Denmark. Ulla Fabricius and Christian Benedictsen-Nislev. NJORD Law Firm

Transcription

1 Denmark Ulla Fabricius and Christian Benedictsen-Nislev General 1 Which are the key ports in your jurisdiction and what sort of facilities do they comprise? What is the primary purpose of the ports? Denmark has more than 130 active commercial ports of various sizes and areas of expertise, from larger scale shipping terminals engaged in international trade to small municipal ports serving local industries. Together the Danish ports handle 75 80% of Danish foreign trade measured in tons. The key ports in Denmark include: Fredericia; Esbjerg; Odense (Lindø Port); Copenhagen (CMP); Aarhus; Aalborg; Kolding; Aabenraa; and Kalundborg. Fredericia is the biggest port in Denmark measured by the amount of cargo volume per year. This port comprises the facilities to handle containers, ro-ro ships and general cargo. Further oil and gas terminals are available in the port of Fredericia. The port is the container port for the entire region of Southern Denmark, and its frequent connections to Hamburg, Bremerhaven and Antwerp link it to overseas container routes. Danish North Sea oil is shipped from the Port of Fredericia. At the same time, oil and petroleum products are distributed to the entire region of Southern Denmark. The nearby motorway network (E20/E45) and Denmark s international railway hub make the port of Fredericia a logistics junction for ro-ro (trailer) traffic to Eastern Europe. Esbjerg comprises ro-ro and oil and gas terminals. It is the leading ro-ro port in Denmark and one of the Nordic area s major intermodal hubs. The port of Esbjerg has been the primary base for all oil and gas activity in the Danish North Sea since the extraction of oil and gas began more than 40 years ago. Finally, Esbjerg is the leading port for wind power in Europe. The port played a key role in the rise of Denmark s offshore wind industry. Lindø Port is the third largest port in Denmark. The focus of this port is bulk cargo. Its north terminal has cranes with the ability to lift up to 150 tons. The port also comprises the Lindø industrial park, where a wide range of maritime companies are based. The industrial park includes four dry docks and repair yard facilities. The port of Copenhagen and Malmø (CMP) comprises container, car, cruise, ferry, general cargo and liquid bulk facilities. CMP has passenger traffic to Norway and Germany, and Copenhagen is the hub for the cruise industry in the region. DFDS operates the Copenhagen Oslo route, and is CMP s largest passenger shipping customer. CMP is also a hub for importing and handling of new cars in the Baltic Sea Region. CMP has the largest dry bulk terminals in Western Sweden and Eastern Denmark. Imports and exports of bulk products are mainly oriented towards the regional market, but some products are also handled for transit. Finally, CMP has the largest liquid bulk terminals in the Øresund region. Imports and exports of liquid bulk products are oriented towards international and regional markets. Aarhus is an all-purpose port and comprises container, general cargo, oil and gas, RO-RO cruise ship and ferry facilities. The Port of Aarhus is the largest container port in Denmark and also includes the largest public bulk terminal in Denmark. Aalborg comprises facilities for bulk and general cargo and project loads, alongside facilities for container and cruise ships. Kolding comprises facilities for bulk and general cargo, tanker vessels, ro-ro vessels and cruise ships. Kolding is close to Fredericia, and hence is also located close to the nearby motorway network (E20/E45) and Denmark s international railway hub. Aabenraa is capable of handling general cargo, dry bulk, ro-ro, project cargo, cruise ships and liquid bulk. Kalundborg comprises facilities for ferries, cruise ships, general cargo, liquid cargo, dry cargo, ro-ro vessels, containers and project cargo. Danske Havne is the industry organisation for Danish ports, while the industry organisation Danske Havnevirksomheder represents stevedores and other companies operating in Danish ports. 2 Describe any port reform that has been undertaken over the last few decades and the principal port model or models in your jurisdiction. In the period from , 10 of the 12 state ports were assigned to Danish local authorities (municipalities). In 2005 and 2012 the last two state-owned ports were assigned to local municipalities, and today no ports in Denmark are operated as state ports. The Danish Port Act (Consolidating Act n of 23 May 2012) governs all Danish ports. Pursuant to section 6 of this Act, a Danish port may be organised in five different ways: a state port; a municipal port; a self-governing municipal port; a private limited company wholly or partly owned by a municipality (hereinafter limited company ports); or a privately organised port, other than such company as set out in the preceding point. Various requirements and restrictions apply under the Danish Port Act depending on which of these models is used, except for privately organised ports, which are not subject to the Danish Port Act. A municipal port is subject to the local municipal administration, and the local municipality is itself subject to Danish regulation of public authorities. A municipality is considered an independent and self-governing public authority and receives funding from the government, including with respect to port development. The municipality is responsible for financing and operating the port, including the maintenance of docks, jetties, fairways etc. The municipality is under no obligation to procure or make available cranes, warehouses or similar port facilities. A port organised as a municipal port provides for very limited commercial freedom. Typically, only small non-industrial ports are organised using this model. A state port is subject to the same restrictions as a municipal port. In addition, a state port must provide for and maintain cranes, warehouses and similar port facilities. A state port is operated by the Ministry of Transportation or those authorised by the Minister of 1

