Shipping Regulation in China

The overriding legislation governing the Chinese shipping industry is the Maritime Code of the People’s Republic of China, which came into force on 1 July 1993. The Maritime Code is supplemented by various other specific legislations, judicial interpretations by the Supreme Court and the State Council’s administrative regulations.

The Hague Rules, the Hague-Visby Rules and the Hamburg Rules are widely accepted as the three primary rules regulating the transport of goods by sea. Although China has not acceded to any of these three rules, many Chinese maritime legislations find their roots in these rules.

As a major shipping country, China has also ratified almost all major shipping conventions, including SOLAS 74, 78, 88, Loadlines 66, 88, Tonnage 69, COLREG 72, CSC 72, STCW 78, IMSO 76, MARPOL 73/78 Annexes I to V, MARPOL 97 Annex VI, Salvage 89, Bunker 01 and etc.

At present, the international conventions of most interest in the industry are SOLAS VGM, Ballast Water Convention and Maritime Labour Convention, on which we now elaborate Chinese positions as follows.

SOLAS VGM

Since 1 July 2016, new requirements to verify the gross mass of a packed container have entered into force pursuant to the amendment adopted by the International Maritime Organization in 2015 to the International Convention for the Safety of Life at Sea (“SOLAS”) 1974 Chapter VI Regulation 2. China is a contracting state of SOLAS, hence, the SOLAS VGM amendment is compulsorily applicable in China.

On 6 June 2016, the Ministry of Transport of the People’s Republic of China issued the Announcement in respect of Implementation of the 2015 Amendment to SOLAS 1974 Chapter VI, Regulation 2 to its subordinated Maritime Safety Administrations:-

  • introducing the requirements under the SOLAS amendment, in particular that shippers are obligated to obtain the verified gross mass (“VGM”) of a packed export container using either Method 1 (i.e. to weigh the packed container using calibrated and certified equipment) or Method 2 (i.e. to weigh all packages and items within the container and add them to the tare weight) prior to shipment, and vessels and terminals shall not load a container for which the VGM has not be obtained;
  • providing guidelines as to Method 2;
  • requiring the maritime administrative departments to carry out ad-hoc inspections from time to time; and
  • setting out the allowance of a negligible margin of error being +/-5% or 1 ton (whichever is smaller).

Weighing service is subject to the policies of each individual terminal in China. It has been suggested that most shippers in China will use Method 2 to obtain the VGMs for operability and cost reasons.

Ballast Water Convention 2004

With a view to preventing the transfer of harmful aquatic organisms and pathogens through ships’ ballast water and sediments, the International Maritime Organization (“IMO”) adopted the International Convention for the Control and Management of Ships’ Ballast Water and Sediments (“BWM Convention”) on 13 February 2004. With Finland acceding to BWM Convention on 8 September 2016, the total tonnage of its contracting states reaches 35.1441% of the gross tonnage of the world’s merchant fleet, with 52 contracting parties. As such, the BWM Convention will enter into force on 8 September 2017, that is 12 months after ratification by a minimum of 30 states, representing 35% of world merchant shipping tonnage.

China has not formally ratified the BWM Convention.

However, due to the “no more favourable treatment” principle of the BWM Convention, the Chinese government has started taking active measures to prepare Chinese  flagged vessels for compliance with the BWM Conventions’ requirements:-

  • on 15 June 2012, the Maritime Safety Administration of the People’s Republic of China released the Provisional Regulation in respect of Declaration of Ships’ Ballast Water Management System, introducing the BWM Convention’s technical standards and IMO approval procedures, and authorizing China Classification Society (“CCS”) to issue Type Approval Certificates of Ballast Water Management System;
  • CCS has formulated guidelines in respect of the approval procedures and requirements for assessing whether ships’ ballast water management systems meet the standards as set out in the BWM Convention.

On 2 April 2015, the State Council of the People’s Republic of China issued a Notice on the Action Plan for the Prevention and Treatment of Water Pollution, which expressly requires that “international vessels sailing within the territory of China shall implement ballast water exchange or install ballast water inactivation treatment system” and at the same time urges the relevant departments to enact domestic legislations/regulations in this regard.

It is presently unclear whether China’s domestic legislations/regulations to be enacted will mirror exactly the BWM Convention.  We will monitor developments and issue updates on developments in this area.

Maritime Labour Convention 2006

On 12 November 2015, the People’s Republic of China formally submitted the instrument of ratification of the Maritime Labour Convention, 2006 (“MLC 2006”) to the International Labour Organisation. The MLC 2006 will enter into force for the People’s Republic of China (exclusive of Hong Kong and Macao) one year after ratification i.e. on 12 November 2016.

MLC 2006 covers basically all aspects of working and living conditions of seafarers and is adopted with the aim to secure the rights of seafarers to decent employment. MLC 2006 provides that “A ship to which this Convention applies may, in accordance with international law, be inspected by a Member other than the flag State, when the ship is in one of its ports, to determine whether the ship is in compliance with the requirements of this Convention.” and “Each Member shall implement its responsibilities under this Convention in such a way as to ensure that the ships that fly the flag of any State that has not ratified this Convention do not receive more favourable treatment than the ships that fly the flag of any State that has ratified it.”

In China, the Ministry of Transport and the Ministry of Human Resources and Social Security will act as the enforcement authority, cooperate and jointly perform duties under MLC 2006 in respect of issuing maritime labour certificates and undertaking port state control.

Detailed implementation measures are not yet in place. It has been reported that the aforesaid two ministries are in the course of preparing relevant domestic regulations so as to achieve full implementation of MLC 2006 in China.

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