THE COLLECTIVE BARGAINING AGREEMENT FOR CHINESE CREW (A) This Collective Agreement is made and entered into by and between the National Committee of the Chinese Seamen & Construction Worker’s Union on one part and China Shipowners’ Association on the other part. It is hereby agreed and the declared between the parties hereto as follows: ARTICLE 1 GENERAL RULES 1. This Agreement is formulated for the purpose of promoting shipping advance, establishing harmonious and stable labor relations, safeguarding the legal rights and interests of Chinese seafarers, advancing their decent work and in accordance with related national laws or regulations, related conventions of ILO and IMO. 2. This Agreement should cover all Chinese seafarers, all ships owned or operated by Chinese shipowners, and all the Chinese seafarer manning agencies. 3. Chinese seafarers shall have the rights to participate in and form trade union organizations, and carry out the trade union work pursuant to the TRADE UNION LAW OF THE P.R.CHINA. The National Committee of the Chinese Seamen & Construction Worker’s Union shall represent the interests of the seafarers and protect the legal rights and interests of the seafarers. The shipowners shall respect the seafarers’ rights to participate in and form trade union organizations, and carry out the trade union work. 4. The shipowners shall sign labor contracts with the seafarers in accordance with the LABOR LAW OF THE P.R.CHINA, LAW OF THE P.R.CHINA ON EMPLOYMENT CONTRACTS, REGULATIONS OF THE P.R.CHINA ON SEAFARERS and the related laws and regulations. And the labor standard of the labor contracts shall not be lower than the 1 rules of this Agreement. The shipowners who recruit the dispatched seafarers shall ensure the seafarers sign labor contracts with qualified service organizations, other shipowners or related units. 5. The term “shipowner” in this Agreement means the owner of the ship or another organization or person who has assumed the responsibility for the operation of the ship from the owner and who has agreed to take over the duties and responsibilities imposed on shipowners. The term “seafarer” in this Agreement means a person who has obtained the Seafarer’s Identity Document after being registered in accordance with the provisions of the REGULATIONS OF THE P.R.CHINA ON SEAFARERS, including the master, officer and rating. The term “ship” in this Agreement means the merchant ship over 500GT and engaging in international voyages or operating Hong Kong-Macao- Taiwan shipping lines, excluding the fishing vessel, military-purpose vessel and sports vessel. The term “basic wage” in this Agreement means the pay for normal hours of work, it does not include payments for overtime worked, bonuses, allowances, paid leave or any other additional remuneration. ARTICLE 2 LABOR CONTRACTS AND MANAGEMENT 6. The shipowners shall conclude the labor contracts and establish the employment relationships with the seafarers complying with the principles of lawfulness, fairness, equality, free will, negotiated consensus and good faith. 7. The standard labor contracts should be made on the basis of fully heeding the opinions of the trade union and the seafarers and shall be 2 delivered to the seafarers in advance so that they have ample time to consult and research. The duration of the probationary period shall conform to the related laws and regulations. 8. When a shipowner is to terminate a labor contract unilaterally, it shall give the trade union advance notice of the reason therefore. The trade union has the right to represent the seafarer, give the views involving the matters of the seafarer’ interests and make representations to the shipowner, and protect the legal rights and interests of the seafarer. 9. The shipowners shall, according with related laws and regulations, exercise the employment management, and institute employment management system. 10. The shipowner may not terminate a labor contract hereof if the seafarer: 10.1 Is engaged in operations exposing him to occupational disease hazards and has not undergone a pre-departure occupational health check-up, or is suspected of having contracted an occupational disease and is being diagnosed or under medical observation; 10.2 Has been confirmed as having lost or partially lost his capacity to work due to an occupational disease contracted or a work-related injury sustained with the shipowner; 10.3 Has contracted an illness or sustained a non-work-related injury, and the set period of medical care therefore has not expired; 10.4 Has been working for the shipowner continuously for not less than 15 years and is less than 5 years away from his legal retirement age; 10.5 Finds himself in other circumstances stipulated in laws or 3 administrative statutes. 11. A seafarer shall be engaged for up to 8 months service on board a ship, and such period may be extended or reduced by 2 months for operational convenience. After accruing 8 months continuous service, the seafarer shall be entitled to a extra increment in his wage, and such extra increment shall not less than 10% of his basic wage. ARTICLE 3 REMUNERATION OF LABOR, SOCIAL SECURITY AND WELFARE 12. The shipowner shall establish and improve the collective bargaining system and wage payment guarantee system to develop harmonious and stable employment relationships. 13. The wages of the seafarer should be paid in a currency and not less than the standard attached hereto in Annex One. 14. The shipowner shall arrange to pay the seafarers the remuneration of labor in accordance with the agreement, including bank transfer and home allotments. The shipowners shall provide the seafarers with list of labor remuneration on a regular basis, the list shall include labor remuneration structure and deductions content. The two sides are free to agree the way to sign the list. 15.The shipowners or employer shall ensure that the seafarers are entitled to have paid annual leave and public holidays in accordance with the law and the regulations. A seafarer on standby means the seafarer who is temporarily unable to be arranged to work on board, not due to the reasons of the seafarer, full exercise of the right to rest, in accordance of laws and regulations of labor and social security or the agreement of the collective contract or labor 4 contract. The shipowner shall pay wages to the seafarers on standby, which are not less than the minimum wages published by the people’s government at the place where the shipowner is located. 16. The shipowner or the employer shall participate in work injury insurance, medical insurance, old age insurance, unemployment insurance as well as other social insurance in accordance with the relevant provisions of the State, and shall pay premiums on time and in full. The premiums of the seafarer’s portion in respect of his social insurance shall be paid by the seafarer himself, or withheld or paid by the shipowner or the employer in accordance with the relevant provisions of the State, and the shipowner shall give the written report to the seafarer regularly. 17. The trade unions have the right to supervise the payment of the premiums of the shipowners’ portion in respect of the seafarers’ social insurance. ARTICLE 4 HOURS OF DUTY, REST PERIODS AND HOLIDAYS 18. The normal hours of duty should be eight hours per day. 19. The shipowner shall give the compensatory leaves or compensation to the seafarer who has worked on Saturdays and Sundays. 20. The seafarers shall enjoy, in addition to the national official holidays, a paid annual leave of at least five days after serving on board for every two months according to the REGULATIONS OF THE P.R.CHINA ON SEAFARERS. 21. The shipowners shall pay the seafarers the remunerations which are not less than 300% of their basic wages if they work during the official public holidays including New Year’s Day (1 day), Spring Festival(3 5 days), Festival for Sweeping the Graves(1 day), Labor Day(1day), Dragon Boat Festival(1day), Mid-Autumn Festival(1 day), and National Day(3 days). 22. Each seafarer shall have a minimum of 40 days rest if he has worked on board for 8 months consecutively. If a seafarer has more than eight months of continuous work on board a ship, the shipowner shall ensure that the rest and vacation time for not less than 40 days straight. In case a seafarer provides extended services, continuous rest and vacation time shall be extended accordingly. 23. The limits on hours of work or rest should be as follows: 23.1 Maximum hours of work not exceed 14 hours in any 24-hour period; and 72 hours in any 7-day period; 23.2 Minimum hours of rest shall not be less than 10 hours in any 24-hour period; and 77 hours in any 7-day period; 23.3 Hours of rest may be divided into no more than two periods, one of which shall be at least 6 hours in length, and the interval between consecutive periods of rest shall not exceed 14 hours. 24. Overtime shall be recorded individually and in duplicate either by the Master or the Head of the Department. Such record shall be handed to the seafarer for approval every two weeks or at shorter intervals. Both copies must be signed by the Master and/or Head of the Department as well as by the seafarer, after which the record is final. One copy shall be handed over to the seafarer. 25. Under one of the following circumstances, the extension of working hours are not subject to restrictions in the 23rd term above: 6 Musters, fire-fighting and lifeboat drills, and safety drills shall be conducted in a manner that minimizes the disturbance of rest periods and does not induce fatigue. Any additional hours worked during an emergency directly affecting the immediate safety of the ship, its passengers, crew or cargo, or work required to give assistance to other ships or persons in immediate peril shall not count for overtime payment. ARTICLE 5 SHIP MANNING AND WATCHKEEPING 26. The ship should be seaworthy and competently, adequately manned so as to ensure the minimum safe manning for the vessel and secure the normal watchkeeping of the vessel in accordance with the standard of IMO and ILO Conventions. And in no case the ship is manned at a lower level than the applicable standard in accordance with relevant international and national laws, rules and regulations. 27. Where the complement falls short of the agreed manning, the extra compensation shall be paid to the replacement. In principal, the vacant shall be filled at the next port of call as soon as possible. ARTICLE 6 OCCUPATIONAL SAFETY AND MEDICAL ATTENTION 28. The ship should have an occupational safety and health management, and shall provide medicines most in use, necessary medical equipment and facilities, and shall carry a seafarer with the approved medical training. 29. The shipowner shall ensure that seafarers on its ships are provided with occupational health protection and live, work and train on board ship in a safe and hygienic environment, and they should undergo the training of occupational safety, health protection and accident prevention. 30. The ship should have safety committee which is responsible for 7 supervising safety and electing seafarer as safety representative to participate in it, and effectively implementing the ship’s training of occupational safety, health protection and accident prevention. 31. The shipowner shall provide seafarers with the adequate occupational protective articles and necessary seasonal protective supplies in accordance with the national standard. 32. The shipowner shall provide seafarers with the health protection, establish the health records for them, and arrange medical examination according to the national medical standards by the competent authorities for seafarers every year 33. A seafarer who is hospitalized abroad owing to sickness or injury shall be entitled to medical attention (including hospitalization) at the shipowner’s expenses including the expenses of medical care and board and lodging until the seafarer has recovered or his treatment has ended. 34. The shipowner shall buy life and health insurance and provide relevant protective measures for the seafarers who serve on the vessels traveling to or through war zones or epidemic areas or vessels carrying toxic or hazardous substances. 35.The shipowner shall provide labor safety and sanitation equipment and arrange labor safety and health knowledge training when employing female seafarers required by “ the law on the rotection of the Rights and Interests of Women of PRC” and “Special Provisions of the labor Protection of Women Workers”. The shipowner shall provide female seafarers with necessary protections in menstrual, pregnancy, birth and feeding periods according to the laws and regulations, and bear the cost of related inspection fees according to the provisions of the national maternity insurance. ARTICLE 7 FOOD, ACCOMMODATION, BEDDING AND RECREATIONAL FECILITIES 8 35. The ship shall provide the seafarers the following items: 35.1 Food in line with the food standard of ILO and having regard to their religious requirements and cultural background, and the necessary mess utensils; 35.2 Sleeping rooms and beddings according with the international conventions; 35.3 Laundry facilities; 35.4 The size of the accommodation spaces and recreational facilities in accordance with the international conventions; 35.5 Heating and ventilation; 35.6 Sanitary facilities; 35.7 Lighting. 36. The standard of seafarer’s food allowance should be not less than the standard attached hereto in Annex Two. 37. The shipowner shall provide nutritious, hygienic food and accommodation if these are not provided on board the ship. 38. The shipowner shall, when feasible, provide the seafarers with convenient condition of onboard communication. ARTICLE 8 SERVICE IN WAR ZONES, EPIDEMIC AREAS OR PIRACY REGIONS 38. Where a ship enters into a war zone, epidemic area or piracy region, a 9 seafarer shall be given full information of this zone, ship’s voyage, port of call and necessary protective measures. 39. During the assignment a seafarer shall have the right not to proceed to a war zone or epidemic area, and in which event the seafarer shall be repatriated at shipowner’s cost. 40. Where a ship enters into a war zone or epidemic area, the seafarer shall be paid a bonus equal to 100% of the basic wage for the duration of the ship’s stay in such area subject to a minimum of five days’ pay. 41. Where a ship enters into a piracy region, the seafarer shall be paid a bonus according to the international requirements. The seafarer who is injured or died due to pirate attacks, should be compensated according to the terms and conditions of the war zone. ARTICLE 9 MEDICAL CARE, SICK PAY, DISABILITY, LOSS OF LIFE-DEATH IN SERVICE AND INSURANCE COVER 42. The shipowner shall timely provide medical treatment for the sick or injured seafarers serving on board until they have been cured, or until the sickness or incapacity has been declared of a permanent character, or until the appointed term of medical treatment has completed. The term of medical treatment is in accordance with the REGULATION OF THE TERM OF MEDICAL TREATMENT published by the Ministry of Human Resources and Social Security of the P.R.China. During the term of medical treatment of the work-related injuries, the seafarer shall be paid full cost of medical and full wages. During the term of medical treatment of sick on board ,the seafarer shall be paid full cost of medical and the wage no less than wage of official rest. 43. A seafarer who dies or suffers permanent disability as a result of an 10 accident whilst in the employment including accidents occurring while travelling to or from the ship, shall be entitled to timely compensation according to the provisions of the Labor Contract or related laws and regulations. 44. The shipowner shall insure the seafarers proceeding to sea on board for crew risks, which shall include death, sickness, injury and disability, with a first class insurance company, underwriter or protection and indemnity association. The shipowner shall inform the seafarers of the insured in writing, and the seafarers shall not pay for the insurance costs. The shipowner shall be responsible for recoursing the indemnity and forward it to the seafarers or the descendants of the seafarers fully and in time. 45. A seafarer or his descendant can choose commercial insurance settlement of social insurance settlement if they meet the payment conditions of commercial insurance, as well as social insurance; if the case is consistent with payment terms of both commercial insurance and social insurance when the seafarer is sick, or dies or suffers permanent disability. 46. The shipowner shall pay the seafarer wages, bear the cost of transporting the ashes or remains and the deceased’s personal relics back to his home when a seafarer dies abroad including accidents occurring while travelling to or from the ship. ARTICLE 10 REPATRIATION 47. When serving on board, a seafarer may ask for repatriation in any of the following circumstances: 47.1 The seafarer’s labor contract expires or is terminated in accordance with law; 11 47.2 The seafarer is incompetent to perform the duties of his post on board; 47.3 The seafarer’s spouse, or child, or a parent has died or has fallen dangerously ill; 47.4 The vessel is lost; 47.5 The shipowner is unable to continue to fulfill its legal or contractual obligations for its seafarers by reason of bankruptcy, sale of the vessel, change in vessel’s registration or other reasons; 47.6 In the event of force majeure. 48. A seafarer may choose the place of repatriation from among the following places: 48.1 The place where he is recruited or he first assumes his post on board; 48.2 The place of residence or registered permanent residence of the seafarer, or the vessel’s registry; 48.3 The place agreed upon by the seafarer and the shipowner. 49. The shipowner shall pay the cost of repatriation of seafarers from the ship back to his employment port. During the probationary service the shipowner shall be entitled to terminate the employment and repatriate the seafarer if the shipowner finds the seafarer is unfit for his duty. If the seafarer agreed, the shipowner shall reduce him to a lower rank. But if the seafarer chooses to be repatriated, the cost of repatriation shall be the responsibility of the shipowner. 12 50. Repatriation shall take place in a reasonable manner. During repatriation, the shipowner shall be liable for the costs of accommodation and food, travel and the other costs as per the agreement. ARTICLE 11 TERMINATION OF EMPLOYMENT 51. A seafarer may terminate employment by giving 30 day’s written notice of termination to the shipowner or the Master of the ship, except for the regulations stipulated by the LABOR LAW OF THE P.R.CHINA, LAW OF THE P.R.CHINA ON EMPLOYMENT CONTRACTS, REGULATIONS OF THE P.R.CHINA ON SEAFARERS. 52. A seafarer may terminate employment and ask for repatriation: 52.1 If the seafarer was employed for a specified voyage, and the voyage is subsequently altered substantially, after consultations to adjust the routes, shipowners and seafarers are unable to reach a consensus. 52.2 If the ship is certified substandard in relation to the applicable provisions the Safety of Life at Sea Convention(SOLAS) 1974 or Port State Inspection; and the permanent ship's deficiencies can not be repaired, so the shipowner can not continue to fulfill contractual obligations. A seafarer shall be entitled to repatriation, the shipowner should agree, and pay the corresponding costs of repatriation. 53. Refusal by any seafarer to obey an order to sail the ship shall not amount to misconduct of the seafarer where: 53.1 The ship is unseaworthy or otherwise is substandard as defined in the applicable provisions the Safety of Life at Sea Convention(SOLAS) 1974 or Port State Inspection; 13 53.2 For any reason it would be unlawful for the ship to sail, in case the ship fails to meet the requirements for safe navigation, or may threaten the safety of lives, property and the ship, or may cause pollution to the waters, or may threaten the safety of navigation. 54. A seafarer shall be entitled to receive compensation on termination of their employment in accordance with LAW OF THE P.R.CHINA ON EMPLOYMENT CONTRACTS and the other laws or regulations. During the voyage, the Master and officers shall not resign, leave or suspend their duties without permission. A seafarer shall undertake certain economic responsibilities on unauthorized leave and causing economic losses to the shipowner. ARTICLE 12 SEAFARER’S COMPLAINTS AND LABOR DISPUTES 55. The shipowner shall provide to seafarers decent working and living conditions on board ship. Each seafarer shall be entitled to work, train and live in an environment free from maltreatment and discrimination based upon race, color, sex, religion, national extraction or social origin. 56. In cases of labor disputes, the seafarers shall submit the claim or dispute to the trade union on board ship or trade union at a higher level. When a labor dispute arises, the parties do not want, or unsuccessfully to negotiate a settlement agreement, or non-compliance, then they may apply for conciliation or mediation organizations have jurisdiction over the labor dispute arbitration committee for arbitration, and they may also take legal proceedings at the maritime court who has direct jurisdiction according to The People's Republic of China Maritime Law of the special procedures of the proceedings. 57. The seafarers shall make complaints to the National Committee of the Chinese Seamen & Construction Worker’s Union or China Shipowners’ 14 Association if they found the ship is not in accordance with the labor standard of this Agreement. Or they can complain to the maritime safety administrations where the ship called on or their labor contract signed. ARTICLE 13 TRAINING FOR SEAFARERS 58. The shipowner shall institute vocational training system, collect and administer the vocational training funds, conduct the vocational training to the seafarers in a planned way, strengthen their employment and working ability, promote the overall quality of Chinese seafarers. 59. The shipowner shall agree with the seafarer on a definite employment period if the shipowner has provided funds for his training. And the seafarer shall pay the penalty for breaching of the agreement to the shipowner according to the related regulations or laws. ARTICLE 14 SUPPLEMENTARY PROVISIONS 60. The labor standard on board merchant ship less 500GT and engaging in international voyages or operating Hong Kong-Macao-Taiwan shipping lines is in accordance with this Agreement. 61. The shipowner shall, if so need, choose a manning agency with valid license issued by Chinese Maritime Safety Administration. The shipowner shall guarantee that the labor standards of seafarers in AGENCY AGREEMENT will not less than the standard specified in this Agreement. The seafarer manning agency shall guarantee that the labor standards of seafarers in EMPLOYMENT CONTRACT will not less than the standard specified in this Agreement. 62. This Agreement will be signed in Chinese and English, each in six copies, and the Chinese version shall prevail. 15 63. The terms and conditions of this Agreement shall be reviewed, and amended by two parties when this Agreement has been valid for 9 months. 64. The amendments and additions to this Agreement shall be agreed mutually by two parties in writing and signed by two parities and to be considered incorporated in this Agreement. 65. This Agreement shall be valid from April 1, 2012 to December 31, 2012. The parties shall assess the text of the Agreement before the expiration of the Agreement, if there is no objection, this Agreement is automatically renewed for one year. Signed on behalf of: National Committee of the Chinese Seamen and Construction Worker’s Union Signed on behalf of: China Shipowners’ Association ____________ _____________ Mr. Yao Jiuqiang Mr. Li Shanmin Chairman of National Committee Chairman of Seamen’sCommittee China Shipowners’ Association Of the Chinese Seamen and Construction Worker’s Union Date: March 9,2012 Date: March 9,2012 16 17 Annex One THE MINIMUM BASIC WAGES SCALE 2012 POSITION BASIC WAGE(USD) 1870 1700 1375 1207 1207 966 966 966 932 932 966 672 620 620 620 620 620 555 555 555 555 473 413 413 1. Master 2. Chief Engineer 3. Commissar 4. Chief Officer 5. First Engineer 6. Second Officer 7. Second Engineer 8. Radio Officer 9. Third Engineer 10. Third Officer 11. Electrical Engineer 12. Purser 13. Bosun 14. No.1 Oiler 15. Chief Cook 16. Carpenter 17. Doctor 18. AB 19. Fireman 20. Oiler 21. Steward 22. Messboy 23. OS 24. Wiper 18 Annex Two THE MINIMUM FOOD ALLOWANCE STANDARD International voyages: USD 8/person/day South-Eastern shipping line: USD 6/person/day 19