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Have you heard about ICAO ATRP? Probably not. And you are not the only one who has not. In fact, the ICAO Air Transport Regulation Panel (ATRP) is a body at ICAO which is currently drafting a Multilateral Air Services Agreement to fully liberalise market access for international air transport and to revolutionise the current rules on foreign investment in airlines, including Ownership and Control provisions.

This would lead to an instant, full opening of the aviation markets worldwide, overriding existing bilateral or multilateral air service agreements between states. It can be compared to a global, instant TTIP* for aviation.

You would expect that such an important agreement must certainly be subject to thorough review, impact assessment and public debate. But although the idea has been in the pipeline for years, few people are aware of it and the agreement is advancing at a greater speed. If adopted, the agreement would significantly change the ICAO founding Treaty without following the appropriate diplomatic processes. Crucially, it has the potential to reverse decades of progress and best practice in economic, labour and safety regulations. It is also wholly contrary to Europe’s objective to develop a durable aviation industry based on a social market economy.

For example, in the agreement there is not the slightest reference to important issues, such as labour, fair competition and environmental aspects. The drafting approach is focused on reducing the economic regulatory burden on airlines, to look to reduce Government involvement in commercial decisions and operations, and to minimise the use of regulation in the Agreement’s text, except for a few important regulatory obligations on safety, security and the application of laws. 

No Social Clause 

The lack of any social clause in the draft Agreement is an assault on the millions of European citizens currently employed in the aviation industry. Liberalization, opening ownership and control and traffic rights, cannot be done without ensuring respect for workers’ rights, employment, high quality jobs, quality training, social protection, social dialogue and to fight against discrimination and social exclusion. Before such proposals can be furthered, these aspects must be considered in the body of the agreement and additionally in a parallel convention at ILO level. 

Principle Place of Business replaces Ownership and Control notion

The proposed liberalisation is based on the simplistic replacement of the traditional concepts of Ownership and Control with the one of Principal Place of Business. While this opens a number of important questions that need to be addressed. Crucially, there is not even a definition of Principal Place of Business proposed! This means that all airlines, as it is the case for many sea vessels today, could for example declare their principal place of business to be Liberia – and all regulatory and oversight tasks will fall under the Liberian flag. Norwegian Air International has recently illustrated how the threat of “Flags of Convenience”, so well-known in the maritime sector, can quickly become a reality in aviation. 

Lacking Fair Competition & environmental provisions

The ICAO Working Group which is tasked with developing the Fair Competition guidelines has advanced at a slower speed. Therefore, no provisions for Fair Competition are foreseen at this stage. The draft agreement also foresees zero environmental safeguards despite ICAO’s previous environmental pledges to limit or reduce the environmental impact of aviation, agreed by the 37th Session of the ICAO Assembly. But a text on full liberalization cannot be accepted until all issues, including fair competition are properly addressed and solved.

* TTIP is the Transatlantic Trade and Investment Partnership currently being negotiated between the EU and the USA


Facts:

6th ICAO Worldwide Air Transport Conference (March 2013) adopted pro-liberalisation conclusions in key areas of the economic regulation of international air transport. It recommended that ICAO initiate work on the development of an international agreement for States to liberalize air carrier ownership and control. (Report here)

At the end of 2013, the Air Transport Regulation Panel (ATRP) was tasked to assist the ICAO Secretariat in the follow up work of the ATCConf/6. Main task: to develop a long-term vision for international air transport liberalization and to examine and develop an international agreement for State use in the liberalization of market access and ownership and control rules. (See Terms of Reference)

In 2014, two Working Groups (WG) were established under the ATRP. The first one, WG1, is dealing with development of international agreements on the liberalization of market access and air carrier ownership and control. WG1 prepared draft texts of the Multilateral Agreement, two related protocols (passengers and cargo) and a multilateral protocol on foreign investment in airlines. The second working group, WG2, is focusing on competition matters but has not produced any papers so far. The two WGs were initially supposed to progress in parallel for obvious reasons but what can be witnessed since is an uneven speed and a de-linked process.

Next ATRP meeting will be held on 1-4 September 2015 in Montreal, Canada. The Panel has to review the work of the 2 Working Groups, their terms of reference and decide on future work to be undertaken by the Panel itself and/or the Working Groups.