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Transport Policy White Paper Response from ESPO to the European Commissions Vision and Road Map to a Single

European Transport Area Towards a Competitive and Resource Efficient Transport System COM (2011) 144 final 6 July 2011

Table of contents:

Executive Summary 1. Introduction 2. The Vision for a Competitive and Sustainable Transport 3. The Strategy for the Internal Market 4. The Strategy for Infrastructure 5. The Strategy for Innovation 6. The Strategy for the External Dimension

p. 2 p. 4 p. 4 p. 6 p. 9 p. 12 p. 13

Treurenberg 6 - B-1000 Brussel/Bruxelles Tel. : 32-2-736 34 63 - Fax: 32-2-736 63 25 E-mail : mail@espo.be - Web site : http://www.espo.be

Executive Summary 1. With this response, ESPO outlines a series of initial views on the Commissions EU Transport Policy White Paper in order to provide input for the political debate in Council and the European Parliament. In autumn this year, ESPO will furthermore present a Port Manifesto which will outline a vision on the role port authorities play as facilitators of business and society and of the sustainable operation of the supply chain. 2. ESPO welcomes the new EU Transport Policy White Paper, and fully shares the Vision of the Commission for the future European Transport System, in which growth of mobility and transport is recognised. To support the expected transport growth, more port capacity will be required and, consequently, more efficient planning regimes and procedures should be set up to facilitate port development. 3. ESPO fully supports the ambitious target of reaching 60% Green House Gas (GHG) emission reduction, but is also aware of the difficulty to make it a reality. Envisaged actions should tackle the EU transport system in an integrated way and all modes should equally strive to contribute to the sustainability and environmental objectives of the EU. Source-oriented measures are the most effective tools to reduce GHG emissions and improve air quality generally. 4. Even for distances below 300 km, which is the threshold established in the White Paper, freight shipments coming in or out of ports are often transported by rail or barge. For these short and medium distances rail and waterborne transport effectively reduce congestion in the immediate hinterlands of seaports. Similarly, maritime transport, through short sea shipping and feedering services is already an option used for distances below 300 km. 5. For the Commissions Vision to be implemented effectively, coordination of policies is key, together with a prioritised action plan and concrete milestones for the short term. 6. ESPO is ready to contribute to the review of the policy framework for seaports that is announced in the Commissions Strategy. Given the diversity of the sector, nonlegislative action should remain the preferred option, with specific attention paid to port financing and transparency of accounts, concessions, dock labour and technical-nautical services. In particular, the review should not fail to provide state aid guidelines for the port sector. Such guidelines should follow the traditional approach, whereby public funding of general infrastructure available to all users would not be regarded as state aid. State aid guidelines however cannot function without the principle that port authorities have independent status and real and effective financial autonomy in order to fulfil their responsibilities, particularly those concerning port infrastructure investments. 7. ESPO urges the Commission to complete the internal market for all transport modes, and in particular for short sea shipping and rail. In this context, ESPO fully supports the development of a Blue Belt area surrounding the European Union where maritime transport will be facilitated. For ports, there is also a clear sense of urgency in achieving a single European railway network. Remaining barriers, be they legal, technical or political, should be lifted without further delay. 8. ESPO welcomes that the Commission expects to deliver a fully functional and EU wide multimodal TEN-T core network by 2030. The connection of all core seaports to the rail freight and inland waterway systems should however be reached before the 2

