Industry Trends

The Planning Bill, the Draft Marine Bill and the Draft Marine Navigation Bill

The next year promises to be a busy one for the ports industry. In Westminster there are three large pieces of legislation at various stages of transition through Parliament which all have important implications for our sector.

The Planning Bill, which was introduced during the 2007/08 Parliamentary session, proposes to introduce a new system streamline decisions on major infrastructure developments such as harbours. The Bill is nearing the completion of its passage through both Houses and should be enacted before Prorogation in the autumn of 2008. Importantly for our industry the Bill will pave the way for a National Ports Policy Statement and require the DfT to develop market forecasts for the sector.

The recently published Draft Marine Bill, which we expect to be introduced as a Bill proper midway through the 2008/09 Parliamentary session, promises to be a substantial piece of legislation which will have a large impact across the whole ports sector. The Draft Bill includes provisions to create a new Marine Management Organisation to administer planning, licensing activities, marine nature conservation and the management of fisheries in the marine area. It also includes proposals to give the public greater access to coastal areas. In July 2008 the Scottish Government published a draft Marine Bill for Scotland which will set up a similar marine management body north of the border.

Also recently published is the Draft Marine Navigation Bill. It includes proposals to reinforce the industry’s ‘Port Marine Safety Code’, reform certain aspects of the pilotage certification system and improve the management powers of General Lighthouse Authorities. We expect that this Bill will also be introduced in the 2008/09 Parliamentary session.

The Impact of the Eddington, Stern and Barker Reports

Ports do not exist in a vacuum. There is a wider world of policy and public interest that sets the context in which we live, and in which we will grow. Three major Treasury-sponsored reports have been published in recent years: Stern (environment), Eddington (transport) and Barker (planning) represent heavyweight contributions to a wider debate on where we are going, and how ports will adapt to changing circumstances.

The most recent expression of national ports policy by government was in “Modern Ports” published by the Department for Transport (DfT) in November 2000. It was the first comprehensive ports policy document for many years and largely confirmed UK policies as they had evolved following the disbanding of the National Ports Council in 1981. The National Ports Council was the last example of direct government involvement in port strategic planning; repeal of the Dock Labour Scheme in 1989 was swiftly followed by the Ports Bill in 1991 which led some ports to privatise, marking the completion of a period of significant deregulation.

The past 10 years have seen a huge expansion in the port responsibilities for safety, security and the environment. Safety covers both dock operations and navigational safety. In 2002, the Port Safety Initiative was launched with the aim of reducing major accidents by 10% by the end of 2005. For navigational safety, the Port Marine Safety Code, published in 2000, led to changes in the way port managements address marine safety. This includes establishing formalised links between port operational managers and port boards, the drawing up of safety plans and wide consultation with users.

The majority of UK ports are trust ports although the majority of cargo – approximately two-thirds – is handled by privatised ports. While the government has powers of compulsory privatisation, this has only been used on one occasion and the option is always open to trust ports to convert to privatised status. Trust ports are unique to the UK in that although some board members will be government appointees, they are nevertheless strategically and financially independent. Although they do not regard themselves as primarily profit driven, they nevertheless have to make a sufficient return on capital to invest in new facilities and to compete with other ports.

Guidelines on Corporate Governance for trust ports (although applicable to all ports) were published in 2000 resulting in substantial changes with the slimming down of many boards and improved accountability to stakeholders. Within the privatised sector there has been some consolidation since the early 1990s but common ownership is not as advanced as in other transport sectors. This may be partly because of the difficulties of consolidating facilities and operations – ports are all about location on the main, generally unchanging, trade routes.

Whether private, trust or municipal, all ports in the UK operate as commercial entities and receive no systematic national funding assistance from the government. Ports operate in strong competition with each other and keenly protect their independence. This is a situation almost unique in the EU and has resulted in UK ports being recognised as amongst the most efficient in the world.