HAVING REGARD to Article 5 b) of the Convention on the Organisation for Economic Co-operation and Development of 14 December 1960;
HAVING REGARD to the Declaration on Trade Policy as adopted by Governments of OECD Member countries on 4 June 1980;
HAVING REGARD to the Code of Liberalisation of Current Invisible Operations of 12 December 1961 and in particular to Note 1 to Annex A of that Code;
HAVING REGARD to the Revised Recommendation of the Council of 27 July 1995 concerning Co-operation between Member countries on Anti-competitive Practices Affecting International Trade [C(95)130/FINAL] and the Decision of the Council on the Guidelines for Multinational Enterprises, adopted on 26-27 June 2000, [C(2000)96/FINAL];
RECOGNISING the special character of shipping as an international activity;
NOTING that differences exist in the application of competition legislation to liner shipping by Member countries;
RECALLING the fact that the major shipping policy problems in the liner trades with which Governments of Member countries or their commercial interests are confronted in their relations with other countries relate to the growth of direct or indirect governmental intervention in shipping affairs by other countries;
NOTING that the United Nations Conference of Plenipotentiaries on a Code of Conduct for Liner Conferences adopted on 6 April 1974 a Convention on a Code of Conduct for Liner Conferences and a Resolution concerning non-conference shipping lines, and that the Convention came into force on 6 October 1983;
CONSIDERING that it is desirable that the policies of Member countries on shipping matters in their relations with non-member countries, as well as their relations among themselves, should be harmonised as far as possible;
RECALLING, that the Council of the OECD at Ministerial level on 17 and 18 April 1986 in their Press Communiqué addressed trade policy and trade in services [C(86)56];
RECALLING also that Ministers underlined the importance of extending and making more effective the Code of Liberalisation of Current Invisible Operations and other existing instruments which are applicable to trade-in-services among OECD Members, in order to promote liberalisation in as many sectors as possible;
RECALLING further that the Ministers considered that increased attention should be paid to trade-distorting effects of government subsidies to specific sectors;
EMPHASISING the particular importance in the field of maritime transport of the Code of Liberalisation of Current Invisible Operations, under which all Member countries have accepted obligations that they must continue to observe;
CONSIDERING that the principle of free circulation of shipping in international trade in free and fair competition, which is elaborated in Note 1 to Annex A of the OECD Code of Liberalisation of Current Invisible Operations (1), forms a guarantee of adequate and economic world shipping services and of maximum economic benefit for shipowners, shippers and consumers;
RECOGNISING the need to maintain an equitable balance of interest between shippers and ship operators, bearing in mind the repercussions upon the consumer;
NOTING that the Maritime Transport Committee of the OECD has carried out a review of the shipping policy problems of OECD Member countries and has reached a number of general conclusions and statements of policy concerning common principles of shipping policy for Member countries and that the Committee on Capital Movements and Invisible Transactions has examined these conclusions and statements in relation to the Code of Liberalisation of Current Invisible Operations.
On the proposal of the Maritime Transport Committee and the Committee on Capital Movements and Invisible Transactions:
I. CONFIRMS that nothing in this Recommendation shall be interpreted as diminishing in any way the obligations accepted by Member countries under the Code of Liberalisation of Current Invisible Operations (hereinafter referred to as "the Code").
II. AGREES that, in pursuance of, and/or in addition to, the obligations under the Code, no Government of a Member country should introduce new and/or additional measures restricting competitive access to international trade and cargoes.
III. RECOMMENDS that the Governments of Member countries should endeavour, in pursuance of, and/or in addition to, their obligations under the Code, when contemplating the introduction of new laws and regulations relating to shipping policy, or the amendment of existing ones, to ensure that they are in conformity with the following general principles, and with the guidelines contained in Annexes I and II to this Recommendation.
Principle 1 - The Bases of Member Countries' Shipping Policies
The shipping policies of Member countries should be directed to safeguarding and promoting open trades, and a situation of free competition on a fair and commercial basis in international shipping in their mutual relations, as well as in their relations with non-member countries. These policies should also prevent the abuse of a dominant position by any commercial party. These general elements form the bases for the following Principles and for Annexes I and II to this Recommendation.
