I. Background of the Issuing of the new Regulations of the People’s Republic of China for the Administration of Waterway Transport

Waterway transport is a transport means for people or cargo with ships as the tool, ports or port terminals as the base and waters (sea, river and lake) as the sphere of operation. Compared with other transport means, waterway transport features significant advantages including low costs, being energy-saving, long duration and larger capacity. Statistics show that cargo transported through waterway means accounts for about half of the total social cargo transport volume, and nearly 90 percent of transport for foreign trade is by water. Waterway transport is playing an important role in China’s comprehensive transportation system with its prominent advantages.

However, as waterway transport is becoming more expansive and international, legislation in waterway transport in China is clearly lagging behind: although the Law on Shipping of the People’s Republic of China should be drafted within 2012 according to plans, the preliminary version of the law hasn’t been finished, so the legislation and regulations on waterway transport in China remain blank; the old Regulations of the People’s Republic of China for the Administration of Waterway Transport (hereinafter referred to as the old Regulations) is far too outdated in content and urgently needs revisions.

II. Limitations of the old Regulations

The old Regulations, which came into effect on May 12, 1987, reflected the development features of and management requirements on the market of waterway transport in China at the beginning of the reform and the opening-up and played an important role in promoting the development of China’s waterway transport market. But over the past 20 years since it was issued, no major revisions have been made on it (only The Chapter III Penalty Provisions was revised in 1997), so many of its content is no longer applicable amid a more developed socialist market economy and cannot meet the requirements of rule according to the law.

First, many articles of the old Regulations were influenced by the considerations of the planned economy era and restrict the role of the market in resource allocation; Second, there are many items concerning administrative approvals in the old Regulations; and conditions for approvals are not clear, procedures are complicated, and the categories and scales of administrative penalties are not reasonable. For example, profit-making waterway transport businesses and agencies offering waterway transport services need approvals from the waterway transport authority, but procedures for administrative approvals haven’t been regulated, which violates the Administrative Approval Law. The provisions that the transport authorities should balance comprehensive waterway transport plans and ports should provide services for ships according to national plans are actually not applicable now. Moreover, complete market supervision systems are absent in the old Regulations and related items are too sketchy and lack operability. And the content concerning security management, energy conservation, emissions reduction and capacity control in waterway transport hasn’t been mentioned in the old Regulations.

Meanwhile, it has become a priority in the scientific development of waterway transport regarding how to make waterway transport play an advantageous role in building up a resource-saving and environmentally friendly society faced with the new requirements on the sector in the current new situations. So it permits no delay in including waterway transport administration into the new system of laws and regulations in China and breaking the limits of the old Regulations.

III. Content and Significance of new Regulations of the People’s Republic of China for the Administration of Waterway Transport

Chinese Premier Wen Jiabao signed the State Council decree No 625 on Oct 13, 2012 and announced that the new Regulations of the People’s Republic of China for the Administration of Waterway Transport (hereinafter referred to as the New Regulations) would come into effect on Jan 1, 2013. The New Regulations consists of 46 items in six chapters, namely general provisions, operators of waterway transport businesses, business activities of waterway transport, supplementary services, legal liabilities, and supplementary provisions. The New Regulations, focusing on regulating market access, improving market supervision and enhancing management capabilities and level, has set up a dynamic market supervision and exit system through improving the conditions and procedures of access to waterway transport market and supplementary markets, regulates the behaviors of business operators in this sector, enhances the obligations for ensuring security and awareness of quality services of market players, defines various rights, obligations and responsibilities of waterway transport administration departments, ensures and promotes the sound and safe development of the domestic waterway transport industry.

Main Content of the New Regulations of the People’s Republic of China for the Administration of Waterway Transport

Basic Principles
 1 Reform the methods and approaches of management and improve the level of public management;
 2 Promote the industrial restructuring in waterway transport and push forward the scientific development of the industry;
 3 Improve the long-term market supervision mechanism in the waterway transport market and maintain the market order;
 4 Promote administration according to the law and build a service-oriented and responsible government.

Main Ideas
Guided by the Scientific Outlook on Development, the Regulations of the People’s Republic of China for the Administration of Waterway Transport meets the demands of the development of China’s economy and society, brings the basic role of the market in resource allocation into full play and enhances the function of the government, i.e. keep things under control from macro perspective and invigorate activities from micro perspective.

Major systems
 1 It establishes the legal status of waterway transport administration agencies.
2 It streamlines the system of administrative approval.
3 It adds the system of macro control in waterway transport capacity.
4 It adds the policies of energy saving, emission reduction and restructuring in the sector.
5 It adds the system of credibility management.
6 It adds the system of service quality management.
7 It adds the system of emergency transport guarantee.
8 It improves the mechanism of market activity supervision and market exit.
9 It maintains the system of domestic waterway transport market protection.
10 It adds the system of compulsory insurance for passenger ships.

