December 6, 2013
South America rediscovers waterways
In Argentina it is common to hear talk simply of the “hidrovía” as the waterway system of the Paraguay-Paraná rivers, running through Brazil, Bolivia, Paraguay, Argentina and Uruguay.
However, it is uncommon to hear references to the Rhine-Danube waterway which may have served as a precedent for its institutional model, and to that of the Mississippi, which has served as its business model, as well as to other similar fluvial systems in South America, among them, no less than six waterways in Brazil.
In an interview with the Herald, Ricardo Javier Álvarez, a lawyer specialized in Navigation Law, Ports and Infrastructure and Vice-President of the Argentine branch of the Ibero-American Institute of Maritime Law (IIDM), draws a general map of these routes.
The new waterway projects in South America entail a number of benefits and opportunities.
“With the exception of Argentina, in the region everything is yet be done,‘ he added, as an advance of his presentation at the next IIDM Congress in Puerto Rico from October 29 to November 3, 2013, on Operations and Legal Regimes in International River Basins organized together with the Maritime Law Association (MLA) of the United States.
The numbers speak for themselves.
The Mississippi waterway moved approximately 500 million tons of goods in 2011, that of the Rhine-Danube about 300 million in that year, so that of the Paraguay-Paraná — currently in the range of 15-16 million tons in its barge navigation section — can grow significantly in the future, Álvarez says.
What general considerations can you make on this new momentum that waterways seem to be gathering?
The world has rediscovered the waterways or inland waterway transportation systems as true substitutes for other modes of transportation of goods, and is willing to develop and optimize them as an efficient, economic and environmentally sound means. It is a very convenient way to transport heavy goods, large volumes, indivisible or dangerous cargoes, or bulk cargo (due to its low unit value): grain, timber, iron ore, fuel, fertilizers, sugar, etc.
At the same time, it is an easy way to connect with other modes such as rail or ship. Therefore, the regional transport of goods by water has been developing at high speed and in Europe the SSS (Short Sea Shipping) routes allow a more reasonable use of truckload transportation.
The world is witnessing a change in transport paradigms, and waterway transport is an excellent logistics solution, which requires us to create new legal standards and new responses to foster it. It will be essential to go ahead with physical infrastructure works, to first analyze and modernize legal infrastructures to give it support.
How has this issue influenced the evolution of unimodal transport to the multimodal one?
Nowadays, it is impossible to think of foreign trade without multimodal transport, without logistics, without state-of-the-art (última generación) ports and their connectivity.
The South American countries should adapt their legal and physical infrastructure to the new needs of trade and regional integration processes.
The door-to-door transport concept forces lower transport costs to compete internationally. Also, the need to include regional economies to foreign trade processes, forces us to rethink the logistics scheme.
Logistics operations areas within river and sea ports, as well as their connection to “dry ports” or “logistics terminals” (located in the hinterland), would be a real boost to the flow of trade in the region.
This evolution requires connecting inland waterways (rivers, ponds, lakes) with seafaring ships, for goods transported in bulk. The ports are no longer immobile tax areas and have become true protagonists of world trade, providing services and logistics. So much so that ports abroad go on tour to promote their services, trying to capture new cargo and offering new services to the market (e.g. services for cruise ships, connectivity with new rail lines and/or waterways, and intra- and extra-logistical port connectivity services with roads and airports, etc.) For the region, port connectivity and its relation to multimodal transport entail the challenge of developing the inland waterways throughout South America.
The world awakens in the XXI century to the study of the development of Inland Waterways, a process which takes place in Europe, North America and Latin America, among others.
Because these national and/or international navigation rivers between states were underexploited, devalued, lacking services, with obsolete fleets without enough training of staff and lacking the necessary investment for infrastructure. Let’s recall that a waterway is a conditioned waterway (dredged, channelled, marked) and navigation services and loads.
How to go to Argentina on the issue of the waterways?
Argentina has been a pioneer in the region and has done it through very successful management. It has become a true state policy.
