HL Deb 15 July 1982 vol 433 cc511-7

6.48 p.m.

Lord Lyell

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Lyell.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clause 1 [Introductory provisions: the Code and the Contracting Parties to it.]

Clause 2 [Implementing regulations: the general scheme]:

On Question, Whether Clauses 1 and 2 shall stand part of the Bill?

Lord Glenkinglas

May I make one or two comments about Clause 2 standing part? I have, as some of your Lordships know, spoken on these problems at our Second Reading debate. As I have studied it more carefully, I find myself even more unhappy about some parts of it than I was at Second Reading. The point that I find particularly difficult is that in signing these new conventions each country is allowed to make what reservations it feels likely and appropriate. As I said on Second Reading, the Bill is unbelievably complicated, and I am assured by my legal friends that the complication is owing largely to the extreme complexity of the treaties on which it is based. When one is dealing with a very large number of some not too literate countries, there will be many who do not understand what they have agreed to do and many who will be determined deliberately not to understand it, so there will be a good deal of cheating.

Having said that—and I do not want to detain your Lordships for long because I know the stresses under which you have been suffering for the last few days—I would ask my noble friend whether he has looked at (which I am sure he has) the reservations that have already been made. If one looks at that brave and determined country, France, one sees that the reservations they have made to their signature say, in effect, "The French Government are only too delighted to sign the new code, but if there is anything they do not agree with, then of course they will not abide by that". What is the point of signing the code with a reservation of that width?

Also as I said on Second Reading, you then get the very real fear—which is the basis of a good deal of the opposition of the British shipping industry to the Bill—that we shall move into a period when bulk cargoes are also controlled. On Second Reading I asked my noble friend whether or not it was true, as had been reported, that Indonesia had already said it would include bulk cargoes, and, if so—this was by then already four or five weeks old—what steps the Government had taken to deal with the situation. It is very important indeed, if we are to go forward with the Bill, that the Government should make it absolutely plain exactly what action they will take against people who deliberately break the codes to the disadvantage of British shipping and expect to get way with it.

Lord Lyell

I thank my noble friend Lord Glenkinglas, for the great interest he has taken in the Bill, and I am sure noble Lords who have studied or attempted to study all the articles and legal complications, and then gone into the code, will agree with him about its complexity. My noble friend asked me on Second Reading, as he pointed out, what we were able to do about the problems of other countries. He mentioned Indonesia in particular and spoke of how they wished to include in the negotiations and discussions on what is essentially the liner trade the matter or bulk cargoes, and as noble Lords who are specialists in this matter (such as my noble friend Lord Inchcape and the noble Lord, Lord Cayzer) and others of your Lordships will be aware, bulk cargoes are not part and parcel of the code or indeed of the Bill.

In relation to my noble friend's query, I am afraid that I am not able to go much further than I was on Second Reading regarding any future negotiations, certainly between Her Majesty's Government and the Government of Indonesia, on the particular matter of the Indonesian Government and shipping interests attempting to bring bulk cargoes within the ambit of the code. I stress, however, that we regard this intrusion into the code and into the liner conferences and liner trade as being entirely inappropriate and unhelpful to the British shipping industry; and that, of course, is at the heart of the Government's concern with the Bill.

I am sorry I am not able to be more helpful or more specific in answer to my noble friend. But I hope he will accept that we are taking the robust view he always took when speaking for the Government on these matters. With the backing of my noble friend Lord Inchcape and the noble Lord, Lord Cayzer, we shall continue to press that the Indonesian Government should not introduce bulk cargoes, or the problems of bulk cargoes, into the negotiations and discussions with which we are concerned.

On Question, Clauses 1 and 2 agreed to.

Clause 3 [Matters which may be provided for by regulations]:

Lord Mottistone moved the amendment: Page 3, line 36, leave out ("may empower the Secretary of State to") and insert ("the Secretary of State shall with their agreement").

The noble Lord said: My amendment relates to the responsibilities of shippers' organisations, which are defined in Chapter 1 of the code and their responsibilities are set out in Article 11. These are weighty responsibilities which, under Clause 3(3) of the Bill, will almost certainly carry with them implied legal obligations. At present, a number of trade associations consult with conferences on such matters as general tariff conditions, freight rates, loyalty agreements and so on, but they do so on the basis that such consultation is generated by commercial necessity. There is no legal obligation on either party for such consultation.

The code creates a new situation inasmuch as it contains consultation rights for shippers who are so designated, and designated under Article 11 at the discretion, in this country, of the Secretary of State. Therefore, if the Secretary of State does not designate an organisation to be a shippers' organisation, certain organisations which presently have a satisfactory consultative relationship with conferences may find their position greatly weakened, if not totally undermined. I should perhaps have said that I am advised by one such organisation, the British Federation of Commodity Associations.

At the same time, it is important that the Secretary of State should consult organisations before designating them. It may well be that some trade associations will consider that because of the staff and expense involved in fulfilling the legal obligations, they are unable to accept designation with all its consequences. On the other hand, there may be others which could have been omitted if there had not been prior consultation and which might well need to have designation in order to perform and continue to perform their functions. This is a very real problem which is worrying several trade associations, and it was with that in mind that I tabled my amendment, which should bring about the necessary improvement to make the Secretary of State's responsibilities more certain with the agreement of those who may be affected. I beg to move.

Lord Lyell

I am sure that we are all grateful to my noble friend for presenting this amendment with his customary clarity, brevity and succinctness. As he pointed out, the problem of consultation affects a very wide spectrum of the shipping and commercial world, which is centred in London and is very important to us. We noted my noble friend's comments on Second Reading, and we have this evening heard expressed his views on the importance of consultation.

I hope that it will help the Committee and my noble friend if, first, I try to deal with what we see as the specific terms of the amendment, and then briefly discuss some of the concerns that we believe lie behind it. The amendment would appear to have the effect of enabling any shippers' organisation, any representative of shippers, or any individual shippers to demand to be consulted by conferences on the very wide range of issues which are set out in Article 11 of the code, which I think your Lordships will find on pages 23 and 24 of the Bill.

The number of persons and groups who could be involved in demanding to be consulted by conferences would place quite unrealistic demands on conferences, and we believe that it would hold out little prospect of sensible, reasonable and helpful consultations, which, after all, is what the Bill is about and what the Government want. Furthermore, the amendment would allow automatic rights to all shippers, but for only some of the issues identified in the code as being of concern to shippers. For those two reasons the amendment is not acceptable to the Government.

I should like, briefly, to look at the broad issues which lie behind the amendment and which were explained by my noble friend at an earlier stage and again briefly this evening. In my turn, I should like to explain that the Government consider it unrealistic to lay a duty on conferences to consult individual shippers, except perhaps in the case of very large shippers prominent in particular trades—and I would stress the words, "in particular trades". In this case shippers' organisations will necessarily incur a major responsibility for consultations.

I think that my noble friend mentioned one or two matters in the definition clause. The Committee will see that the term "shippers' organisation" is defined in Chapter I of the code as An association or equivalent body which promotes, represents and protects the interests of shippers and, if those authorities so desire, is recognized in that capacity by the authorities. In the United Kingdom the appropriate authority is my noble friend the Secretary of State. The Secretary of State may specify conditions for recognising a shippers' organisation, and in that connection I would refer the Committee to Clause 3(8) (b), lines 33 to 35, directly above the part of the text that my noble friend seeks to amend.

Further, under Article 11 of the code more specific provision already exists for appropriate authorities to designate persons or organisations who will have to be consulted. It would seem, at least to us, sensible to adopt common criteria for recognition as shippers' organisations, or a shipper, for each provision of the code, and thus any criteria would encompass Article 11 and each of the half dozen or so other articles which give rights to recognised shippers' organisations. The department will be consulting interested parties on what the conditions should be, and the conditions will be specified in regulations which we shall make under Clause 2(1).

In addition, there are a number of important considerations that parties which are interested in the consultations, and indeed in these matters, would wish to consider. Shippers' organisations may be under an implied duty to their members to carry out their consultations properly, but the willingness of a body to be recognised might therefore be an important factor. It would also be possible—I hope that this will help my noble friend at this stage, at least to a small degree; I say that it would be possible, nothing more than that—to include a condition that an organisation would first have to indicate its agreement to be so recognised. In regard to the amendment, and indeed the entire matter, a balance has to be drawn. I am sure that we all wish to avoid an undue proliferation of bodies that have to be recognised, but certainly we see a role for smaller specialist, or indeed larger specialist, organisations and regional shippers' organisations in addition to the British Shippers' Council.

I referred earlier to criteria for recognition, and I should like to take one obvious and clear criterion for recognition as a shippers' organisation. This might be that the body represents shippers who carry a certain percentage of a conference trade on a particular route. But, as I said both earlier this evening and at an earlier stage of the Bill, clearly further consultations are required in this very complex area. I would assure the Committee, and in particular my noble friend, that views will be sought from all interested parties before the regulations are laid. I would stress that the regulations will be subject to the affirmative procedure, so that your Lordships' House and another place will have full opportunity to discuss them and to consider the form of the consultations and other matters which I believe lie at the heart of my noble friend's amendment.

