Ineffective self-regulation in the shipping industry
Nature: The multinational activities of most conferences and of the conference system are without any form of intergovernmental regulation of operations, and there is a disinclination by states to regulate unilaterally those liner services which touch their trade. As a result, most conference services have remained self-administered or self-regulated. Research has disclosed no evidence that self-regulated conferences provide for arbitration of complaints by independent third parties. Investigation and adjudication of complaints of malpractices committed by their members or shippers is thus purely internal nor has any evidence been found to show that impartial adjudication machinery outside internal conference arrangements is available to member lines, non-conference lines or shippers who may wish to dispute, without litigation, conference decisions taken unilaterally. This gap in the procedures of self-regulated conferences presents a serious disability for the users of conference services, since many of their more frequent serious complaints concern important issues of public interest. Member lines, non-conference lines or shippers that become involved in disputes with self-regulated conferences and that may wish to appeal the decision of the conference have, therefore, no resource other than litigation. Apart from the disadvantage of expense which litigation entails, recourse to law against conference decisions has not been found to be of much comfort to complainants since there is no evidence of a superior court having declared conference practicers to be unlawful in countries which tolerate self-regulation by conferences. Thus, most self-regulated conferences remain the final arbiters in disputes arising from the operation of their agreements and practices.
Claim: Self-regulation by the shipping industry in its various forms does not adequately take into account the needs of shippers or the interests of shipowners that are new to shipping, particularly from developing countries. It has the effect of restricting free access to shipping markets, thus preventing the fleets of developing countries from participating equitably in shipping activities. Market controls exercised by large shipowners institutionalize barriers to trade entry and remove price competition. The absence of effective competition has enabled strong shipowners to exploit market power to the detriment of relatively weak shippers. In this situation, it appears indispensable to create an internationally agreed framework to restrict the possibility of abuse of market power.
Problem Type: F: Fuzzy exceptional problems
Date of last update 01.01.2000 – 00:00 CET