FOC Not the Answer in LNG Trade

The International Transport Workers’ Federation has raised concerns about Flag-of-Convenience (FOC) vessels transporting highly dangerous cargoes around Australia’s coast and Great Barrier Reef.

On Monday, the first consignment of liquefied natural gas was transported out of Gladstone aboard a BG Group-chartered, FOC tanker called the Methane Rita Andrea.

FOC ships are notorious for breaching safety and environmental codes internationally and are utilised by companies in an attempt to flout environmental, safety, labour and tax regulations worldwide.

This week two serious incidents occurred with FOC vessels off the UK coast: The Cemjford, a concrete carrier, sunk of the Scottish coast with all eight crew presumed dead. Meanwhile 25 crewmembers had a lucky escape when the FOC car carrier they were sailing on, the Hoegh Osaka, run aground between Southampton and the Isle of Wight on Saturday.

ITF Australia Coordinator Dean Summers said it was reckless that governments, in Australia and elsewhere, would allow this practice to continue in light of dangerous incidents that occur everyday.

“LNG is possibly one of the most volatile substances that can be shipped and to ship gas out of Gladstone these vessels have to negotiate the Great Barrier Reef, yet we entrust this task to ships flagged in places like Liberia,” Summers said.

“National flagged ships are inherently safer than FOCs, particularly in a place like Australia where regulation is generally good and there is an onus on the ship’s owner to employ skilled and highly-qualified local labour.

“It makes added sense to have an Australian crewed fleet with LNG because the cargoes are extremely profitable and therefore labour costs are negligible as a percentage.”

Gas shipped from the Pilbara to Japan is subject to a Continuity of Operations Agreement (COA), with North-West Shelf Shipping Services, whereby local labour is engaged on a number of the LNG tankers.

“The COA has been in effect for many years with Australian crews and in that time there hasn’t been a single case of industrial action and the safety record of those vessels is unblemished,” Summers said.

“Gas shipped out of Gladstone should be considered for a similar agreement.”