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Thursday, September 20, 2018

THE CURRENT STATE OF AFFAIRS RELATED TO THE FIRST ERIKA PACKAGE

The current political situation concerning the first set of Erika proposals is complicated (amendments to the existing EU directives on port state control and a licensing system for classification societies as well as the proposal on faster phase-out of single hull tankers).

Formally speaking we are only mid-way in the decision-making process with the first of two stages just to be completed at the upcoming meeting of the EU transport ministers on the 22nd of December. The European Parliament completed their part of this first reading by adopting a set of proposed amendments to the initial Commission proposals at a European Parliament plenary meeting on the 30th November.  The Parliament’s proposals contains several elements which are unacceptable not only for shipowners but for the Commission and member states (the Council) as well.

The most problematic one concerns the concept of banning so called “repeated sinners” from European waters.  The Commission has proposed a cumulative list with a ban on vessels that have been detained more than twice, being more than 15 years old and flying the flag of a black listed registry. The European Parliament (in Plenary last week) has basically proposed to take away the age criterion and to turn the list from a cumulative to an "either or system", where one of the following three criteria would be enough in order to ban the vessel from European ports: "Having been detained twice" or "having over the last 36 months been registered with a black listed flag" or "which is not fitted (in effect retrofitted) with VDRs”.

The Commission has voiced particular strong opposition to the flag criterion on this list and has pointed out that most of the accession countries (Malta and Cyprus in particular) but also Panama would be banned all together.  Equally the Council has not been willing to take similar steps - their major concern being the extensive recourses needed for the expanded mandatory inspection scheme which is also an important part of the proposed directive (ref. the Commission's proposal).  The Commission has, however, in effect accepted the European Parliament proposal on mandatory VDRs through its proposal, which was tabled on Wednesday 6 December as part of the Erika II package.

Since the entry into force of the Amsterdam Treaty last year, all three institutions (Commission, Council and Parliament) have approximately similar powers.  An agreement between all three is therefore necessary in order to allow the council to adopt the new measures in the end.

This implies that there must now be real and genuine negotiation among the three in order to achieve a common result that can be adopted. With the sort of political pressure we are experiencing on the Erika follow-up, it seems highly unlikely that an ultimate stalemate will be allowed to develop because this would in the end imply that the Commission would have to withdraw the whole Erika I package.

The aftermath of the "Ievoli Sun" has also increased the political pressure in to find a solution as fast as possible.  There are therefore informal discussions taking place between the Council and the Parliament.  The aim of these informal meetings, to take place in Strasbourg on 13 December is to seek possible compromises which could then again form the basis for a common position to be adopted at the Council meeting on 22 December.

Such a compromise based on an informal agreement with the Parliament would then in effect be expected to be accepted by the Parliament in its second reading, which is due (as part of the Amsterdam procedures) over Christmas. If, on the other hand, and this might be just as likely, there is no room for a compromise next week, the issues (the three proposals on PSC, Class and phase-out) will go on to the second reading in Parliament and then most likely to a formal "conciliation procedure", which in effect is a formal negotiation between the Parliament and the Council with the Commission as a formal mediator. 

At the present state of affairs it is politically inconceivable that the European Parliament proposals (on i.a. banning of flags) will be adopted as is in the final EU text.  It is, however, equally inconceivable that none of the European Parliament's proposals will survive.  There is now a real negotiation situation. A situation of which the Parliament is very well aware.   Together with other relevant associations INTERTANKO is therefore now engaged in finding suggestions that could be thrown into the process.