The current legal situation is that Norwegian pay and working conditions are mandatory only on Norwegian-flagged vessels, registered in the Norwegian Ordinary Ship Register (NOR). The only existing cabotage restrictions in Norwegian waters and ports relate to Norwegian flagged vessels registered in the Norwegian International Ship Register (NIS), which are exempted from many of the mandatory provisions.

The Norwegian government has announced a bill that will set requirements for Norwegian pay and working conditions on NIS and foreign-flagged vessels in Norwegian waters and on the Norwegian continental shelf. The Minister of Fisheries and Maritime Affairs, Bjørnar Skjæran, has indicated that the bill will be submitted for consultation around Easter, with a view to parliamentary considerations during the autumn of 2022. The political signals indicate that the objective is to regulate vessels that are sailing between Norwegian ports.

In such case, the requirements will not apply to vessels that sail directly between Norwegian and foreign ports only. However, it is still unclear to what extent the bill will encompass foreign-flagged vessels, and it is also unclear, among other things, what type of vessel activities on the Norwegian shelf that will be included.[1]

The background for the bill is a multi-party maritime committee (the Holmefjord Committee appointed by the previous Solberg government), whose objective was to consider measures to strengthen Norwegian maritime competence, employment and competitiveness. One of the Committee’s recommendations was to introduce a requirement for Norwegian pay and working conditions when transporting goods or passengers between Norwegian ports.[2]

In connection with the Committee’s work, several legal reports were obtained by the various parties to the Committee. In particular, the following topics were assessed:

  1. What is the legal leeway for manoeuvre under maritime law/international law for Norway as a coastal state to be allowed to regulate the pay and working conditions on foreign-flagged vessels, and
  2. Whether there is such leeway under EEA law, in particular whether there is a basis for an exemption from the principle of free movement of services.

There is significant legal disagreement amongst the specialists on both issues. In this newsletter, we will focus on the first issue, which particularly brings to fore the interaction and balance between key principles of the law of the sea, including flag state jurisdiction, coastal state jurisdiction and the freedom of the sea (innocent passage).

The debate amongst the experts shows that such a regulation implies a clear Norwegian position regarding an extension of the coastal state’s jurisdiction at the expense of the flag state, but it is unclear whether this extension can be categorised as contrary to international law or only as a “political breach” of existing state practice. Regardless of such categorisation, the bill may be of significant importance for Norway as a maritime nation, and in light of the legal debate – which we will outline here – it will be interesting to see the bill’s formulation when it is presented in the near future.

The legal reports

In connection with the Holmefjord Committee’s work, legal reports were obtained from:

  1. The law firm Wikborg Rein and Oslo Economics, commissioned by the Solberg government[3]
  2. The researchers Finn Arnesen, Hanna Furuseth, Alla Podznakova and Henrik Ringbom from the Nordic Institute of Maritime Law, commissioned by Norwegian Confederation of Trade Unions (LO), the Norwegian Seafarer’s Union and Norwegian Maritime Officers’ Union.[4] Arnesen and Furuseth have also, as part of the expert report, prepared a draft bill on behalf of the same organisations.
  3. Professor (now Supreme Court Judge) Jens Edvin Skoghøy from the Arctic University of Norway (UiT), commissioned by the Norwegian Shipowners’ Association.[5]
  4. Ministry of Foreign Affairs, represented by Department Director Andreas Motzfeldt Kravik (the “MFA”)[6]
  5. The law firm Kluge, commissioned by the Norwegian Oil & Gas Association[7]

In the Holmefjord Committee’s report, it was emphasised that the uncertainty regarding the legal leeway for manoeuvre poses a challenge:

“A general challenge for the Committee is that there is a disagreement within the professional communities and between the organisations in the committee regarding the legal leeway for manoeuvre under the Convention on the Law of the Sea, EEA law and other international agreements”.”[8]

The point of departure under international law and the limits of the coastal state’s jurisdiction

As a point of departure, the flag state is assigned jurisdiction over the pay and working conditions on the vessel. It is stated in Article 94 (2) letter b. of the Convention on the Law of the Sea (“the Convention”) that the flag state shall effectively exercise its jurisdiction and control in administrative, technical and social matters over vessels flying its flag and its master, officers and crew.

