Shipowners

Key Points

01

The Final Report of the High-level Tripartite Working Group on Maritime Labour Standards in 2001 recalled the Shipowner Vice-Chairperson who said that:

“They were not pleased with the idea of yet more regulations, controls or penalties. However, they were pragmatists and they wanted to make sure that sensible labour standards were in place and that they were applied impartially to all competitors. This would allow for a level playing field in which standards of service dictated customer preference and not the ability to drive labour conditions down below an acceptable minimum standard. However, such a level playing field for maritime labour standards did not now exist. The industry did not have an up-to-date, effective and properly enforced core of key labour standards impartially applied to all. This created the risk of the fragmentation of regulation”.

02

On 20 August 2013, when the MLC entered into force, the advantage of the MLC was explained by the then Secretary General of the ICS Peter Hinchcliff:

“Shipowners are always looking for a level playing field. I think the Maritime Labour Convention will apply the level playing field very well. That levelling is the main advantage for the shipowner”.

03

In a recent publication of the ICS in 2024, it is stated that:

“… the continuous improvement of good employment practice, embracing ILO MLC standards, is crucial to the ability of shipping to attract and retain the dedicated and high calibre workforce on which the future of the industry will depend”.

04

It is in the interests of shipowners as much as it is in the interests of seafarers that the MLC is effectively implemented and enforced around the world.

05

The definition of “shipowner” appears to be broad enough to cover not only the registered owner (“the owner of the ship”) but also the beneficial owner, although the beneficial owner may be difficult to identify. The definition also appears to cover any version of the operator of the ship fulfilling “certain” of the duties or responsibilities on behalf of the shipowner, although the meaning of the qualification “certain” is uncertain. As stated by the ILO, the premise of the MLC is that “there could only be one person – namely, ‘the shipowner’ – who assumes, vis-à-vis each seafarer, all the duties and responsibilities imposed by the Convention on the shipowner”.

06

The obligation of shipowners pursuant to the MLC are many. Chief amongst these obligations is what has been stressed by the CEACR, namely “…the importance of the basic legal relationship” established by the MLC between the seafarer and “the person defined as ‘shipowner’ under Article II”. The Committee has emphasised that:

“every seafarer must have an original agreement signed by the seafarer and the shipowner or a representative of the latter (whether or not the shipowner is considered to be the employer of the seafarer)”.

07

During COVID-19, an anonymized survey sample of shipowners was conducted by means of a questionnaire that was administered by an independent third party in direct communication with shipowners. The sample of 16 shipowners comprised shipowners, ship managers and crew managers. The views and opinions expressed in the survey it must be emphasised did not purport to represent the views or opinions or official position of the ICS.

08

Some views expressed by survey participants were as follows:

• 75% said that the MLC was an achievement.
• All were of the view that seafarers were the main beneficiaries of the MLC.
• 56% were of the view that the Convention concerned only minimum or basic rights; 19% were of the view that the Convention set aspirational standards.
• Over 80% were of the view that, as they were not exploiting seafarers, the MLC had little impact on them other than an increase in bureaucracy involving some changes to their procedures and paperwork none of which was overly costly.
• 80% were of the view that the intended benefit of the MLC for shipowners was the creation of a level playing field and fairer competition: about 43% of the shipowners suggested some success in this regard; none were of the opinion that a level playing field had been fully or satisfactorily accomplished.

09

Most of the survey participants were of the view that the MLC has many shortcomings. Some shortcomings identified were:

• Standards are too generic and open to interpretation. This creates too many loopholes for non-compliance.
• Lack of effective implementation and enforcement by some flag states means that a level playing field has not yet been achieved.
• The quality of port state control is inconsistent. It is not difficult for substandard ships to trade to less stringent regimes. This means a level playing field has not yet been achieved.
• Flag and port States’ views are not always aligned which creates operational difficulties for good shipowners.

10

Regarding COVID-19, the survey participants generally did not take the view that there is an inherent or structural weakness in the MLC. COVID-19 was seen as a unique situation that the MLC was not designed to deal with. However they stated that if flag States and port States had treated the relevant MLC standards more seriously, the Convention may not have been perceived as so toothless.

11

ESG is rapidly expanding in all respects. And it is directly relevant to the responsibilities of shipowners in the supply chain. The full and complete implementation and enforcement of the MLC around the world is of foundational importance to ESG.