7.7 p.m.

The Earl of Inchcape

On behalf of the British shipping industry, in which I declare an interest, I should like to support my noble friend Lord Lyell in his rejection of the amendment. In theory, all shippers' organisations, representatives of shippers and, where practicable, individual shippers, all demand consultation. The designating process is intended to reationalise and simplify the consultation procedure. Clearly the regulation that empowers the Secretary of State to designate in this way must be carefully worded, so that it does not exclude from the consultation process those parties which have a legitimate and substantial interest in the trade concerned. It is to be hoped that normally their interests can be adequately represented by the British Shippers' Council, and other similar bodies, but of course there will be many occasions when other voices also need to be heard.

However, the present amendment would largely destroy the value of the designating process. It would require the Secretary of State to designate all those who desire to be designated. In doing so, it would enable consultations to get out of hand, which would benefit no one. It is understandable that some smaller organisations may fear that theirs would be a voice in the wilderness. However, their view would go equally unheard if their's were but a voice in the multitude. A middle ground must be found, and, in our view, this can best be done by the Secretary of State using his common sense in the drafting of the relevant regulation.

Lord Mottistone

I thank my noble friend Lord Lyell, though I am not sure that I thank my noble friend Lord Inchcape for his rather heavy-gunned attack on my amendment. He suggested that the Secretary of State would use his common sense. Well, without mentioning any names, it has not been my experience that Secretaries of State use much common sense. However, I see the point made by my noble friend and, indeed, by both my noble friends. I shall certainly take away and read with great care what my noble friend Lord Lyell has said, and I reserve the right to come back on Report. But before I sit down I should like to thank my noble friend Lord Lyell very much for his helpful letter in response to the points that I raised on Second Reading, which of course has been passed on to the appropriate people. With that, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 3 shall stand part part of the Bill?

Lord Ponsonby of Shulbrede

This clause deals, as we have heard, with matters which may be provided for by regulations. Indeed, I was pleased to hear the noble Lord, Lord Lyell, confirm that the affirmative procedure will now be used for dealing with the regulations as and when they are made.

A number of the matters to be dealt with by the regulations will undoubtedly be very complicated matters, and will include such things as the definition of a national shipping line. However, my point in rising on the Question, Whether Clause 3 shall stand part of the Bill? is to ask how it is proposed to regulate the regulations which are made. Will there be some form of annual report by the Secretary of State setting out how in fact the regulations have been complied with; or should there be some form of regulatory machinery, such as we have in the civil aviation field, in the Civil Aviation Authority? Should there in fact be some sort of authority to report annually on whether the regulations have been complied with and how they have worked?

Lord Lyell

The noble Lord, in his usual kind fashion, gave me some warning of the point that he might wish to raise on Clause 3, alas!, I have not been able to see my way entirely through—if I may say so describe it politely—the jungle of regulations and points that have to be considered in Clause 3. But, as I understand it—and I think that probably the noble Lord, Lord Ponsonby, might agree—Clause 3, and above all subsection (1), hangs very much on Clause 2, and above all subsection (1), since Clause 2 sets out the general scheme, as they call it, and Clause 3 details the regulations and especially the matters which may be provided for by the regulations. I hope that the Committee, and indeed all your Lordships, will forgive me if I forgo the marvellous opportunity to go right through the whole of Clause 3 which presents itself to me, and indeed to your Lordships, this evening.

I would assure the noble Lord, Lord Ponsonby, that, so far as his query on the regulation of the regulations is concerned, there are two things to start with: first of all, there will be no annual report; and, secondly, there will be no regulatory machinery. But I am given to understand that a five-year review is built into the code; and I think that the noble Lord would agree, and, indeed, that my noble friend Lord Inchcape and the noble Lord, Lord Cayzer, would agree, as I think would my noble friend Lord Mottistone, too, that the code lies very much at the heart of the Bill. So, if I may reassure the noble Lord, Lord Ponsonby, there will by no annual report and no regulatory machinery per se, but there will be a five-year review built into the code.

Lord Ponsonby of Shulbrede

Before the noble Lord sits down, what we shall in fact have, therefore, is a report every five years as to how the machinery has worked?

Lord Lyell

I am given to understand, by devious means, that the answer is, "Yes".

Clause 3 agreed to.

Remaining clauses agreed to.

Schedule agreed to.

House resumed: Bill reported without amendment; Report received.