In our experience, in port areas, it is quite often unclear who can (legitimately) do what, which of course has an adverse impact on competition.
This is particularly true as regards port operations, a subject recently addressed by the Italian Ministry of Infrastructures and Transport, which once and for all shed light on which "category" of concessionaires is entitled to carry out port operations.
Port operations are defined as "loading, unloading, transhipment, storage and movement in general of goods and other materials carried out in the port area" (Article 16 of Law No. 84 of 28 January 1994 - "Port Law").
Undertakings wishing to carry out port operations on their own behalf or on behalf of third parties must obtain an authorisation from the Port System Authority (Article 16, paragraph 3), subject to ascertaining that they meet the requirements under Article 16, paragraph 4, of the Port Law1.
The grant of the authorisation under Article 16 of the Port Law is also a prerequisite for obtaining a concession under Article 18 of the same Port Law in respect of state property areas and the quays included in the port area "for the performance of port operations".
Concerning the grant of concessions under Article 18, the Administrative Court of Liguria Region stated that "in general, it is provided that the Port Authority will grant concessions in respect of state property areas and the quays included in the port area to the undertakings referred to in Article 16, paragraph 3, by award, subject to determining the relevant rental fees, as well as by means of tender procedures requiring, besides adequate forms of preventive advertising, compliance with the criteria of the equal treatment of candidates". The administrative judge also clarified how concessions for port areas may be granted "only to undertakings authorised under Article 16, pursuant to Article 18 paragraph 1, of Law No. 84" 2.
Both Italian Port Law and administrative case law have therefore highlighted the intent of Italian lawmakers to inseparably link the authorisation for performance of port operations under Article 16 to port concessions under Article 18 of Law No. 84/1994.
In spite of this, the performance of port operations in Italian ports is sometimes also allowed to the holders of state concessions issued under Article 36 of the Italian Navigation Code, which, however, do not involve the use of port quays.
This circumstance - which has the effect of steering the concessionaires under Article 36 of the Italian Navigation Code away from the significant expenses required for obtaining a concession under Article 18 Law No. 84/1994 - appears unlawful, being in conflict with the rationale of the Port Law, which is precisely that of linking port operations only to concessions under Article 18 of Law No. 84/1994, while exposing port concessionaires under Article 18 to unfair competition.
This is sufficiently clear when examining the two provisions at issue:
- to obtain a concession under Article 18, paragraph 1, Law No. 84/1994 the parties concerned are required to:
- submit, at the time of the application, a programme of activities, accompanied by appropriate guarantees, including sureties, aimed at increasing the traffic and productivity of the port;
- have adequate technical and organisational equipment, including from a safety viewpoint, in order to meet the needs of a continuous and integrated production and operating cycle on their own and on behalf of third parties;
- be adequately staffedaccording to the programme of activities;
- no similar requirement is, on the contrary, laid down in Article 36 of the Italian Navigation Code3and the relevant State concessions are issued for performance of activities that have nothing to do with the so-called "port operation cycle"4.
It is therefore abundantly clear that admitting a substitutability between the concessions under Article 36 of the Italian Navigation Code and those under Article 18 of Law No. 84/1994 for the purposes of the valid performance of port operations might lead to the risk of having operators in a port who are unable to provide the guarantees they are statutorily required to for performing port cycle operations.
By a note dated 5 April 2018, the Director General of the Italian Ministry of Infrastructures and Transport removed any doubt in this regard, clarifying that "the provision referred to in paragraph 1 letter c bis) of Article 6 bis of Law No. 84/19945, should be interpreted as meaning that the advisory commission should be heard only in case of concessions granted under Article 18, and not in respect of concessions granted under the Navigation Code, which do not relate to port operations and services"6.
Therefore, the only concessions related to the carrying out of port operations are those approved pursuant to Article 18, Law No. 84/1994, which leads to excluding those provided for under the Italian Navigation Code.
The position taken by the competent Ministry, aimed at preventing concessionaires under Article 36 of the Italian Navigation Code from carrying out port operations if the requirements under the Port Law are not met, is doubly important: on the one hand, it is crucial to port users (who must be in a position to address concessionaires who are reliable and able to carry out port operations on an ongoing and integrated basis) and, on the other hand, it protects port concessionaires under Article 18 Law No. 84/1994, in accordance with the principle of competition.
A Port System Authority is therefore statutorily required to assess the actual eligibility of the applicants for the authorisation to perform port operations and to ascertain every year the continuing existence of the requirements met at the time of obtaining the concession as well as the implementation of the investments envisaged in the activity programme, under penalty, for defaulting concessionaires, of forfeiting their rights.
As a result of the issue of the above-mentioned note by the Italian Ministry of Infrastructure and Transport, Port System Authorities cannot fail to pay increasing attention to the issue of distinguishing between concessions under Article 18 of the Port Law and concessions under Article 36 of the Italian Navigation Code, with a view to protecting port users and competitors.
1 See Article 16, paragraph 4, Law No. 84/94 "For the purpose of the granting by the competent authority of the authorisations under paragraph 3, the Minister of Transport and Navigation, by his own decree, to be issued within thirty days from the coming into force of this law, shall determine:
- the satisfaction of personal and technical-and-organisational requirements as well as the financial capacity and professionalism of operators and applicant companies, in relation to the activities to be carried out, including the submission of an operational program and the determination of directly-employed staff, including managers;
- the criteria, terms and conditions for issue, suspension and revocation of the authorisation as well as for the relevant controls;
- the parameters for setting the minimum and maximum limits of annual State fees and deposit according to the term and specific characteristics of the authorisation, taking into account the investment volume and the activities to be carried out;
- the criteria for the grant of specific authorisations for performance of port operations to be carried out upon arrival or departure of vessels equipped with their own mechanical means and their own staff suitable for the operations to be performed, as well as for setting fees and a suitable deposit".
2 See Administrative Court of the Liguria Region, First Division, No. 546 of 20 March 2007.
3 See Article 36 of the Italian Navigation Code "Maritime authorities, in a manner compatible with the requirements of public use, may grant occupation and use, including exclusive use, of property owned by the State and areas of territorial waters for a fixed term".
4 Pursuant to Article 01, inserted before Article 1 of Law No. 494 of 4 December 1993, converting Law Decree No. 400 of 5 October 1993 (Rules for determination of State rental fees for maritime state property concessions), such activities include: management of bathing establishments and catering and beverage services, pre-cooked foods and monopoly items; the rental of crafts and boats in general; the management of accommodation facilities and entertainment and sports activities as well as retail outlets; services of other nature and management of housing facilities, in a manner compatible with the requirements applicable to the relevant use.
5 Such article refers to concessions with a term of up to four years, to be granted by the President of the Port System Authority after consulting the Advisory Committee under Article 15 of the Port Law and the Management Committee.
6 See note DGVPTM / DIV.2 / MCF, ref. No. U9178 of 5 April 2018.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.