Fjord Line considers suing the state over Kiel ferries
Fjord Line considers litigation against the Norwegian authorities in the Color Line case, whereby the competitor is allowed to move two of their ferries to the Norwegian International Ship Register (NIS).
– The authorities broke the basic principles of administrative law in dealing with the case, says CEO in Fjord Line, Rickard Ternblom to Sysla.
On Tuesday, The Lawyer Firm Thommesen submitted a 19-page letter to the Ministry of Industry and Fisheries on behalf of Fjord Line.
They violate the regulations when they allow Color Line to move their two Kiel ferries to the Norwegian International Ship Register (NIS), which will allow the ferry company to replace large parts of the crew on the two ships with foreign workers. That will in turn result in significant savings for the ship owner.
– Based on the process that has led to the regulatory change and new information and statements that have emerged in recent weeks, we believe it is crucial that the matter be investigated better, writes the CEO of Fjord Line in an email to Sysla.
The Ministry of Industry has been informed of Fjord Line’s criticism. They say they will treat the letter in the usual manner and respond to the sender before commenting on the matter to the media.
Flagged out in 2004
Among other things, the CEO of Fjord Line believes that the claim that there is competition disadvantages associated with Norwegian compared with sailing under the Danish flag is incorrect
– Out of respect for all involved actors, and not least all employees that are affected, we believe there is a need to gather more prudent facts in the decision-making process. We issued the letter to make the administrative and political management in the ministry aware of this.
Market leader Color Line, and the biggest challenger, Fjord Line have been in conflict with each other for more than 20 years. The companies have argued about everything from sailing times to ports of call, and have been involved in several legal processes.
Fjord Line chose to sail under Danish flag in 2004, while Color Line kept their vessels under the Norwegian flag, as the only Norwegian shipping company with international ferry routes.
Demands another round of consultations
Now Fjord Line fears that the competitor will gain a competitive advantage through the altered regulations, and fight with all legal means for the politicians to alter their stance.
– We hope the Ministry realize the need for a better factual basis, and that they decide to review the matter further before deciding whether the regulatory change will come into force or not. We also believe that an extension of the NIS sphere of influence, as the regulatory amendment presently stands, is sent out for another round of consultations, Ternblom continues.
Color Line has not determined whether they will actually take the oppurtunity to move the Kiel ferries to NIS, but it is clear that the regulations as it stands today excludes Fjord Line from doing likewise.
Fjord Line slaughters the process that led to the regulatory change, which was adopted in February 2018, but still has not been implemented:
The law firm of Thommesen states that they believe that the change of regulations rests on an undocumented and incorrect factual basis, as they have told Sysla and Klassekampen in the last few days.
They believe that the consultation round revealed systematic errors in the preparation of the amendment, and criticizes the ministry for not conducting independent investigations into the matter.
In addition to slaughter the process, Fjord Line’s lawyer’s claims that the Government and the Ministry of Industry violated administrative principles of law when the regulation was adopted – including the duty to consultation laid out in the Public Administration Act.
The only effect of Fjord Line being excluded
They also react to the fact that the last amendments was not issued for consultation.
The original proposal for amendment to the regulation stipulated that the distance between the last Norwegian and first foreign port of call on the route should be at least be 175 nautical miles in order for the ship to be allowed to join the NIS.
That would have implicated that Fjord Line could move its “Danish” ferries to NIS as well.
But then the limit for which ships would be within the regulatory amendment was changed from 175 to 300 nautical miles. Only the two Kiel ferries belonging to Color Line are therefore eligible.
Then the matter had been heard twice, the latest amendment was however decided without prior consultation.
– The change was not notified of in advance, and the industry’s actors have not had the opportunity to comment on the alteration, the law firm Thommesen states in their letter.
– the only proven effect of the amendment that sets the distance limit at 300 nautical miles, is that Fjord Line is deprived of the same possibilities that Color Line has.
Facts about the matter
- Since 1993, the regulation on passenger ships registered in the NIS has made it illegal for ships registered in the NIS to serve regular routes between Norwegian and foreign ports, or between other Nordic ports.
- For several years, Color Line, the only ferry company with international ferries registered in the Norwegian Ordinary Ship Register (NOR), threatens to flag out – if the framework conditions are not improved.
- The shipping company claims that they lose NOK 150 million a year to be registered in NOR, compared to belonging in the Danish International Ship Register (DIS).
- In order to remedy the competitive disadvantage, Color Line wants to flag the ships M/S Color Fantasy and M/S Color Magic, which ferries people and vehicles between Oslo and the German city of Kiel, into NIS.
- A change of flag will make it possible to replace parts of the Norwegian crew on these vessels with cheaper foreign workers – in order to reduce personnel costs.
- Color Line has said that they will be content with replacing the catering crew only if a change of flag takes place. This will affect about 685 Norwegian and other employees with a Norwegian work permit.
- More than a year ago, the seamen’s organizations claimed that Color Line would not gain from changing the flags from Norwegian to Danish.
- After a long and inflamed struggle, the decision was made in February: The Government will allow Color Line to flag the Kiel ferries into NIS.
- The Norwegian Labour Party has proposed to postpone the implementation of the regulation, and to study the consequences it will have for the other Nordic countries.
- Minister of Industry, Torbjørn Røe Isaksen (Conservatives), told Sysla two weeks ago that he will not introduce the regulation before this matter has been dealt with by the Norwegian Parliament.
- The Progress Party (Frp) has dallied in the matter, but has landed on that they will not support the Labour Party’s proposal. On the other hand, they will ask the Government to scrutinize the governing body (Fartsområdeutvalget).
- On Wednesday last week, the matter was debated during the Question Hour in the Parliament. View the recording here.
© Sysla / #Norway Today