Flags of Convenience

The WWF and SUA both began deepening their involvement on the issue of "flags of convenience" in the 1970s, particularly with affiliation to the International Transport Workers Federation.

Flags of convenience are defined as ships owners who impose sub-standard shipping conditions by registering vessels in countries with no or very low standards, thus avoiding having to maintain safety, industrial and social standards. Registering in "flag of convenience" countries also typically means avoiding tax obligations in the country of origin. By 1970, the percentage of the world fleet tonnage flying flags of convenience had doubled in just 15 years, posing a significant threat to seafarers' conditions.

In the early 1970s WWF Federation General Secretary Charlie Fitzgibbon reached agreements with large ship charters that they would only use ships which had safety, crew, wage and conditions standards acceptable to the ITF. The WWF appointed inspectors for the ITF, the first of whom was Tas Bull, and later Les Symes. This allowed the WWF, in cooperation with other maritime unions around the world, the provide formal surveillance of ships flying flags of convenience.

SUA's Pat Geraghty declared that the system could only end when the international trade union movement and the national union movements of the United States and Europe joined together in "an effective campaign to black-ban runaway flag vessels". Fighting FOC shipping and thus protecting Australian workers' wages firstly meant ensuring overseas crews were paid Australia wage rates when plying cargo between Australian ports.

Geraghty argued in the Seamen's Journal in January 1973 that it was the union's responsibility to protect and assist all seamen who were exploited by flag of convenience operators. "In underdeveloped countries with high unemployment, it may be the only means of obtaining a job," he told SUA members. "That does not condone the action of shipowners who shift their vessels' registrations or recruitment of crews to where the going is cheapest, the profits highest, and the organisation of seafarers weak and ineffective. We make no apologies for the industrial action taken in Australia to assist our brothers seafarers and to eliminate runaway flag operations."

As an example, in May 1973, officials from the Port Kembla branch instigated action which succeeded in getting back pay (over $17,000) for a Filipino crew, despite overt threats from the Manila office of the shipowners. In November of the same year, the SUA acted to end the exploitation of the crews of two Noumea-registered vessels. The SUA would also lend assistance to PNG seafarers in their efforts to establish a union, with Geraghty personally flying to PNG to work on the project.

Fighting FOC also meant ensuring the employment of Australian seafarers.The decline in Australian-owned ships reduced the job opportunities for Australian seafarers as Australian companies chartered overseas-registered ships to carry their cargoes. Ships were issued with permits to carry cargo but were exempted under the Navigation Act from paying Australian rates.

By mid-1974, levels of unemployment were rising, sparking more anger and more militancy among the seven seagoing unions who were incensed that the Government was approving permits that ushered in employment of overseas cheap labour in the Australian shipping industry.

 

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Background on Flags of Convenience (via the International Transport Workers Federation):

A flag of convenience ship is one that flies the flag of a country other than the country of ownership. For workers onboard, this can mean:

  • very low wages
  • poor on-board conditions
  • inadequate food and clean drinking water
  • long periods of work without proper rest, leading to stress and fatigue

By ‘flagging out’, ship owners can take advantage of:

  • minimal regulation
  • cheap registration fees
  • low or no taxes
  • freedom to employ cheap labour from the global labour market

The ITF believes there should be a 'genuine link' between the real owner of a vessel and the flag the vessel flies, in accordance with the United Nations Convention on the Law of the Sea (UNCLOS). FOC registries make it more difficult for unions, industry stakeholders and the public to hold ship owners to account.

In many cases, the registries themselves are not even run from the country of the flag.

Globalisation has helped to fuel this rush to the bottom. In a competitive shipping market, FOCs lower fees and minimise regulation, as ship owners look for the cheapest way to run their vessels.

Problems for seafarers

Contractual claims

A serious injury can ruin a life, end a seafaring career and rob a family of a regular income. On their own, seafarers have little chance of winning compensation. The ITF and its affiliated unions help seafarers pursue these cases through the courts, but often they must unravel complex company structures before they can work out who has responsibility for the ship and its crew.

Getting paid

Every day, the ITF hears about crews who are owed large sums of money. Some crews simply aren't paid. Those that are find that companies delay, or fail to make, payments to their families when they want to send money home. In many cases, months go by without any sign of the money promised to seafarers. With no pay, they cannot even afford to escape and make their own way home. One of the most important aspects of the ITF inspectors' work is gaining backpay for seafarers. From 2011-2013, USD103 million has been recovered by the ITF for crew who had not been paid - an average of USD34.3 million a year. Many FOC vessels are now covered by ITF agreements, giving direct protection to more than 250,000 seafarers.

Voicing their needs

Despite the hardships, many FOC seafarers are too frightened to protest. Unscrupulous manning agents circulate the names of seafarers who complain to inspectors. It is still common practice for a ship's captain to write ‘ITF troublemaker’ in a seafarer's discharge book. With such a mark on their record, a seafarer may never be employed again. Some seafarers have even been jailed on returning home. And with even more cheap sources of labour opening up – notably China – conditions and pay risk becoming worse.

The role of the ITF

The ITF negotiates agreements with international organisations, including maritime employers and manning agencies, to secure minimum standards and conditions for larger groups of seafarers.

Our Mexico City policy, adopted at the ITF congress in 2010, commits our affiliated unions to provide all seafarers with proper union representation and protection. They work together to provide collective agreement coverage for all seafarers, irrespective of their nationality or country of origin.

  • Politically:

We seek an international governmental agreement that there be a genuine link between the flag a ship flies and the nationality or residence of its owners, managers and seafarers. This would eliminate the flag of convenience system entirely

  • Industrially:

We try to ensure that seafarers who serve on FOC ships, whatever their nationality, are protected from exploitation by ship owners

The industrial campaign has succeeded in enforcing decent wages and conditions on board nearly 11,500 FOC ships. The ITF has become the standard-bearer for exploited and mistreated seafarers, irrespective of nationality or trade union membership. Every year, millions of dollars are recovered by the ITF and its affiliated unions in backpay and in compensation for death or injury on behalf of seafarers who have nowhere else to turn.

The ITF-approved collective agreements

ITF-approved collective agreements set the wages and working conditions for all crew on FOC vessels, irrespective of nationality. All vessels covered by an ITF-approved agreement get a certificate, which signifies the agreed wages and working conditions on board.

There are different types of agreements reflecting the complexity of industry cruise and offshore agreements and the differences between regions.

Inspections

More than 150 ITF inspectors and contacts in ports throughout the world ensure compliance with our agreements. ITF inspectors are union officials who are either full time or part time, working directly with the ITF.

They monitor the payment of wages and other social and employment conditions. If necessary, they take action to enforce ITF policy.

Working with dockers

The fair practices committee (FPC) is made up of both seafarers and dockers’ unions. Between the FPC meetings every second year, the elected FPC Steering Group reviews the day-to-day running and effectiveness of the flags of convenience campaign.

Seafarers’ and dockers’ unions work together to support safe and quality workplaces for all port workers. In many countries, port workers face the consequences of privatisation: casual and precarious work, inadequate training and violations of their freedom of association. To address those issues, the ITF port of convenience campaign was initiated.