Merchant Shipping (Standards of Training, Certification and Watchkeeping) (Amendment) (EU Exit) Regulations 2019

Baroness Sugg Excerpts

Monday 18th March 2019 Lords Chamber

Moved by

[Baroness Sugg]

That the draft Regulations laid before the House on 29 January be approved.

Relevant Document: 16th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, if it is convenient, I shall speak also to the Merchant Shipping (Passengers’ Rights) (Amendment etc.) (EU Exit) Regulations 2019.

These are two sets of draft regulations that will be made under powers in the EU (Withdrawal) Act 2018 and will be needed if the UK leaves the European Union without a deal. To ensure that retained legislation remains operable, both of these draft regulations change references to “member states” and “the Commission” to “the Secretary of State” or “the United Kingdom”. They will also change definitions and other wording to reflect the UK’s position outside the EU.

The Merchant Shipping (Standards of Training, Certification and Watchkeeping) (Amendment) (EU Exit) Regulations 2019 deal with the certificates that seafarers need to hold to demonstrate their competence to perform certain roles on ships. The International Convention on Standards of Training, Certification and Watchkeeping for Seafarers sets the standards of competence for seafarers internationally. Through two directives, the EU harmonised the way in which member states implemented the requirements of the STCW Convention.

The EU directives and the EEA agreement require the automatic mutual recognition of seafarer certificates issued by EEA states. They also establish a process for EU-wide recognition of certificates from third countries. EU countries can accept certificates from third countries that have been approved under the relevant EU process. The EU directives and our international obligations are implemented in the UK by the Merchant Shipping (Standards of Training, Certification and Watchkeeping) Regulations 2015; the SI before the House amends these regulations. This instrument was originally laid under the negative procedure. The Secondary Legislation Scrutiny Committee recommended that the regulations be handled under the affirmative procedure; I am grateful to the Committee for its consideration of the regulations and should like to respond briefly to their concerns.

The committee was concerned that, in the event of no deal, the recognition of the certificates of UK seafarers working on EU-flagged ships will be at the discretion of each member state. This instrument cannot, of course, require other countries to take a particular course of action. However, EU employers and trade unions have welcomed the Government’s commitment to continue recognising seafarer certificates from EU and EEA countries; these regulations will enable the Secretary of State to deliver this commitment.

The UK will also continue to recognise the certificates from those non-EU/EEA countries that we currently recognise under the STCW convention. These regulations will also enable the Secretary of State to remove recognition from any country if he is satisfied that the country no longer complies with the STCW convention. The regulations will remove the requirement to report to the European Commission on the seafarer certificates and endorsements issued by the UK, and replace it with a requirement to report to the Secretary-General of the International Maritime Organization on such compliance.

The second set of draft regulations—the Merchant Shipping (Passengers’ Rights) (Amendment etc.) (EU Exit) Regulations 2019—deals with passengers’ rights and other issues involving the carriage of passengers by sea. Under EU regulation 1177/2010, UK passengers travelling by sea and inland waterway benefit from a comprehensive set of rights and entitlements. The EU regulation puts in place consumer protections which allow, among other things, for redress in respect of delayed and cancelled journeys. It also defines the standards which industry must uphold in respect of disabled passengers.

The IMO’s Athens convention requires ship owners to maintain compulsory insurance. This must be sufficient to cover third party claims in respect of the death or personal injury to passengers, and the loss of, or damage to, luggage and vehicles. EU regulation 392/2009 applied the provisions of the Athens convention in EU member states and added some protections above the requirements of the Athens convention. These included a €21,000 advance payout in case of death or serious injuries to passengers and a requirement to replace or repair personal mobility equipment damaged during the course of a journey.

These draft regulations will amend EU regulations 1177/2010 and 392/2009 to ensure that they continue to function correctly as part of UK law if the UK leaves without a deal. The changes we are making will not affect passengers in any way and will ensure that passengers have the same rights and entitlements as today. The regulations will also amend EU-derived domestic legislation which implements EU law in this area. In order for the UK to continue to meet its international obligations under the Athens convention once the UK leaves the EU, these draft regulations will transfer powers from the European Commission to the Secretary of State. These powers will enable the UK to keep up to date with changes to the compulsory insurance requirements and liability limits for ship owners as and when they are adopted by the IMO.

These draft regulations will remove a requirement to accept state certificates of insurance from an EU member state even when that member state has not ratified the Athens convention. This requirement is a legacy from a time when few member states had signed up to the international provisions on state certificates. In 2018, only 21 ships visited the UK which had insurance certificates issued by non-convention EU member states. Once the UK leaves the EU, the UK will accept state certificates only where they have been issued by a state party to the Athens convention. State certificates are easily obtainable from states parties to the convention, including from the Maritime and Coastguard Agency. This proposed change will not therefore have a significant impact on industry and simply ensures that we are complying with our international obligations under the convention without exception.

Finally, the regulations will also revoke three Council decisions. Two of these decisions were related to the accession of member states to the Athens convention. The third decision relates to the accession of member states to the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001. Like the Athens convention, the bunkers convention obliges ship owners to maintain compulsory insurance—only in this case to cover third party claims in respect of bunker fuel oil spills. The UK will remain party to both of these conventions but these three Council decisions are addressed to EU member states. They will become redundant once the UK leaves the EU and so they are being revoked for the purpose of legal certainty.

The changes made by these draft regulations will ensure that retained EU law operates correctly so that we have an effective system for ensuring that seafarers working on UK ships are qualified to do so, and that passengers can continue to rely upon the rights and entitlements they are currently entitled to. They also ensure that the UK can continue to meet its international obligations and passenger safety commitments. I beg to move.

--- Later in debate ---

[Baroness Sugg]

I thank noble Lords for their consideration of these draft regulations.

The noble Baroness, Lady Randerson, pointed out the high quality of the seafarer qualifications, and we will continue to recognise them in accordance with the international STCW convention, so standards will not slip and will not be affected by our departure from the EU. To work on a UK-registered vessel, EU seafarers will still need to obtain a UK certificate of equivalent competency.

On the position of UK seafarers on EU-flagged ships, it is in the interests of both the UK and the EU to avoid any barriers to UK seafarers continuing to make the important contribution that they already make. If there is no deal, endorsements issued before withdrawal by EU countries to seafarers who hold UK certificates of competency will continue to be valid until they expire. So, if you are a UK-trained seafarer with an endorsement already issued by an EU country, you will be able to continue working on board vessels flying the flag of that country until the endorsement expires.

We are seeking to ensure that UK seafarer certificates continue to be recognised through the well-established EU process for recognising third-country certificates. That will provide continuity for UK seafarers. As I have said, we have committed to recognising EU countries’ certificates, and that approach has been welcomed. The Commission issued a technical notice in January 2018 setting out that the UK would be treated as a third country and that member states would need to apply to recognise UK certificates under the relevant provisions in directive 2008/106. It is not possible to apply for this recognition until the UK becomes a third country, and the Commission can take around 18 months to process the application. However, member states can recognise certificates in the meantime, and we are confident that the EU will accept that UK training is of a high quality, will want to recognise us as a third country and that major commercial flags such as Malta and Cyprus will continue to recognise the UK certificate of competence. When we raised the issue with all of those countries, they have been positive.

As to the impact on day one, the vast majority of UK seafarers will already have a current certificate of competency which, as I have said, will be valid for up to five years.

On the powers of the Secretary of State to remove recognition from countries, we will be advised by the MCA. The Secretary of State currently makes decisions based on its advice and so that will not change. The decisions will be based on all the evidence available that that country meets the STCW requests. The normal administrative law provisions apply so that the Secretary of State’s decisions can be challenged in court if necessary.

No formal consultation was carried out on the STCW SI, but the department has worked closely with shipping representatives and the trade union Nautilus International. The Government also issued technical notices in September to inform seafarers and companies about the approach. The department has met with the general secretary of Nautilus on several occasions; the MCA has regular contact with it and with the Chamber of Shipping on the whole SI programme. The Shipping Minister recently met with Nautilus and the Chamber of Shipping, which was described as productive by Nautilus. Both organisations support the continued recognition by the UK of certificates issued by EU member states.

