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Port Services Regulation – Cui bono?

In all the heated debate in the UK about “Brexit” and the upcoming referendum, one aspect of EU regulation that is of crucial importance to the maritime industries has rather gone under the radar. This is the so-called EU Port Services Regulation or “PSR” which seeks to improve the efficiency and competitiveness of the EU port sector by, inter alia, increasing financial transparency in the ports sector both in terms of public funding that ports may receive and their charges to port users.

To achieve this financial transparency, it is proposed that certain matters will be mandated for EU ports including:

  • “port users' advisory committees” to be set up and consulted on the structure and level of port charges.

  • procedures to allow port stakeholders to be consulted on issues related to the coordination of port services, hinterland connections and administrative procedures. and

  • an independent supervisory body to monitor and supervise ports – effectively a regulator.

The UK Ports sector has thus far been hostile to the PSR and has seen it as a harbinger of unnecessary bureaucracy and interference. Partly this is because the UK ports sector differs from that in most other European countries in that most ports in the UK are in a broad sense private sector institutions (even if they may have a trust or charter status) whereas the proportion of state or local authority owned ports tends much higher elsewhere in Europe. It is also argued that the UK already has a ports regulation regime whereby port users can challenge port costs and seek financial transparency through the appeal process to the Secretary of State for Transport under section 31 of the Harbours Act 1964 (the “Section 31 Process”).

​The Section 31 Process has been described as being “light touch” regulation and it has also been described as being slanted in favour of the ports rather than the port users because it gives very little guidance as to how the Secretary of State should make his decision thereby making it difficult for a port user to know how to challenge the status quo. The most high profile use of the Section 31 Process in recent years was the unsuccessful appeal by the ferry companies operating out of Dover against the tolls imposed by the Dover Harbour Board. While this article is not the place to discuss the merits of that decision, it did follow from a number of appeals by port users at small UK ports which were themselves unsuccessful leading to a general perception by port users that the Section 31 Process was both expensive and flawed.

So as ever the special interests of various parties in the wider marine industry get tangled up with the political and philosophical issues around the benefits or not of EU regulation and the question of the best approach to achieve what everyone seems to want, a competitive and thriving EU ports sector. Nonetheless and despite the generally negative attitude in the UK, the European Parliament did vote on 8 March 2016 in favour of the PSR. The UK ports sector (through the UK Major Ports Group) will no doubt fight a rear-guard battle to ensure the actual text of the PSR is as non-obtrusive on their commercial freedom as it can be but just maybe the Dover ferry operators will be quietly pleased at developments.

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