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What difference does it make?

Abandonment: a missed opportunity

Given the global nature of the shipping industry, seafarers need special protection…so says the preamble to the Maritime Labour Convention. Sadly, it is implicit that it's their employers from whom they need protection.

I for one though am worried that despite the MLC's good intentions we have missed an opportunity to consign to history a shameful aspect of our industry. As night follows day, with shipping recessions come the pathetic sight of abandoned seafarers at favoured places of ship arrest around the world. It has happened before. It is happening now. It will happen again. It is inevitable. Look at the big names that have gone bankrupt in and out of shipping – it doesn't just happen to other people.

Why do I care? Well, first and foremost, we all should. There is an enormous amount to be proud of about our industry, but we should'’t bury our heads in the sand about the bad bits. Secondly, in my previous life as a shipping lawyer, I took delivery of a ship purchased at auction by my client. The abandoned Ukrainian crew had been on board for many many months, unpaid, unfed and reliant upon charity. Tears in his eyes, the Second Officer, a new father some months earlier, spoke to his wife for only the second time using my mobile phone. Their previous employer was no worse than many, but they were insolvent and had left their crew to their own devices.

I was also involved chasing down many vessels in the infamous Adriatic Tankers fleet in the mid-nineties.
And now we read weekly about abandoned TMT crews. TMT's Nobu Su blames the banks and other creditors for the plight of his crews – it's not his fault, he says.

And therein lies the rub – when cashflow dries up, the crew end up holding the baby, stuck between various warring parties – the shipowner, the charterer, the [probably unpaid] P&I club and the port state in the country where their ship has now probably been arrested and who do not want an unmanned ship in their territory. So, will MLC bring an end to all this?

It should, and there are those that say it will, but I don't think it will and I don't think the P&I clubs can or should be expected to step in – it's not a compatible issue (and there's not enough room to explain why here!).

Under MLC, seafarers have the right to be repatriated, "in the event of the shipowner not being able to continue to fulfil their legal or contractual obligations as an employer of the seafarers by reason of insolvency, sale of ship, change of ship's registration or any other similar reason". (See Regulation 2.5 / Guideline B2.5(1)(b)(iii).)

The word abandonment is not actually mentioned but these reasons fall within the definition of abandonment found in the IMO's 2001 Resolution (A.930(22). This was [an unenforceable] set of guidelines suggesting that social security, insurance or similar should comprise direct access financial security covering repatriation, unpaid wages and maintenance from time of abandonment until repatriation:
"the severance of ties between the shipowner and the seafarer. Abandonment occurs when the shipowner fails to fulfil certain fundamental obligations to the seafarer relating to timely repatriation and payment of outstanding remuneration and to provision of the basic necessities of life… Abandonment will have occurred when the master of the ship has been left without any financial means in respect of ship operation."

So, 'abandonment' triggers the right of repatriation, which should be “at no cost” to the seafarer (Regulation 2.5(1)). The obligation on shipowners under Regulation 2.5(2) is to provide "financial security" to ensure repatriation. Guideline B2.5.1(3) lists the items which the financial security should cover, including passage with luggage, accommodation and food, pay and allowances from ship to destination (if provided for by national laws or regulations or collective agreements) and medical treatment until medically fit to travel.

Let's wait and see what evidence port state control inspectors will accept as evidence of sufficient financial security and also whether, in practice, the security itself actually responds to enable seafarers to escape months on board, unpaid and acting as security guards for the port state in which their ship is under arrest.

The obvious missed opportunities are, first, the payment to the seafarer of unpaid wages and, secondly, simplicity.
Wages first. The 2001 IMO Resolution as re-presented to the MLC Preparatory Committee suggested four months wages and entitlements should be covered. Arguably wages will be covered by the "system of protection, by way of insurance or an equivalent appropriate measure" that manning agents are required to "establish" under Standard A1.4 of the MLC in order to "compensate seafarers for monetary loss that they may incur as a result of failure of a recruitment and placement service or the relevant shipowner under the seafarer's employment agreement to meet its obligations to them".

Simplicity second. Placing an obligation on manning agents to establish (whatever that means) some system of protection means that shipowners are obliged to provide financial security to repatriate but it is manning agents that are obliged to establish some appropriate system to compensate for monetary loss. Each member state incorporating the MLC into their national laws must interpret this and each port state must enforce it. What evidence will be accepted from shipowners that the manning agent(s) they use have "established" an appropriate system?

I must admit to bias; although I am no longer involved, I was a founder shareholder of Seacurus Ltd, an insurance broker that has launched a product, CrewSeacure, that provides shipowners with a low-cost system of financial security that gives their crew direct access to repatriation costs and unpaid wages and, surely, the measure of respect that all of us in the industry owe the seafarers who make our working lives possible.

I remain sceptical and dismayed that MLC has not cracked this particular nut and left room for confused port state inspectors and more abandoned seafarers.

– Phil Parry

This article first appeared in Tanker Shipping & Trade magazine.

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