UK Shipping Regulatory Update
In recent years, vessel operators and their insurers have had to address increasing regulatory demands.
The UK is subject to a wide range of regulatory legislation under domestic, regional (at least until the implications of Brexit become clear) and international law. The latter may include resolutions and conventions made by various UN agencies such as the International Maritime Organization (IMO) and the International Labour Organization (ILO).
It is crucial that vessels, crew and systems meet the latest regulations both in terms of current requirements and those anticipated in the near future. Our partner-led teams have specialist expertise in this area, as we recognise that staying ahead of the game when it comes to regulatory issues is essential in today’s climate and critical to business success.
Click on the below links for further information on ‘hot topics’ in this area: –
- Marine Environment and Ship Emissions
Few areas attract more regulatory and compliance demands than the environment. The International Maritime Organization (IMO) and the EU have been particularly active on this subject, reflecting the global push to reduce ship emissions and pollution of the marine environment.
From an international point of view, the IMO periodically proposes and adopts amendments to revise the key Convention in this area, the International Convention for the Prevention of Pollution from Ships (MARPOL 73/78). In relation to ship emissions, it has done so with revisions to MARPOL Annex VI which came into force on 1 July 2010.
The EU has also become increasingly active when regulating maritime safety and the marine environment. Indeed, the EU regime may, in some cases, be more stringent than the international framework. As the UK is currently subject to EU Law, English lawyers need to be fully up to speed with these nuances. Our experience in this area includes advising on: –
- The international and regional restrictions on sulphur emissions and the likely impact for owners/operators (e.g. operating costs);
- Availability and feasibility of alternative solutions (e.g.: low sulphur fuels and abatement technology); and
- Impact of emissions regulations on existing charterparties and necessary contractual arrangements for future charters to ensure regulatory compliance.
- Maritime Labour Convention (MLC)
The Maritime Labour Convention 2006 (MLC) was ratified by the UK on 7 August 2013 and came into force for the UK on 7 August 2014. The MLC aims to ensure minimum standards for seafarers’ employment at sea. Often referred to as the seafarer’s ‘bill of rights’, it comprises the ‘fourth pillar’ of the international regulatory regime for quality shipping, alongside key IMO Conventions such as the International Convention for the Safety of Life at Sea (SOLAS), the International Convention on Standards of Training, Certification and Watchkeeping (STCW), and the International Convention for the Prevention of Pollution from Ships (MARPOL 73/78).
It is important that shipowners and ship operators understand the impact of their obligations under the MLC. The scope of the MLC is very wide: it aims to achieve protection for all seafarers. This is reflected in the broad definition of “seafarer” as “any person who is employed or engaged or works in any capacity on board a ship to which this Convention applies.” The intention is to cover all persons employed or working on board the ship, in any capacity whatsoever, including the self-employed.
Enforcement is to be through a combination of ‘compliance awareness’ at all levels, flag state control and port state control.
MLC-related challenges for owners/operators may relate to: –
- Scope of application of MLC 2006 and related business implications;
- The “Declaration of Maritime Labour Compliance”;
- Preparation of Seafarer’s Employment Agreements;
- Preparation of internal procedures such as the on board complaints procedure; and
- Port State Control and related proceedings.
- SEAFARER RIGHTS
In the aftermath of a casualty, particularly in high profile incidents where pollution is involved, there is often a tendency on the part of local authorities to treat seafarers as potential criminals. Coastal authorities face immense pressure to deal with those assumed to be responsible for the incident – and it is often the crew who suffer the consequences.
In such cases, where breaches of seafarers’ human rights have occurred or indeed where there has been a risk of such breaches, particularly sensitive case handling is required, together with an awareness of the relevant regime under both international and domestic law.
As far as the UK, and other jurisdictions are concerned, there are a number of sources of law (both binding and non-binding) that may be of relevance depending on the particular circumstances. For example: –
- The 1948 Universal Declaration of Human Rights;
- United Nations Convention on the Law of the Sea 1982 – UNCLOS;
- The European Convention on Human Rights; and
- Guidelines on Fair Treatment of Seafarers in the event of a Maritime Accident.
We frequently work on cases where the fair treatment of seafarers is a key factor, including the high profile Prestige oil spill in 2002. Olivia Hamer is the current Chair of the Comité Maritime International’s International Working Group on the Fair Treatment of Seafarers.
- RESCUE AT SEA
The number of migrants fleeing conflict and attempting perilous crossings by sea has risen sharply in recent years. The International Organization for Migration reported that, as at October 2016, about 328,225 migrants and refugees entered Europe by sea during 2016, arriving mostly in Greece and Italy. Back in February 2015, over 300 migrants are believed to have drowned off Lampedusa, the southernmost Italian island that was also the scene of the loss of life that prompted Italy to launch the major search and rescue operation Mare Nostrum in October 2013. Operation Triton was subsequently launched by Frontex (which coordinates joint operations at the external border of the European Union) to assist with increased migratory pressure on Italy’s external borders.
The reduction of state resources dedicated to this issue has led to commercial shipping taking on much of the burden of rescuing those in distress at sea. This situation puts all concerned in danger, as ships’ masters and crews are, with the best will in the world, often ill-equipped for rescue operations, albeit they have a well-established obligation to intervene in many such situations.
There is no doubt that shipowners and crews will continue, literally, to go out of their way to help those in distress at sea. The obligation is not only moral, however. Shipowners, masters and crews have legal duties to help those in distress at sea under international law. These apply in almost all circumstances except where there is a significant risk to the rescuing crew and vessel. They need to be prepared. By ensuring that crew are sufficiently equipped and trained in advance, and given support during a crisis, the chances of a rescue situation becoming a disaster are minimised.
In practice, however, the correct approach to take is often complex. Where a Maritime Rescue Coordination Centre (MRCC) gives an order, whether a master is required to follow it may depend on a number of factors, including whether the vessel is within that MRCC’s jurisdiction. While it is in the nature of rescue at sea that decisions may need to be made quickly, there may be time to take advice from those experienced in handling such situations.
Shipowers/masters and Coastal States will need to be aware of their obligations under international law in this area, in particular under:
- The UN Convention of the Law of the Sea 1982 (UNCLOS);
- The International Convention for the Safety of Life at Sea 1974 (SOLAS);
- The International Convention on Maritime Search and Rescue 1979 (SAR);
- The International Convention on Salvage 1989 (the Salvage Convention); and
- The Convention Relating to the Status of Refugees (the Refugee Convention 1951).
These treaties place different responsibilities on a ship’s master and Coastal States.
- MODERN SLAVERY ACT 2015
The UK’s Modern Slavery Act 2015 (the Act) came into force on 31 July 2015 and addresses the rise of new forms of slavery. These include imposing, as from October 2015, an obligation on companies with a turnover of over £36m to disclose what they are doing (or indeed not doing) to eradicate slavery within their supply chains.
Shipowners, particularly those with links to the UK, may therefore need to review their anti-slavery and anti-trafficking policies and may be particularly affected as an industry because, in some circumstances, the legislation provides for the forfeiture of vessels that have been used (or were intended to be used) for trafficking.
The Act consolidates the UK’s existing anti-slavery legislation and is a response to the increased public awareness of these issues and makes it an offence knowingly to hold another person “in slavery or servitude”, to make them “perform forced or compulsory labour” or, importantly for shipowners, to “arrange or facilitate the travel of another person” with a view to their being exploited.
Shipowners maintaining a part of their business in the UK with a turnover of over £36m should invest resources in investigating their supply chains in order to publish annual statements under s.54 of the Act. Those to whom the Act does not apply directly may need to investigate their supply chains anyway, to enable their contractual counterparties in the UK to satisfy their own obligations under the Act.
Further, shipowners will need to be aware of and address the risk of ship forfeiture. There may be a significant risk of the complete loss of vessels in circumstances where the shipowner is uninsured for that loss.
Recently, an offshore supply vessel and her sister ship were detained in Scotland and Great Yarmouth respectively after it was alleged that Indian crew members on board the supply vessel had not received any wages for at least two months. The vessels are likely to be detained for a lengthy period whilst the situation is resolved.
On 10 June 2016, the High Court handed down its first ever judgment under the Act. In its judgment, the High Court found a gangmaster company liable to compensate victims of modern slavery, although the level of compensation has yet to be determined. The workers in question were from Lithuania and had been trafficked to the UK and were working in supply chains producing premium free range eggs for fast food restaurants and leading British supermarket chains.
These cases highlight the need for all companies to take adequate steps to ensure that they are not unwittingly participating in modern slavery. It would seem that the Act will in future have additional compliance ramifications; there is a Bill currently under consideration to amend the Act that includes requiring commercial organisations and public bodies to include a statement on slavery and human trafficking in their annual report and accounts.
- SOLAS and International Safety Management Code (ISM Code)
Amendments to SOLAS 2015-2017
A version of the SOLAS Convention was first adopted in 1914 following major loss of life in the RMS Titanic disaster, and updated versions and amendments have been produced in subsequent years. The Maritime Safety Committee is IMO’s senior technical body on safety-related matters, and regularly produces resolutions on safety related matters.
In the wake of another maritime disaster in the Costa Concordia cruise ship grounding, regulations that came into force on 01 January 2015 require newly- embarked passengers to be mustered prior to or immediately upon departure from port. Enclosed space entry and rescue drills also became mandatory and require crew members to participate in drills at least every two months.
Amendments to the ISM Code also entered into force in 2015. Arguably requiring only minor changes in practice, companies are required to ensure ships are manned with qualified, certificated and medically fit seafarers in accordance with national and International requirements and are appropriately manned in order to address all aspects of maintaining safe operations on board. Companies must also periodically verify whether all those undertaking delegated ISM related tasks act in conformity with the company’s responsibilities under the ISM Code.
This year, amended regulations covering various safety matters have entered into force. These update the requirements for demonstrating the compliance of steering gear during sea trials and introduce mandatory requirements for inert gas systems on board new oil and chemical tankers of 8,000 dwt and above, as well as for ventilation systems on board new ships. Further amendments require new ships designed to carry containers on or above the weather deck to carry additional firefighting equipment. Cargo ships are also now required to carry additional means of escape from machinery spaces.
Also entering into force in January 2016 were new requirements for safety features on vehicle carriers carrying motor vehicles using compressed gas as fuel. In July 2016, amendments to SOLAS chapter VI required mandatory verification of the gross mass of containers, either by weighing the packed container, or by weighing all the packages. Further amendments added a requirement for ships to carry portable atmosphere testing instruments to measure concentrations of a number of gases prior to entry into enclosed spaces.
Looking ahead to 2017, adopted amendments to SOLAS will come into force on 1 January, relating to the International Code of Safety for Ships using Gases or other Low-flashpoint Fuels (the IGF Code). Additional amendments relate to the secondary means of venting cargo tanks in order to protect against over and under pressure in the event of a cargo tank isolation valve being damaged or inadvertently closed.
We keep a close eye on this frequently-evolving and increasingly burdensome area, advising clients on their responsibilities and helping them to deal with suspected infractions. In short, we know shipping inside out and are here to help.
For more information as to how we can assist you on regulatory and compliance matters in the UK shipping sector, please contact: