Discrimination: View on Labour and Employment Practice with special focus on Equal Opportunities, Wages and Terms of Employment -United Kingdom-India-United States of America

Discrimination in employment and occupation means treating people differently or less favourably because of characteristics that are not related to their merit or the inherent requirements of the job. These characteristics commonly include: race, colour, sex, religion, political opinion, nationality, social origin, age, disability, HIV/AIDS status, trade union membership, and sexual orientation etc.

Discrimination can arise in a variety of work-related activities. These include access to employment, to particular occupations, promotions and to training and vocational guidance. Moreover, it can occur with respect to the terms and conditions of the employment, such as:

• Recruitment

• Remuneration

• Hours of work and rest/ Paid holidays

• Maternity protection

• Security of tenure

• Job assignments

• Performance assessment and advancement

• Training and opportunities

• Job prospects

• Social security

• Occupational safety and health



In some countries, additional issues for discrimination in the workplace, such as age and HIV status, are growing in importance. It is also important to realize that discrimination at work arises in a range of settings, and can be a problem in a rural agricultural business or in a high technology city-based business.

Non-discrimination means simply that, employees are selected on the basis of their ability to do the job and that there is no distinction, exclusion or preference made on other grounds. Employees who experience discrimination at work are denied opportunities and have their basic human rights infringed. This affects the individual concerned and negatively influences the greater contribution that they might make to society as well as the employer.


2. Direct and Indirect Discrimination

Discrimination can take many forms, both in terms of gaining access to employment and in the treatment of employees once they are in work.

It may be direct, such as when laws, rules or practices explicitly cite a reason such as sex or race to deny equal opportunity. Most commonly, however, discrimination is indirect and arises where rules or practices have the appearance of neutrality but in fact lead to exclusions. This indirect discrimination often exists informally in attitudes and practices, which if unchallenged can perpetuate in organizations. Discrimination may also have cultural roots that demand more specific approaches.

Women constitute a growing proportion of the world's workforce, but consistently earn less than their male counterparts. Disabled employees may have particular needs that should be met, where reasonable, in order to ensure that they have the same opportunities (e.g. for training and advancement) as their peers.


3. Consequences of Discrimination at workplace or business:

A company that uses discriminatory practices in employment and occupation denies itself access to talents from a wider pool of workers, and thus skills and competencies. The hurt and resentment generated by discrimination will affect the performance of individuals and teams in the company. Increasingly, Young graduates and new employees also increasingly judge companies on the basis of their social and ethical policies at work. Discriminatory practices result in missed opportunities for development of skills and infrastructure to strengthen competitiveness in the national and global economy. Finally, discrimination isolates an employer from the wider community and can damage a company's reputation, potentially affecting profits and stock value.


4. Discrimination most likely to occur in the following situations:

i) Recruitment of new Workers: Problems can occur as a result of basic prejudice or misunderstanding on the part of those making the hiring decisions. They can also arise from the application of particular criteria or requirements that are not necessary for the job but negatively impact a particular group. Examples include: unnecessary qualifications, language skills that are not required by the job or a requirement that recruits must live in a particular area, unless this is necessary for the job.

ii) Retrenchment and restructuring: These processes often involve the dismissal of workers, which can give rise to discrimination against one group, depending on the procedure and criteria used. For example, dismissing those with the least amount of service may disproportionately affect women and minorities, who are often the most recent entrants in many longer established organizations.

iii) Payment and Promotion: Decisions on how much individuals are paid and who should be promoted can often be subjective and open to influence by discriminatory criteria. Assessment by managers may be subjective, or the rewarding of some characteristics such as strength more than others such as dexterity, for example, can disadvantage women.

iv) Dismissal for cause: While there is nothing inherently discriminatory about dismissing an employee for good reason, employers should ensure that policies and procedures are in place to ensure that such terminations are not masks for discrimination practices.

v) Training and Development: Just as preferences can be made during hiring and promotion, the same can be said for training and development. It is important that, an employee may be later denied promotion apparently on non-discriminatory ground that he or she had less training and qualifications.

vi) Harassment at Work: Where there is gender, ethnic or other tensions at work, harassment may take place. Women in particular are subjected to widespread harassment.

vii) Maternity Protection: In order to effectively participate in the workforce and not suffer discrimination, it is essential for women to receive particular protections in relation to maternity, childbirth, and breastfeeding.


5. Standards on Non-Discrimination:

Most countries have some form of non-discrimination legislation. This can range from simple one-sentence constitutional provisions prohibiting discrimination at large, to detailed labour-specific legislation on various discriminatory practices. Where rules against discrimination exist as part of national law, businesses are obliged to comply.

6. Discrimination and Labour or Employment Laws:

A) UNITED KINGDOM:

The list of Anti-Discrimination Legislations in UK, Which in fact applies to employment related issues.

1) Equal Pay Act, 1970

2) Sex Discrimination Act, 1975

3) Race Relations Act, 1976

4) Disability Discrimination Act, 1995

5) Employment Equality (Religion or Belief) Regulations, 2003

6) Employment Equality (Sexual Orientation) Regulations, 2003

7) Employment Equality (Age) Regulations, 2006

According to English Laws, a person should not be discriminated at work place on the basis of:

1. gender

2. marriage or civil partnership

3. gender reassignment

4. pregnancy and maternity leave

5. sexual orientation

6. disability

7. race

8. colour

9. ethnic background

10. nationality

11. religion or belief

12. age


An employer cannot discriminate against an employee on the basis of his employment contract. E.g. i) Part-time work ii) Fixed Term Contract Work.

English Law covers any kind of discrimination in:

1. recruitment

2. employment terms and conditions

3. pay and benefits

4. status

5. training

6. promotion and transfer opportunities

7. redundancy

8. dismissal


Types Discrimination:

i) Direct discrimination:

Direct discrimination happens when an employer treats an employee less favourably than someone else because of one of the above reasons. For example, it would be direct discrimination if a driving job was only open to male applicants.

There are limited circumstances in which an employer might be able to make a case for a genuine occupational requirement for the job. For example, a Roman Catholic school may be able to restrict applications for a scripture teacher to baptised Catholics only.

ii) Indirect discrimination:

Indirect discrimination is when a working condition or rule disadvantages one group of people more than another. For example, saying that applicants for a job must be clean shaven puts members of some religious groups at a disadvantage.

Indirect discrimination is unlawful, whether or not it is done on purpose. It is only allowed if it is necessary for the way the business works, and there is no other way of achieving it. For example, the condition that applicants must be clean shaven might be justified if the job involved handling food and it could be shown that having a beard or moustache was a genuine hygiene risk.

iii) Harassment:

You have the right not to be harassed or made fun of at work or in a work-related setting (e.g. an office party). Harassment means offensive or intimidating behaviour - sexist language or racial abuse, which aims to humiliate, undermine or injure its target or has that effect. For example, allowing displays or distribution of sexually explicit material or giving someone a potentially offensive nickname.

iv) Victimisation:

Victimisation means treating somebody less favourably than others because they tried to make, or made, a complaint about discrimination. For example, it could be preventing you from going on training courses, taking unfair disciplinary action against you, or excluding you from company social events.


1. Sex Discrimination and Equal Pay:

If a person is being discriminated at work because of his/her sex, marital status or gender, it is unlawful and the employer should stop the discrimination.

i) Sex discrimination:

Under the 1975 Sex Discrimination Act it's unlawful for an employer to discriminate against you because:

i) of your gender

ii) you are married

iii) you have had, are having or intend to have, gender reassignment; this means someone, supervised by a doctor, who changes their gender.

Sex discrimination laws cover almost all workers (men and women) and all types of organisations in the UK.


ii) Equal pay

The 1970 Equal Pay Act makes it unlawful for employers to discriminate between men and women in terms of their pay and conditions where they are doing either:

1. the same or similar work

2. work rated as equivalent in a job evaluation study by the employer

3. work of equal value


2. Age Discrimination:

Age discrimination laws are there to ensure that, a person is not denied a job, an equal chance of training or a promotion because of age. They also protect from harassment or victimisation because of age.

Age discrimination at work is unlawful in almost all types of employment. All employees and workers of any age are protected from age discrimination including partners of firms, contract workers and anyone in vocational training.

All aspects of employment (or prospective employment) are protected from age discrimination, including recruitment, employment terms and conditions, promotions, transfers, dismissals and training.

In some cases different treatment of a worker or employee because of their age can be justified, for example making special provisions for younger or older workers in order to protect their safety and welfare. See section on objective justification below. Age discrimination protection does not cover the provision of goods and services.

3. Sexual orientation discrimination:

It is against the law for an employer to discriminate against, victimise or harass employee because of his sexual orientation, or perceived sexual orientation.

An employee is protected against sexual orientation discrimination if:

i) he/she is a lesbian, gay, bisexual or heterosexual

ii) people think he/she is a gay, lesbian or heterosexual when he/she is not

iii) he/she have gay/lesbian friends or visit gay/lesbian clubs


4. Human rights in the workplace:

Every person’s human rights are protected by the law. If an employer is a public authority, they must follow the principles of the Human Rights Act.

The Human Rights Act:

The Human Rights Act was introduced in October 2000. It's based on the European Convention on Human Rights and adds protection for workers' rights and freedoms. Provisions within the Act deal with work-related matters.

In the public sector, it's unlawful for the employer to violate human rights under the Convention, unless an Act of Parliament means it has no choice.

If the employer isn't a public authority, then an employee can't make a claim against his/her employer for breach of human rights. However, human rights law has been incorporated into general employment law (for example, not to be discriminated against because of your sexuality) and applies to all employers. Any decision by an Employment Tribunal must follow the principles laid out in the Convention.


5. Racial Discrimination:

It's unlawful for an employer to discriminate against an employee because of his/her race. An employee is protected against racial discrimination at all stages of employment.

What constitutes racial discrimination:

The 1976 Race Relations Act makes it unlawful for an employer to discriminate against an employee on racial grounds. Race includes:

i) colour

ii) nationality

iii) ethnic or national origins

Under the Act, it doesn't matter if the discrimination is done on purpose or not. What counts is whether (as a result of an employer's actions) an employee is treated unfavourably because of his/her race. The Race Relations Act protects all racial groups, regardless of their race, colour, nationality, religious beliefs, national or ethnic origins.

6. Disability Discrimination:

Disabled workers share the same general employment rights as other workers, but there are also some special provisions for them under the Disability Discrimination Act (DDA).

The Disability Discrimination Act

Under the DDA, it is unlawful for employers to discriminate against disabled people for a reason related to their disability, in all aspects of employment, unless this can be justified. The Act covers things like:

1. application forms

2. interview arrangements

3. proficiency tests

4. job offers

5. terms of employment

6. promotion, transfer or training opportunities

7. work-related benefits such as access to recreation or refreshment facilities

8. dismissal or redundancy

Reasonable adjustments in the workplace

Under the DDA, an employer has a duty to make 'reasonable adjustments' to make sure a disabled employee is not put at a substantial disadvantage by employment arrangements or any physical feature of the workplace.

Examples of the sort of adjustments employer should consider, in consultation with disabled employee, include:

1. allocating some of the work to someone else

2. transferring to another post or another place of work

3. making adjustments to the buildings where he/she works

4. being flexible about the hours of work - allowing he/she to have different core working hours and to be away from the office for assessment, treatment or rehabilitation

5. providing training or retraining if he/she cannot do the current job any longer

6. providing modified equipment

7. making instructions and manuals more accessible

8. providing a reader or interpreter


7. Religion or belief discrimination:

It is against the law for an employer to discriminate against an employee because of his/her religion or belief. He/she is also protected against harassment or victimisation at work.

Protection from discrimination

There is no specific list that sets out what religion or belief discrimination is. The law defines it as any religion, religious or philosophical belief. This includes all major religions, as well as less widely practised ones.

An employee is also protected against discrimination if he/she do not follow any religion or belief, and the employer discriminates against him/her because of this. Political beliefs are not counted as a religion or belief.

An employee is protected against discrimination through any recruitment process and in employment, including the terms and conditions of employment, pay, status, training, promotion and transfer opportunities, redundancy and dismissal and benefits such as pensions.


B) INDIA:

The Constitution of India prohibits discrimination on the basis of a person's race, sex, religion, place of birth, or social status and government authorities worked to enforce these provisions with varying degrees of success. Rapidly evolving harassment laws in India have cast several obligations on Indian employers. Such laws demand non-discriminatory practices to be followed in workplaces as well as increased sensitivity towards the rights of women workforce. Very few legal domains are as important as the identification, prevention and resolution of discrimination and harassment in the workplace.

The Supreme Court of India has imposed several obligations upon employers to prevent or deter the commission of acts of sexual harassment in the workplace including adoption and publication of workplace policies against sexual harassment and setting up complaint committee(s) within the organization to address complaints from women employees. Failure to abide by the Supreme Court's directions, which under the Constitution of India have the force of law, could result in serious adverse consequences for employers. The Supreme Court has even imposed exemplary costs upon an employer for not following the policy and procedures laid down in its judgment. Such policy and procedures have also been incorporated in various existing Central and State labour legislations and a specific legislation on prevention of sexual harassment of women at the workplace which is in the making.

Labour Law System in India:

India is a founding member of the ILO and has ratified a total of 39 ILO Conventions. Of the eight core ILO Conventions, India has ratified four: the Conventions on Forced Labor (No. 29), Equal Remuneration (No. 100), Abolition of Forced Labor (No. 105), and Discrimination (Employment and Occupation) (No. 111). India has not ratified the remaining four core conventions on Freedom of Association and Protection of the Right to Organize (No. 87), Right to Organize and Collective Bargaining (No. 98), Minimum Age (No. 138), and Worst Forms of Child Labor (No. 182).

Industrial Disputes Act: The Industrial Disputes Act (1947) regulates reductions in force (RIF) and plant closures. It requires state approval 90 days before large firms (more than 100 employees) lay off employees. Likewise, no plant employing more than 100 employees can shut down without obtaining approval 90 days before the closure date. Laws also prohibit firms from employing contract laborers for extended periods of time without extending permanent employment.

Labor Law Reforms: Many observers believe that India's labor laws are antiquated and in need of reform. The second National Labor Commission (NLC), established by the government in September 1999, submitted its report in June 2002. It recommended reviews of Indian labour laws and the social security system and the strengthening of governmental programs to eradicate child labour. Although the NLC recommendations are not binding on the government, the Ministry of Labor has begun consulting various social partners on their possible implementation.

The Right to Association:

The Constitution provides for the right of association, and the Government generally respects this right in practice. Workers may establish and join unions of their own choosing without prior authorization.

In practice, legal protections of worker rights are effective only for the organized industrial sector. Outside the modern industrial sector, laws are difficult to enforce. The authorities generally prosecute and punish those persons responsible for intimidation or suppression of legitimate trade union activities when the victims are members of nationally organized unions. Unaffiliated unions are not able, in all instances, to secure for themselves the protections and rights provided by law.

The Trade Union Act prohibits discrimination against union members and organizers, and employers are penalized if they discriminate against employees engaged in union activities.

The Industrial Disputes Act prohibits retribution by employers against employees involved in legal strike actions, and this prohibition is observed in practice.

The Bonded Labour System (Abolition) Act (1976) prohibits all bonded labour by adults and children; however, such practices remain widespread primarily among the agricultural and rural unorganized workforce.

Status of Child Labour Practices and Minimum Age for Employment:

The Government prohibits forced and bonded child labor; however, this prohibition is not effectively enforced, and forced child labor continues to be a problem. The law prohibits the exploitation of children in the workplace. There is no overall minimum age for employment. However, work by children under 14 years of age is barred completely in "hazardous industries," which include passenger goods and mail transport by railway, and in factories and mines. Work in some other hazardous industries, as defined by the Child Labour (Prohibition and Regulation) Act of 1986, is regulated.

The Factories Act (1948) mandates an 8-hour workday and 48-hour workweek, as well as minimum working conditions. Workers are to be paid twice their regular wage rate for working overtime. State government laws set minimum wages, hours of work, and safety and health standards. These standards are generally enforced and accepted in the modern industrial sector, but are not observed in less economically stable industries.

Discrimination in Employment:

Despite laws designed to prevent discrimination, social and cultural practices as well as other legislation have a profound discriminatory impact, and discrimination against women, persons with disabilities, indigenous people, homosexuals, and national, racial, and ethnic minorities is a problem. The traditional caste system, as well as differences of ethnicity, religion, and language, deeply divides the society.

Women: The participation of women in the formal labor force is much lower than that of males (33 percent vs. 67 percent). The rate of promotion of women to managerial positions within businesses often is slower than that of males. The Equal Remuneration Act of 1976 mandates that men and women performing the same job receive the same payment; however, enforcement is often weak, especially in rural areas where traditions encouraging discrimination against females are deeply rooted. In both rural and urban areas, women are paid less than men are for the same job. Women experience economic discrimination in access to employment and credit, which acts as an impediment to women owning businesses. In a positive development, state-supported microcredit programs for women have begun to have an impact in many rural districts.

