Richard Arnold, technical director at Thomson Ecology, a UK ecology consultancy said:
“Nothing has changed in the law or policy protecting wildlife following the outcome of the EU referendum. All the protection for wildlife that existed prior to the referendum is still in place and there is every indication that it will be retained for the foreseeable future.
“Firstly, all of the EU Directives which relate to wildlife protection (Birds, Habitats, Water Framework, Environmental Impact Assessment and Environmental Liabilities) have been transposed into UK Regulations. It’s true that these Regulations could simply fall away if the European Communities Act were simply repealed, however, it is much more likely that the Regulations would be kept in place until such time they could be deliberated by Parliament. Tellingly, perhaps, the UK Law Commission’s recent review of protected species legislation recommended strengthening the legislation rather than weakening it.
“Secondly, protection for many of the species which we work with comes from national law and policy. The legislation that protects water vole and reptiles is UK legislation (the Wildlife and Countryside Act 1981) and all the species that we now consider to be European protected species (bats, great crested newts, dormouse, etc.) were protected under UK legislation before that advent of the Habitats Directive. If the Habitats Regulations were to be repealed it is likely that the current suite of European protected species would continue to enjoy protection under an updated Wildlife and Countryside Act.
“Thirdly, some protection for biodiversity transcends the European Union, notably the Ramsar Convention and the Convention on Biodiversity, to which the UK is a signatory. This means that we have an international commitment to work towards halting the loss of biodiversity, regardless of the status of our membership of the EU.”
UPDATE: Monday, 27 June, 12.12pm
Martin Baxter, IEMA’s chief policy advisor says:
“The referendum vote in favour of the UK leaving the EU raises significant questions for businesses, professionals and the wider public on environmental protection policy.
In the lead-up to the referendum, IEMA members were overwhelmingly of the view that being a member of the EU is good for business and good for the environment. There was a real concern that environment and climate policy risked being watered down if the vote was to leave. Environment and sustainability professionals will now look to the future with some sense of uncertainty.
It is therefore essential that the government gives a commitment that, in negotiating the terms of the UK’s exit from the EU, an equivalent or enhanced level of environmental protection and climate policy will be implemented here in the UK.
In establishing the UK’s future direction, Government must develop progressive policies for the UK to transition to a low carbon, resource efficient and sustainable economy which delivers real social value over the long-term. It must seize the opportunity to accelerate the transformational change needed to meet long-term sustainability challenges and provide a much-needed boost to UK jobs and productivity.
An immediate test of the Government’s commitment to environment and sustainability lies in the adoption of the UK’s Fifth Carbon Budget. We urge the Government to adopt the independent Committee on Climate Change recommendation for a 57% emissions reduction, giving a clear and positive signal of its long-term environmental commitment.
IEMA is committed to providing leadership and support to ensure that environment and sustainability are placed at the heart of decision making and that policies are in place to develop a sustainable economy for the future.”
The Marine Professional received an exclusive comment from the Baltic Exchange: “The marketplace for shipping is global in nature, and the Baltic Exchange plays a leading role in service of this marketplace. The UK’s vote to leave the EU is not material to the potential SGX transaction, nor do we envisage it playing a major impact on the ability of UK maritime services sector to serve global trade.”
The following was written by Philippe Ruttley Head of EU and Competition Law at Ince and Co
What could Brexit mean for the shipping industry?
Following the victory of the Conservative Party in last May’s general election, British Prime Minister David Cameron promised a referendum on the UK’s membership of the EU by the end of 2017. After negotiations between the UK and the other 27 EU Member States, a package of measures and reforms were recently agreed, and the Prime Minister has announced that a Referendum on EU membership will take place on Thursday, 23 June 2016.
One issue that has already provoked much public debate between those supporting and opposing a British exit (“Brexit”) is whether the package of measures and reforms negotiated by Mr Cameron is legally binding: that is a political hot topic and one on which we do not intend to comment, but we at Ince & Co have been thinking about how Brexit might affect our own clients’ businesses from a practical point of view.
The EU is made up of 28 Member States and some of the world’s largest container and passenger ports are situated in its territory including Rotterdam, Hamburg, Antwerp, and Piraeus. Four of the world’s five largest shipping companies are based in the EU. According to a recent Parliamentary Briefing, the EU is the UK’s largest trading partner, accounting for around 45% of exports, and 53% of imports, of goods and services. Over three million jobs in the UK are linked, directly or indirectly, to exports to the EU. European Union law, in the form of Treaties, Regulations and Directives, affects a wide number of commercial issues including trade, environmental regulation, international trade sanctions, competition law, employment, tax, immigration and infrastructure projects.
