The author schematically presents the shortcomings of the regulatory system in a public concession process for a port terminal. Likewise, the present article exposes the vicissitudes when in the execution of the respective contest of integral projects, the constitutional support of a state regulation, conflicts with the right -also constitutional- of the private, favoring judicial intervention.
I. Background: Dp World Callao
The port activities in Peru are regulated by the Law of the National Port System Law No. 27943 and its regulations, Supreme Decree No. 003-2004-MTC. These standards describe a series of services: pilotage, towing, mooring and unmooring of ships; and, loading, unloading, handling, transshipment and storage of merchandise. In addition to regulating these activities, its governing body, the National Port Authority –APN– grants special authorizations for the use of the coastal strip and port ratings.
As announced by the APN, the physical platform on which these activities are carried out, would be granted in administration to the private through a public concession process. This is based on the investment and development requirements proposed in the National Port System Plan. In the case of ports for public use, the Comprehensive Projects Contest system is used, with selection methods, evaluation and minimum investment conditions specified in the bases and circulars issued for this purpose by the body that conducts the process, as a public tender.
The Port of Callao until 2006 had been operated exclusively by the state-owned ENAPU SA. Its infrastructure is divided into two important areas: the southern area (Hoy Muelle Sur), and the conglomerate of the northern area (Muelle Norte), both extensive land area and / or reclaimed from the sea by modern engineering. The South Pier was awarded to the Arab company DP WORLD CALLAO; The Muelle Norte is currently under concession process, operated by the state-owned ENAPU, a company with the option to participate as an associate of the next concessionaire.
Now, we should ask ourselves what is the economic importance of obtaining the port administration of a port terminal.. La respuesta radica esencialmente por las tarifas que recauda el operador portuario por cada contenedor de veinte pies (TEU) que moviliza, y que oscila en cien dólares por contenedor embarcado o descargado de la nave, ello sin contabilizar otros ingresos portuarios. Las estadísticas señalan que el puerto del Callao moviliza al año por carga contenedorizada más de un millón de TEUS, y proyecta una auspiciosa y creciente demanda. También opera la mayor carga de transbordo de todo el litoral Pacífico Sur. En términos comparativos, el puerto más activo del mundo moviliza treinta millones de TEUS al año, y la opera la estatal PSA de Singapur, por lo que estamos frente a una industria con gran despegue económico.
The objective of this article is to expose the need for institutional strengthening of the state regulatory agencies that participate in the port work; granting them, in matters of defense of competition, powers of control prior to the call for concession –ex ante intervention– to favor effective competition in the port of Callao. Let us remember that with ex ante intervention, we prospect the behavior of economic agents by establishing behavioral parameters; while with ex post intervention, the market is let go, exerting subsequent control only to correct the agent's unwanted behavior.
II. Regulatory framework: Lack of prior control
The intervening regulatory bodies that carry out the work of monitoring, regulating and sanctioning conduct and practices contrary to free and fair competition in the port market are OSITRAN and INDECOPI.
Within its generic functions, the Supervisory Agency for Investment in Public Transport Infrastructure (OSITRAN), has the role of safeguarding the balance between the interests of the concessionaire, the grantor and those of the user (the latter reflected in adequate rates and quality of service); and the Institute for the Defense of Competition and Intellectual Property (INDECOPI), has the task, among others, of proscribing and combating all practices that limit free competition, as well as the abuse of dominant or monopolistic positions, in accordance with the content precept in article 61 of the Constitution.
Regarding the supervision of free competitionIn port services, the regulator OSITRAN has the function of issuing an opinion on the final versions of the concession contracts sent by PROINVERSION (driver of the North Pier contest). These opinions - ex ante and ex post of the contract design, but finally ex post of the tender process - do not allow the regulator to exercise control to incorporate in the tender rules the appropriate award criteria that prevent anti-competitive conduct and / or promote competition.. Subsequent control is exercised under art. 2º of Law Nº 27701 - Law that establishes provisions to guarantee the normative concordance between the privatization processes and concessions with the regulatory legislation; consistent with art. 37º of Supreme Decree No. 044-2006-PCM, OSITRAN General Regulations.
As for the second regulator, it is the function of INDECOPI to monitor free private initiative and company freedom, defending free, fair and effective competition via subsequent control. In conclusion, the ex ante control faculty of this second regulator is delayed, through art. 2.1 literal a) of Legislative Decree No. 1033 - Organization and Functions Law of Indecopi, and art. 2 of its regulations, approved by Supreme Decree No. 009-2009-PCM.
It is in this scenario of deregulation of prior control for both agencies, that on July 22, 2010 Supreme Decree No. 033-2010-MTC is published, on measures to facilitate and promote free competition in the provision of port services. Through this norm, the State made use of its regulatory prerogative to establish ex ante control of the North Pier concession process, establishing the eligibility parameter for the application, in order to foster the much-awaited port competition. Then, but not on the initiative of the regulatory authorities, the incompatibility of a concession company to compete against itself in the administration of a second port terminal adjacent to the one that was already awarded was established.
The economic argument that justifies this barrier to entry consists in that, by limiting the participation of the port operator of the South Pier in the public tender for the North Pier, a third party would eventually obtain the good bid, achieving –by effect of competition between both operators– promote an instinctive reduction of tariffs in order to improve foreign trade and social welfare. The result, the current operator of the South Pier, DP WORLD CALLAO and related parties, was excluded from participation in the public tender for the North Pier.
III. Constitutionality of the regulatory measure
Supreme Decree No. 033-2010-MTC is based on article 61 of the Constitution, which specifies that the State facilitates and monitors free competition, combats any practice that limits it and the abuse of dominant or monopolistic positions. Add this precept, that no law or agreement can authorize or establish monopolies.
Without prejudice to the conclusion reached below on the matter, we agree that this restriction on the formation of monopolies benefits the final consumer, by increasing a surplus in their favor. This is explained below: In the port business, effective competition drives the reduction of tariffs, influencing the price of the product that is directed to the final consumer due to lower transaction costs. Likewise, incentives are generated for foreign trade. In imports, foreign products will enter with lower prices, favoring internal trade and consumption; and in exports, greater demand will be generated for the Peruvian product in the destination country, as it will enjoy more competitive prices with respect to more expensive identical products from third countries.
The measure has economic rather than legal support, however the mechanics, as it has been tried to privilege competition in the concession of the North Dock, has not been the most desired, and in that sense, the state prerogative in terms of regulations, in light of the Execution of the tender for the comprehensive port project of the North Dock of Callao, has been held in court, considering the inapplication of said supreme decree through a precautionary measure. This is the amparo action filed by the subsidiary company DP WORLD CANADA INC of the operating company of the South Dock DP WORLD CALLAO. This constitutional demand is directed against the Ministry of Transport and Communications and Proinversión and is in charge of the second Constitutional Court of Lima, under file No. 23585-2010.
IV. Discriminatory measures
If the company DP WORLD considers that there is discrimination when it is denied participation in this contest, it has well-founded arguments to agree to a judicial declaration to that effect. In principle, because in a free market system, the State guarantees free private initiative, not admitting discriminatory or differentiated treatments. This in accordance with the provisions of art. 60 of the Constitution and art. 12 of Legislative Decree No. 757 - Framework Law for the Growth of Private Investment. To add further, our antitrust legislation –as it is regulated– is aware of the formation of monopolies or “positions of dominance” (art. 7.2º of Dec. Leg. Nº 1034 - Law of Repression of Anticompetitive Behaviors), only proscribing its abuse, which objectively agrees with art. 61 of the Constitution,which is the sustenance of the questioned supreme decree.
V. Conclusions
1. The execution of the precautionary measure against the effects of Supreme Decree No. 033-2010-MTC implies the need to rethink the bases of the concession contest, which was in the qualification phase prior to the presentation of the technical and economic envelopes. This redesign is justified inasmuch as the award criteria or competition factors assigned for this contest were set in a scenario where the participation of DP WORLD CALLAO was dispensed with, without prospecting in the bases having the same competitor as a competitor.
2. The expression of the State's will to regulate has not been the most adequate, since the Ministry of Transport has withdrawn this power despite the fact that there are regulatory agencies created for this purpose, and from whom the verbose, analytical and participatory of the imposed restriction, supported by economic reasons and empirical evidence. For this reason, it is necessary to extend them ex-ante control powers for public service concession processes where situations of ineffective competition are observed, giving binding effect to their opinions. An example that the regulator's power to control was insufficient is the ex post administrative inspection of INDECOPI in the case of the recently concessioned increased rates of the Port of Paita.
3. In the procedural aspect, in case the constitutional precautionary measure that admits the inapplication of the aforementioned "self-applicable decree" is appealed, it must be granted with suspensive effect (with suspension of its effectiveness until decided by the superior), of pursuant to article 15 of the Constitutional Procedural Code. However, the Judge must reserve the appeal process until the full execution of the measure has been previously fulfilled (the measure will be considered fully executed with the granting of the good pro). Please note that this is a precautionary measure of successive execution, not immediate. Once the concession winner is known, the measure will have been executed, proceeding to resume the appeal process and suspend the signing of the contract,delivery of the infrastructure and authorization of guarantees, sending the objection book to the superior.
4. Strengthens the aforementioned, the fact that our constitutional adjective code has legislated the precautionary concession in two effects, but not the opportunity to challenge it, for which reason the provisions referring to the due precautionary execution indicated are applicable in the Civil Procedural Code, especially articles 608º, 612º 637º and 641º that show that the purpose of any precautionary measure is to guarantee compliance with the final decision, which justifies what was noted in the previous conclusion and that could not be fulfilled in any other way. Thus, it could not be denied the participation of DP WORLD CALLAO in the concession process of the North Dock.
