New certificates are required for ships to satisfy MLC requirements, says Dr Anna Mari Antoniou
The IMO’s mission is to promote the highest possible standards in shipping through international maritime legislation and, to this end, it has drafted or helped draft the so-called ‘four pillars of the international regulatory regime for quality shipping’, including:
- SOLAS (Safety of Life at Sea)
- STCW (Standards of Training, Certification and Watching-Keeping)
- MARPOL (Prevention of Pollution from Ships)
- MLC (Maritime Labour)
The MLC officially comes under the agency of the International Labour Organisation, but the IMO aided in the research and development of the convention. It is one of the most widely ratified international agreements, and its main aim is to harmonise and safeguard seafarers’ rights. The MLC came into force in August 2013, bringing together approximately 70 other pieces of legislation dating as far back as the 1920s – it is so widely adopted that 91% of world tonnage now adhere to the convention. Upon introduction of the MLC, there were mixed emotions, with some shipowners concerned it would impose even higher standards to adhere. However, it seems it has mostly brought together accepted good standard practices when it comes to the fundamental rights of the crew, which means the elimination of sub-standard operators from the market. However, many seafarers considered the convention ineffective as it did not materially change life at sea.
Those that cut costs to obtain a competitive edge must now follow the international rules if they are registered with an MLC flag or enter an MLC port. The primary requirement of the shipowner is to obtain and keep on board an MLC certificate from their flag state, evidencing compliance with MLC rules. If the vessel fails to meet the requirements at any time, detainment in port is permitted, which has obvious commercial implications.
The UK authority responsible for policing the MLC is the Maritime and Coastguard Agency which has the power to investigate crew complaints and impose fines or even imprisonment of up to two years. With such grave consequences, adherence to the MLC is a vital concern for every shipowner.
One of the latest developments is a 2014 amendment to the MLC which came into force in January 2017. The new obligations require shipowners to have compulsory insurance to cover abandonment of seafarers and claims for death or long-term disability. These are regulation 2.5 – relating to the financial security of seafarers in the case of abandonment – and regulation 4.2, concerning contractual claims for compensation in the event of death or long-term disability. These amendments require the ship to carry onboard evidence of financial security to comply with new provisions. In practice, this means ships must carry certificates from an insurer confirming that security is in place for the cost of crew repatriation, including up to four months contractually agreed to arrears of wages and coverage for liabilities relating to contractual claims from seafarers’ personal injury, disability, and death.
Although P&I clubs often cover vessel liabilities, there has been some hesitation with the new regulations as, effectively, they will be accepting direct responsibility against crew members and extending their liability for repatriation of the crew. These obligations include essential requirements such as food, accommodation, and medical care, and four months’ outstanding wages in the event of abandonment, which is fundamentally different from the primary purpose of P&I cover which is to protect a shipowner from consequences of maritime accidents. In most cases, it seems P&I clubs are unwilling to take on more than US$10 million exposure, though Lloyds’ market has been able to place reinsurance cover reaching US$200 million exposure on a per fleet basis.
The key takeaway from this is that Maritime Labour Law is a topic that continues to arise and an area the ILO/ IMO is likely to update continuously. With such widespread ratification of the MLC, shipowners should be on constant alert of updates to make sure their MLC certificates are valid. Similarly, other parts of the shipping industry supporting shipowners will have to adapt practices and products to serve new standards. So far, the maritime community is coping well, but in a culture of ever-increasing liability, eventually, a line will need to be drawn.
This article was originally published in the Marine Trader, IMPA’s official journal for maritime procurement and supply chain management, in issue 04 of 2017. Head over to www.impa.net to find out more or simply read new issues on the go with the MT Journal app.