Principle 2 - Principles to Follow for Normal Resolution of Problems
In resolving problems arising in trades with non-member countries, the aim of Member countries should be to prevent the introduction by non-member countries of measures that would run contrary to the general aims of OECD, inter alia, the expansion of world trade on a multilateral non-discriminatory basis. Member countries should thus actively oppose the imposition of regimes which restrict the access to cargo moving internationally by shipping companies adhering to the principle of free competition on a commercial basis, in conformity with Note 1 of Annex A to the Code.
In the case of state-trading countries and their carriers, it is necessary to take account of non-commercial and non-reciprocal practices with the aim of arriving at a situation of reciprocity and equality of opportunity.
Principle 3 - Consultations Among Member Countries
When the trade between a Member and a non-member country is subject to pressures for cargo sharing or cargo reservation in favour of the national flag by the policies of the non-member country, including an expansion of the definition of "Government Cargoes" the government of the Member country should be prepared to enter into consultations with the governments of other Member countries concerned, with a view to defending the aims of this Recommendation, and exploring the possibility of a co-ordinated response. Such consultations may be initiated by the Member country whose national trade is concerned or the other interested Member countries. While fully endorsing the principle of consultations with other Member governments at the earliest practicable stage, as stated in this Principle and Principle 6, a Member government may, on occasion, be obliged to act in advance of consultations with other Member countries, pursuant to its maritime legislation or policy requirements, actions of its regulatory bodies, or the need for a speedy response to restrictive measures of non-member countries. A Member country contemplating action in respect of a trade between another Member country and a non-member country will whenever possible undertake prior consultations with that Member country (2).
Principle 4 - Response to Pressures from Non-member Countries
All reasonable endeavours should first be made to solve any problems with non-member countries via consultations and/or negotiations. If circumstances should arise when such government-to-government consultations or negotiations cannot resolve conflicting interests or when the non-member country refuses to enter into these procedures, the governments of Member countries should be in a position to react and, to this end, should provide themselves with such countervailing powers as they consider necessary. In the final analysis, countermeasures may be necessary, and, in their application, the aim should be to secure arrangements in accordance with the principles expressed in this Recommendation.
Principle 5 - Availability of Countervailing Powers
Where the free competitive sea transport market is undermined by actions of third countries or where such a country disregards its relevant international obligations, Member countries should have at their disposal powers to react to such a situation.
Principle 6 - Use of Countervailing Powers
When the introduction of countermeasures is contemplated, there should be, subject to what is contained in Principle 3, consultations among the OECD Member governments concerned with a view to the co-ordinated use of these powers. If countermeasures are decided upon following these consultations, the Member country whose national trade is involved can reasonably look to the Member countries with companies in the trade as crosstraders for support in the form of the joint introduction of countermeasures by all the Member countries concerned. In those exceptional cases in which prior consultation has not been possible, each Member country undertakes to inform other Member countries as soon and as fully as possible, of countermeasures adopted. Member countries acknowledge that the imposition of countermeasures or the participation in harmonised response as stated in Principle 3 above, is subject to the foreign policy considerations of individual Member countries in each case. A Member country may decline a request to participate in concerted countermeasures if, in its view, the Member country requesting countermeasure actions itself operates practices similar in effect to those against which the countermeasures are proposed to be directed (2).
Principle 7 - Equitable Treatment in Shipping Agreements
OECD Member countries should ensure wherever appropriate the equitable treatment of their shipping through the inclusion, in trade, navigation and other agreements with non-member countries, of clauses aimed at ensuring competitive access of the carriers of all Member countries to both ports and cargo in the trades concerned.
Principle 8 - Freedom of Shipping in the Bulk Trades
OECD Member countries reaffirm their commitment to a free and fair competitive environment in the dry and liquid bulk trades. They are convinced that cargo sharing in the bulk trades leads to substantial increases in transportation costs and has a serious effect on the trading interests of all countries.
Principle 9 - Governmental Supervision of the Trade
OECD Member governments acknowledge that in order to give full effect to international obligations which they assume in connection with other countries, their supervisory powers should, as far as possible, be harmonised on an OECD wide basis.
Principle 10 - The Role of Government and Competition Policy in Liner Shipping
The role of government is to safeguard and promote a situation of open and fair competition and to prevent the abuse of a dominant position by any commercial party. Its involvement should be on a basis of such minimum intervention as may be adequate in the particular situation and consistent with the maintenance of a free and fair competitive and commercial environment (3).
