REGULATORS, INDUSTRY SEE NO CONSENSUS ON OECD ANTITRUST REPORT
Representatives of regulators, governments, shippers and carriers made little progress on the vexed question of antitrust immunity for the liner conferences during a workshop on competition policy in liner shipping in Paris yesterday.
The meeting was organized by the Maritime Transport Committee of the Organization for Economic Cooperation and Development.
About 130 industry, government and regulatory delegates spent the day discussing a draft report produced by the OECD recommending that governments remove the antitrust immunity of conferences, discussion agreements and stabilization agreements.
Chris Koch, president and chief executive officer of the World Shipping Council, the Washington-based carrier representative body, said the meeting may have helped clarify the technical language and meaning of the OECD draft report, particularly the so-called “four principles” put forward by Paris-based organization.
The delegates spent time discussing the third principle, that “carriers should be able to pursue operational agreements with other carriers, so long as these do not include price-fixing or confer undue market power to the parties involved.”
Koch said some delegates took the principle to mean that conferences and discussion agreements should be excluded.
“There was clearly a divided opinion about these principles,” he said.
Delegates of certain shipper groups outside the United States reiterated their views that the antitrust immunity of conferences should be removed. Both the U.S. National Industrial Transportation League and Federal Maritime Commission chairman Harold Creel have reportedly said the Ocean Shipping Reform Act of 1998 has been successful, and did not support the removal of the immunity.
Creel presented to the OECD secretariat letters from Sen. John Breaux, D-La., chairman of the Senate Subcommittee on Surface Transportation and Merchant Marine, and Sen. Ernest Hollings, D-S.C., chairman of the Senate Committee on Commerce, Science and Transportation and a long-time supporter of the maritime industry. The letters from the Democrat senators said their committees would be unlikely to change the law in the United States.
Both shippers’ and carriers’ delegates appear to have agreed during the meeting on four “points of agreement” underlined by the OECD:
* Both sides agree to the concept of direct negotiations between shippers and carriers.
* They are not against contractually protecting and keeping confidential key elements of those negotiations.
* They rely less on collectively agreed rates and conditions.
* Carriers should be allowed to have agreements between them covering the operational side of their services.
In addition to the FMC chairman, the U.S administration sent officials from the Transportation, State and Justice departments to the OECD meeting.
The influential European Commission’s competition directorate was also represented.
The OECD draft report came under strong criticism from ocean carriers during the meeting. The World Shipping Council said “the report does not provide an accurate or balanced analysis of the industry, its current regulatory regime, or the effects and consequences of that regime.”
Although shippers’ groups welcomed the OECD report, carriers were angry that it failed to mention that OECD member countries — the United States, Canada and Australia — have reviewed the need for the immunity and decided to retain it in recent years.
The World Shipping Council alleged that the OECD has reversed the “burden of proof” in its report. “The report avoids altogether the question of carrier agreements’ actual impact on freight rates by simply asserting that ‘common practice’ requires that proponents of the existing policy prove definitively that the current regulatory regime provides a net benefit to the shipping public,” it said in its response.
However, several international shipper groups are hoping the OECD will create a momentum to convince governments to remove the carriers’ immunity.
U.S. ports back the retention of carrier antitrust immunity.
'That position will not change,' said Jean C. Godwin, executive vice president and general counsel of the American Association of Port Authorities.
“We’re still concerned about the loss of antitrust immunity,” Godwin said. “Some areas of the country use it, maybe not so effectively as they should.”
The ports are concerned about the financial well-being of the carriers, because the health of the carriers ultimately impact business at the ports.
Following the meeting in Paris, the OECD is expected to release a final report next year.