Singapore: Amendments to Maritime Labour Convention (MLC) 2006

Compulsory Provision of Financial Security for the Repatriation of Abandoned Seafarers and Work Injury Compensation

The International Labour Organization’s (ILO) 2014 amendments to the Maritime Labour Convention (MLC), 2006 came into force on 18 January 2017. The requirements pursuant to these amendments include obligations for ship owners to have a contract of insurance or other financial security in place to cover their liabilities for outstanding wages and repatriation of seafarers in the event of abandonment, as well as for compensation in the event of a seafarer’s death or long-term disability.

The abovementioned amendments have legal effect in Singapore following the enactment of recent legislation including the Merchant Shipping (Maritime Labour Convention) (Financial Security) Regulations 2017 (read with the Merchant Shipping (Maritime Labour Convention) Act (No. 6 of 2014) (the “Act”)) and the Merchant Shipping (Maritime Labour Convention) (Forms, Certificates and Fees) (Amendments) Regulations 2017. These provisions apply to all ships registered with the Singapore Registry of Ships ordinarily engaged in commercial activities (“MLC Ships”).

Compliance Checklist

If not already done so, owners of MLC Ships will need to ensure that they have adequately insured their liabilities (prescribed under the ILO’s amendments) and that their MLC Ships carry and maintain the requisite documents and certificates attesting that the requisite contract of insurance or other financial security are in place to cover the ship owner’s said liabilities.

  • What are the Financial Security Requirements?

Under the provisions of the Act, an owner of an MLC Ship must not allow its ship to put to or remain at sea unless there is in force a contract of insurance or other financial security contracted with, or provided by, an approved financial security provider, that is adequate to ensure that the ship owner will be able to meet any liabilities it may have arising from its obligation to repatriate a seafarer, or to provide compensation in the event of death or long-term disability to a seafarer arising from occupational injury, illness or hazard[1].

The contract of insurance or other financial security provider must give at least 30 days’ prior written notice to the Maritime and Port Authority of Singapore (MPA), of the cancellation or termination of the contract of insurance or other financial security, before such cancellation or termination[2].

  • What liabilities should be covered?

Pursuant to the ILO’s amendments to the MLC, owners of MLC Ships must ensure that their repatriation liabilities, including the following, are insured under the contract of insurance or other financial security:-

  • Up to four months of a seafarer’s outstanding wages and other outstanding entitlements under their employment agreement, the relevant collective bargaining agreement or Singapore law;
  • All reasonable costs and expenses of repatriation; and
  • The essential needs of the abandoned seafarer (including adequate food, clothing, accommodation, drinking water supplies, necessary medical care, etc.) until the seafarer’s arrival at his repatriation destination.

In relation to the work injury liabilities, owners of MLC Ships should ensure that the liabilities are insured under the contract of insurance or other financial security includes:-

  • Any medical and other expenses reasonably incurred in connection with the seafarer’s occupational sickness or injury, as provided for under their employment contract or under Singapore law;
  • Any wages payable to the seafarer following occupational sickness or injury sustained, as provided for under their employment contract or under Singapore law;
  • Any expenses reasonably incurred in connection with a seafarer’s burial or cremation, if the seafarer dies on board or ashore while employed to work on his ship; and
  • Any liabilities that may arise under the Work Injury Compensation Act (Cap. 354).
  • Who are the Approved Financial Security Providers?

A recent list of financial security providers that have been approved by the MPA can be found at Annex B of the MPA Shipping Circular No. 3 of 2017/Rev.1[3].

  • What Documents or Certificates will need to be maintained or re-issued?

Certificates of the financial security contract

Ship owners must carry certificates of the financial security contract, provided by each financial security provider, on board all MLC Ships. Such certificates must be displayed in a conspicuous place where they are accessible to the seafarers.

Such certificates must state the particulars of a financial security contract listed in the Second and Third Schedules of the Merchant Shipping (Maritime Labour Convention) (Financial Security) Regulations 2017. The said certificates may be inspected by Port State control officers.

Declaration of Maritime Labour Compliance (DMLC)

MLC Ships of 500 gross tonnage and above are required to carry and maintain a Maritime Labour Certificate and a Declaration of Maritime Labour Compliance (DMLC), which consists of Parts I and II.

The updated mandatory ship-specific DMLC Part I, incorporating the amendments made by the Merchant Shipping (Maritime Labour Convention) (Forms, Certificates and Fees) (Amendments) Regulations 2017, has been prepared by the MPA, and which if not already done so, will be re-issued by the MPA before the due date of the MLC Ship’s first MLC renewal inspection after 18 January 2017[4].

Once the MPA has re-issued the DMLC Part I, ship owners should amend their DMLC Part II in accordance with the prescribed form under the amended First Schedule of the Merchant Shipping (Maritime Labour Convention) (Forms, Certificates and Fees) Regulations 2014.

Owners of applicable MLC Ships registered on or after 18 January 2017 will be issued the updated DMLC Part I by the MPA, and must prepare their DMLC Part II to indicate their compliance with the updated DMLC Part I.

[1] See sections 34(1), (2) and (3) of the Merchant Shipping (Maritime Labour Convention) Act (No. 6 of 2014).

[2] See section 8(2) of the Merchant Shipping (Maritime Labour Convention) (Financial Security) Regulations 2017

[3] See <http://www.mpa.gov.sg/web/wcm/connect/www/92d1a9ab-be13-4e07-9384-620db99f3c2f/sc_no_3_of_2017_rev1.pdf?MOD=AJPERES>; last accessed on 11 April 2017.

[4] See MPA Shipping Circular No. 4 of 2017/Rev.1, at paragraph [10].

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