2050 target. Hinterland connections of core seaports should feature as an absolute priority in the forthcoming TEN-T guidelines. ESPO furthermore urges the Commission to ensure that Member States effectively implement the core network and provide sufficient national funding for the development of core priorities. 9. ESPO supports the TEN-T dual layer approach proposed by the Commission, provided that the comprehensive network remains as inclusive as possible. The selection criteria for ports should allow the core network to be future-oriented and be sufficiently robust to anticipate future needs and trends for the next 10 to 20 years. Ports in the core network should have potential for decarbonisation and limitation of external costs, have a gateway function linking the main EU markets with the rest of the world, connect between maritime and land-based networks, be responsive to market needs and be reliable. There needs to be a good spread of core network ports around Europe but on the other hand, a degree of consolidation is necessary to collect positive economies of scale, also in terms of sustainability. The key challenge in the design of the core network is to find an appropriate balance between these two principles. 10. ESPO supports the creation of multimodal freight corridor structures in the context of the core network and invites the Commission to consider appointing EU coordinators to facilitate their establishment and development. To achieve a sustainable transport network, optimising the total journey of trade is necessary, taking into account all segments of transport, including the deep-sea leg. 11. ESPO believes that, next to public-private partnerships and the use of new financial instruments, national governments should continue to take their responsibilities in funding basic transport infrastructure. The use of EU funds is welcome and necessary, but should be conditioned to the achievement of results. ESPO would furthermore support the creation of a framework for earmarking revenues from transport activities to be used for infrastructure funding. 12. A cost-recovery system for externalities for all modes of transport should be integrated in a broader approach, together with the creation of an integrated transport network, administrative simplification and harmonisation and the earmarking of the revenues for investment in sustainable infrastructure projects. Any initiative leading to increased transport costs should be approached with care and ensure that the result is in the end not counterproductive to Europes overall competitiveness and, more in particular, to environmentally friendly transport modes such as maritime transport. 13. ESPO welcomes the intention of the Commission to define a European transport research, innovation and deployment strategy. A rapid deployment of existing and new technologies and solutions is key to achieve the White Paper target. ESPO furthermore encourages the Commission to support sector-driven initiatives and projects which aim at self-regulation, promoting best-practices and achieving high European standards in the field of environmental port management. At the same time a level playing field needs to be ensured when it comes to applying relevant EU and international regulations. 14. EU action should be framed in a global context. ESPO particularly invites the Commission to give more attention to the impact of the IMO SECA regulation, e.g. on short sea shipping in the Baltic Sea; to favour global solutions to deal with GHG emissions of shipping and to urgently address competition with ports in countries neighbouring the EU, especially the social aspects thereof.

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Introduction

The European Seaports Organisation (ESPO) represents seaports in all maritime EU Member States and Norway and has observer members in Albania, Croatia, Iceland and Israel. ESPO ensures that seaports have a clear voice in the European Union. With this response, ESPO outlines a series of initial views on the Commissions EU Transport Policy White Paper in order to provide input for the political debate in Council and Parliament. ESPO is in the meantime also preparing a Port Manifesto which will outline a vision on the role port authorities play as facilitators of business and society and of the sustainable operation of the supply chain. The ESPO Manifesto will be presented in autumn. This response first addresses the Commissions Vision in broad terms and then comments in more detail on those elements of the accompanying Strategy which are of particular relevance for seaports: internal market, infrastructure, innovation and the external dimension.

2.

The Vision for a Competitive and Sustainable Transport System

2.1.

European Seaports Share the Vision of the Commission

ESPO welcomes the new EU Transport Policy White Paper and fully shares the Vision of the Commission for the future European Transport System, in which growth of mobility and transport is recognised. Hence, to support mobility and the expected transport growth, infrastructure requirements need to be anticipated and fulfilled. As regards port infrastructure, more capacity is required in terms of maritime access, terminal facilities and hinterland connections to cope with expected traffic growth. Consequently, more efficient planning regimes and procedures should be set up to facilitate port development. Ports are clusters of industrial and economic activities and increasingly a favourable location for renewable energy production (e.g. offshore wind energy), altogether supporting economic growth and employment. As such, ports offer sustainable solutions and should not just be considered as transhipment nodes linking water with land transport. ESPO fully supports the ambitious target of reaching 60% Green House Gas (GHG) emission reduction, but is also aware of the difficulty to make it a reality. Fighting against climate change and achieving a sustainable transport system require the involvement and commitment of all transport stakeholders. Envisaged actions should tackle the EU transport system in an integrated way and all transport modes should equally strive to contribute to the sustainability and environmental objectives of the European Union.

2.2.

European Seaports Contribute to the Vision of the Commission

Port authorities contribute in several ways to shape the future transport system:

Environmental management has become a widely accepted element of good port governance and port authorities are working to create a level playing field here, eliminating the environment as a competitive factor. Although the direct impact of port operations on GHG emissions is relatively small, port authorities are working towards further reduction. ESPO believes that sourceoriented measures are the most effective tools to reduce these emissions and improve air quality generally. Port authorities stimulate the use of more environmental-friendly modes in hinterland transport, for instance, by means of modal split targets in terminal lease agreements or concessions. Port authorities are also very active in developing rail and barge (when applicable) transport solutions for all distances, including the set up of multimodal platforms. The ability of these platforms to change modes quickly and unexpected if necessary also offers possibilities in the light of climate change adaptation and mitigation.

