Maritime Labour Convention 2006
The Maritime Labour Convention 2006 (“MLC”) entered into force on 20 August 2013, following ratification by thirty states representing at least 33% of the world’s gross tonnage. This webpage is intended to provide Members with information on the Convention and how the Club is supporting them in complying with its requirements.
The 2014 amendments to the Maritime Labour Convention 2006 (MLC) entered into force in early 2017 with the aim of protecting seafarers who had been abandoned by their employers.
Often referred to as the “fourth pillar” of the maritime industry’s regulatory framework, MLC was first adopted by the International Labour Organisation (“ILO”) in February 2006. It aims to establish minimum living and working standards for all seafarers on ships flying the flag of a ratifying state. The text of the Convention in English can be found in Maritime Labour Covention 2006 English text and in other languages on the ILO’s website.
The ILO’s fuller description of the Convention and its aims can be found on their webpage “MLC, 2006: What it is and what it does”. A practical overview of MLC’s applicability and requirements were also set out in the Club’s Notice to Members No. 28 2012/2013.
Additional information on the Convention and its requirements can be found in the "Useful Links" section below. A list of the States which have ratified it can be found here.
Since the Convention entered into force in 2013 shipowners have been required to provide evidence of financial security for the repatriation of seafarers (Standard A2.5) and shipowners' liability for sickness, injury and death (Regulation 4.2). With regard to repatriation all International Group (IG) Clubs amended their rules to embrace the full scope repatriation liabilities envisaged under Standard A2.5. Liability for seafarers' sickness, injury and death already form part of normal P&I cover.
In light of this States had been content to accept an IG Club's Certificate of Entry as satisfactory evidence of financial responsibility in respect of these liabilities. This evidential requirement changed as a result of the 2014 Amendments so that IG Clubs now issue Certificates to confirm adequate insurance is in place to meet liabilities. When the 2014 Amendments came into effect the pre-existing wording in the Convention requiring a shipowner to be named on documents evidencing financial responsibility was not amended to include an alternative option of issuing to the Registered Owner of the vessel, even though IG Clubs can only issue a Certificate to an insured party, who is often the Registered Owner rather than the shipowner. Because of this anomaly, an agreement was reached between the International Group and Member States that confirmed Certificates naming either the shipowner or Registered Owner would be treated as compliant with the MLC. This existing agreement has now also been reflected in a formal amendment to the MLC (see 2022 Amendments, below).
The Special Tripartite committee was established to oversee the workings of the Convention and have since decided to implement various amendments.
All agreed amendments are available on the ILO website, here.
The Special Tripartite Committee decided in 2014 to implement certain amendments which entered into force on 18 January 2017.Ships subject to the Convention are now required to display in a prominent place on board certificates confirming that insurance or other satisfactory financial security is in place to meet the costs of:
- Crew repatriation as well as up to four months contractually entitled arrears of wages and entitlements following abandonment (MLC Regulation 2.5.2, as amended), and
- Liabilities for contractual claims arising from seafarer personal injury, disability or death (MLC Standard A4.2, as amended)
Club cover does not extend to crew wages. However, all IG Club Boards decided that in order to provide the most cost efficient solution for shipowners Clubs would issue the necessary certification and indemnify seafarers directly if required, but on the basis that wage entitlements do not form part of normal Poolable cover and that the Club has a right of indemnity to recover those liabilities which fall outside of cover from the Member. Cover is provided on the basis of the MLC Extension Clause 2016, the text of which can be found in Maritime Labour Convention Extension Clause 2016. The IG Clubs also participate in a separate reinsurance programme. Details can be found in Notice to Members No.13 2016/2017 and No.17 2016/2017.
Amendments incorporated guidance on eliminating shipboard harassment and bullying and have been in force since 8 January 2019.
Amendments have been incorporated to ensure seafarers are paid by shipowners whilst held captive as a result of acts of piracy or armed robbery. These have been in force since 26 December 2020.
Important further amendments adopted in June 2022 to the MLC are expected to enter into force on 23 December 2024. These will help to clarify obligations of Member States and address lessons learned since previous amendments. For example:
- There have been occasions where Clubs have sought to repatriate stranded crew but have been prevented by local authorities who refuse to allow crew to leave the vessel as national laws require the presence of seafarers onboard. The MLC has been amended at 2.5.1 para 9 to include a requirement that Member States facilitate prompt repatriation of seafarers.
- In response to issues relating to access to medical care that arose both before and during COVID, wording is now included that requires Member States to ensure that seafarers can access prompt medical care ashore and are not prevented from disembarking for public health reasons (A4.1, new para 4-6).
- Several other welfare amendments have been passed relating to social connectivity, personal protection equipment sizing and nutrition.
- Shipowners have reported issues with some Port State Control Officers (“PSCO”) issuing deficiency notices where the entity named on a vessel’s Declaration of Maritime labour Compliance (DMLC) was a shipowner and did not match that of the Registered Owner named on MLC financial security Certificates. These alleged deficiencies should not arise due to the existence of an agreement between Member States and the International Group that recognises IG Clubs issue their Certificates to an insured party who is often the Registered Owner rather than the shipowner and naming either entity is valid for the purposes of the MLC. Currently, in circumstances where a PSCO issues a deficiency notice in error for different entities being named on the DMLC and MLC documents, the International Group and local Correspondents are asked to intervene to remind the PSCO that the Certificates are in fact compliant as there is an existing agreement with the Member States saying so, and request that the alleged deficiency is removed. An Amendment to Appendix A2-I(g) and A4-I(g) will now formally reiterate the position that already exists in the agreement between the International Group and Member States, making it clear within the Convention to PSCOs that financial security certificates are compliant if issued to either the shipowner or the Registered Owner.
Members requiring certificates must complete an application form and should note that by signing this form they agree, inter alia, to bind themselves and all other Members, Joint Members and Co-Assureds to the terms of the MLC Extension Clause 2016.
Independent, third party shipmanagers are often named on the vessel’s P&I policy as a Joint Member in order to obtain the benefit of the cover because of their involvement in the running of the vessel. But this also makes them jointly and severally liable under the Club’s Rules to indemnify the Club for any outstanding sums due from the Member (who is usually the shipowner), including any uninsured MLC expenses.
Shipmanagers are therefore potentially exposed to significant liability if their shipowner principal is unable to pay the crew’s wages and to repatriate them and which requires the Club to step in and meet these expenses in the first instance under its 2.5.2 MLC certificate. As our Notice to Members No.21 2017/2018 makes clear, the Club would then look to all Joint Members on the policy – including any shipmanagers – to make good the debt.
The West of England’s Third Party Shipmanagers MLC Cover protects shipmanagers named as Joint Members on the shipowner’s P&I policy against the risk of having to indemnify the Club for uninsured MLC liabilities should the shipowner fail to meet their obligations and to abandon the crew. Fully flexible and able to be tailored to meet a shipmanager’s precise requirements, it is backed by the West of England’s outstanding service.
Download our brochure below:
Third Party Shipmanagers MLC Cover PDF (83 KB)
Those Members who place cover for crew liabilities elsewhere or which are covered by local insurers will be required to also complete separate indemnities in favour of the Club by which those other insurers agree to reimburse the Club for liabilities which it is obliged to meet in the first instance but which form part of the other insurers' cover.
Further details of the application process can be found in Notice to Members No. 19 2016/2017.