Sexual harassment is common, with a vast majority of cases unreported to authorities. In June 2004, the National Commission for Women (NCW) and the Press Institute of India jointly released a report that found that a majority of women experienced gender discrimination at their workplaces. Often, attempts by women to report harassment have resulted in further problems or dismissal. In 2004, the Supreme Court determined that a victim of sexual harassment could be awarded compensation based on the findings of an internal departmental report or investigation of the case.

Dalits, Scheduled Castes, and Scheduled Tribes: The Constitution and the 1955 Civil Rights Act outlaw the practice of untouchability, which discriminates against Dalits (formerly called "untouchables") and other people defined as Scheduled Castes. According to the 2001 census, scheduled castes, including Dalits, make up 16 percent of the country's population, and scheduled tribes (members of indigenous groups outside the caste system) comprise 8 percent of the population. Despite longstanding efforts by the Government to eliminate the discriminatory aspects of caste, discrimination based on the caste system still occurs throughout the country.

The Government uses a system of "reservations," similar to affirmative action programs in the U.S., in an attempt to decrease employment-based discrimination towards these scheduled castes and scheduled tribes. The Anti-Untouchability Act of 1955 and the Prevention of Atrocities Act of 1989 give further protection; however, Dalits are often relegated to the most menial of jobs. Employment discrimination against Dalits is widespread in rural areas; many rural Dalits work as agricultural laborers for upper caste landowners without remuneration. The majority of bonded laborers are Dalits. Those who attempt to change the status quo regularly face violence.

Persons with Disabilities: Although the Persons with Disabilities Act provides equal rights to all persons with disabilities, advocacy organizations admit that its practical effects have so far been minimal, in part due to a clause that makes the implementation of programs dependent on the "economic capacity" of the Government. Widespread discrimination occurs against persons with physical and mental disabilities in employment, education, and in access to health care.


C) UNITED STATES OF AMERICA:

In accordance with United States Laws, these are the Discrimination types, which may arise at workplace:

1) Age

2) Disability

3) Equal Pay/Compensation

4) Genetic Information

5) National Origin

6) Pregnancy

7) Race/Color

8) Religion

9) Retaliation

10) Sex

11) Sexual Harassment

1. Age Discrimination: Age discrimination involves treating someone (an applicant or employee) less favorably because of his age. The Age Discrimination in Employment Act (ADEA) only forbids age discrimination against people who are aged 40 or older. It does not protect workers under the age of 40, although some states do have laws that protect younger workers from age discrimination.

It is not illegal for an employer or other covered entity to favor an older worker over a younger one, even if both workers are age 40 or older. Discrimination can occur when the victim and the person who inflicted the discrimination are both over 40.


Age Discrimination & Work Situations:

The law forbids discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment.

Age Discrimination & Harassment:

It is unlawful to harass a person because of his or her age. Harassment can include, for example, offensive remarks about a person's age. Although the law doesn't prohibit simple teasing, offhand comments, or isolated incidents that aren't very serious, harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted). The harasser can be the victim's supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.

Age Discrimination & Employment Policies/Practices:

An employment policy or practice that applies to everyone, regardless of age, can be illegal if it has a negative impact on applicants or employees age 40 or older and is not based on a reasonable factor other than age.


2. Disability Discrimination: Disability discrimination occurs when an employer or other entity covered by the Americans with Disabilities Act, as amended, or the Rehabilitation Act, as amended, treats a qualified individual with a disability who is an employee or applicant unfavourably because she has a disability. The law requires an employer to provide reasonable accommodation to an employee or job applicant with a disability, unless doing so would cause significant difficulty or expense for the employer ("undue hardship").

Disability Discrimination & Work Situations:

The law forbids discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment.

Disability Discrimination & Harassment:

It is illegal to harass an applicant or employee because he has a disability, had a disability in the past, or is believed to have a physical or mental impairment that is not transitory (lasting or expected to last six months or less) and minor (even if he does not have such an impairment).

Harassment can include, for example, offensive remarks about a person's disability. Although the law doesn't prohibit simple teasing, offhand comments, or isolated incidents that aren't very serious, harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted). The harasser can be the victim's supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.

Disability Discrimination & Reasonable Accommodation:

The law requires an employer to provide reasonable accommodation to an employee or job applicant with a disability, unless doing so would cause significant difficulty or expense for the employer.

A reasonable accommodation is any change in the work environment (or in the way things are usually done) to help a person with a disability apply for a job, perform the duties of a job, or enjoy the benefits and privileges of employment.

Reasonable accommodation might include, for example, making the workplace accessible for wheelchair users or providing a reader or interpreter for someone who is blind or hearing impaired.

While the federal anti-discrimination laws don't require an employer to accommodate an employee who must care for a disabled family member, the Family and Medical Leave Act (FMLA) may require an employer to take such steps. The Department of Labor enforces the FMLA.

Disability Discrimination & Reasonable Accommodation & Undue Hardship:

An employer doesn't have to provide an accommodation if doing so would cause undue hardship to the employer.

Undue hardship means that the accommodation would be too difficult or too expensive to provide, in light of the employer's size, financial resources, and the needs of the business. An employer may not refuse to provide an accommodation just because it involves some cost. An employer does not have to provide the exact accommodation the employee or job applicant wants. If more than one accommodation works, the employer may choose which one to provide.

Definition Of Disability:

Not everyone with a medical condition is protected by the law. In order to be protected, a person must be qualified for the job and have a disability as defined by the law.

A person can show that he or she has a disability in one of three ways:

1) A person may be disabled if he or she has a physical or mental condition that substantially limits a major life activity (such as walking, talking, seeing, hearing, or learning).

2) A person may be disabled if he or she has a history of a disability (such as cancer that is in remission).

3) A person may be disabled if he is believed to have a physical or mental impairment that is not transitory (lasting or expected to last six months or less) and minor (even if he does not have such an impairment).

Disability & Medical Exams During Employment Application & Interview Stage:

The law places strict limits on employers when it comes to asking job applicants to answer medical questions, take a medical exam, or identify a disability.

For example, an employer may not ask a job applicant to answer medical questions or take a medical exam before extending a job offer. An employer also may not ask job applicants if they have a disability (or about the nature of an obvious disability). An employer may ask job applicants whether they can perform the job and how they would perform the job, with or without a reasonable accommodation.

Disability & Medical Exams After A Job Offer For Employment:

After a job is offered to an applicant, the law allows an employer to condition the job offer on the applicant answering certain medical questions or successfully passing a medical exam, but only if all new employees in the same type of job have to answer the questions or take the exam.

Disability & Medical Exams For Persons Who Have Started Working As Employees:

Once a person is hired and has started work, an employer generally can only ask medical questions or require a medical exam if the employer needs medical documentation to support an employee's request for an accommodation or if the employer believes that an employee is not able to perform a job successfully or safely because of a medical condition.

The law also requires that employers keep all medical records and information confidential and in separate medical files.

3. Equal Pay/Compensation Discrimination

The Equal Pay Act requires that men and women in the same workplace be given equal pay for equal work. The jobs need not be identical, but they must be substantially equal. Job content (not job titles) determines whether jobs are substantially equal. All forms of pay are covered by this law, including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits. If there is an inequality in wages between men and women, employers may not reduce the wages of either sex to equalize their pay.

An individual alleging a violation of the EPA may go directly to court and is not required to file an EEOC charge beforehand. The time limit for filing an EPA charge with the EEOC and the time limit for going to court are the same: within two years of the alleged unlawful compensation practice or, in the case of a willful violation, within three years. The filing of an EEOC charge under the EPA does not extend the time frame for going to court.

4. Genetic Information Discrimination:

Under Title II of the Genetic Information Nondiscrimination Act (GINA), it is illegal to discriminate against employees or applicants because of genetic information. Title II of GINA prohibits the use of genetic information in making employment decisions, restricts acquisition of genetic information by employers and other entities covered by Title II, and strictly limits the disclosure of genetic information.

The EEOC enforces Title II of GINA (dealing with genetic discrimination in employment). The Departments of Labor, Health and Human Services and the Treasury have responsibility for issuing regulations for Title I of GINA, which addresses the use of genetic information in health insurance.

Definition of “Genetic Information”:

Genetic information includes information about an individual’s genetic tests and the genetic tests of an individual’s family members, as well as information about any disease, disorder, or condition of an individual’s family members (i.e. an individual’s family medical history). Family medical history is included in the definition of genetic information because it is often used to determine whether someone has an increased risk of getting a disease, disorder, or condition in the future.

Discrimination Because of Genetic Information:

The law forbids discrimination on the basis of genetic information when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoffs, training, fringe benefits, or any other term or condition of employment. An employer may never use genetic information to make an employment decision because genetic information doesn’t tell the employer anything about someone’s current ability to work.

Harassment Because of Genetic Information:

Under GINA, it is also illegal to harass a person because of his or her genetic information. Harassment can include, for example, making offensive or derogatory remarks about an applicant or employee’s genetic information, or about the genetic information of a relative of the applicant or employee. Although the law doesn't prohibit simple teasing, offhand comments, or isolated incidents that are not very serious, harassment is illegal when it is so severe or pervasive that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted). The harasser can be the victim's supervisor, a supervisor in another area, a co-worker, or someone who is not an employee, such as a client or customer.

Rules Against Acquiring Genetic Information:

It will usually be unlawful for an employer to get genetic information. There are six narrow exceptions to this prohibition:

1) Inadvertent acquisitions of genetic information do not violate GINA, such as in situations where a manager or supervisor overhears someone talking about a family member’s illness.

2) Genetic information (such as family medical history) may be obtained as part of health or genetic services, including wellness programs, offered by the employer on a voluntary basis, if certain specific requirements are met.

3) Genetic information may be acquired as part of the certification process for FMLA leave (or leave under similar state or local laws), where an employee is asking for leave to care for a family member with a serious health condition.

4) Acquisition through commercially and publicly available documents like newspapers is permitted, as long as the employer is not searching those sources with the intent of finding genetic information.

5) Acquisition through a genetic monitoring program that monitors the biological effects of toxic substances in the workplace is permitted where the monitoring is required by law or, under carefully defined conditions, where the program is voluntary.

6) Acquisition of genetic information of employees by employers who engage in DNA testing for law enforcement purposes as a forensic lab or for purposes of human remains identification is permitted, but the genetic information may only be used for analysis of DNA markers for quality control to detect sample contamination.

Confidentiality of Genetic Information:

It is also unlawful for an employer to disclose genetic information about applicants or employees. Employers must keep genetic information confidential and in a separate medical file. (Genetic information may be kept in the same file as other medical information in compliance with the Americans with Disabilities Act.) There are limited exceptions to this non-disclosure rule.

5. National Origin Discrimination:

National origin discrimination involves treating people (applicants or employees) unfavorably because they are from a particular country or part of the world, because of ethnicity or accent, or because they appear to be of a certain ethnic background (even if they are not).

National origin discrimination also can involve treating people unfavorably because they are married to (or associated with) a person of a certain national origin or because of their connection with an ethnic organization or group.

Discrimination can occur when the victim and the person who inflicted the discrimination are the same national origin.

National Origin Discrimination & Work Situations:

The law forbids discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment.

National Origin & Harassment:

It is unlawful to harass a person because of his or her national origin. Harassment can include, for example, offensive or derogatory remarks about a person’s national origin, accent or ethnicity. Although the law doesn’t prohibit simple teasing, offhand comments, or isolated incidents that are not very serious, harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted).

The harasser can be the victim's supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.

Citizenship Discrimination & Workplace Laws:

The Immigration Reform and Control Act of 1986 (IRCA) makes it illegal for an employer to discriminate with respect to hiring, firing, or recruitment or referral for a fee, based upon an individual's citizenship or immigration status. The law prohibits employers from hiring only U.S. citizens or lawful permanent residents unless required to do so by law, regulation or government contract. Employers may not refuse to accept lawful documentation that establishes the employment eligibility of an employee, or demand additional documentation beyond what is legally required, when verifying employment eligibility (i.e., completing the Department of Homeland Security (DHS) Form I-9), based on the employee's national origin or citizenship status. It is the employee's choice which of the acceptable Form I-9 documents to show to verify employment eligibility.

6. Pregnancy Discrimination:

Pregnancy discrimination involves treating a woman (an applicant or employee) unfavorably because of pregnancy, childbirth, or a medical condition related to pregnancy or childbirth.

Pregnancy Discrimination & Work Situations:

The law forbids discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, such as leave and health insurance, and any other term or condition of employment.

Pregnancy Discrimination & Temporary Disability:

If a woman is temporarily unable to perform her job due to a medical condition related to pregnancy or childbirth, the employer or other covered entity must treat her the same as any other temporarily disabled employee. For example, the employer may have to provide modified tasks, alternative assignments, disability leave or unpaid leave.

Pregnancy Discrimination & Harassment:

It is unlawful to harass a woman because of pregnancy, childbirth, or a medical condition related to pregnancy or childbirth.

Although the law doesn’t prohibit simple teasing, offhand comments, or isolated incidents that are not very serious, harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted).

The harasser can be the victim's supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.

Pregnancy & Workplace Laws:

Pregnant employees may have additional rights under the Family and Medical Leave Act (FMLA), which is enforced by the U.S. Department of Labor. For more information on FMLA, contact the nearest office of the Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor.

7. Race or Colour Discrimination:

Race discrimination involves treating someone (an applicant or employee) unfavorably because he/she is of a certain race or because of personal characteristics associated with race (such as hair texture, skin color, or certain facial features). Color discrimination involves treating someone unfavorably because of skin color complexion.

Race/color discrimination also can involve treating someone unfavorably because the person is married to (or associated with) a person of a certain race or color or because of a person’s connection with a race-based organization or group, or an organization or group that is generally associated with people of a certain color.

Discrimination can occur when the victim and the person who inflicted the discrimination are the same race or color.

Race/Color Discrimination & Work Situations:

The law forbids discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment.

Race/Color Discrimination & Harassment:

It is unlawful to harass a person because of that person’s race or color.

Harassment can include, for example, racial slurs, offensive or derogatory remarks about a person's race or color, or the display of racially-offensive symbols. Although the law doesn’t prohibit simple teasing, offhand comments, or isolated incidents that are not very serious, harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted).

The harasser can be the victim's supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.

Race/Color Discrimination & Employment Policies/Practices:

An employment policy or practice that applies to everyone, regardless of race or color, can be illegal if it has a negative impact on the employment of people of a particular race or color and is not job-related and necessary to the operation of the business. For example, a “no-beard” employment policy that applies to all workers without regard to race may still be unlawful if it is not job-related and has a negative impact on the employment of African-American men (who have a predisposition to a skin condition that causes severe shaving bumps).

8. Religious Discrimination:

Religious discrimination involves treating a person (an applicant or employee) unfavorably because of his or her religious beliefs. The law protects people who belong to traditional, organized religions, such as Buddhism, Christianity, Hinduism, Islam, and Judaism, and others who have sincerely held religious, ethical or moral beliefs.

Religious discrimination can also involve treating someone differently because that person is married to (or associated with) an individual of a particular religion or because of his or her connection with a religious organization or group.

Religious Discrimination & Work Situations:

The law forbids discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment.

Religious Discrimination & Harassment:

It is illegal to harass a person because of his or her religion.

Harassment can include, for example, offensive remarks about a person’s religious beliefs or practices. Although the law doesn’t prohibit simple teasing, offhand comments, or isolated incidents that aren’t very serious, harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted).

The harasser can be the victim's supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.

Religious Discrimination & Reasonable Accommodation:

The law requires an employer or other covered entity to reasonably accommodate an employee’s religious beliefs or practices, unless doing so would cause significant difficulty or expense for the employer. This means an employer may be required to make reasonable adjustments to the work environment that will allow an employee to practice his or her religion.

Examples of some common religious accommodations include flexible scheduling, voluntary shift substitutions or swaps, job reassignments, and modifications to workplace policies or practices.

Religious Accommodation/Dress & Grooming Policies:

Unless it would be an undue hardship on the employer's operation of its business, an employer must reasonably accommodate an employee's religious beliefs or practices. This applies not only to schedule changes or leave for religious observances, but also to such things as dress or grooming practices that an employee has for religious reasons. These might include, for example, wearing particular head coverings or other religious dress (such as a Jewish yarmulke or a Muslim headscarf), or wearing certain hairstyles or facial hair (such as Rastafarian dreadlocks or Sikh uncut hair and beard). It also includes an employee's observance of a religious prohibition against wearing certain garments (such as pants or miniskirts).

When an employee or applicant needs a dress or grooming accommodation for religious reasons, he should notify the employer that he needs such an accommodation for religious reasons. If the employer reasonably needs more information, the employer and the employee should engage in an interactive process to discuss the request. If it would not pose an undue hardship, the employer must grant the accommodation.

