Shipping 2023

Last Updated February 01, 2023

Turkey

Law and Practice

Authors



Balcıoğlu Selçuk Ardıyok Keki Attorney Partnership (BASEAK) is an Istanbul based full-service law firm led by experienced professionals since 2007. Drawing on broad experience gained at Turkish and global law firms and international organisations, each BASEAK lawyer is well-equipped to provide creative and diligent project counselling and cutting-edge litigation services. The firm’s practice focuses include corporate, banking and finance, transportation, energy, mergers and acquisitions, arbitration, competition, dispute resolution, employment law, intellectual property, joint ventures and regulatory. BASEAK has gained an outstanding reputation and valued clientele by tailoring effective legal solutions to a broad spectrum of clients of all sizes: individuals; entrepreneurs; small businesses and start-ups; governments and government agencies; and mid-sized and larger private and public corporations, including international and global entities. With exceptional practices in corporate, M&A, banking and finance, real estate, hospitality, energy, competition and litigation BASEAK’s Istanbul office provides access to top-tier legal talent.

The main binding provisions on maritime trade in Türkiye are the Turkish Commercial Code, the Code of Obligations and regulations. Common disputes in maritime and transportation relations are disputes arising out of freight, bills of lading and charter contracts, collision, loss of cargo and compensation arising therefrom, insurance claims and maritime claims.

Due to its geographical location, Türkiye is a key member of the Black Sea Memorandum of Understanding (MOU) and the Port State Control Committee is the executive body of the Black Sea MOU. The Committee deals with matters of policy, finance and administration. Daily activity of the Black Sea MOU is supported by the permanent Secretariat located in Istanbul, Türkiye. Locally, incidents occurring in territorial waters in Türkiye are handled by the Port Authority, the General Directorate of Coastal Safety under the umbrella of the Ministry of Transport and Infrastructure, in addition to the Coast Guard Command under the Ministry of Interior.

Port Authorities are responsible for carrying out all maritime and maritime activities carried out within the administrative borders within the framework of national and international standards and legislation, making all kinds of measures and regulations for the safety of navigation, life, property and environment, and undertaking all kinds of measurements, inspections and technical inspections related to them, implementation and control of practices related to marine pollution, flag inspections of ships, inspection of companies providing pilotage and tugboat services, technical examination and reporting of marine accidents, tracking of all ships and marine vehicles, issuing anchoring and berthing permits and exit documents, protection of coasts, and coastal constructions. It is engaged in control and inspection, certification of port facilities by inspection, fisheries inspections, training and certification of seafarers.

General Directorates of Coastal Safety provide ship traffic services, rescue and assistance, navigational aids, maritime communication, pilotage and tugboat services, increase navigational safety and protect marine traffic from possible adverse effects.

Coast Guard Command handles the execution of search and rescue activities within the Turkish search and rescue zone, co-ordination of medical evacuation and patient transport activities at sea and islands, security of ships carrying dangerous goods, economic patrol duties related to control at the borders of areas where sovereignty rights are exercised and at sea side borders, foreign military monitoring and controlling the activities of ships (if necessary), scientific research, exploration, drilling, cable and pipeline laying, fishing, fighting against smuggling, supervising all kinds of commercial and amateur fishing activities, and prevention of marine pollution. Furthermore, its remit encompasses inspection of illegal acts, ensuring the safety of life and property at sea, carrying out relevant procedures regarding persons entering/leaving the country illegally, conducting relevant inspections on passports, submarine security, water sports and enterprises, engaging in inspection of foreign merchant ships under international law in cases of suspected piracy, piracy on the high seas, smuggling of immigrants, human trafficking and drug smuggling, and prevention of unauthorised broadcasts from the high seas.

The Turkish Commercial Code, Turkish International Ship Registry Law and the Turkish International Ship Registry Regulation are the main pieces of local legislation applicable to ship registration. In practice, these works are carried out through the Port Authorities.

According to Turkish Cabotage law, the operation of vessels in Turkish coastal water and calling at a Turkish port must be carried out by Turkish persons. Where the owner of the vessel is a legal entity, it should be an entity incorporated under Turkish law. If such entity is a trade company, then the majority of the persons authorised to manage the company must be Turkish citizens and the majority of votes must be held by Turkish shareholders according to the company agreement; and, in joint stock companies and limited partnership companies with capital divided into shares, the majority of the shares must be registered and the transfer of the shares to a foreigner must be subject to permission of the board of directors of the company.

The prerequisite for registration in the National Ship Registry is that the ship is Turkish flagged and not registered in any other registry. However, ships brought from abroad for financial leasing are registered in a special section in the Turkish International Ship Registry. In addition to this information, temporary registration is available for bareboat charters as they have a special registry.

In order to establish a ship mortgage, the owner of the ship and the creditor must agree on the establishment of a mortgage on the ship and the mortgage must be registered in the ship registry. Contracts for the establishment of the mortgage must be made in writing. The agreement on the establishment of the mortgage will not be valid unless it is made in accordance with one of these forms.

Ownership and mortgages registries are open to the public. They can be examined by citizens by going to the relevant Port Authorities.

Applicable international conventions include the following:

  • the International Convention on Civil Liability for Oil Pollution Damage, 1992;
  • the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996;
  • the International Convention on Civil Liability for Oil Pollution Damage, 2001; and
  • the Nairobi International Convention on the Removal of Wrecks, 2007 (one of the conventions to prevent pollution in the international arena).

In local law, there is the Law on the Principles of Emergency Response and Compensation of Damages in Pollution of the Marine Environment with Petroleum and Other Harmful Substances, and relevant regulations in the Environmental Law.

The Convention on Limitation of Liability for Maritime Claims (LLMC), 1976 and the 1996 Protocol constitute the main international convention in which the liability of the ship-owner and other related persons are regulated. The liability of the ship-owner and other relevant persons arising from collision and salvage is regulated under Turkish legislation in the Turkish Commercial Code.

The 1976 Convention on Limitation of Liability for Maritime Claims (LLMC) is applicable in Türkiye. The LLMC and the 1996 Protocol are stipulated in Article 1328 of the Turkish Commercial Code No. 6102 and Article 37 of the Law on the Enforcement and Implementation of the Turkish Commercial Code and have been incorporated into the Turkish legal system through domestic legal regulations.

In general, under Turkish law, the limitation of liability for maritime claims is possible up to a certain amount. There are two methods envisaged for this purpose: defence; and establishment of limitation fund. In the defence method, which is a less preferred method, this right can be asserted in the event that one or more claimants assert their claims before a court with the same jurisdiction. The International Convention on the Limitation of Liability for Maritime Claims dated 19 November 1976 applies to the establishment of a limitation fund. The calculations and the parties are determined in accordance with the said convention.

Türkiye has not approved the Hague Rules, Rotterdam Rules or Hamburg Rules. However, the Turkish Commercial Code incorporates rules that set to adapt the Hamburg Rules and Hague-Visby Rules.

Even though the right to sue depends on the type of claim, parties who have claims according to the bill of lading can bring claims to court, such as the carrier, the consignee and the shipper.

Pursuant to the Turkish Commercial Code (TCC), the ship-owner is liable for the negligence of seamen and pilots in the performance of their duties, the Master’s actions, the ship, freight rescued in joint carriage, collision and salvage, and marine pollution. It is possible to hold the ship-owner liable when the cargo is damaged due to one of these issues, if the ship-owner is the contractual or de facto carrier. The carrier shall be liable for loss of, damage to or delay in delivery of the goods provided that the loss, damage or delay in delivery occurred while the goods were in the custody of the carrier. The amendments regarding the carrier’s liability are applicable for the aspects of the transportation where the actual carrier had directly carried the cargo by itself; however, the carrier is always liable for the whole transportation process even where it was assigned to another carrier.

It is stated in the TCC that the general type of the goods, the signs required for their recognition, if necessary, clear information on whether they are dangerous goods or not, the number of parcels or pieces and their weight or the amount expressed in another way shall be written on the bill of lading in accordance with the declaration of the shipper. Also, the shipper is obliged to make full and accurate declarations to the carrier about the goods. The shipper shall be liable to the carrier for damage arising from inaccurate declarations; the shipper shall be liable to other persons who are damaged thereby only if they are at fault.

All claims arising from ship lease agreements, time charter agreements and freight contracts or from the bill of lading or its issuance, and all kinds of liability for loss or damage to the cargo are time-barred after one year. If an instruction given by the consignor requests the cessation of transportation and the return of the goods, the statute of limitations starts to run from the date of actual delivery of the goods to the consignee. In the case of carriage in parts, the statute of limitations shall run from the date of delivery of the last part. If partial carriage is agreed upon, separate limitation periods shall run for each outgoing and arriving part.

Currently, there are no international conventions applicable in Türkiye regarding ship arrest. However, the Turkish Commercial Code covers ship arrests in line with international conventions such as the Geneva Convention of 1999.

Maritime liens include the following claims:

  • for seaman’s wages;
  • in respect of loss of life or personal injury occurring;
  • for port, canal and other waterway dues and pilotage dues; and
  • tort arising out of physical loss or damage caused by the operation of the vessel other than loss of or damage to cargo, containers and passengers’ effects carried on the vessel.

Maritime liens are applicable for maritime claims.

The ship-owner and the charterer are subject to liability for their own acts or omissions as would any other person according to the general principles of private law and are subject to general provisions pursuant to personal fault liability according to the Commercial Code. The liabilities of the ship-owner are specifically regulated in the legislation, as the ship-owner is liable to third parties as a result of fault committed by the seafarers while performing their duties. In addition to this, the ship-owner can incur debts like anyone else, and is liable for the actions of the Master, the rescued ships in joint average and the cause of freight loss, and is liable for collision and salvage. Furthermore, the ship-owner is strictly liable for marine pollution.

The option to arrest the vessel is only available for maritime claims; and, regardless of whether a charterparty has been arranged, any dispute arising from any contract for the carriage of goods or passengers on board is considered a maritime claim. If there is provision in the contract on the matter, arrest is possible. Parties’ rights to claim shall be considered according to the authorisation specified in the transportation documents and liabilities mentioned therein.

Arrest of a ship against which a maritime claim is asserted is only possible in the following circumstances:

  • the person who was the owner of the ship when the maritime claim arose is liable for this debt and is the owner of the ship at the time the precautionary attachment is applied;
  • the person who was the lessee of the ship when the maritime claim arose is the owner of the ship and liable for this debt at the time the precautionary attachment is applied;
  • the maritime claim is secured by a ship pledge, ship mortgage or a real obligation of the same nature on the ship;
  • the dispute relates to the ownership or possession of the ship; or
  • the claim gives a ship creditor right pursuant to Article 1320 of the TCC.

Further, to secure a maritime claim, the party seeking an arrest is required to provide security in amount of 10,000 Special Drawing Rights (SDR). (The amount may be increased by the request of the counterparty and decreased by the request of the claimant.) In addition, evidence of maritime claims and their monetary value must be submitted to the court. After the evidence is presented and a lawsuit is filed in the relevant court, the creditor is obliged to request the execution of the decision from the enforcement office in the jurisdiction of the court that issued the decision or where the ship is located within three business days from the date of the precautionary attachment decision. Otherwise, the precautionary attachment order is automatically cancelled.

The whole procedure can be carried out with a power of attorney. Notarised documents are sufficient; and the documents must be translated. An amount for security deposit is required.

According to Article 1201 of the TCC, the carrier can claim right of retention on the bunker or the freight related to their receivables arising from the freight contract and the carrier shall use the right of retention pursuant to Articles 950–953. The right of retention continues if the goods are in the possession of the carrier.

As a result of the Turkish Commercial Code, sister-ship arrests are not possible in claims against the main ship.

Regular liens and mortgages can be imported to vessels as a way of obtaining security.

The opposing party may challenge the decision of the court regarding the arrest and file another lawsuit claiming damages. Alternatively, the court may request the annulment of the decision if there are any deposited pledge, security or bond; or an immovable pledge or a valid bank surety. An unconditional letter from a Turkish bank issued for an unlimited period is sufficient as well.

Sales of arrested ships are regulated by the legislation of the country where the arrest ruling decision has been made. For vessels registered at the National Registry, there would be an auction process and then appraisal. The maintenance of seized goods is carried out by trustees.

A number of privileged creditors are defined by law:

  • tax authorities for tax debts;
  • claims of pledged creditors;
  • labour claims;
  • alimony claims; and
  • claims arising from custody/guardianship.

After secured receivables, labour receivables within the scope of maritime claims are collected.

It is possible to appoint trustees to ships in bankruptcy cases and to manage the ship through trustees. Since bankruptcy cases are within the exclusive jurisdiction of Türkiye and bankruptcy judgments are not considered as “judgments in the nature of a writ” under the law, experience has shown that, in recognising bankruptcy judgments rendered by foreign courts in Turkish courts, the local court only recognises the enforceable financial sections of the judgment.

If the opposing party files a claim for damages, it is possible that they will be awarded for wrongful arrest.

The applicable laws and conventions are the 1974 Athens Convention, the Turkish Commercial Code, the Turkish Code of Obligations and Consumer Law. Although the time limits vary depending on the nature of the damage, in general terms, the right to sue for damages and civil liability for tort is valid for two years.

Turkish courts recognise and enforce law and jurisdiction clauses stated in bills of lading.

Turkish courts will recognise and enforce a law and arbitration clause of a charterparty incorporated into the relevant bill of lading.

The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards is applicable in Türkiye. Under Turkish law, the recognition and enforcement of foreign arbitral awards are regulated under the provisions of Law No. 5718 on Private International Law and Procedural Law.

The issue of jurisdiction shall be examined ex officio by the court, and no action shall be taken outside the competent court and jurisdiction. In cases where the lex fori is Türkiye, the location where the ship is moored/anchored becomes authorised, therefore a decision regarding the arrest can be ruled and implemented through a substantive proceeding in the local court. Finally, the designated jurisdiction/arbitration tribunal may rule on the matter.

Türkiye does not have a domestic arbitration institute that specialises in maritime claims.

The defendant may prevent the case from being examined on the merits by proving this claim within the framework of its first objections as “objection to jurisdiction” and “objection to arbitration” are considered as “first objections” that, if proved accordingly, result in the court dismissing the case without examining the merits.

Earnings derived from the operation and transfer of Turkish International Ship Registry (TISR) registered ships (over 3,000 DWT for imported ships) and yachts (except imported yachts) by local and foreign residents and companies established in Türkiye are exempt from income or corporate tax. In addition, purchase, sale, mortgage, registration, loan and freight contracts of these ships and yachts are exempt from stamp tax, fees and exempted from insurance transaction tax. Wages paid to employees working on ships and yachts registered to TISR, are exempt from income tax (except stamp tax) without any condition.

Deliveries of marine transportation vehicles made for this purpose to taxpayers whose activities are partially or wholly the rental or various forms of operation of marine transportation vehicles (including floating facilities and vehicles), deliveries and services related to the manufacture and construction of these vehicles and services arising in the form of their modification, repair and maintenance are exempt from tax. However, income tax is deducted from the earnings obtained through the company (corporation) if they are distributed to the shareholders. Owners of ships and yachts registered with TISR will only pay registration fees and annual tonnage fees.

The maritime sector and related organisations in our country have taken many measures regarding the COVID-19 pandemic to ensure the continuity of maritime and port operations. In this context, on 17 March 2020, the Ministry of Transport and Infrastructure General Directorate of Maritime Affairs announced new measures titled “Seafarers’ Procedures and Corona Virus (COVID-19) Measures”, which were forwarded to the port authorities and seafarers’ commission. In addition, the Directorate General issued Circulars 2020/2 and 2020/3 on the measures to be taken by port authorities regarding COVID-19.

