2.5 Substantial connection
As mentioned above, the coastal State’s jurisdiction is limited by customary international law prescribing the need for a “sufficiently close or substantial connection with the person, fact, or event and the State exercising jurisdiction”.(1) Molenaar (2016) p. 287. See also Mann (1964) p. 49. Crawford describes a principle of “genuine connection between the subject matter of jurisdiction and the territorial base or reasonable interests of the state in question”.(2) Crawford (2019) p. 441. This limitation to coastal State jurisdiction applies even if regulation of wage and working conditions can be designed so as to not interfere with any of the provisions of UNCLOS.(3) UNCLOS, preamble, at para. 8. It can also serve to inform the coastal State’s obligations under UNCLOS art. 300, as well as other provisions relating to good faith, reasonableness and the prohibition of abuse of rights.
Paraphrasing Molenaar and Crawford, the principle of substantial connection prescribes the need for a sufficiently close or substantial connection between the subject matter of jurisdiction and the territorial base or reasonable interests of the State exercising jurisdiction.(4) Crawford (2019) p. 441; Molenaar (2016) p. 287. The sufficiency of grounds will often be considered relative to the rights of other States.(5) Crawford (2019) p. 441, Molenaar et al. (2008) p. 101. When assessing whether such a connection exists, one must therefore weigh the jurisdictional base and reasonable interests of the coastal State against the rights and reasonable interests of other States.(6) Crawford (2019) p. 441, Ringbom (2015) pp. 132–133.
When regulating ships in ports and territorial waters, the coastal State’s jurisdiction can be based on the principle of territorial sovereignty.(7) UNCLOS art. 2. As pointed out by Molenaar, “[t]he sufficiency of the territorial principle as a basis for jurisdiction can be presumed unless international law stipulates otherwise”.(8) Molenaar (2016) p. 287. For ships involved in cabotage between the coastal State’s ports and between these ports and installations on the continental shelf, jurisdiction can also be based on the coastal State’s right under customary international law to regulate cabotage.(9) Marten (2014) pp. 199–201; Ringbom (2015) pp. 147–148. See discussion in section 2.2.4.
Regulation of wage and working conditions on board foreign-flagged ships may also be linked to the coastal State’s reasonable interests in securing both safety and decent working conditions at sea. For ships performing cabotage or work in the coastal State’s ports or waters for longer periods of time, this is even more relevant, as such ships and their crews are competing against other ships present in and seafarers living in the coastal State. For ships visiting only one port, the connection will be weaker.
As regards the rights and reasonable interests of other States, the degree of “genuine connection” between flag State and ship will vary. This is because it is up to each individual State to “fix the conditions for the grant of its nationality to ships”, and there are no provisions, either in UNCLOS or in similar conventions, regulating the consequences of a lack of the “genuine link” required in UNCLOS art. 91. The rights of the flag State under the Convention, however, such as the freedom of navigation and the right of innocent passage, must of course be respected.(10) UNCLOS arts. 87 and 17.
When regulating licensees in the exclusive economic zone and on the continental shelf, State jurisdiction can be based on the coastal State’s sovereign rights for the purpose of exploring and exploiting natural resources.(11) UNCLOS arts. 56 and 77. Here too, regulation of wage and working conditions on board foreign-flagged ships, in this case indirectly through the licensee, may be linked to the coastal State’s reasonable interests in securing both safety and decent working conditions at sea.
The reasonableness of coastal State regulation of wage and working conditions on board foreign-flagged ships in territorial waters and ships engaged in cabotage is supported by State practice. As described above, coastal State regulation of cabotage is more the norm than the exception world-wide, and sources referring to the right of coastal States to regulate cabotage date back as far as the late 1800s.(12) Fitzpatrick et al. (2018) pp. 10–11; Institut de Droit international (1898) art. 5 (1) and (3). As concerns regulation of ships engaged in resource exploration and exploitation in the exclusive economic zone and on the continental shelf, Australia and Canada are clear examples of such practice.(13) Fair Work Act 2009 (No. 28, 2009, Compilation No. 36) section 33 (1) c) and d) [Australia]; Coasting Trade Act (S.C. 1992, c. 31) section 2 (1) [Canada].
Coastal State regulation of wage and working conditions may be designed as minimum requirements, so as not to interfere with concurrent flag State jurisdiction imposing higher standards. International conventions on safety, environmental standards and working conditions at sea are based on the development of minimum standards and do not, for all intents and purposes relevant to this discussion, prevent individual States from imposing more stringent conditions.(14) See e.g. MLC, preamble, at para. 11, citing the ILO Constitution’s art. 19 (8), which “provides that in no case shall the adoption of any Convention or Recommendation by the Conference or the ratification of any Convention by any Member be deemed to affect any law, award, custom or agreement which ensures more favourable conditions to the workers concerned than those provided for in the Convention or Recommendation”. By imposing the same requirements on all ships, both foreign-flagged and national, coastal State regulation of wage and working conditions can be designed so as not to breach requirements of non-discrimination and market access in international trade law and EU/EEA law.(15) This is discussed in Arnesen et al. (2019) and Arnesen and Furuseth (2020).
In summary, there is strong indication that, even under the “substantial connection test”, the coastal State regulation of wage and working conditions on board foreign-flagged ships, when based on its territorial sovereignty in ports, internal waters and the territorial sea, and on its sovereign rights in the exclusive economic zone and on the continental shelf, will be justified.