FMC RENEWS JAPAN PORT PROBE
The U.S. Federal Maritime Commission, dissatisfied with Japan's lack of progress in removing port rules that put U.S. and non-Japanese ocean carriers at a disadvantage, is taking a fresh look at the issue.
The FMC on Thursday ordered Japanese lines Kawasaki Kisen Kaisha Ltd., Mitsui O.S.K. Lines Ltd. and Nippon Yusen Kaisha Ltd., and several non-Japanese lines to file information regarding Japan's port practices and whether non-Japanese lines have experienced discrimination by the Japan Harbor Transportation Association (JHTA), an association of Japanese waterfront employers, and the Japan Ministry of Transportation (MOT).
Of particular interest to the FMC are the implementation and interpretation of Japan's Port Transportation Business Act, which took effect in November 2000. The commission has ordered the Japanese lines to file “copies of any cabinet order or ministerial ordinances, notifications, notices or regulations” issued by the MOT or the Ministry of Land, Infrastructure and Transport, regarding the implementing or interpreting of the revised act.
The Japanese government said the act was an effort to improve port practices, but the FMC alleged it met with controversy and opposition from Japanese labor unions and underwent significant revision.
“The commission is concerned and frustrated about the slow pace of port reform in Japan, and is amending the reporting requirement previously imposed on Japanese and U.S. lines to ensure we have updated information, particularly in light of new Japanese laws and regulations,” said Thomas Panebianco, counsel to FMC Chairman Harold Creel.
The commission's initial attempt in 1997 to enact change at the Japanese ports resulted in a final rule implemented Sept. 4, 1997, that imposed sanctions of $100,000 per voyage fees on the three Japanese lines. The FMC suspended the rule two months later after the U.S. and Japanese governments signed accords to reform Japanese port practices.
Despite no noticeable progress in opening Japan's ports to U.S. lines, the FMC withdrew the final rule in May 1999 and instead required the Japanese lines and U.S.-affiliated lines Maersk Sealand and APL to submit reports on Japanese trade conditions ever six months.
The FMC's order Thursday requires those same lines to file reports by Nov. 7 along similar lines as the 1999 requirements.
“We're not so much re-opening the case as updating it. We never closed out the original proceeding because the promised reforms were never fully carried out,” Panebianco said.
In a separate order Thursday, the FMC has sought reports from nine foreign-flag shipping lines exploring whether they have experienced discrimination by the JHTA and MOT regarding port services.
The lines, which are also required to file reports by Nov. 7, are Evergreen Marine Corp., Hanjin Shipping Co. Ltd., Hyundai Merchant Marine Co. Ltd., COSCO Container Lines Co. Ltd., Orient Overseas Container Line, Yangming Marine Transport Corp., P&O Nedlloyd Ltd., Westwood Shipping Lines and Hapag-Lloyd Container Linie.
“The commission also determined to obtain information from other carriers serving the U.S./Japan trade to ascertain their experiences,” Panebianco said. “Our statutory mandate extends to our trade at large, not to the interests of U.S.-owned or U.S.-flag carriers.”
The JHTA, which is under the regulatory authority of the MOT, has authority under “prior consultation” practices to approve or deny virtually all operational changes by carriers. The FMC in its 1997 final rule accused the JHTA of using its prior consultation authority to punish and disrupt non-Japanese lines' operations; extract fees and impose restrictions; and barring lines from choosing stevedores and terminal operators. The MOT allegedly imposed licensing standards which blocked U.S. carriers from performing stevedoring and terminal operating services for themselves or third parties in Japan.