The Maritime Labour Convention 2006 (MLC) has been in force internationally since August 2013 and, in that time, it has become clear that it has received widespread ratification, that enforcement is a reality, and that ships run the risk of detention if they are not compliant. However, there has also been a good deal of confusion over the question of “who is the ‘shipowner’?” under the MLC. The answer to the question is important, since it is that person who has the principal burden of ensuring MLC compliance.
In the MLC, the “shipowner” is defined to mean the owner of the ship or another organisation or person who has assumed responsibility for the operation of the ship from the owner and who in doing so has agreed to take over the duties and responsibilities imposed on shipowners under the MLC. This is the case even if another organisation carries out some of the duties of “shipowner” on its behalf. Therefore, the owner and the “shipowner” may well be different persons or organisations.
The MLC definition gives as an example the bareboat charterer as one type of person who may assume the mantle of “shipowner” from the owner. This accords with the charterer’s significant responsibilities under bareboat charterparty agreements whereby typically the charterer provides the crew and operates the vessel. By way of illustration, Barecon 2001 imposes extensive responsibilities on the bareboat charterer for the ship’s operation and her navigation, maintenance, repair and manning.
By contrast, the charterer under a time or voyage charterparty agreement would not owe the same duties and responsibilities and thus day-to-day is unlikely to be the “shipowner”. Rather, responsibilities for the ship’s operation are likely to reside with the owner who on that basis will be the “shipowner”.
As “shipowner”, the owner of a ship on time charter has prima facie responsibility for ensuring the MLC compliance of all seafarers’ employment on board the ship. For example, the requirement that every seafarer has a seafarer employment contract containing certain minimum terms. Under the MLC, this is the case even if some of the seafarers on board are legally employed by a different organisation such as the charterer (e.g. in respect of a supercargo).
This raises a potential difficulty for the owner; how can he be expected to ensure that the charterer’s employment of seafarers on board is MLC compliant? Furthermore, how can the owner avoid a scenario where the charterer asserts that the ship is off-hire on the basis that she has been detained for MLC non-compliance, for which default the owner as “shipowner” is prima facie responsible, but where non-compliance is in reality the charterer’s fault?
An answer is to draft the charterparty so that responsibilities for MLC compliance do not reside solely with the owner as “shipowner” but are apportioned between the owner and the charterer in order that liabilities attach where the responsibilities truly lie. For example, the charterparty could provide that it is the charterer’s duty to ensure that its employment of seafarers on board is MLC-compliant. This could be reinforced with an indemnity in favour of the owner in case there do prove to be MLC deficiencies. However, if “knock for knock” arrangements are desired in respect of other aspects of the charterparty, care would be needed in the drafting so that these are not prejudiced by the inclusion of the indemnity. Additional charterparty clauses could also provide for whether the ship will be considered to be off-hire in circumstances where she is delayed in port for MLC deficiencies that are in reality attributable to the charterer’s non-compliance.