The Panama flag is heading for a clash with unions over its recent note informing shipowners that cadets are not covered by the minimum welfare and labour standards as set out under the recently enforced Maritime Labour Convention (MLC) 2006.

In Merchant Marine Notice 265, the Panama Maritime Authority (PMA) listed cadets among 12 different job descriptions that should not be considered as “seafarers” under MLC 2006.

The PMA defines a cadet as “an aspiring merchant marine officer, whose training programme includes the improvement of academic and professional skills, as well as the formation of attitudes and behaviours under the observance and strict compliance of rules and regulations and existing orders”.

Panama is the world’s largest ship register and unions fear that its decision may mean hundreds of cadets serving under its flag could be denied the protection of internationally agreed minimum working conditions and standards for seafarers.

The MLC, which was agreed in 2006 and came into force last month, is known as the seafarer’s bill of rights and brings together all the legislation covering seafarer welfare and working conditions into one convention.

Unions also fear the PMA’s decision may make a seafaring career less attractive and come as a blow to attempts to boost cadetships and train more officers to solve the industry’s skills shortage.

The issue has been taken up by UK-based officers’ union Nautilus International, which has asked the International Transport Workers’ Federation (ITF) to make a formal complaint to the International Labour Organisation.

The move is set to become the first serious challenge of a state’s interpretation of MLC 2006.

However, cadets are not the only job description with which the ITF may differ with flag states over MLC 2006.

It is widely accepted that categories such as pilots, armed guards, surveyors and port workers should not be included under the convention, but the question of whether to include some other shore-based technical professions, where an extended period of employment takes place onboard, may prove to be more contentious.

Other forms of employment not considered as a “seafarer” by Panama that unions are likely to dispute include superintendents, technical staff working on offshore drilling platforms and specialist offshore technicians whose work is not part of the routine operation of the ship.

Panama’s decision not to include cadets as seafarers also reveals the wide-ranging differences in the interpretation of the MLC 2006 by national and flag-of-convenience (FOC) ship registers.

In the UK, the Department of Transport, for example, clearly states that under its interpretation, “cadets and trainee seafarers are seafarers as defined in the Convention”.

The Marshall Islands, the world’s third-largest flag and an open register, also includes cadets as seafarers.

Panama was generally viewed as being supportive of MLC 2006. It was one of the first nations to ratify it and its backing was seen as crucial to the convention coming into force. The ITF has also been campaigning for ships that do not have a wage agreement in place, as required under the convention, to be detained.

Within a month of MLC coming into force, two ships have been held by port-state control, according to the ITF.

The Transmed-controlled, 84,094-dwt Lia M (built 2013) was detained in Canada earlier this month, while the 2,700-dwt supply ship Atlantic Carrier (built 1974) was detained in Denmark. Neither had a wage agreement in place.

ITF seafarer’s section head Dave Heindel said: “It’s great to see the MLC in action.

“These were serious infringements and remedial action has been swiftly taken.

“These detentions should be a wake-up call to shipowners who are not complying with the MLC and a further reminder to those countries who haven’t yet ratified of why they need to.”

Talks to decide shipping’s largest collective wage agreement are set to kick off again for the first time in two years, with employers and unions playing their cards close to their chest as a fragile market recovery places uncertainty over the strength of their relative negotiating positions.

The International Bargaining Forum (IBF) is meeting in St Petersburg next month and a follow-up meeting is planned in Tokyo in February next year, with an eye on a final agreement being reached in June 2014.

The existing three-year agreement is set to run out in January 2015 and growth in the membership of the main employers’ representative body is likely to mean it is the most wide-reaching agreement to date.

While previous rounds of negotiations have been heralded by forthright demands from the International Transport Workers’ Union (ITF) and a rebuttal by employers, this year, neither side is ready to reveal their position.

The ITF is going into the talks for the first time under the leadership of recently appointed general secretary Steve Cotton. Under the last round of negotiations in 2011, it was calling for an average 8% increase in the model ship structure that is used to determine wage rates. This time, a spokesperson said in response to TradeWinds: “We wouldn’t say anything ahead of negotiations.”

The largest negotiating employers’ organisation under the IBF, the International Maritime Employers Council (IMEC), which participates in the employers Joint Negotiating Group (JNG), has been buoyed by a significant 65% increase in its membership over the past five years.

IMEC head Giles Heimann simply said of the employers’ position: “Many operators struggle to cope with the continuing reality of the international financial downturn.”

“However, the IBF process continues to successfully demonstrate its ability to provide a pragmatic and realistic outcome through reasoned negotiation and practical understanding in what is acknowledged to be the only example of international collective bargaining.”

One observer suggests that neither side will be willing to come out into the open while the direction of the recovery seems so uncertain.

“The ITF in particular will not want to get its members hopes up at this stage,” he said.

The 2011 agreement was for 7.5%, but spread over three years, and followed a wage freeze that had been in place since 2008. The IMEC insisted the agreement in real terms represented a 1.2% annual increase between 2009 and 2014.

A key factor for the ITF will be whether it can bring the next agreement back to the usual two-year deal, allowing it to come back to the negotiating table at a time when the shipping market recovery is more robust. Alternatively, the employers may feel more comfortable locking into another three-year agreement that reflects the current poor trading market.

Another factor is likely to revolve around whether the high-risk area in the Indian Ocean, where seafarers covered by IBF agreements are currently paid a premium, should be drawn back to reflect the declining piracy activity.

But the ITF has also been keen to see an additional high-risk area added in West Africa, which has replaced East Africa as the world’s piracy hot spot.

Whatever the outcome, this next IBF wage agreement is likely to be the most influential reached to date, following the strong growth in IMEC membership.

Its recently completed five-year survey shows that the IMEC now has 179 member companies, controlling 9,716 vessels and employing 209,000 seafarers. The seafarers include 70,466 officers, 44,404 cadets and 127,472 ratings.

IMEC members include shipmanagment giants Maersk, Bernhard Schulte, Anglo Eastern, Clipper, Columbia, Teekay, Thenamaris, Wallem and Thome.