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Pacific shipping commissions (PSC)
Wednesday, 20 January 2010

Background

The long standing concerns of irregular shipping affecting the Pacific Island countries and territories (PICTs) continue to dominate the transport agendas of the Forum Island leaders and small island states (SIS) leaders meetings.  

Directive by PICT leaders

Recognising the fact that shipping is crucial to the economic development and sustainability of the region, the 2006 meetings of the Forum leaders and SIS provided definitive direction on the way forward. Thus the Secretariat of the Pacific Community (SPC) was tasked to provide high-quality shipping company management and operational advice to PICTs and promote more efficient shipping services to PICTs, in particular SIS. By carefully studying the shipping patterns in the region, SPC’s Regional Maritime Programme (RMP) realised that the close collaboration among the shipping companies has resulted in a near cartel environment that offers little or no competition in this area. Their services are also very selective, targeting regular to profitable ports while providing erratic services to others.  

Pacific shipping commissions (PSC)

To address this arrangement, the establishment of shipping commissions, based on the Micronesian Shipping Commission (MSC) model, is planned for the central and eastern Pacific region. The Central PSC will include Kiribati, Tuvalu, Marshall Islands, Wallis & Futuna, while the Eastern PSC will include Tokelau, Niue, Cook Islands, American Samoa, Samoa and possibly French Polynesia.   

What is PSC?

It is envisaged that PSC will become an inter-governmental agency for joint cooperation, coordination and regulation of international shipping services in participating governments or member states.  

Brief history of MSC & PSC

PSC is modelled after MSC, which includes participating governments of Marshall Islands, Federated States of Micronesia and Palau. MSC was based on its predecessor, “Trust Territory Executive Order 113”, which in turn was based on the United States Federal Maritime Commission. This was formally established by signing of the MSC Treaty on November 21, 1997 with the intention of controlling competition to provide sustainable commercial shipping services that best meets the needs of the Micronesian people.   Purpose of PSCPSC will serve as a medium for consultation on matters affecting international shipping services to its members. It will cooperate in advancing an attractive shipping environment to service providers and form a united front for the negotiation of favourable shipping services through joint regulation and enforcement of shipping policies.  

Objectives of PSC

To limit competition based on the volume of cargo available.To provide:

  1. access to international markets for the promotion of national trade and commerce;
  2. adequate and reliable frequency to guarantee sufficient supply and inventory;
  3. favorable route structures to serve all member states’ ports;
  4. affordable service rates in line with the local economies; and
  5. protection to approved service providers from external interference in exchange for the agreed service. 

Entry Assurance System

Entry Assurance will be required for all commercial carriers servicing the region, except for government owned and operated vessels. Entry Assurance Certificate (EAC) will be granted or denied on the basis of the “merits” of proposals submitted. EAC may be revoked if a carrier fails to provide the service, does not perform in accordance with internationally accepted shipping standards of operation and violates applicable laws of the participating governments. An annual fee will be applied for each EAC issued by PSC. Member states also contribute to the effective operation of PSC. Criteria for Granting Entry AssuranceRoutes must satisfy the basic trade requirements of member states. Tariffs charged should be reasonable for the service proposed. A carrier must demonstrate the capability to provide a reliable and stable service in terms of frequency, regularity and timely performance. Service must be flexible to accommodate both specialised and conventional tonnages/cargo. Capitalisation or investment shall be sufficient to adequately sustain the proposed service.   

Commission of PSC

The commission will consist of cabinet ministers, one from each participating government. Chairmanship of the commission will be rotated annually. Decisions made by the commission will be based on consensus, although a majority vote of 2/3 will be required for adoption of any measures. The PSC will meet annually or as often as may be required to evaluate performance of shipping services, as well as review new shipping proposals and carriers’ tariff rates.    

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Last Updated ( Monday, 25 January 2010 )
 
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