Noel Treacy (Galway East, Fianna Fail)

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.