On The Legal Nature Of Port Operators

Before the introduction of the first Harbor Law of China in 2003,legal relations relevant to ports in China were regulated by waterway transportation laws as a whole.The "unification of port and shipping" was a unique historical stage in the legal relationships relevant to ports and shipping under the planned economic system in China,during which both ports and shipping were part of the completion of the national transport plan.At this point,the services provided by ports and shipping are only public and not for profit.After ‘unification of port and shipping’,port operators gradually acquired a certain degree of operational autonomy.The Harbor Law of China strictly follows the reform idea of separation of government and enterprises,separating port operators from port authorities and port administration.In 2009,the Ministry of Transport’s second "Regulations on Port Operations"(the "Regulations")set out detailed regulations on various types of port operations.However,the concept of port operator has never been clarified.After the separation of government and enterprises,port operators are still engaged in duties that should be undertaken by government departments,such as port safety inspections.This problem is commonly referred to as the "after-effects" of the reform of the separation of government and enterprises.State-owned enterprises are still the mainstay of port operators in China,and the assets of large state-owned port operators are state-owned.However,there is a sharp line between the state assets in the name of port operators and the property of the state defined by our constitution.The actual use of the port shoreline,urban land,and waters by the port operator is the property of the State.The use of the latter by the port operator is restricted by democratic principles.The Harbor Law separates the government from the enterprises and the port operator has the right to operate autonomously as an independent enterprise under the P.R.C.Constitution.Apart from the natural public characteristic,the port operators also undertake the duties of government departments such as safety inspection and emergency response in case of emergency,as stipulated in the local port regulations.The former conforms to the franchise structure in theory which embodies the theory of social administration;the latter confors to the public function authorized by laws and regulations which embodies the theory of state administration.In this area of ports,the reform of the separation of government and enterprise is not complete.Port operators both engage in business activities as market players,provide public services in their operations and undertake some government departmental functions.The public nature of the services they provide and the appearance of public authority to undertake government functions on their behalf give them the theoretical characteristics of public legal persons in the administrative jurisprudence of civil law countries.When undertaking public functions,port operators can refer to the concept of ‘the public legal person’ in civil law countries and are subject to public law regulation,enjoying certain limits of public power and fulfilling public law obligations.This thesis confronts the issue of the relationship between the status of the enterprises that take public functions,represented by port operators,as market subjects engaged in business activities and their status as providers of public services when they undertake public functions,and as carriers of public power who sometimes exercise the powers of government departments on their behalf,and seeks to analyze how the dual legal nature of such state-owned enterprises as port operators can be self-consistently integrated into one,and how China can rationalize them through reform,which is the ultimate proposition in the construction of the administrative rule of law.This is the ultimate proposition in the construction of the administrative rule of law.The main text is divided into six chapters,which analyze the theoretical basis for port operators to assume public functions,the main concepts of port operators in the current legal system,the reasons and manifestations of the incomplete reform of the separation of government and enterprises in the development of port operators,the specific problems of port operators affected by the "post-reform" effects,and the specific problems to be solved in the subsequent reform.The specific problems of port operators affected by the "post-reform" effects,the dilemma of the legal nature of port operators in theory and the suggestions for improving the system in the subsequent reform concerning the dual attributes of port operators.The first chapter is a normative analysis of the various concepts involved in port operators,which by the end briefly introduces the potential problems that port operators in our country faces.The Harbor Law only defines the concept of "port operation" in a rough manner,and does not define the concepts of port operator,port administration and management.The Regulations enumerate several main types of port operators without really defining their connotations and extensions.The concept of port operator in the 1991 United Nations Convention on the Liability of Operators of Transport Terminals in International Trade is an important reference for the clarification of the concept of port operator in our legal system.The port operator in the legal system of China should be defined as "a person who,within the scope of the port area,provides cargo handling,barging and storage operations and port tug operations for ships,cargo and passengers in waterway transport".This concept of port operator extensively includes tug operators,stevedoring operators,warehousing operators,barge operators,cargo handling operators and passenger terminals,but does not include pilotage operators and freight forwarders.The port administration department refers to the department that interfaces with port operations in practice and supervises and manages the various operational activities of the port operator.The port administration department,in its extension,includes the port authority in each place,as well as some maritime bureaus and traffic bureaus that are substantially responsible for port supervision and management.The State-enterprise relationship around a port operator is significant for clarifying its legal nature,which under the framework of ’Public Legal Person’ theory that the next chapter will introduce,can help locate an appropriate seat for the public functions it has been taking on.This is also the core problem among those that port operators experience since the reform.The second chapter analyses the theoretical basis for port operators to undertake public functions,starting from the theory of ’public legal person’ in the administrative jurisprudence of civil law countries.The private law nature of port operators is widely recognized in theory and practice,and port operators are market subjects when carrying out business activities.In contrast,when a port operator undertakes public functions,it is subject to public law and performs public law obligations,which requires a jurisprudential foundation.Thus the ‘Public Legal Person’ theory is necessary.The‘Public Legal Person’ derives from the ‘National Legal Person Theory’,which is established under public law and subject to public law,complements and completes the concept of an administrative subject.This concept better fits the enterprises take public functions in our legal framework.These enterprises that carry out public utility construction and undertake public functions undertake specific public functions under explicit authorization or delegation,and in the performance of their functions,they enjoy the administrative powers necessary for the performance of their duties within the scope of their authorization and delegation and are subject to supervision.In the exercise of their functions on behalf of government departments,these enterprises are "organizations authorized by law or regulation" in China.There is some recognition of the public law status of the various urban water supply enterprises and rail transport enterprises in China when they exercise their responsibilities in terms of approval and penalty powers.Port operators also have the appearance of being authorized to undertake public functions under the regulations of the various port provinces and cities,as they enjoy the power to carry out safety inspections and to deal with emergencies.There is no conflict between the public legal role of these enterprises when they undertake public functions and their private legal role in their business activities.In modern countries,government departments cannot be expanded indefinitely when government functions are developing rapidly.The assumption of public functions by such an organization is a necessary form of horizontal separation of public functions.State-owned enterprises,such as port operators,which undertake large public utilities,assume the necessary public functions in order to assist the government to better realize public services,in line with the requirements of a state based on the rule of law and good governance.Administrative privatization is another form of horizontal decentralization of public services in countries around the world,usually done in the form of public-private partnerships.Port operators engage in business activities that overlap with public services and are therefore subject to the prescribed procedure to obtain the appropriate qualifications.The doctrine of concessions,therefore,complements the ’Public Legal Person’ theory and provides the basis for the public law nature of the port operator.This theory in this thesis,as it is,is not trying to strengthen the public functions of these enterprises.Instead,it is deviding a reasonable line between its public functions and private ones,trying to achieve a best organization of both public welfare and economic efficiency,which also accepts the mornitoring from the law and the public.The third chapter is a historical examination of the legal nature of port operators and an in-depth excavation of the contents of our Harbor Law and Regulations in relation to the legal nature of port operators.Through observing how the duties in law on port operators evolve in different periods,we analyze the active and subtle changes of the public and private nature shown in the duties of port operators.At the ‘unification of port and shipping’ time,port operators and shipping companies were instruments for the fulfillment of the national transport plan,reflecting only the nature of public law and not private law.From 1995,the port and shipping were gradually separated and the port operator became separate from the carrier and began to reflect private law nature.But,the content of the "Two Regulations" is influenced by the planned economy and still places more emphasis on the public nature of port operators.Harbor law in 2003 recognized the private nature of port operators and put forward the mode of strict government-enterprise division,However,this law does not include any rule on the private nature of port operators,which merely regulates on the administrative relationships related to port operators and pursues a difficult balance between the two natures.The subsequent three times revision of harbor law and the coming and six times revision of Regulation on Harbor Operation and Management both shows the complexity of the legal nature of port operators and the hardness in lawmaking.The fourth chapter sorts out how the dual attributes of port operators manifest themselves in practice and the problems caused by their attributes not being clearly defined in law.The fourth chapter first combs the problems in the operating practice of port operators.Some port operators took an indifferent attitude its franchising system awarded by the law,taking the power of collecting fees for granted,neglecting public interests.Then this thesis combs judicial practice in our courts on the legal nature of port operators,and analyzes the comprehension and application of the franchising system,arranging quality,fair competition(interested party),administrative punishment and so on relevant to port operators.Reflecting the unclear legal attributes of port operators in our judicial practice makes this thesis realize the public and private attribute of port operators exist and influence each other.Our courts have tended to deal vaguely with the issue of the legal nature of port operators,commenting only on specific claims in practice,such as the qualifications of port operators and the appropriateness of their business activities.This approach to judicial decisions on matters of fact is always correct,but lacks sufficient predictability in terms of the expectations of our various port operators,which also takes too much time and money.Then this thesis analyses the concrete manifestations of the unclear legal nature of port operators issue in the practice of port integration reform,based on the background of the current port integration reform.This reform avoided vicious competition to a certain extent.However,the problem between the central and local government on allocating resources still stands out.The integration of ports irritate the concern on the possible new monopoly.At the same time,the consolidation of large carriers to control port operators can no longer be ignored.Carriers are driven by profit and are eager to control ports in order to gain priority access to berths when port resources are tight.The profitseeking nature of carriers is to some extent incompatible with the public law nature of port operators.If the right to allocate port resources is unduly influenced by carriers,it may threaten the stability of port resources.The fifth chapter works on the complexity and locality of the issue the legal nature of port operators in the international community and in other harbor countries.International conventions recognize the private legal nature of ports more clearly.The harbor laws of Germany and Japan more emphasis on the private law nature of the port operator;the harbor laws of the United States place more emphasis on the public law nature of the port operator.A comparative analysis can also show that port operators are characterized by both public and private law nature and this conflict exists in all countries.The sixth chapter proposes a theoretical picture of the legal nature of port operators in public law with some suggestions in legislation.This chapter proposes that China can give the port operator a special theoretical position as ‘A Special Subject’ in theory and make some adjustment in the future amendment of the Harbor Law,clarifying the dual attributes of the port operator,especially its public law nature.In what circumstance would ‘A Special Subject’ fit port operators,the test methodology lies in the organization of the public property of the resources they take advantage of,the actual use where the resources are put in,as well as the authority of their public functions.This will not only solve the indifferent attitude of some port operators in their operating practice,but also facilitate the intervention of the State-owned Assets Supervision and Administration Commission at the appropriate time to obtain the right to allocate berths when port resources are in short supply.This concept fits China’s circumstances better than some other concepts that some scholars put forward to illustrate the status of the enterprises that take public functions.This institutional positioning is conducive to safeguarding public safety and interests in the port sector and preventing the erosion of the public law nature of the port operator.In international community,port operators are normal enterprises.This thesis tried adjusting some contents in the Harbor Law and some other legislations,realizing the theoretical picture of ‘A Special Subject’ and awarding the power to port operators through ‘Decisions on Legal Issues’ when necessary.These rules not only aim at giving these enterprises an exact title while fulfilling the public functions,but also at limiting its potential negative influence.