The Maritime Labor Convention 2006 (MLC) came into force internationally on Aug. 20, 2013. Various maritime interests question the “need to know” about the MLC. Ship owner clients wonder what it means for them—in a nutshell, non-compliance with the requirements of the Convention will result in port state control (PSC) detentions. Insurers ask what it means for them—it means knowing what your policy states and how the Convention is interpreted to know whether a given situation is covered under the policy. Smaller vessel managers and operators figure it does not apply to them, so many of them simply want a letter from a lawyer that states they are not required to be compliant. When they are told that such a letter may not be possible in their given situation, all of a sudden, they say “what the [bleep] is this law and why am I subject to it?”
What is the Maritime Labor Convention?
The MLC is a product of the International Labor Organization (ILO) which aims to provide a consolidated legal framework governing the rights of seafarers, updating, and supplanting previous applicable international conventions. The Convention was adopted during the 94th International Labor Convention on Feb. 23, 2006 with a view towards achieving worldwide protection for all seafarers. The Convention was ratified with the submission from the Philippines being lodged with the ILO on Aug. 20, 2012, meeting the criteria of 30 states representing at least 33 percent of the world’s tonnage ratifying the Convention.
The MLC is also known as the Seafarers’ Bill of Rights. The MLC was designed to sit alongside other regulations such as the IMO standards on ship safety, security and quality ship management as the “fourth pillar” of the international regime for quality ships. The MLC certification process is similar to ISM and ISPS for ships. The MLC Certificate shall be issued to a vessel by the “competent authority” (Flag State). Practices for issuing the Certificate will vary by country and may deal with more than one government department. The Certificate may be issued for a period not to exceed five years. The MLC requires owners to submit a Declaration of Maritime Labor Compliance (“DMLC”) to their Flag State, which is a party to the Convention. The Flag State will then issue an MLC Certificate to ships flying their flag which should be posted on board in a conspicuous place that is accessible to seafarers. Thus, the MLC Certificate is issued by the vessel’s Flag State, following approval of certain paperwork and a physical inspection of the vessel.
Under the MLC, every ship 500 gross tonnage or over, which engages in international voyages or voyages between foreign ports, is required to develop and carry out plans for ensuring that the applicable national laws, regulations or other measures to implement the MLC are actually being complied with. In addition, port states, which have ratified the MLC, will verify foreign ships’ compliance with the MLC. In this regard, ships of all countries (irrespective of ratification) will be subject to inspection by port state control in any country that has ratified the MLC. The vessel is subject to possible detention if they do not meet the minimum standards of the MLC. The intended system of port state enforcement will allow those ships carrying the MLC Certificate issued by its Flag State to avoid inspection, whereas those that do not will be subject to inspection, resulting in possible delays. This is known as the “no more favorable treatment” clause to ensure that ship owners are not able to evade minimum obligations to their seafarers by failing under a non-ratifying Flag State.
Ships excluded from the Convention include the following:
• Ships navigating exclusively in inland waters or closely adjacent to sheltered waters or areas where port regulations apply
• Ships engaged in fishing or similar pursuits
• Ships of traditional build, such as dhows and junks
• Warships or naval auxiliaries
How the MLC Changes the Framework
The MLC constitutes a major shift in maritime labor law. It links an increase in the strength of rights for seafarers, flexibility in application but with a strong regime of enforcement. The MLC’s stated purpose is to set out the minimum rights that these seafarers should expect. The MLC is aimed at those shipping companies that are grossly exploiting third-world labor in exchange for increased profits. The MLC will provide seafarers with fair terms of employment and guarantee them safe, secure and decent living and working conditions on board ships. Importantly, it is intended to level the playing field so that unscrupulous operators cannot undercut on price those operators already providing decent living and working conditions aboard ships.
Scope of the MLC
While the preamble of the MLC lists fundamental labor principles which ratifying states need to satisfy themselves are respected in their national laws, the MLC then sets out the essential rights, principles and obligations of its Member States. The Convention is made up of three related parts, the Articles, the Regulations and the Code. The Articles and Regulations set out the core rights and principles of the MLC while the Code contains details for the implementation of the Regulations. The Code is made up of two parts: a Standard (Part A); and a Guideline (Part B), which is organized under five (5) Titles:
Title 1: Minimum requirements for seafarers to work on a ship.
Title 2: Conditions of employment
Title 3: Accommodation, recreational facilities, food and catering
Title 4: Health protection, medical care, welfare and social security protection
Title 5: Compliance and enforcement
The Regulations and Part A Standards are mandatory while the Part B Guidelines are advisory and not mandatory.
There are 14 areas which are required to be inspected and certified under the MLC:
1. Minimum age
2. Medical certification
3. Qualification of seafarers
4. Seafarers’ employment agreement
5. Use of any licensed, certified and/or regulated private recruitment and placement service
6. Hours of work and rest
7. Manning levels
8. Accommodation
9. Onboard recreational facilities
10. Food and catering
11. Health, safety and accident prevention
12. Onboard medical care
13. Onboard complaint procedures
14. Payment of wages
While many of these areas have been discussed in detail in various publications and further guidance can be provided if requested, there are a few which provide more consternation than others; these are: 1) the provisions for financial support and security; 2) implementation; and 3) applicability. These are each taken in turn.
Financial Support and Security
The MLC sets out the general principle that vessel owners owe seafarers material financial support in the event of sickness, injury or death occurring while they are serving under a seafarer’s employment agreement (a requirement) or arising from their employment under such an agreement.
The most significant regulation under Title 2 is regulation 2.5, which confirms a seafarer’s right to be repatriated to his/her home country at no expense to themselves. Each member state shall require ship owners that fly its flag to provide “financial security” to ensure that seafarers are duly repatriated when their employment contract expires; their employment contract is terminated; and/or when the seafarer is no longer able to carry out their duties under their employment contract. The MLC expressly provides that a seafarer shall not be required to make an advance payment towards the cost of repatriation at the commencement of employment nor shall a seafarer bear the cost of their repatriation unless the seafarer is found to be in serious default of their employment obligations in accordance with national laws or applicable collective bargaining agreements. If a shipowner fails to make arrangements for or meet the cost of a seafarer’s repatriation, the competent authority of the Member State shall arrange for repatriation and said costs are recoverable from the ship owner.
The Convention does not provide a list of suitable financial instruments. Thus, each Member State will determine what it considers to be suitable financial security.
Financial security is required under the MLC for the following “risks”:
• Compensation in the event of death or long term disability
• Repatriation of seafarers
• Recruitment, manning and placement agents
There is a lot of debate out there on how Flag States will implement the financial security obligations. Many vessel owners are hoping that their insurance cover will be sufficient, but specific insurance products are being created to cover the risks insurers do not want to cover in the first instance.
Implementation
Flag States are responsible for initial and continuing inspection and certification. Port State Control officers are responsible for inspecting foreign ships calling into their ports and assessing whether they comply with the MLC. Under the MLC, the Certificate and the DMLC constitute prima facie evidence that the ship is compliant with its requirements and the inspection should, in principle, be limited to a review of those documents. However, there are four exceptions to this which would enable an officer to carry out a more detailed inspection aboard the ship:
1. Where there are issues with the documentation
2. Where there are doubts concerning the seafarers’ actual working and living conditions
3. Where there is suspicion that a change of flag was motivated by the desire to avoid compliance
4. Where there is a complaint regarding working and living conditions
Smaller ships (below 500 gt) that are not subject to the MLC’s certification requirement and which sail on international voyages or voyages between foreign ports will be expected to respect domestic laws and other measures implementing the Convention and thus, will be subject to inspection if not an excluded vessel.
Applicability
The MLC will apply to ships of all tonnages, whether publicly or privately owned, which are “ordinarily engaged in commercial activities.” The Convention does not provide a definition for what constitutes this quoted language and there has been some debate in yachting circles as to whether these vessels are included. Some Flag States have been publishing their narrow interpretation of this language as a way to encourage these vessel owners to change flags. However, this interpretation is not an answer to the “no more favorable treatment” clause which is a principle of the Convention.
In summary, this Convention sets out seafarers’ rights to decent working conditions. Not only does the MLC apply to ships that fly a Convention-country’s flag, but also to seafarers on board ships in a Member States’ territorial waters. This expands the application of the MLC dramatically. As a result, we all need to be cognizant of the MLC’s reach, unless we know for sure we are dealing with an excluded vessel.
For more information about the MLC, please do not hesitate to send an e-mail message to mov@chaloslaw.com.
Michelle Otero Valdés is the managing partner of the Miami office of Chalos & Co. P.C., which specializes in both civil and criminal maritime and admiralty law matters. Visit www.chaloslaw.com. Read more blog posts from Michelle Otero Valdes at http://miamishippinglaw.blogspot.com/.
