Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share 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 The first problem goes to the core assumptions behind the Warsaw system: they are old and outdated.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.

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