Singapore proposes to extend liner immunity

Singapore proposes to extend liner immunity    The Competition Commission of Singapore has recommended to the country's Minister for Trade and Industry that a block exemption for liner shipping antitrust immunity be extended by five years, through the end of 2015.
   The current block exemption, approved in 2006, expires at the end of 2010. The recommendation by the competition commission would continue to allow liner carriers to collaborate on rate setting and capacity issues on trades to and from Singapore.
   'Shipping is a global trade and CCS notes that antitrust exemptions remain the regulatory norm for the liner industry globally, and for most of Singapore's major trade partners,' the commission said. 'In its recommendation of the block exemption order (BEO) to the minister in 2006, CCS noted the possibility of imminent changes in the immunity status of conference-type activities under competition law in several jurisdictions. Since then, one notable change has been the European Union,' which banned liner antitrust immunity in 2008.
   'CCS has considered the changes in the international regulatory environment carefully in its review. In view of the global economic downturn that has impacted the liner industry significantly, CCS is of the view that more time is required to assess the impact of regulatory changes in the EU. It is also important to recognize that there are other routes through Singapore which will not be affected by regulatory developments in the EU.'
   The commission's primary argument for retaining the block exemption is to help preserve Singapore's status as a maritime hub for container shipping. The country's population is 4 million, but through 2009, it was home to the busiest container port in the world, mostly due to being a key transshipment hub for Southeast Asia, South China and the Indian Subcontinent.
   'CCS is of the view that the rationale for the BEO in 2006 remains relevant,' the commission said. 'As a small and open economy, the presence of an extensive network of liner shipping companies has played a large part in contributing to Singapore's status as a premier international maritime center for liner shipping operations. In particular, the concentration of activity within Singapore generates considerable benefits, both directly and indirectly to Singapore, including providing a higher degree of connectivity and service choice for Singapore's importers and exporters, beyond what might ordinarily be expected if the port had simply developed as a gateway facility. In this way, Singapore's shippers benefit from the port's success as a transshipment hub.'
   The move to extend the block exemption will rankle the Asian Shippers' Council, which has been fighting in recent years to repeal antitrust immunity across Asia. While there are positive signs for ASC in China and India, success has eluded the group in other pockets in Asia (like Singapore and Japan).
   The CCS is accepting comments on its proposal until Oct. 4. It said it arrived at its decision to recommend extended the block exemption after consulting with more than 30 trade associations, regulators, individual shippers, liner carriers, and logistics service providers.
   For more information, contact Corrine Chia or Yvette Yoong. ' Eric Johnson