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Will your ship be the next banned from Australia?

Australia has a reputation for rigorous inspection and enforcement action in relation to its Port State Control (PSC) activities. In recent years, this reputation has been most clearly illustrated by an ongoing focus on enforcing compliance with the Maritime Labour Convention 2006 (MLC) and the imposition of hard-hitting trading bans for ships on which crew are underpaid.

Since 2014, 16 ships have been banned from Australian ports by the Australian Maritime Safety Authority (AMSA). This year alone, four ships have been banned from trading to Australia for breaches of the MLC, for a cumulative total of 36 months.

The Maritime Labour Convention 2006

Australia is a signatory to the MLC, which sets out standards for the working and living conditions of international seafarers. Australia has certain obligations under the MLC in relation to foreign vessels which enter its ports. This includes an obligation to exercise PSC over ships which enter those ports and which do not meet their obligations under the MLC.

AMSA has the legislative authority to ensure vessel owners and operators are fulfilling their obligations under the MLC. Relevantly, regulation 2.2 of the MLC provides:

“All seafarers shall be paid for their work regularly and in full accordance with their employment agreements.”

Port State Control inspections and vessel bans

In order to investigate and enforce compliance with the MLC and other international and domestic shipping requirements, AMSA exercises PSC over all trading vessels in Australian waters. Under the Navigation Act 2012 (Cth) (Navigation Act), AMSA has the power to ban vessels that do not meet PSC requirements, for up to 24 months, if the vessel has been issued two prohibitions and is subsequently detained within two years of the expiry of the second prohibition.

In August 2014, AMSA exercised its prohibition powers for the first time by prohibiting the Liberian flagged ship “Vega Auriga” from using or entering any Australian ports for three months based on repeated breaches relating to seafarer welfare and maintenance of the ship. The General Manager of AMSA’s Ship Safety Division said at the time of issuing the direction:

“Vessels that do not meet such standards, including standards for the welfare and treatment of crew, pose an increased risk to seafarers, safe operations and the marine environment.”
“Seafarer welfare is just as important as the proper maintenance of ship equipment, and an integral part of safe operations. A failure in either system could lead to serious accidents.”
Today, AMSA conducts approximately 3,000 PSC inspections annually. In enforcing the MLC, it is common for AMSA to scrutinise crew employment and payment arrangements, including contracts of employment, records of service and wage accounts. As a ship owner, you can expect vessel detentions until any identified breaches are rectified.

“Fortune Genius” banned for 12 months – September 2019

An example of the circumstances resulting in a recent significant vessel ban can be found in the case of the “Fortune Genius”. On 5 September 2019, AMSA was notified of a complaint that some of the seafarers on the “Fortune Genius” had been underpaid. On 5 and 6 September 2019, two delegates of AMSA carried out a detailed inspection of the ship and its records. The vessel was later detained by AMSA. The notice of the detention specified a number of deficiencies relating to the payment of wages to the group of crew members from Myanmar. The deficiencies in the operation of the ship identified during the inspection included:

seafarers were not given a monthly account of wages
more than one set of wage accounts were in use, contrary to regulation 2.2 of the MLC
the seafarers had not been paid at monthly intervals in full for their work in accordance with their employment agreements and/or collective bargaining agreement
some seafarers had been coerced by the ship’s master to sign false wage statements
the delegates were presented with false documentation purporting to show home allotments made on behalf of the seafarers, but there was no objective evidence that these allotments had been made
the above actions or failures were in breach of the conditions of employment set out in the MLC.
AMSA directed the “Fortune Genius” not to enter or use any port in Australia. This direction commenced on the day the vessel departed Australia and lasts for 12 months unless withdrawn earlier. The ban was challenged and later upheld by the Administrative Appeals Tribunal of Australia (Tribunal).

Panama-flagged bulk carrier “AC Sesoda”

In more recent times, AMSA has banned the Panama-flagged bulk carrier “AC Sesoda” for underpaying its crew. On 10 September 2020, AMSA boarded the ship at Mourilyan in Queensland to investigate allegations about underpayment. During its investigation, evidence emerged that a number of crew members had only been paid half of their wages since October 2019 by more than $118,000. According to AMSA:

“The ship’s master and Taiwanese operator, Sincere Industrial Corporation, attempted to conceal the underpayment from AMSA inspectors by only producing a fabricated wage record which indicated that these seafarers had been paid in full…”
The ship was released from detention and issued with a 12-month ban, prohibiting it from entering an Australian port during that period.

2020 has been a year of ship bans

“AC Sesoda” is the fourth ship AMSA has banned in 2020 for serious breaches of the MLC. Other ships banned from Australian ports this year include the “Unison Jasper”, “TW Hamburg” and “Agia Sofia”. Together, the seafarers on these four ships were underpaid in excess of $290,000.

What owners should do

The contraventions outlined above in relation to the MLC are extremely serious. Vessels subject to Australian PSC inspections can expect detailed examinations of crew employment and payment history by AMSA.

Owners should also ensure that the ship’s masters cooperate with AMSA during its inspections. One of the reasons why the Tribunal upheld AMSA’s direction in the case of the “Fortune Genius” is that the master of that ship did not deal with AMSA honestly during the investigation.

As a reminder, AMSA is sending a simple yet strong message to operators:

“Pay your crew properly, treat them respectfully and comply with the requirements of the Maritime Labour Convention or you will not be welcome in Australia…” – Allan Schwartz, AMSA General Manager Operations.

Source: Holding Redlich – Nathan Cecil and Meshal Althobaiti

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