On the high seas, the flag state principle applies unrestrictedly, cf. Articles 87-94 of the Convention. The flag state thus has full jurisdiction over the vessel on the high seas.

In the territorial waters of the coastal state, the jurisdiction of the flag state is limited by the coastal state’s jurisdiction. How the jurisdiction is distributed when the coastal state has jurisdiction will depend on a factual delimitation. In its assessment, the MFA points out that there has been a development towards a somewhat greater leeway for the coastal state to set requirements for foreign-flagged vessels, particularly as concerns environment and safety.[9]

As an example, Norway has national rules that regulate the permitted levels of emissions of nitrogen oxides (NOx) from vessels[10] (also foreign-flagged) sailing in the world heritage fjords.[11] It is clear that the coastal state can regulate emissions that directly affect the environment, regardless of the flag of the vessel. Conversely, as we shall see, it is more uncertain whether the coastal state may have jurisdiction over the vessel’s internal matters (including pay and working conditions).  

The core of the professional disagreement is how far the coastal state may go, and how far the coastal state should go, in placing requirements on foreign flagged vessels. The leeway under international law can best be described as unclear and open to interpretation. This is reflected in the widely differing conclusions of the reports.

The potential restrictions on the leeway for manoeuvre are partly set by international law, but also by the (partly unresolved) intersection between custom and practice under international law. Here, there are also interesting differences in how the reports allow this intersection to determine the leeway for manoeuvre for Norwegian legislators. Arnesen et al seem to define the leeway for manoeuvre on the basis of a sharp distinction between restrictions under international law and political considerations: As long as there are no absolute impediments under international law, they consider such a regulation as a possibility.

In Skoghøy’s report and, in particular, the MFA’s report, there is greater focus on whether Norway should introduce such rules. The reports examine in more detail the practical consequences of Norway’s implementation of the planned legislation, which do not necessarily depend on the conclusion of a fine-grained legal analysis of the presumed applicable international law. The MFA is, among other things, pointing to the fact that Norway is risking reactions from other coastal states towards Norwegian-flagged vessels, while Skoghøy is stressing that Norway, as a maritime nation, has an “interest in maintaining high focus on the flag state principle”[12].

Exercise of jurisdiction by setting conditions for foreign-flagged vessels in Norwegian ports

Beyond emergency cases, no foreign flagged vessel has a right under international law to use the ports of a coastal state. The coastal state may set the terms for port access, which also follows from section 25 of the Convention.

This does not necessarily mean that the coastal state is free to exercise its jurisdiction as it pleases, without (potentially) violating rules under international law, or perhaps more accurately: challenge the “system” of the Convention. In the legal reports, there is significant disagreement as to whether the coastal state’s jurisdiction over a vessel at port is objectively delimited. The key point is whether the coastal state may regulate so-called “internal matters” on board the vessel when at port. Pay and working conditions are assumed to be part of the vessel’s internal matters.[13]

Arnesen et al point out that the coastal state has full jurisdiction at port, while also referring to the fact that most coastal states refrain from regulating the vessel’s “internal matters“. However, in their view, this practice is not the result of legal restrictions, but of “political assessments and the internal law of the port state“. They refer to this being the prevailing view within legal theory[14].

It is somewhat unclear what Arnesen et al means by political assessments. However, it is likely that the absence of such regulation is due to perceptions of international custom or that the individual state is of the opinion that the flag state shall have unlimited jurisdiction within certain areas. In addition, it must be assumed that a number of states do not have self-interest in such a coastal state regulation, which may also be categorised as a political assessment.

For his part, Skoghøy does not agree that the practice is the result of purely political assessments, and in his view, “the best of reasons indicate” that the practice of not intervening in the vessel’s internal matters can be considered customary international law. Regardless, he believes that it should not be decisive whether the practice is of a legal or political nature:

“The practice of not intervening in internal matters on board is in any case so widespread in international relations that it would be staggering should Norway contest the validity of this principle.”[15] 

At the same time, Skoghøy points out that there is an important exception from this principle in cases where the work on board is carried out in direct competition with employees employed at the port.[16]

Innocent passage in Norwegian territorial waters

A clear legal restriction on the coastal state’s jurisdiction applies to vessels in “innocent passage”, cf. Article 18 of the Convention on the Law of the Sea. Article 21 provides an overview (letters a through h) of what the coastal state may regulate through national legislation with effect for vessels in innocent passage. None of the letters provide competence to regulate the vessels’ internal matters.

There is considerable disagreement in the different reports as to whether Article 21 of the Convention on the Law of the Sea exhaustively delimits the coastal state’s jurisdiction or not.

Arnesen et al clearly indicate that the coastal state has competence to regulate by law beyond what follows from Article 21:

“As territorial waters in principle are subject to the sovereignty of the coastal state, and this principle is not expressly limited in the provisions under the Convention on the Law of the Sea, there are good reasons to assume that the coastal state retains large parts of the legislative jurisdiction also over vessels that are in innocent passage”.”[17]

Here, the MFA takes the opposite point of departure, and points out that the coastal state is in principle precluded from issuing rules for vessels in “innocent passage” with effect for the vessel’s crew, unless the rules correspond with international rules and standards, see Article 21 (2) cf. Article 17 of the Convention.

Skoghøy, for his part, believes that the Convention exhaustively states which matters the coastal state may regulate. He stresses that the regulation of pay and working conditions on board clearly falls outside the competence of the coastal state, and criticises, in clear terms, the approach of Arnesen et al:

“[They] are heading in the completely wrong direction when they try to justify the coastal state’s competence to intervene in internal matters on vessels that are in innocent passage. They do not grasp that the right of innocent passage represents a significant restriction of the coastal state’s exercise of jurisdiction in the territorial waters”.”[18]

As for vessels that are sailing to or from a Norwegian port, and that are otherwise in innocent passing, there is the question of whether the coastal state may regulate the vessels’ internal matters also during the time they are not at port (but in Norwegian territorial waters). The MFA points out that vessels that cross the maritime territory “uninterruptedly and quickly” are, as a point of departure, in innocent passage according to the Convention, and that:

“Vessels that are crossing the maritime territory on their way to or from a Norwegian port, may meet the requirements for innocent passage”.[19]

However, Arnesen et al maintain that any restrictions on the jurisdiction over vessels in innocent passage are of limited importance for vessels sailing from or to Norwegian ports, as:

“[T]he coastal state’s legislative jurisdiction over a vessel in innocent passage does not interfere with the coastal state’s right to impose conditions for port access [pursuant to Article 25 (2) of the Convention on the Law of the Sea]”.[20]

The idea here seems to be that the coastal state may at all times regulate vessels, also during the time they are in innocent passage in Norwegian territorial waters, by utilising its right to set conditions for port access.

In our opinion, the argument that the coastal state has a discretionary right to set the conditions it may wish seems to be a rather unsystematic approach to the leeway of manoeuvre under international law. The MFA also points out that conditions for port access may come in conflict with the jurisdiction of the flag state.[21] In addition, the MFA states that there will be significant practical challenges in introducing and enforcing Norwegian rules and conditions.[22]

Skoghøy believes, by extension of his conclusion as referred to above, that there is no right under international law to set requirements for the vessel’s internal matters when it is in transit (on its way to or from a Norwegian port).[23]

Vessels in cabotage in Norwegian territorial waters

Vessels in cabotage, i.e. vessels sailing in domestic traffic between national ports, or between national ports and installations on the Norwegian shelf, are not in “innocent passage”. The same restriction in the coastal state jurisdiction does therefore not apply to such vessels. There seems to be a consensus on this in the legal assessments.

