NORWEGIAN MARITIME INDUSTRY CONCERNED ABOUT EU VOTE FALLOUT

NORWEGIAN MARITIME INDUSTRY CONCERNED ABOUT EU VOTE FALLOUT

Norway's powerful maritime industry received a bitter blow earlier this year when the Scandinavian country voted against joining the European Union.

The shipping community had lobbied strongly in favor of membership, convinced that Norway and the EU would mutually benefit. The EU would have become a net exporter of shipping services through Norway's membership, while the Norwegian maritime sector would have gained greater access to the huge EU marketplace and participated in policy-making.But after membership was rejected in a referendum last November, Norway was left outside when neighboring Sweden and Finland joined at the start of this year.

So far, the fallout has been small. The country's shipowners, shipbrokers, shipbuilders, marine insurers, ship-finance bankers and a myriad of other maritime businesses are still waiting to see how they will fare outside the EU, and there has been no sudden exodus of shipping companies to other European capitals, as some had feared.

Nevertheless, one or two incidents have raised concern within the country's maritime community. Earlier this summer, Norway's representative was asked to leave the coordinating committee that was representing EU interests during a maritime review meeting held by the Geneva-based United Nations Conference on Trade and Development.

Kvaerner AS, the Norwegian shipbuilding company that also is the largest in Europe, said recently that expansion plans would probably be directed toward its Finnish and British subsidiaries amid evidence that EU customers are more likely to place orders with EU yards.

"Norwegian shipbuilding companies will in the future employ a proportionally larger number of workers through their EU-based subsidiaries than in Norway," Mikko Niini, marketing and sales manager at Kvaerner Masa- Yards, told the Nor-Shipping conference earlier this summer.

The country's shipowners, meanwhile, are concerned about being excluded

from the expanding coastal shipping trades throughout the rest of Europe as cabotage restrictions are removed and Brussels actively promotes local shipping services. Although Norway is still a member of the European Economic Area which is closely tied to the EU, coastal trades will not be opened up to EEA members.

Norway, with a population of just over 4 million, is Europe's second most important maritime nation, after Greece, with both countries ranked among the top globally. Norwegian shipowners control a fleet of almost 1,400 ships of 47 million deadweight tons, the fourth biggest in the world after those of Greece, Japan, and the United States.

The fleet is highly diversified, ranging from oil tankers, bulkcarriers and gas carriers to containerships, car carriers, ferries, and offshore supply vessels. The Norwegian Shipowners' Association estimates the market value of these ships at around $20 billion.

Although the fleet has fallen in size since the early 1990s when it stood at around 55 million dwt., Norwegian shipowners nevertheless operate one of the largest oil tanker fleets in the world, and one of the biggest fleets of bulkcarriers.

Figures published recently also show that Norwegian shipowners are planning to invest more than $5.5 billion in new ships with 87 vessels of 5.2 million dwt. on order. Ships being built for Norwegian companies include cruise liners, crude oil and product tankers, bulkers, roll- on, roll-off ships, semi-container vessels and combined carriers.

Maritime-related activities provide nearly 60,000 jobs in the small Nordic country, and generate almost 7 percent of Norway's wealth. Maritime services also are a major export earner for Norway.

Although Norway's shipowners operate globally and are not dependent on the European marketplace for most of their business, they nevertheless are not happy about being excluded from decision-making in Brussels.

Both the European Commission's transport and competition directorates are actively involved in developing regulations for the maritime transport industries that will affect both EU and non-EU shipowners, while EU Transport Commissioner Neil Kinnock is working on a strategy document covering the maritime trades to be published later this year.

Competition rules governing the activities of liner shipping conferences and consortia are of less concern to Norwegian shipowners, who are not particularly active in the container trades, than the development of maritime safety standards.

The European Commission is working on a number of directives aimed at raising safety levels, and while these will be compatible with International Maritime Organization standards, Norway's shipowners still would like some input, according to Arild Wegener, director of the Norwegian Shipowners' Association.

But with no direct representation in Brussels, Norway's shipowners are having to lobby through the European Community Shipowners' Association, of which the NSA remains a member.