If the electorate votes for Brexit, the UK will be the first Member State to do so since the creation of the first European “Community” in 1952, marking a new chapter in the European experiment, and sending the UK into uncharted waters. Commentators provide varying assessments of the likelihood of Brexit but it cannot be denied that it is a possibility that must be taken seriously, and now is the time for businesses to start thinking about how it might impact on them. As the debate develops and we get a better idea of the shape of any post-Brexit UK, it will be easier to assess its likely impact: the discussion below is therefore necessarily tentative but is intended to be helpful to contingency planning.
What might change?
UK laws of particular importance to the shipping industry that would be affected by Brexit:
> Directly: where EU Institutions create laws that are automatically incorporated into UK national law, such as Regulations, or where EU Treaties are transposed into UK law by the UK’s Parliament enacting implementing laws;
> Indirectly: where the EU Institutions issue Directives setting an objective aimed at creating harmonised EU-wide rules but leaving it to Member States to adopt national laws to achieve the objectives set by the Directives; and
> EU Decisions and the rulings and opinions of the EU Courts.
Laws of particular importance to the shipping industry are likely to those regarding trade, insurance, environmental regulation, international sanctions, contract terms, competition law, employment, dispute resolution and trade treaties with non-EU states. We discuss some of these below.
Competition Law: EU competition law applies to agreements and market conduct that affect trade between Member States, and the EU Commission has primary jurisdiction to enforce EU competition law, including granting clearance to mergers and investigating cartel activity. Where the effects of an agreement or market conduct are confined to a single Member State, national laws apply. Brexit would likely lead to a separate competition regime applying to the UK and to competition enforcement in the remaining 27 Member States, leading to the need for dual clearances in the case of mergers and exposure to regulatory investigation under two parallel, but distinct, regimes. Brexit would likely mean that compliance with both UK and EU competition rules would become more complex and burdensome.
Contract Terms: Many shipping contract (for example voyage and time charters) provide for trading to certain countries or geographical regions. Should Brexit occur, there may be uncertainty as to whether a contract signed pre-Brexit (which contains such a clause) which refers to the EU will continue to include the UK. If existing contracts are drafted in a way that presumes the existence of an EU containing the UK, or makes a reference to the EU without specifically defining what that is, such contracts may give rise to disputes as to the meaning or ambit of the contract. If Brexit occurs, care will need to be taken in the event that an existing contract is renewed, as the court would likely apply the definition of EU as at the time the (renewed) contract is entered into, which might be different from the original or intended definition. The impact of Brexit on any related contracts will need to be assessed, including those intended to be on 'back to back' terms, in which relevant clauses may not be similarly defined.
Dispute Resolution: The rules by which the UK courts determine jurisdiction over, and the law applicable to, the majority of disputes arising between parties within the EU (both for contractual and tortious claims) are currently determined by EU Regulations. In addition, parallel proceedings in the courts of more than one EU member state are prohibited where those proceedings involve the same or related issues, meaning that a defendant is protected from being sued in relation to the same dispute in two separate EU jurisdictions. Parties also benefit from the ease with which judgments may be enforced across EU borders. Should the UK withdraw from the EU, its courts may no longer be bound by the EU Regulations that achieve this. In the event of Brexit, it is not known whether the UK will continue to apply similar rules on applicable law and jurisdiction as the current EU rules, or whether a system similar to that adopted in relation to disputes arising with companies in states outside the EU will apply. Either way, until clarified, Brexit would leave companies unable to calculate with any degree of certainty their exposure to different legal systems should a dispute arise. An exclusive law and jurisdiction clause in all contracts therefore remains of fundamental importance.
Employment: A significant amount of UK employment law is based on EU rules, for example the Working Time Directive and the Agency Workers Directive. In the event of Brexit, it would be open to the UK to redraft any aspect of its employment law. The UK would have to negotiate appropriate arrangements in relation to residence and employment of UK nationals working in the EU and EU nationals working in the UK. Given the significant number of international employees engaged by the shipping community, both onshore and offshore, the potential changes to UK employment law may therefore have a significant impact. For maritime operators with European operations both in the UK and in the rest of the EU, unless the UK chooses to continue to apply pre-Brexit EU employment law without modification, which appears unlikely, two separate (and not necessarily complementary) employment regimes may apply to their workforce.
