Changes to providing for your crew under MLC
In June, the ILO voted in favour of amendments to the Maritime Labour Convention, 2006 (MLC), regarding owners' provision of financial security for crew. Charles Boyle, director of legal services for Nautilus International, outlines the specifics of the amendments and the changes owners need to be aware of.…
In June, delegates at the 103rd meeting of the International Labour Organization (ILO) voted in favour of approving amendments to the Maritime Labour Convention, 2006 (MLC) regarding the provision of financial security for crew. Owners will therefore need to be aware of what is required of them to remain compliant with the MLC.
What are the amendments about?
The MLC already provides that flag states must ensure owners provide financial security to cover the costs of abandonment and assure compensation in the event of death or long-term disability of seafarers due to an occupational injury, illness or hazard. These amendments contain the specifics as to how this is to be achieved and outline exactly which liabilities will be covered.
What do the amendments require?
The amendments will require ratifying flag states to ensure that their ships are covered by a financial security system, as described above. The exact means of implementation will be a matter for each individual flag state, so owners should look there for advice on what exactly will be required of them. It would also be advisable to contact your P&I Club for advice.
How is “abandonment” defined?
Abandonment will have occurred where the owner: fails to cover the cost of repatriation; has left the crewmember without the necessary maintenance and support (e.g. adequate food, accommodation, drinking water supplies, essential fuel for survival on board the yacht and necessary medical care); or has otherwise unilaterally severed their ties with the crewmember, including failure to pay contractual wages for a period of at least two months.
In an abandonment situation the financial security system must be sufficient to cover the following: outstanding wages and other entitlements under the crewmember’s Seafarer Employment Agreement (SEA), the relevant collective bargaining agreement or the national law of the flag state (limited to four months); all expenses reasonably incurred, including the cost of repatriation (e.g. food and accommodation from the time of leaving the ship until arrival home, necessary medical care, passage and transport of personal effects and any other reasonable costs or charges arising from the abandonment); and the essential needs of the crewmember including adequate food, clothing, accommodation, drinking water supplies, essential fuel for survival on board the yacht, necessary medical care and any other reasonable costs or charges until the crewmember’s arrival home.
What is covered under death or long-term disability due to an occupational injury, illness or hazard?
The financial security shall provide for the payment of all “contractual claims” covered by it which arise during the period for which the document is valid. In this context, it refers to any claim relating to death or long-term disability of crewmembers due to an occupational injury, illness or hazard as set out in national law or the crewmember’s SEA or collective agreement. Where the nature of the long-term disability makes it difficult to assess the full compensation due, an interim payment(s) shall be made to avoid undue hardship.
What form will the financial security take?
Security may be in the form of a social security scheme, insurance, national fund or other similar arrangements. Its form shall be determined by your flag state so this is something on which owners will need to take advice from their flag state and P&I Club.
How do I show that my yacht is compliant with the amendments?
Owners must possess “a certificate or other documentary evidence of financial security issued by the financial security provider”. The document must be posted in a conspicuous place on board and be available to all crewmembers and must not cease during its period of validity unless the provider has given at least 30 days prior notice to the flag state. Inspection of the document will become part of the Port State Control (PSC) inspection process, and your Declaration of Maritime Labour Compliance (DMLC) Part II must also contain reference to how you comply.
With regards to security in relation to death or long-term disability, crew are to receive prior notification if a shipowner’s financial security is to be terminated and the flag state must be notified by the provider of the financial security if it is cancelled or terminated.
What must the certificate or documentary evidence contain?
As well as some basic information about the yacht and its owner, the document must show the name and address of the provider(s) of the financial security, contact details of the persons or entity responsible for handling crewmembers’ requests or claims; period of validity of the financial security and an attestation from the financial security provider that the financial security meets the requirements of the MLC.
When do the amendments come into force?
They should come into force by early 2017, although it is open to flag states to implement them sooner if they so wish. Current Maritime Labour Certificates and DMLCs issued before the amendments came into force will remain valid, but will have to be issued or renewed in the new updated format no later than the date of the first renewal inspection following the amendments’ entry into force.
What are the amendments about?
The MLC already provides that flag states must ensure owners provide financial security to cover the costs of abandonment and assure compensation in the event of death or long-term disability of seafarers due to an occupational injury, illness or hazard. These amendments contain the specifics as to how this is to be achieved and outline exactly which liabilities will be covered.
What do the amendments require?
The amendments will require ratifying flag states to ensure that their ships are covered by a financial security system, as described above. The exact means of implementation will be a matter for each individual flag state, so owners should look there for advice on what exactly will be required of them. It would also be advisable to contact your P&I Club for advice.
How is “abandonment” defined?
Abandonment will have occurred where the owner: fails to cover the cost of repatriation; has left the crewmember without the necessary maintenance and support (e.g. adequate food, accommodation, drinking water supplies, essential fuel for survival on board the yacht and necessary medical care); or has otherwise unilaterally severed their ties with the crewmember, including failure to pay contractual wages for a period of at least two months.
In an abandonment situation the financial security system must be sufficient to cover the following: outstanding wages and other entitlements under the crewmember’s Seafarer Employment Agreement (SEA), the relevant collective bargaining agreement or the national law of the flag state (limited to four months); all expenses reasonably incurred, including the cost of repatriation (e.g. food and accommodation from the time of leaving the ship until arrival home, necessary medical care, passage and transport of personal effects and any other reasonable costs or charges arising from the abandonment); and the essential needs of the crewmember including adequate food, clothing, accommodation, drinking water supplies, essential fuel for survival on board the yacht, necessary medical care and any other reasonable costs or charges until the crewmember’s arrival home.
What is covered under death or long-term disability due to an occupational injury, illness or hazard?
The financial security shall provide for the payment of all “contractual claims” covered by it which arise during the period for which the document is valid. In this context, it refers to any claim relating to death or long-term disability of crewmembers due to an occupational injury, illness or hazard as set out in national law or the crewmember’s SEA or collective agreement. Where the nature of the long-term disability makes it difficult to assess the full compensation due, an interim payment(s) shall be made to avoid undue hardship.
What form will the financial security take?
Security may be in the form of a social security scheme, insurance, national fund or other similar arrangements. Its form shall be determined by your flag state so this is something on which owners will need to take advice from their flag state and P&I Club.
How do I show that my yacht is compliant with the amendments?
Owners must possess “a certificate or other documentary evidence of financial security issued by the financial security provider”. The document must be posted in a conspicuous place on board and be available to all crewmembers and must not cease during its period of validity unless the provider has given at least 30 days prior notice to the flag state. Inspection of the document will become part of the Port State Control (PSC) inspection process, and your Declaration of Maritime Labour Compliance (DMLC) Part II must also contain reference to how you comply.
With regards to security in relation to death or long-term disability, crew are to receive prior notification if a shipowner’s financial security is to be terminated and the flag state must be notified by the provider of the financial security if it is cancelled or terminated.
What must the certificate or documentary evidence contain?
As well as some basic information about the yacht and its owner, the document must show the name and address of the provider(s) of the financial security, contact details of the persons or entity responsible for handling crewmembers’ requests or claims; period of validity of the financial security and an attestation from the financial security provider that the financial security meets the requirements of the MLC.
When do the amendments come into force?
They should come into force by early 2017, although it is open to flag states to implement them sooner if they so wish. Current Maritime Labour Certificates and DMLCs issued before the amendments came into force will remain valid, but will have to be issued or renewed in the new updated format no later than the date of the first renewal inspection following the amendments’ entry into force.
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