International Chamber of Shipping Limited and Maritime International Secretariat Services Limited Competition Law Compliance Policy
PRELIMINARY
This competition law compliance policy (the “Compliance Policy”) has been endorsed and adopted by the Boards of ICS and Marisec (together “the Boards”) after due and careful consideration, and a copy has been circulated to all the members of ICS (the “Members”).
STATUS OF ICS AND MARISEC
The Boards recognise that the unique structure of ICS as an international association of national shipowners’ associations means that it is most unlikely that the activities of ICS will infringe competition laws. ICS is not competing in any commercial markets and its activities are directed primarily at enhancing safety and technical standards in the shipping industry at an international level. As such, ICS is not engaged in economic activity that would have any effect on competition in commercial markets.
ICS and Marisec recognise that Marisec does engage in commercial activities, including carrying on a publications business, and that those activities must comply with competition law. The Boards recognise the fundamental importance of compliance with competition law.
Accordingly, the Boards consider it appropriate by means of this Compliance Policy to remind ICS Members / Marisec employees of the basic principles of competition law generally and to highlight areas that may be of specific relevance to ICS and Marisec.
Complying with competition law is the responsibility of every Member, director, employee, it is important that you:-
a. Read this policy;
b. Are aware of the key actions you should or should not do to be competition compliant.
c. Attend any competition compliance training organised by or on behalf of ICS / Marisec;
d. Refer to the policy in carrying out your activities. Speak with and take the advice and guidance from the ICS Legal team if you have any doubts or concerns.
If you have any questions or concerns please ask the Principle Director (Legal) via email here. They will discuss your questions or concerns in confidence.
COMPLIANCE CULTURE
Compliance with competition law is of primary importance to ICS and Marisec. As such, it is the policy of ICS and Marisec to fully comply with all applicable competition laws including but not limited to such laws and regulations enacted in the United States of America, the European Union and the United Kingdom, including the Sherman Antitrust Act 1890, Articles 101 and 102 of the Treaty on the Functioning of the European Union, the Competition Act 1998, the Enterprise Act 2002, the Enterprise and Regulatory Reform Act 2013 and all associated legislation, guidelines and notices. ICS and Marisec aim to foster a culture of competition law compliance and it is in this spirit that ICS and Marisec adopt this Compliance Policy. It is essential that the activities of ICS and Marisec comply with competition law and this Compliance Policy not only in form but also in substance.
The Boards recognise that breach of competition law exposes ICS and its Members, and Marisec, to the risk of heavy fines, court orders and significant costs and bad publicity associated with a competition investigation. Individuals may also face criminal sanctions and director disqualification orders.
Failure to comply with competition law or with this Compliance Policy is a serious matter and any Member’s conduct contributing to non-compliance which comes to our attention may result in a Member’s expulsion.
In addition, breaching competition law is a breach of an employee’s employment contract with Marisec. It could lead to written warnings and possibly dismissal, and it could be treated as gross misconduct, especially if advice from the ICS Legal team had not been taken in advance of any action.
TRADE ASSOCIATIONS & COMPETITION LAW
Competition law treats the activities of trade associations much like any other form of cooperation between competitors: there is no special competition law regime. So, whilst trade associations often perform legitimate and valuable functions, like any other form of cooperation between competitors, the activities of trade associations are capable of breaching competition law. For competition law purposes decisions or recommendations of trade associations are treated as agreements between its Members. Competition law may be breached even when the decisions or recommendations of trade associations are not binding on the Members.
PROHIBITED AGREEMENTS & UNDERSTANDINGS
It is recognised that the following are serious breaches of competition law:
- Agreements with the object or effect of fixing prices, restricting discounts or rebates;
- Agreements limiting output or production, allocating markets or customers;
- Agreements to exchange current and specific information on price, capacity, costs and other commercially sensitive information;
- Collective boycotts or other coordinated measures intended to eliminate competitors; and
- Coordinated measures that slow technical development or otherwise exploit markets.
Accordingly, ICS must not serve as a means for Members to coordinate on any of these matters. Nor must ICS be used as a forum for discussions that would facilitate the arrival at or enforcement of any such anti-competitive agreements or understandings.
Further Marisec should not undertake any activity that would be prohibited under competition law, in carrying out its commercial activities.