At the same time, there are general restrictions under the Convention to which the exercise of the jurisdiction must comply. Any condition set must comply with the requirement of good faith and the ban on abuse of rights pursuant to Article 300 of the Convention.[24]

The MFA points out that even where the coastal state in principle has jurisdiction, it is, in terms of foreign politics, precarious to regulate the foreign vessels’ internal matters, also for vessels in cabotage:

“Even where the coastal state has jurisdiction, there is a tradition of exercising a certain degree of restraint in terms of regulating the foreign vessels’ internal matters. Admittedly, coastal states have introduced extensive regulations for vessels in cabotage, i.e. in domestic traffic between national ports and between national ports and installations on its shelf. However, it cannot be ruled out that the conditions set by the coastal state to comply with Norwegian employment law will lead to various forms of reactions, for instance that foreign states will set conditions for allowing Norwegian vessels to enter port”.

It is worth noting the MFA’s reference to “tradition” as a possible limitation for regulation. The debate shows that there may be unclear interfaces between what constitutes a “foreign policy” tradition and what constitutes customary international law.[25] In both cases, it can be said that the consequence remains the same: Risk of reactions from other states against Norwegian-flagged vessels.

The Norwegian continental shelf

In principle, outside the territorial waters, the flag state’s jurisdiction over the vessel applies in full, cf. Article 92 of the Convention.

At the same time, Norwegian authorities have exclusive jurisdiction over the operation and use of constructions and facilities with economic purposes on the Norwegian continental shelf. Thus, Norway will have jurisdiction over vessels that are included in the operation or use of installations on the Norwegian shelf. The MFA states that for such vessels, Norway may impose Norwegian pay and working conditions.[26]

However, apart from said vessels, Norway does not have direct jurisdiction over vessels in the maritime areas above the continental shelf. Jurisdiction beyond the above-mentioned cases will therefore have to be based on so-called effect-based jurisdiction, the continental shelf state’s regulations in private law agreements, or in production licences.[27]

Arnesen et al do not consider the principle in Article 92 of the Convention on exclusive flag state jurisdiction on the high seas as an absolute impediment to requiring Norwegian pay and working conditions for seafarers on foreign vessels, as this can be implemented by setting conditions for port access. However, this must be assessed in view of whether such exercise violates or results in unjustified interference in the shipping trade and the rights and freedoms of other states pursuant to Article 78 (2) of the Convention.[28]

The MFA agrees that an approach of setting conditions for port access is possible “in principle”, but warns against opposition from foreign flag states in the form of reciprocity actions.[29]

Skoghøy, for his part, believes that Arnesen et al are expressly mistaken when they assume that the Convention does not prevent the coastal state from setting conditions for port access (that Norwegian pay and working conditions shall apply) for vessels that are operating transport to and from continental shelf installations. With reference to Article 78 (2), cf. 77 (1), Skoghøy believes that it is “clear as day” that the coastal state’s jurisdiction over the shelf is limited to activities that directly concern exploration and exploitation of the natural resources.[30] Norwegian petroleum extraction takes place on the high seas, where the flag state principle applies.[31]

The conclusions of the legal reports and final remarks

As can be seen from the above review, there are significant differences in how the reports interpret the leeway to impose Norwegian pay and working conditions onto foreign-flagged vessels. This is partly due to a real (international law) interpretation disagreement, but we also note that the approaches to the distinction between politics and law are different.

Arnesen et al seem to formulate the leeway for manoeuvre as a classical legal issue, in which there is a sharp distinction between legal and political restrictions. They conclude that a requirement for Norwegian pay and working conditions may be made on board foreign vessels in Norwegian waters and on the Norwegian shelf,[32] and that there are no “absolute impediments“[33] for such a regulation.

The MFA, for its part, concludes that there is a “certain right” under international law to impose Norwegian pay and working conditions when the vessel is within the Norwegian territorial waters, when the vessel carries out work related to the shelf, and from time to time in light of specific affiliation assessments.

At the same time, the MFA, to a greater extent than do Arnesen et al, focuses on practical challenges, as well as on the foreign policy / “international maritime law policy” consequences of such a regulation. Firstly, the MFA points to practical challenges[34] in determining factual, temporal and geographical proximity when assessing the vessel’s affiliation to an installation or Norwegian territory, and that this calls for a certain restraint in such a coastal state regulation on the part of Norway. Secondly, there is a risk that Norwegian vessels will be subjected to similar restrictions in other countries.

Skoghøy sums up his analysis by stating that the report from Arnesen et al goes “too far” in giving jurisdiction to the coastal state / shelf state, and points to the fact that Norway, as a maritime nation, has an interest in maintaining high focus on the flag state principle. Even if there were admission under international law for extraterritorial Norwegian legislation, such legislation must be expected to be met with similar measures by other nations – which he believes may be detrimental to Norway’s interests in the long run. He believes that under all circumstances, Norway should refrain from legislation that is questionable under international law.

In our opinion, it is not necessarily meaningful to talk about “absolute impediments” when balancing the coastal state jurisdiction and the flag state jurisdiction, and especially when it is unclear whether the existing state practice can be categorised as tradition or customary international law. Nor is it certain whether such a categorisation should be decisive: Norway is still risking reactions from other states (although an “obvious” violation of international law must be presumed to create stronger reactions). If the regulation is balancing on the edge of accepted rules under international law, there is still a risk that some other states believe the law to be contrary to international law. Norway, as a small state, has a vested interest in strict compliance with international rules and norms. As a significant shipping nation, Norway also has a vested interest in how the system of international shipping is organised and enforced.

Based on the legal discussion that is outlined here, it will be intriguing to see how far the bill goes in giving Norway costal state jurisdiction over foreign-flagged vessels, and to see how practical and legal challenges will be solved in the bill. In any case, everything is set for an interesting debate on these issues during the consultation round.

[1] https://www.regjeringen.no/no/aktuelt/fiskeri-og-havministeren-vil-fa-pa-plass-ny-lov-om-norsk-lonn-i-norske-farvann-raskt/id2888551/

[2] https://www.regjeringen.no/no/dokumenter/forslag-for-a-styrke-norsk-maritim-kompetanse-sysselsetting-og-konkurransekraft/id2839058/

[3] https://www.regjeringen.no/contentassets/7091ab39955f41c09f5b8d2af1902fef/vedlegg-4-wr-utredning.pdf

[4] https://www.regjeringen.no/contentassets/7091ab39955f41c09f5b8d2af1902fef/vedlegg-5-nifs-utredning.pdf

[5] https://www.regjeringen.no/contentassets/7091ab39955f41c09f5b8d2af1902fef/vedlegg-8-skoghoy-betenkning.pdf

[6] https://www.regjeringen.no/contentassets/7091ab39955f41c09f5b8d2af1902fef/vedlegg-10-ud-notat.pdf

[7] https://www.regjeringen.no/contentassets/7091ab39955f41c09f5b8d2af1902fef/vedlegg-9-kluge-betenkning.pdf

[8] The commission’s report, p. 26

[9] The MFA’s assessment, p. 3

[10] From 2019

[11] FOR-2012-05-20-288 (environmental safety regulations), section 14c

[12] Skoghøy, p. 9

[13] But “not necessarily” according to Arnesen et al, p. 13-14.

[14] Arnesen et al, p. 13

[15] Skoghøy, p. 2

[16] Skoghøy, p. 3

[17] Arnesen et al, p. 19

[18] Skoghøy, p. 6

[19] The MFA’s assessment, p. 3

[20] Arnesen et al, p. 19

[21] The MFA’s assessment, p. 3

[22] The MFA’s assessment, p. 3

[23] Skoghøy, p. 3

[24] The MFA’s assessment, p. 3

[25] Cf. The disagreement between Skoghøy and Arnesen et al on whether or not to refrain from regulating internal matters is customary under international law

[26] The MFA’s assessment, p. 4

[27] The MFA’s assessment, p. 4

[28] Arnesen et al, p. 16.

[29] The MFA’s assessment, p. 4

[30] Skoghøy viser her til Prop. 106 L (2017-2018), s. 18.

[31] Skoghøy, p. 7

[32] Arnesen et al, p. 9 and 30

[33] Arnesen et al, p. 26

[34] Here, the MFA is referring in particular to Wikborg Rein’s report on p. 151 et sec

  • Published: