea, such as the penalization of accidental pollution.

Α: Yes, that’s something else. Without going into the legal details one could summarize that this Directive would penalize pure accidental pollution. This is of course unacceptable. Remember the dramatic example of Captain Mangouras who was subject to appalling and unacceptable measures by the Spanish authorities following the Prestige accident. We strongly advocate respecting international legislation as laid down in UNCLOS and IMO. Measures deviating from this existing legal framework should not be taken. Legal certainty based on international legislation is essential for young people choosing for a maritime career.

Q: There is the successful model of Denmark, proposing the corporate association for the qualitative education of mariners and officers. Is it possible, with the support of the European Commission, that this model can be applied to other countries?

A: There are also similar models in other countries for attracting and maintaining young people for a career in the maritime cluster. At the basis are a high quality education and training system and the application of the already mentioned State Aid guidelines. Training on board is also of key importance. People have to serve on board for a long time before they get a degree and be able to work as a qualified seafarer aboard the ship. Government support for training as applied in other sectors to arrive at the highest skills, should be enhanced. There are also possibilities through the European social funds to arrive at such support.

Q: Let’s talk about the European ship owners. What are the particular problems faced by the European shipowners, not only in Europe but internationally as well?

A: Well, shipping has had a good time the last five years, and European shipping is a world leader. This is all good. However one should not forget that shipping is a cyclical business with ups and down. Let’s hope that the ups will be maintained for a longer period and that there will not be extreme downs. It remains to be seen whether the growth in world trade will be high enough to use the new ship capacity that will come on the market the coming years. Also the development of the oil price is worrying. Shipping being a global business global political stability is also very important. Let’s cross our fingers.

Q: Who do you believe are the most appropriate persons to trace out a line of conduct in maritime policy? Is it going to be a body that can promote maritime industry in cooperation with states globally, such as the IMO, or is it going to be a group of EU bureaucrats, who naturally will consider the maritime cost among other things?

A: I used to have a Chairman who rightly said: European shipowners can compete with the best in the world; however, they need the right structural framework to do so. This brings us of course with the policy makers within the European Institutions and directly the Member States. In this context I have to repeat what I said earlier notably: our structural conditions should be global. This is valid on all fronts: the competitive position of European shipping, safety, security, environment, employment conditions etc.

New since a few years is the role of the European Maritime Safety Agency (EMSA). They give technical advise to the EU Institutions and monitor the application of existing legislation. This is a good development. In the past decisions were often taken based on political considerations only. With the help of EMSA technical safety elements should be at the basis of decisions. The monitoring of the application of existing legislation is also a step in the right direction. Rather than making new legislation existing legislation should be ratified, applied and controlled. Targeted controls with the aim to get rid of substandard shipping should be the way forward. I have a feel that progress has been made in this respect recently.

Another key point is that policy makers should take into account that there is an urgent need for sufficient transport capacity and infrastructure. In our case more port capacity and more and efficient hinterland connections. This is the basis for co-modality and sustainable transport.

Interview: Markos Kantzios economic outlook January 2008