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

– in the House of Lords at 3:37 pm on 18 March 2019.

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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)

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

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.

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport) 3:45, 18 March 2019

My Lords, I thank the Minister for her explanation.

The first of these two SIs relates to training standards in the industry and is based on EU directives 2008/106/EC and 2012/35/EU. The EU-wide process for the recognition of certificates has been very important—indeed, fundamental—in raising safety levels in an industry where international crews are the norm. In 2016, as the Explanatory Memorandum helpfully tells us, 3,410 UK seafarers had certificates enabling them to work in EU and EEA-registered vessels. The SI adopts the usual procedure, replacing “EU Commission” with “Secretary of State”.

It will not surprise the Minister to hear that I am concerned about the reduction once again in transparency in the process because the SI gives the Secretary of State responsibility for the withdrawal of recognition of parties to the STCW convention where standards are not met. What is the procedure by which the Secretary of State will come to that conclusion? Who will advise the Secretary of State? Will there be any right of appeal? We are replacing a well-established, well-understood European process with a process bathed in mystery. Perhaps the Minister could explain whether any further regulations will set out the process and where any advice might be given to the Secretary of State.

The Joint Committee on Statutory Instruments drew this SI to our attention because of its impact on seafarers. The UK will continue to recognise the certificates it currently recognises but there is no guarantee of the EU recognising our certificates in future. The 2005 directive established certificates of competency; each seafarer must have one, and have it endorsed by the flag state of the vessels on which they want to work. These are known as certificates of equivalent competency. Once the European Commission has approved a third country, other member states can, but are not obliged to, accept seafarers from that third country on their ships. That is an unusual discretion. How does it work in practice? How has it worked in practice until now? Is there a record of seafarers from a recognised third country not being accepted on ships from other EU countries? If there are cases where that has happened, which countries have chosen to exercise this power of discretion? Have we always accepted those certificates?

I am sure the Minister can see where I am going with this. My concern is that once we become a third country our seafarers may find themselves excluded by some EU countries, even though the European Commission has agreed to accept our certificates as compliant with STCW.

There is also my usual concern about how we keep up with the flow of information as the EU changes its standards. It is fine to say that we will hitch ourselves to the current standards, but keeping up with the list of countries recognised by the EU might be more complex than it seems. In this SI, the Secretary of State is given the power to add to or subtract from the list of recognised countries, so I ask the same questions again about that power. What will be the system for this? Where will be the transparency? Who will give the Secretary of State advice? I am even more concerned, because as usual there has been no consultation on this, and it involves individual seafarers. Although companies can be expected to keep abreast of all these changes, individuals should not be expected to have to do so.

I turn to the SI on passenger rights. Officials working in the Department for Transport must be losing the will to live during this whole process. As things descend into farce, it is probably difficult to keep abreast of the pace of these things, but I have to say that this is an unusually opaque Explanatory Memorandum. I draw noble Lords’ attention to paragraphs 2.8 and 2.9, which introduce us to the bunkers and Athens conventions in terms that suggest we chat about them over our cornflakes, so familiar are they to us all. I really grappled with this one; I raise this because if I have misunderstood it, it is because bits of it are particularly complex.

In practical terms, this SI seeks to continue current arrangements on passenger rights and on insurance. I have a technical question for the Minister. In the EU rules on this, the compensation for when things go wrong is currently dictated in euros. It is converted to sterling at the rate for the year ended 31 December 2017. Why are we using something pretty historical for this? It makes it look rather outdated before we start.

Once again, there has been no consultation on this. I want to make an important point in relation to the comments on small business. One after another of these SIs say that there will be minimal impact and only familiarisation costs to SMEs. I am beginning to be extremely concerned that, within each sphere—here we are on maritime—individual businesses are expected to absorb and to familiarise themselves with a number of SIs, not just one. The pace of change for them is adding up to something substantial, and the Government have not consulted them on it.

I also want to ask my usual question: how will the Government keep up with changes that happen in the EU on this? Passengers’ rights are very dear to people’s hearts. If there is any shadow of thought that we in this country have inferior rights, passengers would be extremely angry—and rightly so. Therefore, I am keen that we know how the Government intend to keep pace with change. What will be the process by which the Secretary of State makes decisions to change things when necessary? On whose advice would he act?

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords), Shadow Spokesperson (Defence), Shadow Spokesperson (Treasury), Shadow Minister (Transport)

My Lords, there is a certain disadvantage in following the noble Baroness, Lady Randerson: she has usually nicked most of my points. I will therefore highlight only a couple.

Paragraph 3.2 of the Explanatory Memorandum states that,

“EU recognition of United Kingdom certificates will be at the discretion of Member States”.

Clearly, here we have a non-reciprocal situation, where we are providing rights to the EU and it is not necessarily reciprocating. Will the Minister explain the processes the Department for Transport intends to carry forward? Is there reciprocity, as we desire, or will it have to be done state by state? Can it be done through some comprehensive agreement with the EU? What efforts are being made at the moment to try to get a reciprocal agreement?

I share the concern of the noble Baroness, Lady Randerson, about the Secretary of State. To be even-handed, I should say that that is any Secretary of State—one is tempted to ponder on this one in particular, but I will set that to one side. I could not find it in the Explanatory Memorandum, but I may have overlooked it: what political oversight is there in the exercise of the Secretary of State’s powers? If there is none, how can there be transparency in the process? To pick up the noble Baroness’s point, how will he be advised?

Turning to the very important issue of passengers’ rights, although the Explanatory Memorandum is a document in the public domain, it is not one dear to people’s hearts, whereas Hansard is. Paragraph 7.1 of the Explanatory Memorandum seems to say that passengers’ rights will be identical. Will the Minister tell us in plain language that they will be identical, so that it can be included in the formal record?

On paragraph 7.3, I share the view about opaqueness. It talks first about EU member states that are not state parties to the Athens convention. Elsewhere, one got the impression that all EU member states were parties now to the Athens convention. Of the member states, which are not parties to the convention? It tells us little about how the Athens convention works and gives appropriate support and assurance to passengers. Will the Minister spell out what the convention does for passengers? I know it limits compensation, but how does it ensure that compensation will be paid? I recognise that the answer to that might be rather complex, so I am content for the Minister to write to me on that subject.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport) 4:00, 18 March 2019

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—

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords), Shadow Spokesperson (Defence), Shadow Spokesperson (Treasury), Shadow Minister (Transport)

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

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

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.