I move: "That the Bill be now read a Second Time."
I am pleased to introduce this Bill and I look forward to hearing Deputies' contributions.
Ireland must not lag behind other modern and progressive countries with regard to relevant current international standards of maritime law. My purpose in introducing this Bill is to bring Irish law, in relation to the carriage of goods and passengers by sea, into line with current international standards as reflected in a number of relevant international conventions, namely the London Convention, the Athens Convention and the Brussels Convention. The Merchant Shipping (Liability of Shipowners and Others) Bill, 1996, will put in place a charter for the providers and recipients of maritime transport services — that is the owners of Irish registered ships, and the passengers and shippers using these ships — as well as for those others who may suffer loss or damage caused by Irish registered ships.
This Bill is an important step towards levelling the playing pitch for Irish shipowners, shippers and exporters as against our international competitors. Our proximity to some of the world's busiest shipping lanes and our consequently enhanced exposure to possible compensation claims resulting from maritime incidents serves to highlight the necessity and the desirability of updating the legislation. This Bill will give effect in domestic law to three international conventions on shipowners' liability. The conventions establish the commercial relationship between shipowners and their clients, the passengers and shippers.
The intention behind the introduction of the conventions and their Protocols was to remedy a number of deficiencies that existed in earlier conventions concerning claims for compensation in maritime incidents. This was achieved by: (i) establishing a uniform international regime for determining the limits of liability and the methods by which these amounts would be computed. The Special Drawing Right (SDR) of the International Monetary Fund was adopted as the "currency" for the purpose of stating the limits of liability; (ii) raising the limits of liability to a more realistic level but at the same time making it possible for a shipowner to insure at a reasonable cost; (iii) making the right to limit liability virtually unbreakable unless loss is caused by deliberate negligence or recklessness on the part of the shipowner, ship operator, manager, charterer or carrier. A claimant must prove such negligence or recklessness through the courts; (iv) providing — in the case of the Athens and Brussels Conventions — a uniform means of establishing liability by clarifying the rights and responsibilities of carriers, passengers and shippers. The London Convention deals exclusively with rules in relation to limitation of liability whatever the basis of liability may be.
Shipping is vital to a small open economy such as ours. More than 75 per cent of our imports and exports are carried by sea. Shipping, in general, and certainly in so far as it affects us, is an international, even global business. International fora and conventions play an important role in setting agreed standards in respect of ships of different flags. While a small country such as ours could not claim to have tremendous power or influence on the international maritime front, it is important that nations large and small contribute towards international co-operation in the common interest.
This Bill is a house-keeping exercise. It is a levelling of the playing pitch with regard to maritime law. It will introduce into our law the three international conventions and Protocols already mentioned and will enable the State to accede to them in due course. All these instruments are in force internationally. Accession to the conventions will mean shipowners will know the extent of their liability unless they are deliberately negligent or reckless in running their vessels. The limits of liability will apply whether they are involved in a marine incident within the jurisdiction or outside it.
The fact that a Master made a mistake, was negligent in some respect or the navigation gear was faulty would not rule out limitation. It is a matter for a claimant to prove deliberate intent to cause loss or damage in the courts.
The London Convention on the Limitation of Liability for Maritime Claims, 1976, came into force internationally in 1986, and to date 26 states including the United Kingdom, Denmark, Germany, France, Spain, the Netherlands and Belgium have become parties.
The Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974, and the Protocol of 1976 came into force internationally in 1987 and 1989, respectively. To date 22 states including the United Kingdom, Spain and Belgium have become parties to the Convention; 18 states including the United Kingdom, Spain and Portugal have become parties to the Protocol.
Regarding the Brussels Convention, the Protocol of 1968 to this came into force internationally on 23 June 1977. To date some 30 states including the United Kingdom, France, Germany, Belgium, Denmark and the Netherlands have become parties to the convention. The Protocol of 1979 came into force internationally in 1984 and 28 states have become parties.
All three instruments provide for limits of liability. The London Convention deals exclusively with rules in relation to limitation irrespective of who is liable. The other two conventions lay down the rules for establishing liability. This Bill provides for the London Convention to take precedence over both the Athens and Brussels Conventions.
Ships which operate in our waters but which belong to countries that have previously acceded to these conventions already enjoy the benefit of their terms. This Bill will extend these terms to the owners of Irish registered ships — currently numbering 73. The terms will also extend to passengers and shippers using Irish registered vessels as well as to other parties subjected to damage or loss caused by Irish registered vessels.
