Australia must back Rotterdam Rules

Australia must sign up to a new international convention on the carriage of goods by sea or face being stuck with an “antiquated” regime of maritime law that's inconsistent with trading partners

November 11, 2009

The Australian Government must give serious consideration to signing up to a new international convention on the carriage of goods by sea or face being stuck with an "antiquated" regime of maritime law that is inconsistent with major trading partners.

This is according to Stuart Hetherington, a partner at Sydney-based international law firm Colin Biggers and Paisley.

Hetherington says the United Nations (UN) backed Rotterdam rules for international ocean-based transport has now been signed by 21 nations which make up
more than
25 percent of the world's trade volume.

He says the new convention seeks to consolidate and modernise a patchwork of "piecemeal rules" which date back to the 19th century.

"Eighty percent of world trade is now conducted by sea. Supporting a uniform framework that clarifies the rights and responsibilities of marine cargo carriers and shippers promotes international trade and is in turn good for Australia," Hetherington says.

"Australia’s regime has been grafted on to the original archaic rules which hark back to a time when cargo was shipped in bags or boxes rather than containers, and communication technology was still in its infancy.

"It is generally considered out of date and cumbersome by contrast, the new convention brings the maritime sector into the 21st century.

"It reflects current shipping practices and recognises the impact of e-commerce and electronic communications on shipping transactions."

Hetherington says the new rules make sensible changes to legal rights and liabilities that reflect the Australian business community’s current expectations such as extending the "tackle to tackle" period to include cargo receivals by the carrier to deliveries to the consignee including at any agreed inland locations.

"This extension of responsibility acknowledges that today, carriers are often part of a larger logistics supply chain and therefore, it is appropriate for their liability to match their delivery obligations," Hetherington says.

concepts of duty of care are applied more consistently under the new laws and the nautical fault defence has been scrapped in order from negligent ship captains and crew can no longer escape liability.

Hetherington says although there will be debate on accepting the new laws from various sides of the industry failure to sign the agreement would hurt Australia’s trade dramatically.

"Goods traders and shipping companies will no doubt debate who gets the short straw under the new rules but at a national level, the benefits to Australia of a uniform law are clear," he says.

"With the US having signed, and hopefully moving to ratification soon, it is likely that other major nations will feel greater pressure to commit.

"Australian traders and shipping companies will have to grapple with the reality of the new regime as it applies to their contractual arrangements once the rules come into force. It is now timely for the Australian government to back the Rotterdam rules".

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