The tourism ministry has invited aviation stakeholders to finalise the air carriers’ liability and insurance draft bill for domestic airlines as it prepares to send it to the law and finance ministries for their comments.
According to ministry officials, all stakeholders have been invited on September 2 with their inputs.
Officials said that after receiving their suggestions, the draft will be sent to the law and finance ministries before it is tabled at the Cabinet.
The bill will be registered in Parliament after the Cabinet’s go-ahead.
On March 1, the erstwhile government approved the tourism ministry’s proposal to prepare the draft domestic air carriers’ liability and insurance bill.
Nepal adopted the Montreal Convention 1999 (MC99) on December 15, 2018. The MC99, however, makes only international airlines liable in case of passenger death or injury.
A year after Nepal adopted the MC99, preparation for adopting a similar kind of law started but could not proceed, although the draft had been prepared.
Tourism ministry officials say the process was stalled multiple times as governments changed. Since 2019, when the drafting of the MC99 started, the ministry has welcomed 11 ministers.
Since 2019, there have been six fatal plane and helicopter crashes that killed 130 people, and all the families of the victims have been barred from a justifiable compensation that would be $100,000 as per the proposed provisions.
The draft, however, is ready. And with a political will, officials expect the registration process to be completed within weeks. The draft bill was extensively discussed with the stakeholders before finalising it in 2020.
“But the will to serve the public is rare among politicians. No minister was interested in passing the bill. All they did was stunt. No work,” said a senior official at the ministry.
The draft of the air carriers’ liability and insurance bill proposes a fivefold increase in compensation from domestic carriers for death or injury.
As per the planned law, domestic airlines have to pay a minimum compensation of $100,000 for the injury or death of a passenger. Currently, the minimum compensation for passenger death on a domestic flight is $20,000.
Under the Montreal Convention of the International Civil Aviation Organization (ICAO), carriers have to pay 128,821 Special Drawing Rights (SDRs) or ($171,018) if the damage is due to the carrier’s negligence or a wrongful act or omission.
SDRs are an interest-bearing international reserve asset used by the International Monetary Fund.
Under the Montreal Convention 1999, in any crash, the victims’ families have the right to claim unlimited compensation for a wrongful death.
The draft bill states that the carrier should make an advance payment when necessary to meet the immediate economic needs of passengers or victims’ families.
According to the proposed law, a compensation claim should be filed with the airline or its agents within 60 days of the incident or accident. The carrier’s liability limitation for cargo lost and damaged shall be $20 per kg if the damage was caused or contributed to by the negligence of the airlines, it says. The cargo damage is limited up to $5,000.
The compensation for the hand baggage, if lost or damaged, shall be $400.
Under the Montreal Convention 1999, effective as of December 28, 2019, a carrier’s liability limitation for cargo lost, damaged or delayed shall be 22 SDRs per kg ($29.21 per kg) in the case of destruction, loss, damage or delay concerning cargo carriage.
Carriers must pay 1,288 SDRs ($1,709.90) for each passenger in case of baggage destruction, loss, damage, or delay.
Likewise, 5,346 SDRs ($7,097.16) should be compensated for each passenger in relation to damage caused by delay in the carriage of persons.
The draft also sets the minimum compensatory damages for the third party. Under the proposed rule, the minimum compensatory damages for the third party by an aircraft weighing 10 tonnes or below shall be $25 million.
Similarly, the minimum compensatory damages for the third party by an aircraft weighing up to 35 tonnes shall be $35 million and $60 million for the aircraft weighing above 35 tonnes.
However, the domestic carriers have been objecting to a few clauses, such as the carrier’s liability for delays and unlimited compensation, which, according to them, is impractical in a country like Nepal.
Airlines officials say that, given Nepal’s geographical terrain, climatic behaviour, and airport facilities, Nepali airlines cannot afford to be liable for delays.
According to tourism ministry officials, the proposed legislation is a modified version of the Montreal Convention 1999, as several clauses would be difficult for domestic airlines to comply with.
As a result of the delay, 130 passengers who died in different crashes since 2019 missed out on compensation in millions of rupees.
