SHIPPING: New Rules Can Affect Local Shippers
Recent Western Cape Business News
A new international convention that governs cargo liability during sea and inland inter-modal transport will be signed by the United Nations, next month (September), which could have far reaching implications for local shippers.
Accepted by the United Nations General Assembly in December 2008 the 'Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea', to be known as the Rotterdam Rules, will have far reaching consequences for shippers, says Mardus Mynhardt of Shepstone & Wylie Attorney’s International Transport, Trade and Energy Department.
The Rotterdam Rules aim to improve on, and ultimately supersede all the previous conventions which currently govern the international carriage of goods by sea, i.e. The Hague, The Hague Visby, and The Hamburg Rules.
They intend to bring about global harmony in contracts related to international maritime trade, and to deal with modern aspects of shipping contracts that were previously neglected by the older international conventions.
The rise in containerised shipping, the demand for door to door transport and the use of electronic shipping documents are a few of the modern aspects of cargo transport that were previously neglected by the older international conventions and which the Rotterdam Rules seek to address.
South Africa abides by The Hague Visby Rules, which among other things accept that shipping is inherently dangerous and that ship owners cannot have absolute responsibility throughout the voyage. Therefore, ship owners only need to ensure that the ship is seaworthy at the start of the voyage, and there are recognised defences if cargo owners suffer loss as a result of navigational errors resulting from faulty instruments or even by fires caused by negligent crew members.
However, modern-day equipment, improved communications and stringent safety standards have encouraged the Rotterdam Rules, among other things, to move away from these recognised defences, and to obligate the ship owner to ensure that the ship is seaworthy throughout the sea voyage.
Clearly the ratification of the Rotterdam Rules will shift the risk involved in sea trade and should be considered when revising or purchasing new insurance policies. It will also be important to keep an eye on which countries adopt the Rules since this could have a significant effect on the carriers', shippers' or consignees' rights under the contract of carriage, depending where litigation may take place.
According to Mynhard it was unlikely that South Africa would become a signatory to the new Convention immediately as a full consultative process with the shipping industry would first need to be undertaken. But its adoption by other countries could impact on importers.
Initial indications are that influential countries such as the United States of America and Japan support the new Convention, and in May this year the International Chamber of Commerce (ICC) added its support for the ratification of the Rules.
In asking governments to consider ratification of the convention the ICC says this should be done in active consultation with international business—including shippers, carriers, forwarders and insurers, noting that these constituencies may have differing views on the regime.
The Rotterdam Rules have already been adopted by the General Assembly of the United Nations on 11 December 2008. Once signed on September 23, the Convention will be open for ratification and will come into force on the 20th signature.
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