Reform of Australian cargo liability

Reform of Australian cargo liability

NEW regulations governing cargo liability in Australia have come into force. As a result of amendments made last year to the Australian Carriage of Goods by Sea Act 1991, the Australian parliament authorised amendments by regulation to the Hague-Visby Rules, as scheduled to the act. The regulations made pursuant to the act have now been approved and took effect from July 1.

The scope of the new regulations, and their effect, is quite wide. They will apply to all sea carriage documents issued after July 1. The proposed definition of 'sea carriage documents' will be wider than the existing notion of bills of lading and will include, for example, certain sea waybills, consignment notes and electronic documents.

Other major changes to be aware of include:

1. The extension of the carrier's period of responsibility from a hook-to-hook period to the period from the time of receipt by the carrier at the sea terminal at the port of loading until delivery from the sea terminal at the port of discharge. This change will be most relevant to the container trades.
2. A review of the carriage regime for deck cargo. Where a carrier agrees underdeck stowage with a shipper, but carries on deck contrary to that agreement, the carrier will be liable for loss or damage attributable to deck carriage without being entitled to rely on any Article 1V Rules 2 defence or any limitation of liability. Deck carriage of cargo at shipper's risk will still be permitted, but only in limited circumstances.
3. The carrier being liable for damages for delay (with liability limited generally to 2.5 times freight). This liability for delay will be independent of any liability for loss of or damage to cargo. The carrier will not be liable for delay, however, where the delay is excusable. The regulations identify a number of circumstances that will constitute 'excusable' delay.
4. Presently, coastal carriage of cargo between Australian ports is frequently undertaken on no-liability consignment notes, rather than pursuant to the Hague-Visby rules. While this will continue to be permitted for domestic cargo, any cargo declared by the shipper to be international cargo will be carried subject to the regulations.
5. The scope of application of the regulations has been extended. In addition to compulsory application to sea carriage documents for outward shipments, they will also apply to inward shipments, but only where these are not otherwise subject to the Hague Rules, the Hague-Visby Rules or the Hamburg Rules (or a compulsorily applicable variation of one or other of those rules) pursuant to the law of the country of shipment. The regulations do not apply to the carriage of good by sea under a charter party.

It is likely that companies involved in Australian shipping will need to have their documentation reviewed in relation to not only sea carriage documents but also any relevant charter parties, contracts of affreightment and other documents. Anyone involved in electronic or paperless transactions should pay particular attention to the changes imposed by the regulations.

Companies will also need to ensure that their insurance arrangements are sufficient to cover the additional responsibilities and risks. (Middleton Moore & Bevins, Melbourne).

Liability limits to rise under new Canadian regime

WITH effect from August 10, new limits will apply to maritime liabilities in Canada, following the recent passing of a bill to amend the Canada Shipping Act (Maritime Liability).

One purpose of the bill is to amend the general liability provisions in Part 1X of the Act, which is currently based on the 1957 Limitation Convention but which will, from August 10, be based on the 1976 Limitation Convention and its 1996 Protocol.

The result is likely to be a dramatic increase in limits of liability. By way of example, the death and personal injury claims and property claims limits for a vessel of 50,000 limitation tons will increase by 254 per cent and 448 per cent respectively, from Can$20.07 million to Can$71.05 million and from Can$6.47million to Can$35.53 million.

For the time being, there will be no special limits for death and personal injury claims brought by passengers. But provision has been made for such specific limits to be brought into force - 175,000 SDRs (Can$341,600) multiplied by the number of passengers the ship is authorised to carry according to its certificate or, if no certificate applies, the greater of 2 million SDRs or 175,000 SDRs multiplied by the number of passengers actually carried.

Another effect of the new bill is to bring within the terms of the 1976 Convention pollution damage caused by vessels other than tankers. The bill also implements the 1992 Protocols to CLC 1969 and the 1971 Fund Convention, twelve months after the day Canada deposits its instrument of accession to the Protocol.

In all cases, the increases in liability limits will be balanced by the greater certainty that the owner's right to limit will not be denied. (London P&I Club/Brisset Bishop, Montreal).

Ship registration committee for Dubai

IN Dubai, the minister of transport has decreed the establishment of a committee for the registration of commercial ships.

The committee is to be formed under the chairmanship of Abdullah Ahmed Lootah, under-secretary of transportation, and will maintain the power to decide all applications submitted for the registration of commercial ships as well as the grant and renewal of shipping licences for such vessels. (Al Tamimi, Dubai).

Shipboard garbage management plans compulsory

FROM July 1, 1998, all ships of 400 gross tons and above, and all ships certified to carry fifteen people or more, are required to carry a garbage management plan, as required under Marpol.

The plan is to include written procedures for collecting, storing, processing and disposing of garbage, including the use of equipment on board. It should designate the person responsible for carrying out the plan, and should be in the working language of the crew.

The regulation is important because it requires ship operators to track their garbage and take notice of what happens to it.

All ships covered by the plan must provide a garbage record book, to record all disposal and incineration operations. The date, time, position of ship, description of the garbage and estimated amount incinerated or discharge must be logged and signed. The books must be kept for a period of two years after the date of the last entry.

It is anticipated that ships' garbage management plans will be examined by both flag state and port state control and will be regarded as an integral part of ships' Safety Management Systems as required by the ISM Code. (IMO).

US passes shipping reform act

THE US senate has passed the Ocean Shipping Reform Act of 1998 by a vote of 71 to 26. The bill provides for confidential service contracting between shippers and ocean carriers, thus eliminating the previous regime of tariff-like filing of proprietary business information. Broad antitrust immunity for liner operations is maintained. Maritime carriers, major shippers and senate sponsors are urging prompt passage of the bill, while reservations about its content have been expressed by a number of intermediaries, including forwarders and NVOCCs.

New rules for dangerous goods down under

A NEW regulatory scheme for the transport of dangerous goods by road and rail came into operation in Australia in March. The scheme tries for the first time to implement uniform or consistent regulations in each state and territory.

The new scheme incorporates the sixth edition of the Australian Code for the Transport of Dangerous Goods by Road and Rail, which has been comprehensively revised to enhance its workability, clarity and enforceability. Many of the specific requirements included in previous editions of the code have been replaced with more performance-based standards, although the overall regulatory style of the code remains highly prescriptive.

The scheme applies to all classes of dangerous goods except explosives, and infectious and radioactive substances. To promote harmonisation between the road and rail rules and those applicable to transport by sea and air, the sixth edition of the code has been based more closely than previous editions on the United Nations Recommendations on the Transport of Dangerous Goods.

The regulations set out in detail the obligations placed on drivers, owners, consignors and other parties involved in the transport operation to comply with particular requirements of the code. They are the first set of regulations developed by the National Road Transportation Commission in Australia to comprehensively adopt chain-of-responsibility principles, involving the drafting of legislative requirements in such a way as to impose responsibility and liability for on-road conduct at all levels of the transport chain, from drivers through to transport companies, and their directors and managers. (Phillips Fox).