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ILO Maritime Labour Convention has been in force in Brazil since May 2021 and now its financial security requirements are being implemented
Brazil ratified the International Labour Organization (ILO)’s Maritime Labour Convention, 2006, as amended (MLC 2006), in May 2020, and it came into effect in the country a year later, as detailed in this report.
MLC financial security requirements
MLC 2006 establishes and regulates seafarers’ rights to fair labour, repatriation and compensation. It provides that all commercial ships of 500 GT and above must carry on board and conspicuously display financial security certification to the crew on board if they are registered in an MLC 2006 Flag State or calling at a port in a jurisdiction where the Convention is in force, which is the case of Brazil.
Blue Cards
The certificate of insurance or other financial security in respect of shipowners’ liabilities towards seafarers, otherwise known as a “Blue Card”, is typically issued by the vessel’s P&I club, fixed-premium insurers and other financial security providers, confirming that covers are in place for:
- Shipowners’ liabilities for repatriation of crew, essential needs such as food, accommodation, and medical care, and up to four months of outstanding contractual wages and entitlements in the event of abandonment (MLC 2006 Regulation 2.5); and
- Contractual payments for death or long-term disability due to an occupational injury, illness or hazard set out in the employment agreement or collective agreement (Regulation 4.2)
For the twelve P&I clubs that are members of the International Group of P&I Clubs (IG), the Blue Card is valid for the entire policy year, traditionally commencing on 20 February each year. Its authenticity can be verified directly on the website of the IG P&I club that provided the insurance or other financial security, without the need for additional financial checks.
In the case of Blue Cards issued by an insurance company, financial security provider or non-IG P&I club, evidence of the company’s financial standing and solvency must also be provided.
MLC allows the termination of the financial security on at least 30 days’ notice by the provider to the competent authority of the Flag State. If notice is not given, the undertaking remains effective.
Implementation of MLC certification requirements
Last week, just over two years after the entry into force of the MLC 2006 in the country, the Brazilian Ministry of Labour and Employment (MTE) ruled that all foreign-flagged ships calling at Brazilian ports must produce, through the Porto sem Papel – PSP (paperless port single-window system interconnecting intervening authorities and stakeholders), copies of:
- Maritime Labour Certificate;
- Declaration of Maritime Labour Compliance; and
- Certificate of Financial Security (Blue Cards)
The Maritime Labour Certificate and the Declaration of Maritime Labour Compliance that must be attached to it are typically issued by classification societies on behalf of the respective Flag State or directly by the Flag State.
Entry into force
The MTE has determined that the obligation to upload the referred MLC certificates to the PSP system, through the agents, would come into effect from 11 July 2023. However, after appeals from the National Federation of Maritime Navigation of Shipping Agencies (FENAMAR) and industry sectors, which claimed that the timeframe given was too short to implement the requirement, the Brazilian maritime labour authority eventually postponed the entry into force of the certification requirement to 1 August 2023.
In addition to other statutory certificates and information already required by the various authorities under the paperless port system, visiting shipowners must ensure that said certification is provided to the local agents as soon as possible to avoid any eventual delay to inward or outward clearance process, especially when the Blue Card was issued by a P&I club outside the IG or another insurance or financial security provider.
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