Air Navigation and Transport (International Conventions) Bill 2004: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Is cúis mhór áthais dom bheith anseo i measc na Seanadóirí chun an Bille Aerloingseoireachta agus Aeriompair (Coinbhinsiúin Idirnáisiúnta) 2004 a chur faoi bhráid an tSeanaid. Ba mhaith liom leithscéal a ghabháil thar ceann mo chomhghleacaithe polaitiúla, an tAire, an Teachta Brennan agus an tAire Stáit, an Teachta McDaid, atá lasmuigh den tír ag obair le hUachtaránacht na hEorpa.

Before moving on to the detailed provisions of this Bill and the Montreal Convention, which the Bill enables us to ratify, it is useful to place it in the correct context. Aviation is first and foremost an international activity. As far back as 1929, when the first Warsaw Convention was adopted, it was clear that international agreement was needed to facilitate the smooth operation of air transport. Even during the extremely difficult international circumstances of the Second World War, nations came together in 1944 to adopt the Chicago Convention, which created the International Civil Aviation Organisation and still serves as the framework for the conduct of worldwide civil aviation. We in Ireland have always recognised the importance of international aviation to our economy because we are an island on the western periphery of Europe, and because of our deep business and historical links with North America over the centuries.

We have participated fully in the development of international aviation and its various international conventions. Owing to our location on the eastern edge of the Atlantic Ocean, we played a pivotal role in the early development of transatlantic aviation, and Ireland continues to enjoy a strong reputation in the international aviation community. The purpose of the Bill is to enable us to ratify the 1999 Montreal Convention along with our European Community colleagues. That convention is a further milestone in the co-operative development of international aviation, and it is right that Ireland should support it and continue our tradition of support for international aviation.

In the course of preparing the Bill, the opportunity has been taken to restate the existing law relating to the existing Warsaw Convention and its amendments so that the entire subject is covered in one Bill. The Montreal Convention is an updated replacement for the 1929 Warsaw Convention for the Unification of Certain Rules Relating to International Carriage by Air, which, together with numerous subsequent amendments, is referred to as the Warsaw system. The Warsaw system now provides a worldwide system of standards and rules for carriage by air, and in particular common rules on liability limits for the carriage of passengers, cargo and baggage in the event of damage, delay or loss. The Warsaw system is already enshrined in Irish law in the Air Navigation and Transport Act 1936, as amended.

The Montreal Convention represents a major improvement over the liability regime established under the Warsaw Convention and its related instruments relative to passenger rights in the event of an accident. Among other benefits, the convention holds carriers strictly liable for damages up to 100,000 special drawing rights; removes the upper limit on damages for accident victims which exists in the Warsaw system; extends the range of jurisdictions in which claims for damages may be brought; clarifies the duties and obligations of carriers engaged in code-share operations; and, with respect to cargo, provides for modernised documentation.

Significantly for passengers, the convention makes it easier for them to bring legal action. In addition to the jurisdictions in which legal action for damages may now be taken under the Warsaw system, the Montreal Convention allows legal action to be taken in the state where the passenger lives if the carrier operates services to or from that state. That will, in almost all cases, allow the passenger to take legal action in the courts with which he or she is most familiar.

The new Montreal Convention will supersede the Warsaw system in every state which implements it. However, the Warsaw system will continue to apply to international air travel where either or both of the states has not yet ratified the Montreal Convention. The Bill deals with that by providing that the most recent convention common to both Ireland and another state will apply to air travel to or from that state. The rules of the Montreal Convention are already included in European law for all European airlines and their passengers through EU regulations. Ratification of the Montreal Convention will extend the higher liability limits worldwide, thereby providing very significant benefits for passengers travelling with non-EU airlines.

Ratification of the Montreal Convention by all EU member states and the European Community before 1 May 2004 will ensure the Montreal Convention will automatically extend to the ten accession countries when they become members on 1 May 2004. Otherwise, the process will be delayed until all ten accession countries are able to ratify, and Ireland, as the current holder of the Presidency of the European Union, would not wish to delay the passage of the Bill.

I now turn to the main provisions of the Bill. Sections 1 to 3 contain standard provisions in legislation, the Short Title, the purpose of the Act and the various interpretations. Section 4 provides for the two versions of the Warsaw Convention and the new Montreal Conventions to have the force of law in Ireland. The first two are already enshrined in Irish law in the Air Navigation and Transport Act 1936. The texts are set out in the three Schedules to the Bill. The provisions in the Air Navigation and Transport Act 1936, which enshrine the first two conventions, are repealed in section 11 of this Bill. That means all the legislation in the area will be conveniently included in one Act. Section 5 provides for the French language to prevail if there is a dispute about differences between the English and the original French texts of the Warsaw system conventions. Those conventions were originally drafted only in French, and the original French texts are deposited with the Ministry of Foreign Affairs in Poland.

Section 6 empowers the Government to certify which states are contracting parties to this convention. Section 7 sets out the liabilities of a carrier if a passenger dies, and specifies who is entitled to claim compensation. It is based on section 18 of the Air Navigation and Transport Act 1936, as amended.

Section 8 empowers the Minister to make a notification, as provided for in Article 57 of the Montreal Convention. That article allows a state to declare that the convention will not apply to international flights carried out by the state for non-commercial purposes, or to military flights. There are no immediate plans to make such notifications. However, it is customary in international aviation to treat "state aircraft" separately from civilian aircraft. Section 9 empowers the Minister to extend the convention to apply to internal non-international flights. In practice, internal flights are already subject to equivalent provisions through EU law.

Section 10 is a standard provision authorising money to be provided by the Oireachtas. It is not expected that the Act will give rise to any additional costs for the Minister. Section 11 repeals certain provisions of the Air Navigation and Transport Act 1936 and includes some consequential amendments to ensure that this new Act will be taken into account, when appropriate.

As the purpose of this Bill is to enable Ireland to ratify the Montreal Convention, I will give some background to the convention and describe its main provisions. The Montreal Convention represents the successful culmination of work by the International Civil Aviation Organisation to modernise the patchwork of liability regimes around the world. Currently, air carriers operating to countries that are not EU member states are faced with widely differing liability regimes, depending on the treaties to which various governments are parties. Many private inter-carrier agreements further complicate matters.

The success of the Montreal Convention is clearly illustrated by the fact that it was immediately signed by 52 countries, including many EU member states of which Ireland was one in 2000. In November last, the United States became the 30th country to ratify the convention, thereby causing it to enter into force among the states that have ratified it.

As soon as the Montreal Convention is ratified by Ireland, by the other EU member states and by the Community, it will become part of European law and will take precedence over the Warsaw Convention and any of its amendments and related instruments.

Chapter 1 covers the general provisions of the convention and deals mainly with who and what is covered by it. Chapter 2 deals with both the documentation and duties of the parties relating to the carriage of passengers, baggage and cargo.

Articles 3 to 11 of the convention, deal with the documentation requirements for international air carriage of passengers, baggage and cargo. Most significantly, they provide benefits to the cargo industry by providing for modernised electronic documentation, including the elimination of the need for consignors of cargo to complete detailed air waybills prior to consigning goods to a carrier. Consignors may use simplified electronic records to facilitate shipments, thereby expediting the movement of goods.

Chapter 3 of the convention deals with the liability of the carrier and the extent of compensation for damage. Article 21 provides for compensation in the case of death or injury of passengers. First, the carrier will be strictly liable for the first 100,000 SDRs, or approximately €118,000 of proven damages for each passenger. This is a big increase from the approximate 16,600 SDRs, approximately €20,000, under the Warsaw system. A carrier may not avoid liability for this amount, even if the carrier can prove that the harm was not caused by its negligence. This means that even if an accident was caused by weather or if a third party, such as a terrorist, caused an accident, the carrier is still liable for damages up to 100,000 SDRs. The only way a carrier can exonerate itself from this liability is if it can prove that the passenger for whom the damages are sought, caused or contributed to the accident.

In addition to the amount of 100,000 SDRs, carriers are subject to unlimited liability if the plaintiff can show that the carrier was negligent. This is a major change from the Warsaw system, which placed a low upper limit of 16,600 SDRs on the amount of damages, except in very unlikely cases where it could be proved that the carrier or its staff intentionally or recklessly caused the accident.

As these limits are already in force in Ireland under European law, there are no cost implications for Irish air carriers. Also, under European law all European air carriers must insure themselves sufficiently to meet these liability limits. Consequently, ratification of this convention will not increase costs for carriers in Europe, nor will it lead to increased fares for passengers.

Article 28 provides for advance payments, which acknowledges the right of states to have national laws that require their own carriers to make such payments in the event of passenger death or injury, and addresses certain procedural issues related to such payments. In addition, a resolution adopted by the diplomatic conference, as part of the final Act, encourages all states to adopt such laws.

European law already provides for advance payments of the type referred to in Article 28. Amounts of at least 16,000 SDRs, approximately €19,000, are to be made without delay to persons entitled to make claims to meet immediate financial needs. These advance payments do not involve an admission of liability and may be offset against the total amount of damages payable.

Articles 29 to 35 provide for rules relating to the basis for making claims and include a new provision allowing persons to bring actions in the state where the passenger lives, if the carrier operates services to or from that State. Disputes may also be settled by arbitration.

Chapter 4 of the convention deals with combined carriage. This is where a person or cargo makes a journey partly by air and partly by surface transport. In that case the convention only applies to carriage by air. Chapter 5 deals with carriage by air performed by a person other than the contracting carrier. This is primarily to cover what is known as "code-sharing" among airlines. Code-sharing is where airline "A" agrees to carry passengers on behalf of airline "B" and the tickets issued by airline "B" carry its flight number. This has become a very common arrangement among airlines as it allows much wider international marketing by, for example, linking internal US flights by US airlines with Aer Lingus's transatlantic flights. Senators have heard about the one world alliance to which this is related.

When a claim arises under the convention, a claimant may take an action against the carrier from which the carriage was purchased or against the code-sharing carrier operating the aircraft at the time of the accident.

Chapter 6 of the convention deals with other provisions, such as nullifying clauses in contracts that do not comply with the convention and which require insurance. Chapter 7 contains the final clauses, covering such matters as signature, ratification and entry into force. Article 53 includes provision to allow regional economic integration organisations, such as the European Community, to ratify the convention on a macro basis.

The provisions I have described reflect the many benefits that will accrue under the convention to the air transportation industry, especially its many consumers. One key benefit, not reflected in the provisions, is the benefit of uniformity. Based upon the response to the convention at the diplomatic conference and on communications with other governments since that time, Irish ratification of this convention, which will allow EU ratification by 1 May of this year, will help to achieve a much-needed and long sought after modernisation and unification of the liability regime applicable to international air carriers.

I commend the Bill to the House.

Ba mhaith liom fáilte a chur roimh an Aire Stáit. Fine Gael welcomes this Bill and I thank the Minister of State for his comprehensive speech which certainly cleared up some questions in my mind. This Bill was referred to the Sub-Committee on European Scrutiny on 21 November last and then referred to the Joint Committee on European Affairs for further detailed scrutiny. The members of that committee had little difficulty with it and felt it took a sensible approach.

We welcome a harmonised approach to insurance for airline carriers. The world is now a small place.

Huge volumes of traffic pass through airports every day and it is vital that airline passengers have maximum rights. I was amazed to learn that in any given 24-hour period, in the region of 1,000 aircraft use Irish airspace. This works out at nearly 7,000 aircraft per week at peak times, although the distinction between peak and off-peak has blurred in recent times.

The previous obligation on aircraft operators from non-EU countries simply to have insurance has proved unsatisfactory. The fact that an amount of insurance is specified is a welcome step. As Aer Lingus and Ryanair already meet the proposed insurance requirements there should not be any fare increases for passengers using their services.

Widespread public consultation was undertaken in regard to this proposal. Advertisements were placed in newspapers last March. The lack of response is an indication that the public is quite happy with the proposal.

The Bill deals with the insurance requirements for air carriers and aircraft operators. It aims to ensure a harmonised approach to the level of insurance held by aircraft carriers in response to the increased fears of terrorist attacks arising from the events of 11 September 2001 in the United States. We continue to be at risk from such attacks. In the terrorist attack in Bali but for the grace of God some Irish people would have been killed. Even a terrorist attack thousands of miles away in Bali can have a direct impact on Ireland.

The Bill will allow us to ratify the Montreal Convention, thus giving it the force of law here. The Montreal Convention updated and replaced the Warsaw Convention and the Minister of State clearly outlined the benefits attached to this.

On a point of clarification, will the Minister inform the House of the implications of the Rome Convention, which I came across in researching this area? I am not sure what it is, although I am aware we have not yet signed it. What is it, do we plan to sign it and, if not, why not? Will it have an implication for the Bill before us?

Currently European Union countries have high levels of insurance cover, in excess of €1 billion, but many carriers from non-EU countries have considerably less than this. Given this state of affairs the European Commission correctly brought forward a proposal to ensure a harmonised approach to insurance that will enhance the rights of passengers.

The regulation will apply to all EU and non-EU carriers and operators that fly into EU airports or use EU airspace. All such carriers will be required to have specific minimum levels of insurance for passengers, baggage, mail, cargo and third parties.

Current regulations require aircraft operators simply to have insurance, without specifying actual amounts. The existing recommended amounts are relatively low compared to that held by most carriers in EU member states. The level of insurance will depend on the maximum take-off weight of the aircraft and the insurance must include cover for acts of war or terrorism.

The Minister of State's point on ratification before 1 May is valid. Accordingly, I wish the Bill a speedy passage through the Houses. By passing the legislation before 1 May, it will also apply to the ten accession countries, which is good news for all concerned.

Non-EU aviation carriers operating in Ireland are currently regulated by the Department of Transport, but the implementation of the regulation is not expected to have significant implications for it. The Irish Aviation Authority will be responsible for enforcement in the area of individual aircraft licences. Does the Minister of State foresee any extra workload for the Department or the authority in this area?

The legislation will ensure that sufficient funds will be available to meet compensation costs in the case of an accident in Ireland between EU and non-EU carriers from any of the states which are party to the convention.

The provision on the French language is unusual. The Minister of State expanded on this point in his speech. Surely it would make more sense to have English as the main language of Europe. While it may not be the first language of most European countries, it is one which is widely spoken and may help prevent further confusion. Is this provision set in stone or can it be changed?

Where do we stand in regard to making amendments to the Bill? If we make amendments, will they have an impact on other countries? Does the legislation go back to the European Parliament, for example, for further ratification?

I welcome the Bill, which is a good one. It is hard to say anything bad about it. Members of the Joint Committee on European Affairs queried the matter of state aircraft not coming under the remit of the legislation. This is due to the Chicago Convention which dictated that, in the event of a crash involving state aircraft, the Government in question would honour any liabilities. This may be the subject of discussion in Brussels today. It is certainly on the agenda for discussion at European Union level. Will the Minister of State clarify the issue of liability in the case of the involvement of military or State aircraft in an accident? As far as I know, it is outside the remit of the legislation.

I welcome the Minister of State, Deputy Treacy. He is filling in for the Minister, Deputy Brennan, and the Minister of State, Deputy McDaid, who are chairing a Council of Ministers meeting in Brussels. It is an important meeting which deals with the open skies issue, which is currently under discussion between the European Union and the United States. We send them our best wishes in that regard. As Senators are aware, the open skies issue, which is of benefit to the country, has given rise to concern, especially in the west of Ireland. I am sure the Minister of State, Deputy Treacy, shares those concerns in regard to Shannon Airport and the western region. We await the outcome of the discussions with bated breath.

As previous speakers' outlined, the principal purpose of the Bill is to ratify the Montreal Convention and give it the full force of Irish law. It updates the Warsaw Convention and the various amendments that have taken place since the Warsaw Convention was agreed in 1929.

Senator Browne rightly referred to the vast changes that have taken place in the area of aviation since that time, especially in recent years with the advent of low fares and other developments. The Warsaw Convention is not a matter we have dealt with in great detail or one that we need be concerned with on a daily basis. However, when we are bored on a flight we may decide to read some of the fine print on the back of our airline tickets where one usually finds details relating to the liability of the carrier. Flying at 37,000 or 38,000 feet one may discover the scant liability of an airline in the event of an accident or, as frequently happens, when one's bag does not appear and is never found or if it is damaged.

As the Minister of State said, the Montreal Convention updates many of the terms and conditions of the Warsaw Convention. The liability of airlines is important, especially in regard to our own person and the concerns we have about accidents which might take place while we are on board an aircraft.

Nobody is overly concerned about who is liable in the event of a major accident because those involved are generally not alive to worry about it. However, there is a concern that those who have non-fatal accidents outside the jurisdiction might not have sufficient finances to take care of their medical expenses. Permanent loss of one's baggage or damage to goods must also be considered.

I welcome the provisions on cargo in the Bill. Much worldwide trade is now about just-in-time delivery of goods. Trade used to be of a much less advanced nature and shipping took place over a prolonged period. Many goods nowadays, particularly hardware and software for the IT industry, require just-in-time delivery. As the Minister of State outlined, updating the conventions will allow for much speedier delivery of goods between the exporter, the baggage handlers and those at the delivery point. This is a welcome development and will ensure that trade will be facilitated by electronic means.

If one believes increased liability on air carriers means there is no longer a necessity to have travel insurance, one should note that travel insurance is a very important part of air travel. It is not just to cover any medical problems a passenger might have, either as a result of an accident or falling ill while out of one's jurisdiction, but also to cover the loss of personal baggage or damage thereto. My experience of travel over many years has shown there is a very good range of insurance products on the market, of which passengers should make themselves aware. It is only as a last resort that one should be depending on the conditions as set down in this legislation and the conventions. It is vital that people still continue to take out travel insurance to protect against the aforementioned eventualities.

It has been made clear that all airlines we refer to as First World airlines already have sufficient insurance to cover their liabilities. I understand that they retain insurance against a liability of about €1 billion. However, the purpose of this Bill and the conventions is to bring into line Third World airlines that do not cover themselves to this extent. Principally, it is about the extension of the higher liability limits to airlines worldwide, thus providing very significant benefits for passengers travelling with certain non-EU airlines.

Although many Third World airlines are not flying to Ireland or Europe, this will obviously change as business develops between Europe and the countries in which those airlines are based in the coming years. It is important to bear this in mind because air travel is increasing outside the EU and between the EU and Third World countries. Many Third World countries are emerging from the depths of a depression and poor economic circumstances and are growing by way of many of the many economic development programmes initiated by First World countries, thus resulting in an increase in air travel. The conventions ensure that the Third World airlines will put in place the necessary finance to ensure their liability is covered in all circumstances.

We are all familiar with the international growth in tourism and business links. India, for example, has experienced high growth in its IT industry. The net effect of the business generated by India's measures to ensure its education system produces graduates highly skilled in the development of computer software is an increase in the frequency of air travel and, ultimately, of cargo transfer between India, Europe and the United States.

This effect is also evident in respect of the increased manufacturing trade between Europe, America and China. The manufacturing industry in China is partly operating to the detriment of manufacturing throughout Europe but it will bring about an increase in air travel. Therefore, it is important that this legislation is in place. It serves as further recognition of what is referred to as the global village and the fact that certain parts of the world, although they might have been considered well outside the remit of the First World, have generated business through the development of trade links and through their manufacturing base, albeit using cheaper labour.

Air travel has certainly changed significantly in recent years. We spoke of this last week when the Aer Lingus Bill was passing through the House and we recognised that low fares and no-frills services are very much a part of passenger travel. It is important that these phenomena are not operating at the expense of safety. By putting in place the proposed legislative measures, we will ensure there will be a level playing pitch in terms of the insurance liability of airlines, in which case it will not be possible for some airlines to have a much poorer safety record than others. We would all welcome this.

Baggage handling is an important part of air travel and it is important to ensure that airlines are largely responsible for the protection of one's goods while travelling. Thus, there would be fair competition between all airlines, even in a low-fares, no-frills environment.

The Warsaw system was good and while it needed updating it certainly provided for air travel to date. This Bill will take account of the recent amendments that have been made. There are two European regulations covering this area, one of which came into force in 1997 and the other in 2002. As Senator Browne stated, all the airlines operating in the European Union were already subject to the rules in this regard. However, they will now be enshrined in European law.

As the Minister of State has outlined, under section 11 the relevant provisions of the current law, namely the Air Navigation and Transport Act 1936, as amended, are repealed, allowing one Bill to cover the entire subject. This should be welcomed in the House. Legal practitioners, politicians and many of those who must consider Bills before amendments are made will welcome this. As Bills are amended over a number of years, following the changes can be quite tedious and therefore it is good that the Department of Transport has sought to consolidate all the legislation in this area. I hope the legal people in the courts, who often like to tell us what to do, will compliment the Department on its efforts in this regard.

I also welcome the provision that makes it easier for passengers to bring a legal action in their principal country of residence, referred to as the fifth jurisdiction. There were four places in which one could take a case, namely, the place of business of the airline, the place of an accident if it related to an accident, the point of origin of the passenger or the goods and the intended destination if the goods arrived. It is important to allow passengers or companies to whose goods it relates to take the case in their own countries. When we deal with Third World countries whose legal systems are very different from ours and from those of the First World in general, it is important that a level of good governance is put in place to ensure the credibility of the efforts made.

It is important on procedural grounds that if all members of the EU have ratified the convention by 1 May it will automatically extend to the ten accession countries. We know how necessary it is to pass legislation to ensure that we comply with many EU conditions and if we can assist our friends in the accession countries we should attempt to do so. We on this side of the House intend to get this Bill through as quickly as possible. I thank Senator Browne for his efforts in that regard. I see Senator McDowell here although I have not yet heard him speak but I hope he will not delay the Bill in any way.

He will not.

In some quarters the discussion seems to be academic in that many First World airlines already adhere to those standards and as we do not have much trade between the two countries it is not particularly relevant. This is changing, however, because much of the work of the Department of Transport in restructuring Aer Rianta to have three independent boards manage the airports will place an onus on each board to find new business and new airlines prepared to build links with other markets. We will see some airlines hitherto unknown to us travelling in and out of Ireland. Trade will be generated too by the multicultural society now emerging here. Many of those who have come here seeking asylum will eventually become part of our society and as their countries move beyond their own difficulties we will trade with them. This is an important Bill to ensure that emerging airlines wishing to travel to and from Ireland will be in a position to provide the same level of cover as others.

I can reassure Senator Dooley that I have no intention of delaying the Bill.

The Senator has no intention of delaying himself.

Indeed no. It is one of those frustrating Bills which sets out a convention the negotiation of which did not involve anyone in either House and which we cannot change. Nevertheless, it is a product of international negotiation over some years and improves conditions for passengers and cargo which is positive. This is necessary because the nature of international air travel has changed quite dramatically in recent years. It seems passengers feel the standard of service which they had come to expect is no longer available as of right and necessity. The emphasis in the past five or six years has been on low cost travel and no frills or low frills. Passengers now feel the most they can reasonably expect is to turn up, hope the flight is there and that they and their baggage arrive more or less on time at their destinations. Our expectations have diminished since ten or 15 years ago when air travel was regarded almost as a luxury to be enjoyed for its own sake. Now we take a more utilitarian view, namely to reach our destinations as quickly and cheaply as possible. In those circumstances it is important that there are standards and that there is an international body and convention or conventions that at least regulate basic standards of carriage. The Warsaw Convention sought to do that and the Montreal Convention now seeks to update it.

Others have set out the legal background to this Bill and I do not intend to repeat that. There are, however, some issues worth highlighting or exploring a little further. I read cursorily the two conventions as set out in the Schedules and the new Montreal Convention. There seems to be a significant improvement in the manner of dealing with liability which is crucial to the possibility of any passenger trying to enforce rights. One starts in a position of peculiar inequality between the parties concerned. If baggage is lost or an accident occurs, in most cases passengers have no idea how it happened. They may have checked luggage through in Dublin to Warsaw via Paris or London and do not know whether their baggage got lost or damaged, or whether something was taken out of it, in Dublin, London or Warsaw. They are not in a position to prove that the airline or the airport authorities in a particular place were responsible so they do not know against whom they should bring an action. The shift between the conventions from having to establish some level of liability to strict liability is crucial and provides a reasonable level of certainty to the passenger that even if he or she does not know what happened he or she can still hope to get some compensation.

The Minister of State gave the impression that liability was absolutely strict but it seems from reading the conventions that is not quite as strict as we would like. There are still ways in which the carrier can evade some responsibility, for example, for delay. According to Article 8.19 of the Montreal Convention the carrier is liable for damage occasioned by delay unless it proves that it took all reasonable measures to avoid the damage or that it was impossible to take such measures. There are still ways in which the carriers can use information known only to them to avoid liability. We have moved, however, from a position in which the passenger had to prove the negligence of the airline to one in which the airline must prove it was not negligent, which is a great improvement.

The Montreal Convention removes the upper limit for accident victims but in section 7 of the Bill we set a limit of €20,000 on the damages that can be provided for mental distress. Perhaps the Minister of State can clarify whether this is a specifically Irish provision. I am not sure whether that flows from the convention or whether it is a self-imposed limit. I recall from my practice of law that there is a similar limit in Irish law for compensation for mental distress arising out of someone's death being provided to dependants. Perhaps it is a Department decision to impose a similar limit for Irish purposes and to transpose it into the convention. I would be interested to know if that is the case and the rationale behind it.

The provision for state non-commercial flights is interesting. There is little persuasive reason that we should not extend the provisions of the convention, for example, with regard to the death of passengers or of people on the ground, to damage that might be caused by state or military aircraft. We have been fortunate here in having escaped this but there have been accidents in other countries involving military aircraft that have caused damage and killed people on the ground. For example, in Italy a few years ago some American military aircraft were involved in an accident with a ski lift. The convention does not appear to cover such incidents. We should perhaps consider that such an accident might occur here and it would be useful if the Minister made the declaration which is open to him to make under the terms of the Bill that state aircraft would also be included under the terms of the convention.

There is a provision in the Montreal Convention dealing with tickets but I am not sure what it means. A cursory layperson's reading of the earlier conventions makes it clear, strangely, that tickets were required to be in writing. They had to be on paper giving the details of the passenger's name, destination, time of flight etc. Recently we have seen an accelerated move towards electronic booking. The majority of people book airline seats on-line and frequently do not get tickets. Some airlines are trying to encourage a ticket-less flight. From my reading of Article 3 of the updated convention I am not clear whether this matter is covered. It seems the ticket comprises the contract between the airline and the passenger. While this does not nullify the existence of a contract, the absence of a ticket obviously provides difficulty in establishing whether one exists. Is it the Minister's understanding that the notion of ticket-less flight is to be included in the context of the new convention?

I wish to comment on enforceability. The convention has detailed provisions requiring compensation to be provided within a particular period of time and requiring passengers to complain within a particular period of time. A passenger whose baggage is lost is required to complain within 21 days. Following a delay of a few days or a week, the airline should be obliged to notify passengers of their rights under the convention or other EU law and that they are entitled to compensation. I do not know what is the current practice or whether there are many instances of passengers who would be entitled to compensation failing to claim it within the requisite period. People take it for granted that there is a risk of their baggage not showing up and it is tough luck if this happens. Most people are unlikely to follow through provided their baggage arrives at some time. It is important that the airline be up-front in advising passengers that they may be entitled to compensation in such circumstances.

I listened with interest to what Senators Browne and Dooley said about insurance. I confess to only having read the Schedules today and I did not see those provisions. They may be provided for elsewhere and perhaps the Minister could clarify this matter. I presume there is a liability on carriers to ensure they have a level of insurance that enables them to abide by the provisions of this convention and other EU law. I know updated regulations exist that oblige airlines to pay passengers in the event of a delay in flights and to provide accommodation if there is a delay overnight. While I do not believe it is contained in this convention, are airlines required to show they can abide by the provisions and look after passengers inconvenienced by their negligence?

This is not a Bill that can be amended in that it is dictated by an international convention. It is a significant move forward and we hope it will be adopted by the requisite number of countries within a reasonable period.

I join my colleagues in welcoming the Minister of State, Deputy Treacy, and his officials to the House. I am pleased to have the opportunity to speak on the Air Navigation and Transport (International Conventions) Bill 2004. The Bill will allow Ireland to ratify the Montreal Convention, and will give the convention the force of law in Ireland. The Montreal Convention is an updated replacement for the Warsaw Convention for the Unification of Certain Rules Relating to International Carriage by Air (1929), which, together with subsequent amendments, is referred to as the Warsaw system. The Warsaw system provides a worldwide system of standards and rules for carriage by air.

Section 4 provides for the three conventions, the Warsaw Convention with the amendments made by the Hague Protocol in 1955, the same convention with the additional amendments made by Protocol No. 4 of the 1975 Montreal Convention and the 1999 Montreal Convention we are discussing today, to have the force of law in Ireland. I note that the first two conventions are already enshrined in Irish law under the Air Navigation and Transport Act 1936, as amended. The relevant provisions of that Act are repealed in section 11 of the Bill. I welcome that all of the legislation in this area will be conveniently available in one Act.

I mentioned 1936, the year Aer Lingus, our national airline, was formed. On the day the airline announced profits of €78.5 million against the background of the war in Iraq and the SARS scare, I take the opportunity to congratulate the board, the chief executive, his management team and the workers on their success which is a far cry from the depressing state of the airline three years ago.

From the Minister's speech I note that ratification of the Montreal Convention by all EU member states and by the European Community before 1 May 2004 will ensure the Montreal Convention will automatically extend to the ten accession countries, when they become members on 1 May 2004. Otherwise the process will be delayed until all ten accession countries are in a position to ratify the agreement individually, which would be regrettable.

I welcome that the Montreal Convention was signed by 52 countries on its publication in 1999, including many EU member states. Ireland signed in 2000. In November 2003, the United States became the 13th country to ratify the convention thereby causing it to enter into force among the states that have ratified it.

Article 21 provides for compensation in the case of death or injury of passengers. I welcome that the carrier will be strictly liable for the first €118,000 of proven damages for each passenger. I was amazed that the amount under the Warsaw system was only about €20,000. Chapter 5 of the convention deals with carriage by air, performed by a person other than the contracting carrier. This is primarily to cover, what is known as "code-sharing" among airlines. A person may be quoted a price on the Internet for a flight from Dublin to New York and then find a cheaper price through a competing airline. I welcome the developments in this regard in chapter 5.

As an island, aviation is very important to us and I welcome the Bill, which reflects many improvements on the old Warsaw system. I join my colleague Senator Dooley in thanking Members from the Labour Party and Fine Gael for their agreement with this Bill thus far this evening.

Last week we discussed the Aer Lingus Bill 2003. The mid-west region has a very close affinity with air navigation. First, there were the flying boats that flew out of Foynes, from where I come. There is a very good aviation museum in Foynes which commemorates that important era in our navigational past. Subsequently, we became very familiar with the successes at Shannon and at the air navigation control centre in Ballygireen just outside Shannon.

I recognise that the whole objective of this Bill is to achieve harmonisation in respect of different airlines in the context of insurance and so on. That is desirable. This legislation has many inherently good values in terms of people being able to take the legal part of their case within their own country. I understand that much of this is the result of the events of 11 September 2001 and concern about terrorism. When the Montreal Convention came into operation, 50 OECD countries automatically signed up to it. The events of 11 September changed the operation of the whole airline area, especially regarding security, and various restrictions have been introduced, particularly in the United States. Perhaps the Minister would comment on why it took until November 2002 for the US to sign up to the Montreal Convention when other countries enthusiastically embraced it.

Senator McDowell referred to the important point of how one copes in a ticketless situation. What verification is there, and how can one prove one's case, if there are no tickets? In page 15 of the Bill, Article 22(5) of the charter, as amended, states:

The sums mentioned in francs in this Article shall be deemed to refer to a currency unit consisting of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred. These sums may be converted into national currencies in round figures.

Perhaps the Minister would clarify what that means. What are the guidelines for converting something so vague into round figures if the currency referred to is gold in all cases? What is meant by the word "millesimal"? I am usually good on vocabulary, but I have never heard of that word. The Minister's officials will probably be able to clarify it.

I will not belabour points already made. From our point of view the Bill contains nothing contentious. It is important to have it enacted by 1 May deadline. If it is not ratified and in operation in all the European countries there will be inherent difficulties when the ten accession countries join as the issue of having it ratified could linger for a long time. The Minister will have the co-operation of both Houses in ensuring its ratification during the Irish Presidency. Far be it from me to try to embarrass the Government, but it will be extremely embarrassing if we have not ratified it by 1 May when the other EU countries are moving on it.

I join Senator Wilson in congratulating Aer Lingus on its revenue success and on how it has been turned around as a company. It has had to confront many serious worldwide incidents since the 11 September attacks, including the SARS and foot and mouth disease outbreaks. Aer Lingus has been a very successful carrier in recent times. It has learned much from Ryanair's "no frills" approach, which has been adopted on many of its continental routes in recent times. Passengers no longer get the privilege of a cup of tea. However, the consumer is the person who dictates, and if the consumer is happy with the price and is prepared to put up with not having extra concessions, Aer Lingus was probably right in taking the direction it has.

That does not allay the concerns of the mid-west region regarding what is happening in Shannon. I elaborated on it in last week's debate on the Aer Lingus Bill and will not repeat what I said then. However, if more than 100 redundancies are being sought and 28 cabin crew are required to transfer to Dublin, that is very hard to reconcile with the fact that the airline has been successfully turning over significant revenue in the past three years and €78 million in the current year. One might play the devil's advocate and say that if we want to return greater revenues next year rationalisation is necessary. However, it is important to bear in mind that decentralisation, an issue that raised the rafters at the Fianna Fáil Ard-Fheis over the weekend, will probably be a lifeline for many communities around the country because the type of employment it will bring is regarded as long-term and stable. Nevertheless, it might be seen as contradictory to speak of decentralising Government Departments and agencies to 25 different counties if, so far, only four people in Enterprise Ireland have volunteered to transfer to Shannon. Decentralisation, if it happens, will probably create an extra 200 jobs, but alongside that will be a reduction of 100 jobs in Aer Lingus and Shannon and the dislocation of many families, in addition to which Aer Rianta will have to make adjustments in terms of many of its staff.

The high degree of uncertainty in the mid-west region is compounded by the lengthy failure to appoint a board of directors at Aer Rianta. A board of directors has recently been appointed for Dublin, but there is uncertainty in the mid-west region about what the directors of Aer Rianta will be doing and what kind of business plan they will operate regarding the future of Shannon. It is time this uncertainty was resolved.

Despite the revenues and strong performance of Aer Lingus, I am extremely concerned about what is evolving in Shannon and the type of rationalisation taking place. If we are to be true to the whole decentralisation concept, Shannon was a classic example of decentralisation operating very effectively because it involved an airport entity which has been in existence since the late 1940s. It was a crucial issue a few years ago when two Government Deputies resigned because of changes in the Shannon area. Subsequently both returned to the fold and one was successful and became a Minister. It is time we saw a clamour from the many Fianna Fáil members in Clare about what is happening in the Clare area. It is far more serious than the issue over which people took a classic stance a few years ago when a policy decision was taken by the Government which would impact on Shannon in the long term. What is happening now is very worrying. I would like to see much more leadership on the other side in highlighting it and perhaps taking firm stances on it in the future.

To return to the Air Navigation and Transport (International Conventions) Bill——

It is good being lectured by Fine Gael on Shannon Airport.

Fianna Fáil spouts off about what it has done with Shannon Airport in the past, but most of the major policy changes that have taken place that have impacted on Shannon happened under a Fianna Fáil Administration.

If Fine Gael policy on the landing of military aircraft had been implemented, Shannon would be closed down.

The landing of military aircraft is only temporary. If the landing of military aircraft disappeared——

It would be temporary if Fine Gael got its way.

It has had a financial impact in the airport because there is no continuity of military aircraft landing. It is impacting on the revenue of Aer Rianta. To say that is a significant earner which sustains Shannon is disingenuous for the simple reason that it gave only a temporary lift to the economy and Aer Rianta. It is unsustainable in the long term. What will sustain Aer Rianta and Shannon in the long term is much more promotion of the airport and increased aircraft traffic. One can hardly fly from Dublin to Shannon or from Shannon to Dublin. There are business interests, including companies like Dell, moving into Shannon. They cannot attract business from abroad, their clients cannot even fly into Shannon, and they are trying to get connecting flights from Shannon to Dublin. We should bring back Garrett FitzGerald and ask him to study the timetables. He might decide that they should be revised and positive action might then be taken in respect of Shannon.

Fine Gael needs to bring him back.

Senator Dooley should not lecture me on Shannon. Fianna Fáil has three Deputies in the area, whereas Fine Gael has only one. It is time those three Deputies took action. The Senator and Senator Daly should also take action. They should be more vocal and fight for what is required at Shannon rather than engaging in the occasional flirtation with Clare radio in an attempt to convince people they are doing something, which they are not.

The Senator has reached the end of the runway.

I thank Senators for their positive contributions. Each of them offered broad, deep commitment and visionary positivity in respect of international air navigation.

I assure Senator Finucane that Shannon Airport is safe. We are putting new boards in place and we will create new opportunities for all of the airports in our country. We have a track record of initiation and creation of opportunity in respect of the provision of facilities.

The Minister of State is not at the Fianna Fáil Ard-Fheis now.

We will continue to enhance those facilities going forward.

Senator Dooley, in a wide-ranging contribution referred to the importance of international aviation in terms of the multicultural society in which we live. We are confident that the changes we are making will take account of the opportunities for our country. The convention with which the Bill deals takes account of the major changes taking place on a global basis. Aviation is becoming ever more relevant and practical and is being used by increasing numbers of people.

Senator Browne inquired about the Rome aviation convention. That convention deals with compensation for people on the ground and it has not been ratified by a sufficient number of countries to make it part of international law. It is, therefore, inert at present. The International Civil Aviation Organisation, ICAO, is currently considering revisions to the Rome Convention. We hope that these will be supported internationally and will help to create a more modern, relevant convention which will be acceptable to the vast majority of countries and which will be ratified in the future.

The Montreal Convention does not involve activity by the Department of Transport; it only comes into effect when a court case arises. In other words, the Department will respond from a national point of view in the event of Irish nationals being involved in court cases and similar situations. The old Warsaw Convention was drafted in French. As the baseline documents are all in the French language, the convention cannot be changed. State aircraft are included in the Montreal Convention unless we, as a sovereign Government, specifically exclude them. I thank Senator Wilson for his contribution.

Senator McDowell referred to section 7 and inquired whether it is an Irish provision. The people who drafted the Montreal Convention decided not to include mental distress therein. The limit on damages for mental distress is also included in the Civil Liability Act 1961, as amended by subsequent legislation. It is, therefore, an Irish provision which was introduced in 1961 and which has been updated in the interim.

The Senator also referred to Article 50 of the Montreal Convention which requires aviation insurance to be provided by carriers. Airlines are also required to have insurance under European law and a new European Union regulation is currently nearing completion. This will apply insurance requirements to non-EU airlines, a matter to which Senator Dooley alluded.

Senator Finucane referred to Article 22. This relates only to countries which do not use special drawing rights. The special drawing rights contained in the original convention are used by most countries. In the event that they are not included in the domestic legislation passed by such countries, the bottom line comes down to the interpretation and the comparison in respect of the gold standard situation.

What are special drawing rights?

This is the title given to the various allowances and compensation in international law under the Montreal Convention. Senator Finucane also referred to ticketing. Article 3.2 of the Montreal Convention allows for other means of tickets but also requires the carrier to also offer to provide a written statement to passengers.

The Montreal Convention on aviation is extremely important. It will deliver significant benefits for international air passengers and users of the air freight industry. Ratification by Ireland and other European Union member states will ensure that those benefits are available on routes to and from Europe. This is important to our economy in terms of its future growth. We are confident that such economic growth will be sustainable and that international aviation will play a major role in that growth. This is also an important matter for the European Union and its economic growth, particularly in light of the accession of new member states on 1 May. We thank the Seanad for its committed co-operation to ensure that the Bill will be passed as quickly as possible in order that new member states will enjoy the full protection of this important convention.

Gabhaim buíochas do na Seanadóirí uilig agus tá súil agam go mbeidh mé ar ais arís roimh i bhfad.

Question put and agreed to.
Committee Stage ordered for Wednesday,10 March 2004.

When is it proposed to sit again?

Tomorrow at 10.30 a.m.