Religious Discrimination & Reasonable Accommodation & Undue Hardship:

An employer does not have to accommodate an employee’s religious beliefs or practices if doing so would cause undue hardship to the employer. An accommodation may cause undue hardship if it is costly, compromises workplace safety, decreases workplace efficiency, infringes on the rights of other employees, or requires other employees to do more than their share of potentially hazardous or burdensome work.

Religious Discrimination And Employment Policies/Practices:

An employee cannot be forced to participate (or not participate) in a religious activity as a condition of employment.

9. Retaliation:

All of the laws we enforce make it illegal to fire, demote, harass, or otherwise “retaliate” against people (applicants or employees) because they filed a charge of discrimination, because they complained to their employer or other covered entity about discrimination on the job, or because they participated in an employment discrimination proceeding (such as an investigation or lawsuit).

For example, it is illegal for an employer to refuse to promote an employee because she filed a charge of discrimination with the EEOC (Equal Employment Opportunity Commission), even if EEOC later determined no discrimination occurred.

Retaliation & Work Situations:

The law forbids retaliation when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment.

10. Sex Discrimination:

Sex discrimination involves treating someone (an applicant or employee) unfavorably because of that person’s sex.

Sex discrimination also can involve treating someone less favorably because of his or her connection with an organization or group that is generally associated with people of a certain sex.

Sex Discrimination & Work Situations:

The law forbids discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment.

Sex Discrimination-Harassment:

It is unlawful to harass a person because of that person’s sex. Harassment can include “sexual harassment” or unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature. Harassment does not have to be of a sexual nature, however, and can include offensive remarks about a person’s sex. For example, it is illegal to harass a woman by making offensive comments about women in general.

Both victim and the harasser can be either a woman or a man, and the victim and harasser can be the same sex.

Although the law doesn’t prohibit simple teasing, offhand comments, or isolated incidents that are not very serious, harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted).

The harasser can be the victim's supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.

Sex Discrimination & Employment Policies/Practices:

An employment policy or practice that applies to everyone, regardless of sex, can be illegal if it has a negative impact on the employment of people of a certain sex and is not job-related or necessary to the operation of the business.

11. Sexual Harassment:

It is unlawful to harass a person (an applicant or employee) because of that person’s sex. Harassment can include “sexual harassment” or unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.

Harassment does not have to be of a sexual nature, however, and can include offensive remarks about a person’s sex. For example, it is illegal to harass a woman by making offensive comments about women in general.

Both victim and the harasser can be either a woman or a man, and the victim and harasser can be the same sex.

Although the law doesn’t prohibit simple teasing, offhand comments, or isolated incidents that are not very serious, harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted).

The harasser can be the victim's supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.


7. Short Comparative Analysis: India & International Standards:

Other than Reservation provisions of Constitution of India, The Equal Remuneration Act of 1976, The Employment Exchanges ( Compulsory Notification of Vacancies) Act, 1959, The Persons With Disabilities (Equal Opportunities, protection Of Rights And Full Participation) Act, 1995, Anti-Untouchability Act of 1955, and Prevention of Atrocities Act of 1989, in India the Anti-Discrimination Rules at workplace are largely does not have specific legislations to deal with Equal Employment Opportunities. Very few legal domains are as important as the identification, prevention and resolution of discrimination and harassment in the workplace. Many observers believe that India's labor laws are antiquated and in need of reforms.

Therefore, to deal with Discrimination at Workplace, India requires a specific legislation. Only then as a welfare state, India can redress almost all the issues in this regard and achieve International Standards.

Another issue is implementation of legislations; we lack resources or will to implement the legislations, which are already in existence. E.g. Child Labour (Prohibition and Regulation) Act of 1986.

Copyright - Indian Perspective

Introduction:


"Pen is mightier than sword". This phrase refers to the potential of an author, who has infinite powers in his pen that can influence an individual, society, state and world at large. However, there is an acute lack of awareness on various issues relating to copyright and related rights amongst stakeholders, enforcement agencies, professionals like the authors of literary or artistic works, scientific or academic communities and members of the public.

Copyright is a right given by the law to creators of literary, dramatic, musical and artistic works and producers of cinematograph films and sound recordings. In fact, it is a bundle of rights including, inter alia, rights of reproduction, communication to the public, adaptation and translation of the work. There could be slight variations in the composition of the rights depending on the work.


Copy Rights & Protection:

Copyright ensures certain minimum safeguards of the rights of authors over their creations, thereby protecting and rewarding creativity. Creativity being the keystone of progress, no civilized society can afford to ignore the basic requirement of encouraging the same. Economic and social development of a society is dependent on creativity. The protection provided by copyright to the efforts of writers, artists, designers, dramatists, musicians, architects and producers of sound recordings, cinematograph films and computer software, creates an atmosphere conducive to creativity, which induces them to create more and motivates others to create.

If copyright protection is applied rigidly, it can hamper progress of the society. However, copyright laws are enacted with necessary exceptions and limitations to ensure that a balance is maintained between the interests of the creators and of the community.

To strike an appropriate and viable balance between the rights of the copyright owners and the interests of the society as a whole, there are exceptions in the law. Many types of exploitation of work which are for social purposes such as education, religious ceremonies, and so on are exempted from the operation of the rights granted in the Act. Copyright in a work is considered as infringed only if a substantial part of it is used without authorization. What is ‘substantial’ varies from case to case. More often, it is a matter of quality rather than quantity. For example, if a lyricist copy a very catching phrase from another lyricist’s song, there is likely to be infringement even if that phrase is very short.


Use of copyright without authorisation:

In order to protect the interests of users, some exemptions have been prescribed in respect of specific uses of works enjoying copyright. Some of the exemptions are:

i) for the purpose of research or study,

ii) for criticism or review,

iii) for reporting current events,

iv) in connection with judicial or legislature proceedings,

v) performance by an amateur club or society if the performance is given to a non-paying audience, and

vi) the making of sound recordings of literary, dramatic or musical works under certain conditions.


Works & Copyright Act:

1. An artistic work means

i) a painting, a sculpture, a drawing (including a diagram, map, chart or plan), an engraving or a photograph, whether or not any such work possesses artistic quality;

ii) a work of architecture; and

iii) any other work of artistic craftsmanship.

2. Musical work means a work consisting of music and includes any graphical notation of such work but does not include any words or any action intended to be sung, spoken or performed with the music. A musical work need not be written down to enjoy copyright protection.

3. Sound recording means a recording of sounds from which sounds may be produced regardless of the medium on which such recording is made or the method by which the sounds are produced. A phonogram and a CD-ROM are sound recordings.

4. Cinematograph film means any work of visual recording on any medium produced through a process from which a moving image may be produced by any means and includes a sound recording accompanying such visual recording and "cinematograph" shall be construed as including any work produced by any process analogous to cinematography including video films.

5. Government work means a work which is made or published by or under the direction or control of

i) the government or any department of the government

ii) any legislature in India, and

iii) any court, tribunal or other judicial authority in India.

6. Indian work means a literary, dramatic or musical work,

i) the author of which is a citizen of India; or

ii) which is first published in India; or

iii) the author of which, in the case of an unpublished work is, at the time of the making of the work, a citizen of India


Authorship:

Author means:

i) In the case of a literary or dramatic work the author, i.e., the person who creates the work.

ii) In the case of a musical work, the composer.

iii) In the case of a cinematograph film, the producer.

iv) In the case of a sound recording, the producer.

v) In the case of a photograph, the photographer.

vi) In the case of a computer generated work, the person who causes the work to be created.


Rights of authors:

The rights of the authors are purely dependent upon the nature of the work. As such the authors of different work are guaranteed with a different set of rights. Apart from this they do enjoy rights common to all of them. All these rights spring from the different provisions of the Act. These can be classified as follows:-

i) Economic Rights;

ii) Moral Right;

iii) Right to claim share in Re-sale price of a work;

iv) Right to resort to administrative remedies;

v) Right to claim the possession of the infringing material;

vi) Right to take civil and penal actions to infringements.


Term of the Protection:

Intellectual Property protection is not perpetual. The protection is granted for a limited period. It is dependent upon two factors:-

1. Whether it is created by an individual; or

2. by an institution or a legal person.

Work created by an individual is protected for the lifetime of the author and 60 years after his death. In all other cases it is protected only for 60 years from the date of publication.


Conditions to avail protection:

The copyright protection is not subject to any formalities like registration, deposit of a copy with the Registrar of Copyright etc. However, certificate of registration of copyright and the entries made therein serve as prima facie evidence in a court of law with reference to dispute relating to ownership of copyright. The minimum conditions are laid down to avail the protection are:-

i) It must be an original work.

ii) It must have been published in India.

iii) If published outside India or is an unpublished work, the protection is granted if the author is a citizen of this country.

Thus, the Act makes it clear that if the author is a citizen of the country his work is protected whether his work is published or not.


Guidelines for registration:

Both published and unpublished works can be registered. The facilities for registration of a work in the Register of Copyrights maintained in the Copyright Office of the Department of Education. The Copyright Office has been set up to provide registration facilities to all types of works and is headed by a Registrar of Copyrights.

i) Application for registration.

ii) Separate applications should be made for registration of each work;

iii) Each application should be accompanied by the requisite fee prescribed; and

iv) The applications should be signed by the applicant or the advocate in whose favour a Vakalatnama or Power of Attorney has been executed. The Power of Attorney signed by the party and accepted by the advocate should also be enclosed.


Foreign works or Indian Works in a Foreign Country:

Copyrights of works of the countries mentioned in the International Copyright Order are protected in India, as if such works are Indian works. Copyright of nationals of countries who are members of the Berne Convention for the Protection of Literary and Artistic Works, Universal Copyright Convention and the TRIPS Agreement are protected in India through the International Copyright Order.

Copyright as provided by the Indian Copyright Act is valid only within the borders of the country. To secure protection to Indian works in foreign countries, India has become a member of the following international conventions on copyright and neighbouring (related) rights:

i) Berne Convention for the Protection of Literary and Artistic works.

ii) Universal Copyright Convention.

iii) Convention for the Protection of Producers of Phonograms against Unauthorised Duplication of their Phonograms.

iv) Multilateral Convention for the Avoidance of Double Taxation of Copyright Royalties.

v) Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement.


Copyright Infringements:

The following are some of the commonly known acts involving infringement of copyright:

i) Making infringing copies for sale or hire or selling or letting them for hire;

ii) Permitting any place for the performance of works in public where such performance constitutes infringement of copyright;

iii) Distributing infringing copies for the purpose of trade or to such an extent so as to affect prejudicially the interest of the owner of copyright ;

iv) Public exhibition of infringing copies by way of trade; and

v) Importation of infringing copies into India.


Remedies:

Two kinds of remedies are available with the holder of the Copyrights:

Civil remedies: A copyright owner can take legal action against any person who infringes the copyright in the work. The copyright owner is entitled to remedies by way of injunctions, damages and accounts.

Criminal remedies: Any person who knowingly infringes or abets the infringement of the copyright in any work commits criminal offence under Section 63 of the Copyright Act. The minimum punishment for infringement of copyright is punishable with imprisonment for a term of six months and a fine of fifty thousand rupees, but which may extend to three years and a fine of two lakh rupees in case of repeated offences.


Enforcement of law in case of Copyright Violations:

Any police officer, not below the rank of a sub inspector, may, if he is satisfied that an offence in respect of the infringement of copyright in any work has been, is being, or is likely to be committed, seize without warrant, all copies of the work and all plates used for the purpose of making infringing copies of the work, wherever found, and all copies and plates so seized shall, as soon as practicable be produced before a magistrate.


Proposed amendments to bring the Indian Copyright Act in compliance with WCT (WIPO Copyright Treaty) and WPPT (WIPO Performances and Phonograms Treaty):

i) Proposed amendment ensures protection to the holders of the right against circumvention of effective technological measures applied for protection of his rights like breaking of passwords, etc. And an appropriate balance between the interests of the right holders on the one hand and of technology innovators, researchers and educational institutions on the other.


ii) The Performers’ Rights are proposed to enhance by a new section to include exclusive rights in compliance with WPPT.

iii) The Moral Rights of Performers are proposed to include in a new section.

iv) Amendments are introduced to protect the interests of researchers, students and educational institutions to make sure that technological measures do not lead to difficult situations, for further development of the technology. The proposed amendments address, the access to information in the digital context and the accountability of Internet service providers.

v) The copyright period for photographs is proposed to Lifetime of the photographer plus 60 years.


Proposed Amendments to the Copy Right Act, 1957 and Rights of the Authors:

i) Amendments are introduced to give copyright protection to authors of literary and musical works in cinematograph films, which were till now denied and wrongfully exploited, by the producers and music companies and the authors of the works, particularly songs included in the cinematograph film or sound recordings, receive royalty for the commercial exploitation of such work. Moreover, to introduce a system of statutory licensing to ensure that the public will get access to musical works through the radio and television networks and consecutively the owners of works are not subject to any disadvantages.

ii) It is proposed to make sure that the authors keep hold of their rights to receive royalties and the benefits enjoyed through the copyright societies.

iii) It is proposed to provide compulsory license through the Copyright Board to publish or communicate to the public such a work or translation, where the author is dead or unknown or cannot be traced or the owner of the copyright work in such a work cannot be found.

Electronic Documentation and Sea Transport: Adoption of Electronic Documentation System in International Carriage of Goods by Sea.

Chapter I

I.1 Introduction:


International Trade will get enormous benefits by incorporating electronic documentation system into international trade transactions . In spite of developments in the field of information and communication technology and huge benefits, paper based documents still remains as a primary method of exchanging data or information in international trade transactions . Every year millions of paper-based, documents are exchanged as part of international transactions; this involves huge costs to both governments and International business community . According to SITPRO , the current paper based documentary system costs more than £1 billion annually in the perishable food supply chain alone and £ 700 million or more could be saved by implementing electronic documentation system in UK. The intricacy of paper-based documents and complicated procedures of international business made the situation worse in this era of computerisation. Moreover, paper-based documents are not in a position to handle the more complex, faster and huge volume of international trade transactions in terms of efficiency and security .



Bills of lading is the primary document among transport documents and hold most important position in International Trade. Therefore, the query is whether electronic bill of lading can become an alternative to the traditional paper equivalent. According to a survey conducted by UNCTAD (United Nations Conference on Trade and Development), electronic documents were not able to play a significant role as paper based documents in commercial practice as expected . The main obstacle or challenge before electronic bill of lading is functional replication and legal recognition as its paper counterpart .



Therefore, the objective of this dissertation is to study, the legal and practical issues associated with the aforesaid situation.



In the first part of this dissertation, the role of sea transport documents in international trade with special emphasize on bill of lading will be described. This includes an overview of Negotiable bills of lading, non-negotiable seawaybills and other sea transport documents used in international trade. Then in the second part,

the positive and negative aspects of traditional bills of lading will be illustrated.

In addition, the adoption of electronic documentation system, especially electronic alternatives to sea transport documents in International Trade will be explained. Moreover, a detailed analysis of the developments in this area and its relative lack of success will also be the part of this dissertation. Then the legal and practical challenges before electronic alternatives will be part of the discussion. In the third part, the UNCITRAL Draft Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, 2008 (Rotterdam Rules) will be examined with special emphasize on electronic transport records.



I.2 Aims and Objectives of Dissertation:



1. To what extent the electronic documentation system has become an alternative to the traditional paper based system of documentation in Carriage of Goods by Sea - An analysis.



2. In this age of information technology and development, the electronic documents are not having the success they deserve in comparison with traditional paper based documents within the sphere of international trade transactions - A research to legal and practical reasons associated with this particular situation and solutions.



3. The Draft Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea (Rotterdam Rules) is adopted by UNCITRAL and how this draft convention could alter; the destiny of electronic transport records in future-A study.



I.3 Methodology:


The dissertation is part of an academic study. Therefore, the method of research is literature assessment. Extensive use of internet and web based resources like Jstor, Westlaw, LexisNexis Butterworths, Cambridge Law Journals Online, HeinOnline, University of Wales Online Library, UNCITRAL and UNCTAD websites etc has been done for the collection of relevant articles, cases, statutes, conventions and other sources. Books and printed materials were accessed with the help of College Library and British Library.



I.4 Literature Review:



1. John F. Wilson, Carriage of Goods by Sea, Sixth Edition (2008), PP 155-171



Popular book of J.F. Wilson is the main source of inspiration and moral fibre of this dissertation. Especially Chapter 5 ‘Bills of Lading and their functions’ gives an insight into the role of bills of lading in international trade. At end of this chapter, the shortcomings of paper- based bills of lading has been explained with examples like ‘delayed presentation’ of bills of lading and soaring expenses etc. Moreover, in this chapter, the author is trying to find solutions to these practical problems and suggesting some alternatives to the paper-based bills of lading. However, he is not denying the fact that even in this era of information technology, the traditional paper-based bills of lading is still popular among its users.

The author believes that ‘electronic bills of lading’ is the most important alternative to the traditional bills of lading than seaway bill, short form bill of lading and straight bill of lading. However, the author raises doubts about the acceptability of electronic alternative by referring to a survey conducted by UNCTAD. Even if electronic alternative is faster and reduces the cost of the transactions, the users of traditional bills of lading is not ready to accept the former, because the existing systems are not secure and underlying legal framework is either unclear or inadequate. On the other hand, a traditional paper-based bill of lading protects the rights of its users. Therefore, the author is very clear and precise about the present circumstances. And gives a clear description about three main types of electronic documentation currently in use namely, Atlantic Container Line datafreight system, Electronic Data Exchange Systems and Bolero.



Then author gives certain recommendations to increase the acceptability of electronic bills of lading. Firstly, the originality and genuineness of the electronic record must be established. Secondly, there must be a confidence in the security of the method of communication i.e. there must be no fear of any leakage of confidential business information. Finally, the bill must replicate all the functions of traditional bill of lading and have the same legal effect as its paper equivalent. All these can be achieved by electronic bill authenticated by digital signature. Unfortunately, no convention explicitly deals with this issue and author keeps his hope on new carriage convention.



2. Emmanuel T. Laryea, Paperless Trade: Opportunities, Challenges and Solutions (2002), PP 51-92



An important work from Australian University Professor. This book illustrates the importance of efficiency and speed in international trade and thereby, become a guideline for the preparation of this dissertation. In the opinion of the author, the concerns about fraud in electronic documentation system are also applicable to paper-based equivalent. Therefore, critics of electronic system cannot put the risk of fraud entirely on it, because the risk is equally applicable to paper-based system as well. In this book, author clearly explains the difficulty in replicating the functions of bills of lading, especially the negotiability features in an electronic environment. According to the author ‘negotiability feature’ and electronic system will not go together unless proper conventions or statutes are present to support this particular situation. Regrettably, technologically advanced countries like UK and USA (Carriage of Goods by Sea Act and UCC ) does not have clear provisions to deal with electronic bills of lading. Only exception is Australian legislation. In this book, author considers the lack of advanced systems of electronic transactions among developing countries is the major challenge and the only solution is technical assistance.



3. Athanassios N. Yiannopoulos, Ocean Bills of Lading: Traditional Forms, Substitutes, and EDI Systems (1995) PP 3-53



The book is published fourteen years back. However, the book is still valid for the purposes of this dissertation, because the issues discussed in this book is very relevant even today. The entire book is dedicated to the study of bills of lading. Moreover, the book is a compilation of the ‘National Reports’ on bills of lading from 12 different countries.



This book is extensively used during the preparation of ‘SeaDocs Projects area’ and ‘CMI Rules on Bills of Lading’ and a clear understanding of the ‘first attempts on the electronic documentation’ is gained. In addition, the drawbacks of traditional bills of lading were explained with examples by the author in a straightforward manner. And this book gave an insight into the Technological and Legal Challenges faced by electronic bills of lading during those days, especially on the writing requirement and electronic signatures. Chapters: 5-6 deals with historic developments of EDI System and challenges before the legal community to keep up to date with technology developments.



4. The Use of Transport Documents in International Trade, Report by the UNCTAD Secretariat (UNCTAD/SDTE/TLB/2003/3)



This article form UNCTAD Website holds a key position in this dissertation. Almost all the literature works regarding electronic documentation system in carriage of goods by sea refers to this report of UNCTAD Secretariat. The suggestions and views expressed by John F. Wilson on electronic bills of lading are based on this report. The views expressed in this report, after conducting a survey among legal advisors, transport providers, transport users, intermediaries, banks and insurers is still valid, even after six years of its publication.



This report points out the importance of bills of lading in international trade. Considering the difficulties and costs associated with traditional bills of lading, there was a call by international community to use non-negotiable seawaybills, especially, when there is no intention to transfer the ownership of goods in transit. According to the survey, negotiable bills of lading were frequently used even in cases where no negotiable document of title was required. This report clearly guides us to the fact that the attempts to create a practical electronic alternative to bills of lading are not yet a reality. The survey answers many queries like, the main purpose behind the use of traditional transport documents i.e. negotiable bills of lading is the requirement by banking and financial sectors or as a standard practice in international trade. Through this report, the UNCTAD is intending to promote the non-negotiable seawaybills or electronic alternatives of bills of lading. Nevertheless, the international commercial community is not ready to accept it, unless the electronic alternative can replicate all the functions of traditional ‘negotiable bills of lading’ including legal recognition in international scenario. This article gives a clear and precise understanding of traditional bills of lading and its alternatives within the point of view of the ‘user’.



5. Marek Dubovec, The Problems and possibilities for using Electronic Bills of Lading as Collateral, Arizona Journal of International and Comparative Law Vol.23, No.2 2006.



A good article from Arizona Journal of International and Comparative Law by Research Attorney at the National Law Centre for Inter-American Free Trade in Tucson, Arizona. This article from the American author, examined the limitations of electronic bills of lading and its future as valuable collateral in secured lending and letter of credit transactions.



In the opinion of the author, physical transfer of the document of title provides a direct link between the creditor’s rights and his collateral. However, in the case of electronic documents of title, author raises certain doubts as electronic documents are intangible and he lays hope on UNCITRAL Working Group 4 on Security Interests to find a solution.



The author illustrates the reason behind the lack of success in the case of electronic bills of lading. The acceptance of electronic documents is not a matter of changing transportation law to enable electronic documentation, but it is predominantly a matter of gaining trust and answering the security concerns of the customers who use shipping documents in their trade relations. The author criticises BOLERO system for its confusing legal structure. In addition, the lack of legal framework or legislation to deal with electronic commerce is the major issue and not the technological developments. According to the author, if electronic negotiability and collateral security is possible, then other functions of bills of lading can be easily replicated in electronic environment. This article is a revelation to the real issues with regard to the electronic bills of lading.


6. Paperless Trade in International Supply Chains: Enhancing Efficiency and Security- A Roadmap towards Paperless Trade.

An Outcome of the Forum, United Nations Centre for Trade Facilitation and Electronic Business 2005 .


This article is the result of a forum conducted by United Nations. This forum came out with more challenging and practical views regarding paperless trade. It illustrates role of Governments in initiating the use of paperless trade. The successful implementation of paperless trade will bring down the cost of international trade transactions. According to this article, the gap between the developing countries and developed countries in implementing paperless trade is the major challenge before United Nations. Therefore, co-operation from the governments of both developing and developed countries is necessary for the successful implementation of paperless trade.



This article is pointing towards the negative aspects of paper- based documentation system without taking into consideration the popularity of it among its users. However, the article provides a strategic transition policy from paper-based system to paperless system. These strategic transition policies, made this article a crucial part of this dissertation. The key characteristics of the transition to the global paperless trade system include benefits, Costs, Policy and Strategic Considerations.



7. Miriam Goldby, Electronic Bills of Lading and Central Registries: What is holding back progress? Information & Communication Technology Law, Vol: 17.2 2008.


This article from Information & Communication Technology Law is very important as the ‘Practical Challenge’ part i.e. the crucial area of this dissertation is prepared in accordance with the insight provided by this article. This article deals with legal background required for the successful implementation of electronic bills of lading, especially the ‘singularity requirement’. Then this article considers the BOLERO Project and its functional capabilities. In addition, the author goes deep into the reasons behind the lack of widespread use of the Project by International Community. And at the conclusion, author identifies three main reasons, which blocked the progress of BOLERO System. These are the reasons: The Complexity of International Trade, lack of cross border infrastructure and lack of any urgency in implementing electronic alternatives.



8. SITPRO, The Cost of Paper in the Supply Chain: ‘Project Hermes’ Perishable Food Sector Research Report 2008.



Project Hermes revealed for the first time, the underlying cost of paper documentation to the UK perishable food supply chain. Paper documentation costs, £1 billion per annum to the UK food supply chain. According to the research, by the introduction of electronic documentation system, £700 million or around 70% of the costs can be saved. These facts give us a promising picture of cost reduction, if we implement electronic documentation system. Billions may be saved by introducing electronic documentation system in global scenario. Open international standards for data and messaging (such as UN/CEFACT’s UNeDocs project and the UK implementation,UNeDocsUK) are a vital step towards providing this interoperability. The detailed analysis of use of paper in the whole international supply chain from suppliers in the third countries to UK, made this research project a predestined reference material for this dissertation.



I.5 Outcome of Study:


A detailed analysis of articles and books reveals that, the users of traditional paper based documentation system gives much importance to security and protection of their rights. They are not ready to compromise these two factors. As long as traditional paper-based system or negotiable bills of lading can provide security and electronic alternatives cannot do it, the international commercial community will continue to use the traditional system. Electronic bill of lading has satisfactorily fulfilled two of the functions of the paper document, i.e. receipt and evidence of terms and conditions of contract . Noticeable progress has been made in this regard. Many internet platforms now provide secure services and legal barriers are removed to an extent by adopting UNCITRAL Model Law on Electronic Commerce, 1996 and UNCITRAL Model Law on Electronic Signatures, 2001 . However, the replication of document of title function unique to traditional bills of lading, in an electronic environment is far from clear . Under the present national and international laws, legal rights attached to physical possession of the paper document. Therefore, physical possession of the original document gives constructive possession of the goods, to the holder . Consequently, the present legal regime cannot guarantee the same legal rights to the electronic documents as its traditional equivalent . However, the United Nations General Assembly ratified the Draft Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, now known as Rotterdam Rules on 11 December 2008 and a signing ceremony will be held in September 2009. The Rotterdam Rules contain express provisions regarding ‘electronic transport record’. Therefore, the Rules might be able to provide solutions to the issues surrounding electronic documents.




Chapter II



II.1 Introduction:



The buyers and sellers of International Trade belong to different countries. Moreover, international sale of goods involves third parties, other than buyer and seller, namely, Carriers, Banks and Insurance Agencies etc. Transportation plays an important role in international trade, because the goods need to be transported over a large distance. The buyer or the seller has to take responsibility of the goods in transit. Moreover, they need to perform their obligations towards each other, i.e. payment of agreed price and delivery of goods based on contract of sale. The evolution of CIF and FOB contracts in international trade leads to development of documentary sales. Financial institutions play an important role in documentary sales and this involves an added advantage of security to third parties, buyer and seller .



The acceptance of documentary sales in international trade lead to the development of new trade practices, i.e. a complete dependency on documents. Different types of documents are in use namely bills of lading, seawaybills, ship’s delivery orders and freight forwarder’s receipts etc. However, these paper-based documents are not capable enough to meet the needs of modern international trade. The only alternative is the adoption of paperless international trade. Nevertheless, adoption of electronic alternative faces many challenges. This part of dissertation is mainly focussing on this particular aspect.



II.2 Role of Sea Transport Documents in International Trade-With Special Emphasize on Negotiable (traditional) Bills of Lading:



A typical International Trade Transaction: Carrier of goods issue a sea/other transport document against delivery of goods by the shipper or seller. Shipper transfers the document to the banks or financial institutions against payment of letter of credit. The banks in turn hand it over to the buyer after the payment of the agreed price. Then the buyer has to pass it to carrier at the destination port for release of goods .


Around 90 percent of International Trade is served by sea transport .

Among sea transport documents bills of lading is the most significant. It is an established system in international trade. Therefore, it has the support of standard contract clauses, case laws and statutes. For example, Hague/Visby Rules provide harmonisation of practices with regard to bills of lading internationally.


English Law recognised three main functions of bills of lading :


a. Receipt for the goods or shipment

b. Evidence of the terms and conditions of Contract of carriage.

c. Document of title. This gives the holder of bills of lading, the constructive possession of goods.



According to Hague/Visby Rules, Art.III r 3, the shipper can demand the issue of bills of lading from carrier containing specific information: The quantity, quality, apparent order and condition of the goods. Therefore, a bill of lading attracts mandatory application of Hague/Visby Rules.



In Bradley (F.C.) & Sons Ltd V. Federal Steam Navigation Company Ltd

Lord Viscount Summer held that:



The carrier is obliged to deliver goods unless exempted by perils. The ‘Receipt Function’ constitutes prima-facie evidence for the condition of the goods. And the concerned parties may use the ‘Receipt Function’ of bills of lading to counter the allegations raised in Court of Law. When the bill of lading functions as a receipt and transferred to third party in good faith, constitutes conclusive evidence .



As evidence of contract of carriage, the carrier has to print the terms and conditions of contract on reverse side of the bills of lading. During transit, suppose the goods were lost, damaged or short delivered, the holder of the bills of lading can sue the carrier for the loss . This proves the ‘evidentiary value’ of bills of lading. However, it will not constitute the contract itself, it just acts as evidence of contract .



The most important function of bills of lading or the function, which, the electronic alternatives cannot successfully implement yet, is the ‘Document of Title Function’. The possession of the bills of lading, regarded as the equivalent of the possession of goods in three circumstances :



a) The holder of the bill is entitled to the delivery of goods at the port of discharge.

b) By indorsing the bills of lading, the holder can transfer the ownership of the goods in transit, “i.e. when the goods are in the possession of the carrier, the holder of the bill can transfer the possession and property in the goods to a subsequent buyer by passing the negotiable document of title .”

c) The bill can be utilized as a security for debts.



“As a document of title, the bill of lading is unique among transport documents and plays a very important role in international commerce, especially when the trade is financed under documentary credits .” The bill of lading enables the sale of goods by trading the document, while the goods are on high seas. Generally, any lawful holder of the bill of lading has rights to possession and in specific cases ownership of the goods. This offers security to concerned parties. For example, banks issuing letter of credits for the trade can hold the bill of lading as pledge or security over the goods and sellers have control of the goods until they are paid or have immediate right to stop the goods in transit or re-route or resell the goods by retaining the bill of lading .



Hence, the negotiable bills of lading is advantageous, when the goods in transit are for sale or if documentary security needed by the buyer, seller or the financial institutions or banks. Due to the special nature of bills of lading, it needs to be transferred physically to buyer. Usually, in international trade, the documents may pass through a chain of buyers and financial institutions; this may give rise to increased administrative costs with regard to the issuance, the processing and transfer of paper documents .



II.3 Non-negotiable Seawaybills and Other Sea Transport Documents used in International Trade:



Non-negotiable seawaybills are also functions as receipt of goods or shipment and evidence for the contract of carriage. Nevertheless, it is not necessary present to the carrier, to obtain delivery of the goods. Consequently, seawaybills cannot tender constructive possession of the goods . Moreover, in short transit, the delayed arrival of transport documents may not lead to any issues .



The seawaybills cannot be used, when the holder decided to transfer the ownership of goods in transit or the banks or financial institutions require documentary security. In addition, without express contractual incorporation, the Hague/Visby Rules will not extend its protection to seawaybills .



In European Enterprise Case it was held that, the application of Hague/Visby Rules would get activate, only when it is effectively incorporated in the contract of carriage. Then the evidentiary value of seawaybill is less strong in comparison with bills of lading, because the statement of goods in former will constitute prima facie evidence only, but in the case of latter, it is conclusive evidence . The electronic alternative of seawaybill is also in use; to replicate the functions seawaybill electronically is not difficult. However, the ‘electronic seawaybill’ is a seawaybill in electronic form. Therefore, it is non-negotiable.



Short form bill of lading is another form of traditional bill of lading, the only difference is that the printed terms of contract of carriage was removed from the back of it and incorporated the terms of contract by reference (carrier’s terms and conditions), but it raised a doubt about the effectiveness of incorporation clause in different jurisdictions .



Straight bill of lading is another type of sea transport document, which is made out to a consignee and not transferable. Therefore, it is a non-negotiable document, cannot be used in a successive sale contracts and not suitable for transfer of ownership, while the goods are in transit. Until recently, English Law was not clear about document of title function and its role with regard to straight bill of lading .



In Rafaela S Case, the Court of Appeal held that, when the bill of lading is made out to a named consignee and has a clause on its face that surrender of the bills of lading is essential for the delivery of the goods from carrier. Then straight bill of lading is a document of title even though it is not a negotiable document.



Now, the straight bill of lading needs to be submitted for the delivery of goods by the carrier and the Hague/Visby Rules is applicable to it as well. In addition, it may be used to transfer ownership rights to the named consignee and offers a limited security for debts. Other sea carriage documents like ship’s delivery orders and freight forwarders’ receipt do not have document of title function.



Unquestionably, The Negotiable Bills of Lading is the Ultimate Sea Transport Document. It is the only transport document, which can meet all the needs of its users. The functional capability of negotiable bills of lading makes it the favourite of the shipping industry. Other sea carriage documents are not an alternative to it. Even if the electronic equivalent of other sea carriage documents are implemented successfully does not mean that, the commercial community will adopt it blindly. The successful transformation from paper-based traditional negotiable bills of lading to electronic equivalent is possible, when the electronic equivalent can replicate all the functional capabilities of the traditional one with legal patronage.



II.4 The Negative aspects of Traditional Bills of Lading:



a) Delayed Arrival:



The Negative aspects of traditional bills of lading are developed recently, especially after the introduction of containerisation and faster ships. Moreover, the banking delays (documentary credit procedures) and slow postal services are making the situation more worse, when the transit is very short and the cargo is bulky . Therefore, in increasing number of cases, the cargoes are reaching its destination before documentation. The slow delivery of imported goods by one day itself costs $7 billion in a year . The unique character of bills of lading, the delivery of goods only against presentation of documents is causing serious practical issues .



The carrier will be in great dilemma, due to late arrival of documents, he cannot insist the presentation of documents. Most of the time, to get storage space for the cargo on board is the main problem. The charterer may be held liable for the damages for detention. The ship owner may face the risk of loosing the next assignment. If the goods are of perishable nature or the market fluctuations may leave the cargo owner in great loss .



In Hansen-Tangens (A/S) Rederi III V. Total Transport (The Sagona)



The carrier delivered the cargo without the presentation of the bills of lading due to its delayed arrival. During the examination in the Court of Law, the master of the ship was asked, how often the original bills of lading had been produced before him for verification prior to the delivery of the goods, the answer was interesting: “I have never seen it.”



Suppose the carrier knows the identity of the cargo owner and if he delivers the goods without the presentation of the bills of lading, the carrier may be held liable for wilful misconduct and a deliberate breach of his contractual obligations. In addition, the carrier may loose entire protection limitation of liability clause of Hague/Visby Rules and loose the protection of liability insurance afforded by Protection and Indemnity Club. Alternatively, the carrier uses letter of indemnity in the absence of bills of lading, but the bank indemnity is very expensive and personal guarantee depends on the financial standing of the guarantor .



b) Fraud and Bills of Lading:



Fraud in paper documentation system is relatively common, because one of the three bills of lading issued by the carrier can be misused. In some cases, the seller or shipper may even send the copies of bills of lading to agents in different regions or countries to find a buyer, who is ready for a better deal that. However, this may lead to fraudulent transactions . “Blank forms may be used to create and negotiate fraudulent bill of lading. Fraudulent issuance of second set of bills of lading is possible and thereby sale of non-existent goods may take place and bank security may be obtained. Entire bills of lading can be created using fraudulent means, signatures can be forged, the quantity of goods can be altered, and it is possible that, consignor can sell the same goods to more than one buyer at a time. Therefore, paper bills of lading constitute a considerable source of maritime fraud .”



In Mediterranean Shipping Company SA V. Trafigura Beheer BV



The owner of the goods sued the carrier for conversion and breach of contract in relation to consignment of copper stowed in eighteen containers shipped at Durban and destined for Shanghai. A fraudster presented a forged bill of lading and the carrier issued a delivery order against it. However, the Customs Division of Shanghai Port did not allowed the delivery without the proof of payment of customs duty. The fraudster then paid the customs duty and made the customs division to endorse the delivery order. Then a day later, the genuine owner of goods came with original bills of lading and the carrier stopped the delivery of the goods to fraudster.



The fraudster even went to the extend of defrauding the whole system of international trade, but even after the stoppage of delivery to the fraudster, the owner of the goods was not able to get the delivery of the goods, Customs denied the endorsement of delivery order due to fraudulent bill of lading and related legal issues. Therefore, the real trader is being denied his right to delivery of goods and underwent a huge loss.



In Maersk Sealand V. Far East Trading & Others



The Maersk Sealand , the carrier, awarded damages against Mr.Khalil, who is fourth defendant, for loss, due to delivery of six containers of frozen meat against forged bills of lading, to two companies in Republic of Congo controlled by Mr.Khalil . It is proved that, the bills of lading were forged by Mr.Khalil.



From the above mentioned it is understood that, anybody can create a counterfeit paper bills of lading and thereby cheat the buyer, seller and the carrier even in this modern day world trade. The only alternative is electronic bills of lading, where, chances of fraud are comparatively very less.



c) Incorrect or Inadequate Information :



The incorrect or inadequate information in paper bills of lading is a regular problem. For example, more than 10% of shipping consignment into USA is facing fines and delays due to incorrect documentation and product classification or other errors . This usually happens with regard to the data concerning the consignee and goods. Due to this, costly delays in release of goods may arise. Then the carrier should resurvey the goods, even forced to change the ship’s manifest and bills of lading. These problems can be easily solved by adopting electronic alternatives, the data can be easily altered by the concerned party in charge and it can be send within seconds to the carrier by the use electronic message transfer system. Thus, costly delays in delivery of goods may not arise at all.



d) Time and Expense:



Another disadvantage of paper document is the time and expense, required for its preparation. The cost of paper document depends upon the size and the cargo intake capacity of a ship. In such a case, the documentation of one trip alone will come to thousands of pages. For documentary credit transactions the banks need to keep their own copies as a proof, again thousands of pages are added to single voyage. And the cost of postal or courier charge in international scenario is very high, especially if the documents constitutes thousands of pages. In addition, if the goods are sold in transit, the document needs to travel from one destination to another, especially in a chain of sale transactions, documents may travel thousands of miles before reaching the final destination . As already mentioned, the SITPRO’s Hermes Project confirms that the cost incurred by paper use on UK’s perishable food supply chain alone is £1 Billion and approximately the cost of producing paper shipping documentation globally is $420 billion per year i.e. 7 to 9 % of the cost of international trade .



The processing charge of traditional paper based purchase order is $50, $2.50 for EDI and $1 for Internet respectively . According to UN/CEFACT, an export process involves normally, 27 parties, 40 plus documents, and required 300 plus copies of the document. In Unites States, alone international trade documentation consumes more than one billion man-hours . According to UNECE survey, the container clearance costs and time in Japan is :



26” Yen and 23 Hours: Paper Documents.

11” Yen and 4 Hours: Electronic Documents.



Therefore, these data clearly shows the negative aspects of paper documents in modern world trade.



II.5 Electronic Documentation System:



Adoption of electronic documentation in sea transport may considerably reduce the high costs and time in international trade transactions. Moreover, it will reduce the risk of fraud as well.



Electronic documents will be speedier and safer than paper documents. The main advantage is an electronic document can be send from one computer to another, using computer networks. No need to use, paper printouts and postal services. Therefore, increased efficiency and more flexibility can be achieved. Moreover, the storage space for electronic documents is minimal; it can be stored in computer discs and the cost of storage is very low.



Electronic data transfer from one computer to another is known as EDI (Electronic Data Interchange). According to UNCITRAL Model Law on Electronic Commerce, 1996, “the electronic transfer from computer to computer of information using an agreed standard to structure the information.”



The main advantage of EDI is the ease and speed at which electronic documents can be transferred from one place to another. To be more effective commercially the EDI system should be capable enough to replicate the functions of a negotiable paper bill of lading. For example, the EDI should enable the sale of goods in transit. To enable this EDI has to satisfy two conditions, firstly, it must have a signature on equal par with handwritten signature, and secondly, it must replicate the exclusive quality of the paper document . The first condition is attained by the introduction of electronic signatures and the second is by employing various forms of encryptions .



The main document content standard for EDI was developed and launched by UN, known as EDIFACT-Standard and another one was Accredited Standards Committee X 12 (ASC X 12) by American National Standards Institute .



II.6 Adoption of Electronic Documentation System in Sea Transport and its relative lack of success:



The dissertation is now dealing with a detailed analysis of the efforts to adopt electronic documentation system in sea transport and its limitations.



1. Atlantic Container Line Datafreight System (1971):



The first ever known attempt to establish a standard management system for electronic documentation is Atlantic Container Line Datafreight System (1971). “This had been started on an experimental basis in Sweden. The system was designed to use full possibilities of electronic documents and thereby reducing the use of paper documents. The information regarding the shipment is given by the shipper and stored in the carrier’s computer at the port of loading. Then the carrier will add information relevant to himself, like amount of freight due, ‘clean bill’ notation if appropriate etc. The carrier will then give printouts of this information to the shipper. After this, all the information will be transferred to carrier’s computer at the port of destination. By this time an advance notice of the about the arrival of the cargo will be despatched to the consignee together with a copy of datafreight receipt. The entire procedure is based on waybill model, problems relating to the disposal of the goods during transit will never arise and the consignee is only required to identify himself to get the delivery of the cargo .”



This new system showed many interesting practical features, it found solutions to the problems like delayed arrival of bills of lading, as there is no need of the presentation of the documents for delivery of goods. The entire system is functioning within legal limits, therefore, no need to amend the existing legal system. In addition, the new system is capable enough to fulfil the ‘receipt function’ and as evidence of contract of carriage.



i) The Negative aspects:



1. The financial institutions or banks are traditionally suspicious about waybill formula, so they are reluctant to accept the new system.

2. This system is a private company initiative, developed for its own use and not useful for world trade as a whole.

3. It cannot replicate the document of title function and therefore not suitable for sale of goods in transit.



These three disadvantages made the whole system futile as an alternative to traditional paper bills of lading.



2. The SeaDocs (Seaborne Trade Documentation System, 1986):



A serious attempt to introduce an electronic alternative to negotiable bills of lading. The concept of ‘Central Registry’ was first introduced in SeaDocs project. SeaDocs project was the initiative of Delaware Corporation (London) . Intertanko, an association of independent oil tanker operators and Chase Manhattan Bank, formed this Corporation. The main purpose of this project is to replicate the ‘negotiability function’ of bills of lading issued for shipment of oil in electronic environment and thereby increase the speed of the oil trade transactions, and avoid any kind of fraud . International oil trade involves sales and resale while the goods are in transit. The paper-based transactions cannot keep up with the pace of modern oil trade transactions.



Under SeaDocs Registry system, “the Chase Manhattan Bank was the central registry, depository of shipping documents, acted as agent of its clients with authority to endorse, deliver bills of lading and authenticate the transfers of ownership .” The carrier issues traditional paper bills of lading to the seller or shipper, then instead of sending it to the buyer or financial institutions, the paper bills of lading will be deposited into the SeaDocs Registry. Then onwards, it will act as a ‘depository custodian’ of the bills of lading and registry of the ‘negotiations’ as well. In return, the seller or the shipper will get a test key or code for safety reasons and this key will be used to effectuate any transaction related to bills of lading . For each transaction, the shipper should inform or notify electronically (telex) the SeaDocs Registry and share the buyer or endorsee with a portion of the code or key. Then, the buyer should also notify the registry about the sale. The SeaDocs had to make sure the authenticity of the notification from shipper and the buyer or endorsee by verifying the portion of the code or key before effectuating the final transaction. When the authenticity of the notification is confirmed, the name of the buyer will be recorded in electronic registry and on the paper bills of lading . Then an ‘identifying code’ would be despatched by the SeaDocs Registry to both carrier and the buyer. Thus, at the port of destination, the buyer is entitled to the delivery of goods .



In reality, the SeaDocs system did not replaced the paper-based system, to function within legal limits and thereby reducing the challenges from it. Even though, it was a well-structured system and did not face any operational difficulties, the SeaDocs system lasted only a year. This was due to practical implementation issues .





i) Limitation of SeaDocs Registry System :





1. Commodity traders were not ready to enter the transactions in a central registry, which was accessible by tax authorities, competitors and rivals.

2. The final buyers were not ready to acquire bills of lading from a system, which was designed to serve intermediaries and speculators.

3. The high cost related to registry operations and insurance, particularly, when the liability of party’s was not established.

4. The financial institutions or banks were not ready to co-operate with a system, which is exclusively under the control of their rival .

5. The system was not accessible to trading partners and interested third parties, which reduced the popularity of the SeaDocs Registry in the commercial world.

6. It was not free from paper documents and its use; in fact, SeaDocs Project was dependent on it and therefore, this project cannot be considered as an attempt to paperless trade.

7. The SeaDocs Project was considered by many as a ‘monopoly registry’, working for the protection of its own interests rather than trading parties.

8. The Project was not able to bring in traditional negotiability function, because the transfer of ownership was communicated with the carrier and endorsee.

9. “The Bills of lading Act, 1855, the legislation in operation at that time, would not apply in the absence of physical endorsement and transfer of bills of lading.” Therefore, when it comes to application of law, the SeaDocs project was not able to bring in the ‘document of title function’ as the law existing at that time does not recognise static bills of lading as a document of title , because of its premature ending, the SeaDocs Project did not face any challenge from legal fields.





3. CMI Rules & Electronic Bills of Lading (1990):



The Comite Maritime International (CMI) came out with CMI Rules for Electronic Bills of Lading in an attempt to solve the issues raised in the case of SeaDocs project and in support of United Nations Rules for Electronic Data Interchange . CMI Rules promotes UN/EDIFACT as a format of communication or messaging, but it is up to the participant’s choice . It was not a ‘system of electronic existence’, but it provides regulatory framework for shippers and carriers, who were ready to adopt electronic bills of lading. Rules were the proposal from CMI to the parties interested. CMI Rules proposed a ‘decentralised carrier oriented system’, a major shift from the centralised depository system of SeaDocs. However, it is left for the choice of the parties involved, if they desired to choose a depository system, it is possible by contractual incorporation (Rule.1) .



CMI Rules were subject to substantive law; it was not intended for a complete regulation of bills of lading procedure by substituting the substantive law. The Rules offer a contractual system to replace paper bills of lading with electronic bills of lading by replicating the functions of traditional paper bills of lading in electronic environment . According Rule 6 of CMI, the contract of carriage should be governed by the substantive laws or international conventions. Therefore, in the case of United Kingdom, Carriage of Goods by Sea Act 1971 and 1992 should govern the Contract of Carriage and Hague/Visby Rules should be governing negotiable bills of lading and its functions. Under this system, the carrier is entitled to issue an electronic document called ‘receipt message’ with the protection of a private key (combination of numbers and letters), for receipt of goods from shipper or seller and it is send to the electronic address of the shipper containing the name of the shipper, date and place of receipt of goods, the description about the quantity, quality and present condition of the goods, private key, terms and conditions of carriage etc . The shipper should confirm the receipt of message to become a valid holder of the ‘receipt message’ . The negotiation of ‘receipt message’ i.e. CMI electronic bills of lading is done by notifying the carrier. Consequently, the carrier issues a message and sends it to the electronic address of the new holder or future transferee. Then he should confirm the message by accepting the right of control. As a result of this action of the intended transferee, the carrier will cancel the previous CMI bills of lading and private key by issuing new ones. Only the holder of a valid private key is entitled to the delivery of goods at port of destination , name a consignee or replace him, instruct the carrier about the matters regarding the goods shipped and transfer the title of the goods etc. The private key is used as a secure method to authenticate the entire transaction. Therefore, holder of the private key is in corresponding position of the holder of paper bills of lading . Hence, the entire CMI Rules is revolving around the issuance of private key.



i) Drawbacks of CMI Rules for Electronic Bills of Lading :



1. CMI Rules lack provisions for the transfer of rights of the parties of contract and liabilities with the documents.

2. The Rules are silent on the issue, when the holder with the right to control or transfer is not in a position to pay the price of the goods, since the previous holder loses his right to control and transfer when the subsequent holder accepts the offer of sale.

3. There is no provision in the Rules regarding the passing of property.

4. CMI Rules are not free from fraud, because the communication (microwave or radio signals) of private key between the carrier and the shore is accessible by anybody in principle, especially when the digital signature system is not used by Rules. Therefore, the authenticity and integrity of the CMI Rules is left in the shadow of suspicion. Fraudster, who is in possession of the private key can act as the legitimate holder with right of control or transfer of goods and sell or re-sell the goods to an innocent party. The chances of fraud may arise, when the communication of private key takes place between the carrier and the future-subsequent holders. However, the communication between the ultimate shipper and the carrier is more secure, because it is the first transaction and private key is not required to transmit to third parties.

Moreover, the lack security related to the private key system made the banks to reject the CMI Rules.

5. CMI Rules is an instrument based on contracts, therefore, it will not allow the parties to choose or dispose of the application of the provisions of the applicable law.

6. In accordance with the provisions of CMI Rules, the carrier is acting as the central registry; this particular role brings additional administrative costs and it is burdensome for the Carrier.

7. The carrier’s role as a central registry is questioned by many, as for each negotiations the intervention of the carrier is required. Some traders finds it as a difficult stage in the CMI Rules 1991.

8. The CMI Rule is silent on the liabilities of the carrier; therefore, the carriers are not ready to accept a system, which does not clearly define their rights and duties.

9. The lack of administrative body is another drawback of CMI Rules, which made it unpopular among its users.

10. The legal effect of ‘private key procedure’ in the negotiation of document of title is under suspicion, because the making of negotiable document of title is the privilege of statutes. Therefore, the ‘document of title function’, and the status of ‘message receipt’ and ‘private key’ as the equivalent of traditional paper bills of lading were questioned .



4. @GlobalTrade Secure Payment and Trade Management System:



@GlobalTrade was the initiative of CCEWeb Corp. based in Toronto, Canada. This project was launched in 2000 and it’s commercial version in 2002. @GlobalTrade is not a system for replicating the functions of paper bills of lading in an electronic environment instead it is using electronic seawaybills; therefore, its main application is based on letter of credit transactions. @GlobalTrade is an internet oriented trade-processing system with interactive facilities and support all participants in trade namely sellers, banks, insurance agencies, buyers, carriers etc. to do the transaction on one system . @GlobalTrade is functioning in accordance with its own ‘rulebook’, CMI Rules for Seawaybills, UCP 500 (when it was launched), @GlobalTrade service contracts and INCOTERMS 2000 .



The core of the system is a ‘Document Clearance Centre’, which brings together the services of the “credit-issuing bank, advising bank, confirming bank and reimbursing bank .” By the use of electronic seawaybills, the services of the system are ‘open’ in nature. The financial institutions or banks issuing electronic letter of credit card and the potential buyers are supposed to enter into an agreement with the @GlobalTrade, to use its services. However, there is no obligation to all the participants of trade to register with @GlobalTrade or sign the service contracts. The functioning of the system is as follows:



The buyer gets an eLC Card from his financial institution or bank, which is used for obtaining documentary credits. Then the buyer should register with @GlobalTrade by using an electronic registration form through the participant financial institution or bank or by visiting the website of @GlobalTrade at www.cceweb.com . Then @GlobalTrade confirms the buyer’s registration by sending an email. Now the buyer can ‘log in’ via the participant bank into the system and apply for the issuance of electronic documentary credit. To process the application, the buyer should submit the recipient’s or beneficiary’s agreement to the conditions of the credit. Then the beneficiary or recipient will be notified by an email about the issuing of credits and document instruction templates of the documents needed for it . And then the beneficiary will demand the issuing of documents (seawaybills & insurance policy etc.) from trade service providers based on document instruction template. To complete the processing, the beneficiary will send the documents by using electronic message system (Internet) to the hub known as ‘document clearance centre’ for verification. After verification, the credit-issuing bank will release the funds in favour of beneficiary and the documents will be forwarded for import clearance as per the instructions of the buyer. To secure the entire transaction @GlobalTrade uses cryptographic technology and digital signatures for authenticity and integrity . “@GlobalTrade combines the functionality of a letter of credit with that of a credit card .”



i) Disadvantages of @GlobalTrade:



1. The @GlobalTrade is not intended to replace the paper based electronic bills of lading, it is using electronic seawaybills. Therefore, the system cannot be used to replicate the document of title function or negotiation of bills of lading in electronic environment.

2. The system is heavily dependent letter of credit transactions and its services are entirely based on it.




5. Other Paperless Trade Initiatives:



TradeCard, an e-commerce firm based in New York, offers its members, a patented system of trade document management and innovative financial settlement services. These services are equated with electronic letter of credit; in fact an alternative to ‘paper based’ letter of credit . In order to commence the application of TradeCard, the buyer should create an electronic purchase order by using the TradeCard applications or online market place. TradeCard then inform the seller about the pending purchase order. Then the buyer and the seller may negotiate the purchase order using TradeCard facilities. If both buyer and seller reached on acceptable sale agreement, they should authenticate the purchase order with digital signatures .



When the seller, prepared a packing list, invoice, and authenticated it, assurance of payment will be attached to the purchase order. Then the patented electronic compliance engine evaluates the shipping documents and purchase order. When the transaction is authenticated by the electronic compliance system, payment will be done electronically from buyer’s bank to seller’s bank. TradeCard is comparatively cheaper than traditional paper based letter of credit transactions . TradeCard provides ‘Supply Chain Visibility’, which is not possible with in traditional letter of credit transactions as financial institutions or banks cannot provide it .



Mandate is a concept developed by Marinade Ltd (UK) and Cryptomathic A/S (A security system developer from Denmark) with the support of European Commission. The primary objective of this concept was a complete replication of ‘negotiability function’ in electronic environment, i.e. “a generic method of achieving electronic negotiability.” Mandate transactions were meant for direct transactions between the concerned parties. In other words, there is no need of central registry system .



The Mandate Concept was the major raison d'être behind the Mandate-II Pilot Project funded under the European Commission’s Electronic Trusted Program. The Concept was implemented as ‘electronic cheque’. The Pilot Project was successfully experimented with major European Banks. The Concept’s success was regarded as a milestone in achieving ‘negotiability function’ in electronic environment without the use of central registry.



In addition, Marinade Limited acquired patent rights on this project. However, the application of successful model of negotiability function in electronic environment is yet to be answered in the case of bills of lading, because the negotiability function was successfully trialled only with electronic cheques. And the participating firms did not initiate any such proposal. Furthermore, the commercial version of the Mandate Concept is not yet launched, even after the successful completion of the pilot project in 1997 .



Another impressive project was EDIBOL. This project was sponsored by European Union during 1990s. And this project was also in search of an alternative method to achieve negotiability of electronic bills of lading. This project was considered as a parallel one to BOLERO . However, this project was not able to accomplish success at the end. This project proposed a relatively new concept known as ‘distributed registry’ . This can be achieved by storing electronic bills of lading in ‘BOL-Smartcard’ and using special encryption protocol . Thus, electronic bills of lading can be transferred from one smartcard user to another through internet and the digitally stored data in sender’s smartcard will be deleted automatically , thereby uniqueness of the bill of lading can be guaranteed. And the originality of the bill of lading was maintained by ‘Write once read many (WORM)’ concept of electronic technology . However, this project was always under suspicion that, any computer expert can alter the data stored in smartcard easily, it may not possible theoretically, but possible in the virtual world of computer technology . As already mentioned EDIBOL proposed a ‘distributed registry’ and it is always not controlled or administered by a Central Server as it is in the case of Central Repositories. Therefore, the originality of the electronic bill of lading cannot be guaranteed . And fraudster can easily duplicate a smartcard and sneak into the ‘transaction chain’ and defraud millions with just one transaction. Consequently the project was abandoned due to fear of large scale fraud .



There were more initiatives of paperless international trade; unfortunately, most of them are not in ‘active mode’ or no data available about their existence. Initiatives like Cyber Merchants Exchange, Ecredible, LConnect, Originals Online, and V-LC were met premature ending, renamed, or sold to other competitors . SoliDoc was an initiative of Oil companies namely Shell and BP, except an article in February 2002 issue of Petroleum Economist , detailed information is not available about this project. According to the article ‘battle for the back office’, SoliDoc was “designed to streamline the back office work of physical oil trade and digitise Bills of Lading .”



As already mentioned, @GlobalTrade and TradeCard were successful projects. However, these two projects are mainly focussing on ‘letter of credit style’ transactions and seawaybills. Contrary to the views proposed by @GlobalTrade, TradeCard and other systems of e-commerce, BOLERO is the only project capable enough to replicate the functions of Traditional Paper bills of lading in electronic environment by using ‘Title Registry’ and thereby ownership of goods attached to bills of lading can be transferred electronically between BOLERO users .



6. BOLERO (Bill of Lading Electronic Registry Organisation):



This was an inspirational project of a highly enthusiastic group of carriers, financial institutions or banks, traders, telecommunication companies and European Union in 1994 . However, after the initial trials, the project was almost abandoned. Later in 1997, the TT Club and SWIFT , two major organisations in International Trade joined the project and took the project into a new level by providing confidence to other partners. And in 1998, BOLERO Operations Ltd. was launched under the leadership of SWIFT and TT Club. Under the initiative of SWIFT and TT Club, BOLERO Association Limited (Association of Bolero Users), major Industrial Organisations and Companies conducted a detailed ‘trial-study’ on the functional and legal implications of BOLERO Project .



On 27/08/1999, the commercial version of the BOLERO was launched. The entire BOLERO system is administered by BOLERO International Ltd and BOLERO Association Ltd . BOLERO is a system of multilateral contract. The participants of BOLERO platform should become a member of BOLERO Association Ltd by entering into a contract with it . This action of the participants implies that, they are subjected to BOLERO Rule Book, its procedures of operation and another contract with BOLERO International Limited . There are different types of contracts namely basic contracts, commercial-corporate contracts etc. The contract between the participants and BOLERO system is in accordance with the Rule Book. And the Rule Book established, operational procedures to meet the present or existing legal requirements as there is no legal recognition for BOLERO bills of lading .

BOLERO includes two major components namely, Bolero Core Message Platform and Bolero Title Registry. The Core Message Platform is used as the channel of electronic communication among the BOLERO members and the Title Registry holds the record of the Members and Bolero Bills of Lading. In addition, the Title Registry deals with the legal responsibility and rights in connection with Bolero Bills of Lading .



The negotiability function of bills of lading under the BOLERO project is reproduced by using the doctrine of novation and attornment , because the BOLERO bills of lading does not possess a complete legal recognition in many jurisdictions. Hence, the BOLERO depends on a contractual instrument based on the doctrine of novation to deal with the international commercial trade transactions . Suppose a legal regime gives full legal recognition to electronic bills of lading, the principles of novation and attornment to transfer title with regard to BOLERO bills of lading may not be essential or if the legal regime does not recognize the electronic bills of lading, the evidential value of BOLERO bills of lading may be left with uncertainty. Consequently, the buyers, the financial institutions and banks will be depending on a document of no significance. Hence, this will lead to the collapse of entire system . To evade the collapse of the system, the BOLERO Rule Book proposes two solutions:

(a) The description made by the carrier regarding the marks, quantity, quality and nature of the goods in BOLERO bills of lading is binding on the carrier as it is in the case of paper bills of lading .

(b) The Rule Book brings the BOLERO bills of lading under the statutory protection of the International Conventions on bills of lading and National Laws of the concerned jurisdictions .



These two provisions of the BOLERO Rule Book, “bestow BOLERO bills of lading with statutory evidential value .” Moreover, if a legal regime only assigns the ‘negotiable document of title function’ to traditional paper bills of lading or the buyer is not a member of the BOLERO Association, in such a case BOLERO bills of lading cannot be used, and the only solution is paper bills of lading. Rule Book allows the use of paper bills of lading in such a situation .



The functioning of BOLERO: By issuing the BOLERO bill of lading to the shipper, the carrier dispatch a message to BOLERO Core Message Platform with a note that, the message is for shipper. Then, the BOLERO Core Message Platform, by confirming the genuineness of the message, acknowledges the reception of message to the carrier, endorses it with digital signature, and transmits to the shipper. The shipper is supposed to acknowledge the reception of the message. The name of the holder of the BOLERO bills of lading is then registered with BOLERO Title Registry. Thus at any given time, there will be only one holder of the BOLERO bills of lading, who can initiate the transfer of goods to a subsequent holder . Then for documentary credit purposes, if the shipper required transferring the BOLERO bills of lading to the financial institutions or banks, the shipper should correspond to BOLERO Core Message Platform . Subsequently, after confirming the authenticity of the message (instruction to transfer) by verifying it against BOLERO Title Registry, the BOLERO Core Message Platform adds the digital signature, forwards the message to the financial institution or concerned bank, and records the details of the new holder of the BOLERO bills of lading in the BOLERO Title Registry . The entire procedure will be repeated again in successive transactions .



In comparison with traditional bills of lading, BOLERO system has an additional stage: the use of Title Registry. However, the extra step does not have any limitations as electronic transactions can overcome any issues related to time consumption . In fact, the use of Title Registry brings a sense of security by reducing the risk of fraud. BOLERO achieves this by confirming the genuineness of all the messages and adding its own digital signature on them . Therefore, BOLERO acts as an independent trustworthy third party certification authority.



BOLERO obviously has many advantages. It accelerated and simplified international commercial transactions by using BOLERO bills of lading and successful replication of the three main functions of traditional bills of lading. However, BOLERO is a ‘closed subscription system’, i.e. all parties using BOLERO platform should be members of BOLERO Club. But, a significant proportion of the international commercial community is not part of the Club. This lead to the frequent switching to the paper bills of lading or paper documentation and the use of sophisticated technology made BOLERO unsuitable for underdeveloped and developing countries . Moreover, the application of Article 3.1.3 of BOLERO Rule Book is not sufficiently clear, especially when it is relying on the Doctrine of novation and attornment to reassign rights and duties as part of the contract. The principle of novation replaces the shipper or holder of the BOLERO bills of lading with subsequent users in the new contract with the carrier. There is a reservation regarding the evidentiary value of BOLERO bills of lading, whether it is a prima-facie evidence or conclusive evidence with regard to the new parties or subsequent holders against the carrier?. Due to the lack of “statutory presumption,” the subsequent holders are forced to rely on the Doctrine of Estoppel under Common Law, if the carrier disputes the representations of BOLERO bills of lading. Moreover, as mentioned earlier, the BOLERO cannot function efficiently, when the national legislation of a particular state needs paper documentation system for its trade transactions .



II.7 The Practical, Legal Challenges and the adoption of Electronic Documentation System:



The Paperless initiatives of International Sea Transport revolutionised, the views of the Commercial community to the electronic documentation system. Now they know the benefits of electronic alternatives. However, the ‘Marvellous Projects’ like BOLERO, @GlobalTrade, and TradeCard are not able to achieve the confidence of the commercial community. Even after the successful replication of ‘document of title function’ of traditional bills of Lading, BOLERO Project is not attaining the acceptability of Commercial community at large. Two major reasons lead to the formation of this particular situation. They are: (I) Practical Challenges and (II) Legal Challenges. The dissertation is now focuses on these issues.



(I) Practical Challenges:



When considering the practical challenges, the need of electronic alternatives to traditional paper bills of lading and the hindrance to successful implementation of it should be answered. The primary obstacle to the electronic alternative is “cross border factor” involved in international sale of goods. In international sale of goods, the goods travel from one legal jurisdiction to other and this involves developed countries, developing countries and least developed countries . The adoption of electronic alternatives in developing countries is still in its infancy. In addition, the position in least developed countries is very inferior. However, the traditional paper bill of lading is serving the international commercial community for centuries without much problems and it is a ‘time-trusted solution’. The legal fraternity in many countries including least developed countries are more clear about traditional paper bills of lading.



A simple international sale of goods transaction involving electronic alternatives of paper bills of lading has to consider minimum three legal systems . The law governing the ‘ownership rights of the goods, the contract of carriage and the registry system’. Considering three different legal regimes in an electronic environment in comparison with paper documentation system is very complex .



The ‘central repository system’ or ‘central registry system’ proposed by the electronic alternatives of paper bills of lading is not suitable for the present legal systems (suitable only for traditional bills of lading and requires physical transfer of documents ) and ‘registration’ to a third party is not required according to it. As already mentioned ‘registration’ according to the present legal regimes is an unnecessary step or in other words the legal system is ill equipped to deal with ‘central registry system’. Moreover, in the case of Multiple String Contracts involving paper documents, “the ownership of the goods is transferred by mere endorsement and by physical delivery of the bills of lading; the rights of the intermediate endorsee is not legally clear with regard to electronic alternatives .” Therefore, legal regimes require a reformation or amendments to deal with the new registry system .



The UNCITRAL Model Law on Electronic Commerce, 1996, proposals about the electronic alternative of the paper bills of lading, not yet achieved a significant success and the international laws regarding the transfer of property rights in sale of goods is not uniform . Moreover, it is very difficult to harmonise international laws in this area .



All these aspects lead to the formation of a situation, which is less favourable to the electronic bills of lading. The UNCTAD Survey held in 2003 confirmed that, inadequate Legal framework was among the major reasons for not implementing electronic system of bills of lading . The BOLERO Project determined to solve the lack of Legal framework in connection with electronic bills of lading by establishing a multi contractual system of private law in international scenario . As already mentioned, the use of trusted third party is not required in the case of traditional paper bills of lading. However, electronic alternatives require trusted third party service providers and they need membership due to security reasons. Moreover, the operational integration with third party service providers necessitates payment of fees . However, if the sale of goods is with an outsider i.e. a non-member, then the whole system is ineffective and simply a waste of money, especially when the carrier, shipper or other members of international commercial community is dealing with least developed or developing countries. The insurance costs regarding electronic alternatives are very high because these are not ‘time- trusted solutions’ . When implementing electronic alternatives, volume of trade also should be taken into account, the whole system is not suitable for small traders, because his commercial interests and costs for electronic alternatives won’t match .



Confidentiality and security of information is another concern for traders, they are worried about governmental action by accessing their trade transactions for tax related matters etc . However, as a closed system, non-members cannot access the electronic projects like BOLERO, the government or other legal authorities may seek access to deal with commercial-legal matters. For e.g. In the case of Fraud, Commercial scams etc.



Bills of lading is not a single document, many other documents are also issued with it, namely, “export certificates, quality certificates, insurance certificates and certificate of origin etc”. Therefore, other documents also should be transformed into electronic format. However, some of the above mentioned certificates are issued by state authorities at ports. If they do not issue or accept certificates in electronic format, then the whole purpose of issuing electronic bills of lading will be of no use . Another issue is with regard to financial institutions, if the banks or financial institutions in developing countries or least developed Nations do not accept electronic bills of lading for the purposes of letter of credit transactions, the whole system of electronic document system will meet a dead-end.



The practical challenges include, another question, who will be held responsible or liable for ‘system breakdown’ in the case of electronic alternatives. Moreover, electronic based systems are always susceptible to system breakdown or electronic threats like viruses, spywares, malwares etc. A simple system breakdown may make the situation complex, for e.g. the status of the rights of the holder of the electronic bills of lading will become uncertain. The BOLERO tried to answer the situation by introducing the ‘liability clause’ in the multilateral contract and by “accepting liability for messaging and certification services .” In other words BOLERO accepts responsibility for misdirected, misplaced, belated, fraudulently created or validated messages and certificates . No such cases reported, even after 10 long years . However, the amount for which, the BOLERO is liable in the case of prospective loss is low. Consequently, the commercial community is unwilling to use electronic systems like BOLERO, especially, if the sale involves billions . At this juncture, we should consider, lots of money are lost by fraud or other related factors in the case of paper documents. Therefore, it is clear that, the conservative attitude of the commercial community is the main reason, which stalled the progress of electronic alternatives like BOLERO. And this is proved in UNCTAD Survey held in 2003.



Several legal regimes consider negotiable bills of lading as true negotiable document, which can provide a good title of ownership. However, in United Kingdom, the document is not considered to have the “same inherent proprietary value , because in accordance with English Law, the bill of lading is a quasi-negotiable and it lacks ‘true negotiability’ i.e. the ability to pass free from all equities and its transfer does not confer a better title on transferee .” And the ‘true negotiability’ of electronic alternatives of paper bills of lading is under the scanner of the critics of electronic versions. The critics are biased in their views, the quasi-negotiable status of the paper bills of lading is considered as a customary development as part of common law traditions, and however, when considering the theme of electronic alternatives, they are not liberal and insist for a true negotiability from it .



“According to UNCTAD Survey, the lack of genuine market interest in respect of the use of electronic documents was a reason, which stopped the success of electronic alternatives of traditional bills of lading. ” The international commercial community is reluctant to use electronic alternatives of traditional bills of lading, because they are satisfied with the current international trade transaction set up . Even if the paper based system has many limitations, the international commercial community is focusing only on the ‘time factor’ , according to them, the present system is ‘time proven one’ and at the moment, there is no need of switching to electronic version and bring unnecessary complexities into picture. In addition, there is no persuasive factor to use electronic alternatives. In fact, according to academicians and scholars of international trade, it’s a matter of ‘psychological barrier’ rather than ‘practical or legal barriers.’



(II) Legal Challenges:



The dissertation is now focussing on the legal barriers of electronic bills of lading. As already mentioned in the previous part of this dissertation, the lack of proper legal framework is considered as the one of the main obstacle or challenge to implement electronic alternatives of traditional bills of lading. If the electronic version achieves legal validity, members of the international commercial community may come forward to test it. Most commercial legislations or conventions are not suitable for electronic bills of lading, as they are only suitable for paper bills of lading. These legislations or conventions are developed in accordance with centuries old legal traditions, when paper was the only available source of documentation.



In the opinion of Ake Nilson , the difference between paper as the information carrier and the paper as token is noteworthy . The paper’s duty as information carrier can be easily replicated in electronic format. However, the transformation of paper “traded as token for a specific value” into electronic format is much more complex . The main concern regarding the electronic format is that, it does not physically exist ; instead it exists in the ‘virtual electronic world’. Thus, in accordance with ‘traditional-thinking’ the electronic versions cannot be a physical token for specific value . In the case of negotiable bills of lading, the ‘uniqueness of the document’ is very important, because the document “represents a definite value.” The documents in electronic format are very easy to duplicate and therefore, it cannot guarantee uniqueness . Hence, negotiability of electronic bills of lading is not possible.


Considering these arguments, the UNCITRAL, acknowledged the ‘guarantee of singularity’ as an essential requisite of electronic bills of lading or any such initiative . As mentioned earlier, the innovative concepts like BOLERO met this requisite by registration. However, the concepts like BOLERO lack a clear and precise legal backup. This implies that, the court of law may not accept electronic bills of lading as an equivalent of traditional version .



According to UNCITRAL Model Law on Electronic Commerce, 1996, “information should not be denied effectiveness, validity or enforceability solely on the ground that it is in the form of a data message and also provides in reference to admissibility and evidential value of data messages in any legal proceedings, that nothing in the application of the rules of evidence shall apply so as to prevent the admission of a data message in evidence on the ground that it is a data message .”



These are considered to be main legal barriers or Evidential admissibility and reliability issues:

(a) Rights of the holder of the electronic bills of lading.

(b) Writing Requirement.

(c) Signature Requisite.


(a) Rights of the holder of the electronic bills of lading:


According Carriage of Goods by Sea Act, 1992, “the lawful holder of the bills of lading, shall have transferred to and vested in him all rights of suit under the contract of carriage as if he had been a party to that contract .” However, according to S.1 (1) of the Act, consider bills of lading as a ‘document’. Then an important question arises, whether electronic bills of lading can be considered as a ‘document’.


‘In Derby & Co v. Weldon


Justice Vinelott held that, the information stored in the database of a computer or in a backup file and which can be reproduced into readable format is a document.’ However, the Carriage of Goods by Sea Act, 1992 (UK), considers the bills of lading as a paper document, because it should be signed and there is no clear or express mentioning of digital signatures and electronic documents . Moreover, “according to S.5 (2) of Carriage of Goods by Sea Act, 1992, considers holder as a person with possession of the bills of lading. There is ambiguity in this regard, it is difficult to establish the electronic bill of lading, which is accessed by cryptographic methods is in the possession of the particular party. Therefore, electronic bills of lading cannot be an object of possession as paper bills of lading .” Therefore, the acceptability of electronic bills as a ‘proper document’ or ‘legally valid document’ is questioned here and negotiation of electronic bills of lading might not transfer the same rights (including title to sue) as it is in the case of paper bills of lading under the contract of carriage . This will clearly jeopardise the rights of the holder of the electronic bills of lading in comparison with traditional paper bills of lading.



How far the litigants can depend on Electronic Communications Act, 2000 is an unanswered question. The Carriage of Goods by Sea Act, 1992, which is dealing with bills of lading, is silent about electronic bills of lading and the supporters of electronic bills of lading are trying to superimpose the electronic bills of lading into the Act and thereby attain acceptability for it. These attempts to superimpose, actually makes the situation into a more complex one.



In accordance with S.1 (5) of the Carriage of Goods by Sea Act, 1992, the application of the Act can be extended to electronic alternatives; however, no such extension has been done in this regard. And just a legislative extension cannot resolve the issues of uncertainty in this regard and considered as the one of the main reason behind the letdown of the electronic bills of lading. However, the situation is more clear in Australia, according to Sea Carriage Documents Act; a sea carriage document in the form of electronic message is given the same status of the paper document .



(b)Writing Requirement:



According to Interpretation Act (UK), 1978, “writing means typing, photography, printing, lithography and other modes of representing or reproducing words in visible form .” “The electronic document visible on the computer screen fulfils the definition of writing .” Therefore, in England electronic document is considered on equal par with paper document in the case of writing requirement and in almost all technologically advanced countries as well. And the UNCITRAL Model Law on Electronic Commerce, 1996, also recognises the data message as writing. Nevertheless, only the agreement between the parties to contract will initiate the application of Model Law .



However, when considering the bills of lading, the writing on paper is not expressly specified in Hague/Visby Rules. But the Carrier has a duty to issue bills of lading, when Shipper asked him to do so and information regarding the quantity and quality of the goods should be inserted on it . Then one question should be answered, what will be the end result of issuing electronic bills of lading by the carrier in this context. Obviously, there are two opinions, one is in favour electronic bills of lading and the other one is against it . The Hague/Visby Rules was drafted during a period, when the electronic communication was not much advanced. Therefore, it is highly improbable that, the drafters considered the application of Hague/Visby Rules to electronic bills of lading. The second opinion is that, admit the use of linguistic meaning of the word ‘issue’ and thereby allow the use electronic bills of lading under Hague/Visby Rules. Therefore, the application of Hague/Visby Rules in the case of electronic bills of lading is vague. On the other hand, the Hamburg Rules recognises the electronic bills of lading or leaves a possibility by stating the use of electronic signatures . It is clear from the previous statement that, if required, the Hamburg Rules can adopt the electronic bills of lading. However, the Hamburg Rules is not accepted by major trading nations of the world in comparison with the Hague/Visby Rules and the use of electronic signatures is only possible, if it is consistent with the laws of the state, where the bills of lading is issued .



(c) Signature Requisite:



Manual signature is the universal authentication method accepted by both International and National Legislations or Conventions. Signature of a person links him to the contract and in case of litigation, it is considered as the primary evidence. Therefore, a signature plays a major role in linking a person with other parties of the Contract, which allows the Court of Law to interpret the legal rights and liabilities of each party to the Contract. Moreover, there are different forms of signatures other than Manual Signatures. They are: (a) Secret Digital Codes (b) Digital Signatures and (C) Biometric Signatures .



For the purposes of this dissertation, only Digital Signatures or Electronic Signatures are considered. The acceptability of Digital Signature in a Court of Law is the main concern of the promoters of the electronic bills of lading. At different stages of sale transaction the traditional bills of lading needs to be signed and as an alternative of the traditional bills of lading, the electronic bills of lading also should be authenticated, when necessary. The authentication of electronic document is only possible through an electronic medium.



As stated earlier, The Hamburg Rules expressly accepts the use of electronic signatures. This was considered as the major proposal for initiating electronic documentation system by United Nations .



In United States of America, the State of Utah came up with a legislation known as ‘Utah Digital Signature Act, 1995’. This Act gave legal backup to electronic messages by recognising digital signature and cryptographic technology. Moreover, this Act was considered as the first ever National Legislation acknowledged the use of digital signatures and Part-IV of the Act gives the digital signature same legal recognition as Manual signature . The provisions of the Act, does not expressly applicable to electronic bills of lading. However, the Act offers clear provisions regarding the use digital signatures to a variety of documents. Hence, this Act, paves a route map for the adoption of digital signature internationally .



In United Kingdom, the Electronic Communications Act, 2000 and Electronic Signatures Regulations, 2002, forms the legal backing of electronic signatures. These legislations are in line with European Union Directive 1999/93/EC and initiate a broad scope for the application of the digital signature. The ‘Advanced Electronic Signature Concept ’ was also put forward by these legislations.



“According to Electronic Communications Act, 2000, the admissibility of electronic signatures as evidence in a Court of Law is possible under these circumstances: (i) If the electronic signature is certified. (ii) If the electronic signature is included in an electronic communication. ”



In PNC Telecom plc v. Thomas and another , the court confirmed the legislative standpoint on electronic signatures.



In 2001, The Model Law on Electronic Signatures was ratified by the United Nations. The Model Law was formed as an aid of the UNCITRAL Model Law on Electronic Commerce, 1996 and to facilitate the states to enact legislations in favour of electronic signatures . Art. 16 and 17 of UNCITRAL Model Law on Electronic Commerce, 1996, introduces the scheme of absolute replacement of traditional bills of lading with electronic bills of lading with the assistance of the Model Law on Electronic Signatures.



However, the Digital Signatures is not competent enough to substitute the traditional paper based electronic bills of lading because, the International Commercial Conventions or National Legislations does not expressly acknowledge the transferability of an electronically authenticated electronic document as negotiable document of title .



II.8 Rotterdam Rules-A New Era of Electronic Documentation:



The information technology developments brought its effects to sea transport as well. However, as noted above, the uncertainty in the legal field stalled the successful implementation of the electronic documentation system in sea transport . Among them electronic alternative of the bills of lading became a ‘hot-topic’ in international level and at academic level as well.



The present legal system dealing with International Carriage of Goods by Sea is not in a position to adopt uniformity and contemporary sea transport requisites, especially, in the case of electronic alternatives of transport documents . The new rules of international contracts of carriage wholly or partly by sea is expected to promote legal certainty in this regard . These rules known as ‘Rotterdam Rules’ would encourage innovative projects like BOLERO and may increase its acceptability or the formation of new system of electronic bills of lading, functioning independent of trusted third party service providers.



In 2001, the 34th session of UNCITRAL constituted Working Group III on Transport Law. The main assignment was related to the formation of a legislative convention on matters of international carriage of goods. The Rotterdam Rules is the product of seven to eight years negotiations in UNCITRAL . The Rule was prepared in a collaborative effort with other international organisations like Comite Maritime Intrenationale (CMI), the International Chamber of Commerce (ICC), the International Union of Marine Insurance, the International Federation of Freight Forwarders Associations, the International Chamber of Shipping and the International Association of Ports and Harbours .



In the Rules, there is no express mentioning of bill of lading instead it is referred as ‘transport document’ or in the case of electronic alternative as ‘electronic transport record’ (both negotiable and non-negotiable) and the word ‘data messages’ used in Model Laws was replaced by ‘electronic communications ’. According to Drafters, it might lead to a uniform interpretation across the legal regimes of the world and at national or international level the courts may not find it difficult to interpret Rotterdam Rules with previously developed principles or this may lead to the increased acceptance of newly developed systems.



According to Art.3 of the Rotterdam Rules, some communications should be in writing, especially, the carrier’s representations regarding the leading marks required for the identification, quantity and weight of the goods. However, the electronic communications may be used for this purpose, provided with the consent of the concerned parties and it is reaffirmed in Art.8 of the Rules. The consent of the parties is very important, especially, when one of the parties to the contract may be from a country, whose legal regime does not accept or recognise electronic communications . Hence, with the consent of the parties, electronic transport records may be used in international carriage of goods and thereby Rotterdam Rules confer same legal status of the paper documents on electronic communications . However, the provisions regarding ‘Consent’ may be used by the opponents of electronic transport records to evade its use in International Trade, because of ‘psychological barrier’ to attempt a New Concept.


Art.9 of the Rules provides procedures for the use of negotiable electronic transport records and Art.10 of the Rules provides guidelines for replacing an already issued negotiable transport document with negotiable electronic transport record and vice versa. Therefore, the Rotterdam Rules ensures a smooth transition of negotiable transport documents to negotiable electronic documents and vice versa in accordance with the desires of the parties.



One of the major points to be noted here is that, Art.8, 9 and 10 are balanced in their nature towards technology and this promotes or accepts all sorts of systems including potential new developments, which may be on the basis of registry system or not .



The main ‘legal functions’ of traditional bills of lading is replicated by Rotterdam Rules. Now this dissertation is intended to analyse these ‘functions’ with regard to electronic transport records.



(a) The Receipt Function :


The transport documents and electronic transport records is dealt in Chapter.8 of the Rotterdam Rules. According to Art.35 of the Rules, when the shipper delivered the goods for carriage, the carrier has mandatory duty to issue a transport document or electronic transport record. The express mentioning of the electronic transport records in the Article clears the vagueness in the previous conventions and national legislations with regard to electronic records. Then Art.36 of the Rules put forward the contract particulars, which should be included in the transport document or electronic transport record. “These are the particulars:

(i) Description of the goods.

(ii) The leading marks necessary for identification of the goods.

(iii) The number of packages or pieces, or the quantity of goods.

(iv) The weight of the goods.

And then the following details also should be included:

(i) A statement of the apparent order and condition of the goods.

(ii) The name and address of the carrier.

(iii) The date on which the carrier or a performing party received the goods, or on which the goods were loaded on board the ship, or on which the transport document or electronic transport record was issued.

(iv) If the transport document is negotiable, the number of originals of the negotiable transport document, when more than one original is issued.

(v) The name and address of the consignee, if named by the shipper.

(vi) The name of a ship, if specified in the contract of carriage.

(vii) The place of receipt and, if known to the carrier, the place of delivery.

(viii) The port of loading and the port of discharge, if specified in the contract of carriage .”



Moreover, the Rotterdam Rules also includes provisions regarding electronic signatures . Art.38 of the Rules expressly accepts the electronic signatures. According to it, “an electronic transport record shall include the electronic signature of the carrier.” Therefore, by recognising the electronic signatures, the Rotterdam Rules made the circumstances more favourable to electronic transport records.



In addition, Art.41 of Rotterdam Rules considers the evidentiary effect of both transport documents and electronic transport records. According to this article, “transport documents and electronic transport records constitute a prima facie evidence of the carrier’s receipt of the goods .”



The above mentioned provisions of Rotterdam Rules made it possible for the transport document, especially the electronic transport record to ‘do’ the receipt function of the traditional paper bills of lading .



