Between 25 May 2015 and 15 June 2015, the Competition Commission of Singapore (the “CCS”) isconsulting on the proposed extension of the Competition (Block Exemption for Liner Shipping Agreements) Order (“BEO”) in its current form, for another five years until 31 December 2020.
The BEO was first issued in July 2006, and extended in 2010 following a public consultation. It is set to expire on 31 December 2015.
The BEO exempts a category of liner shipping agreements from prohibitions against anti-competitive agreements in Singapore under section 34 of the Competition Act (the “Act”). Section 34 of the Act prohibits agreements, decisions and practices which have as their object or effect the prevention, restriction or distortion of competition within Singapore unless they are exempt under the Act.
The current public consultation seeks views on the possible impact of the proposal on the Singapore economy, in particular on players in the maritime industry such as shippers, port operators, liners, and logistics service providers.
Some of the factors which the CCS considered when recommending a further extension of the BEO include the following:
- The connectivity and concentration of liner shipping services available in Singapore generates considerable benefits, both directly and indirectly to Singapore.
- Operational agreements offer cost savings and also enhance competition between liners when they enable a group of smaller liners to provide services that compete with larger liners or other alliances.
- Liner shipping agreements improve the production of liner shipping services and the distribution of goods in Singapore resulting in economic benefits that are likely to be significant enough to outweigh any anti-competitive effects.
- Liner shipping agreements allowed under the BEO do not impose restrictions that are not indispensable to the attainment of economic benefits for Singapore.
- Liner shipping agreements do not eliminate competition in respect of a substantial part of the goods and services in question.
The following materials are available on the CCS website www.ccs.gov.sg: