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Pilot service in a market economy
Material posted: Gornova Anna M.Publication date: 25-05-2020
On consideration in the state Duma a draft law № 889303-7 creating a state pilotage service of Russia, in connection with which there is fierce debate between supporters and opponents of the bill. In a situation when the problem is not solved for more than 15 years, when more than 15 years for some reason to the end not executed the decision of the constitutional court to get to the truth and fact is very important to find the source. Highlights of the draft bill, which is being prepared to 1st reading, inform – 24 commented one of the founders of pilotage movement for the independence of Mr egorkin. Since 1974 Vladimir Ivanovich spent 18 years of seagoing vessels in the port of Leningrad as a state marine pilot, from 1992 he was in charge at the port of St. Petersburg non-state pilotage organization that since 1995 has hosted the work of non-state pilotage organizations, founded by the Association of sea pilots of Russia as its President and represented the interests of pilots in the session of the constitutional court of the Russian Federation adopted a Resolution dated 06/04-2004 n 7-P. currently, Vladimir is an expert at the Center for strategic estimates and projections.

- Vladimir Ivanovich, what is the essence of the Decision of the constitutional court referenced opponents?

V. egorkin: - I was one of the authors of the appeal to the constitutional court and its decision is a victory for the pilots in the fight with the arbitrariness of individual officials. Being a direct participant of this process explained - the main thrust of the Resolution No. 7-P is the removal of uncertainty of a legal norm, not more. In the constitutional court pilots were required to recognize non-conforming to the Constitution of the Russian Federation, the uncertainty of legal norms, part 2.St.87. KTM of the Russian Federation, from which it followed that limit the activities of non-state pilotage organizations, in case of equality of forms of ownership at the time only possible by the publishing of law, was allowed by a normative act of the Government. Before 2005, the pilot provision had no market relations, there were no private pilotage companies and, therefore, they had no legal rights that had to be returned. The decision of the constitutional court of the Russian Federation No. 7-P is irrelevant to the protection of market relations in a pilot case.


- You defend a bill to create a state pilot organizations, although had previously been a staunch opponent of the nationalization of pilots. What caused the change of position on the opposite?

- V. egorkin: there is No change of position. I defended and protected non-commercial essence of the pilot scheme, which was implemented by non-state organizations of pilots in the period from 1991 to 2005, and is categorically against the use of a pilot function for commercial purposes.

Here is a "watershed" pilotage should be carried out for non-commercial purposes, in order to ensure the safety of navigation, as required by the merchant shipping Code of the Russian Federation, not for profit, according to the owners of private pilotage companies. Knowing very well the foreign practice of the pilot case, I defended then and defend now non-commercial essence of pilotage. Nowhere in the world there are no private pilotage companies, where the beneficiaries of a pilot of the collection are the business. In all countries, the state, and pilots work closely. And in 1991, pilots were able to withdraw from the commercial structures, aktsionirovanija then the ports only with the help of the state. The Decision of the standing Committee of the Leningrad city Council transport complex from 13/12-1990 "About the advisability of removing a pilot service from the jurisdiction of the Leningrad commercial port and the creation on its basis of small state-owned enterprises – society of sea pilots of Leningrad. Form of small state-owned enterprises were proposed by the pilots which have never chased the "big money". It was further the decision of the Commission on transport, telecommunications and Informatics of Supreme Soviet of the USSR dated 17/01-1991 No. 63, proposed MMF of the USSR to consider in an experiment to provide in 1991, economic independence a pilot service of the Northern and Western basins. The Ministry of transport also supported the activities of organizations that are created by pilots for non-commercial purposes.


- Opponents believe that the abandonment of competition in the provision of pilotage services will lead to the reconstruction of the inefficient models of service, growth rates will increase a corruption component. Is there any danger?

- V. Egorkin. Here, the opponents enter the public astray. From 1991 to 2005 in each port exclusively worked only one (public or private) pilot service. It was really a period of history successfully and effectively worked non-state pilotage organizations, but only non-profit, who until 2001 worked closely with the Ministry of transport, on a permanent basis participated in the international pilot associations and raised their level of equipment and equipment, acquiring it in the property, to the highest international standards. The history of market relations in a pilot case, which now protect the opponents, has no more than 15 years and it began in 2005, when due to failure of the constitutional court of the Russian Federation No. 7-P private "pilot" companies with major port operators have started to squeeze out of the terminals of the FSUE "Rosmorport", having bought his pilots. Then themselves and the port operators have started to create a pilot unit in its composition or its pilot, the company also Perekopa state pilots. Squeezing with terminal state organization, it is clear that they are already there started up nobody. Thus, in this "time of troubles" market relations in the field of pilotage services arose only in 15% of Russian ports, while in the remaining 85% of pilot organizations as worked for hundreds of years, and work in the mode of natural monopolies. In General, there is no classic competition in the pilotage business. Negative consequences of artificially created "competition" and "unnatural" monopolies, when a pilot collection profitable sector of the ports goes to the revenue of traders and unprofitable ports are subsidized by the state organization, has long been in need of adjustment. But not empty hot air, as suggested by the opponents of the Bill, as well as in neighbouring Finland, where 90% of the ports loss-making and state pilot service subsidizes them at the expense of pilotage in the ports profitable.

