As the dust begins to settle following the implementation of the Maritime Labour Convention 2006 (MLC), there have been a number of ship detentions for various offences of non-compliance as owners get to grips with precisely what they need to do in order to satisfy the new legislative burden. It is, however, sometimes difficult to identify who the shipowner is with overall responsibility for ensuring compliance.
The MLC says “shipowner“ means “the owner of the ship or another organisation or person, such as the manager, agent or bareboat charterer, who has assumed the responsibility for the operation of the ship from the owner and who, on assuming such responsibility, has agreed to take over the duties and responsibilities imposed on shipowners in accordance with this Convention, regardless of whether any other organisation or persons fulfill certain of the duties or responsibilities on behalf of the shipowner”. The definition can therefore give rise to the situation where the owner and “shipowner” are different organisations.
Reflecting on the definition above, this scenario could arise where a ship is used by a bareboat charterer. While the ship will be owned by someone else, the bareboat charterer may be considered to be the shipowner with overall responsibility for ensuring MLC compliance. Since bareboat charterers normally provide crew and operate the ship, this would seem to make sense.
However, where a boat is operated under a time or voyage charterparty agreement, responsibility for MLC compliance is likely to fall on the owner, since they will be in overall charge of the ship’s operation. Difficulties can arise, however, where some of the seafarers working on the ship are provided and employed by the charterer. One of the requirements of the MLC is that all seafarers should have an employment contract containing specific minimum terms. Under the MLC the owner is the party responsible for ensuring compliance of all employment contracts on the ship even if he is not the employer. It will be difficult for owners themselves to ensure that the charterers have MLC-compliant employment contracts in place for their crew.
It is easy to see how a dispute could arise where a ship is detained for non-compliance as a result of the charterer not having appropriate employment contracts in place. The charterer will argue the ship is off-hire and submit that responsibility for compliance rests with the owner.
It is therefore crucial to ensure that charterparty agreements are now drafted with these scenarios in mind. For example, responsibility for MLC compliance could be apportioned between the owner and charterer, and additional clauses could be inserted so there is agreement as to whether or not the ship will be deemed to be off-hire during periods of detention. A suitably drafted charterparty agreement will ensure that both parties are aware of their obligations and should at least assist in reducing the number of disputes arising as a result of the provisions of the MLC.
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.