The new Regulations of the People’s Republic of China for the Administration of Waterway Transport has made improvements as follows:

First, administrative approval items have been reduced and approval procedures streamlined. In the old version of the  Regulations of the People’s Republic of China for the Administration of Waterway Transport, the problem of multiple administrative approval items and low approval efficiency remains. So the new version removes the provision that ship representative, passenger and cargo transport by watercraft representative businesses should operate after getting necessary approvals. Ship management services should be qualified in obtaining necessary professional technologies as it involves the security of the ships and human life. Related businesses should get administrative approvals according to provisions in the Administrative Approval Law. But other businesses that offer supplementary services such as ship representative and passenger transport by watercraft only have to register with industry and commerce authorities and report to waterway transport administration agencies for record. Moreover, the New Regulations specifies conditions of approval for enterprises offering waterway transport and ship management services and sets rules on procedures and time limits for approval which is beneficial for improvement on working efficiency.

Second, the function of public administration of waterway transport authorities has been defined. The conditions for market access have been made more rigid as the New Regulations defines the qualifications for waterway transport and ship management operators. Waterway transport operations have been regulated. The New Regulations rules that waterway transport operators should ensure that their ships are opt for shipping, operate within the approved scope, should never overload, should provide qualified services, arrange carrier liability insurance for passenger ships or get related financial guarantees, abide by the rules on transportation of dangerous cargo, perform the duty of disclosure over liner transport services, make transportation of emergency cargo and personnel prior to other transportation services and ensure military transportation according to the law, and report data to authorities. Moreover, the New Regulations defines the legal obligations of operators of waterway transport supplementary businesses and rules that those operators should perform duties according to Contract Law, administrative regulations and commission contracts. And the New Regulations also specifies supervision and management of waterway transport market and punishments on illegal operations.

Third, waterway transport security has been enhanced. The New Regulations defines the qualifications for the practitioners in this sector. Transport and ship management enterprises should possess marine service and maintenance personnel based on their scope of businesses and ship sizes; senior sailors should account for a certain proportion of the staff in transport enterprises. The New Regulations also defines that ships in operation should get valid certifications on ship registration, tests and operations and meet the requirements on technological specifications according to a certain ship category and ship age. The New Regulations also defines the conditions when transport enterprises are not qualified for secure management. For enterprises that have experienced major and above waterway transport accidents or seen security hazards which may lead to severe results, waterway transport administration agencies can order their businesses be suspended for internal rectifications; for disqualified enterprises, authorities should withdraw the operation approval for them. Besides, the New Regulations also sets rules for emergency transportation and important military transportation. It asks operators to make transportation of necessary cargo, equipment, tools, relief personnel and victims in emergencies prior to other transportation services. The implementation of those rules provides strong support for management of waterway transport security and reaction to emergencies.

Fourth, legal obligations undertaken by waterway transport industry in energy saving and emission reduction have been specified. According to preliminary estimates of China Waterborne Transport Research Institute, when the distance and cargo transported is set, energy consumption by watercraft is only 50 percent of that by railway and 40 percent of that by road; CO2 emission by watercraft is only 33 percent of that by railway and 7 percent of that by road, and transportation cost is 25 percent of that by railway and 7 percent of that by road. In terms of transportation capacity, transportation per horsepower by watercraft is 4 times and 50 times that by railway and by road. But in recent years, technological specifications for some old ships in inland rivers are backward and ship types are too complex, which affects the throughput capacities of channels and facilities, hinders security insurance, energy conservation and emission reduction, and greatly reduces throughput efficiency of some major inland rivers. To this end, the New Regulations specifically defines new ship technological standards. For ships in service that do not meet new standards but are not qualified for discard, measures such as subsidies should be adopted to guide and encourage operators to renew and renovate their ships. Meanwhile, support is offered to operators to adopt advanced and adaptable waterway transport facilities and technologies so as to save energy and reduce pollutant discharge.

As the fundamental law for better development of waterway transport industry, the New Regulations defines rights, obligations and duties of all parties concerned in and outside the industry. It plays an important role in unifying the conception of the industry in the society and forces of all parties, improving the development environment for the industry, regulating competitions and forming a forwarding momentum. The promulgation and implementation of New Regulations is another major achievement in legislation in transport industry and a major event that will exert a long-term influence on waterway transport industry, which will not only help form a unified and regulated market with competitions in order, maintain regular market order, beneficial to leading the sector to reform development pattern, accelerate restructuring and achieving the transformation from a traditional industry to a modern industry. Meanwhile, the promulgation of New Regulations will further improve the energy saving, emission reduction and low-carbon development strategy and help form a green transport system, and strengthen management on waterway transport security so as to provide a guarantee for the sector. It is beneficial for orderly and sound development of the industry based on rule by law and systemic innovations; and it is helpful for the realization of restructuring through industrial regulations and multiple goals in development quality, security, environmental protection and energy conservation through supervision based on the law.