MLC 2006 generates costs & benefits. In this presentation, KPIs are presented to measure the convention’s successful implementation by ship management companies.

1. Presented at:
1st Maritime Trends Conference
“Trends in Crew Management”
8 June 2013
MLC 2006 Compliance:
Costs & Benefits
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Published in :
Assessment of the maritime labour convention
compliance using balanced scorecard and
analytic hierarchy process approach.

2. MLC 2006 & Ship Management
Dr. Hristos Karahalios
Dipl. Mar. Surveyor, STCWII/2
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3. Maritime
Regulations
Labor
Ship
Management
MLC 2006 & Ship Management
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4. Commercial Implications of MLC
• The Shipping Industry is a High Risk Industry
Error is not Tolerable
Negative Public Opinion
• The Commercial Position of the Ship Manager
Redefine the Customers
• Costs - Benefits Analysis
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5. Main Stakeholders and their Distance from a Hazard
Source: THEMES 2003
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6. The weight of stakeholders’ in the implementation
regulatory process
Source: Karahalios et al (2011)
30.3
17.5
12.9
12.7
5.5
5.1
4.3
4.1
3.9
3.8
0 5 10 15 20 25 30 35
Flag state
Coastal state
Classification society
Ship operator
Shipyard
Cargo owner
Underwriter
Marine consultant
P&I Club
Crew members
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7. Identified Risks
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8. Notable Implementation Tools
• Formal Safety Assessment
 Risk Management
 Regulatory Costs
• ISM Code
 Documentation
• Tanker Management Self Assessment (TMSA)
 Key Performance Indicators
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9. Notable Implementation Tools
•Common Elements :
 Risk Management (Safety & Economics)
 Measurement
μέτρον άριστον: Moderation is the best thing
Kleoboulos, 6th century BC
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10. Performance Management
• Main Goal: Profit in an Over Regulated Industry
• Identify the Key Divisions in a Ship Management
Company
• Establish Key Performance Indicators and Measures
• Conduct Cost-Benefit Analysis
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11. Performance Management
Bourbon Dolphin Accident:
 Training
 Stability Issues
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12. Step 1: Risk Management
• Risk analysis
 Headquarters (NK, Bourbon Dolphin)
 Onboard (MCA)
 Statistics (req. 4.3.5, req. 4.3.6. req. 4.3.8)
• Planning
 Position and Number of People Involved
 Procedures
 Health and Safety (req. 4.3)
 Shipowner’s liability (req. 4.2)
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13. Step 1: Risk Management
• Training
 Effective Training
 Manning Levels & Rest Hours (req. 2.3.1, req. 2.7)
 Recruitment (req. 1.4)
• Review
 Number of Unexpected Errors
 Money/hours spent
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14. Step 2: Internal Process
• Human capital
 Skills (req. 2.8)
 Talent
 Knowledge of Employees
• Information capital
 Software Applications
 Ship Monitoring
 Documentation
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15. Step 2: Internal Process
• Organizational capital
 Culture
 Leadership
 Share Knowledge (Internally)
• Innovation
 Risk Management
 Statistics
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16. Step 3: Customer Satisfaction for the Ship
Manager
• Productivity
 Costly Errors
• Competitiveness
 Dissatisfaction of Customers
• Quality
 Number of Management Deficiencies
• Reputation
 Claims
 Crew Complaints (req. 5.1.5)
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17. Step 4: Financial Issues
• Profit
 Recession Period
 Monitoring Labour Cost (req. 2.2)
• Revenue
 Reduce Off Hire Days
 Detentions (req. 5.2)
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18. Step 4: Financial Issues
• Costs
 Administration Expenses
 Additional Labour (Onboard & Headquarters)
• Additional Expenses (Cash)
 Additional Training
 Consulting
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19. Comparison of Existing Systems
Perspectives Indicators ISO 9001:2008 ISM Code
Finance Profit NA NA
Revenue NA NA
Cost NA NA
Additional Expenses NA NA
Customer
Satisfaction
Productivity 8.2.4 NA
Competitiveness 7.1.2 NA
Quality 4 NA
Reputation 8.2.1 NA
Know-How Human capital 6.1, 6.2.1 6
Information capital 6.3 1.1.7
Organizational capital 5.5, 5.4.1, 5.5.1, 5.5.2, 6.2.2 3.3, 4, 5
Innovation 5.1, 5.5.1, 5.5.3 1.2.2.3
Risk
Management
Risk analysis 5.1, 5.5.1, 5.5.3 1.2.2.2
Planning 5.4, 8.5.3, 7.3.1 7
Training 6.2.1, 6.2.2 6.5
Review 5.6 1.4.6
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20. What is the Weight of Each Perspective?
Source: Karahalios et al (2015)
54.1
21.3
15.7
8.9
0
10
20
30
40
50
60
Finance Customer
Satisfaction
Internal Process Risk Management
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21. How Many Measures?
0
0.2
0.4
0.6
0.8
1
1.2
0 5 10 15 20 25 30 35 40 45
Weighting
Number of Measures
Adoption of numerous
measures may generate
excessive bureaucracy
Source: Karahalios (2009)
Risk
Area
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22. The Contribution of HRM
• Productive People
 Effective Training
 Fair Salaries
 Safe, Healthy Working Environment
 Keep Valuable People
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Source:
Risk Analysis of Ship Operations (2019)
Pelorus Loss Prevention

23. Knowledge Evaluation
• Proof of Knowledge: Education, Qualifications and Training
 Seagoing
 Academic
• Experience
• Consensus with Experts
• Discrimination Ability
• Consistency
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