Laws Regulating Tourism Transport Business PDF

SESSION 5 – Legal Aspects in Tourism and Hospitality Laws Regulating Tourist Transportation Business Learning Objectives: 1. Distinguish common carrier from private carrier 2. Discuss the characteristics of common carrier 3. Explain why common carriers need to render extraordinary dilige...

SESSION 5 – Legal Aspects in Tourism and Hospitality Laws Regulating Tourist Transportation Business Learning Objectives: 1. Distinguish common carrier from private carrier 2. Discuss the characteristics of common carrier 3. Explain why common carriers need to render extraordinary diligence 4. Enumerate the different government agencies in the Philippines involved in transportation business Let’s recall first you lesson in your Introduction to Transport Services… What is transportation? Transport or transportation is the movement of people and goods from one location to another Transportation is the movement of products from one mode in the distribution channel to another. What are the different modes of transportation? Land Transport – Rail and Road transport Water Transport – ship, boat Air Transport – plane, helicopter Intermodal Transportation – combination of 2 or more kinds of transport What are the roles of Transportation in Logistics? Transportation is the physical link connecting the firm to its suppliers and customers. In a nodes and links scenario, transportation is the link between fixed facilities (nodes). Transportation also adds value to the product by providing time and place utility for the firm’s goods. Legal Classification of Carriers 1. Common Carrier For-hire carrier that serves the general public at reasonable rates and without discrimination. Carrier is liable for damages to products carried. Exceptions to liability include acts of God, acts of the public enemy, acts of the shipper and defects inherent in the goods. Backbone of the transportation industry.  2. Regulated Carrier Regulated carriers are found in motor and water carriage. Regulations including entry controls, reasonable rates, and nondiscrimination provisions. Must provide safe and adequate service 3. Contract Carriers For-hire carrier that does not have to serve the general public. May serve one or a few shippers exclusively. May offer specialized equipment. Other aspects of the carrier/shipper relationship are made a part of the contract between the two parties. Rates usually lower than common or regulated carriers. 4. Private Carriers Private carriage is the firm’s own transportation. Not for-hire and not subject to Federal regulations. May not be the firm’s primary business but can charge an intracompany fee for transportation services. Almost exclusively motor, but some rail, air and water also exist Firms gain ultimate control over shipments and achieve maximum flexibility in moving goods. Backhauls are usually empty or return materials to the firm’s plants and/or warehouses. Requires a large capital investment. Requires management time and expertise. Laws on Common Carrier What is a common carrier? Operators of public utility vehicles are considered as common carriers. A common carrier is defined under the Philippine Civil Code as “persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public”. What are the Elements of a Common Carrier? 1. Business of transportation. 2. For compensation. 3. For public use – the holding out of the service is made to all persons in general without going through any selection process  Difference of a Common Carrier from a Private Carrier Common Carrier Private Carrier Holds himself out in common that Agrees in some special cases with is to all persons who choose to some private individual to carry for employ him as ready to carry for hire. hire. Bound to carry for all who offer It is not bound to carry for any such goods as it is accustomed to reasons, unless it enters a special carry and tender reasonable. agreement to do so. It is for public service and subject Not for public and not subject to to regulation. regulation. Required to exercise Not required to render extraordinary extraordinary diligence. diligence. What are the 4 Characteristics of Common Carrier? 1. The common carrier is regarded to some extent as a public service since he holds himself out as ready to engage in the transportation of goods for hire as a public employment and not as a casual occupation. He is bound to serve all who apply and is liable for refusal, without sufficient reason to do so. 2. The common carrier cannot lawfully decline to accept a particular class of goods for carriage to the prejudice of the traffic in those goods. However, the common carrier can do so where for some sufficient reasons, the discrimination in such goods is reasonable and necessary under all the circumstances of the case. 3. No monopoly is favored. The Public Service Commission has the power to say the reasonable rules for the convenience of the traveling public and to enforce them. 4. It is also for public convenience. What is a Charter? It means that there is a contract between the passenger and the carrier wherein the latter undertakes to transport the former to his destination safely. Is charter a common or private carrier? Under transportation laws, a common carrier engaged in the carrying of passengers, from the nature of its business and for reasons of public policy, is bound to observe extraordinary diligence to ensure the safety of the passengers transported by them. The law further provides that a common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. Ordinary diligence is not good enough. It has to be extraordinary diligence. Nature of Responsibility of Common Carriers 1. The public must of necessity rely on the care and skill of common carriers in the vigilance over the goods and safety of the passengers. 2. Extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all circumstances of each case. 3. In case of death of, or injuries to, passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence. 4. The obligation of a common carrier arises from contract known as “contract of carriage”. 5. Common carriers are likewise responsible for injuries suffered by passenger on account of the willful acts or negligence of other passengers or strangers, if the common carriers’ employees could have prevented or stop the act or omission. This duty of common carriers to exercise the highest degree of diligence commences from the moment the person who purchases the ticket from the carrier presents himself at the proper place and in a proper manner to be transported. Once created, the relation of carrier and passenger will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carrier’s conveyance or had a reasonable opportunity to leave the carrier’s premises. Case Scenario: In relation to this, in the landmark case of Dangwa Transportation Co. v. Court of Appeals (G.R. No. 95582, 07 October 1991) A passenger attempted to ride the bus and was able to step on its platform but was run over by the rear right tires of the vehicle and eventually died because the driver’s sudden acceleration of the bus. Are the bus company and the driver liable for the death of the passenger even though no ticket was issued yet? The Court held the common carrier liable for damages ratiocinating that the victim, by stepping and standing on the platform of the bus, is already considered a passenger and is entitled to all the rights and protection pertaining to such a contractual relation even though he had not been issued a ticket and gained a seat. Thus, the carrier failed to observe the diligence required of it when its driver did not make a full stop to allow the passenger to board the bus. The Court also ruled that once a public utility bus stops, it is in effect making a continuous offer to bus riders. Therefore, it becomes the duty of the driver and the conductor, every time the bus stops, to do no act that would have the effect of increasing the peril to a passenger while he was attempting to board the same. Such rule equally applies to all common carriers transporting passengers by land such as taxis, jeepneys, tricycles, FX, and public vans.  Period Wherein the Degree of Extraordinary Diligence Should End: 1. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice. 2. The common carrier’s duty to observe extraordinary diligence over the goods remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner has made use of the right of stoppage in transit. 3. The extraordinary liability of the common carrier continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of destination, until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. Case Scenario: (La Mallorca v. Court of Appeals, et al., G.R. No. L-20761, 27 July 1966). Another case held by the Supreme Court is instructive on when the said duty of common carrier ends. In that case, a family rode the bus and alighted therefrom. The father led his family to a shaded spot on the left pedestrian side of the road about four or five meters away from the vehicle and returned to the bus to get one of his baggage which was not unloaded. Unknown to him, his four-year old daughter followed him. However, although the father was still on the running board of the bus waiting for the conductor to hand him the bag, the bus started to run, so that even the father had to jump down from the moving vehicle. It was at this instance that the child, who must be near the bus, was sideswiped and killed. Is the bus liable even though the passengers already alighted from the bus? The Court likewise ruled against the common carrier and held that the presence of said passengers near the bus was not unreasonable and they are, therefore, to be considered still as passengers of the carrier, entitled to the protection under their contract of carriage. Moreover, it explained that the carrier-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if, for example, such person remains in the carrier’s premises to claim his baggage Common Carriers are Absolved from Liability when: 1. Flood, storm, earthquake, lightning, or other natural disaster or calamity; 2. Act of the public enemy in war, whether international or civil; 3. Act or omission of the shipper or owner of the goods; 4. The character of the goods or defects in the packing or in the containers; 5. Order or act of competent public authority. What is a Contract of Carriage? A contract of carriage is a contract between a carrier of goods or passengers and the consignor, consignee or passenger. Contracts of carriage typically define the rights, duties and liabilities of parties to the contract, addressing topics such as acts of God and including clauses such as force majeure. Among common carriers, they are usually evidenced by standard terms and conditions printed on the reverse of a ticket or carriage document. Air waybill (AWB) - is a non-negotiable document issued by a carrier when goods are transported by air. An air waybill acts as delivery instructions, a contract of carriage, and a cargo receipt for air freight. Bill of lading (BOL or B/L) - is issued to a shipper detailing the method and path of a shipment. It is a contract for the movement of the goods, and serves as a receipt for the cargo and can act as proof of ownership of the goods being transported. Ocean shipments use bill of lading. What are the liabilities of International Air Carriers according to Warsaw Convention? Air carrier is presumptively liable for all damage to cargo unless the airline shows not at fault or the shipper is negligent Air Carrier is liable for death or bodily injury resulting from accident aboard the aircraft or in boarding and disembarking Air Carrier is liable for Cargo Loss or Damage unless due to inherent defect, defective packaging not by carrier, act of war or armed conflict, act of public authority, negligence of shipper Air carrier is liable for baggage loss of the passenger Enforcing Warsaw Convention Suits can only be brought in countries that are signatories o Where ticket was purchased, final destination or where carrier has principal place of business Suits for death or injury in passenger’s principal residence If carrier operates there (Montreal Convention) Time Limits o Must file notice for cargo or baggage damage – notify within 7 days of receipt of checked luggage; 14 days for receipt of cargo o Delay of baggage or cargo – notify in writing no later than 21 days from date of actual delivery o Must file suits against air carrier within two years What is Carriage of Goods by Sea (COGSA)? What are the liabilities under COGSA? Carrier must use diligence in providing seaworthy vessel at beginning of voyage. Carrier is not liable for damage due to fire, storms and negligence in navigating or managing ship Delivery of Damage Cargo – carrier must give written notice to carrier at port of discharge o For visible damage – give notice immediately o If damage is not visible – give notice after 3 days o Must file suit within one year o Clean Bill of Lading establishes presumption that goods delivered to carrier are in good condition – shifts burden to carrier o For sealed containers – the outer condition of container is only established Carrier is not liable for perils of sea Shipper is liable for inherently shipping dangerous goods when neither shipper nor carrier had actual knowledge of the danger Ways of Enforcing the Liability of Common Carriers When a common carrier fails to comply with the standard of care required of it by law, it may be sued on the ground of either: 1. Breach of contract 2. Tort or quasi-delict **A person suing a common carrier cannot maintain an action under both grounds. Damages Recoverable from Common Carriers 1. Actual or Compensatory damages – are adequate compensation for pecuniary loss suffered by a person as he has proven (e.g. – medicine, hospitalization expenses). 2. Moral damages – include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. 3. Nominal damages – are adjudicated in order that a right of a person, which has been violated or invaded by the CC, may be vindicated or recognized, and not for the purpose of indemnifying such person for any loss suffered by him. 4. Temperate or Moderate damages – which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot from the nature of the case, be proven with certainty. 5. Liquidated damages – are those agreed upon by the parties to a contract, to be paid in case of breach thereof. 6. Exemplary or Corrective damages – are imposed, by way of example or correction for the public good, in addition to actual or compensatory, moral, temperate or liquidated damages. Ex. Recklessness - the court will decide whether or not they should be granted. For online discussion purposes, research the duties and responsibilities of the following government agencies involved in the Tourism Transportation Business Regulations of Air Transportation Business The airline industry is primarily regulated by the Civil Aeronautics Board (CAB) and Air Transportation Office (ATO), now the Civil Aviation Authority of the Philippines (CAAP). The governing law is R.A. No. 776 a.k.a. Civil Aeronautics Act of the Philippines. What are the duties and responsibilities of the CIVIL AERONAUTICS BOARD (CAB)? The CAB regulates the economic aspect of air transportation. It supervises and regulates, has jurisdiction over air carriers, sales and cargo agents, air freight forwarders. Fixes and determines reasonable individual, joint or special rates, charges or fares which an air carrier may demand, collect or receive for any service in connection with air commerce. CAB is authorized to grant any foreign airline increase in frequencies and or capacities on international routes, when in judgment the national interest requires it. Air Commerce means and includes air transportation for pay or hire, navigation of aircraft for business. Certificate of Public Convenience and Necessity (CPCN) – permit issued by CAB authorizing a person to engage in air commerce, whether foreign or domestic. It specifies: o Terminal and intermediate points between which the air carrier is authorized to operate o Time of arrival and departure at each point o Frequency of flights o No carrier should abandon any routes or part for which CPCN was issued, unless it is for the public interest. What are the duties and responsibilities of the CIVIL AVIATION AUTHORITY OF THE PHILIPPINES (CAAP)? The CAAP, formerly ATO, is an agency under the Department of Transportation (DOTr) It is the national aviation authority of the Philippines, responsible for implementing policies on civil aviation to assure safe, economic and efficient air travel. The agency also investigates aviation accidents via its Aircraft Accident Investigation and Inquiry Board. Government Agencies That Have Jurisdiction over Common Carrier DEPARTMENT OF TRANSPORTATION (DOTr) Responsible for the maintenance and expansion of viable, efficient and dependable transportation and communications system as effective instruments for national recovery and economic. It is responsible for the country’s land, air, sea and communications infrastructure. LAND TRANSPORTATIONFRANCHISING AND REGULATORY BOARD (LTFRB) Responsible for promulgating, administering, enforcing and monitoring compliance of policies, laws and regulations of public land transportation services. LAND TRANSPORTATION OFFICE (LTO) Responsible for optimizing the land transportation service and facilities and to effectively implement the various transportation laws, rules and regulations. MARITIME INDUSTRY AUTHORITY (MARINA) Responsible for integrating the development, promotion and regulation of the maritime industry of the country. PHILIPPINE COAST GUARD Involved in the broader enforcement of maritime laws in the country especially against smuggling, illegal fishing and drug trafficking. It is also involved in maritime Search and Rescue missions, as well as the protection of maritime environment. PHILIPPINE NATIONAL RAILWAYS (PNR) It forms the backbone of all Metro Manila’s regional services which extends to its suburbs and provinces. METRO RAIL TRANSIT / LIGHT RAIL TRANSIT A private consortium responsible for the maintenance of the MRT and LRT system. NINOY AQUINO INTERNATIONAL AIRPORT Is one of the two international airports serving the Metro Manila Area and is the main international gateway to the Philippines. There are 4 terminals: o Terminal 1: NAIA Terminal - International flights, non-Philippine Airlines o Terminal 2: Centennial Terminal - All Philippine Airlines flights only (North wing International, South wing Domestic) o Terminal 3: NAIA International Terminal - International flights (Air Philippines, Cebu Pacific, PAL Express) o Domestic Terminal - All domestic flights other than Philippine Airlines PHILIPPINE PORTS AUTHORITY Government entity specially charged with the financing, management and operations of public ports throughout the Philippine