MLC: one year on

One year after the Maritime Labour Convention 2006 came into force in the original 30 ratifying countries (on August 20, 2013), we are now in a position to consider what sort of impact it has already made. Of course, it is still coming into force in many countries – such as the UK where it came into force on August 7, 2014 – and others are still signing up.

There are now 64 ratifications to the MLC (including those pending further registration), representing over 80% of the world’s gross tonnage. Thus, it seems that the ILO’s aim of achieving near-universal ratification of the convention dubbed the “fourth pillar” of shipping’s international regulatory regime, alongside STCW, SOLAS and MARPOL, is making great progress, although whether the ILO’s stated aim of having all its 185 members sign up remains to be seen.

Despite being a new convention, it was already apparent that amendments would be needed (having been discussed even prior to the MLC coming into force), and in June 2014 the ILO’s 103rd meeting voted in favour of the proposed amendments, which extend the requirement for financial security in cases of abandonment of seafarers and in relation to death and disability. These amendments are likely to come into force in early 2017, if no member states raise major objections, thanks to the flexible design of the MLC which means that it can adapt as the needs of the industry change or emerge.

Abandonment

The need for these amendments becomes clear when one considers some high profile recent abandonment situations. The crew of the A Whale were abandoned without pay for several months, and the crew of the Panama-flagged Donald Duckling were left stranded at the Port of Tyne without pay or supplies after the vessel was detained, albeit not under the MLC. The local community provided food and fresh water, and ultimately the International Transport Workers’ Federation paid for repatriation without the aid of the flag state.

The new MLC provisions aim to prevent situations like these arising in the future. Although the cost of covering four months’ wages of abandoned crew is relatively small in many cases, one can imagine a more significant impact in the case of passenger vessels, where there are many more crew members, and owners will now have to have additional financial security in place to guarantee wage bills.

However, in its first year of operation, most reported MLC deficiencies and detentions have related to less dramatic (but often individually significant) issues, such as lack of proper seafarer employment agreements, wage discrepancies, payment of recruitment fees or lack of proper rest periods. The full picture has not yet emerged, and member states will have only just filed their first year reports to the ILO, but figures published by Paris MOU indicate that around 10%-12% of detentions in the first month were MLC-related, with a total of 21 detentions for MLC deficiencies in 2013 (August to December 2013).

Pioneers

The first port states to detain vessels were Canada, Denmark, Russia and Spain and vessels detained included those flagged in Cyprus, Liberia, the Marshall Islands, the Netherlands, Panama and Tanzania. Paris MOU commented that the MLC has already had a significant impact on the working and living conditions of seafarers.

As the first year of the MLC has progressed, Paris MOU detention statistics continue to show detentions for various deficiencies under the MLC, particularly wages, but that seafarer employment agreements are now increasingly compliant, presumably as owners/operators become more comfortable with the requirements, and have the correct contracts in place.

While this shows that the MLC is already having a positive impact on seafarers’ rights, owners are concerned that maritime unions are using the MLC as a bargaining chip to win wage deals for crews, with the threat of detention adding pressure. It is not always clear from whom the complaints leading to detentions have originated – whether from seafarers or representative bodies – and certainly at least one inspection by Tokyo MOU in Canada appears to have originated from an ITF complaint. Furthermore, the ITF has recently called for tighter controls and MLC inspections in the Black Sea, which they say is a haven for older vessels operated by owners with “scant regard for obligations to their crew”, although only Russia and Bulgaria are currently parties to the MLC.

The nature of the MLC means that the pressure to comply falls largely on owning/operating companies, who are the “shipowner” under the MLC, responsible for crew agreements, wages, accommodation and welfare issues. It is unclear whether any of these responsibilities are being passed on to charterers or cargo interests, either practically or financially, but no doubt any extra insurance premiums from the extended requirements for financial security will be felt more widely through the industry. As far as the UK is concerned, the MCA has suggested that where the shipowner is not the crew employer, the shipowner obtains an indemnity or similar arrangement from the actual employer, to ensure they are MCA-compliant.

Mixed views

The Sailor’s Society, who concern themselves with seafarers’ welfare, have mixed views on the efficacy of the MLC, following its first year. Marc Schippers, based in Antwerp, commented in Lloyds List that he had not seen any drop in the number of exploitation cases, particularly with regard to rest periods and he feels that although the MLC “looks great on paper” there is a long way to go. On the other hand, the Society has also seen evidence that the MLC is giving crews more confidence in relation to enforcement of their rights, and in raising awareness of welfare issues within the industry.

The ILO itself has suggested that they would expect “a year or two of some uncertainty and possible confusion… due to the novelty of the MLC”, but has also conceded that the full impact of the MLC will not be known until the MLC has been operative for a (non-specified) period of time. Port and flag state authorities are still getting to grips with MLC requirements, but the industry has taken the introduction of the convention seriously, and there has been extensive effort in training inspectors and reviewing policies at both national and shipowner levels to ensure compliance.

Given that the MLC is still being ratified and is not yet in force in member states (and there are still a number of areas, particularly in Asia and South America, where few countries have signed up), it will no doubt take more time for the full impact to be entirely felt. However early experience shows that where the MLC is in force, port states are taking their obligations under the MLC, or “Seafarers’ Bill of Rights”, seriously, even taking into account the ILO’s original plea that inspectors should show leniency during the first 12 months. Overall, the consensus seems to be that the MLC is having a real effect on progress towards improved conditions for seafarers, but that there is still some way to go. No doubt this is something to watch as all parties become more familiar with the MLC in practice.

Author information

Eleanor Ayres is an associate at Holman Fenwick Willan, an international law firm advising businesses engaged in international commerce. For more information on HFW go to www.hfw.com.