AREAS OF SPECIFIC RELEVANCE TO ICS
- Coordination with other Trade Associations on Terms of Membership
ICS must not coordinate with other shipowners’ trade and employers’ associations or similar bodies on membership fees, services offered to members or any other terms of membership liable to affect competition between associations. Discussions that take place between associations must avoid such commercially sensitive subjects. - Terms of Membership
Rules on admission of Members to ICS and terms of membership have been reviewed from a competition law perspective to ensure they are transparent, proportionate, non-discriminatory and based on objective standards. Procedures for expelling Members from ICS should be based on reasonable and objective standards. - Commercial Negotiations
ICS should not engage in joint buying or selling on behalf of Members. Coordination on buying and selling is only permissible in competition law when the combined market share of the parties is very low. ICS may engage in discussions on behalf of its Members that are merely consultative or that do not involve negotiation on the parameters of competition such as price or quantity or markets or territories for carrying on an economic activity. - Information Exchange
Information relating to the parameters of competition, such as price, capacity or costs should not be exchanged between Members unless it is sufficiently historic or aggregated so that competitors are unable to discern each other’s business strategies.Exchange of data that is aggregated so as to combine a sufficient number of independent undertakings so that recognition of individual competitors is impossible does not in principle infringe competition law. Even so, ICS must not be used for the exchange of capacity forecasts not based on publicly available information, even in aggregated form.Similarly exchange of historic data does not in principle breach competition law. Although much will depend on the individual circumstances – the key being whether the information exchanged is still relevant to a Member’s current or future business strategy – individualised commercial data that is less than a year old is not usually considered as historic. The more frequently data is exchanged the more likely it is to breach competition law.
In addition to the exchange of historical and/or sufficiently aggregated data, the exchange of information which is already in the public domain or that does not relate to the parameters of competition such as technical or environmental standards is unlikely to cause competition law problems.
- Technical Standards, Codes of Conduct and Recommendations
Coordination activities of ICS (both as between Members of ICS and between ICS and other trade associations) are unlikely to raise competition law concerns to the extent that the sole object and effect of this coordination is the implementation of technical agreements or the achievement of technical cooperation. Likewise, coordination that relates to the implementation of environmental standards will not usually infringe competition law. Conversely, ICS must not be used for competitors to coordinate on price, capacity or any other parameter of competition.Codes of conduct or other forms of guidance for the shipping industry must not be used as a means of competitive coordination. Where they relate to technical and safety standards and do not include guidance on competitive matters such as pricing or market/customer allocation they are unlikely to cause competition law concern. - Standard Terms and Conditions
Standard terms and conditions are more likely to breach competition law when Members are obliged to contract on those terms. Members should therefore remain free to adopt different terms and conditions if they wish, while acknowledging that in marine industries standard forms of contract are the norm, they are usually applied on different commercial terms for each transaction.Standard terms and conditions must not establish uniform price tariffs; this is the equivalent to an agreement to fix prices and one of the most serious infringements of competition law. Even recommended prices may breach competition law if this leads to the coordination of price behaviour.Standard terms and conditions may also affect competition by creating coordination on other elements of competition therefore reducing Members’ ability or incentive to compete on non-price factors. Standard terms and conditions that benefit customers, for example by making it easier for customers to compare terms offered by Members may be justified. In no case must the standard terms and conditions be more restrictive than necessary to achieve a legitimate objective.
- “Off the agenda” discussions
ICS must not be used by Members or their representatives as an opportunity to engage in anti-competitive behaviour outside the official business of ICS. ICS should diligently prepare an agenda for any meetings, circulate this agenda prior to any meetings of ICS, accurate minutes of discussions should be taken, including of any other business that may be raised, and delegates reminded at the outset of all meetings of the importance of competition law compliance.
RISK MANAGEMENT
Each member of staff of ICS / employee of Marisec must make every effort to act in full accordance with competition law. Committee chairpersons have particular responsibility to ensure that the activities of ICS committees do not breach competition law. Committee chairpersons should immediately report any actual or suspected breach of competition law to the Secretary General and the Chairman. Members of the ICS Secretariat / Marisec employees who suspect or who become aware of any breaches of competition law should report to the Secretary General / Managing Director who in turn should report the matter to the Chairman.
If, in the course of its activities with other trade organisations, ICS becomes aware of anti-competitive behaviour it must take active steps to show unambiguous disapproval of the conduct: silence in meetings is not sufficient. In the event of an investigation the burden of proof will be on ICS to show this disapproval, therefore ICS must make sure that these objections are accurately documented, and it should retain copies of relevant documents.
ICS should conduct regular internal competition law compliance audits in order to identify and address any areas of concern. As part of the audit individuals should be invited to report any knowledge or suspicions of anti-competitive behaviour occurring within ICS. If ICS has doubts as to the competition law compliance of its conduct it should seek specialist legal advice.