Law is Regulation

A related second shipping law is Regulation 870/97 encompassing the exemption for particular consortium agreements. This exemption finds support from the recognition that certain functions of consortia provide benefits to shippers provided a certain degree of effective competition remains. One benefit of allowing consortia, in a manner that retains effective competition, is improvements in the quality of shipping services of liners and greater productivity through the rationalisation of the operations of the firms that are party to the consortia.

Another benefit is economies of scale since consortia agreements necessitate a certain degree of resource pooling providing mutual benefit to the members of the consortia. Unlike the Regulation 4056/86, although repealed, Regulation 870/97 supports competition by excluding price fixing within the consortia. By repealing Regulation 4056/86 with the effect of removing exemption from cartel activities such as price fixing by liner conferences, a consideration of the Article 81(1) of the European Community Treaty and Commission regulation 870/97 creates greater alignment between the two shipping regulations.

The EC shipping laws finds grounding on the establishment of competition particularly the curtailment of price fixing balanced by rational exemptions for consortia agreements. The second shipping law is Regulation 4057/86 that provides the guidelines on dumping practices of shipping vessels and responses to the unfair practices of third-party ship owners involved in cargo liner shipping within EC . The purpose of the regulation is two-fold. One is to secure the environmental objectives of the EC by de-motivating dumping practices of shipping liners in EC waters, determining liable parties, and enforcing liability for violators.

This constitutes the basic shipping law covering environmental issues that expanded with the enactment of succeeding laws specifically addressing emerging environmental problems. The other is the identification of the liability of third parties involved in maritime services in EC jurisdiction on a range of issues from price fixing to dumping and torts or negligent actions. This legislation is important because it provides for the liabilities and the concurrent obligations of both direct and third parties to ensure accountability for actions within EC jurisdiction.

Nevertheless, in practice, the regulation has limited application with Hyundai Merchant Marine as the most prominent case that invoked this legislation . As such, ship owners and organisations clamour for improvements, particularly the better consolidation of the provisions, to provide watertight and applicable guidelines that support prevention of incursions as well as the existence of actions for accountability and remedies for violations. This supports competition by developing accountability that supports efficiency and better performance.

The third shipping law is Regulation 4058/86 securing free and safe access to cargoes in shipping activities. This relates to the fourth shipping law Regulation 4055/86, which propounds the principle on the freedom to provide shipping services through the coordination of shipping lines based in member states and outside of the EC. This means that shipping lines cannot limit access to other shipping lines by using arrangements or agreements subject only to remaining exemptions and subject to the monitoring by the EC.

Concurrently, Regulation 4058/86 provides for the manner of coordinating action to secure the free accessibility to cargoes in maritime trade. This also provides for the retaliatory actions that the EC can enforce as counter measures for restrictions on its shipping lines from freely accessing cargoes subject to the exemptions provided by the UNCTAD Liner Code. Coordination could be through diplomatic channels or via shipping organisations to secure free access.