The thesis of the opponents of the Bill that the creation of the state pilot service will lead to growth of tariffs, do not have grounds, because this does not allow the current law on natural monopolies and complete control by the state created the state pilotage service. Corruption will become impossible when you will go into oblivion, the choice of best orders.


- Correcting any defects in the current system the organization of the pilotage service sent a Bill?

- V. egorkin: the Main shortcomings, in my opinion, very significant. The first is the violation of the principle of necessary sufficiency of pilotage. International pilot enterprises declare that its value must be no more and no less necessary expenses. Pilotage dues in full (in port or in the country) should be spent only for the purposes of pilotage, the nonprofit that defines the essence of the subject of legislative regulation. The expenses of the pilotage is not a priori inherent commercial benefit of the business as it is today in Russia from private owners, and a formal pilot profit organizations around the world spent only for the purposes of pilotage. The second is the lack of regulatory requirements to pilot organizations: their equipment, number and qualifications of their employees, established by the Ministry of transport for a particular article 86. KTM of the Russian Federation the purposes of pilotage. Normative legal acts regulating now a pilot activity, reglamentary only the actions of the pilots and not reglamentary activities of pilotage organizations from which pilots and pilotage are inseparable, is a unified whole.


- How do You feel about the statement by opponents that the reference to Resolution A. 159 (ES.IV) IMO is a recommendation, was adopted in 1968 and now it is not relevant?

- V. egorkin: IMO, which constantly monitors the safety of navigation in all regions of the World ocean and systematically releases updated recommendations, said this resolution is basic and relevant, if not found it necessary to change it. And about its Advisory nature, we can say that acts of UN agencies, which include the resolutions and recommendations of IMO are considered as a source of international law. The Resolution, IMO, not being imperative, is ultimately the responsibility of the state as well as other decisions of international organisations concerning the external activities of the state, the obligation of which rests on the voluntary consent of their members. And this commitment is confirmed by its implementation in the legislation of Maritime countries.


- Opponents write that a pilot boat private companies will be withdrawn from the production process, and will require a considerable budget investments for the construction/purchase of pilot boats to replace the withdrawn from the work cycle. Whether or not this will require immediate recourse to the budget?

V. egorkin: It is not. The establishment of the state pilot service will not lead to stop the production process and will not require additional budget financing. Private companies have virtually no ownership in the special pilot boats, do not invest pilotage dues in their construction, and for the delivery of pilots cost of rent at the expense of pilotage for those vessels (not special pilotage) that are on the market. It doesn't bother opponents, but the public pilot organization, in their opinion why something urgently needs to purchase a pilot boat in the property. The amount of pilotage in the country are sufficient to provide the necessary expenses for the provision of pilotage services in all ports. But private pilotage companies that about 1/3 of the pilotage services, only cost-effective, get the same amount of pilotage dues as the FSUE "Rosmorport", providing about 2/3 of pilotage services and virtually all unprofitable. In figures it looks so: 2017- 1 668 018/1 607 712; 2018– 1 971 068/1 728 291; 2019– 1 784 532/2 020 726 (RUB thousand), respectively, private companies/FSUE "Rosmorport". The newly established state pilot service, pilotage dues combining, at first, in its framework without any problems will cost the rental of boats, without recourse to the budget, as is done now by private pilotage companies, and then of course they will build.


- Opponents argue that the Bill contravenes the law on natural monopolies No. 147-FZ (p. 1 and p. 3.St.4) and the law on protection of competition No. 135-FZ (paragraph 5.h.1.St.15 claim 1.St.10). Is it really so? And why pilotage is regulated by two different in fact laws? As it is regulated in the Maritime countries abroad?

V. egorkin: that is another law equally reflects the market relations in the state, and that another form of economic relations reflects the role of the state in a market economy. Law No. 135-FZ protects competition in General, and law No. 147-FZ determines the policy of the state where the activities of organizations in the status of natural monopolies are more efficient than their competition. What kind of protection of competition can be discussed, if a pilot organization 85% of the country's ports working in the status of natural monopolies? Obviously, if the constancy of pilotage his expenses to work 2 or more pilot organizations in the port will be higher than one. This is the inefficiency of competition and efficiency of natural monopoly. In almost all Maritime countries of the world, including countries with a long tradition of market economy and private property, strictly market of the European Union, for example, Sweden, Norway, Finland, Greece, is a pilot service of the state, and in the field of pilotage services, there is no competition. Now fashionable in Russia the trend of "regulatory guillotine" is aimed at protecting businesses, was first developed in Sweden in the 1980-ies. However, a pilot service in the market of this country is the state, operates a natural monopoly. And "Swedish guillotine" came to us by their pilotage services.


I interviewed the coordinator of the project "Marine policy"

Center for strategic assessments and forecasts

Anna Gornova


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