The limitation of shipowners' liability is governed by the Merchant Shipping Act, 1894, as amended. Shipowners may limit liability in the case of: (a) loss of life or personal injury either alone or together with loss of or damage to vessels, goods, merchandise or other things to an aggregate amount not exceeding £15 per ton of the ship's registered tonnage; and (b) loss of or damage to vessels, goods, merchandise or other things, whether there be additional loss of life or personal injury or not, to an aggregate amount not exceeding £8 per ton of the ship's registered tonnage. The right to limitation, however, is subject to the condition that the occurrence takes place without the carrier's actual "fault or privity", that is knowledge that loss or damage will, or is likely to, occur.
Under the Sale of Goods and Supply of Services Act, 1980, a shipowner is at liberty to disclaim all liability for the payment of compensation to passengers under a contract of carriage. I understand, however, that some of our shipowners have voluntarily incorporated the terms of the Athens Convention into their contracts of carriage.
I will now deal with the provisions of each of the conventions in turn. The London Convention on the Limitation for Maritime Claims provides for the totality of claims which may arise from any one incident resulting in loss of life or personal injury, loss of or damage to property — including damage to harbour works and navigational aids — and loss from delay in the carriage of cargo or passengers and their luggage. It deals exclusively with rules in relation to limitation of liability viz. who is entitled to limit liability, claims excepted form liability, conduct barring limitation, time bar for claims, the limits applying to personal, property, passenger and other claims and the global limits in respect of claims arising on any distinct occasion.
Such claims can include damage resulting from the spillage of bunker fuel from a vessel. They cannot, however, include claims arising from damage to or the loss of an oil tanker itself. The Bill does not apply to tankers carrying oil as cargo. Under the Oil Pollution (Civil Liability and Compensation) Act, 1988, oil tankers are already covered for claims of up to £14 million in respect of any one incident.
The Athens Convention deals with the carriage of passengers and their luggage by sea. It specifically covers the loss of life or personal injury to passengers and the loss of or damage to their luggage through establishing a uniform international regime of liability. Under its terms the burden of proving that an incident occurred in the course of carriage and the extent of loss or damage lies with the claimant except in the case of shipwreck, collision, stranding etc. when fault of carrier is presumed.
The Brussels Convention specifically covers the loss of or damage to cargo where goods are carried under a bill of lading. A bill of lading is a document issued by a shipowner to a shipper of goods. It serves as a receipt for the goods, evidence of the contract of carriage and document of title. As a receipt, it contains the description and quantity of the goods. As evidence of the contract of carriage, it contains the terms and conditions of the contract. As a document of title, it is used by a third party to take delivery of the goods from the ship.
The 1924 convention is known within the shipping industry as the "Hague Rules". The 1968 amending Protocol is known as the "Visby Rules" and the 1924 convention so amended as the "Hague-Visby Rules".
Prior to the Hague Rules there was little law in existence that prevented the carrier of goods by sea trading under bills of landing from contracting out of virtually all liability in respect of loss or damage to cargo. The Hague Rules standardised the conditions of carriage set out in bills of lading and have been incorporated into the domestic legislation of most maritime countries, including Ireland. The Athens Convention and the Hague-Visby Rules, as well as providing for limitation of liability, lay down the rights and responsibilities of carriers and passengers and of carriers and shippers, respectively.
The Hague Rules were incorporated into Irish law by means of the Merchant Shipping Act, 1947. Ireland acceded to the Hague Rules Convention in 1962. The rules were amended through the adoption of Protocols in 1968 and 1979. The 1968 Protocol amended and expanded the rules in a number of important respects in relation to: (i) prima facie evidence, (ii) time limits for claims, (iii) monetary limits of liability, (iv) liability in tort and (v) nuclear damage.
The Protocol of 1968 provides that nothing in the Hague-Visby Rules shall affect the provisions of any international convention or national law governing liability for nuclear damage. The Protocol of 1979 substitutes the Special Drawing Right, SDR, of the International Monetary Fund for the gold franc as the unit of account. The texts of these conventions and Protocols are each included in the Schedules to the Bill.
When it becomes law, this Bill will make it possible for passengers to qualify for realistic levels of compensation for loss, injury or damage either to themselves or their luggage. It will put an end to existing inequities with respect to claims facilities as between travellers by sea and airborne passengers. Shippers, for the first time in almost 100 years, may seek and expect to receive realistic levels of compensation for instances of loss, damage or delay in the transit of their goods by sea. Shipowners will enjoy the advantages of knowing in advance the absolute maximum limit of compensation for which they are liable in the event of accidents and-or delays occurring in the course of their operations. Most importantly shipowners will be facilitated in being able to arrange the necessary levels of insurance cover.
In the case of a typical vessel of 3,000 registered tons, the absolute limit of liability will be increased for loss of life or injury from the present ceiling of £45,000 to the more realistic maximum of 1,580,000 Special Drawing Rights which is about £1.47 million. Where loss of life or personal injury occurs on a passenger ship, the present maximum possible claim is £45,000. The Bill will increase this figure to £50,000 per passenger up to an aggregate maximum not exceeding 25 million SDRs which is about £23 million. In instances involving loss of or damage to goods or a vessel, the present maximum claim possible is a ludicrous £24,000. Under this Bill, the maximum claim possible will be a more realistic 580,000 SDRs which is about £540,000.
With regard to liability for removal of a wreck and its cargo, it is important to note that while the London Convention provides for limitation of liability in cases of wreck, it permits adhering Governments to opt out of this provision if they see fit. It allows for such adhering Governments to provide for no limitation to apply in such cases. This provision was availed of in section 53 of the Merchant Shipping (Wreck and Salvage) Act, 1993. That Act provided for no limit to the liability of the owner of a wrecked or stranded vessel in respect of the cost of raising, removing or otherwise disposing of such a vessel.
It is proposed to replace section 53 of the Wreck and Salvage Act with Section 11 of the Liability of Shipowners and Others Bill, 1996, and to strengthen the wording to cover "the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned including anything that is or has been on board such a ship". The new wording is designed to take account of experience to date with the enforcement of the Wreck and Salvage Act, 1993.
The London Convention further provides for an absolutely unlimited claim facility for loss or damage in respect of accidents to vessels powered by nuclear power or carrying nuclear materials. Given our position on the Sellafield nuclear processing plant and the vessels transiting the Irish Sea route to and from Sellafield, this provision is of particular importance.
This Bill will provide a balanced framework of obligations and rights for shipowners, shippers and passengers and will further facilitate the smooth operation of sea transport service for all the various interests involved, whether providing or availing of sea transport services.
The Bill extends to Irish-registered vessels the benefits enjoyed heretofore only by vessels which belong to countries which have acceded to these conventions already. Its passage into our law will balance this anomalous exposure and, indeed, prudent owners of Irish-registered vessels will have already insured against liability at a rate higher than provided for under our existing law on limitation and in line with the more practical limits which will now be introduced.
Since becoming Minister for the Marine in May of last year I have become very conscious of the need to redress the competitive disadvantages being endured at international level by the Irish sector. Simultaneously, I must continue to ensure that reliable efficient services are available to industry, that we protect our marine environment and that safety standards on our ships meet the most exacting standards. These targets while attainable will not be easily met.
My colleague, the Minister of State, Deputy Gilmore and I, as the House is already aware, have recently brought legislation through the Oireachtas on the management of harbours and on dumping at sea. The Government on my recommendation approved a scheme to give grants during periods of shipboard training to deck officers and marine engineering cadets and trainees who are students at Cork Regional Technical College.
The scheme was introduced to secure placement opportunities for our students who had found themselves during recent years at a severe competitive disadvantage when compared to students in other countries where subsidies had been introduced as an inducement to shipowners to ensure a continuing supply of good quality officers. The scheme should overcome this disadvantage and ensure that we maintain and develop the maritime skills base which is essential for an island country.
Provisions are included in this year's Finance Act which are aimed at encouraging good quality tonnage onto our register. My colleague, the Minister for Finance, Deputy Quinn has also agreed to have the situation in relation to PAYE and PRSI as it concerns seafarers examined during the coming year with a view to determining what action may be taken to enhance employment opportunities and the competitiveness of our fleet.
I am committed to pursuing all avenues to achieving a level playing pitch in the international maritime sector. That implies a commensurate input from small as well as large countries on the international scene. In Ireland's case this includes updating our laws, having due regard to our situation.
Concerning cost implications for shipowners and the export industry, the advantages derived from a shipowner knowing the full extent of his liability whether he is involved in a marine incident in Irish territorial waters or in waters under other jurisdictions, and facilitating the shipping industry by way of ready availability of insurance cover, early settlement of claims etc. outweigh the cost implications. It gives me great pleasure to recommend this Bill to the House.
