My Lords, this is a bit of a humdinger of a group, but a lot of the amendments are mine. Only four are of substance and the rest are consequential, so it is not as bad as it looks.
The first set of amendments I tabled concern the duty for setting a tariff of surcharges and moving it from the harbour authorities, as currently provided for, to the Secretary of State. I will explain why I think this is important. The practice of harbour authorities surcharging is well established. When I was on the board of Harwich Haven we created surcharges as a way of funding specific objectives, such as channel deepening. They are always done after a process of negotiation with the shipping companies that will pay them. I am not going to say that they are always popular but they are generally accepted. At the end of it all, harbour authorities always have to be mindful of the competitiveness of their own ports. That holds them in check.
The problem is that what is being called a surcharge is not; it is a fine. There is a danger of muddying the water by taking a tried and tested system of surcharging, which is generally positive, and then turning it into something negative when it is really a fine. As I and the BPA understand it, the rate of surcharge or fine will be set by the harbour authorities with reference to the national living wage deficit—in other words, the difference between the actual amount paid to seafarers and the amount they should have been paid under the national minimum wage. The problem with that is that it makes it impossible to do what one normally would with fines and produce a tariff in advance. In the interests of transparency, that is pretty much always the case but in this the authorities could almost make it up as they went along. This puts harbour authorities in quite a difficult position. It would be much better to have a system of fines—and call them fines—and a tariff set by the Secretary of State.
That is linked with my amendment on conflicts of interest. It is really to try to get a sense from the Government about how harbour authorities are to manage this conflict of interest, given that port ownership in this country is very much a mixed model: Holyhead is privately owned, Dover is an independent trust and Portsmouth is owned by the local authority, while it is of course quite common for shipping companies to seek ownership of a harbour or terminal. The Committee can see that there would then be a direct conflict of interest in setting the surcharge or fine, so I would be interested in hearing more from the Government about that.
Then I have a group of amendments about the consequences of a shipping company failing to meet its obligations or to pay. What I envisage is that harbours would still request the declarations and pass them on to the MCA for enforcement. The Government would require HMRC to have the power to investigate vessel operators, and the MCA could levy fines for non-payment. Importantly, in the event of repeated infringements the MCA would have the power to detain the vessel. It sounds much more draconian to detain a vessel—does it not?—rather than deny access, as proposed in the Bill. In fact it is standard practice by port state control. I would not say that the MCA
does it all the time, because it rarely comes to that, but it has that power and it is a way of dealing with vessels which do not meet their legal obligations.
Denial of access to harbours is an extremely important matter. It would require a derogation from the open port duty on harbour authorities but, even then, it would be a very draconian step. The International Chamber of Shipping has cited the OECD’s Understanding on Common Shipping Principles, which refers to
“non-discriminatory treatment … in … the assignment of berths and facilities”
and so on. It goes on to promote the freedom for shipping companies to promote the interests of “maintaining a competitive environment”. Can the Minister say whether she has had specific legal advice on compliance with these OECD common principles?
Finally, I have amendments which return to the Delegated Powers and Regulatory Reform Committee’s report. In Clause 11(2), the Bill gives the Secretary of State power to give directions to the harbour authorities to exercise their powers, or not to do so, or to exercise them in a particular way. It is worth quoting from the report. The committee says
“it is capable of being exercised not only in individual cases but generally, so as to have legislative effect: it would allow the Secretary of State to direct all harbour authorities that they must not, for example, impose surcharges or indeed exercise any of their powers”.
The committee finds this “startling”, and goes on to say that this clause
“should be removed from the Bill”.
I would be very interested to hear what the noble Baroness says about that.
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