The Ports Law 24,093 and dredging and marking ordered by Decree 863/93 and extended by Decree 113/2010, have proved to be the essential legal infrastructure to put the country at the forefront of dredging and marking in the Paraguay-Paraná waterway, performing the necessary infrastructure works (ports, dredging and signalling) in its navigable stretch from the Emilio Mitre Channel (to access the River Plate) to Santa Fe in the oceanic stretch and from north Santa Fe to its confluence (with the Paraguay River in Argentina’s Chaco province), and in the future to Asunción, in the stretch of barges.
Argentina also shares with Uruguay, via the Administrative Commission of the River Plate, the dredging and marking of the Martín García (binational) Channel.
It is now left to Paraguay, Brazil and Bolivia to go ahead with the necessary works for the preparation of this common international river (Treaty of the Paraná/Paraguay Rivers Waterway). According to the news of new works projects and legal changes (especially the New Law of Ports of Brazil), we see that Paraguay and Brazil are already geared to this objective.
At the Argentine Engineering Centre you mentioned in late August some precedents of the Paraguay-Paraná Rivers Waterway. Could you elaborate?
There are always comparisons with other schemes and systems, which often serve as reference to adapt them to the needs of the countries of South America. To do this, we need to analyze the business experience of the Mississippi River in the US which, despite being a national river, has been a source of inspiration to our waterway system of tug-propelled barge convoys transporting goods, with specialized terminals, along the Paraguay-Paraná, highlighting the ports of San Lorenzo “Up River.” But in the legal and institutional field it is also important to mention the system created by the Central Commission for the River Rhine in Europe since the Treaty of 1868, at which time many European countries made the decision to work together to materialize a sustainable transport system along a common international river
What has been the experience in Europe?
In Europe we have the Rhine 1,320 kilometres in length, along which are transported two-thirds of the goods of the waterway (300 million tons annually), with its natural outlet in the port of Rotterdam. For its part, the River Danube is crucial because it crosses the continent from east to west, and those two waterways represent a major transport system for an enlarged Europe. Both systems have been connected since 1992 by the channel of the River Main, totalling about 3,500 kilometres. The longitudinal extension of the system of the Rhine-Main-Danube is similar to our Paraguay-Paraná Waterway, so it is not unreasonable to project a future development of the tonnage transported.
These waterways agreements involve the harmonization of national laws...
At an institutional level, today, in force in the European Union are: a) the area of the application of the Convention of Mannheim of 1868 (Regulations of the Central Commission of the River Rhine and its jurisdiction); b) the area of the 1948 Belgrade Convention (statutory regulations of the Commission of the Danube); and c) the area of the Community Treaties and the European Commission with jurisdiction in the field of transportation. The solution being sought is to achieve co-ordination between the various authorities and a harmonization (respecting the experience and precedents of the Central Rhine Commission), via the creation of a European Agency for the TVN, which would tend to unify the system throughout Europe. Let’s recall that the CCNR (Central Commission of the Rhine) is uniform in its legislation (Germany, France, the Netherlands, Belgium and Switzerland) as their rules are integrated into their national legislation systems. Instead, the Danube Commission can only make recommendations that each state member may or may not introduce into their domestic law (this agreement was adopted by Germany, Austria, Hungary, Romania, Bulgaria, Croatia, Russia, Serbia and Montenegro, Moldova, Slovakia and Ukraine).
You said that while Europe would somehow be like a legislative mirror — accepting differences — the commercial profile of the Paraguay-Paraná Rivers Waterway is modelled on the US.
Indeed, the operating system of transportation of goods loading and unloading in the Paraguay-Paraná waterway is the image and likeness of the Mississippi. While our system has always used the standard Mississippi barges (1,500 tons), now also larger barges (2,500 tons) are being adopted for the Paraná River. The logistics system, the type of goods transported, the installed terminals and river-sea interface is based on that system.
The Mississippi River in the US is 3,774 kilometres long. It connects with the Gulf of Mexico and captures 80 percent of the goods inside the US which are transported by river, with an average transport of about 500 million tons/year, mainly bound for South America. The length is similar to our Paraná-Paraguay Rivers Waterway, and to the European system of the Rhine-Main-Danube.
Also, in North America there is the remarkable basin of the Great Lakes, the St. Lawrence River Channel, the Erie, Ohio, and Mississippi and Missouri Rivers — which form an international (US-Canada) waterway — but of interconnected lakes, with an outlet to the sea, through the Saint Lawrence channel.
