Tugowners challenge EU exemption for towage

Shipowners have contested the new European Commission policy stating that towage can in certain cases be shielded from the full force of competition law because it is a service of general economic interest.

The assertion, contained in the latest Brussels port policy communication, is wrong because towage is purely a commercial service, the European Community Shipowners?EUR(TM) Association claims.

Towage is not a service of general economic interest,?EUR? said Ecsa secretary general Alfons Guinier.

For pilotage we think there is more evidence than for towage. In practical terms towage is a commercial service.?EUR?

The commission definition groups pilotage and towage together as services with a strong link to maritime safety. Mooring, on the other hand, is considered to have only a weak link.

Technical-nautical services are pilotage, towage and mooring,?EUR? the policy document said. Often those services are also linked to port safety. This link is much stronger in the case of pilotage and towage than with regard to mooring. Such activities may either be provided by the public administration or constitute services of general economic interest.

The commission goes on to state that while EU laws on freedom of establishment apply to all technical-nautical services, monopolies may be justified ?EURoeto the extent that they are necessary and proportionate for the provision of the service in question.

For shipowners keen to inject as much competition as possible into the towage market, this phrase could be misused in order to set worrying precedents.

Defining towage as a service of general economic interest could lead to abuse, said Mr Guinier.

Tugowners’ representatives say the link established by the commission is self-evident. Towage does provide a service which is one of general public interest, said Andrew Dalrymple, honorary chairman of the European Tugowners’ Association.

It has a high level of safety provision and is very much in the interests of shipowners.

Compulsory towage is rare and is imposed at the discretion of the port authority, usually when hazardous cargo is being shipped, he pointed out.

The commission is only basing its statement on [European Court of Justice] case law, said Hugo Callens, tug association secretary-general. I don’t think this will make much difference in the way we operate now.

When is competition among towage providers desirable? This is the key question, and here there has also been some movement within the commission.

Mr Dalrymple points out that the Brussels authorities no longer use a one-size-fits-all definition of the towage market based on tonnage and passenger throughout.

Previously, EU officials believed competition was desirable when certain thresholds had been breached, whereas now they admit ports vary significantly and must be judged on their individual merits.

A UK port handling nuclear waste will have very few ships but the cargo is very dangerous, [therefore requiring towage] whereas a major port such as Dover has thousands of ship visits from vessels which are highly manoeuvrable, Mr Dalrymple said.

If the need for competition among towage providers is contested, the courts and ultimately the European Court of Justice will be required to decide. The commission’s new policy document will however be used as guidance when judges make up their minds.

source: Lloyd’s List