Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

The Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Bill 2008 will modernise Australia’s arrangements for air carriers’ liability. It will do 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. The bill also makes some amendments to modernise and update various legislative provisions relating to the scope of carriers’ liability.

Under the Warsaw convention, carriers were not liable for the death or injury of a passenger or for damage to air cargo if they could prove that they took all necessary measures to avoid the loss. It also capped carriers’ liability at a rate which is now out of date, unreasonably low and set in a currency which no longer exists. Different parties to the Warsaw convention subsequently adopted a variety of amending instruments, resulting in a complex and confusing array of international arrangements for carrier liability.

The Montreal convention is designed to overhaul this system and eventually replace the Warsaw convention. It introduces a two-tier system of liability for death or injury. The first tier, for damages up to approximately A$190,000, is on the basis of no-fault liability and cannot be reduced except in the event of contributory negligence by the passenger. For the second tier, for damages exceeding this threshold, the carrier is liable unless it can demonstrate that the damage was not due to its negligence or that of its agents.

Effectively, the Montreal convention increases the compensation limits for victims of air accidents. It also sets the monetary unit of compensation as the SDR, the special drawing right, of the IMF rather than the long abandoned gold standard and provides for the periodic review of compensation to take account of inflation. It will also enable Australians to bring legal action in Australia rather than in the country where the air accident occurred, and it modernises the list of family members who are entitled to seek compensation in the event of death in an air accident. The Montreal convention will also ease the burden on air shipping companies by removing the need for paper based waybills for air cargo and allowing them to use electronic means to keep track of shipments.

The Montreal convention was concluded in May 1999. It combines the various provisions of the previous Warsaw system arrangements into a single package. It entered into force in November 2003. The Department of Transport and Regional Services issued a discussion paper in January 2001 seeking input on whether or not Australia should accede to the Montreal convention.

The Montreal Convention Treaty was tabled in the Senate, along with a national interest analysis, on 4 August 2004. The Joint Standing Committee on Treaties published a report shortly thereafter which concluded that Australia should accede to the Montreal convention and that it would not have any detriment to Australia. The department of transport also issued a discussion paper in 2005 reviewing the Civil Aviation (Carriers’ Liability) Act in light of the decision by the Australian government to accede to the Montreal convention and proposing amendments to Australian law that would have had the same effect as the legislation currently proposed by the government.

Effectively, the previous coalition government had already decided to accede to the Montreal convention and this is the next step in amending the law in such a way as to put that accession into force. This legislation, therefore, is implementing a convention for which there is bipartisan support. It has gone through the proper processes of the parliament, including consideration by the Joint Standing Committee on Treaties, and it is therefore appropriate that it be brought here for the parliament to take this next step in implementation.

My office has discussed the content of this particular bill with the Australian aviation industry. Qantas and Virgin, our international carriers, have indicated their support. The domestic carriers are not opposed, but then again this legislation does not affect them as it involves only international carriers. It is clear that this convention enjoys the support not just of the industry but also of aviation customers in Australia.

It is not expected that the Australian air carriers would face higher costs, as most carriers operating in Australia voluntarily subject themselves to higher liability limits than those that currently apply under the Warsaw convention. Carriers, particularly the cargo freight industry, are also expected to benefit from the simplification of the documentation procedures which are provided for in this legislation.

The opposition is more than happy to support this legislation. As I indicated, it is a carryover from work that had been begun by the previous government. I think it is high time that Australia became a full partner to this convention. Most of our OECD colleagues have already joined it. Most of the countries to which Australian airlines fly are a party to it. It is therefore appropriate that Australia should also accede to the Montreal convention.

Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share this | Link to this | Hansard source

I rise to speak this evening about why we need to pass the Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Bill 2008. It is bipartisan, it is long overdue and it is about change. It is about problems with the old system and the solutions that are offered by this legislation. At the moment, international air travel is usually covered by the Warsaw convention and its amending protocols and treaties. There are two major problems with the Warsaw system. These problems highlight why the implementation of the Montreal convention is so important. The first problem goes to the core assumptions behind the Warsaw system: they are old and outdated. The Warsaw convention dates back to 1929, when the aviation industry had yet to take off as a viable alternative to road, rail and shipping. It was an era when the safety and reliability of air travel had yet to be proved. These were the days of great aviators such as Charles Kingsford Smith and Bert Hinkler and aviatrixes such as Amelia Earhart and Lores Bonney. This was a time of adventure, of testing and breaking records, not a time when aviation was a serious and trusted alternative to traditional modes of transport. Just two years before Warsaw was signed, Charles Lindbergh was the first pilot to fly nonstop from New York to Paris in his single seat, single engine monoplane the Spirit of St Louis.

The year 1928 saw a number of significant developments in terms of Australian aviation records. Bert Hinkler in February completed the first solo flight from England to Australia, arriving in Darwin after 15 days, two hours and 15 minutes. Charles Kingsford Smith in the Southern Cross flew across the Pacific from America to Australia. And 1928 also saw a modified Qantas aircraft, fitted with two stretchers, conduct the inaugural flight of the Royal Flying Doctor Service. The Warsaw convention was even before the days of airline hosts and hostesses. In May 1930, Boeing hired the first-ever airline hostess. These were the days of plywood covered fuselages and fabric covered surfaces. This was a long time before regular international air services reached Australian shores. It was not until the 1930s that Qantas began to move into international passenger services.

Back then, the thinking was that in order to encourage the industry to develop and flourish it needed protection from large compensation payouts. The industry could not have grown if airlines were bankrupted every time there was an accident. With this in mind, the drafters of the Warsaw convention put a cap on the amount of compensation that airlines had to pay. The trade-off for passengers has been that, although the amount of compensation is capped under Warsaw, liability is usually strict—that is, fault of the airlines does not have to be proved, making court cases a lot easier for victims. This cap, still in place today, has not been adjusted for inflation and has been set in franc Poincare, a currency that no longer exists. The franc Poincare was a unit of account used in the international regulation of liability and it was defined as 65.5 milligrams of gold, with a millesimal fineness of 0.900. It was identical in value to the French franc, although it has not been so since, and of course the franc has now been replaced by the euro. As I said, this is an old and outdated convention.

Australia signed the Warsaw convention on 12 October 1929, only two weeks before Black Thursday and the beginning of the stock market crash. These were times of great economic uncertainty and using a gold standard was a way of ensuring stability for the airline industry. The liability cap under the Warsaw convention is 125,000 francs Poincare. There is legal uncertainty as to how this amount is converted to Australian dollars. However, the cap could be as low as A$16,000 to A$20,000.

A number of nation states have also implemented other supplementary arrangements in their domestic laws. As a result, there are significant variations in the law governing air carriers’ liability. This lack of uniformity means that relatives of passengers who are killed in the same aircraft accident may receive vastly different amounts of compensation.

In the year ended June 2007, 22,138,000 passengers travelled on international flights to or from Australia. Times have definitely changed from the 1920s, when there were fewer than 100 planes registered in Australia. Aviation now ranks among the safest travel modes. These days, if airlines go bust because they keep having accidents then perhaps that is not such a bad thing. That is not likely to happen in Australia in the light of our stringent safety regime and our system of compulsory non-voidable insurance. Nevertheless, the time has well and truly arrived for our liability arrangements to properly reflect the commercial and safety realities. And this is what the Montreal convention will do by making airlines potentially liable for every last dollar of damage caused to airline passengers.

The second problem with the Warsaw system is that it is extraordinarily complicated and confusing. The convention has been amended on a piecemeal basis over the years by a number of protocols and conventions. As well as the original 1929 agreement, there is the Hague protocol, the Guadalajara convention, the Guatemala City protocol, Montreal protocols Nos 1, 2, 3 and 4, plus a host of voluntary airline agreements that operate within the Warsaw framework.

Different countries have adopted different instruments, leading to a complex morass of interlocking agreements. All these different instruments bring variations not only to the liability caps but also to the different rules relating to the liability of codeshare partners. In which country may a victim seek a court case? How long does a victim have in which to bring a claim to court? Which defences are available to the airline?

Imagine, for a moment, an airline tragedy involving the crash of a wide-body jet, in which 400 people from around the globe perish. Each passenger could have booked through any one of a host of codeshare airlines and each passenger could have been ultimately travelling to a different final destination. Although the voluntary airline agreements may apply so that the liability caps are waived, these agreements do not deal with issues such as who can be sued, where they can be sued and how long people can wait before bringing an action, and they may not deal with which defences are available to the airline. As can be seen, vastly different compensation arrangements may apply to victims of the same accident. Not only is this system exceedingly complicated; it is simply unfair.

Korean Air Lines flight 007—also known as KAL-007—was a civilian airliner shot down by Soviet jet interceptors on 1 September 1983, north of Japan. A total of 269 passengers and crew, including US congressman Lawrence McDonald, were aboard KAL-007 when it went down in the Sakhalin Sea. There were no known survivors. A six-person jury decided that the KAL-007 crew was guilty of criminal negligence in deviating from the prescribed flight path. Such a decision, from a practical viewpoint, meant that the victims’ families could sue the South Korean company for any sum the courts agree to award them.

Pan Am flight 103 was Pan American World Airways’ third daily scheduled transatlantic flight from London’s Heathrow International Airport to New York’s JFK International Airport on Wednesday, 21 December 1988. The aircraft flying this route—a Boeing 747 named Clipper Maid of the Seaswas destroyed by a bomb. The remains landed in and around the town of Lockerbie, in southern Scotland, killing not only those on board but also people on the ground. Following the Pan Am 103 disaster, Pan American Airlines was found liable for wilful misconduct by failing to prevent a bomb from being smuggled aboard flight 103 and thus the victims were allowed to claim above the Warsaw limit.

The Warsaw system, with its limited liability, forced the families of the victims to seek compensation through a traumatic and unnecessarily lengthy trial process. Warsaw was about the protection of airlines from the risks inherent in the industry, but it was also a financial deal that allowed limited liability in exchange for a strict set of benefits. In the tragic circumstances of losing a family member in an airline accident, a family could get justice—not a lot of justice, but some.

The Montreal convention aims to be a fresh start. Implementation of the convention will make it easier for Australians to seek fair and timely compensation, representing a big step forward in passenger and consumer protection. It will also be good for business by cutting the time consuming paperwork that is currently associated with passenger and cargo transportation, clearing the way for modern electronic billing systems. There is international consensus that the convention represents a positive development. The Warsaw system will still operate in circumstances where countries have not implemented the Montreal convention, but hopefully this will soon become the exception rather than the rule. Our aviation partners are implementing the Montreal convention widely and rapidly. The convention was negotiated in 1999 and came into force on 4 November 2003, and already 86 countries are party to it.

There is a clear need to ensure that Australia is at the forefront of international agreements on civil aviation. This point hit home for me after a discussion with a home owner in my constituency, Sam Morton. On 9 September 2004, three Australians on a tourist flight in Zambia died in a tragic plane crash—Sam’s daughter, Justine Watters; her husband, Matt; and her mother-in-law, Shirley. The investigation conducted by the Zambian civil aviation authorities found the cause of the accident to be the loss in flight of the propeller due to failings in the maintenance of the plane. For us, as regular travellers over this vast country of ours, this is a scary thing to even contemplate.

The plane in question, a Cessna 210, registered in South Africa as ZS-KOX, was maintained by NelAir Engineering. Subsequent investigations by the South African Civil Aviation Authority found probable cause that NelAir Engineering was responsible for the crash. NelAir Engineering carried out a mandatory periodic inspection only 19 days before the accident. Through the South African CAA investigation, it was found that the cause of the accident was the in-flight detachment of the propeller from the aircraft as a result of: improper torque of the propeller studs; failure to wire lock the studs that allowed the studs to back out of the propeller hub assembly, resulting in the separation of the propeller; failure to follow correct propeller installation procedures; and failure to use identifiable manufacturer approved parts.

I am advised that NelAir Engineering’s air maintenance operator’s licence was suspended by the South African Civil Aviation Authority in November 2006, with cancellation to occur within 30 days and to remain effective until such time as any court challenge was heard and a relevant decision made. I am not aware of any court action but I understand that the AMO licence was reissued to NelAir on or about 27 September 2007. The latest advice I have is that NelAir’s AMO licence has again been suspended with an intention to cancel the licence. The South African Director of Aviation, in the Department of Transport, advised the Australian High Commission that the department was seeking legal advice with a view to referring the crash to the Department of Justice to determine whether criminal charges could be laid. This process has been terribly disappointing to the loved ones of those who died in the accident. They know that nothing will bring them back, but someone should be held accountable and something needs to be done to ensure that an accident of this nature does not occur again.

While this is disappointing for the family who have so tragically lost family members, there have been changes made to ensure that our own practices are better in such situations. When the crash occurred, the Department of Foreign Affairs and Trade received notification of the accident and worked with the families involved to repatriate the bodies. What did not happen was communication between DFAT and the Australian Transport Safety Bureau. In fact, it was 12 months before ATSB became aware of the accident. ATSB investigators were not given the opportunity to assist the investigation carried out by Zambian and South African authorities. This incident highlighted the need for greater communication between Australian government agencies. DFAT’s consular services have now strengthened their relationship with ATSB and will in future ensure that communication occurs when consular officials become aware of a transport accident involving injuries to Australian citizens abroad.

I congratulate the Minister for Foreign Affairs on his department’s new policy of informing the Department of Infrastructure, Transport, Regional Development and Local Government, and in particular the ATSB, of all overseas accidents. The ATSB can then provide the families of victims with any information on the progress of an investigation, explain technical issues that may be confusing for the layperson and obtain a copy of the investigation report for the families at the earliest time after its release. This is not a difficult thing and I find it surprising that such a communication process was not already well established.

It is also surprising that it has taken so long to put the Montreal convention into practice in this country. It is essential that Australia implement the convention without further delay. It is also essential for us as a nation of travellers to ensure the rights of travellers are supported by our government and the department of foreign affairs. It is useless signing international treaties if we do not make them work. Australian families have been exposed to inadequate carriers’ liability arrangements for too long. Implementation of the Montreal convention is essential if they are to get a fair go after an airline tragedy. I commend the bill to the House.

Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

It is important for me also to speak on the Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Bill 2008 because, like the member for Brand, the constituent and the other family members lived in my electorate. The progress we have made is, I think, very important.

Airline travel has become fast and a preferred mode of travel for people across the globe, with thousands of traffic movements every day in diverse parts of the world. Airline partners are a common feature of international travel, introducing complexities that were not foreseen in the past. Airline travel is considered safe, but accidents do happen. In the 1920s the Warsaw convention was established to ensure a secure future for the airline industry. The convention is superseded by the Montreal convention of 1999, which is designed to modernise arrangements for the liability of international carriers with a uniform code for international air carrier liability.

There is no doubt that modern aviation has outgrown the old Warsaw convention, which had at its core the principle that carriers are not liable for the death or injury of a passenger, or for damage to air cargo, if they can prove that they took all necessary steps to avoid loss. In addition, it capped the liability rate, which was set in a currency no longer used in the modern world. Like so many of these conventions and legislative instruments, amendments flowed over the years, making the Warsaw convention clumsy and unworkable, with a confusing array of international arrangements.

The Montreal convention will overhaul the system of liability and damages that may flow and will eventually replace the Warsaw convention entirely. The Montreal convention is a two-tiered system of liability for death or injury. The first tier is for damages up to approximately A$190,000 based on no-fault liability and cannot be reduced except in the event of contributory negligence by the passenger. The second tier is for damages exceeding this threshold where the carrier is liable unless it can demonstrate that the damage was not due to its negligence or that of its agents. Effectively, this convention increases the compensation limits for victims of air accidents, sets the monetary unit of compensation as the special drawing rights of the International Monetary Fund rather than the long-abandoned gold standard and provides for the periodic review of compensation to take account of inflation. It will allow Australians to bring legal action in Australia rather than in the country where the accident occurred.

Most of the countries with which Australia shares major international air routes, including New Zealand, the United States, Europe and Japan, have already signed the Montreal convention. Qantas and Virgin airlines have both indicated their support for the legislation. The Howard government conducted appropriate rounds of consultations with relevant parties, and a uniformly positive response was received. It appears that Australian airline carriers will not face higher costs as they already subject themselves to a higher liability limit than those that currently exist under the Warsaw convention.

It is anticipated that the cargo and freight industry will benefit, though, from simplified documentation procedures. On that basis, the previous government had proposed that Australia should agree to the Montreal protocol, and the Joint Standing Committee on Treaties supported that decision in a report in 2005. In these times of fast global travel it is important that we have strong protocols dealing with adverse events. In the event of a serious air accident resulting in passenger deaths, grieving relatives and friends should not have to be dragged through protracted legal proceedings across a multitude of international boundaries.

Of course, that brings me to the issue confronting my constituent. It is very fresh in my mind, although this matter has gone on for several years. I have been assisting my constituent, Mr Sam Morton, who lost three family members in an air crash in Zambia. In the crash, Mr Morton and his wife lost their daughter, Justine; her husband, Matt; and Matt’s mother. The tragedy has had a devastating impact on the families. The trauma has been added to by long, protracted investigations. That process has been arduous indeed for Sam Morton, who, from the time of the crash, not only undertook to retrieve the bodies of his own family members but as well attended the arrangements for British and Canadian families who also had lost their loved ones in the crash.

Determined to leave no stone unturned to get to the bottom of what caused the crash, Mr Morton has pursued the case relentlessly, seeking answers from not only our own authorities but also the Zambian and South African authorities, and has frequently travelled at his own expense to these countries to try to progress those investigations. Mindful of the grief of all the families as well as his own personal grief, as I said, Sam Morton has constantly liaised with the other families and travelled numerous times to the African continent to do all that he can to make sure that others do not have to suffer due to negligence.

The member for Brand has clearly detailed the crash investigations, and I do not therefore propose to prolong my contribution by going over the same ground. Needless to say, the report makes for sobering reading. However, I do want to acknowledge the contribution of the Australian high commission staff and the high commissioner to South Africa, Philip Green, who, when Mr Morton encountered many roadblocks, did everything possible to clear the way and assist Mr Morton to take his well-founded concerns to the South African authorities.

Travelling to South Africa as leader of the Inter-Parliamentary Union delegation in 2006, I had great assistance from the high commissioner, Mr Green, and his staff, as they facilitated meetings with members of the South African parliament for me and other members of our delegation as well as a phone hook-up for me to speak to the adviser to the South African transport minister. This gave me a chance to raise firsthand the issues on behalf of Mr Morton. Despite the crash taking place in 2004, Mr Morton and the other families still do not have closure on this matter. Discussions with the South African authorities continue, and we hope that for the families affected by this disaster a satisfactory conclusion is reached sooner rather than later.

This case has resulted in some procedural changes between DFAT and the Australian Transport Safety Bureau, which is welcome, and I acknowledge the assistance and responsiveness of staff in both agencies. Through Mr Morton’s representations to me and to the member for Brand, the department has initiated an effective line of communication with the ATSB, and I thank both the former Minister for Foreign Affairs, the member for Mayo, and the current Minister for Foreign Affairs for facilitating those changes. This will result in far better communication in future with families faced with these kinds of circumstances. We can thank also Mr Morton for his determination to ensure that other families do not have their grief added to by unnecessary complexities. Given the fast pace of change and the growing global movement of people and freight, I am pleased to be supporting this bill. It is important that parliaments be responsive to the need for change and to ensure that compensation available to injured passengers is equitable.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Bill 2008. This bill is important because it is about offering greater protection for Australians travelling abroad. The Montreal Convention for the Unification of Certain Rules for International Carriage by Air deals with international air carrier liability for the carriage of passengers, baggage and cargo. It spells out an air carrier’s liability for injury or death of a passenger. My next-door neighbour, an in-flight services manager for an airline, says that it does happen, that deaths do occur not infrequently. Often he or she—I do not want to name him or her—has had to counsel flight attendants and it is a very traumatic experience when it does happen. It is easy to talk about it here, but the reality is that deaths do occur. Obviously with an ageing population, a wealthy population, and with baby boomers more of us will be flying. While there are requirements about having medical certificates to fly, obviously every now and then people get it wrong and deaths occur. This is a very timely piece of legislation. As I said, it spells out an air carrier’s liability for the injury or death of a passenger, the loss or damage of luggage and damages caused by arrival delays which occur in the course of international travel.

The convention was agreed to on 28 May 1999. I asked one of my youngest staff members if they could remember that date. The years blur a bit for me. I am in my 40s, but a younger member could definitely remember May 1999 because it was Kylie Minogue’s 31st birthday—my staffer was still in school. I think Kylie Minogue will be 40 tomorrow. That gives you an idea of when this convention was first agreed to. Happy birthday to Kylie Minogue from Parliament House here in Canberra and a special thank you from me for those gold hotpants!

What else was going on back in 1999? Take your mind back. The average city retail price for unleaded petrol was 80.4c per litre. It is great to be able to mention the word ‘petrol’ and not have a chorus of voices in this House at the moment. The average price for a house was $200,000. The housing interest rate was 6.5 per cent and the size of the average home loan was $136,500. Back in May 1999, Britney Spears had just released her debut album. The title track was ‘Hit me baby one more time.’ At that time she had no babies under her control and it is much the same now, as it turns out. In 1999, The Matrix had just hit the cinemas and there were no sequels to The Matrix movie at the time. Back in 1999, John Howard’s approval rating on 28 May 1999 was at 42 per cent, which is 30 per cent more than that of the current Leader of the Opposition.

Back to the more mundane matters to do with flight: the Montreal convention was agreed to on 28 May 1999 and came into effect on 4 November 2003. I point out that there was a fair gap between when it was actually agreed to and when it came into effect. So far, 86 countries have signed and ratified the Montreal convention. To pluck a couple of names out of the air, Bolivia, Tonga, Namibia, Estonia and Botswana—none of these countries, though wonderful in their own way, are OECD countries. Nevertheless, all of them managed to ratify the Montreal convention.

You may be wondering why it has taken so long to be enacted by the Australian government. Since 1999, the coalition had nine years to sign and ratify the Montreal convention, yet they failed to do so. 28 May 1999 is a very long time ago. So while other countries moved swiftly to enact the laws, the coalition government sat on their hands. They simply could not be bothered. They did not care about Australian international travellers. Like their stubborn refusal to ratify Kyoto, here we have another example of the former coalition government being slow to act to advance international laws. They were not able to look beyond our shores. In fact, with the passing of this bill, Australia will be the last OECD country to sign and ratify the Montreal convention.

On that note, I will just take this moment to thank Minister Albanese for moving so swiftly to bring this bill before the parliament. The Montreal convention replaces rather than amends the complicated and outdated Warsaw system of carriers’ liability. The Warsaw convention became law in 1929, in an era when air travel was just taking off, so to speak. I am sorry, Deputy Speaker; I do apologise for that pun. I do not think it ever got off the ground. In fact, I think that pun might have crashed. Nonetheless, the Warsaw system, with its origins in 1929, before jet engines were even invented, is written in archaic language. It measures compensation in the gold franc Poincare, a currency that no longer exists, and offers very low compensation to victims and their families, sometimes as low as $16,000. Obviously this is manifestly inadequate in 2008, in this millennium. Compensation for damaged luggage could be as low as $30. For anyone who has been in an international airport, $30 barely buys you a milkshake and a sandwich in most airports. But it gets worse. In some circumstances, under the Warsaw convention, the amount of compensation is limited to a cap that was set two weeks before the great crash. Of course, I am talking about the Wall Street crash, not a plane crash.

It is therefore essential that the Rudd government modernise these arrangements to ensure that equitable compensation is available to injured passengers or passengers that have incurred damage. It is essential work for a government that believes in the future. It is essential work for a government committed to the new millennium. We believe that our world has changed quite a bit since 1929. The Warsaw system has also become unwieldy through many additional instruments such as the Hague protocol from 1955, the Guadalajara convention of 1961, the Guatemala City protocol of 1971, the 1975 additional Montreal protocols Nos 1 to 3 and Montreal protocol No. 4. These were introduced in an effort to modernise the laws regarding the international carriage of cargo.

Today, international jet travel is booming and we need fair and workable laws in place to protect consumers. The Montreal convention provides this protection for Australians travelling overseas. It does this by removing the cap on carrier liability and introducing a much fairer two-tier system. For damages up to a threshold of 100,000 special drawing rights, which is equivalent—as you well know, Deputy Speaker—to around $170,000 in today’s terms, passengers will not have to prove fault on the part of the airline. That is, it makes it a much easier process for the consumer, for the poor traveller who has suffered at the hands of a carrier. So, instead of adding insult to injury, this new Montreal initiative pours oil on troubled waters. On the other hand, for damages greater than the 100,000 special drawing rights threshold, the onus will be on the airline to prove that they were not at fault. As I am sure you well know, Deputy Speaker, special drawing rights are a unit of currency used by the International Monetary Fund, based on a basket of international currencies. The new compensation thresholds will ensure that victims and their families are now fairly compensated for injury, death or loss.

I have heard some argue that this bill will lead to greater travel costs for consumers. However, as many international airlines have already voluntarily begun operating under more generous liability arrangements, this bill is not expected to increase travel or insurance costs.

This bill is also good for modern families. The bill expands which relatives are able to claim damages in the event of a passenger death. The list now includes stepsiblings and wards of the passenger. The Montreal convention may also be applied to domestic air travel. However, as our domestic scheme is working so well, as mentioned by the member for Brand, the government has decided to keep the existing arrangement covered under part IV of the Civil Aviation (Carriers’ Liability) Act. The legislation is complemented by state government legislation to create a national, uniform liability framework for domestic air travel.

Finally, I am pleased that the passing of this bill will strengthen Australia’s standing as a leading aviation nation. Certainly, coming from Queensland, I know that the state of Queensland is particularly committed to aviation and, having an airport in my electorate, I am particularly interested in it as well. So we will join the 86 other countries as a signatory to the Montreal convention. We will catch up with the protections afforded the good citizens of places like Bolivia, Tonga, Namibia, Estonia and Botswana and, in doing so, we will ensure greater protection for Australia’s international travellers. I commend the bill to the House.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

I am afraid that my speech will be nowhere near as ‘punny’ as the member for Moreton’s. I am pleased to speak in support of the Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Bill 2008, the intention of which is to modernise and consolidate the raft of inconsistencies and variations which currently prevail under the Warsaw convention—which was negotiated, as the member for Moreton mentioned, in the early years of aviation and came into force in 1929—and other subsequent conventions. My colleague the Hon. Warren Truss MP, the shadow minister for transport, has already underlined the principal reasons why the coalition is supporting the bill. I shall add my observations on this welcome legislation.

With this bill the government has put the finishing touches to all the former government’s preparatory work and genuine consultation that preceded it. We on our side of the House have a natural reservation when it comes to conventions and treaties, and we wish to ensure first and foremost that they benefit the Australian people and would have their support. Some international agreements are signed mainly to express support or make a symbolic gesture. On the other hand, this legislation will have a definitive concrete benefit for those Australians flying overseas. I understand that something like two million overseas trips are made each year by Australian air passengers, and this will no doubt continue to increase. Therefore, the number of people this legislation could affect is quite significant.

Judging by the information that has been provided on this bill, there appear to be many benefits for Australia and few, if any, negative effects, which should always be the main consideration when deciding whether or not to support such legislation. From my understanding, the situation as it currently stands is not acceptable. There are a patchwork of conventions, rules, protocols and practices which, in many cases, lead to lack of certainty about precisely what the responsibilities and liabilities are for international air carriers. Also, there is the prospect of those injured, killed or in other ways affected by events connected to international air travel, such as lost luggage, having to launch costly and protracted legal action against large companies. This legislation should provide certainty for carriers, passengers and regulators as to precisely what the rules are pertaining to loss and injury and ensure a more simplified, user-friendly system for resolution of such cases.

The first problem with the current situation is related to certainty and ease of access to damages on the part of victims of accidents or other unfortunate circumstances. There is a two-tier system of liability proposed for death and injury. Of course, we in Australia are familiar with this sort of system. Many states have had a similar system in workers compensation for years. The first tier is a no-fault area, where no proof of negligence or error need be proved but where there is a legislated cap on the amount which can be awarded. This threshold is most important when assessing whether the ultimate result will be increased costs to the carriers, which would of course be passed on to the travelling public. The threshold must be high enough to provide fair compensation and to limit the number of instances which need resolution in the courts and low enough to ensure that carriers do not face increased insurance premiums. The second tier would only be available when loss or damage was incurred solely due to negligence or a wrongful act on behalf of the carrier, its servants, its agents or a third party. I believe that this is an eminently sensible resolution of the thorny problem of liability, damages and legal proof.

The second problem was a farrago of regulation combining the remnants of the Warsaw system, which in itself permitted higher limits of liability with other arrangements; therefore, there was no consistency. There was dissatisfaction with the low liability limits set by the Warsaw convention and The Hague protocol and with the inability of the international community to agree on higher ones, which often led to various measures to get around those limits.

Another cause of confusion was the reliance on a provision of the Warsaw convention that permits a carrier and passenger to agree by special contract to a higher limit of liability. Many carriers agreed among themselves to apply an increased liability limit or to waive liability limits. To this end, private agreements and voluntary arrangements among air carriers were developed, notably within the International Air Transport Association, IATA. Japanese airlines also abandoned liability limits. Some countries took action in relation to their own airlines. For example, Australia imposed higher liability limits on Australian carriers, although its obligation under the Warsaw system prevented it from opposing the same limits on foreign carriers.

Another cause of complication was the fact that different Warsaw parties adopting differing amending instruments resulted in a complex array of international arrangements. For example, Australia is a party to the Warsaw convention as amended by The Hague protocol, the Guadalajara convention and Montreal protocol No. 4. Indonesia is a party to the Warsaw convention as amended by the Guadalajara convention. Having had a tooth taken out last week does not help with pronouncing some of these words, I can tell you. If an accident occurs on a flight for which Australia is the country of departure and Indonesia is the country of destination, the applicable international law is the Warsaw convention as amended by the Guadalajara convention, the liability limits being those in the Warsaw convention. However, if Australia is the country of departure and France is the country of destination, the applicable international law is the Warsaw convention as amended by The Hague protocol and the Guadalajara convention, the liabilities being those of The Hague protocol. These are the instruments to which both France and Australia are parties.

In Australia, there was further relevant legislation. In addition to the Civil Aviation (Carriers’ Liability) Act, a voluntary industry code, being the Code for the Preparation of Airline Family Assistance Plans, sets out the minimum standards for airlines operating to and from Australia in giving assistance to victims and the families of victims in the event of a major civil aircraft accident involving loss of life or serious injury. It should be noted that the provisions of the carriers liability act applying to a non-Montreal convention international flight—that is, between Australia and a country that is not a party to the Montreal convention—would remain unchanged. The provisions of the act applying to domestic flights would also remain unchanged.

That was an unworkable nightmare which had to be rationalised and put on a firm logical and legal footing. I do not agree that Australia should blindly follow other countries simply because that is what Europe or the United States is doing. However, in this case the policy is correct and it would help untangle an almost impenetrable and unworkable maze of regulations and laws.

Another complication under the existing system is that of jurisdiction. Under the pre-Montreal convention Warsaw system, claims for damages can be heard in one of four jurisdictions: a court in the state where the carrier is ordinarily resident; a court in the state where the carrier has its principal place of business; a court in the state where the carrier has an establishment by which the ticket was purchased or contract was made; and, finally, a court in the state of the passenger’s destination.

Article 33 of the Montreal convention provides for a ‘fifth jurisdiction’. It allows an action for damages for the death or injury of a passenger to be brought in the country where the passenger had his or her principal and permanent residence at the time of the accident, if it is a country to or from which the carrier operates and where it has premises. This would give most Australian citizens access to Australian courts to pursue claims in relation to flights to which the Montreal convention applies.

There are other areas which have been modernised and improved to the benefit of the flying public. Under the Warsaw convention the limits of damages were expressed in terms of the somewhat esoteric and arcane Poincare gold franc, which was linked to the gold standard. This standard has now been abandoned and establishing the monetary value of a claim has been somewhat of a raffle, with courts in different countries adopting different approaches to determining the exchange rate. We now have one uniformly agreed unit—the SDR, or special drawing right. One SDR is roughly the equivalent of A$1.72. Put simply, tier 1 claims can be up to 100,000 SDRs, or about A$172,000. Every other member country can translate SDRs into their own currency, but it is clear to everyone what the limit is. Another significant improvement is to widen the definition of family to include, for example, partners, a de facto spouse, wards, grandchildren, grandparents, step- and half-brothers and step- and half-sisters, and guardians.

Travellers will by now be familiar with electronic documentation. This is already being widely used by the aviation industry for both passenger ticketing and cargo movement, but it does not meet the requirements of the Warsaw convention. The Montreal convention provides for simplified documentation. It eliminates the need for cargo consignors to complete detailed paper based air waybills and so allows simplified electronic records to be used. As long as the passenger or consignee has adequate evidence of the contract and provided it is in a form that meets the requirements of border control agencies, there is no reason why documentation should not be electronic.

Usually the first question asked when changes are proposed is: what will they cost? There are minimal financial implications for the Australian government from the bill. There are no ongoing administrative costs. Where the Commonwealth is the operator of an aircraft, liability, in the event of an accident, for the death or injury of a passenger may be higher under the Montreal convention than it would be under existing international obligations. Adoption of the Montreal convention provisions is not expected to increase insurance premiums for Australian international carriers or foreign international carriers. Apart from the effect of the intercarrier agreements, insurers, in setting premiums for carriers that operate into the USA, already factor in the possibility of US courts deciding that the carrier or its agents have engaged in wilful misconduct and that liability limits therefore do not apply. Carriers and consumers will also benefit from the fact that the Montreal convention expresses liability limits in SDRs. This removes existing uncertainty about the values to be applied resulting from disagreement on the way in which the obsolete gold franc amounts in the Warsaw system instruments are to be converted.

The other important question is how the legislation and regulations will operate. As any regulations will be a disallowable instrument, parliament will maintain oversight. Article 24 of the convention provides for five-yearly reviews of liability limits to account for inflation. As regulation changes can be disallowed, this will ensure that parliament retains oversight of such amendments. At the same time, having such a facility will allow the government to bring amendments into force more quickly than through primary legislation, allowing continuing consumer protection in line with international practice.

In summary, this is an excellent and much-awaited improvement to the legal framework in which international airlines operate. As of February 2008, Australia will be joining 86 state parties to the convention, including Australia’s key aviation partners, such as the United States, New Zealand, Canada, Japan, the United Arab Emirates and the European Community and its member countries. I welcome this legislation and encourage members to support it.

Debate (on motion by Mr Marles) adjourned.