(b) The Contract of Carriage Function :


Art. 12 of the Rotterdam Rules provides the period of responsibility of the carrier. The period of responsibility begins, when the carrier receives the goods for carriage and ends when the goods are delivered. The Chapters 4 to 6 of Rotterdam Rules handles, the obligations of the carrier, damage or delay, the carrier’s liability for loss and additional provisions relating to particular stages of carriage. And Chapter 12 deals with the limits of the carrier’s liability and Chapter 13 gives Time for suit . Moreover, Chapter 11 deals with Transfer of Rights in the case of negotiable transport documents and electronic transport record. According to Art. 57, when a negotiable transport document or negotiable electronic record is issued, its holder may transfer the rights incorporated in it, to another person. And Art.58 provides liability of the holder . These provisions stated above, unquestionably capable enough to perform the contract of carriage function of the paper bills of lading. The point to be noted here is that, electronic transport records stands in equal par with transport documents with regard to the contract of carriage function.



(c) Document of Title Function :


The Rotterdam Rule grants ‘symbolic or constructive possession of goods- power’ to both ‘transport documents’ and ‘electronic transport records’. Art.47 of the Rule deals with delivery, when a negotiable transport document or negotiable electronic transport record is issued. In addition, the holder of transport document (upon surrender) or electronic transport record (upon demonstration in accordance with Art.9) is entitled to claim delivery from the carrier after the goods have been arrived at the port of destination and thereby Art.47 clearly confers the ‘document of title’ function on electronic transport record .


According to Art.51 (4), when negotiable electronic transport record is issued, with respect to the rights of the controlling party the following rules apply :

(i) “The holder is the controlling party.

(ii) The holder may transfer the right of control to another person by transferring the negotiable electronic transport record in accordance with the procedures referred to in article 9, paragraph 1.

(iii) In order to exercise the right of control, the holder shall demonstrate, in accordance with the procedures referred to in article 9, paragraph 1, that it is the holder.”


Therefore, both negotiable transport record and electronic transport record is good enough to handle or transfer the constructive possession of the goods to its new holder in accordance with Rotterdam Rules . However, the Rotterdam Rules is not clear on transfer of title of the goods from transferor to transferee of the negotiable electronic transport record, because it is considered as an issue of international sales law, by the drafters. Therefore, negotiability of electronic transport record is still an issue by some scholars of International Trade .



According to Art.75 of the Rules, the parties may agree that any dispute that may arise relating to carriage of goods under this convention shall be referred to Arbitration. The inclusion Arbitration Clause is considered as another attempt of Rotterdam Rules to enter into traditionally untouched areas. In case of any disputes between the parties, they can resort to arbitration procedure. The adoption of Arbitration clauses may reduce the conflicts between different jurisdictions or legal regimes involved in the whole process of shipping and may bring some harmony during transition from traditional regimes to Rotterdam Rules and thereby provide time for legal regimes to adopt the Rules successfully .



Criticisms: “Multiple ‘opting-out’ provisions may lead to the avoidance of important or explicit rules by many participants to protect their interests. ” However, this may lead to the letdown of the Rotterdam Rules . In the opinion of the learned scholars, “the language of the Rotterdam Rules is very complex and unfamiliar in its nature and which may set aside established jurisprudence of many years ”. According to Prof. William Tetley (McGill University, Canada), it’s just a Contracts Act, not a Transport Convention .



However, Rotterdam Rules put forward a much awaited legal recognition to negotiable electronic transport record, which functions same as traditional paper bills of lading . Now it’s with the members of the United Nations, Major Maritime Nations, Emerging Economies and Developing Countries to adopt the Rotterdam Rules and bring legal certainty to negotiable electronic transport records and its dealings . Even if the Rules found unpopular after its adoption, it may be helpful in the formation of National Legislations supporting electronic alternatives of the bills of lading and it can be also used as an applicable law to carriage contract, if the parties wishes so .



II.9 Solutions or Roadmap to Success:



The Rotterdam Rules is only a solution to the legal uncertainty. According to UNCTAD Survey, the lack of infrastructure development, in ‘trade- partner countries’ is considered as the major reason for holding back progress in the area of electronic documentation. As already mentioned, the issues regarding infrastructural developments to deal with electronic alternatives in the ports cannot be resolved without state’s involvement in the matter . The development of an international infrastructure to deal with electronic documentation system in all areas of trade is still in its infancy. As an initiation, the states should acknowledge the electronic medium of documentation in its administrative wings, which are directly dealing with export and import. For e.g. The Customs, Health and Security wings of the state’s administration .



The United Nations Centre for Trade Facilitation and Electronic Business and UNECE recognised this view in 2005 by issuing a ‘paper’ known as ‘A Roadmap Towards Paperless Trade’ . According to this ‘paper’, as already stated in the introduction of this dissertation, the adoption of electronic alternatives will reduce the costs incurred by paper documentation and improved transparency and security will be the by-products . Moreover, the states or governments should give a ‘special treatment’ to traders who utilize the electronic documents to present the information during international trade transactions . The ‘special treatments’ will draw small or medium traders towards the electronic alternatives .

Roadmap for Electronic Documentation System :

[I]. Integration of Rotterdam Rules with National Legislations, especially Carriage of Goods by Sea Act, Export and Import Rules etc.

[II]. Expansion of the Electronic Customs Declaration System.

[III]. Electronic Integration of all the Government Administrative Wings related to Export and Import.

[IV]. Electronic Interlinking of all Major Ports and National Trade Centres, thereby better Service to Commercial Community at large.

[V]. Creation of an Electronically Integrated National Logistic Platform, by Interlinking the Administrative Wings of the State, managing Export and Import, with the Commercial Community and Financial Institutions or Banks for better Administration.

[VI]. Electronic Integration of National Logistic Platform with Regional Trade Centres or Information-Exchange Systems.



The adoption of electronic documentation system is beneficial to individual traders, Multinational Companies, financial institutions or banks and the Nation as a whole.


The commercial community will be benefited in such a way that, “the processing expenditure in relation to paper documentation will be reduced and greater precision in supply chain and information exchanging .” The financial institutions or banks or other trusted third party service providers may be able to “develop new systems for value added services known as automated trading and tracing systems to observe the document processing and other related matters .” The states will get benefited by infrastructural development, which makes them more attractive for international commercial community. In addition, the trade transactions may be more secure and taxes or revenues from international trade can be collected in an efficient manner by avoiding fraud or tax evasion and costly delays at national borders can be minimised .



In accordance with ‘paper’ published by UNECE, the electronic alternatives cannot be adopted within a short span of time. The adoption of electronic documentation is a time consuming process . Therefore, during transition from paper to electronic alternatives both the ‘documentation systems ’ should be recognised by law as well as by commercial community. This situation increases the significance or importance of Rotterdam Rules. The adoption of Rotterdam Rules will bring the international commercial community into a ‘transition period’. Therefore, the adoption of the Rotterdam Rules should be considered as the first step towards electronic documentation system by a State. And the transition period would be successful only if it is headed by the state, because the integration of the Rotterdam Rules into its National Legislation requires amendments or reformation. This includes recognition to electronic signatures or digital certificates, the admissibility of electronic transactions in courts as evidence etc.



Moreover, the UNeDOCS Project introduced a standard data based repository for International Trade as part of providing route map to adopt electronic alternatives during ‘transition period’. This repository helps to coordinate the international standards for making international electronic trade documents, UN EDIFACT and XML . The UNeDOCS Project also offers an ‘International Trade Single Window Projects’ to help the states to pass the transition period successfully. The ‘International Trade Single Window Projects’ is a Logistic platform interlinking all administrative wings of the government to deal with administrative procedures of International Trade . Therefore, no need to submit same documents to different governmental agencies for the purposes of International Trade and thereby the elimination of costly time consuming duplication process. And only a single ‘application form’ is enough, to meet the necessities of the International Trade. The Single Window Project can be considered as an encouragement for the traders to use electronic documentation system during transition period .



Therefore, by providing a legal backup and necessary infrastructural development, the international commercial community may adopt electronic documentation system in the near future under the leadership of the State.


II.10 Conclusion:


The complications involved in the international trade, the lack of infrastructural developments, legislative support and the cross border nature of the International Sales of Goods slowed down the successful adoption of the Electronic Documentation System in Sea Transport. However, the introduction of Rotterdam Rules may change the situation and the plight of the Electronic Documentation System. If the Rotterdam Rules is successfully adopted by Major Trading Nations of the World and if it is not going to meet the fate of Hamburg Rules, 1978, there is no doubt that, Paperless Documentation System is expected to become a ‘Standard Format’ of International Commercial World in the near future.



As already stated, the ‘Psychological Reason’ is considered as a barrier in the adoption of Electronic Documentation System. The International Commercial Community of the Modern World acts like Prehistoric Men in this regard. The primitive men used particular kind of fruit shell to store oil, wine and other liquids. Since the bottom of the shell was round, it cannot be placed on a flat surface. Therefore, it was placed in sand or supported with other equipments. Later, when the primitive men made bottles from clay its bottom was also round in shape! . Hence, this dissertation keeps the entire hope on Rotterdam Rules and its successful adoption.

[Reproduced - Part of  LL.M. Dissertation submitted to University of Wales, Cardiff, United Kingdom]

II.11 Bibliography:

Books & Journals:

• Athanassios N. Yiannopoulos, Ocean Bills of Lading: Traditional Forms, Substitutes and EDI Systems. International Academy of Comparative Law, Published by Martinus Nijhoff Publishers, 1995.


• David A. Glass, Freight FORWARDING AND MULITIMODAL TRANSPORT CONTRACTS LLP, London & Singapore, 2004.


• Damas, Philip: E-shippers kick the paper habit, American Shipper, February 2001, (http://www.cceweb.com/amshipfeb2001.htm)

• Emmanuel T. Laryea, Paperless Trade: Opportunities, Challenges and Solutions. Published by Kluwer Law International, 2003.

• Emmanuel T. Laryea, Paperless Shipping Documents: An Australian Perspective. Tulane Maritime Law Journal.

• E. Van Hooydonk, H. Boonk, English and Continental Maritime Law: After 115 Years of Maritime Law Unification : a Search for Differences Between Common Law and Civil Law, Published by Maklu, 2003.

• Florian Gehrke, New Attempts at Electronic Documentation in Transport

Bolero – The end of the experiment, the beginning of the future?

( http://www.uctshiplaw.com/theses/gehrke.pdf)

• Felix W. H. Chan, Jimmy J. M. Ng, Bobby K. Y. Wong, Shipping and logistics law: principles and practice in Hong Kong, Published by Hong Kong University Press, 2003.

• George F.Chandler: -Fundamentals of Maritime Electronic Commerce, Self Publication, Houston/Texas, Sept. 2000, The Electronic Marine Insurance Certificate, International Trade Law Journal, 1999, Maritime Electronic Commerce for the Twenty-First Century, Tulane Maritime Law Journal, 1998. The Electronic Transmission of Bills of Lading, JMLC , 1989.

• Indira Carr, Peter Stone, International Trade Law, Edition: 3, Published by Routledge Cavendish, 2005.

• Internet Law- Electronic Signatures in UK, Internet Business Law Service. http://www.ibls.com/internet_law_news_portal_view.aspx?s=latestnews&id=2082 (Accessed on 15/03/2009).

• John F.Wilson, Carriage of Goods by Sea. Sixth Edition, Published by Pearson Education, 2007.

• Livermore, John; Krailerk, Euarjai: Electronic Bills of Lading and FunctionalEquivalence, published 30. June 1998, (http://elj.warwick.ac.uk/jilt/ecomm/98_2liv/)

• Marek Dubovec, The Problems and possibilities for using Electronic Bills of Lading as Collateral, Arizona Journal of International and Comparative Law Vol.23, No.2 2006. (www.law.arizona.edu/journals/ajicl/AJICL2006/vol232/Dubovec%20note.pdf (Accessed on 09/01/2009)

• Miriam Goldby, The performance of the bill of lading’s functions under UNCITRAL’s draft Convention on the Carriage of Goods: unequivocal legal recognition of electronic equivalents, The Journal of International Maritime Law, Lawtext Publishing Limited, 2007.

• Goldby, M, Electronic bills of lading and central registries: what is holding back progress? Information & Communications Technology Law, 17:2,125 — 149, 2008.

• Michael Salter and Julie Mason, Writing Law Dissertations, An Introduction and Guide to the Conduct of Legal Research. Published by Pearson Education, 2007.

• Martin Dockray, Katherine Reece Thomas, Third Edition, Published by Routledge Cavendish, 2004.

• Maurice Schellekens, Electronic signatures: authentication technology from a legal perspective, Published by Cambridge University Press, 2004.

• Raphael Brunner, Electronic Transport Documents and Shipping Practice: not yet a married couple, 2007 (http://web.uct.ac.za/depts/shiplaw/theses/brunner.pdf )(Accessed on 15/03/2009)

• Richard Gwynne, Putting the “e” in BLs, 2004. (http://www.tfreview.com/xq/asp/txtSearch.Legal+Issues/exactphrase.1/sid.0/articleid.C6FEB669-D511-4741-B56F-13F2E59EF123/qx/display.htm) (Accessed on 12/03/2009)

• Robert Force, Martin Davies, Jurisdiction and Forum Selection in International Maritime Law: Essays in Honour of Robert Force. Published by Kluwer Law International, 2005.

• Ronald M. Lee, Vu Nguyen and Anastasia Pagnoni, Securing Uniqueness of Rights e-Documents: A Deontic Process Perspective, Journal of Theoretical and Applied Electronic Commerce Research, Vol.3, Issue 3, December 2008.

• Roushi Low, Replacing the paper bill of lading with an electronic bill of lading: Problems and possible solutions. International Trade and Business Law.

• Sharon Christensen, William Duncan & Rouhshi Low, The Requirements of Writing for Electronic Land Contracts – The Queensland Experience Compared with Other Jurisdictions. (http://www.murdoch.edu.au/elaw/issues/v10n3/christensen103.html) (Accessed on 12/03/2009).

• Simon Baughen, Shipping Law, Edition 3, Published by Routledge, 2004.

• Schulz Andrea, Legal Aspects of an E-commerce Transaction: International Conference in The Hague, 26 and 27 October 2004, Published by sellier. european law publ., 2006.

• Sir Guenter Treitel and F.M.B. Reynolds Carver on Bills of Lading Sweet & Maxwell, 2001.

• SITPRO, The Cost of Paper in the Supply Chain: ‘Project Hermes’ Perishable Food Sector Research Report 2008. (www.sitpro.org.uk/reports/hermes.pdf)

• Todd Paul, Dematerialisation of shipping documents, 2000. (http://ourworld.compuserve.com/homepages/pntodd/intr/publns/demat.htm) (Accessed on 15/02/2009)

• Victor Emerson (University of Westminster), United Kingdom: The Concept of Negotiability And The Electronic Bill of Lading- An Overview, 2001. http://www.mondaq.com/article.asp?articleid=13425 (Accessed on 07/03/09).

• Winnie, Ma, Lading without Bills-How good is the BOLERO bill of lading in Australia, Bond Law Review, www.bond.edu.au/study-areas/law/publications/BLR/vol12-2/Ma12_2.doc (Accessed on 14/03/2009)




Websites:

• http://www.cceweb.com

• http://www.cisg.law.pace.edu

• http://www.comitemaritime.org

• http://www.edifact-wg.org

• http://www.iccwbo.org

• http://www.swift.com

• http://www.ttclub.com

• http://www.tradecard.com

• http://www.uncitral.org

• http://www.unece.org

• http://www.boleroassociation.org/dow_docs.htm

• http://www.bolero.net.

• http://www.marinade.ltd.uk/2003/mandate.shtml

• http://www.petroleum-economist.com


Papers or Articles Prepared by United Nations:

• The Use of Transport Documents In International Trade Report by the UNCTAD secretariat 2003 UNCTAD/SDTE/TLB/2003/3. (www.unctad.org/en/docs//sdtetlb20033_en.pdf (Accessed on 09/01/2009)

• Commentary by the UNCTAD secretariat on Draft Instrument on Transport Law United Nations Conference on Trade and Development 2002,UNCTAD/SDTE/TLB/4.

• UNCITRAL Guide to Enactment of the Model Law on Electronic Commerce,1996 (www.uncitral.org)

• UNCITRAL Guide to Enactment of the Model Law on Electronic Signatures, 2001 (www.uncitral.org)

• UNCITRAL Working Group III Transport Law Documents.(www.uncitral.org/uncitral/en/commission/working_groups/3Transport.html)

• UNCITRAL Working Group IV Electronic Commerce Documents (www.uncitral.org/uncitral/en/commission/working_groups/4Electronic_Commerce.html)

• Paperless Trade in International Supply Chains: Enhancing Efficiency and Security- A Roadmap towards Paperless Trade. An Outcome of the Forum, United Nations Centre for Trade Facilitation and Electronic Business 2005 (www.unece.org/forums/forum05/presentations/Roadmap_Final.doc (Accessed on 09/01/2009)

• Rotterdam Rules.

(http://www.uncitral.org/pdf/english/workinggroups/wg_3/res122e.pdf )

(Accessed on 17/03/2009)