Following the entry into force of the landmark Maritime Labour Convention in August this year, the International Labour Organisation (ILO) has confirmed that an international tripartite meeting will be held in April 2014 to discuss proposed amendments to the Convention.
Article XIII of the Convention specifically provides for the ILO to carry out a process of continuous review, and to convene “Special Tripartite Committees” made up of all the ILO Member States that have ratified the Convention. Non-ratifying Members are permitted to attend the Committee meeting but do not have voting rights.
Among the matters up for discussion is that of shipowner liability. More specifically how claims for death, personal injury and the abandonment of seafarers are to be handled.
In broad terms, Regulation 4.2 of the Convention provides that the “shipowner” (as defined – itself an interesting point) should:
- Bear the medical expenses incurred by a seafarer working on its ships.
- Provide financial compensation to seafarers (or their families as appropriate) in the event of long term illness or death, and cover burial expenses.
- Indemnify seafarers to the tune of up to two month’s wages in the event of a ship’s loss or foundering.
In the lead up to the MLC’s “D-day” earlier in the year, Bargate Murray’s Superyacht team advised extensively in relation to how its shipowner liability provisions were to take effect in practice. With that background in mind, here are some interesting observations that might call for discussion next April.
- The way in which the MLC is framed puts the burden on individual Member States to implement its terms by way of their own domestic legislation. Quite obviously, this leaves the door open for differences of opinion in how to go about putting the Convention into practice. A general “health check” of how key yachting and shipping Member States have dealt with the issue, might give rise to some interesting discussions right at the outset.
- As above, the Convention defines “shipowner” as:
“the owner of the ship…or another organisation or person, such as the manager… who has assumed the responsibility for the operation of the ship from the owner and… agreed to take over the duties and responsibilities imposed on shipowners…”
- This, of course, leads to the question of whether a particular yacht manager has assumed the relevant responsibilities usually imposed on the shipowner itself. If they have, then the Member State whose flag the ship flies could (arguably) treat them as the shipowner. In practice, this left some yacht managers faced with the prospect of being dragged, kicking and screaming, into the “shipowner” position and being forced to shoulder the associated risk – particularly unsatisfactory where the terms of a yacht manager’s contract with the owner, may not have provided a route of recovery of the costs a manager may have been required to outlay.
- Initially this led to a drive from some key shipping registries to “split” the financial and operational elements of this risk, so that the yacht manager shouldered the operational aspect, and another legal person with sufficient financial wherewithal took on the financial risk. Thankfully for many, this view was superseded when the insurance industry came up with products which provided cover for these risks. So, provided a particular ship carried sufficient “MLC compliant” insurance, those operating a particular ship on behalf of her legal owner could breathe a sigh of relief. It will be interesting to see how this issue has been dealt with by the different members of the Committee next April.