During the COVID-19 outbreak, ports in Türkiye have been operating to the maximum extent against COVID-19 by taking the necessary measures, especially in dry bulk and containerised cargo and continued to the handling activities. According to the Directorate General’s cargo statistics, the total amount of foreign trade cargo handled at Turkish ports in the January–October period of 2020 increased by 3.6% compared to the same period of 2019, the number of containers handled in November 2020 increased by 3.3% compared to the same month of the previous year, export container shipments increased by 2.0% and transit container shipments increased by 24.7%.

According to the liability regulations under the TCC, the carrier shall not be liable for any damage caused where not arising from the intent or negligence of the carrier or its agents; also, the carrier shall bear the burden of proving that the intent or negligence of the carrier or its agents did not cause such damage. In this regard, the negligence or intent of the carrier or its agents will not be discussed in relation to the COVID-19 pandemic. Further, according to another article of the TCC, if the damage occurs as a result of the quarantine sanctions, the carrier and its agents shall not be deemed to be fault. In addition, even if there is no arrangement regarding force majeure in the contract, if there are conditions, the provisions of Article 136 of the Turkish Code of Obligations (TCO) on impossibility of performance, Article 137 on partial impossibility of performance and Article 138 on excessive difficulty of performance may be applied.

Both the first degree and the appeal courts have dealt with many matters related to the non-performance of contractual obligations due to the COVID-19 pandemic but there is no established jurisprudence regarding the force majeure of COVID-19, as, in Turkish law, each concrete case must be evaluated separately in order for a fact to be considered as a force majeure. Therefore, various court decisions accepted COVID-19 as force majeure, in cases where there was no force majeure clause in the contract, evaluating it within the scope of the above-mentioned excessive inability to perform. Finally, on the contrary, it has been interpreted that the situation created by COVID-19 does not individually constitute an obstacle to performance and that the contract should be performed.

In Türkiye, maritime communities, institutions and organisations have made evaluations, conferences and written articles on IMO 2020 and the Ministry of Transport has started to take some actions. In this respect, the Ministry has implemented the “Green Port” project to eliminate possible environmental problems and to bring more environmentally sensitive port facilities to the country. The Turkish Port Authority is responsible for the enforcement of the sulphur content limitation together with the Transportation and the Infrastructure Ministry.

In accordance with the MARPOL Convention and the Directive in Turkish legislation, the sulphur content in fuel is limited to 0.5% mass by mass (m/m) for ships not using approved pollution abatement methods and 0.1% m/m for ships sailing in SOx Emission Control Areas. Vessels anchored in the administrative responsibility areas of the Port Authorities or docking at the coastal facility must immediately switch to the use of marine fuels whose sulphur content does not exceed 0.1% by mass and inspections are carried out in these areas. When the sulphur content found as a result of the analysis of the Fuel Delivery Sample is equal to or lower than the sulphur content application limits determined by MARPOL Annex VI or national legislation, the fuel is considered to meet the rules, and, when it is higher, the fuel is considered not to meet the rules.

In the event that the amount of sulphur allowed to be present in maritime fuels within the scope of the Directive is exceeded or if it is detected during the inspection that the appropriate fuel transition procedures are not applied, administrative sanctions are imposed in accordance with the provisions of the first paragraph of Article 39 of the Ports Regulation in accordance with Article 2 of the Ports Law, and, if the ship is in port, the ship is not allowed to depart until the requirements are met. Taking into account the approved pollution abatement method on board and the existence and appropriateness of the Lack of Suitable Fuel Report, the use of fuels outside the application limits is not allowed and one of the following measures is applied:

  • the non-conforming fuel is discharged from the ship; or
  • provided that the written approval of the flag state of the ship is also obtained, it is ensured that the tank or tanks containing inappropriate fuel are sealed and the use of the fuel is prevented, and this is recorded in the log.

In relation to the second bulleted measure, copies of the relevant parts of the log, soundings and other fuel-related information and documents are taken. The ship’s flag state and the port authority of the next port of destination are notified and the ship is allowed to sail.

UN Security Council (UNSC) sanctions resolutions are implemented in the Republic of Türkiye by a decision of the President of the Republic. UNSC resolutions can be implemented by legislative or administrative action in accordance with their content. In this regard, the Law No. 6415 on the Prevention of the Financing of Terrorism was enacted. As a single state, Türkiye’s implementation of economic sanctions are also taken in the form of general administrative decisions. Türkiye has imposed sanctions on a few governments such as Iran, Syria and Egypt.

No sanctions were incorporated directly against Russia by the Turkish government. The decision to impose any secondary sanctions has not been taken by countries that have imposed sanctions on Russia so far during the Russia-Ukraine war. Therefore, the sanctions against Russian investors and businesses has no direct impact on people in Türkiye. Should any economic sanctions or exemptions be imposed, the Ministry of Trade is the authority in Türkiye that will implement them or grant the necessary authorisations.

Cabotage Law

It is useful to mention the Cabotage Law, which is a regulation specific to Turkish legislation. According to the Turkish Cabotage Law, vessels operating in Turkish coastal water and calling at a Turkish port must fly the Turkish flag and the operations must be carried out by Turkish persons.

There are multiple conditions to be satisfied under the Turkish Commercial Code (TCC) for a vessel to fly Turkish flag. Where the owner of the vessel is a legal entity, these conditions are as follows.

  • It must be incorporated under Turkish law.
  • If the vessel will be owned by a trade company, the majority of the persons authorised to manage the company must be Turkish citizens and the majority of the votes must be held by Turkish shareholders according to the company agreement; and, in joint stock companies and limited partnership companies with capital divided into shares, the majority of the shares must be registered and the transfer of the shares to a foreigner must be subject to the permission of the board of directors of the company.
  • If the vessel will belong to organisations, institutions, associations and foundations with legal personality, the majority of the persons constituting the governing body must be Turkish citizens.

In addition to the cabotage regulations, it is also useful to mention the bond requirement for foreign plaintiffs regulated under Article 48 of in Türkiye’s International Private and Procedural Law. According to the relevant article:

“Foreign natural and legal persons who file a lawsuit, participate in a lawsuit or pursue an enforcement proceeding before a Turkish court are obliged to show the security determined by the court in order to cover the costs of the proceedings and the damages and losses of the other party.”

According to the guarantee exemption regulated in the second paragraph of the Article, if the reciprocity condition is met between the countries that constitute the foreign element, that is, if a guarantee exemption is stipulated by bilateral or multilateral agreements or if Turkish citizens in a foreign country benefit from the same exemption, or if such a regulation is included in the law (the Hague Convention on Civil Procedure of 1954, to which Türkiye is a party, is an important example of this), then the obligation to pay a bond requirement for foreign plaintiffs is eliminated.

Notification in Disputes With a Foreign Element

Finally, notification to foreign countries in disputes with foreign elements should be explained. This is because notification to foreign countries is made either according to the provisions of bilateral or multilateral agreements to which Türkiye is a party, or according to the relevant provisions of the Notification Law and the Notification Regulation, and experience has shown that there are serious differences in terms of the procedures regulated in the laws and agreements in terms of the period of notification.

The Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, 1965, to which Türkiye is a party, essentially provides for a simple procedure by stipulating that a central authority to which notification shall be made shall be determined in the party countries and that the notification shall be sent directly to this central authority by the issuing authority or person. Furthermore, it is also made possible to send the notification directly to the persons by mail, unless the country to which the notification is to be sent raises an objection. On the other hand, diplomatic notification, which will be applied to countries that are not party to the Hague Agreement, and which is regulated in Türkiye’s domestic law, is a much more complicated method and is carried out by sending the notification to the Ministry of Foreign Affairs by the Ministry to which the issuing authority is affiliated, and from there to the Turkish embassy or consulate. Therefore, diplomatic notification does not save time.

Balcıoğlu Selçuk Ardıyok Keki Attorney Partnership

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+90 212 329 30 00

www.baseak.com
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Trends and Developments


Authors



Balcıoğlu Selçuk Ardıyok Keki Attorney Partnership (BASEAK) is an Istanbul based full-service law firm led by experienced professionals since 2007. Drawing on broad experience gained at Turkish and global law firms and international organisations, each BASEAK lawyer is well-equipped to provide creative and diligent project counselling and cutting-edge litigation services. The firm’s practice focuses include corporate, banking and finance, transportation, energy, mergers and acquisitions, arbitration, competition, dispute resolution, employment law, intellectual property, joint ventures and regulatory. BASEAK has gained an outstanding reputation and valued clientele by tailoring effective legal solutions to a broad spectrum of clients of all sizes: individuals; entrepreneurs; small businesses and start-ups; governments and government agencies; and mid-sized and larger private and public corporations, including international and global entities. With exceptional practices in corporate, M&A, banking and finance, real estate, hospitality, energy, competition and litigation BASEAK’s Istanbul office provides access to top-tier legal talent.

Prudential Analysis of the UN’s Sustainable Future of Transportation

Climate change is a reality of the past, present and future, and its impact is becoming more rapid and palpable with each passing day. Since the 1992 United Nations (UN) Conference on Environment and Development, Rio de Janeiro (the “Rio Earth Summit”), countless conferences have been held and countless conventions have been signed to fight the current and future impacts of climate change. However, according to a 2018 Report (the “1.5°C Report”) by the Intergovernmental Panel on Climate Change (IPCC), the average temperature of our planet has risen by 1°C compared to the pre-industrial revolution because of human factors and sectoral activities.

As a result of the research, it was determined that if the greenhouse gas (GHG) emissions that cause global warming continue as they are, the warming will exceed 1.5°C between 2030 and 2050. It is important to note that a half-degree increase of more than 1.5°C is vital because, to illustrate, a 2°C increase in climate change, which is projected to reach 2°C by 2065 if the recommendations and targets in international agreements are not followed, will lead to increased deaths due to heat waves, 8% of the world’s population will suffer from extreme thirst, and the glaciers in the Arctic Ocean will melt completely during certain months for several years in a row.

Of the energy used for the movement of transport vehicles, 95% is still provided by fossil fuels. Therefore, the role of the transportation and logistics sectors in climate change is of great importance, as it is known that road transport accounts for 89% of GHG emissions. On the other hand, sustainable transportation, which may be achieved by new technologies, regulations, policies and innovations, could decrease expected emissions in 2030 by 25%, particularly as a result of changes in the shipping, aviation and lifestyle sectors. In this regard, since the Rio Earth Summit, countries have been conducting research on the subject and making regulations with a view to to reducing the impact of the transportation and logistics sector on climate change and GHG emissions.

The United Nations Framework Convention on Climate Change (UNFCCC) was signed by 154 states at the Rio Earth Summit and advised all parties to promote and co-operate in the development, application and diffusion, including transfer, of technologies, practices and processes that control, reduce or prevent anthropogenic emissions of greenhouse gases not controlled by the Montreal Protocol in all relevant sectors, including transportation. Since the UNFCCC came into force, the parties to the UNFCCC meet annually at the Conference of the Parties (COP). The most important COPs convened so far, and the most important texts agreed upon in these meetings, and which contain regulations on transportation, are as follows.

1992 – Rio Earth Summit

  • Agenda 21: includes many examples of how to reduce the impacts of transportation, and especially shipping, on the increase of GHG emissions. In this regard, countries should encourage technological training and research to encourage development patterns that reduce transport demand, adopt urban-transport programmes favouring high-occupancy public transport, encourage non-motorised modes of transport by providing safe cycleways and footways in urban and suburban centres, develop and promote cost-effective policies or programmes, support wider ratification and implementation of relevant shipping conventions, co-operate in monitoring marine pollution from ships, especially from illegal discharges, and enforce MARPOL discharge, provisions, assess the state of pollution caused by ships in particularly sensitive areas identified by the International Maritime Organization (IMO) and take action to implement applicable measures, promote navigational safety by adequate charting of coasts and ship routing, support the ongoing activities of the IMO, etc. 
  • Rio Declaration.
  • UNFCCC.

1995 COP1 (COP1)

At COP1 it became obvious that most of the industrialised countries had not taken adequate measures to achieve the objectives of the UNFCCC. Representatives from 120 countries produced the Berlin Mandate, in which industrialised countries agreed to reduce their greenhouse gas emissions by setting specific targets with certain years such as 2005, 2010 and 2020.

1997 Kyoto Protocol (COP3)

The Kyoto Protocol includes the Clean Development Mechanism (CDM), whereby industrialised countries could earn emission credits to meet their obligations by financing projects that reduced carbon emissions in developing countries. This was the first implementation of measures under the UNFCCC and created the demand to begin research and initiatives to work towards a sustainable transportation system. The Kyoto Protocol delegated responsibility to the International Civil Aviation Organization (ICAO) and IMO to set the measures for reducing greenhouse gas emissions.

The CDM regulated in the Protocol was also the pioneer of carbon offsetting, which is a market-based mechanism whereby CO₂ emissions in one place are compensated by a reduction in emissions elsewhere in the transportation sector. Thanks to the ICAO Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), introduced in line with its delegation in the Kyoto Protocol, the aviation sector became the first transportation sector to organise a global voluntary carbon offsetting mechanism. Airlines using CORSIA-eligible fuels (CEF) – fuels with lower CO₂ life-cycle emissions than jet fuel – will be eligible for reduced offsetting requirements. 

Although the Kyoto Protocol put forward striking targets for minimising carbon emissions and combating climate change and proposed an optimistic outlook for the future, and even though in 2005 many countries planned to meet or exceed their targets under the agreement by 2011, others such as the US and China, which are the world’s biggest emitters, produced enough greenhouse gas to mitigate any of the progress made by countries who met their targets. In fact, there was an increase of about 40% in emissions globally between 1990 and 2009. As a result of the unexpected inconclusiveness of the Kyoto Protocol, the need for new agreements and amendments occurred.

2015 Paris Agreement (COP21)

The Paris Agreement is the legally binding international treaty on climate change that aims to limit global warming to well below 2°C, preferably to 1.5°C as compared to pre-industrial levels. It is a landmark in the multilateral climate change process as, for the first time, a binding agreement gathers nations into common ground to undertake ambitious efforts to combat climate change and adapt to its effects. Key aims of the Paris Agreement are:

  • limiting global temperature rise by reducing greenhouse gas emissions;
  • providing a framework for transparency, accountability, and the achievement of more ambitious targets; and
  • mobilizing support for climate change mitigation and adaptation in developing nations.

In providing a framework for transparency, accountability, and the achievement of more ambitious targets, the Paris Agreement ensures a series of mandatory measures for the monitoring, verification, and public reporting of progress towards a country’s emissions-reduction targets. The enhanced transparency rules apply common frameworks for all countries, with accommodations and support provided for nations that currently lack the capacity to strengthen their systems. Countries must also report their greenhouse gas inventories and progress relative to their targets, allowing outside experts to evaluate their success, revisit their pledges, and put forward progressively stronger targets every five years with the goal of further driving down emissions. Nations must participate in a global stock-take to measure collective efforts towards meeting the Paris Agreement’s goals.

Even though it is landmark as a so-called binding agreement regarding the environment, the system ensured by it does not include financial penalties. It is criticised as being unlikely to create the necessary conditions to achieve its targets due to literature presenting mixed results, lack of comparable information, and unclear reporting standards. Most experts declare that the commitments are not ambitious and bold enough compared to the seriousness of carbon emissions; nonetheless, they are a step further.

2021 Glasgow Climate Pact (COP26)

The United Nations Climate Change Conference in Glasgow brought together participants to agree on:

  • recognising the emergency of global warming;
  • accelerating action on reducing carbon dioxide emissions;
  • moving away from fossil fuels;
  • delivering on climate finance;
  • stepping up support for adaptation to the impacts of climate change and building resilience; and
  • completing the Paris rulebook focusing on loss and damage.

Nations also agreed that carbon emissions must fall by 45% by 2030 to stand with the commitments made under the Paris Agreement.

The COP26 Declaration on Accelerating the Transition to 100% Zero Emission Cars and Vans brought together: over 35 countries; 6 major car-makers; 43 cities, states, and regions; 28 fleet owners; and 15 financial institutions and investors, all committed to ending the sale of internal combustion engines by 2035 in leading markets and by 2040, worldwide. At least 13 nations also committed to ending the sale of fossil fuel-powered heavy-duty vehicles by 2040 for green transport.

Vehicle manufacturers representing more than 30% of the global market now have commitments to phase out fossil-fuelled vehicles, up from almost zero two years ago: General Motors, Jaguar, Fiat, Volvo, Audi, Ford, and Volkswagen in Europe have all committed to 100% zero-emission vehicle (ZEV) production by 2023. More than 110 companies have signed up to the EV100 pledge, committing to fully zero-emission vehicle fleets by 2030 and the World’s biggest CO₂ emitters, US and China, pledged to co-operate more over the next decade in areas including methane emissions and the switch to clean energy.

While the UN summit achieved its main goal of sticking to the goals and objectives of the Paris Agreement, COP26 President Alok Sharma made a call to “make coal power history” after the 2040s but, after Chinese and Indian interventions, countries only agreed to weaker “phasing down” commitments rather than “phasing out” coal. COP26 is considered as an “unfinished” success as wealthier nations blocked the step taken in order to create a “loss and damage” fund for developing countries by only promising a future dialogue.

At COP26, countries also failed to fulfil their missions, rushing to provide funds to developing countries, and ended up making only ambitious commitments. The progress in the use of green vehicles was impressive, but inadequate as the commitments were made regarding personal cars, not transportation vehicles which constitute one of the major causes of environmental pollution.

2022 Sharm el-Sheikh (COP27)

A new global climate agreement called the Sharm El-Sheikh Implementation Plan was agreed upon at the COP27 summit, marking a key turning point in history, and marking the first time countries agreed to set up a “loss and damage” fund. This reparations fund is a fund to help poor countries recover from the effects of climate change. So far, poor countries have only received funds for climate protection.

In addition to financial support, COP27 countries pledged to “improve the clean energy mix, including low-carbon and renewable energy”. COP27’s “low emission energy” was a concern, as it was not formally defined and could lead to increased gassing. The 2030 Carbon Removal Breakthrough was also announced, stating that by 2030 carbon removal will be responsibly and equitably scaled to remove 3 billion tonnes of CO₂ per year and store another 500 million tonnes per year for at least 100 years. 

Following a multi-stakeholder consultation process convened by his COP27 Presidency in Egypt, the Presidency, in collaboration with his SLOCAT, launched the Low Carbon Transport for Urban Sustainability (LOTUS) initiative: implementation of urban transport solutions for developing countries. At its launch, LOTUS specified interventions for new traffic breakthroughs in 2023.

Building on the Zero Emission Vehicle Declaration established at COP26, the UK, High-Level Champions, International Council on Clean Transport, Climate Group and Drive Electric Campaign launched Accelerate to Zero (A2Z). As the world’s largest transport coalition with over 200 organisations, including governments, industry, and civil society, the coalition aims for zero-emission sales of new cars and vans by 2035 in major markets and 2040 globally.

The 2015 Paris Agreement target of limiting global warming to +1.5°C is both the goal and the benchmark for the ITF. There was clear disappointment in Sharm el-Sheikh in this regard: 98% of countries refer to transport as part of their official decarbonisation plans (NDC), but only a few have green mobility plans. Of the 194 COP parties, only 35, or just 18%, have such targets. Critics say COP27 is a setback for transport visibility in climate negotiations. The transport minister did not sit at the negotiating table in Egypt as the ITF pledges to maintain a strong ministerial presence at the next COP in ITF affiliate United Arab Emirates. The conclusions of the conference do not expand on past conference calls to “phase down” the global use of “unabated coal”, even though India and other countries pushed to include oil and natural gas in language from Glasgow, and the fund created seems like a very weak step to support establishing participants.

Montreal Convention on Biodiversity (COP15)

In the United Nations Convention on Biological Diversity held in Montreal, members agreed to the Kunming-Montreal Global Biodiversity Framework, a worldwide framework to guard nature and halt and oppose biodiversity loss, setting nature on a direction towards healing using 2050 targets as an aid. The Global Biodiversity Framework sets targets for 2030 to be attained together with powerful conservation and control of a minimum of 30% of the world’s land, coastal regions, and oceans (currently, 17% of land and 8% of marine regions are under protection). They include the following:

  • recovery of 30% of terrestrial and marine ecosystems, lessen to close to zero the lack of regions of excessive biodiversity significance and excessive ecological integrity;
  • halving worldwide meals waste;
  • phasing out or reforming subsidies that damage biodiversity with the aid of using as a minimum USD500 billion according to year;
  • scaling up high-quality incentives for biodiversity conservation and sustainable use, mobilising as a minimum USD200 billion according to year from public and personal reassets for biodiversity-associated funding; and
  • elevating worldwide monetary flows from advanced to growing nations to, as a minimum, USD30 billion according to year, requiring transnational organisations and monetary establishments to monitor, assess, and transparently expose dangers and influences on biodiversity via their operations, portfolios, delivery and fee chains.

The deal will drastically boom the mobilisation of finance for biodiversity from all reassets, home, worldwide – both public and personal – mobilising as a minimum USD200 billion according to year using 2030 targets. It will create incentives for home and worldwide reassets, which include commercial enterprise investment. However, the UK’s surroundings goals are criticised as an overlooked possibility to shield Britain’s rainforests, bloodless water coral reefs, chalk streams, and peat bogs, environmentalists have said, amid accusations of hypocrisy over the government’s function at COP15. Despite the long hours spent within the conference, COP15, there has been no major development because of the lack of cohesiveness and countries’ hesitation to take serious steps.

The way ahead

At the point reached today, although the conventions, as explained above, have imposed obligations and recommendations on countries to combat climate change, reach the planned targets for global warming, and minimise carbon emissions, these regulations are still insufficient to combat the problems as they are not binding and do not impose sanctions in case of non-compliance. New innovative technologies supported by and with the regulations, policies, and sanctions of governments and international bodies are key to solving many of the challenges to achieving sustainable transport.

Making the transportation sector climate resilient will, of course, require significant investments, as in every sector, in order to make infrastructural changes such as increasing rail transportation, as it is the least fossil fuel-intensive mode of transportation; reducing CO2 emissions from ships and aircraft; reducing the GHG emissions of ports, etc.

Private-sector investments in transport were distributed by subsector as follows:

  • roads, circa 50%;
  • rail/metro, circa 22%;
  • airports 19%; and
  • ports 9%.

Transport lags behind other sectors in climate finance, as less than 2% of climate finance projects are associated with low-carbon transport. A follow-up study by the World Resources Institute (WRI) estimates that 2050 transport infrastructure investment needs at least USD2 trillion per year for the 2°C scenario benchmark. The net transitional investment required to increase the quality of existing and new transport systems for climate resilience is estimated at over USD3 trillion (in addition to existing transport investments estimated at USD1–2 trillion per year), of which over 80% relates to low-carbon modes for the period 2015–2035.

Examples such as Russia’s proposed law stipulating that transport facilities can only be built with a permit if they meet certain environmental requirements, plans to ban the use of diesel vehicles in Europe by 2035, countries such as France and Japan investing in the expansion of railway networks, which are the least fossil fuel-intensive means of transportation, etc, show that countries have started to tackle climate change problems arising from the transportation sector through restrictive and developmental regulations and projects; but, unfortunately, they are still insufficient.

In this respect, states should provide incentives for climate-friendly transportation: measures should be taken such as restricting the entry of vehicles such as ships and aircraft that exceed a certain amount of carbon emissions to ports and airports; transportation vehicles should be technologically adapted to low carbon emissions; and low greenhouse gas emission transportation infrastructures should be established. The harmonisation process in this direction will require numerous infrastructure projects and technological investments; and making the transportation sector suitable for combating climate change is a global investment and legal gold mine.

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Law and Practice

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Balcıoğlu Selçuk Ardıyok Keki Attorney Partnership (BASEAK) is an Istanbul based full-service law firm led by experienced professionals since 2007. Drawing on broad experience gained at Turkish and global law firms and international organisations, each BASEAK lawyer is well-equipped to provide creative and diligent project counselling and cutting-edge litigation services. The firm’s practice focuses include corporate, banking and finance, transportation, energy, mergers and acquisitions, arbitration, competition, dispute resolution, employment law, intellectual property, joint ventures and regulatory. BASEAK has gained an outstanding reputation and valued clientele by tailoring effective legal solutions to a broad spectrum of clients of all sizes: individuals; entrepreneurs; small businesses and start-ups; governments and government agencies; and mid-sized and larger private and public corporations, including international and global entities. With exceptional practices in corporate, M&A, banking and finance, real estate, hospitality, energy, competition and litigation BASEAK’s Istanbul office provides access to top-tier legal talent.

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Balcıoğlu Selçuk Ardıyok Keki Attorney Partnership (BASEAK) is an Istanbul based full-service law firm led by experienced professionals since 2007. Drawing on broad experience gained at Turkish and global law firms and international organisations, each BASEAK lawyer is well-equipped to provide creative and diligent project counselling and cutting-edge litigation services. The firm’s practice focuses include corporate, banking and finance, transportation, energy, mergers and acquisitions, arbitration, competition, dispute resolution, employment law, intellectual property, joint ventures and regulatory. BASEAK has gained an outstanding reputation and valued clientele by tailoring effective legal solutions to a broad spectrum of clients of all sizes: individuals; entrepreneurs; small businesses and start-ups; governments and government agencies; and mid-sized and larger private and public corporations, including international and global entities. With exceptional practices in corporate, M&A, banking and finance, real estate, hospitality, energy, competition and litigation BASEAK’s Istanbul office provides access to top-tier legal talent.

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