2 Transportation to do so. Currently, no Danish ports are organised as state ports. A self-governing municipal port is controlled by the municipality in which the port is located. The municipality has general responsibility for the port and its finances, and appoints a board of directors for the port. The board is responsible for the daily operation and maintenance of the port. Such daily operation is subject to the restriction in Section 9 of the Danish Port Act, which provides that the board must contract out port operations, ship operations, the operation of warehousing and storage, and the operation of wind farms and wave energy facilities to independent third parties. A self-governing municipal port is considered an independent legal entity. This means that the finances of the port are separate from the finances of the municipality. The port must be run so that the earnings of the port cover its expenses, and any revenue accrued must benefit the users of the port (eg, through lowering the port charges). A limited company port wholly or partly owned by a municipality allows for a certain level of commercial freedom. The municipality is only liable to the extent of its equity in the company port. A key feature of this model for port ownership is that the owning company may undertake port operations. The restriction regarding ship operations still applies, however, and the municipality must as a general rule outsource such operations. Subject to certain limitations with regard to the allotment of the shares, the profits of the port must benefit the owners of the port. A private limited company owning a port may invest up to 15% of its equity in foreign ports in an attempt to improve its own development. Twenty-five Danish ports are organised as municipal ports (including Esbjerg, Frederikshavn, Kolding, Odense, Kalundborg and Aarhus), 28 as self-governing municipal ports, six as limited companies wholly or partly owned by the local municipality (including Fredericia, Aalborg and Copenhagen) and five as private organisations. 3 Is there an overall state policy for the development of ports in your jurisdiction? In recent years, the Danish government has had an increasing focus on promoting Danish ports and improving the connection between the ports and the rest of the Danish infrastructure. The Green Transportation Policy Reform was adopted in 2009 and provides a framework for the area until The framework agreement consists of two central elements; a reduction in CO2 emissions; and a reduction of the pressure on Danish land-based infrastructure (rail and road). Despite the focus of this agreement being on the general infrastructure of Denmark, the agreement has already had an impact on Danish ports in the pursuit of promoting sea transport to and from Denmark. Since 2009 the Danish ports have become more interconnected with the Danish road and train network. In addition, the industrial ports of Denmark have been subject to extensive expansions, renovations, reconstructions and general developments. The Danish Association of Consulting Engineers (a Danish trade organisation) issued a report in March 2016 describing the future development of Danish ports. The report anticipates an upgrade and expansion of docks and quays and other port facilities of about 1,000 hectares by What green port principles are proposed or required for ports and terminals in your jurisdiction? Danish ports are subject to the general policy framework set out in the Green Transportation Policy Reform, as well as Danish and EU environmental legislation. This legislation plays a vital role when ports engage in new projects with a potential environmental impact, and includes the Danish Marine Environment Act (the Consolidating Act no of 10 December 2015) and the Danish Act for the regulation of Danish ports facilities reception of waste from ships (the Consolidated Act no. 415 of 10 May 2012). Green port principles are often developed by the owners of the port (local municipalities and private operators). Some of the proposed ways to make Danish ports more green are: to increase the use of sustainable energy in the port; to develop new bunkers for ships, such as hydrogen gas and fuel cells, and to develop techniques which enable ports to connect the ships to an electricity grid when berthing; to focus on preventing any environmental accidents by establishing and maintaining contingency plans; to obtain ISO certification; and to play an active role in stimulating the development of more sustainable ports Legislative framework and regulation 5 Is there a legislative framework for port development or operations in your jurisdiction? The Danish Port Act provides the framework within which Danish ports may be developed and operated. The Danish Port Act applies in combination with the Danish Planning Act (the Consolidated Act No of 23 November 2015) and other applicable Danish and EU environmental laws. Also, EU regulation on competition and state aid will be of relevance, subject to the specific port development. 6 Is there a regulatory authority for each port or for all ports in your jurisdiction? The Danish Minister of Transportation is the regulatory authority for Danish ports (sections 1a, 3, 4 and 15 of the Danish Port Act). 7 What are the key competences and powers of the port regulatory authority in your jurisdiction? The key competences of the Danish Minister of Transportation include: issuing regulations for the ports (sections 1a and 15 of the Danish Port Act); implementing and applying rules deriving from International Conventions (eg, SOLAS, the ISPS-Code) and from EU law (section 1a of the act); determining the distribution of costs between two or more ports for improvements of fairways etc estimated to benefit those ports (section 3 of the Act); and issuing notices when the security of a port is unsatisfactory (section 4 of the act). 8 How is a harbourmaster for a port in your jurisdiction appointed? A Danish harbourmaster is employed by the port. The harbourmaster performs multiple tasks and will typically be an ex-seafarer. A Danish harbourmaster will be subject to a collective agreement regulating his or her employment. 9 Are ports in your jurisdiction subject to specific national competition rules? Generally speaking, Danish municipalities may not be engaged in the operation of businesses with the aim of creating a profit. However, the Danish Port Act specifically empowers local municipalities to do so under certain conditions. In addition to the EU competition rules as enacted in the Danish Competition Act (Consolidating Act no. 869 of 8 July 2015), Danish ports are also subject to the specific competition rules set out in sections 9 and 10 of the Danish Port Act. Section 9 of the Act contains specific competition rules for selfgoverning council ports, while section 10 contains specific competition rules for ports operated as a limited company wholly or partly owned by a local municipality. A key difference between self-governing municipal ports and limited company ports is that the latter may undertake port operations. With regard to a self-governing municipal port, the municipality is only entitled to conduct ship and port operations if it does so in competition with private operators. If it is estimated that a specific port operation task will create an annual turnover of DKK500,000, the municipality must make a public tender of such a task and may not itself engage in this operation if a private operator offers to undertake the task on market conditions. Certain exceptions apply under the Danish Public Procurement Act (Consolidated Act no of 15 December 2015) and the Danish Act for Procurement within the Building and Construction Sector (Consolidated Act no of 7 December 2007), to the extent that the task in question falls under those acts. 2 Getting the Deal Through Ports & Terminals 2017

3 If no private operator is willing to tender for a given port operation task, the municipality may undertake such a task itself, but must re-announce the tender every five years. The municipality must also establish an independent limited company responsible for this port operation task. Apart from the initial equity injection by the municipality, no further economic aid must be provided to this company for as long as it is owned and operated by the municipality. 10 Are there regulations in relation to the tariffs that are imposed on ports and terminals users in your jurisdictions and how are tariffs collected? Subject to competition laws and rules, in particular regarding the abuse of dominant position, it is for the independent ports to collect the tariffs from the users. Danish municipal ports are exempt from the duty to pay tax on the revenue from its activities under Section 3 of the Danish Corporate Tax Act (Consolidated Act no. 680 of 20 May 2015). A private limited company port wholly or partly owned by a municipality may also be subject to the tax exemption in section 3(1), no. 4, provided the following conditions are met: the port must be open for public maritime traffic; the income of the port must benefit the port and this must be clear from the by-laws of the port; and any operations that are outsourced by the owners of the port or undertaken by the owner itself must be port-related. 11 Does the state have any public service obligations in relation to port access or services? Can it satisfy these obligations through a contract with a private party? The Danish state sets out the legal framework for Danish ports. With regard to port access, it follows from section 5 the Danish Port Act that Danish ports are under a duty to receive ships subject to available space in the port and subject to security concerns. 12 Can a state entity enter into a joint venture with a port operator for the development or operation of a port in your jurisdiction? Is the state s stake in the venture subject to any percentage threshold? Subject to the special competition rules in sections 9 and 10 of the Danish Port Act (as discussed above), a state entity such as a local municipality may be engaged in ship and port operation as defined in question 2, as well as in the development of the port. Both self-governing ports and limited company ports will often contract out such development projects to private contractors. Due to the way in which Danish ports are organised, it is not common practice for the Danish state to be financially involved in port projects owned by municipalities or private parties. 13 Are there restrictions on foreign participation in port projects? There are no general restrictions on foreign participation in port projects. However, such foreign participation will have to be carried out subject to Danish law, including Danish environmental regulation. Public procurement and PPP 14 Is the legislation governing procurement and PPP general or specific? The legislation governing procurement and PPP is subject to the general rules in the Danish Public Procurement Act, as well as the more specific rules in the Danish Act on Procurement within the Building and Construction Sector and finally sections 9 and 10 of the Danish Port Act. 15 May the government or relevant port authority consider proposals for port privatisation/ppp other than as part of a formal tender? If one of the port operation tasks listed in sections 9 and 10 of the Danish Port Act is estimated to create a turnover of DKK500,000 or more per year, the owners of the port must make a public announcement of the task. An operation estimated to create a turnover of less than DKK500,000 may only be undertaken by the port owner themselves if no private operator is willing to do so. Such private operators may be contracted with or without a formal tender. 16 What criteria are considered when awarding award port concessions and port joint venture agreements? This will depend on the rules governing the tender. First, sections 9 and 10 of the Danish Port Act require the port to ensure transparency regarding the criteria that the port takes into consideration when awarding a contract to a private operator. Such criteria may include price, quality, environmental effects etc. Secondly, under applicable EU regulation on public procurement, the criteria which the port is able to consider when awarding a port concession or joint venture agreement will generally have to be included in the tender offer. Criteria for awarding a project may encompass economics, commercial impact, competition, tourism, environmental impacts, general impact on nature, good design, health and security considerations and port infrastructure considerations. 17 Is there a model PPP agreement that is used for port projects? To what extent can the public body deviate from its terms? PPP and concession agreements are subject to general freedom of contract. Such agreements are drafted on a case-by-case basis. In the case of construction work between Danish parties, the parties will typically contract on one of the Danish standard term turnkey contracts (ie, AB92 and AB93). In the case of leases of land at port facilities, the Association of Danish Ports have drafted a set of standard terms, which can be found at lovgivning/havnedrift/. 18 What government approvals are required for the implementation of a port PPP agreement in your jurisdiction? Must any specific law be passed in your jurisdiction for this? In the case of the construction of a new port, the relevant parties involved in such a project must seek permission from the Danish Ministry of Transportation. Expansions of existing ports must comply with applicable environmental and planning regulation. 19 On what basis are port projects in your jurisdiction typically implemented? They are typically implemented on a case-by-case basis. 20 Is there a minimum or maximum term for port PPPs in your jurisdiction? What is the average term? There is no minimum or maximum period for PPPs in Denmark. With regard to leases of port areas or buildings owned by the port, lease contracts tend to run for a period of between 20 and 50 years. Private ship and port operators will also typically agree on long-term contracts with the port owners. 21 On what basis can the term be extended? An extension may follow from the contract or may be negotiated between, for example, a local municipality and a private operator. 22 What fee structures are used in your jurisdiction? Are they subject to indexation? The individual ports have the authority to determine their own port fees. The calculation of port fees typically depends on the type of cargo carried, the dimensions of the ship, the duration of the mooring period etc. The fees vary from port to port. With regard to land rents, the prices are negotiated in each individual contract. With regard to storage of cargo, the fee payable will depend on the area used for the storage of the said cargo. 23 Does the government provide guarantees in relation to port PPPs or grant the port operator exclusivity? Government guarantees may only be provided to PPPs subject to EU regulations on state aid. As no Danish ports are owned by the government, it is therefore not for the government to grant exclusivity. However, such exclusivity may arise under a contract between the port 3

4 owners and a third party port operator (subject to applicable competition regulation). Port development and construction 24 What government approvals are required for a port operator to commence construction at the relevant port? How long does it typically take to obtain approvals? Construction of a new port requires approval from the Minister of Transportation. The time for obtaining approvals may depend on a range of factors and it is difficult to provide a general estimate. If the owner wants to expand an existing port within its current area, such expansion would not require approval from the Minister of Transportation. It could include the establishment of new works, new port facilities, general improvements of the infrastructure of the port etc. The expansion would have to comply with the Danish Act regarding the estimation of environmental impacts when expanding Danish ports. If a port development is deemed significant under sections 11 and 13 of the Danish Planning Act, a special permission must be obtained from the relevant local municipality to carry out the expansion. In a recent case the port of Randers filed for permission to expand its port in A permission to do so was granted in Further consents and licences may be required, depending on the nature of the specific project, for example with respect to LNG terminals. 25 Does the government or relevant port authority typically undertake any part of the port construction? The duty to maintain the port and its facilities lies with the owners of the port (sections 7, 9, 10 and 11 of the Danish Port Act). Road and railroad construction is undertaken by public authorities. Normally, the state would employ private contractors to carry out construction projects involving ports. 26 Does the port operator have to adhere to any specific construction standards, and may it engage any contractor it wishes? The construction standards are agreed between the port owners and the third party contractor. See question What remedies are available for delays and defects in the construction of the port? The remedies will be regulated by the contracts between the port owners and the third-party contractor, and generally include damages (including liquidated damages). Port operations 28 What government approvals are required in your jurisdiction for a port operator to commence operations following construction? How long does it typically take to obtain approvals? See question What services does a port operator and what services does the port authority typically provide in your jurisdiction? Do the port authorities typically charge the port operator for any services? The primary services of self-governing municipal ports and limited company ports wholly or partly owned by a municipality are to put the infrastructure of the port at the disposal of private contractors. The port authority of a self-governing municipal port will normally outsource port-related operations. It will therefore be for the third-party port operator to handle services such as stevedoring, sale of bunkers, sale of storage space, truck services and related transportation activities. For a limited company port, the port authority may itself conduct these port operations, while it will normally have to outsource ship operations such as towage, salvage, line handling (mooring services etc), ice removal and pilot services. The port authority (the owners of the port) will charge the private operators for allowing them to offer such operations and services to the customers of the port. The charge will be individually negotiated in each contract. 30 Does the government or relevant port authority typically give any commitments in relation to access to the hinterland? To what extent does it require the operator to finance development of access routes or interconnections? As the rail and road infrastructure in Denmark is a public affair, there is no need for such commitments. The operator will not be required to finance the development of the access routes or interconnections. See also question How do port authorities in your jurisdiction oversee terminal operations and in what circumstances may a port authority require the operator to suspend them? The overseeing of terminal operations will be regulated in the general terms and conditions (by-laws) of the ports. Whether the port authority may suspend the operation will depend on the contract between the port authority and the relevant private contractor or operator. 32 In what circumstances may the port authorities in your jurisdiction access the port area or take over port operations? This will depend on the by-laws of the port. 33 What remedies are available to the port authority or government against a port operator that fails to operate and maintain the port as agreed? The normal remedies for breach of contract under Danish law, including damages and termination of the contract, for example. 34 What assets must port operators transfer to the relevant port authority on termination of a concession? Must port authorities pay any compensation for transferred assets? The port operators are not under an obligation to transfer their assets or equipment to the owners of the port on termination of a concession. Miscellaneous 35 Is a port operator that is to construct or operate a port in your jurisdiction permitted (or required) to do so via a special purpose vehicle (SPV)? Must it be incorporated in your jurisdiction? Many of the bigger port projects must obtain permission from a public authority containing the special requirements with which the operator may be obligated to comply. Such requirements may vary depending on the project and where the project is to be carried out. 36 Are ownership interests in the port operator freely transferable? On the assumption that port operator in this question refers to the port owners, it is for the port owners to decide whether to transfer ownership or not. 37 Can the port operator grant security over its rights under the PPP agreement to its project financing banks? Does a port authority in your jurisdiction typically agree to enter into direct agreements with the project financing banks and, if so, what are the key terms? Yes. The key terms vary from project to project. 38 In what circumstances may agreements to construct or operate a port facility be varied or terminated? This may be achieved in accordance with the contract agreed to between the port owners or port authority and the third-party contractor. 39 What remedies are available to a government or port authority for contractual breach by a port operator? The contractual remedies generally available for breach of contract under Danish law (ie, damages and termination of the contract). 4 Getting the Deal Through Ports & Terminals 2017

5 40 Must all port PPP agreements be governed by the laws of your jurisdiction? Not necessarily, but such agreements tend to be governed by Danish law. 41 How are disputes between the government or port authority and the port operator customarily settled? Such disputes are normally settled through court proceedings if an amicable settlement cannot be reached. For construction works, disputes tend to be settled by reference to arbitration at the Arbitrational Tribunal for Building and Construction Works. Ulla Fabricius Christian Benedictsen-Nislev Pilestraede 58 DK-1112 Copenhagen Denmark Tel: