Thursday, May 16, 2013

U.S. implementation of the Maritime Labour Convention, 2006

 New Development

The Maritime Labour Convention, 2006 (“MLC 2006”) was adopted by the International Labor Organization (“ILO”) at the 94th Maritime Session of the International Labour Convention (“ILC”) on February 7, 2006, and will enter into force on August 20, 2013. The United States has not ratified MLC 2006; however, on February 11, 2013, the Coast Guard published a notice (“MLC Notice”) in the Federal Register announcing the availability of a draft Navigation and Vessel Inspection Circular (“NVIC”) setting forth proposed Coast Guard policies and procedures regarding the inspection of U.S. vessels for voluntary compliance with MLC 2006. The primary purpose of the NVIC is to assist U.S. vessels in avoiding port State control actions in foreign ports of countries that have become party to MLC 2006 by providing for a voluntary inspection program mechanism for U.S.-flag vessels resulting in the issuance of a Statement of Voluntary Compliance, Maritime Labour Convention (“SOVC-MLC”).


MLC 2006 is an international agreement that will essentially revise and replace, upon its effective date, most of the existing ILO maritime labor instruments and recommendations adapted since 1920, and consolidate those labor instruments into one globally applicable and uniformly enforceable legal instrument.

MLC 2006 encompasses and updates the requirements of a number of existing ILO Conventions with the aim of establishing a comprehensive international instrument governing the working and living conditions for seafarers and creating conditions of fair competition for shipowners. With these principles in mind, MLC 2006 establishes specific standards and detailed guidance as to how to implement these standards at the national level though its Articles, Regulations, and Code.

MLC 2006 Regulations and the Code are organized into general areas under five Titles, each of which contains groups of provisions relating to a particular right or principle or enforcement measure, as follows: (1) Title 1 - Minimum requirements for seafarers to work on a ship, which addresses minimum age, medical certificates, training and qualifications, recruitment, and placement; (2) Title 2 - Conditions of employment, which addresses employment agreements, wages, hours of work and rest, leave entitlement, repatriation, compensation in the event of loss of a ship, manning levels, career and skill development, and seafarer employment opportunities; (3) Title 3 - Accommodation, recreational facilities, food and catering, which addresses standards for accommodation, recreational facilities, and food and catering; (4) Title 4 - Health protection, medical care, welfare and social security protection, which addresses medical care, shipowner’s liability, health and safety and accident prevention, access to shore welfare facilities, and social security; (5) Title 5 - Compliance and enforcement, which addresses flag State responsibilities, port State responsibilities, and labor supply responsibilities.

MLC 2006 mandates that commercial vessels that are 500 gross tons and above, whether publicly or privately owned, engaged on international voyages, must demonstrate compliance with the requirements of MLC 2006 by maintaining a Maritime Labour Certificate, to which is annexed a Declaration of Maritime Labour Compliance (“DMLC”) issued by its flag administration. The Maritime Labour Certificate and DMLC must state the specific national requirements implementing MLC 2006 for the working and living conditions of seafarers and the specific measures adopted by the shipowner to ensure compliance with the requirements for the ship. A copy of this certification must be maintained on-board the vessel at all times. Failure to maintain this certification will expose those vessels to potential port State control actions.

Vessels operating under a flag of a country that is not a party to MLC 2006 are also exposed to potential port State control actions where that vessel calls at a port of a country party to MLC 2006. This is because, in addition to establishing minimum requirements for seafarer working conditions and inspection, MLC 2006 also provides for enforcement by countries that are a party to MLC 2006 under the principle of “no more favorable treatment” for ships of a non-party country. Generally, this means that a party to MLC 2006 may take port State action, including potential detention of the vessel, to ensure that a shipowner and operator of a vessel operating under a flag of a non-party is not treated more favorably than a vessel that operates under the flag of a country that is a party to MLC 2006.

Although MLC 2006 was adopted unanimously in 2006, there were two outstanding requirements at that time needed to enable MLC 2006 to come into effect. The first requirement was that at least thirty ILO member countries become party to MLC 2006 and the second requirement was that the ratifying countries represent thirty-three percent (33%) of the world’s gross shipping tonnage. While the later requirement was met in 2009, the former was only recently satisfied in August 2012 with ratification by Russia and the Philippines. At this time, approximately thirty-nine countries have ratified MLC 2006.

Draft Guidelines for U.S. Vessels

The United States has not ratified MLC 2006, and as a result, the Coast Guard will not enforce compliance with MLC 2006 on U.S. vessels or foreign vessels while navigating within U.S. waters. Despite the fact that the United States has not ratified MLC 2006, U.S.-flag vessels are exposed to potential port State action under the “no more favorable treatment clause” as discussed above under the background section. In light of this potential risk, which could include detention at a port in a country that is a party to MLC 2006, the Coast Guard encourages shipowner and operator compliance with MLC 2006. To that end, the U.S. Coast Guard published the MLC Notice.

The NVIC, titled “Guidance Implementing the Maritime Labour Convention, 2006,” clarifies that the NVIC is intended to provide guidance for Coast Guard marine inspectors, Recognized Class Societies (“RCS”), and U.S. vessel owners/operators for meeting the provisions of MLC 2006 and to establish a voluntary inspection program for vessel owners/operators who wish to document compliance with the requirements of MLC 2006. Consistent with MLC 2006, the Guidance applies to ships greater than 500 gross tons on international voyages as well as U.S. commercial vessels less than 500 gross tons, including uninspected commercial vessels, engaging in international voyages to ports of MLC 2006 party nations. Vessels that do not operate in ports of those countries that are a party to MLC 2006 are not required to be in compliance with MLC 2006. The MLC Notice and draft NVIC may be reviewed at!docketDetail;D=USCG-2012-1066.

Similar to the Maritime Labour Certificate and DMLC issued by parties to MLC 2006, the Coast Guard intends to issue a SOVC-MLC to vessels demonstrating compliance with MLC 2006. Shipowners and operators of vessels that fall within the scope of the NVIC are not obligated to obtain a SOVC-MLC certificate, but may voluntarily request inspection to obtain this certificate. The Coast Guard has authorized RCSs to conduct MLC 2006 compliance inspections and issue SOVCs at the request of vessel owners and operators.

Generally, MLC 2006 establishes fourteen areas that are subject to mandatory compliance for certification and the issuance of certificates. These areas that must be inspected for compliance include: minimum age; medical certification; qualifications of seafarers; use of any licensed or certified or regulated private recruitment and placement services; seafarers’ employment agreements; payment of wages; hours of work and rest; manning levels for the ship; accommodation; on-board recreation facilities; food and catering; on-board medical care; health and safety and accident prevention; and on-board complaint procedures. Similar to the MLC 2006 certificate, an inspection conducted by the RCS for the purposes of issuing a SOVC-MLC will confirm compliance with these fourteen points.

The format to the SOVC-MLC will be consistent with the MLC certificate provided in the MLC Code and will be supplemented with a SOVC Declaration of Maritime Labour Compliance, which will reference the applicable U.S. federal rule or regulation applicable to the relevant mandatory area of compliance. To the extent that there is no applicable U.S. rule or regulation, the Coast Guard will defer to the applicable MLC 2006 standard. In addition to stating the current U.S. laws and regulations for the relevant mandatory areas of compliance, the SOVC-MLC must also state the measures adopted by the shipowner or operator to ensure compliance with the laws and regulations.

Once the SOVC-MLC is issued, it must be posted on the vessel in a visible location accessible by the seafarers. The certificates will be valid for a period not exceeding five years or until there has been a material change in circumstance. Foreign country port State control authorities are not obligated to accept the Coast Guard SOVC-MLC, and unless the United States becomes a party MLC 2006, the Coast Guard has no enforcement authority to certify vessels as compliant with the MLC.


At this time, it is unclear how various port State control authorities will implement MLC 2006 requirements when it goes into effect on August 20, 2013. Regardless of whether the United States becomes a party to MLC 2006, however, it behooves U.S.-flag owners and operators to take advantage of this voluntary program to obtain a Coast Guard SOVC-MLC prior to August 20, 2013. Although there is no guarantee that a particular port State control authority will honor the Coast Guard SOVC-MLC, taking action now to schedule an inspection by an owner’s or operator’s RCS to confirm compliance with the mandatory areas of compliance under MLC 2006, will minimize the chances of a port State control authority taking adverse action against a U.S.-flag vessel once MLC 2006 goes into effect.

Friday, April 12, 2013

Applications sought to promote rural economy

Agriculture Secretary Tom Vilsack announced Monday that applications are being accepted from qualified non-profit and public organizations (intermediaries) to provide loans to support rural businesses and community development groups.

Funding, which is intended to spark business expansion and create jobs, will be made available through USDA's Intermediary Relending Program. The announcement is one part of the Department's efforts to strengthen the rural economy.

"This program is a part of the Obama Administration's ongoing effort to leverage private investments with public funds to create jobs and expand economic opportunity for rural entrepreneurs," Vilsack said. "Intermediaries serve as a critical component to boosting local economies."

USDA Rural Development State Director Terry Brunner added, "This program has been successful in leveraging private investments with public funds and expand economic opportunity for rural entrepreneurs," Brunner said. "These loans will continue to help small rural businesses grow, and create jobs."

Brunner is referring to a $400,000 loan that was made to the New Mexico Loan Fund last fall which is using the funding to target ag-producers and small businesses to fund renewable energy systems in communities such as Raton and in Roswell. The rest of the funds will be used to provide sustainability to small businesses in numerous small towns throughout the state.

The IRP is USDA Rural Development's primary program for capitalizing revolving loan funds. USDA lends money to economic development intermediaries (nonprofits and public bodies) who in turn re-lend the funds as commercial loans to rural businesses (ultimate recipients) that might not otherwise be able to obtain such financing. The repayment of the ultimate recipients' loans allows the intermediary to continue to make more loans to new recipients, supporting sustainable economic development. Since President Obama took office, the program has created or saved an estimated 20,000 jobs.

Funds are used to assist with financing business and economic development activity to create or retain jobs in disadvantaged and remote communities. Intermediaries are encouraged to work with state and regional representatives and in partnership with other public and private organizations that can provide complimentary resources.

The USDA says that President Obama's plan for rural America has brought about "historic investment and resulted in stronger rural communities." Under the president's leadership, they say, the investments in housing, community facilities, businesses and infrastructure have empowered rural America to continue leading the way by strengthening America's economy, small towns and rural communities.

USDA, through its Rural Development mission area, has an active portfolio of more than $172 billion in loans and loan guarantees. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America.

The USDA says it has made a concerted effort to deliver results for the American people, even as USDA implements sequestration, the across-the-board budget reductions mandated under terms of the Budget Control Act. USDA has already undertaken efforts since 2009 to save more than $700 million in taxpayer funds through targeted, common-sense budget reductions.

For more information about the Intermediary Relending Program, and to learn about application deadlines, visit For information on how to apply, see page 20883 of the April 8, 2013 Federal Register ( Applications and forms may be obtained from any Rural Development State Office.

Friday, March 22, 2013

Obamacare Medical Device Tax Faces Likely Symbolic Repeal In Senate

Opponents of a 2.3 percent tax on medical device companies will likely win passage this week in the U.S. Senate of a largely symbolic resolution calling for repeal of the tax, with some Democrats likely to join all Republicans.

The tax helps to fund President Barack Obama's 2010 healthcare law. It applies to a range of medical products - from bedpans to expensive heart devices - many manufactured in the home states of the senators backing the repeal.

The resolution calling for repeal will be symbolic because it will come in the form of a non-binding amendment to a non-binding budget measure drafted by Senate Democrats. The resolution would not actually repeal the tax.

Full repeal of the tax may be difficult to achieve, given its $30 billion price tag and the opposition of key Senate Democrats, including Majority Leader Harry Reid.

"The industry has a fighting chance of getting the tax moderated or eliminated as part of a much larger tax reform bill, where the device levy becomes a rounding error," said Paul Heldman, a policy analyst at Potomac Research Group. "But major tax reform in this Congress is a long shot."

Nine Senate Democrats are signed up to back the symbolic amendment. More than a dozen Senate Democrats wrote to Reid last year seeking to delay the tax.

Reid does not support repeal. Nor does Senate Finance Committee Chairman Max Baucus, who helped usher Obama's healthcare bill into law. The medical device tax is among several new industry levies in the healthcare overhaul law, which aims to provide health insurance for millions of Americans who lack it.

The law is being implemented. It was declared constitutional by the U.S. Supreme Court last year.

The medical device tax, which went into effect this year, is projected to raise about $30 billion over a decade. That government revenue would be lost if the tax were repealed.

Democratic Senators from Minnesota, Indiana and Pennsylvania, where some big medical technology companies are based, are among those who have been pushing for a repeal.

Industry officials and lawmakers against the tax say it will hurt innovation and job creation. (Reporting by Kim Dixon; Editing by Kevin Drawbaugh and Jan Paschal)

Tuesday, February 19, 2013

Hurricane Sandy Relief Bill "Blows In" Opportunity For States To Adopt Better Building Codes

The fifty billion dollar (yes, that's $50,000,000,000) Hurricane Sandy Relief Bill (the "Relief Bill") is headed to President Obama's desk for his signature. The Full Text of the bill is available here

The Relief Bill provides several different opportunities for the Federal government to encourage states to adopt up-to-date building codes by tying distribution of the funds to commitments from the states to adopt the most up-to-date building codes.

 According to studies by the Multi-Hazard Mitigation Council, for every dollar invested in building code adoption and enforcement, four dollars are saved in recovery costs.  As a result, FEMA has been very public about the critical role building codes play in reducing building damage from natural disasters.

David Miller, the Associate Administrator for Federal Insurance and Mitigation Administration at FEMA, testified before the House Committee on Transportation and Infrastructure last year on this issue, concluding:

Post-disaster assessments of many communities have shown a direct relationship between building failures, the codes adopted, the resources directed toward implementation and enforcement, and the services available to support those codes.

Tying emergency relief funds to code adoption would not be new.  Department of Energy state energy block grants from the American Reinvestment and Recovery Act (ARRA) were tied to governors' commitments to adopt the 2009 version of the International Energy Conservation Code (IECC) and ASHRAE 90.1-2007, as I posted in greater detail here

Two allocations which could logically be tied to building code adoption commitments are the $5.4b allocated to the Federal Emergency Management Agency (FEMA) for the Disaster Relief Fund and the $16b allocated to the Department of Housing and Urban Development (HUD) for "necessary expenses related to disaster relief, long-term recovery, restoration of infrastructure and housing, and economic revitalization..." (Bill at 74)(emphasis added).

However, in tying emergency fund allocations to code adoption, FEMA and HUD should incorporate some lessons learned through the ARRA commitments.  First, the ARRA commitments only related to a one-time adoption of the 2009 energy-related code provisions.  Second, there was no reporting required from the states on their progress with adoption and enforcement of the codes.  Finally, as I posted here (, enforcement of the commitments has been weak.  To be effective, any code-related commitments must require regular code updates, and a mechanism for reporting and recapture of funds for failure to fulfill the code commitments.

Hurricane Andrew ushered in a new era of code adoption on the Gulf Coast.  With some encouragement by the Federal government, Hurricane Sandy could have the same effect. 

Tuesday, January 29, 2013

Rick Scott Health Care Costs Run Less Than $400 Per Year

Looking for inexpensive health care? Run for office in the state of Florida.

The Associated Press reported Monday that Gov. Rick Scott (R) and dozens of Sunshine State officials are receiving coverage for their families at less than $400 annually. Back in 2011, the AP reported a similar deal, which at the time applied to more than 30,000 state employees.

This inexpensive benefit comes in lieu of a major decision Scott will have to make regarding Medicaid expansion. Under Obamacare, if Florida decides to extend its program to cover low-income residents who were previously left without coverage, the federal government will pick up a huge slice of the bill -- three years fully paid for, followed by 90 percent thereafter.

The governor's administration has been a leading source of opposition to that piece of Obamacare, with Scott citing figures that overstate the costs of the plan. HuffPost's Jeffrey Young traced the progression of "faulty data" on Jan. 10, explaining how much higher Scott's Medicaid expansion estimates were than the actual numbers.

Three days later, Scott reversed course, admitting that Medicaid expansion would total only $5 billion -- a far cry from the $25.8 billion sum that had been floated in previous months.