How are we in South America?
In this field we have to focus on the treaty of the Paraguay-Paraná Rivers signed by Argentina, Brazil, Bolivia, Paraguay and Uruguay. It is a partial agreement under the ALADI (LAIA) involving a 3,442-km waterway which connects five countries from Puerto Cáceres (Brazil) to Nueva Palmira (Uruguay). However, in order not to affect the Pantanal — the Brazilian marshlands which are a leading environmental resource — its course has been rethought and in practice navigation is taking place further south, that is, from Corumbá (Brazil) going through Asunción (Paraguay) and the ports of Paraná to Nueva Palmira (Uruguay) and/or the ports of Argentina.
What are the main points of the treaty?
From the point of view of public law, the River Transport Agreement (signed in 1992) provides for the free navigation of rivers, free transit and equality of opportunity for the ship-owners of the member countries. The organs of the Agreement are the Intergovernmental Waterway Committee as the executive body and the Commission as the technical body. In addition, protocols governing Insurance, Customs, Navigation and Security, Provisional Flag Waiver and Terms of Equal Opportunities for greater competition.
The purpose of this legal instrument was navigating the stretch of tug-propelled barge convoys from Santa Fe (northern Argentina) to Corumbá in Brazil, to a depth of 10 feet, 365 days a year, day and night). And that each country take care of the infrastructure in its national section.
All these instruments have been incorporated by member countries into their domestic legislation and were duly ratified. Argentina ratified it by Law 24,385. Also issued were regulations which have not yet been incorporated into all the national legal systems of the member countries.
While the task of international bodies (the CIH and The Commission) has been very important, no relevant achievements on the harmonization and/or regional legislative uniformity have been made, since these organisms lack the delegation of national competition. And national standards and navigation bilateral agreements signed by member countries prior to PPH Agreement, continue to be applied.
You have mentioned several other new waterway projects in the continent. Which ones would you highlight?
From the several states, and on a regional basis, there are projects to integrate South America through infrastructure works. The truth is that this process of modernization and regional union, which is at an incipient study level, includes inland waterways. However, its implementation requires an analysis to remove obstacles and modernization of the legal and physical infrastructure, and that no work can be addressed without a legal basis to support it properly. The IRSA project is a good example of this, as well as the Project of the CAF (Andean Development Corporation), which refers exclusively to connecting inland rivers of the region in a north-south axis.
The IRSA Project: In 2000 12 South American governments gathered and proposed an axial regional integration and infrastructure projects and territorial integration and harmonization of policies to achieve the goals. Ten axes are on the basis of a unit methodology which includes river corridors. On the other hand, the rivers which connect the CAF with the North-South axis. The basins of the rivers Orinoco-Amazon-River Plate total 50,000 km. And the total longitudinal extent drawing a straight line north-south of the rivers Orinoco-Casiquiaré-Negro Amazon-Madeira-Mamoré Itinés-Guaporé Paraguay-Paraná-River Plate totals 10,000 kilometres. However, there are some obstacles: The strong Atures and Maipures rapids, that is, the upper River Madeira, and the navigation of the Rivers Guaporé and Paraguay in Mato Grosso.
Could you list other waterway projects in the region?
New waterway projects in South America entail a number of benefits and opportunities, as everything is yet to be done. In fact, working groups and institutions have been created to promote the six waterways in Brazil, the CORMAGDALENA in Colombia, etc.
The river basins and rivers to be developed in the region to transport cargo and people could be listed as follows:
Orinoco Basin: 1) Orinoco-Apure-Portuguesa, 2) Casiquiaré-Negro, 3) Orinoco-Meta;
Amazon Basin: 1) Amazon-Solimoes, 2) Madeira-Beni-Madre de Dios, 3) Negro, 4) Putumayo-Ica, 5) Huallaga-Marañón, 6) Ucayali;
Magdalena Basin (Colombia);
River Napo (Ecuador);
San Francisco Basin;
and Paraná-Tietê waterway.
The connection of these waterways would allow Venezuela, Colombia, Brazil, Ecuador, Peru, Bolivia, Paraguay, Uruguay and Argentina, to be connected by their inland waterways.