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Benefits of Hamburg Rules may be over-estimated

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The benefits of the Hamburg Rules were overestimated by the Government in its presentation of the Carriage of Goods by Sea Bill - and may well have been overĀ­ estimated by shippers as well.

The Chairman of the Conference at which the Convention establishing the Hamburg Rules was agreed to, Professor Herber, has warned that "the expectation of a possible decrease in overall transportation costs for shippers all over the world, however, does not seem to be justified" and that "it would certainly not m eet overall expectations as to a decrease in overall costs.

The Opposition is concerned to defend the interests of shippers in Parliament. In the debate on the Carriage of Goods by Sea Bill, we were concerned that shippers had been led to expect unrealistic gains from the Hamburg Rules - and particularly if they are implemented by Australia before they have general acceptance, especially by our

trading partners and rivals.

In their rush to get reform runs on the board, the Government has exaggerated the benefits of the Rules to cargo owners.

The point of legislation on liability for cargoes carried by sea is that the regime should, firstly, allocate responsibility and liability for damage or loss as simply as possible and, secondly, that it should reduce legal disputes and the costs of those disputes. It follows that international practice ajnd acceptance is a major concern.

The regime should be equitable and efficient - and it should also conform with the practices of our trading partners and rivals.

If the Hamburg Rules attract general acceptance among our trading partners, they may well benefit shippers - they favour shippers in the general division of liability.

Until they do that, however, Australian shippers would be placed at a disadvantage, since many legal complexities would result from disputed and rival claims.

Shippers may not have taken into account added insurance costs to carriers - which will almost certainly be passed back in increased freight rates.

David Roylance, a Melbourne transport and trade law solicitor, has also pointed out to Daily Commercial News readers that there will be an expanded requirem ent for

insurance by carriers to cover "gaps", which will work their way through to increased freight rates.

The Opposition sought to ensure that comprehensive consultation would take place before the Rules were introduced. Some of these concerns were adopted by the Government in its Senate amendment to the Bill.

There remains a concern, however, that the Government has opted for a default provision where the Rules will come into effect unless measures are taken to repeal parts of the Act or to delay consideration of their coming into effect.

The Opposition's concern was to ensure that the shippers were not sold another Government pup - and that Parliament would be able to monitor the situation in order to ensure that the legislation is not brought into effect until the time is right in order to actually deliver the expected benefits to users. .

The Government's record on the presentation of the legislation was indeed sloppy and included having to withdraw its initial attem pt once it was realised that the form in which it was presented would have created more problems that it intended to solve.

The Government's claims of rewards from reform need closer scrutiny than shippers and others have so far given them - and in the form the Bill has now been passed, both the Coalition and shippers will need to be alert to ensure that proper

examination is given to the international acceptance of the Hamburg Rules before their adoption by Australia.


21- 10-91 ,$10/91 Contact: John Wallis

A /H 048 21 2098