Of the vessels inspected, 2,755 (36 per cent) had MLC-related problems, up four per cent (371 vessels) on Year One when 32 per cent had problems.
"The payment of wages below ILO [UN`s International Labour Organisation] minima was also a significant issue," she said.
There was no change in the non-compliant rankings year on year, Panama led the list with 569 (510 in Year One), followed by Malta with 245 (229), Liberia with 242 (233), Antigua & Barbuda with 241 (188), Marshall Islands with 192 (155), Bahamas with 123 (91), Cyprus with 89 (78) and Hong Kong with 80 (72).
But Russia dropped to 12th place, while Belize moved up to ninth place with 71 (66) and Singapore to 10th place with 67 (64).
All flag states, but Hong Kong had ratified the MLC, Ms Smith said.