In determining how national competition policy should be applied in international shipping, it is essential for governments to give adequate consideration to the way their measures will affect the activities of foreign companies or might interfere with the competition policies and the interests of other OECD Member countries' governments.
Principle 11 - The Relationship of Governments to the Activities of Shipping Lines and Conferences
In determining what activities of shipping lines and conferences are desirable or undesirable, in accordance with the guidelines set out in Annex II to this Recommendation, governmental involvement should be directed towards the maintenance of a balance between the interests of shippers and shipowners, bearing in mind the repercussions on the end-users of the cargoes. If it appears that these interests and repercussions are not being sufficiently taken into account it is the responsibility of governments to redress the balance as appropriate. However, in doing so the normal commercial activities of shippers, shipowners and conferences should not be unduly impeded or distorted.
Principle 12 - Avoidance and Resolution of Conflict in Matters of Competition Policy Concerning Shipping
If agreement could be reached concerning what activities should be controlled from the point of view of competition and on how this should be done, there would be no source of conflict between regulatory authorities. However, this may prove to be impossible and, because of its inherent character, international shipping will be particularly affected by conflicts of law and policy.
When such conflicts emerge, or appear imminent to any party, either because of the enactment of new competition legislation affecting shipping, by modifications to existing legislation, or as a result of the application by a government or one of its agencies of existing laws or policy in a particular case, governments of Member countries should endeavour as appropriate and practicable to minimise these and arrive at mutually acceptable solutions through bilateral or multilateral consultations. Such consultations should be in accordance with mutually acceptable arrangements adopted on a bilateral or multilateral basis between Member countries.
Governments of Member countries should make full use of existing OECD fora including the Maritime Transport Committee. These arrangements and the spirit in which they are implemented should be in accordance with the general considerations and practical approach established under the Revised Council Recommendation of 21 May 1986 and the second Revised Council Decision of 17 May 1984, to ensure full mutual comprehension by Member countries of the philosophies and practical effects of the application of competition policy to shipping in Member countries.
Principle 13 - Non-Conference Shipping
The protection of free circulation of international shipping in a competitive commercial environment requires that opportunities for fair competition on a commercial basis by non-conference shipping lines continue to exist and that shippers are not denied an option in the choice between conference and non conference shipping lines, subject to loyalty arrangements where they exist. Restrictions should not be imposed by governments on the right of individual shipping lines to decide whether they want to operate inside or outside the conference system. Governments of Member countries should take appropriate steps when another country adopts measures or practices that prevent fair competition on a commercial basis in their liner trades and should, under such circumstances, consult with each other, upon request, with the objective of remedying the situation.
Principle 14 - Maritime Auxiliary Services
OECD Member countries consider that there should be non-discriminatory treatment as regards the access to and use of maritime auxiliary services, and that the application of fees and charges should be transparent.
Additionally, where these auxiliary services are commercially provided, there should be a free and fair competitive environment as regards their provision, subject to providers meeting required safety and other standards of the country where the services are provided.
This Principle applies to those services which a vessel might use within a port, including while berthed, and includes (but is not limited to): pilotage, towing and tug assistance; provisioning; discharge of waste and ballast water; navigational aids; shore-based operations essential to ship operations, including communications, water and electrical supplies; emergency repair services; anchorage and berthing services; container handling, storage and depot services; maritime agency services; maritime freight forwarding services; maritime cargo handling services; custom clearance services and maintenance and repair of vessels.
Principle 15 - International Multimodal Transport
OECD Member countries consider that international multimodal transport involving a sea-leg is an integral part of the transport chain, and that there should be non-discriminatory treatment as regards the access to and use of those services, as well as a free and fair competitive environment in regard to their provision.
Principle 16 - Measures Relating to Safety, the Environment and Substandard Shipping
OECD Member countries acknowledge the leading role of the International Maritime Organization in respect of questions related to safety, the environment and in combating substandard shipping.
OECD Member countries recognise their responsibilities in respect to safety, the environment and substandard shipping. Therefore, the shipping policies of OECD Member countries should be directed to:
• Involving all players in the shipping market in creating a fair and transparent market;
• Ensuring that all vessels entering their register of ships, and flying their flag, meet applicable international rules and standards concerning, in particular, the safety of ships and persons on board and the prevention of pollution of the marine environment; and
• Properly exercise port state control.