Insurance: Any insurer in the EU is automatically entitled to write insurance business in other member states. This means that, for example, German insurers can write business in the UK, and London underwriters can write shipping risk in Germany (and indeed all other EU states). This is known as “passporting” and the idea is that the insurer’s “home” regulator regulates that insurer’s activities, removing the need for the insurer to be regulated in each Member State. Brexit would undermine this and, unless alternative measures were introduced, may restrict the ability of insurers (and those buying insurance) to shop around and get the best price and terms for their business.
Sanctions: As a member of the EU, Britain is party to, and therefore must comply with, the sanctions regime imposed by the EU. Those sanctions are currently against states such as Russia, North Korea, Belarus, Syria, and Yemen. The situation regarding Iran is currently, as widely reported, in a state of change. It remains to be seen whether, were Brexit to occur, the UK would implement mirror legislation, or even harsher or less strict sanctions. Regardless of whether it were to impose any replacement sanctions regime, the UK would not be ‘sanctions-free’, as it would still be a party to, and therefore have to comply with, the sanctions imposed by the United Nations against several regimes.
Trade: Under EU law, trade within the Union is liberalised as between Member States, allowing goods and services to be traded within the EU without internal customs barriers or tariffs. In addition, EU citizens can move freely, establish themselves commercially or as residents and can trade without restrictions (except for certain professional qualification rules). EU membership therefore gives UK businesses access to the EU “Single Market”. As to external trade with non-EU countries, the EU benefits from a wide range of bilateral and multilateral trade treaties, allowing preferential access to EU goods and services in these countries, as well as reducing or eliminating customs or tariffs.
Should the UK cease to be an EU Member State, UK businesses would no longer benefit from EU internal trade access without a bilateral agreement between the UK and the EU. Although it is possible to be a member of the European Economic Area (EEA) as an associate state of the EU, it is not clear whether the UK would seek to do this or seek to enter into an entirely new free trade or association agreement with the EU. Operating within the EU market may become increasingly complex and consequently potentially more expensive for UK operators, as might operating in the UK market for EU operators. Those operating in the UK and also in the rest of the EU would face the burden of having to comply with both EU and UK laws on trade, rather than complying with the current harmonised EU system.
UK businesses would also not be able to benefit from the network of EU bilateral and multilateral external trade agreements with other countries, as the UK would have to negotiate its own individual trade agreements with those countries. The UK would continue to benefit from World Trade Organisation agreements, but these would not cover the detailed preferential bilateral arrangements that exist in current EU agreements with other countries. Exporting UK goods and services would become a more complex process than at present and, during the UK’s negotiations for its own individual trade treaties as a non-EU state, there would likely be uncertainty, which could be for a lengthy period.
What you should be doing and how we can help
If the UK votes to leave the EU, it will not happen overnight; under the existing Treaties, a two year exit process is envisaged. But now is the time for those who will vote in the June referendum to think about how their vote might impact on their industry and for all who may be affected by Brexit, wherever they may be, to start thinking about, and planning for, its possible implications. As the debate continues and we get a better idea of the “shape” of a possible post-Brexit UK and EU, we will provide our further thoughts and comments on its possible effect on shipping.
Brexit result could see facing an exodus of maritime talent, says Mark Charman, Faststream Group CEO
The UK’s decision to leave the EU has the potential to drive many of its maritime employees away, according to the results of a survey issued by industry recruitment group Faststream earlier today.
A survey to UK based maritime employees, issued following the Brexit results today (24.06.16), shows that over 39% of employees who wouldn’t previously have looked at a move away from the UK would now consider roles overseas, with a further 23% undecided. “It’s a leave vote for the UK and a leave vote for UK maritime employees” comments Mark Charman, Faststream Group CEO.
Charman continued; “Global mobility has always been a positive aspect of working in the maritime industry. 66% of respondents to our survey would have considered a role outside the UK prior todays Brexit results, which shows just how flexible the maritime workforce are. The uncertainty that a leave vote brings just adds fuel to the fire.”
The UK, like many other global maritime hubs, already faces a serious shortage of talent in shore-based operations. The opportunity for UK employees to secure jobs away for its shores will be possible for many, but not all. “The shock factor created by the reality of the UK leaving the EU will create immediate uncertainty for many UK maritime employees. However, wanting to move away from the UK doesn’t mean that employees can or should. It’s a big decision, both personally and professionally, and not one to take lightly.”
Charman continued; “The subject of losing talent from one location to another is not ground-breaking. Whether it’s a downturn in a certain region, rising living costs, lack of opportunities or low pay, there will always be a host of reasons for maritime employees to consider a move away from their current location. On face value the leave vote in the UK is not unlike any of these. Time will tell.”