On passenger rights, the noble Baroness, Lady Randerson, asked about the conversion rate. This was done using the average exchange rate for the year ending 31 December 2017 and the figures were rounded. Therefore, the €80 and €6 in EU regulation 1177 becomes £70 and £5, and the €21,000 reference in EU regulation 392 becomes £18,500. In each case, those roundings work to the benefit of passengers. The conversion was carried out at the beginning of the drafting process according to cross-government guidance, and at the time 2017 was the last full year available. However, as the noble Baroness said, the exchange rate has fluctuated since but, because of the rounding, the effect on passengers is minimal. Those amounts were fixed and we do not have the power to vary them other than through primary legislation.

Passenger rights and entitlements will be the same as they are today. I hope that is plain English enough for the noble Lord, Lord Tunnicliffe.

No formal consultation was undertaken on the passenger rights SI, but the department consulted a range of stakeholders in 2018 when preparing the post-implementation reviews of the Merchant Shipping (Carriage of Passengers by Sea) Regulations 2012 and the Merchant Shipping (Passengers’ Rights) Regulations 2013, which implement the relevant EU law in the UK. In both cases, all stakeholders expressed support for the 2012 and 2013 regulations and a desire to see the current rules retained in their existing form.

On further delegated powers to the Secretary of State, the draft regulations transfer powers which currently enable the Commission to amend certain elements of regulation 392/2009, which applies the Athens convention. The powers transferred to the Secretary of State are limited to amending the liability limits to incorporate changes made by the IMO Athens convention and to other non-essential elements of the regulation. No changes to the EU regulation have been made since it came into force, and it is not expected that we will use this power frequently. We will continue to monitor developments in the implementation of the Athens convention at international and EU level. Any other changes to that regulation will need to be made through primary legislation.

The noble Lord, Lord Tunnicliffe, asked about the Athens convention. It establishes a regime of liability for damage suffered by passengers on a sea-going vessel. It declares a carrier liable for damage or loss suffered by a passenger if the incident causing the damage occurred in the course of the carriage and was due to the fault or neglect of the carrier. As far as loss or damage to luggage is concerned, the carrier’s limit of liability varies depending on whether the loss or damage occurred in respect of cabin luggage, a vehicle or other luggage carried in or on it. The key requirement is that the registered owner of a vessel must maintain compulsory insurance. Passengers travelling on ferries to or from the EU after exit will continue to be protected, as it applies to all passengers regardless of nationality.

Under regulation 1177/2010, passengers have the right to information, refunds and rerouting, in some cases, and compensation in most circumstances in which their journeys are delayed or cancelled. The regulation also grants the right to assistance and travel at no extra cost. I hope that is a sufficient explanation of what the Athens convention does. The EU regulations were harmonised and brought it into UK law. The new regulations we are discussing transfer them.

The noble Lord, Lord Tunnicliffe, also asked which member states have not yet ratified the convention. A number of member states have not ratified the convention, despite it having been in force for almost five years. They are Austria, the Republic of Cyprus, the Czech Republic, Estonia, Germany, Hungary, Italy, Luxembourg and Poland, but only Cyprus, Estonia, Germany, Italy and Poland have maritime ports. Only 21 ships made that journey and it is very easy to get a certificate of competence. We are in contact with those countries which have not ratified the Athens convention.

I hope I have managed to address the points—

[Lord Tunnicliffe]

I asked whether there is any parliamentary involvement in the Secretary of State exercising his rights under either of these instruments.

[Baroness Sugg]

On the first instrument and the Secretary of State’s right to remove a country from STCW, I do not believe there is any parliamentary involvement. That would be based on the MCA, as previously. On the delegated powers under the passengers’ rights obligation, that will depend on which regulation he is using. The powers transferred to the Secretary of State are limited to amending the liability limits to incorporate changes and other non-essential elements of regulation. Any other substantial changes will need to be made through primary legislation, which will be subject to parliamentary scrutiny. There are no further delegated powers through the STCW regulations.

I hope I have managed to address the points that noble Lords have raised during the debate. I will perhaps write to the noble Lord to clarify the last point on parliamentary scrutiny.

This completes the programme of maritime SIs that noble Lords will consider. I thank the policy officials and legal advisers to the DfT—who I hope are not losing the will to live—for their hard work and diligence in both producing the SIs and briefing the Minister on them. The proposed changes made by these draft regulations are appropriate to ensure that retained EU legislation relating to seafarer qualifications and passenger rights work effectively in the UK from day one in the event of a no-deal exit.

Motion agreed.