Maritime

New Development

On August 6, 2013, the U.S. Coast Guard published a Notice of Availability in the Federal Register announcing the availability of Navigation and Vessel Inspection Circular 02-13 dated July 30, 2013 (“NVIC 02-13”) to provide guidance on Coast Guard policies and procedures regarding the inspection of U.S. vessels for voluntary compliance with the Maritime Labour Convention, 2006 (“MLC 2006”). 78 Fed. Reg. 47716. NVIC 02-13 updates a draft MLC 2006 NVIC published on February 11, 2013. The timing is critical because MLC 2006 goes into effect and Port State enforcement could start in less than two weeks on August 20, 2013.

The Federal Register Notice is available at http://www.regulations.gov/#!documentDetail;D=USCG_FRDOC_0001-3779 NVIC 02-13 is available at: http://www.uscg.mil/hq/cg5/nvic/pdf/2013/MLC%20NVIC%2002-13.pdf.

Background

As we previously advised, MLC 2006 is an international agreement that will essentially revise and replace most of the existing International Labour Organization (“ILO”) maritime labor instruments and recommendations adopted since 1920, while consolidating those labor instruments into one globally applicable and uniformly enforceable legal instrument.

The United States has not ratified MLC 2006 and, as a result, the Coast Guard will not enforce compliance with MLC 2006 on U.S.-flag vessels or foreign-flag vessels while navigating within U.S. waters. Despite the fact that the United States has not ratified MLC 2006, U.S.-flag vessels may be subject to Port State Control action in other countries. In light of this potential risk, which could include detention at a port in a country that is a party to MLC 2006, the Coast Guard encourages shipowners and operators to comply with MLC 2006. To that end, the Coast Guard published the draft NVIC which has now been superseded by NVIC 02-13.

As provided in NVIC 02-13, the Coast Guard intends to issue a Statement of Voluntary Compliance Maritime Labour Certificate (“SOVC-MLC”) to vessels demonstrating compliance with MLC 2006. Shipowners and operators of vessels that fall within the scope of the NVIC are not obligated to obtain a SOVC-MLC, but may voluntarily request inspection to obtain this certificate. The Coast Guard has authorized Recognized Class Societies (“RCSs”) to conduct MLC 2006 compliance inspections and issue SOVC-MLCs at the request of vessel owners and operators.

U.S.-flag vessels that operate on international routes, meaning those vessels that will enter the ports of countries that are parties to the MLC, are encouraged by the Coast Guard to participate. Those vessels not engaging on international voyages are not affected. Once the SOVC-MLC is issued, it must be posted on the vessel in a visible location accessible by the seafarers. The certificates will be valid for a period up to five years or until there has been a material change in circumstances. It is important to note that Port State Control authorities are not obligated to accept the Coast Guard SOVC-MLC. And, unless the United States becomes a party MLC 2006, the Coast Guard has no enforcement authority to inspect a vessel for compliance with the MLC.

See the Blank Rome May 2013 Advisory for more details on the background of MLC 2006 and the content of the draft MLC 2006 NVIC published on February 11, 2013., available at: http://www.blankrome.com/siteFiles/Publications/A0FD86E8E77F8AD5834126CFF0E132A1.pdf.

The Major Changes in NVIC 02-13 as Compared to the Draft NVIC

NVIC 02-13 incorporates several changes derived from public comments, with the majority of the changes found within the NVIC’s eleven enclosures, some of which are briefly described below.

The Coast Guard agreed with public comments that the draft NVIC lacked “substantial equivalencies” necessary for a vessel to demonstrate that it meets the requirements of the MLC via their compliance with equivalent U.S. laws, regulations and other measures. Accordingly, the Coast Guard amended the NVIC to incorporate the necessary equivalencies.

In addition, the NVIC now includes definitions of key terms consistent with the MLC 2006 and United States equivalent interpretations. The definition section addresses previous concerns that the term “seafarer” was too broad and provides a definition consistent with ILO Resolution VII, Concerning Information on Occupational Groups. In addition to defining “seafarer,” the NVIC enclosure also defines “ship” and “shipowner” according to both MLC 2006 and the U.S. equivalent interpretations. It is important that owners/operators understand the appropriate definitions to these key terms in order to ensure proper compliance.

Also, the Job Aid—previously included as the fifth enclosure in the draft NVIC—was removed when the Coast Guard concluded the aid was redundant and did not adequately address required equivalencies to meet MLC standards.

The Coast Guard also included further guidance on MLC standards for ship’s cook competency, on board complaint procedures, and how to determine what types of activities would be considered hazardous to seafarers under the age of 18.

Finally, the Coast Guard also added a model form titled “Interim Maritime Labour Certificate” (“SOVC-IMLC”), which can be issued by the Coast Guard or RCS on an interim basis to (1) new ships on delivery, (2) when a ship changes flag, or (3) when a shipowner assumes responsibility for the operation of a ship that is new to that shipowner. However, the SOVC-IMLC can only be issued by the Coast Guard or RCS for a period not exceeding six months, and a full MLC inspection must be completed prior to the expiration of the SOVC-IMLC.

Conclusion

As the few remaining days tick away before MLC 2006 enters into force, what is the real threat of enforcement by Port State Control authorities on and after August 20, 2013, and what actions should a shipowner or operator take at this late stage?

With regard to the threat of enforcement, a Party to MLC 2006 is only required to start compliance inspections 12 months after it becomes a Party. In addition, the International Labor Organization has urged Parties, during a period of one year following the initial entry into force of MLC 2006, to initially display leniency and give due consideration to allowing ships to continue to operate without a Maritime Labor Certificate provided that inspectors do not find evidence of a non-conformity with the Convention. This guidance is published in ILO Resolution XVII on the practical implementation of the issue of certificates upon the entry into force of MLC 2006.

This does not mean, however, that an owner/operator should simply ignore implementation of MLC 2006. Some Port State Control authorities may still decide to enforce the Convention on August 20, 2013. Accordingly, those owners and operators of U.S.-flag vessels operating vessels in international trade that have not yet taken action to arrange for inspection as per NVIC 02-13 and obtain a SOVC-MLC, should do so immediately to avoid any potential and costly delays in those countries which decide to begin vigorous enforcement. In addition, all owners and operators should review and take action to conform to NVIC 02-13, taking into account the changes highlighted above.