IN 1340 – Maritime Labour Convention: New certificate requirements for shipowners

On 18 January 2017 the 2014 amendments to the Maritime Labour Convention (MLC), 2006 will enter into force. The amendments were approved at the 103rd annual meeting of the International Labour Conference (ILC) in June 2014 and relate to financial security of seafarers in cases of abandonment, and contractual claims for compensation in the event of a seafarer’s death or long-term disability due to an operational injury or illness.

By way of background, the MLC establishes minimum working and living standards for all seafarers working on ships flying the flags of ratifying countries. The Convention is also an essential step forward in ensuring a level playing field for countries and shipowners. Ships flying the flag of countries that have not ratified the MLC, 2006 (e.g. the United States for the time being) are also subject to inspection with respect to working and living conditions for seafarers, when those ships enter in ports of countries where the MLC is in force. This inspection, called ‘no more favourable treatment’, is aimed at helping to ensure fair competition for shipowners who comply with the MLC by providing decent working conditions for seafarers.

The 2014 amendments to the MLC relate to financial security of seafarers in cases of abandonment (Regulation 2.5) and contractual claims for compensation in the event of a seafarer’s death or long term disability, due to an operational injury, illness or hazard (Regulation 4.2). As of 18 January 2017, ships that are subject to the MLC will be required to display certificates issued by an insurer or other financial security provider confirming that insurance or other financial security is in place for:

1. Costs of the seafarer’s repatriation.
2. Expenses regarding the essential needs of the seafarer – including such items as adequate food and essential fuel for survival on board the ship and other reasonable costs from abandonment – until the seafarer’s arrival at home.
3. Up to four months contractually entitled arrears of wages and entitlements following abandonment.

The financial security system may be in the form of social security scheme or insurance or a national fund or other similar arrangements.

In addition, a further certificate will be required for liabilities for contractual claims arising from seafarer personal injury, disability or death (MLC Standard A4.2, as amended).

A copy of both of the aforementioned certificates or other documentary evidence of financial security shall be in English and posted in a conspicuous place on board where it is available to the seafarers.

The new requirements were approved on 11 June 2014 and will enter into force on 18 January 2017.  As of this date, each ship must carry on board two certificates or other documentary evidence of financial security to comply with these new provisions. Unless shipowners comply with the new certificate requirements then they risk vessel detention in a port.

As a result of the aforementioned changes, shipowners will need insurance cover in place for crew claims and cases of seafarer abandonment, as well as death or long-term disability of seafarers due to occupational injury and hazard.