Norwegian Pay Mandate on Ships Sparks ESA Surveillance Case

Norway’s law imposing local pay on foreign-flagged ships has sparked a legal clash with European authorities, who say it breaches EEA rules.

In July 2025, certain amendments to the Norwegian Act of the General Application of Collective Agreements (In Norwegian, “Allmenngjøringsloven”) (hereinafter referred to as the “Act”) came into effect, with the aim of making the wage conditions for seafarers onboard foreign flagged ships that operate in Norway similar to those that work on NOR-registered Vessels^[1].  For NIS or foreign flagged vessels, the regulation applies to those vessels that are occupied in coastal trade, in Norway. In short, the following type of trades were included^[2] :

(i)   Ships that carry cargo or passengers between mainland Norwegian ports, thereby excluding those that transport cargo or passengers exclusively to or from a foreign port. 

(ii)   Cruise ships operating solely between mainland Norwegian ports, or exclusively from a single Norwegian port, excluding vessels that call at Norwegian ports as part of voyages to or from foreign ports.

(iii)   Ships that provide services in Norwegian 

Territorial Waters by the mainland, excluding fishing vessels as well as naval and state vessels. 

The Norwegian Maritime Authority (Sjøfartsdirektoratet) supervises compliance with the wages and working conditions in accordance with the Act and may also undertake inspections, detentions and fines of the Vessel should non-compliance become evident. 

The changes to the legislation received a substantial amount of criticism when proposed. Both the Norwegian Shipowners Association and Nordisk were critical of the proposed changes and argued that it was, at best, doubtful whether Norway had the ability to make the changes with reference to the current obligations that Norway has as party of the EEA Treaty^[3],^[4]. 

It should be noted that the EFTA Surveillance Authority (ESA), responsible for monitoring compliance with the EEA rules, was consulted by the Norwegian government prior to the proposed legislation changes were made. In that consultation, ESA concluded that the draft was in breach of EEA law^[5]. This was also highlighted in the preparatory works in connection with the proposed changes to the Act.  Despite the clear warning from ESA, the Norwegian government simply said that they are of the view that the proposed changes to the Act were in line with Norway’s obligations under the EEA.  The law was passed in June 2025, and for ships entered into force on 1 July 2025. 

On 5 November 2025, ESA informed the Norwegian Ministry of Trade, Industry and Fisheries that ESA, on their own initiative, were opening a case against Norway concerning the changes to the Act^[6].  ESA’s view remains that the proposed changes to the Act: (i) violates the principles of the Maritime Cabotage Regulation and the Maritime Transport Regulation, which sets out that “all matters relating to manning” shall rest with the flag state, not the host state. ESA are of the view that “all matters relating to manning” also includes wages, whilst Norway argues that this only reals with size and qualification of the crew and not manning. 

(i)   including mandatory pay rules establishes a restriction on the freedom to provide services. ESA are of the view that the main objectives, being protecting the Norwegian labour market and preventing unfair competition, are not overriding public interest justification under EEA law. Furthermore, Norway has failed to demonstrate why these changes are required, thereby also failing to evidence the proportionality and necessity of the proposed measures. 

(ii)   represents non-compliance with the Port State Control Directive, in so far as Norway has extended the right to inspect whether vessels subject to port state control adhere to the newly introduced changes to the Act. ESA’s view is that only a specified set of items may be checked under the Port State Control Directive, and inspections for wage conditions are outside the scope of the same. 

The Norwegian Ministry of Trade, Industry and Fisheries were given until 5 December 2025 to provide a response. Upon receipt of the same, ESA would consider whether initiating infringement proceedings in accordance with Art. 31 of the Agreement between EFTA States on the Establishment of a Surveillance Authority and Court of Justice would be done. 

It therefore seems that the last word in this case is yet to be said. Nordisk will continue to monitor the situation and keep its members updated of any further developments. 

^[1]               The changes were made through “Lov om endringer i allmenngjøringsloven og petroleumsloven mv. – LOV-2025-06-20-109»

^[2]              Allmenngjøringsl. § 2 (2)

^[3]              Nordisk’s response to the proposed changes can be found here: nordisk-legal-services.pdf

^[4]              The Norwegian Shipowners’ Association’s response to the proposed change can be found here

^[5]              Prop. 88 L (2024-2025) Endringer i allmenngjøringsloven og petroleumsloven mv. (allmenngjøringslovens anvendelse på innenriks skipsfart og rettighetshaveres plikt til å sørge for norske lønnsvilkår på skip) i p. 11 

^[6]              The full letter may be found here