Faststream will be looking closely at confidence within the sector over the coming months. “We already have plans in place to record, analyse and release a monthly maritime confidence index later this year which will monitor employee confidence data within global maritime hubs. We feel that this is important, not just for the UK but to the market as a whole.”
A statement from the IMarEST, written by chief executive David Loosley:
“We will be learning gradually what the impact of the UK leaving the EU will have on the maritime sector. We will be seeking our members views in the near future about existing EU maritime legislation and the way forward. To be involved in the discussion please contact ”
Dr Christos Tsinopoulos,Senior Lecturer in Operations & Project Management at Durham University Business School, comments on the repercussions for the UK manufacturing industry following Brexit:
“Brexit repercussions for the UK manufacturing industry will be questioned by many over the next few weeks and months. What we do know is that the integration across a supply chain is king. Research conducted by Durham and others demonstrates how a closely integrated supply chain, where there is an easy exchange of ideas and information, is likely to perform better. Supply chains know this and over the years there have been several efforts to bring manufacturers closer together.
“However, the key point here is that to make this happen there needs to be a degree of standardisation in legislation, systems, policies, and even engineering methods. Over the last few years this has largely been facilitated by several European bodies. Many have been guided by the EU whereas others have been industry led. The result has been some highly integrated and efficient supply chains which have benefited many of us.
“The good news here is that given the high degree of integration of many of them they are relatively difficult to change in the short term. The bad news however is that in the medium and longer term there would be a higher incentive to do so. In a competitive environment where small changes can have significant impact on performance and relationships, switching between supply chains and countries may become an increasingly popular choice.”
UK Chamber of Shipping calls for ‘Free Trade Commission’ in wake of Brexit
The UK Chamber of Shipping remained neutral on the question of the UK’s membership of the EU but we recognise the decision of the British people.
The chamber has always argued that the shipping industry is resilient by its nature. Shipping moves 95% of the UK’s international trade and we don’t see that changing.
We may now be beginning the process of leaving the European Union, but we are still an island nation that has to make its way in the world through buying and selling, and the shipping industry is here for that very purpose.
“What we need now are cool heads. We’ve had the political debate, now it’s time for rational and strategic thinking.
“The rest of the world beyond Europe has experienced significant economic growth, and a key argument by the Vote Leave campaign was that the UK would be able to quickly sign free trade deals with trading partners around the world. Government now has to act quickly to ensure that happens.
“Leaving the European Union is a process, not an event, and that process has to be managed carefully. David Cameron’s decision not to immediately invoke Article 50 is a welcome one, and there should be no rush to do so for his successor. First we must get our chess pieces in place.
“We believe that Government should establish a new Free Trade Commission, working across the Department for Business and the Foreign Office, to train trade negotiators and begin the process of establishing new trading ties around the world and be ready for the negotiations with the remaining members of the EU.”
The chamber highlighted a series of key policy areas that will need attention from the government before the UK leaves. These include:
* Visas and work permits
* Border controls at ferry and cruise terminals
* Various fiscal arrangements including Tonnage Tax
* The future of EU Navfor and collaboration of European navies to counteract piracy and support rescue activities in the Mediterranean sea
Russ Mould from AJ Bell says traders need to wait for the markets to settle after the UK voted to leave the EU. He says "don’t try to second guess money":
Exiting the EU is a risk to UK engineering, says Institution of Engineering and Technology
Following the outcome of the EU referendum to leave the EU, the Institution of Engineering and Technology (IET) is calling for an urgent discussion to mitigate the impacts on the engineering sector – which is vital to the UK’s economy.
The IET had published a statement of concern that a vote to leave the EU could result in a number of negative impacts on UK engineering, including exacerbating the UK’s engineering and technology skills shortage by making it more difficult for companies to recruit engineers from other EU countries.
Other issues identified included changes to access to global markets and companies, a decline in funding for engineering and science research, and a weakening of the UK’s influence on global engineering standards.
Naomi Climer, IET President, said: “We thought it hugely important that the role of UK engineering was considered as part of the EU debate.
“It was for that reason that we looked carefully at the issues affecting engineering, including the skills shortage, the global markets that engineering is a part of, research funding and global standards.
“We concluded that, at a time when we have a huge shortage of engineers, limiting the number of professional engineers that could come and contribute to our economy would affect the industry and the nation’s financial wellbeing.
“We were very careful to consider the options as they related to UK engineering but the result of the referendum is clear and we are calling for an urgent discussion so that any negative impacts can be mitigated for the benefit of UK engineering and our country’s economy.”