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Thursday, 20 March 2008
Page: 2389


Mr ALBANESE (Minister for Infrastructure, Transport, Regional Development and Local Government) (9:45 AM) —I move:

That this bill be now read a second time.

This bill will modernise Australia’s arrangements for air carriers’ liability. It does this by implementing the Convention for the Unification of Certain Rules for International Carriage by Air done at Montreal on 28 May 1999, known as the Montreal convention.

In addition, the bill will make amendments to modernise and update various legislative provisions related to scope of carriers’ liability.

The Montreal convention updates the arrangements applying to the liability of air carriers during international carriage of passengers and cargo. This includes the liability arrangements for:

  • the death or injury of a passenger;
  • the loss or damage to a passenger’s baggage;
  • the loss or damage to a freight shipment, as well as:
  • delays to the scheduled arrival of a passenger, baggage or freight.

At the moment, liability arrangements for international travel are usually determined with reference to the Warsaw convention and its amending protocols and treaties. Under the Warsaw system, in some circumstances the amount of compensation is limited to a cap that was set in the 1920s. This cap has not been adjusted for inflation, and is set in a currency that no longer exists—that being the franc poincare, consisting of 65.5 milligrams of gold of millesimal fineness 900.

The Montreal convention modernises these arrangements to ensure that equitable compensation is available to injured passengers. And it is extraordinary that it has taken the election of the Rudd Labor government to introduce this legislation into the parliament.

The Montreal convention removes the cap on carriers’ liability, and provides for a two-tier system of liability. Applicants will be able to claim up to 100,000 special drawing rights, equivalent to around $A172,000, as at 25 February 2008, on a strict liability basis. Up to this limit, the applicant will not need to prove that the carrier was at fault. Damages above the 100,000 special drawing rights threshold are available to the claimant, unless the air carrier is able to prove that the damage was not caused by the negligence or other wrongful act or omission of the carrier, its servants or agents.

Another advantage of the Montreal convention is that it provides for a ‘fifth jurisdiction’ to hear claims for damages. The ‘fifth jurisdiction’ allows passengers to bring an action for damages in the country where the passenger resided at the time of the accident, provided it is a country that is serviced by the carrier, and the carrier has premises in that country. This will make it easier for Australians to enforce their legal rights in Australia, rather than having to deal with the legal system in a foreign country.

The Montreal convention has important benefits for business.

It will help business by creating efficiencies in the paperwork associated with the transportation of passengers and cargo. It does this by allowing simplified electronic records to be used for both freight and passenger air transport. This means that business will no longer have to use the old-fashioned system of paper based waybills, and can instead use improved electronic billing systems.

Finally, the bill will modernise the language associated with some of the legislative provisions dealing with carriers’ liability. It will do this by inserting a definition of family member into the Civil Aviation (Carriers’ Liability) Act 1959, while removing references to children who are ‘legitimate’ and ‘illegitimate’. The new definition affects who can enforce liability under the act in the event of a passenger death.

The categories of family member who will be able to enforce liability will be expanded. It will now include stepsiblings and wards of the passenger; as well as any foster sibling, foster child or guardian who is wholly or partly dependent on the passenger for financial support. Additional categories of family member will be able to be prescribed by regulation. This will allow the government to quickly implement any future government policy decisions in relation to families.

The bill will implement these changes by making amendments to:

  • the Civil Aviation (Carriers’ Liability) Act 1959;
  • the Air Accidents (Commonwealth Government Liability) Act 1963; and
  • the Civil Aviation Act 1988.

The bill introduces a new part IA to the Civil Aviation (Carriers’ Liability) Act 1959 to give the Montreal convention the force of law in Australia. Part IA is modelled on part II, but amended to give effect to the Montreal convention. Like other parts of the act, the bill includes provisions which give certain articles of the convention a particular application to suit Australia’s judicial system and legal policy.

The bill will not implement the convention for the purposes of domestic carriage within Australia. Domestic carriers will continue to be governed by part IV of the carriers’ liability act, which provides for liability limits of $A500,000.

The Joint Standing Committee on Treaties has supported accession to the convention. The committee recommended binding treaty action be taken in its report No. 65, tabled on 20 June 2005. The implementation of the provisions of the convention by this bill is a necessary step towards this. It is extraordinary that Australia is currently the only OECD country not to have signed the Montreal convention. The countries most Australians travel to ratified the Montreal convention many years ago. The USA, Japan, China and New Zealand ratified in 2003, and the United Kingdom and most European countries ratified in 2004.

The Montreal convention provides improved consumer protection to international air passengers and cargo consignors when the country of destination or origin is also a party to the convention. It also facilitates important business efficiencies.

Acceding to it will maintain Australia’s international standing as a leading nation in international aviation reform. This is reform that is long overdue, and I commend the bill to the House.

Debate (on motion by Mr Truss) adjourned.