Trishelea Sandosam highlights the key amendments to the Merchant Shipping Ordinance 1952.

INTRODUCTION
 
Tides have changed. In the wave of the 21^st century, the global shipping community has increasingly recognised the importance of balancing growth of trade with protection of rights of seafarers. How does Malaysia fare on this front?
 
Malaysia has ridden these shifting tides by ratifying the Maritime Labour Convention 2006 (“MLC 2006”) on 20 August 2013. Following the ratification of the MLC 2006, the Merchant Shipping Ordinance 1952 (“MSO 1952”), Malaysia’s foremost shipping legislation, was amended pursuant to the Merchant Shipping Ordinance (Amendment) Act 2016. The amendments came into operation on 1 March 2017 to anchor the provisions of the MSO 1952 with the requirements imposed by the MLC 2006.
 
This article will provide a brief overview of the MLC 2006 and set out the key provisions contained in the amendments to the MSO 1952.
 
WHAT IS THE MLC 2006?
 
Often hailed as the “bill of rights” for seafarers, the MLC 2006 was developed by the International Labour Organisation to establish minimum working and living standards for seafarers. It came into force on 20 August 2013 and has currently been ratified by 81 countries including leading shipping nations such as the United Kingdom, Singapore, Korea and China, which represent approximately 91% of the world’s gross tonnage. 
 
The MLC 2006 consists of Articles and Regulations which outline the core rights, principles and basic obligations of countries ratifying the MLC 2006. There is also the Code which comprises mandatory standard and non-mandatory guidelines providing details for implementation of the MLC 2006.
 
THE MSO 1952 AMENDMENTS
 
The main amendments are set out in the new Part III, which completely replaces the former Part III, and offers a more concise read than its predecessor. The provisions of Part III are divided into various sections which include manning and qualification, conditions of service, wages, health, accommodation and provisions, and conduct and discipline.
 
Who does Part III apply to?
 
Owners - The definition of owner is wide and includes any person who has interest in the ownership of the ship, a charterer, or a person responsible for the navigation and management of the ship, in circumstances where neither the owner nor the charterer is responsible for the same.
 
Seafarers – The previous term “seaman” has been dispensed with in favour of the MLC term “seafarer” which now includes a master. Persons such as pilots, repair and maintenance technicians, and military personnel are excluded from the definition of seafarers.  
 
Ships – The bulk of the provisions in Part III apply to Malaysian ships, while a number apply to both Malaysian and foreign ships. The exempted categories of ships include government or state owned ships, fishing vessels, pleasure yachts, Malaysian ships trading or operating exclusively within Malaysian ports, FPSO and FSO vessels.
 
What are the minimum standards?

Safe manning - Before a ship can embark on a voyage or excursion, she must have the sufficient number of ship personnel as prescribed by the safe manning document issued by the Director of Marine (for Malaysian ships) or the flag state (for foreign ships). The penalty for non-compliance is a fine not exceeding RM100,000 and the possibility of detention by the Director of Marine if the ship is in Malaysian waters.
 
Certification and training – Owners are to provide adequate training to seafarers who must also hold the relevant certificates issued by the Director of Marine or other recognised countries/training institutions to prove their competency and qualification to serve on a ship.
 
Minimum age – Seafarers employed on board a Malaysian ship must now be at least 16 years of age. Limitations are also imposed on the timing and type of work that may be carried out by seafarers below the age of 18 years.  
 

 
Employment contract­ – Seafarers employed on board a Malaysian ship must have a signed employment contract and have been given an opportunity to examine its terms beforehand. Such contract is deemed to be breached if the owner fails to provide work. This seafarer’s employment contract is distinct from the article of agreement (“Article of Agreement”) required to be signed between the master of every ship and the seafarer whom the master carries to sea from any port in Malaysia.
 
Hours of rest – Seafarers on board Malaysian ships are required to be given at least 10 hours of rest in a day, and 72 hours of rest in a week. Special conditions apply to seafarers below the age of 18. In calculating hours of rest, short breaks not exceeding 1 hour or breaks for meals are excluded. Masters or owners who fail to comply face a maximum penalty of RM100,000 on conviction.
 
Leave – Minimum annual leave of 2.5 calendar days per month of employment must be provided to seafarers employed on Malaysian ships. These seafarers are also entitled to shore leave to benefit health and well-being, consistent with the operational requirements of their position. A maximum penalty of RM 50,000 is imposed on owners who do not provide the minimum annual leave to their seafarers.
 
Termination of contract – A notice period of 14 days, or salary in lieu thereof is required for termination of the employment contract by either party, except in the event of wilful breach of contract or misconduct. In the event of a finding of misconduct after due inquiry, the seafarer may be dismissed without notice or may be subject to a lesser punishment including suspension without wages for not more than two weeks. Notwithstanding these provisions on termination, seafarers employed on board Malaysian ships with employment contracts governed by Malaysian law may be subject to the Industrial Relations Act 1967, in which case any termination of contract by the owner must be with just cause or excuse. 
 
Repatriation – Seafarers on board Malaysian ships are entitled to free repatriation. Owners are prohibited from requiring an advance payment of these potential repatriation costs from the seafarers or recovering the costs of repatriation from wages, except in cases of default by seafarers.
 
Seaworthiness – There is an implied obligation on the owner in every seafarer employment contract for him or his agent to use reasonable means to make the ship seaworthy at the beginning of the voyage, and keep the ship seaworthy during the entire voyage.

Seafarers on Malaysian ships must be paid wages, including overtime and holiday pay, in accordance with the prescribed timing and method, subject to the deductions permitted by the amendments. The seafarer employment contract is deemed to be broken upon failure by the owner to comply with these obligations. Additionally, the owner of the ship would be liable to a fine between RM50,000 and RM300,000.

Owners of Malaysian ships must make contributions under the Malaysian Employees Social Security Act 1969 and Employees Provident Fund Act 1991 in respect of Malaysian or Malaysian permanent resident seafarers. Further, owners must also provide medical care, sickness benefit and employment injury benefit to all seafarers, regardless of nationality. Failure to comply carries a fine not exceeding RM200,000 or a maximum term of imprisonment of two years or both.
 
Owners of Malaysian ships must further ensure that:
 
a.   They are in compliance with the standards for health and medical care and occupational safety;
b.   Seafarers working on board their ships are medically fit;
c.   They provide and maintain accommodation and recreational facilities for the seafarers; and
d.   They provide sufficient drinking water and food of reasonable nutritional value, quality and variety to seafarers serving on board.

It is a requirement that Articles of Agreement must be signed before the Port Officer or other officer authorised by the Director of Marine and kept updated and available for inspection when necessary. Penalty for non-compliance is a fine not exceeding RM25,000.
 
Malaysian and foreign seafarers employed on board Malaysian ships are required to hold a seafarer record book and a valid seafarer identity document. Additionally, foreign seafarers must be registered at a port office. Non-compliance may result in a penalty not exceeding RM5,000 upon conviction.

The new sections 114 and 115 of the MSO 1952 provide penalties for the following conduct of seafarers, unless the seafarer can avail himself of the defences contained in section 114(2):
 
a.   Conduct endangering ship, structures or persons - applicable to seafarers on board Malaysian ships or on board foreign ships within Malaysian waters; and
b.   Disobedience of lawful commands or neglect of duty – applicable to seafarers on Malaysia ships.

Owners of specified categories of ships must hold a valid Maritime Labour Certificate (“Certificate”) or Interim Maritime Labour Certificate (“Interim Certificate”) (collectively “Certificates”) before the ship can commence a voyage. Applications for the Certificate are to be made to the Director of Marine who will issue such Certificate if he is satisfied that (i) the ship has complied with the requirements under Part III; and (ii) the ship has been issued with a Declaration of Maritime Labour Compliance.
 
The Certificate may be issued for a period not exceeding five years whereas an Interim Certificate may only be issued once for a period not exceeding five months. The Certificates must be displayed in a conspicuous part of the ship, be available for inspection and be produced upon request of interested parties such as the Director of Marine, the seafarer or his representatives.
 
In the event of any breach of the provisions of Part III or the conditions of the Certificates, the Director of Marine may suspend the Certificates and direct the owner to take steps to remedy the breach. Failure to remedy the breach may result in a revocation of the Certificates, after which the Owner must surrender the Certificates within 14 days of revocation or risk a fine not exceeding RM25,000 on conviction.

Private employment agencies carrying on the business of supplying seafarers to work on any ship must hold a valid licence issued by the Director of Marine, failing which they will be liable to a fine not exceeding RM200,000 on conviction.

The International Convention for the Safety of Life at Sea (“SOLAS 1974”) is the leading international shipping convention pertaining to safety of life at sea. The new section 127 of the MSO 1952 introduces mandatory procedures in line with SOLAS 1974 for the owner and master of a ship to comply with when dealing with stowaways, which include taking appropriate measures to ensure the security, general health, welfare and safety of the stowaway until disembarkation.
 
COMMENTS
 
While some of the standards under the MLC 2006 were already part of Malaysian law, the recent amendments to the MSO 1952 signal Malaysia’s continued commitment to increase harmonisation of her shipping laws with that of the global shipping community. This augurs well for Malaysia in her quest to become a leading maritime nation. What is imperative now is for the Malaysian authorities to ensure proper enforcement of these standards, to avoid making “a scarecrow of the law”.
 
Owners, masters and seafarers should apprise themselves of the various obligations imposed by the amendments and take the appropriate measures to avoid contravention of the MSO 1952.
 
Life may have just got harder for the likes of Captain Jack Sparrow.