Disagreement about sea insurance

Press, 27 June 1983, Page 24

Disagreement about sea insurance

The New Zealand marine insurance industry is seeking the help of producer boards and shipping companies to fight a change in sea-insurance rules. A set of international rules governs the carriage of goods by ships. From 1924 these were known at the Hague rules. These were amended by the Hague-Visby rules in 1977. In 1978 the Hamburg rules were drawn up, and an attempt is being made to have these replace the Hague-Visby rules. The Hague rules have been adopted only by Barbados, Uganda, Rumania, Tanzania, Tunisia, Morocco and Chile. Countries that have ratified the HagueVisby rules include: Singapore, Norway, Syria, Sweden, Lebanon, Denmark, Switzerland, Britain, France, Ecuador, Tonga, Belgium, Poland, West German Republic, Bermuda, Hong Kong, the Netherlands, Sri Lanka, and Egypt. Mr J. R. Grant, marine manager of the Commercial Union Insurance Company, Ltd, told an Insurance Council news seminar in Wellington that a Ministry of Transport paper had led to

the possibility of New Zealand’s ratifing the Hamburg rules. Mr Grant described the Hamburg rules as an academic answer to the complex problems of liability for loss and damage to cargo carried by sea in international trade.. “They seem more likely to damage the delicate but workable machinery which has been perfected through over 50 years of practical experience since the introduction of the Hague Rules in 1924.” The motivation for a newshipping convention had come from the developing countries, which “in a gross over-simplificaation of a very complex area of international commerce, law, and finance, saw the Hague Rules as having been imposed on them by an old economic order which had been detrimental to their interests. “The Hamburg rules were arrived at by a series of political trade-offs and compromises and were forumlated in spite of such expert practical advice as those directly affected were permitted to give rather than as a result of the careful evaluation of the wealth of

expert legal and practical knowledge available.” The Ministry of Transport document seemed to be saying that the Hamburg rules were clearer and would therefore be cheaper to use, Mr Grant said. But there had been a good deal of international criticism from lawyers that the liability provision could only be described as “notoriously unclear.” The Hamburg rules attempted to increase the carrier’s liability under the belief that this would result in greater care and fewer claims. “The Government appears to be advocating the Hamburg rules for all the wrong reasons so far as New Zealand economic and commercial welfare is concerned. New Zealand is a shipper nation, not a ship-owning nation. The adoption of the Hamburg rules would result in a worsening of our balance of payments situation as the rules will automatically bring about an increased freight cost due to increased protection and indemnity insurance charges to cover the shipowner’s increased liabilities, unclear though they are in the proposed wording.”