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Flagging out – the long tail of convenience

22 January 2020

Corrosive flags of convenience have undermined national flags, says Nautilus general secretary Mark Dickinson. We must support flag states that exercise effective control

News reached my desk over the New Year that Stena Line's latest new build Stena Estrid has, without much fanfare, quietly changed flag from the UK to Cyprus.

Stena Estrid is the first of three Ropax vessels being built for the company's Irish Sea routes, with sister ships Stena Edda and Stena Embla expected to commence operations in the spring of 2020 and early 2021. I guess we can expect them to join their sister in Limassol.

Is this another blow to post-Brexit Britain, a symbol of wider maritime malaise in the UK, or merely a reflection that no one really cares what the flag state is anymore?

Hot on the heels of Maersk, CMA-CGM, P&O Ferries and Carisbrooke Shipping (see March 2019 comment) this is surely another painful blow to the UK's continued aspiration to remain a strong and growing maritime nation. It is made more painful because Stena, like P&O Ferries, has opted in favour of the Cyprus flag of convenience (FOC) ship register (and an EU member state).

As far back as the 1930s the International Labour Organization (ILO) was concerned about ship registers such as Panama and Liberia, when predominantly Greek and US shipowners joined them, seeking to avoid strong seafarer trade unions, rising employment costs and labour regulations. Lack of transparency over ship ownership and low or no taxes also appealed.

In 1948, fearing the erosion of national standards, the International Transport Workers' Federation (ITF) launched a campaign to eradicate 'FOCs' and drive ships back to national flags. Over 70 years later, despite the ITF's best efforts, FOCs have grown to now represent over 55% of the world fleet. The ITF FOC list now includes a total of 35 ship registers including Red Ensign Group members Bermuda, Cayman Islands and Gibraltar. Many also feature on the Organisation for Economic Co-operation and Development’s (OECD) list of 'uncooperative tax havens'.

FOCs also spurned the growth of international and second registers, drove the deregulation of national flags such as the Netherlands and led the UK Ship Register to ease eligibility requirements in a vain attempt to appeal to a much broader shipowner community.

International law (UNCLOS) requires registers to maintain a 'genuine link' between the flag of the vessel and the shipowner. This ensures the flag states can, as the Maritime Labour Convention (MLC) states, 'effectively exercise jurisdiction and control' over their ships. With FOCs that rule is waived, meaning flag states cannot effectively control or regulate ships flying their flag.

Flag states therefore rely on port states to do their dirty work, and that is why we now have Port State Control. It is why we have the International Safety Management Code. It is why flag states contract out to classification societies. It is why flag states woo shipowners, calling them 'customers'. It is why the International Maritime Organization (IMO) is criticised as being slow to respond to global developments.

FOCs at their corrosive best are why we needed the MLC, SOLAS, MARPOL and STCW – because national flags were utterly defenceless against what the maritime author Ian Urbina refers to as 'the Outlaw Ocean', undermined and compromised by the growth of FOCs. What we have witnessed over the last century is the re-regulation of the shipping industry at the global level.

The choice of flag state is crucial, I hope I am not alone in thinking so.

International law requires registers to maintain a 'genuine link' between the flag of the vessel and the shipowner Nautilus general secretary Mark Dickinson
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From the general secretary January 2020

Corrosive flags of convenience have undermined national flags, says Nautilus general secretary Mark Dickinson. We must support flag states that exercise effective control.

As we start the new year, we recommit to being an action-focused, modern and dynamic union, driven by a clear organising strategy, says Nautilus general secretary Mark Dickinson

As we enter a new decade in which disruption is the name of the game and technology transforms our world, shipping is at the centre of the evolving storm.

The industry is at the heart of our globalised just-in-time economy. Every hour of every day, thousands of vessels are on the oceans and rivers connecting countries and keeping global trade moving. But while shipping's importance remains unchanged, the way it works – and the ways in which its people work – are facing transformation.

Nautilus International has worked long and hard on our four-year Strategic Plan and 2030 Vision adopted at the General Meeting in October 2019. It puts in place a proactive response to ensure that we remain relevant, responsive and financially sustainable for the future.

This year will be critical for the delivery of this vision. We are focused on developing new ways of working, new ways of organising, new ways of campaigning, and new ways of servicing our members that demonstrate our continued relevance.

We will keep our organisation at the cutting edge, responding to globalisation's challenges with, for example, the Nautilus Federation of like-minded ITF affiliated unions providing a worldwide support and assistance network based on cooperation and collaboration.

We look to the future with optimism, but we face a double whammy. The demographics of our membership mean that around one-third of our members will reach retirement age over the next decade. Despite the renewed investment in skills in the UK and NL the numbers coming into the shipping industry are falling short of the numbers leaving. It's very clear that we can't continue as we are. If that sounds stark, it's meant to.

The 2030 Vision is our response – a positive vision for the future based not on fear of the unknown, but a clear track of hope. Because we don't just face risks and challenges, we also face opportunities, and we are determined to seize them.

Our 2030 Vision will strengthen our recruitment efforts, continuing our growth in the superyacht and windfarm sectors, capitalising on the potential in inland waterways and river cruises and seizing the opportunities offered in fishing, through the new ILO Convention 188.

Our 2030 Vision will transform the way we work – we will relaunch Nautilus as an action-focused, modern and dynamic union and professional organisation, driven by a clear organising strategy, that is innovative, creative and, above all, proactive and professional.

The 2030 Vision is our blueprint for the future – a sustainable future that ensures that the scale of the challenges faced by Nautilus is matched by the scale of its ambition. Nautilus is proud to say that Wherever You Are So Are We. That will continue to be but we will also focus greater efforts on supporting you throughout your career journey in a positive and aspirational way.

Happy New Year!

 

From the general secretary February 2020

A long term vision is needed if the Maritime Labour Convention (MLC) is to become a 'passport to decent work for seafarers', says Nautilus general secretary Mark Dickinson, who is also a vice-chair of the International Transport Workers' Federation Seafarers' Section. He discusses some strategies for improvements to the upcoming MLC amendments on living and working condition due to come into force later this year

The Maritime Labour Convention (MLC) has now been ratified by 96 countries, representing 91% of the world fleet by gross tonnage, and there are good prospects of reaching 100 signatories soon.

The MLC has been a remarkable success and truly is the fourth pillar of global regulation alongside STCW, SOLAS and MARPOL.

In around 12 months I will be attending the 4th meeting of the International Labour Organisation (ILO) Special Tripartite Committee (STC). This is the committee provided for in Article XIII of the Maritime Labour Convention 2006 (as amended) that is charged with developing amendments so that seafarers’ living and working conditions are continuously improved. So far three sets of amendments have been agreed in 2014, 2016 and 2018 – the latter will come into force in December this year.

In my capacity as one of the vice-chairs of the International Transport Workers’ Federation (ITF) Seafarers’ Section I have been asked to act as the spokesperson for the Seafarers’ Group at the STC meeting.

If confirmed in due course, it will be my task to put forward the views of the seafarer unions and to engage in negotiations with the shipowner and government groups to hopefully agree further amendments to the MLC. Work has begun with discussions both at ITF and jointly between ITF and the International Chamber of Shipping (ICS).

I have been advocating for a longer-term vision and a strategy for improvements to the MLC. At the heart of the convention is an understanding that minimum standards must be enhanced. The MLC has always been a journey not a destination, ‘a passport to decent work for seafarers’ as Nautilus honorary member Dr Cleo Doumbia-Henry has said.

It is the obligation of all those associated with the MLC to advance the current minimum standards, but we need to know where we want to be in 10, 20 and 30 years and beyond.

It is therefore time for the tripartite parties to focus on truly enhancing seafarer protection so that the MLC becomes ever more meaningful and appreciated by seafarers.

One of the improvements Nautilus will be calling for is to the working and rest hour regimes. Why are seafarers still working over 90 hours per week when technological advances could potentially reduce workloads to much more manageable levels?

Instead of improving the work life balance for seafarers, I can anticipate many shipowners arguing that technological advances will deliver cost savings through reduced numbers of seafarers onboard, leaving those who remain to continue working outrageously long hours. The current fad for ‘wellbeing’ to be addressed by introducing awareness training is not a silver bullet but ending the deeply engrained culture of long working hours surely is.

It is also time for greater powers to enforce the ILO minimum wage.

Currently contained in Code B and non-mandatory, the minimum wage should be made enforceable alongside the existing and fundamental right of seafarers to engage in collective bargaining. This would be entirely consistent with the United Nations Sustainability Goals (specifically #8) for which so many politicians and chief executives trumpet their support. With the current focus on corporate social responsibility this is the least we should expect.

There is much talk in maritime circles about what the future will look like as the fourth industrial revolution unfolds. It is high time that the human element – the seafarer – was the forethought and not constantly playing catchup. Only then will we all be able to create more and better jobs in a sustainable shipping industry.


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