Even for distances below 300 km, the threshold established in the White Paper, freight shipments coming in or out of ports are indeed often transported by rail or barge. For these short and medium distances rail and waterborne transport effectively reduce congestion in the immediate hinterlands of seaports. Similarly, maritime transport through short sea shipping and feedering services is already an option used for distances below 300 km. As key nodal points, seaports benefit from all transport modes and simultaneously suffer from their shortcomings and externalities. Policy measures should be aimed at helping each mode to exploit its full potential and to ensure a level playing field.

2.3.

Towards an Effective Implementation of the Vision

ESPO proposes the following guiding principles to effectively implement the Commissions policy vision:

Ensuring coherence and coordination between transport policies at all levels, between Member States and also between and among transport modes. Coordination of policies is key to facilitate the completion of goals. Prioritising action, so that measures or instruments that are implemented first start yielding results and encourage further action. If feasible, to set concrete milestones for the next ten years to monitor effectiveness of policies so that measures and instruments with poor results are improved or eliminated.

Ensuring that EU action is always framed in the global context, making sure EU policies do not hinder competitiveness of European companies.

3.

The Strategy for the Internal Market

ESPO is ready to contribute to the review of the policy framework for seaports that is announced in the Strategy. Given the diversity of the sector, non-legislative action should remain the preferred option, with specific attention paid to port financing and transparency of accounts, concessions, dock labour and technical-nautical services. ESPO furthermore urges the Commission to complete the internal market for all transport modes, and in particular for short sea shipping and rail.

3.1.

Review of Ports Policy (Part of Initiative 4)

The White Paper announces a review of seaport policy. The Commissions current policy is based on the Ports Policy Communication that was issued in 2007, following the withdrawal of the Port Services Directive. The Communication essentially proposed nonlegislative actions. For ESPO this is still the preferred option, which works well provided the sector takes up its responsibility too. ESPO however recognises that a policy review is part of the process. From its side, ESPO has taken various initiatives since 2007 in the field of governance, concessions, port performance, environment, societal integration etc. which it is ready to present as input for the review. Initiative 4 of the Road Map particularly aims to assess whether there are any restrictions with regard to port services. ESPO supports this assessment but believes that future action from the Commission should continue to favour non-legislative measures and instruments, as these match better with the diversity of European ports. 3.1.1. Port financing and Transparency of Accounts Port development requires substantial investments. Restrained government budgets have made public-private partnerships more common and essential. For such partnerships to enjoy legal certainty and, in particular, to avoid distortion of competition, it must be clear where public financing in ports is compatible with the Treaty rules on State aid. Also, more transparency on the use of public funding in ports should be achieved. Despite a considerable number of attempts and many years of discussions with the port sector, State aid guidelines have not materialised yet. The Commission should therefore make sure that the current ports policy review does not fail to provide a series of guidelines which support and facilitate the development of the port system and provide legal certainty to both public and private investors. In ESPOs view (1), such State aid guidelines should follow the traditional approach whereby public funding of general infrastructure available to all users would not be
(1) See: http://www.espo.be/images/stories/policy_papers/policy_papers2010/2010-0111openlettertothemembersonthecommittee%20.pdf

regarded as state aid. Considering a priori all forms of public funding as State aid would create huge bureaucracy in terms of notification procedures. This would add to already cumbersome port planning processes. Besides, to ensure a level playing field, this approach would logically have to be applied to all forms of transport infrastructure. Furthermore, State aid guidelines should apply to future funding schemes only and apply in principle to all ports. There should be no distinction between different categories of ports, with the exception of truly peripheral ports that are not engaged in international competition with other ports. Also, ports should have the same possibilities to receive public funding regardless of the type of port management or legal structure. Finally, State aid guidelines cannot function without the principle that port authorities should have financial autonomy. The Commission should therefore encourage Member States to ensure that, as regards management, administration and internal control over accounting matters, port authorities have independent status and real and effective financial autonomy in order to fulfil their responsibilities, particularly those concerning port infrastructure investments. 3.1.2. Concessions Contractual relationships between port authorities and terminal operators are varied in nature. Fairness and transparency obligations must apply when port authorities decide to entrust a third party with a portion of port land for the provision of cargo-handling services. In this context, ESPO believes first of all that the pragmatic approach taken in the Ports Policy Communication should continue to prevail. It recognises the discretionary powers of port authorities in setting selection criteria and specifies that transparency obligations must only apply where they matter, i.e. in case there is a sufficient connection with the functioning of the internal market. Secondly, ESPO shares the view that incumbent terminal operators should not have an unconditional and automatic right of prolongation. Contract durations have to be limited and proportional to depreciation of investments, allowing a reasonable return on investment, but maintaining at the same time a risk inherent in exploitation. However, ESPO believes that if an incumbent operator is performing well and commits itself to continued investments, there should be scope for prolonging its agreement with the port authority. ESPO is therefore seeking pragmatic and transparent solutions that match the need for open market access with the need for continuity of investment. ESPO concretely recommends that prolongation options should be anticipated in the original agreement and that arbitrary modifications should be avoided 3.1.3. Dock Labour ESPO agrees with the basic principle that service providers in ports should have full freedom in engaging qualified personnel of their own choice and employ them under conditions required by the service, provided all applicable social and safety legislation is respected.

ESPO notes that the Commission has ordered a study on the organisation of port labour in Europe. This study aims to provide, by spring 2012, an in-depth overview of labour-related issues of the stevedoring sector in EU ports (labour conditions, labour arrangements, training and qualifications, health and safety issues), to identify possible shortcomings in these areas and to propose recommendations, including action at Commission level. ESPO is contributing to the study and sees it as an essential input for the forthcoming European social dialogue on ports. 3.1.4. Technical Nautical Services Without prejudice to applicable national legislation, ESPO recommends that, within the area under their jurisdiction, port authorities should have a role in controlling technicalnautical services, taking responsibility for giving a license to operate as well as controlling tariffs, where applicable. Technical-nautical services provided outside the jurisdiction area of the port authority should be controlled by another relevant competent authority, but with a participation of the port authority / port authorities which is / are most directly concerned by the quality and performance of the services. As part of the ports policy review, the Commission is about to launch a study on the use of Pilotage Exemption Certificates (PECs). Port authorities realise the potential benefits for the shipping industry and for short sea shipping of Pilot Exemptions. On the other hand, it is vital that maritime safety and environment, which are best known at local or regional level, are not compromised. In this context, ESPO believes that a common EU framework for the granting of PECs would be useful in order to avoid random decisions by competent authorities and ensure a level playing field. This can however best be achieved by nonlegislative guidelines. ESPO also invites the Commission to explore other systems that can make pilotage more cost effective (e.g. the use of shore-based pilotage). An Internal Market for Short Sea Shipping: Blue Belt (Part of Initiative 4)

3.2.

ESPO fully supports the Commissions ambition to complete the internal market for short sea shipping through the development of a Blue Belt area surrounding the European Union where maritime transport will be facilitated. A truly internal market is vital for short sea shipping to become an attractive and competitive alternative to inland transport. In this context, ESPO welcomes the use of pilot projects as a means of testing in practice initiatives aimed at simplifying administrative procedures for maritime transport. ESPO looks forward to the outcome of the Blue Belt pilot launched in May. Any future project should take advantage of the overall perspective and expertise of port authorities and of existing ICT systems such as Port Community Systems which already play a key role in facilitating trade in an increasing number of ports. The Commissions Road Map also foresees the set up of appropriate port facilities, called Blue Lanes, aimed to speed up the transit of EU cargo through ports. ESPO invites the Commission to examine together with port authorities already existing virtual or physical Blue Lanes before taking further steps. ESPO invites the Commission to avoid any initiative with physical implications for ports (separation of community / non-community cargo) and to make sure that ultimate decisions are left to port authorities.

3.3.

A True Internal Market for Rail (Initiative 1)

For ports, there is a clear sense of urgency in achieving a single European railway network. A single European railway area without barriers would be the best way to guarantee an efficient use of existing railway capacity. Remaining barriers, be they legal, technical or political, should be lifted without further delay. ESPO and the European Federation of Inland ports (EFIP) have recently published a joint policy paper (2) on railways, in which they fully support the recast proposal of the Commission, and ask specifically for: the full unbundling of railway infrastructure and operations; a transparent role of the infrastructure manager; a railway strategy based on a genuine European approach; a non discriminatory access to rail related services in ports, with the exclusion of dedicated rail tracks on seaside or waterborne terminals (so-called on dock terminals) which are only used by the undertakings running those terminals; - a transparent charging system for using railway infrastructure; - no higher charges (mark ups) for international railway services than for domestic services.

4.

The Strategy for Infrastructure

ESPO welcomes that the Commission expects to deliver a fully functional and EUwide multimodal TEN-T core network by 2030 which will be made of links and nodes of high strategic importance for Europe. ESPO furthermore welcomes that the White Paper establishes, as one of its benchmarks, the connection of all core seaports to the rail freight and inland waterway systems (where applicable). However, ESPO believes that this goal should be reached way before 2050. The role seaports play for Europes external and internal trade cannot be overestimated. This is why the hinterland connections of core seaports should feature as an absolute priority in the forthcoming TEN-T guidelines. ESPO invites the Commission to ensure that Member States effectively implement the core network and make sufficient national funding available for the development of core priorities.

(2) See: http://www.espo.be/images/stories/policy_papers/policy_papers2011/2011-05-18_espo-efip_rail.pdf

4.1.

A Core Network of Strategic European Infrastructure (Initiative 34)

ESPO has welcomed (3) the review of the Trans-European Transport Networks as an opportunity to reinforce the multimodal gateway position of European seaports. ESPO has already expressed its support for the dual layer approach proposed by the Commission, consisting of the priority development of a core infrastructure network overlaying a broad comprehensive network. This support is however based on the assumption that the comprehensive network remains indeed as inclusive as possible. It is therefore necessary to ensure that the final volume threshold that will be proposed by the Commission in the new TEN-T Guidelines will not exclude ports from the comprehensive network that are included under the present criteria. In general, ESPO believes the selection criteria for ports should allow the core network to be future-oriented and be sufficiently robust to anticipate future needs and trends for the next 10 to 20 years. Ports in the core network should have potential for decarbonisation and limitation of external costs, have a gateway function linking the main EU markets with the rest of the world, connect between maritime and land-based networks, be responsive to market needs and be reliable. There needs to be a good spread of core network ports around Europe, so that markets are accessible in an efficient and flexible way. On the other hand, a degree of consolidation is necessary to collect positive economies of scale, also in terms of sustainability. The key challenge in the design of the core network is to find an appropriate balance between these two principles.

4.2.

Multimodal Freight Corridors For Sustainable Networks (Initiative 35)

ESPO supports the creation of multimodal freight corridor structures in the context of the core network but warns the Commission about the difficulty of the management and coordination of such structures, as Regulation 930/2010 has already proven. The Commission should consider having EU coordinators to act as facilitators for the establishment and development of such multimodal freight corridors. ESPO further calls for the full implementation of Regulation 930/2010 which aims at the creation of international rail freight corridors and supports their inclusion in the TEN-T core network. Finally, in order to achieve a sustainable transport network, optimising the total journey of trade is necessary, taking into account all segments of transport, including the deep-sea leg. This should be considered when establishing multimodal freight corridors.

(3) See: http://www.espo.be/images/stories/policy_papers/policy_papers2011/policypapers2011.pdf and http://www.espo.be/images/stories/policy_papers/policy_papers2010/2010-09-15TEN-TResponse%20.pdf

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4.3.

Infrastructure Funding (Initiatives 37 and 38)

ESPO recognises the need to stimulate private sector participation in infrastructure funding. However, ESPO believes that for major infrastructure projects the importance of Public Private Partnerships should not be overestimated since private investors are not always likely to take high risks. New financing instruments could also play a role in addressing the needs for investments in large EU infrastructure projects. In this context, the EU Project Bond Initiative is an option to be further assessed. In any case, ESPO believes that governments should continue to take their responsibilities in funding basic transport infrastructure. ESPO expects that the Commissions new multi-annual financial proposal and cohesion policy will further clarify the role of the Cohesion Fund, Regional Funds and the European Investment Bank in port projects. The use of EU funds is welcome and necessary, but should be conditioned to the achievement of results. Finally, as regards the use of transport revenues, ESPO would support the creation of a framework for earmarking revenues from transport activities to be used for infrastructure funding.

4.4.

Smart Pricing and Taxation (Initiative 39)

One of the goals accompanying the Commissions Vision relates to the need to move towards the application of polluter pays and user pays principles. In particular, in phase II (2016-2020), the Commission intends to internalise costs for local pollution and noise in ports. ESPO has following questions and observations on this approach: - Which instruments and measures could the Commission use to restructure transport charges and taxes, in particular when these are commercially set ? - Principles of transparency should apply to port charges, but ESPO finds it equally important that, where appropriate, the port authority can set or control these charges and adapt them to meet the requirements of its customers and/or the overall interest of the port. There should in any case be no regulation of port charges at EU level and differential charging for environmental or other purposes should be left to subsidiarity. - To avoid harming European ports competitiveness, the effects on competition with neighbouring ports should be analysed carefully before any action is taken at EU level. - Ports are nodal points connecting all transport modes but also clusters of industry and economic activities which may already be subject to different environmental and tax related legislation. In phase I (up to 2016), the Road Map foresees the internalisation of external costs for all modes of transport. ESPO agrees that, theoretically, a policy framework ensuring that prices applied by service providers reflect all costs, both internal and external, would favour more environmentally-friendly transport modes such as short-sea shipping, rail and inland navigation. However, pricing is far from being the only factor which determines the choice

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of a transport mode. A cost-recovery system for externalities for all modes of transport should be integrated in a broader approach together with the creation of an integrated transport network, administrative simplification and harmonisation and the earmarking of revenues for investment in sustainable infrastructure projects. Any initiative leading to increased transport costs should be approached with care and ensure that the result is in the end not counterproductive to Europes overall competitiveness and more in particular to environmentally friendly transport modes such as maritime transport.

5.

The Strategy for Innovation

5.1.

A Technology Roadmap (Initiative 24)

ESPO welcomes the intention of the Commission to define a European transport research, innovation and deployment strategy. A rapid deployment of existing and new technologies and solutions is key to achieve the White Paper target. Port authorities have identified a number of areas that can be supported in this context: - the development of ICT systems, including Port Community Systems; - the use of LNG in shipping, port-related infrastructure (filling stations in ports) and safety considerations; - the development of sustainable port infrastructure.

5.2.

Carbon Footprint Calculator (Initiative 29)

Port authorities are developing common standards to estimate ports carbon footprint. ESPO endorses the development of the World Port Climate Initiative (WPCI) project on carbon footprint calculation (4). ESPO also encourages the creation of carbon inventories of the port and the supply chain and the creation of structures and reporting schemes to internalise CO2 self assessment and monitoring. Through the EU co-funded project PPRISM (5), ESPO is developing an indicator to measure the carbon footprint of the EU port sector so that it can be monitored. ESPO is convinced that reducing the carbon footprint of ports and increasing their energy efficiency opens up a wide range of business opportunities for the port sector. ESPO encourages the Commission to support sector-driven initiatives and projects which aim at self-regulation, promoting best-practices and achieving high European standards in the field of environmental port management. At the same time a level playing field needs to be ensured when it comes to applying relevant EU and international regulations.

4 5

More information on this and other WPCI projects can be found on: www.wpci.nl See PPRISM website: http://pprism.espo.be/

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6.

The Strategy for the External Dimension

Transport, and in particular shipping, is and will be global. ESPO therefore wants to underline the importance of framing EU action in a global context. Measures undertaken at EU level should avoid distortion of competition. ESPO in particular invites the Commission: - to give more attention to the impact of the IMO SECA regulation, e.g. on short sea shipping in the Baltic Sea;. - to favour global solutions to deal with GHG emissions of shipping; - to urgently address competition with ports in countries neighbouring the EU, e.g. in North Africa, especially the social aspects thereof.

Since 1993, ESPO represents the port authorities, port associations and port administrations of the seaports of the European Union and Norway. The mission of the organisation is to influence public policy in the EU to achieve a safe, efficient and environmentally sustainable European port sector operating as a key element of a transport industry where free and undistorted market conditions prevail as far as practical. For more information, contact Patrick Verhoeven, Secretary General, at: Treurenberg 6 B-1000 Brussel / Bruxelles Tel : + 32 2 736.34.63 Fax : + 32 2 736.63.25 E-mail : patrick.verhoeven@espo.be Web: www.espo.be

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