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Chartering requirements and regulations

Chartering requirements and regulations

Regulatory effects

Owners should also understand that the regulations are constantly updating and changing to suit the current environment.

The latest major development that will affect all commercially operated vessels, including charter yachts in the next year or so, is the Maritime Labour Convention (MLC), sometimes referred to as the Seafarer’s Bill of Rights. When ratified in August 2013, parts of the convention could potentially hit yacht owners in the pocketbook.

MLC 2006, as it is called, along with the MCA’s LY3 (Large Yacht Code Revision 3), are designed to improve the living and working conditions of seafarers. While directed at merchant ships, yachts are also covered.

Here are some ways the regulations associated with moving up in class would affect a yacht:

Scenario 1: Owner with a boat over 24m and under 500GT

The owner does not charter or operate the vessel for gain, but uses it as a promotional tool. It is strictly a private, pleasure yacht.

This situation only requires that the vessel complies with the basic pollution and safety requirements such as lifejackets, bell, lights etc., and controlled bilge and sanitary systems.

There are no requirements for minimum manning, vessel classification or any of the statutory certificates required for commercial vessels.

Most flag administrations however, strongly recommend that some type of safety management system with operational procedures be used.

An owner wishes to offer the vessel for occasional charters to defray operational costs

The vessel is now required to be in class (meeting requirements of one of the seven major class societies) and comply with certain regulations including the Large Yacht Code 2 (LY2) and Minimum Safe Manning.

Under the International Safety Management Code (ISM) a Safety Management System (SMS) is now a requirement for all vessels over 24m load line length and under 500GT operating commercially. This would include the majority of the charter fleet in operation today.

This is commonly called Mini–ISM because it has lesser requirements than full ISM compliance and the absence of flag administration audits.

A Safety Management System:

States the overriding authority of the master to make decisions regarding the safety of the vessel and personnel,
Provides a statement of safety and environmental responsibility policy. Provides on-board operating procedures and checklists to ensure safe working practices,
Provides a simple diagram outlining the lines of communication and responsibility and authority of personnel both on-board,
Provides procedures and verification documents for training and familiarization of crew,
Provides a health and safety policy, including a policy on prevention of drug and alcohol abuse,
Provides a system and records of maintenance of the vessel and equipment,
Provides reviews, amendments and updates, and
Requires compliance with LY2 (or its successors).

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