Posted: April 24th, 2023

Crewing of ships in contemporary ship registry systems : safety and socio-economic considerations

Crewing of ships in contemporary ship registry
systems : safety and socio-economic considerations

LIST OF TABLES
Table 1 – The ten biggest ship registers …………………………………………………………….. 7
Table 2 – British Petroleum standard new vessel tonnage and crew size ……………… 14
Table 3 – Crew costs differences…………………………………………………………………….. 41
Table 4 – Wage differences of a master and able seaman employed in different
countries……………………………………………………………………………………………………… 43
Table 5 – Monthly wage comparison ………………………………………………………………. 46
Table 6 – Officer wages (USD per month) ………………………………………………………. 47
Table 7 – Recent trends in supply by area………………………………………………………… 48
Table 8 – Trends in demand …………………………………………………………………………… 49
Table 9 – Supply and demand of seafarers by different national groups ………………. 50
Table 10 – Projected supply by broad area ………………………………………………………. 51
Table 11 – Supply/Demand balances ………………………………………………………………. 52
Table 12 – Selected disasters, flag of vessels and crew nationality ……………………… 61
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LIST OF ABBREVIATIONS
BIMCO Baltic and International Maritime Council
COLREG Convention on International Regulations for the Prevention
Collisions at sea, 1972
CSO Company Security Officer
DOC Document of Compliance
DP designated person
FIS French International Ship Register
FOC Flags of Convenience
GIS German International Ship Register
ILO International Labour Organisation
IMO International Maritime Organisation
ISF International Shipping Federation
ISM Code International Safety Management Code
ISPS Code International Ship and Port Facility Security Code
ITF International Transport Workers’ Federation
ITMMA Institute of Transport and Maritime Management Antwerp
LL International Convention on Load Lines, 1966
MARPOL
73/78
International Convention for the Prevention of Pollution form
Ships, 1973, and its Protocol of 1978
MSC Maritime Safety Committee
NIS Norwegian International Ship Register
NUSI National Union of Seafarers of India
OECD Organization for Economic Cooperation and Development
(includes Western Europe, Turkey, North America, Japan,
Australia and New Zealand)
POEA Philippines’ Overseas Employment Administration
SMS Safety Management System
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SOLAS International Convention for the Safety of Life at Sea, 1974, and
its Protocol of 1988
STCW 1978, as
amended in
1995
International Convention on Standards of Training, Certification
and Watchkeeping of Seafarers 1978, as amended in 1995
UNCCROS United Nations Convention on Conditions for the Registration of
Ships, 1986
UNCLOS United Nations Convention on the Law of the Sea, 1982
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TABLE OF CONTENTS
DECLARATION …………………………………………………………………………………………. ii
ABSTRACT………………………………………………………………………………………………… iii
LIST OF TABLES………………………………………………………………………………………. iv
LIST OF ABBREVIATIONS ……………………………………………………………………….. v
TABLE OF CONTENTS ……………………………………………………………………………. vii
CHAPTER 1 INTRODUCTION……………………………………………………………….. 1
1.1 Preliminary……………………………………………………………………………………… 1
1.2 Nationality, Registration and Ownership of Ships ……………………………….. 2
CHAPTER 2 COMPARATIVE ANALYSIS OF CONTEMPORARY SHIP
REGISTRY SYSTEMS………………………………………………………………………………… 6
2.1 Closed Registry……………………………………………………………………………….. 8
2.2 Open Registry …………………………………………………………………………………. 9
2.3 Second Registry …………………………………………………………………………….. 10
2.4 The Hybrid Registry ………………………………………………………………………. 11
2.5 The Bareboat Charter Registry ………………………………………………………… 11
CHAPTER 3 CREWING AS A SOCIO-ECONOMIC FACTOR OF
SAFETY…………………………………………………………………………………………………….. 13
3.1 Safe Manning Requirements under the Conventions ………………………….. 13
3.2 Training and competency………………………………………………………………… 17
3.3 Crew nationality: The ITF perspective and socio-economic interests…… 26
3.3.1 The ITF perspective: the debate over open versus closed flags …….. 26
3.3.2 The ITF perspective: crew nationality and socio-economicinterests 35
interests ………………………………………………………………35
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CHAPTER 4 COST/BENEFIT FOR SHIPOWNERS IN TERMS OF CREW
NATIONALITIES ……………………………………………………………………………………… 40
4.1 The flag state versus shipowner perspectives…………………………………….. 40
4.2 Supply and demand of seafarers ………………………………………………………. 47
4.3 Future prognosis in the demand of competent crews and efficient supply 51
supply…………………………………………………………..…………51
CHAPTER 5 CONCLUSION………………………………………………………………….. 59
REFERENCES…………………………………………………………………………………………… 63
APPENDICES………………………………………………………………………………………………..
Appendix 1 – SOLAS, Chapter V, Regulation 14……………………………………………… 67
Appendix 2 – ILO 109, Part IV, Article 21………………………………………….68
Appendix 3 – ILO C180, Part III, Article 11, Paragraph 1…………….……………69
Appendix 4 – Ratings aboard national flags and flags of convenience (FOCs), with
and without ITF agreements ………………………………………………………………………….. 70
Appendix 5 – A comparison of seafarers employment statistics…………..…………71
Appendix 6 – Top labour supplying countries in 2005 ………………………………………. 72
Appendix 7 – Top labour supplying countries in 2000………………………………73
Appendix 8 – Foreign seafarers restrictions……………………..………………….74
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CHAPTER 1
INTRODUCTION
1.1 Preliminary
The central theme of this dissertation is crewing of ships. Within the
framework of this theme a number of specific issues arise in the context of
globalisation in shipping. It is evident that as the international economic landscape is
undergoing structural changes, so in the crewing of the world fleet there is a clear
shift of preference in the shipping industry from the traditional closed registry system
to the so-called open registries. This dissertation emphasizes the fact that registry
systems today lie within a spectrum; some are totally closed, others are totally open,
but there are a sizable number that fall somewhere between these two extremes. The
two major considerations in terms of a shipowner’s choice of registry is compliance
with safety and environmental protection requirements on the one hand and
ownership restrictions on the other. The issue of crewing has implications for the
safety side of the equation.
Safe manning is an international convention requirement. At the same time
shipowners naturally look at the cost/benefit factor in terms of nationalities of crews
when they engage them. The interaction between the need for compliance with safety
requirements and the socio-economic considerations in relation to crewing is
analytically examined in this dissertation. In the process of this investigation the
supply and demand factor for ships crew is analysed, and consequently the focus is
on the major crew supply countries. It is evident that to be successful in a globally
competitive market shipowners have been forced to employ seafarers from low-cost
labour supply countries. This is an important factor from the shipowner’s perspective
because the cost differential is some 15 times higher for able seaman and 5.6 times
higher for chief officers than between a traditional flag state and low-cost labour
supply state. (Joint Study of the Federation of Transport Workers’ Unions in the
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European Union and of the European Community Shipowners’ Association [ECSA],
1998) These wage differences are even more significant if consideration is given to
the fact that manning costs account for 50% of daily operating costs of the vessel and
represent the largest single variable cost in ship operations. (Stopford, 1997, p.161)
The ultimate question is whether the object of safe manning can still be achieved in
the face of these socio-economic considerations.
1.2 Nationality, Registration and Ownership of Ships
In international law every ship must possess nationality. The principal reason
for this requirement is that whereas in waters within the jurisdiction of a coastal state,
a ship may be subject to its legal regime, on the high seas a ship without nationality
is a stateless ship. With the purpose of avoiding a situation of anarchy and abuse on
board (Coles & Ready, 2002, p. 1) and preventing a ship from floating in a legal
vacuum every ship with its crew must possess a national character on the high seas.
(Mukherjee, 1993, p. 31) Moreover, a stateless ship can be refused entry into port
and therefore cannot trade; in addition it cannot be protected under international law.
(Coles & Ready, 2002, p. 1)
Under public international law reflected in Article 91 of United Nations
Convention on the Law of the Sea (UNCLOS), States are required to fix conditions
for the grant of ship nationality. This Article also establishes the fundamental
principle of “genuine link”. It is unequivocally stated in this context that this socalled genuine link must exist between the state and the ship”. It is important to
stress this significant statement of law as it will emerge from the discussion later that
there are differences in opinion among the various interested parties, that is
essentially, flag states and shipowners. Another international convention that
mentions the requirement of genuine link in relation to ship nationality is United
Nations Convention on Conditions for the Registration of Ships (UNCCROS).
Unfortunately, neither of these conventions provides a clear definition of what
constitutes genuine link. For that, one needs to look at case law, which at any rate is
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in short supply, and the writings of commentators and scholars. It has been described
as an “elusive” phenomenon. (McConnell , 1985, p. 365) It is perhaps fair to say that
in the current milieu of registries, discussed below, genuine link is what it is
conveniently perceived to be by the interests concerned with it, i.e., the shipowners
and flag states.
The Nottebohm Case (Lichtenstein v. Guatemala, [1955] I.C.J. Rep. 4), which
concerned the nationality of an individual, is the principal authority regarding the
doctrine of genuine link. It appears that the concept has been imported into the law of
ship’s nationality from this case although it involved the nationality of an individual.
(Coles & Ready, 2002, p. 10) Its application to ship nationality has engendered much
confusion; and it is still unclear as to what exactly genuine link means in terms of
maritime law. (Mukherjee, 1993, p. 33) Some Helpance may be had from the feeble
attempt made in Article I of UNCCROS in which it is stated that flag states shall
“exercise effectively its jurisdiction and control over such ships with regard to
identification and accountability of shipowners and operators as well as with regard
administrative, technical and social matters”. One thing, however, is clear, and that is
that the link referred to here, as in Article 91 of UNCLOS, is a link between the flag
state and the ship. As will be seen later in this discussion, this is not precisely the
opinion in certain quarters where the link is viewed as the requirement of common
nationality between the beneficial owner of the ship and the ship itself. The
alternative view of genuine link is, as illustrated above, a link between the flag state
and the ship in terms of technical, administrative and social control over the ship.
Registration is the procedural device through which nationality is conferred
on a ship by the flag state. Thus nationality is considered to be the substantive
element for which the procedural formality is registration. (Mukherjee, 1993, p. 32)
Registration as a procedure consists of two functions; namely, the public law
and the private law functions. Administrative matters such as conferment of
nationality, the right to fly the national flag, national regulatory jurisdictions over
maritime safety, pollution prevention, manning and seafarer labour conditions,
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shipboard discipline, the right of the ship to diplomatic and naval protection by the
flag state and the right of the ship to engage in cabotage activities etc., are public law
functions of registration. By contrast, the protection of proprietary interests, such as
providing for priority rankings of mortgages in ships and evidencing of title and
ownership are private law functions of registration.
As evidence of registration and the consequential conferment of nationality of
the ship, the flag state or state of registration issues a certificate of registry. This is
also known as certificate of registration or certificate of flag in certain jurisdictions.
This certificate must be kept on board as it constitutes a part of the ship’s
documentation. (Mukherjee, 1993, p. 32)
Ship ownership was traditionally linked to ship nationality by virtue of the
presumption that a flag state is in the best position in so far as regulating the ship is
concerned, if it could regulate its owner; and if the owner also held the same
nationality then he would be amenable to the laws of the flag state. As will be seen in
the discussion below, that view is no longer predominant and is hardly sustainable in
the current climate of globalised shipping.
Without dictating any specific qualifications for ship ownership, UNCCROS
requires that the laws of the flag-state pertaining to such qualification be sufficient to
permit it to exercise effective jurisdiction and control over its ships. The Convention
requires a corporate shipowner to be established and/or have its principal place of
business within the territory of the state of registration. But where the corporation is
not established in, or the principal place of business is not in the flag state itself,
there must be a representative or management person, natural or juridical, who or
which, must be a national of the flag state and must be available to meet all legal,
financial and other obligations of the shipowner. Clearly, this provision represents a
dilution of the “principal place of business” requirement.
The other aspect of ownership in the context of ship registration, as indicated
earlier, is that registration provides prima facie evidence of ownership. Thus it is an
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important element of the private law function of ship registration in the event of a
potential dispute over ownership. Clearly, the substantive and/or procedural elements
of nationality, ownership and registration of ships, are inextricably linked to each
other.
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CHAPTER 2
COMPARATIVE ANALYSIS OF CONTEMPORARY SHIP
REGISTRY SYSTEMS

Registration of vessels is an antiquated maritime practice dates back to
Roman times, although it was not until much later, consonant with the development
of the medieval maritime codes of Europe, that it became a formalised practice. The
practice of flagging out started during the period between the two world wars of the
20th century and grew significantly in the post-colonial era. In recent times it has
proliferated to the extent that over 50% of the world fleet today is registered with a
flag other than a traditional maritime one. (Stopford, 1997, p.161) This has largely
been necessitated by the desire and need to be competitive in the world shipping
market. The spectacular growth in the use of such flags is also attributable to other
global developments such as the emergence of new aspiring maritime states looking
to compete with the old guard.
The global shipping industry has undergone extreme changes over the last
three to four decades. (Nielsen, 2005, p. 80) Until recently closed registries
represented the norm. This system, which still prevails but has lost its status of preeminence, is based on the premise that the genuine link must exist between the owner
and ship through the medium of common nationality. In other words, both the
beneficial owner and the ship must posses the nationality of the flag state. A foreign
owner would thus be banned from owning a ship registered in the flag state to the
extent that if one did, his ship would be forfeited to the flag state. (United Kingdom
Merchant Shipping Act 1894, s. 71, see Thomas and Steel, 1976, p. 53)
In the strictest of closed registry traditions, the ship is also required to be built
in the flag state and be manned by flag state nationals. Seafarers of the flag state’s
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nationality are usually subjected to a high standard of maritime education and
training at national maritime training and educational facilities before they can be
granted the relevant certificate of competency. But the global scenario today has
changed dramatically. As illustrated in the following chart, most of the world’s fleet
today is registered in a so-called open registry jurisdiction, many of which lack the
compliance framework required under the relevant international conventions.
(Nielsen, 2005, p. 80)
Table 1 – The ten biggest ship registers (per 1.01.2003)
Country No. of ships 1,000 gt 1,000 dwt % share of
world fleet
Panama 5,276 123,072 185,598 22.7
Liberia 1,446 49,217 75,392 9.2
Bahamas 1,165 34,124 48,040 5.9
Greece 1,160 28,583 47,712 5.8
Malta 1,312 26,638 43,505 5.3
Cyprus 1,239 23,109 36,537 4.5
Singapore 966 20,962 32,887 4.0
Norway 1,108 20,855 31,147 3.8
Hong Kong 636 15,715 26,388 3.2
PR China 2,136 16,091 24,102 3.0
Source: Institute of Shipping Economics and Logistics. Shipping Statistics Yearbook. (2004), see
Nielsen, D. Manpower Requirements in the Shipping Industry, WMU Alumni Journal.

In the open registry system there is usually little or no compulsion requiring
flag state nationals to serve as seafarers on board flag state ships. Often the
management entity that manages and operates the ship or fleet is located or resides in
another state or in more than one state anywhere in the world. This state of affairs
has engendered the practice of owners engaging ship management companies to hire
crews from labour supplying states either directly, or through manning or crewing
agencies that specialise in this enterprising field of maritime services. (Nielsen, 2005,
p. 80)
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The main characteristics, on which the closed registry can be summarised by
paraphrasing the “Rochdale Criteria” of the British Committee of Inquiry of 1970,
that is-
(a) the flag state requires citizens of the state to own
and control the vessels;
(b) access to and transfer from the register is restricted;
(c) shipping income is taxed at full rates;
(d) the flag state requires a fleet for its own economic
purposes;
(e) manning is only permitted by nationals;
(f) the country actively seeks to impose national and
international regulations on its shipowners.
(Cohen, 1997)
2.1 Closed Registry
The characteristics of closed registries may vary from one closed registry to
another. For example, completely closed registries will permit only a natural-born
citizen to be a registered owner of a ship under its flag. A relatively more open
jurisdiction of the closed registry type will, allow a domicile, a permanent resident or
other person, who may not necessarily be a citizen, to be a registered shipowner. In
the case of corporate shipowners, the usual requirement is that the entity must be a
body corporate established under the laws of the flag state and must have its
principal place of business in the flag-state. In a strictly closed registry the law
requires that all involved individuals such as masters and all officers, shareholders
and beneficial owners of the corporation be nationals or citizens of the flag-state; or,
that the majority of the shares be held by citizens or nationals. In addition, the flagstate may require the ship to be built in a national shipyard; that certificates and
licences of all officers and ratings be issued by national authorities; or that the ship
be classed by the national or recognized classification society. These key factors are
essential characteristics of the closed registry regime. (Mukherjee, 1993, p. 33)
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2.2 Open Registry
For some shipowners, such a strict criteria proved to be a good reason for
flagging out of a closed registry regime and choosing an open registry as a viable
alternative for saving running costs and staying competitive in a fiercely competitive
global shipping environment. Amongst the earliest open flags were Panama, Liberia
and Honduras, first used by American owners to escape their burdens under the
United States flag. In the reconstruction phase of the shipping industry after the
Second World War, the use of open registries expanded rapidly. This is undoubtedly
one of the most topical issues in contemporary shipping. The former Secretary
General of the IMO, William A. O’Neil once stated that shipping is now virtually in
the hands of the developing world and the process is irreversible. (O’Neil, 1999, p. 4)
In the open registries there is often zero tax incentives arise from the
ownerships of vessels being allowed to non-nationals of the flag state. The main
source of government revenue for shipping is not income tax but the annual ship
registry fees. (Stephens, 2001) Another distinctive feature of the open registry is that
the access to the registry is very easy. The shipowner has to pay a registration fee and
subsequently annual fee, based on tonnage for the duration that the vessel is entered
in the register.
The following is a sampling of zero tax regime of some of the popular open
registers (Stephens, 2001):
Cyprus Malta
Income tax exempt exempt
Capital gains tax exempt exempt
Inheritance tax exempt exempt
A shipowner may also request from the flag-state authorities a guarantee from
future taxation relief or tax exemption. Another typical characteristic of the open
registry is that manning of ships on the global basis by non-nationals is freely
10
allowed. Some open registries states have neither the will nor wherewithal and
administrative machinery to effectively enforce and impose any national or
international laws. (Mukherjee, 1993, p. 34) Thus, the shipowner might have less
regulatory control and more anonymity. That is because the capital of the shipowning
company will generally be presented by bearer shares and the main persons such as
the director and officers will be hidden in the shadow, having no say in the running
of the company or the operation of the vessel. On the one hand having become
virtually invisible the shipowner favours the situation, however, lack of control may
lead to sacrifice of safety on the other hand.
In order to counteract the negative affect on safety some open registries have
recently adopted requirements such as age limits on vessels; pre-condition survey
requirement before the issue of the certificate of registry thus enforcing compliance
with some international maritime standards.
2.3 Second Registry
The successful development of open registries gradually became a threat to
the traditional maritime counties as a result of which they created second registries to
support their maritime clusters. The expressions second, offshore or international
registries are used interchangeably to describe these types. In such a secondary
registry as that of the French Kerguelen Islands, for example, the principal of the
genuine link between a ship and the flag state is retained because this secondary
registry is maintained only for use by national shipowners. However, there are some
second registries that do not meet the requirements of genuine link in the traditional
sense. That is because access to the registry is open to foreign shipowners on the
condition that certain technical standards are met. Examples of these kinds of second
registries are the Norwegian, Danish and German International Ship Registries, the
Isle of Man, and Luxemburg for Belgian-owned ships. There is also the Portuguese
off-shore registry operating from Madeira (MAR), and the Marshall Islands Registry
operating under an agreement of Free Association with the United States.
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(Mukherjee, 1993, p. 32) A typical characteristic of all second registry regimes is
that crewing of seafarers from foreign countries is quite freely permitted.
2.4 The Hybrid Registry
There are some varieties of registries that are generally considered to be
closed but are actually not entirely closed. These are the hybrid registries. They are
characterized by certain advantages offered by them which are not available in the
closed registry regime. A typical example of hybrid registry is that of the United
Kingdom. The shipowning company must be incorporated in the United Kingdom
and have its principal place of business in that country. As distinguished from the
traditional closed registry system there is no requirement for the shareholders of the
company to be British citizens. Thus, the beneficial owners of such ships may be
non-citizens. In contrast, the Ghanaian registry requires, in addition to the two
above-mentioned requirements, that the majority of shareholders of a similar
corporation be Ghanaian citizens. On the other hand, some registries have strictures
pertaining to maritime safety matters which are characteristic of typical closed
registry flags. At present, hybrid registry systems are becoming increasingly popular
because of relatively easy access, fewer requirements than in the closed registry
regime and a much better image of the registry in terms of safety. Examples of this
type are the ship registries of Trinidad and Tobago, the Isle of Man, Cayman Islands,
Singapore and Marshall Islands.
2.5 The Bareboat Charter Registry
There is another type of ship registration that is bareboat charter registry. In
essence it is a temporary change of flag for the duration of the bareboat charter. The
involvement of two registries in the context of bareboat charters has created a regime
of dual or parallel registration. The system provides considerable advantages to the
parties involved. The owners earn charter revenue without having to operate the ship,
the charterer acquires a ship without having to purchase one and enjoys the benefits
12
offered by a flagging-in state, and the flagging-in state enjoys economic gains from
more tonnage added to its national fleet and employment for its seafarers. In this
system, the state of registration of the owner must ensure that proprietary interests in
the ship including those of purchasers, mortgagees and other creditors are adequately
protected.
From the above explanation it is seen that flagging out is unavoidable and a
challenging step in the process of ship acquisition. There are numerous factors that
influence the choice of the shipowner. Among them fiscal considerations are
predominant. That is because in the competitive market environment of international
shipping, the goal of the shipowner is minimizing costs and maximising revenue.
However, legal and practical considerations are equally important because in the
final analysis they have a major impact on the economic implications. (Mukherjee,
1993, p. 37)
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CHAPTER 3
CREWING AS A SOCIO-ECONOMIC FACTOR OF SAFETY
3.1 Safe Manning Requirements under the Conventions
Manning of ships, since the post war era, has considerably reduced with
advances in ship technology. Richard Morris describes these changes in the
following way-

Self-tensing mooring winches lessened the man-handling of ropes
at arrival and departure times. Noncorrosive paints applied by
spray and roller sped the continuous process of hull and
superstructure maintenance. Cargo-handling cranes, relatively easy
to prepare and overhaul, replaced cumbersome tackles and derricks.
Press button hydraulic hatch covers superseded the apparatus of
beams, wooden hatch covers and tarpaulins removed by hand
whenever cargo was due for stowing or discharge. The later
generation of dry cargo technologies, namely containerisation and
“roll on roll off”, abolished hatches and onship cargo lifting gear.
Similarly, in the engine-room, self-lubricating diesels and marine
turbines substituted for labour-intensive plant. The centralisation of
control systems, the “unmanned engine room” controlled from the
bridge without separate constant monitoring by engine-room
personnel became a feature of new vessels. At the same time, on
the bridge, the installation of the automatic steering device or “iron
mike” dispensed with the round the clock operation of a manual
helm. The gallery and mess are characterized by the labour saving
household equipment. (Morris, 1990)
Thus, operations and maintenance became less labour intensive and caused
the crucial changes in manning of ships. Among manning reductions which became
14
relevant during these times, the first was the tanker sector which cut down a number
of crew members. The reason for this was the escalation of demand in the oil trade
after 1945 when a tenfold growth occurred in liquid freights. By 1970, crude and
refined petroleum represented roughly half the world’s seaborne trade. Mass oil
shipment augmented the rate of advancement in tanker design and construction. Hull
sizes were increased as far as the availability of properly equipped ports would
permit. Concurrently, automated pumping, navigation and propulsion systems
incorporated into the new generation of vessels broke down the steam age
relationship between tonnage, horsepower and crew numbers. (Morris, 1990)
Changes in manning can be best exemplified by the following data of the largest
United Kingdom tanker owners:
Table 2 – British Petroleum Standard New Vessel Tonnage and Crew Size
Date Tanker
Tonnage
Complement
1948 16,000 45
1958 50,000 62
1968 210,000 44
Source: BP Tanker Co. Retrieved 02 June 2006 from the World Wide Web:
http://www.acirrtclient.com/pubs/WP01.pdf, see Morris, R. (1990). New Industrial Relations
Procedures and Work Reform in Australian Shipping 1982-1990.
In the bulk and dry cargo sectors, crucial changes in manning scales occurred
during the 1960s, the mainly due to shorter time lags. Japanese shipowners obtained
trade union and government assent to the reduction of crew numbers from 50 to 32
on new cargo vessels in 1962. By the mid 1980s, reduction in manning scales in
oil/bulk/ore carriers, container ships, and roll-on-roll-off ships typical crew led to a
typical crew complement of 23. A substantial number of vessels in Japan, Norway
and West Germany reduced their respective crews to 18. Furthermore, crews on
prototype later generation vessels had experimentally reduced the numbers to as low
as 8. (Morris, 1990)
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There is no doubt that safe manning has significant implications for maritime
safety. The tendency towards reduction in crew complements in recent times has
evidently led to a lowering of maritime safety standards. This is mainly the
connection to the issue of fatigue that became a subject of major concern within the
international maritime community. Stress and fatigue are consequences of overworked crew resulting from under-manning of ships. This state of affairs signals
accidents and casualties at sea. Nevertheless, it is well known that it is interests of the
shipowner to reduce crewing costs considerably. This objective is realized by
employing of crews of different nationalities and reducing crew complement.
Unfortunately, there are shipowners and operators who sometimes fail to appreciate
that it is unlawful to reduce the crew complement of a ship to a level below its safe
manning scale established by the flag state.
The responsibility of the flag state in terms of crewing, manning and the ship’s
readiness for its intended service is reflected in Article 94 of UNCLOS which is the
framework convention for all maritime matters under public international law.
Paragraph 3 of Article 94 requires flag states to take necessary measures to ensure
safety at sea with regard to certain matters including the manning of ships, labour
conditions and the training of crews, taking into account the applicable international
instruments. This paragraph also requires flag states to ensure that the crew is
appropriate in qualification and number for type, size, machinery and equipment of
the ship; that the master, officers and, to the extent appropriate, the crew are fully
conversant with the applicable international regulations which they are required to
observe. These are the general obligations imposed by UNCLOS on flag states. The
principles by which these measures are to be implemented are contained in other
specific international instruments specialised in the subject matter, namely, the
International Convention for the Safety of Life at Sea 1974 (SOLAS), and ILO
Convention No. 109 on Wages, Hours of Work and Manning, now replaced by ILO
Convention C-180 on Seafarers’ Hours of Work and the Manning of Ships
Convention, 1996.
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Sufficiency and efficiency of crew, and safety pertaining to crew, are the
essential ingredients of the fundamental principle of safe manning as envisaged by
the above-mentioned international conventions. (Mukherjee, 2002, p.p. 183-184) In
SOLAS 1974, Chapter V, Regulation 14 (see Appendix 1) and in ILO 109 Part IV,
Article 21, paragraph 1 (see Appendix 2), the principles are stated in terms of
sufficiency and efficiency of crew. The principles of sufficiency and efficiency were
ILO requirements for many years; the element of safety was added through SOLAS
and later, through ILO Convention C-180 (see Appendix 3).
Paragraph (2) of SOLAS (see Appendix 1) requires that every ship which is
flying the flag of the flag state shall be provided with a safe manning document. The
IMO through Resolution A.890 (21) has promulgated Safe Manning Guidelines
elaborating on the above-mentioned principles. For determining the minimum safe
manning of a ship the whole set of principles should be observed. Some of these are
set out below:
.1 the capacity to:
.1.1 maintain safe navigational, engineering and radio
watches in accordance with regulation VIII/2 of the 1978
STCW Convention, as amended, and also maintain general
surveillance of the ship;
.1.2 moor and unmoor the ship safely, etc.
(IMO Resolution A.890 (21), 1999)
There is no particular procedure for determination of minimum safe manning
levels. It depends very much on the size and type of ship; number, size and type of
main propulsion units and auxiliaries; construction and equipment of the ship;
method of maintenance used; cargo to be carried; frequency of calls, etc. The
procedure for compliance with safe manning requirements adopted by some states is
as follows. The shipowner presents to the Flag State Administration a proposed safe
manning scale consistent with the IMO Guidelines for each ship. The Administration,
if satisfied that the proposal is consistent with the relevant international instruments
17
of IMO, ILO, ITU and WHO then approves it. It is entirely the Flag State’s
responsibility to approve or reject or modify the shipowner’s proposal; and when
satisfied that there has been compliance with the Guidelines, to issue for each ship a
Safe Manning Certificate. (Hill, 1995, pp. 485-486) It is the responsibility of the flag
state to ensure that a ship is manned sufficiently, efficiently and safely. The
instruments mentioned above deal with watchkeeping, hours of rest, safety
management, certification of seafarers, occupational health and hygiene and crew
accommodation. (IMO Resolution A.890 (21), 1999)
Bearing in mind that the driving force of the open registry is economic
considerations, a nonchalant shipowner who simply wishes to increase his profits
would look for a flag state which is relatively liberal, i.e., one that places few or no
obstacles to his safe manning proposal. (Mukherjee, 2000, p. 111) Such a shipowner
would naturally be interested in operating his ship with a reduced crew complement
at the expense of safety. This would obviously result in a diminution of maritime
safety standards ultimately leading to accidents and casualties. A responsible and
prudent shipowner, on the other hand, would appreciate the dangers of compromising
safety and environmental standards in terms of safe manning. A maritime accident
such as a collision, grounding or oil spill resulting from an inadequate crew
complement may, in the end, cost him a fortune. A prudent shipowner will make his
choice of crew nationality not only on the basis of cost/benefit when he engages
them, but also, and perhaps more importantly, on the basis of which crew will
operate his ship in a safe and environmentally sound manner.
3.2 Training and competency
With the world economy today being highly depended on foreign trade, there
is a potential need for highly skilled manpower to man the ship that drives the trade.
Nielsen, 2005, p. 78) Safety of seafarers, their welfare, competence and professional
standards stretch to the concept of maritime safety. The reason for this is the socalled human element in shipping which is considered to be a major problem which
18
springs from maritime disasters. One research indicates that human error is the cause
of 65 – 80 percent of maritime casualties (Maritime Safety Committee [MSC], 1995);
another study revealed that over 90 percent of collisions and groundings and over 75
percent of fires and explosions were attributable to the human element. (Bryan, 2003,
p. 2) Therefore, competency and experience among masters, officers and ratings are
the most vital elements in the safe operation of any ship. As stated by Captain W.S.G.
Morrison, a maritime disaster can be avoided by a well trained and experienced
master and crew. (Morrison, 1997, pp.1) Moreover, no matter how perfectly
designed a ship may be, or the extent to which automation prevails, it is no salvation
for an incompetent master or unskilled crew from the consequences of faulty
navigation or lack of requisite proficiency. While it is impossible to attain safety or
environmental soundness in the operation of ships in absolute terms, a high degree of
safety in their operation is not impossible at all, as indicated by studies and analyses
of accident records of shipping companies and national fleets. (Morrison, 1997, p. 10)
The above-mentioned problem of human error and safety aspects of manning
in terms of competence, professional standards, training and certification is
addressed through the revised IMO Convention on Standards of Training,
Certification and Watchkeeping of Seafarers (STCW 1978, as amended in 1995).
(Mukherjee, 2002, p.184)
The STCW Convention pioneered the concept of competency of seafarers
which highlighted the need for enhanced quality in crew proficiency and safety
awareness. The terms “competency” and “competence” are sometimes used
interchangeably. Regardless of the precision of terminology, in the present context
the concept may be described as a combination of knowledge and proficiency in the
fields of navigation and seamanship, or marine engineering together with their
associated disciplines such as information technology, and also a good grasp of
maritime English, and shipboard management for certain personnel. At this juncture,
it is necessary to examine in some detail the relevant provisions in the STCW
Convention regarding competency and related matters. In the discussion below an
19
attempt is made to address these matters with due regard to the contextual
significance of each identified provision.
Paragraph (1) of Article VI of the STCW Convention provides that
certificates for seafarers must be issued by and to the satisfaction of the
Administration provided that the requirements for service, age, medical fitness,
training, qualification and examinations in accordance with the appropriate
provisions of the Annex to the Convention are met. Paragraph (2) requires each
issuing Administration to endorse the certificates issued under Article VI in a
prescribed form.
Paragraph (1) of Article VIII allows Administrations, in exceptional
circumstances, to issue a dispensation permitting a particular seafarer to serve in a
specified ship for a specified period of time not exceeding six months in a capacity
for which he does not hold the appropriate certificate. However, the other capacity
excludes that of a radio officer or radiotelephone operator except as provided by the
relevant Radio Regulations. The granting of a dispensation is also conditional upon
the requirement that the person to whom it is issued is adequately qualified to fill the
vacant position. In this regard the Administration must be satisfied that safety
concerns are met. In any event, no dispensation must be granted to a master or chief
engineer officer except in circumstances of force majeure, and even then, only for
the shortest possible period.
Paragraph (2) of the same Article requires that any dispensation granted for a
post shall be granted only to a person properly certificated to fill the post
immediately. Furthermore, this paragraph prescribes requirements for the
Administration in terms of dispensation in cases where certification of the position is
not required. In addition, it is stated that the position in question must be filled by the
holder of an appropriate certificate as soon as possible.
Paragraph (3) was created in order to restrict and control the issuance of the
dispensation certificates. It requires that a report containing the information about the
20
total number of dispensations that have been issued during the year to seagoing ships,
together with those ships above and below 1600 gross register tons to be sent to the
Secretary-General as soon as possible after 1 January of each year.
Paragraph (3) of regulation I/2 entitled “Certificates and endorsements”
requires that the endorsement required by Article VI of the Convention to attest the
issue of a certificate, is to be issued only if all the Convention requirements are
fulfilled. By contrast, in paragraph 5 of that regulation, the reference to endorsement
is in relation to attestation of recognition of a certificate issued by an Administration
other than the recognising Administration. It is important to note, in this context, that
the Convention addresses two different kinds of endorsements; one is in connection
with the issuing of a certificate; and the other, with regard to the recognition by an
Administration of a certificate issued by another Administration the state of which is
a party to the Convention. Thus, the issuing state is responsible for the first kind of
endorsement, but the second kind, i.e., the recognition endorsement is the duty and
responsibility of the recognising Administration. The relevant provision in the
Convention provides the standard form for each kind of endorsement with which the
relevant Administration must comply. (Mukherjee, 2003, p. 3)
Paragraph (1) of regulation I/6 requires each state Party to ensure that training
and assessment of seafarers, are administered, supervised and monitored in
accordance with the provisions of section A-I/6 of the STCW Code. This section
requires each Party to ensure that all training and assessment of seafarers for
certification is structured in accordance with written programmes, and is conducted,
monitored, evaluated and supported by persons qualified in according to paragraphs
4, 5 and 6. Paragraph 2 requires each state Party to ensure that those responsible for
training and assessment of competence of seafarers, as required under the
Convention, are appropriately qualified according to the provisions of section A-I/6
of the STCW Code for the type and level of training or assessment involved.
Regulation I/8, contemplates the issuance of a certificate by a Maritime
Academy or other non-governmental training institution, or a government body other
21
than the Maritime Administration with a mandate for educational or vocational
matters. In such circumstances, whether or not a certificate was issued under proper
authority is safeguarded through the requirement of endorsement by the
Administration. (Mukherjee, 2003, p. 3) Thus, training, Assessment of competence,
certification, endorsement and revalidation must be carried out according to a
relevant quality standards system.
The recognition regime created through Regulation I/10 in STCW 1995 is
perhaps the most significant feature of that instrument. It undoubtedly impacts
considerably on open registries. While it facilitates the use by a flag state that is party
to the Convention, of certificates issued by another state party, it also imposes a
number of strictures in relation thereto. Paragraph (1) of this regulation contains
three requirements in this regard that recognising Administrations must observe. First,
it must ensure there is compliance with regulation 1/10 as a whole by itself as well as
the issuing Administration. Needless to say, the seafarer concerned must also fully
comply. Second, the Administration must confirm compliance by taking all
necessary measures in relation to standards of competence, the issuance and
endorsement of certificates and the maintenance of records to ensure totality of
compliance by the issuing Administration. Third, it must extract an undertaking from
the issuing state that prompt notification will be given to the recognising state of any
significant changes to the training and certification arrangements established in
compliance with the Convention. (Mukherjee, 2003, p. 3)
One new and notable feature of regulation I/10 is that the recognising state, in
order to confirm these three above-mentioned conditions, may have to inspect the
facilities and procedures of the issuing state in relation to these matters. As stated by
Mukherjee P.K., inspection of facilities will naturally involve a physical inspection
of the premises. The task will have to be carried out by officials or representatives of
the recognising Administration responsible for these matters. As pointed out rightly,
it will need allocation and expenditures of substantial resources if the requirements
of this provision are carried out properly. Furthermore, as mentioned above, the
22
issuing state concerned must agree to undertake to promptly notify the recognising
state of any significant changes in arrangements, and the recognising state must be
vigilant in ensuring that the undertaking is given and observed.
The second paragraph of regulation I/10 is also new and is indeed very
important. The recognising state must establish measures to ensure that seafarers
who present to it certificates for recognition in relation to shipboard service on board
in a management capacity have a sufficient knowledge and understanding of the
recognising state’s maritime legislation. This provision has been created to ensure
that the seafarers in the relevant category, i.e., at management levels, possess at least
adequate knowledge of the flag state’s maritime laws to be able to satisfactorily carry
out their duties and responsibilities. It is thus implied that a seafarer at a management
level who wants his certificate issued by a foreign state party to be recognised must
have the same knowledge of maritime law as that of a seafarer certificated by the flag
state. (Mukherjee, 2003, p. 3)
This requirement is necessary because there are many aspects of maritime
law where the laws of an issuing state may be quite different from those of the flag
state. Before the era of open registries, a seafarer of a flag would invariably be a
national of that state and be certificated by the flag state authorities. In the current
environment of shipping, that scenario has all but changed. (Mukherjee, 2003, p. 3)
The norm today is multi-national crews serving on open registry ships where a
seafarer is a national of one state, his certificate is issued by another state, and he
serves on a ship flagged with yet another state.
In the past, a seafarer was aware of the flag state’s maritime laws by virtue of
the fact that he was a national of the flag state and was certificated under the regime
of that state. The ship was also subject to the laws of that state. A national
certification regime would naturally include in its training curriculum, its own
maritime laws. In addition, the curriculum would include the international maritime
law, in particular, the convention law applicable to that state. No one would expect a
state to include the maritime laws of another country in its curriculum relating to
23
seafarers’ qualifications and certification. In this context, however, it would be
reasonable to assume that the international law content would be the same as in any
other state.
In the shipping world of today, a seafarer frequently serves on board a ship of
a nationality different from his own; and furthermore, he is likely to hold a certificate
issued by yet another state. If he serves on board in a capacity at the management
level, especially as a master, he would obviously be required to know enough the
maritime laws of the flag state pertaining to cargo operations, seaworthiness, carriage
of goods by sea, marine insurance, salvage, general average, liability and
compensation in relation to collisions, marine pollution and carriage of passengers
and their luggage in order to carry out his duties and functions efficiently and
effectively. For example, he must know which conventions apply to the flag state,
and consequently, to his ship. As a master he must be aware of his rights as well as
his obligations under those conventions, and what are the rights and duties that apply
to his ship. Essentially, the public law issues would be pursuant to relevant public
law conventions such as UNCLOS and various IMO and ILO specialised
conventions covering matters of maritime safety, environmental protection and
maritime labour including seafarers’ welfare. (Mukherjee, 2003, p.7) Particular
attention must be paid by a seafarer at the management level for the potential liability
to which his shipowner, the flag Administration may be exposed due to lack of
knowledge of some relevant law. It is most likely that the STCW Convention would
be applicable to the flag state of his ship. Thus, he must be more than familiar with
the safe manning, certification and watchkeeping requirements applicable to the flag
state and to his ship. With regard to maritime labour matters, aside from the relevant
ILO Conventions, other national laws pertaining to labour and worker welfare may
be applicable. These would be outside the domain of ILO Conventions but would
nevertheless be of significance with regard to the crew. (Mukherjee, 2003, p. 7)
24
Paragraph (4) provides for a relaxation under limited circumstances allowing
service on board a ship of the recognising state even if the recognition endorsement
procedure has not been completed, provided there is evidence that an application for
such endorsement has been submitted. (Mukherjee, 2003, p. 7)
Paragraph (6) is extremely important because it prohibits recognition of a
certificate that itself has been recognised by another state. Practically it means that
the flag state can not just recognize the certificate and therefore entirely delegate
responsibility in terms of standards of training, revalidation of certificates, their
issuance, etc. to the state where the certificate was issued. This responsibility is nondelegable, that is why it the responsibility of the recognizing state to inspect the
facilities and procedures of the issuing state to ensure that the issuing state is in
compliance with the regulation 1/10 as a whole and that the convention requirements
in respect of standards of competence, the issuance and endorsement of certificates
and the maintenance of records, have been fully complied with by the issuing
Administration.
Regulation I/14 requires that each Administration shall hold companies
responsible for the assignment of seafarers for service in their ships in accordance
with the provisions of the present Convention, and shall require every such company
to ensure that:
.1 each seafarer assigned to any of its ships holds an appropriate
certificate …
.2 its ships are manned in compliance with the applicable safe
manning …
.3 documentation and data relevant to all seafarers employed on
its ships are maintained and readily accessible, and include,
without being limited to, documentation and data on their
experience, training, medical fitness and competency in assigned
duties;
25
.4 seafarers, on being assigned to any of its ships, are
familiarized with their specific duties and with all ship
characteristics that are relevant to their routine or emergency
duties; and
.5 …
STCW 1995 gave birth to the notion of the so-called “White List”. This is the
list of countries who properly implement the revised STCW Convention, which sets
out clearly defined minimum competency requirements for all seafarers. A position
on the White List entitles other Parties to the STCW Convention to accept, in
principle that certificates issued by or on behalf of the parties on the list are in
compliance with the revised STCW. (MSC, 2001)
As it was already mentioned earlier the driving force of open registries is
financial considerations. They are well known for placing no restrictions on the
nationalities of crews serving on board their ships. That is how the shipowner can
reduce a considerable amount of operating costs. The freedom to engage less
expensive crews is therefore a major attraction from his point of view. On the other
hand, unless ships employ white list crews, at least at the management and support
level, they are likely to be targeted by PSC and the flag state’s reputation is likely to
be potentially tarnished. In this case delays caused by the PSC and mistakes done by
cheap or inadequately trained crew will cost hundreds time more by the end of the
day. Therefore no compromise in safety standards must ever be allowed neither by
the shipowner nor by the flag state itself. (Mukherjee, 2000, p. 111)
26
3.3 Crew nationality: The ITF perspective and socio-economic interests
3.3.1 The ITF perspective: the debate over open versus closed flags
The International Transport Workers’ Federation (ITF), which is well known
for its antagonism against shipowners who flag their vessels out to open registries or
flags of convenience (FOC) states to gain economic advantages. The ITF definition
of a flag of convenience ship is one that flies the flag of a state other than the state of
its owner’s nationality. (ITF, 2006) By corresponding definition an FOC state is a
state which allows ships beneficially owned and/or controlled by owners elsewhere
to be registered in its register. (Coles and Ready, 2002, p. 17) The ITF is of the view
that the international law requirement of genuine link is only met when the
nationality of the owner and its vessel is the same; in other words the link is
manifested through the commonality of nationality between the owner and the vessel.
In their view, it is the only way in which a flag state can exercise effective control
over its ships. (ITF, 2006) This is the established ITF interpretation of Article 91 of
United Nations Convention on the Law of the Sea (UNCLOS) and therefore their
policy is directed towards elimination of flags of convenience. As such, it is their
view that the genuine link requirement is not met with respect to ships registered
with flags of convenience. (ITF, 2006) The position so taken is consistent with the
closed registry system where traditionally the owner, the ship and the crew all
possess the same nationality. In the most stringent of closed registries, the ship must
also have been built in the flag state and at least a majority of the shareholders of the
ship or the ship-owning entity must be nationals of the flag state.
By June 2006 the ITF Fair Practices Committee had declared thirty two
countries and territories as flags of convenience, that is: Antigua and Barbuda,
Bahamas, Barbados, Belize, Bermuda (UK), Bolivia, Burma, Cambodia, Cayman
Islands, Comoros, Cyprus, Equatorial Guinea, French International Ship Register
(FIS), German International Ship PhD thesis writing service US Register (GIS), Georgia, Gibraltar (UK), Honduras,
Jamaica, Lebanon, Liberia, Malta, Marshall Islands (USA), Mauritius, Mongolia,
27
Netherlands Antilles, North Korea, Panama, Sao Tome and Príncipe, St Vincent, Sri
Lanka, Tonga, Vanua. (ITF, 2006)
Another type of registry condemned by the ITF as belonging to the FOC
group is the secondary registry, even though these registries being off-shoots or
subsidiaries of some of the major traditional closed flag states claim to make no
concessions on compliance with safety and environmental protection standards
regarding its ships. The most successful secondary registry is the Norwegian
International Ship Register (NIS). It is outlawed by the ITF because it is open to
foreign shipowners and foreign crew are employed. Therefore, the principle of
genuine link between ship and state is not retained. Only where the secondary
registry is maintained for the exclusive benefit of national shipowners, such as the
French Kerguelen registry (Mukherjee, 1993, p. 34), it does not fall under the ITF
category of Flags of Convenience.
Those secondary registries which permit hiring of foreign crews such as the
German International Ship Register, are considered “fully-fledged” flags of
convenience by the ITF and all ships registered there are treated as Flags of
Convenience. (Coles and Ready, 2002, p. 17) Additionally, the ITF may designate on
an individual basis as Flags of Convenience ships, vessels registered in The
Philippines (foreign owned ships bareboated-in) and Singapore (foreign-owned ships
without approved crew agreements). Equally, ships flying the flags of countries not
mentioned above are treated as Flag of Convenience ships if the ITF receives
information that they are beneficially owned in another country. (Coles and Ready,
2002, p. 17)
When declaring a registry as a flag of convenience the ITF not only takes into
account the degree to which foreign owned vessels are registered and fly the
country’s flag, but also such criteria as –
(i) The ability and willingness of the flag state to enforce
international minimum social standards on its vessels,
28
including respect for basic human and trade union
rights, freedom of association and the right to collective
bargaining with bona fide trade unions;
(ii) The social record as determined by the degree of
ratification and enforcement of ILO Conventions and
Recommendations;
(iii) The safety and environmental record as revealed by the
ratification and enforcement of IMO Conventions and
revealed by port state control inspections, deficiencies
and detentions. (ITF, 2006)
The ITF claims that in the absence of a genuine link in the traditional sense it is
difficult to contemplate how a flag state can discharge its international obligations
and impose penalties of adequate severity to discourage violations of international
norms and standards. In other words, the problems are in terms of enforcing
administrative penalties in another jurisdiction and in securing the extradition of key
personnel within the shipping company. This means that flag states do not stop such
vessels from trading, but just remove them from the register. The ITF also opposes
the way the registration procedure is conducted. This is in respect of cases where
registration is effectuated through provisional certificates issued by Consulates of the
flag state or even through the internet. In these cases usually no flag-in surveys are
carried out until some six months have passed. (Whitlow, 2004)
Other issues related to the opposition of the ITF to flags of convenience are-
(i) corporate secrecy as a way of avoiding liability;
(ii) while there may be non-criminal motives for shipowners
to seek such levels of corporate secrecy, clearly FOCs
are ideal for concealing the ownership of vessels
engaged in many forms of criminal activity, including
29
people smuggling and trafficking, drugs smuggling,
arms smuggling and money laundering;
(iii) the link between FOCs and other forms of criminality,
including terrorism;
(iv) the failure of many FOCs to ensure the protection of
seafarers’ human and trade union rights;
(v) direct link between FOCs and poor scores on the
welfare rights category and many of these flags keep no
labour records for the workforce onboard ships flying
their flag;
(vi) poor record of many FOCs in terms of casualty
investigation, etc.
(ITF, 2006)
All of the above allegedly result from a lack of genuine link in the traditional
sense by obscuring transparency in the ownership of ships. Such a tool as control of
the beneficial owner who is also a national of the flag state is seen by the ITF as a
solution in terms of providing better security and greater pressure on sub-standard
shipping operations. The ITF, by seeking greater transparency, has focused on the
link between the ship and the owner of the ship by explaining that only if the flag
state knows the ultimate owner it is able to exercise control over the ship. (Howell,
2004) The ITF position is not without its critics. Those opposed to their position
view the allegations as nothing but an attempt by the ITF to strike at the owners, for
the plight of seafarers, e.g. in pollution matters, rather than strike at those responsible
for the conditions. (Howell, 2004)
However, shipping being extremely capital-intensive, cyclical, volatile and a
highly competitive industry, historically evolved into sophisticated ownership
structures with roots in both traditional maritime practice and in legal protection
against business risks. Such mechanisms as the corporate veil legally allows owners
to conceal their identity by the creation of a separate corporate entity, i.e., with legal
30
personality separated from its beneficial ownership. (Corporate Veil, 2001) That is
why the ITF believes that the flag state can exercise control over the ship only
through transparency of beneficial ownership. What is overlooked in this argument is
that the corporate veil exists across the entire world of business and commerce,
maritime enterprises included. Historically it has existed in both open as well as in
closed registries. (Corporate Veil, 2001)
Ships are owned by varieties types of organisations such as insurance
companies, pension funds, savings banks, trust funds, finance houses, public
companies (Stopford, 1997, p. 201); individual limited partnerships owing one or a
group of ships; private limited companies owning one or a few ships, etc. Within
these arrangements there are more sophisticated structures. A shipping company may
well have several different kinds of shareholders. One may be a publicly listed
savings bank, another a pension fund; and yet another may be a limited partnership
of professionals such as doctors or dentists, not to mention a multiplicity of private
investors. The savings bank and pension fund will have numerous shareholding
members and the group of professionals will likewise have many limited partners as
investors. It would be virtually impossible the beneficial owners in this ownership
chain. Whatever may be the position advanced by the ITF regarding genuine link, in
reality it is barely conceivable that such beneficial owners who are simply investors
can be capable of exercising operational control over their ship. They are admittedly
not the managers or operators of the ship.
Of course, in the shipping world there are many so-called single ship
companies with limited liabilities. In these cases shareholders can be readily
identified no doubt. This type of ownership structure is created basically to shelter
owners from possible liabilities arising out of the sistership arrests and other
situations attracting unlimited liabilities in respect of other ships in their beneficial
ownership, as well as to gain fiscal advantages. These mechanisms aimed at
maximising financial positions are totally legal and are a reality of the commercial
31
shipping world. Furthermore, such structures go a long way to alleviating the
insurance burden of an owner with a large fleet of ships. (Howell, 2004)
In this connection the question arises as to how important in reality is the
transparency of beneficial ownership to genuine link. It is indisputable that direct
operational control over a ship is exercised not through its beneficial owners but
through its managers. All operational elements of a ship pertaining to, inter alia, fleet
management including safe manning, seaworthiness and cargoworthiness, technical
support, including up to date surveys and certification, keeping the vessel in class,
stores, arranging for ship’s stores, equipment and spares so that the voyage can be
properly prosecuted, are all functions and responsibilities of the ship’s managers
(Prasad, 2005, pp.14-15).
The responsibility for enforcing international convention requirements and
oversight of the ship’s compliance with international requirements lies with the flag
state administration. This is clearly the case under the relevant provisions of
UNCLOS and is the rational basis for the statement in convention that there must be
a genuine link between the ship and the flag state. Nowhere is there a mention of
genuine link between the ship and its beneficial owners through the common
denominator of nationality. That is simply the interpretation of “genuine link”
advanced by the ITF and proponents of the traditional closed registry system.
In its 84th session, held during 22-26 April 2002, the IMO Legal Committee
concluded that the answer to the fundamental question as to who has effective
operational control of vessels for maritime security purposes, is the person who
appoints the crew, who fixes the use of the ship and who signs the charterparty.
(Legal Committee, 2002) In the International Safety Management (ISM) Code the
definition of “company” is – “[t]he owner of the ship or any other organisation or
person such as a manager or the bareboat charterer, who has assumed the
responsibility for the operation of the ship from the shipowner”. (ISM Code, 2002,
p.6) Indeed, the ISM Code goes further in stating that, if the entity is other than the
32
owner, the owner must report the full details of such entity to the Administration.
(ISM Code, 2002, p.8)
The ISM Code has created a new entity known as the “designated person”
(DP) who is the operational link between the shore-based management and the
shipboard management. Under the International Ship and Port Facility Security
(ISPS) Code, the corresponding entity is the Company Security Officer (CSO). The
DP must have direct access to the highest level of management ashore and his
responsibilities include monitoring the safety and pollution prevention aspects of the
ship’s operation. If he fails in his tasks and the crew on board do not know who he is
there is a risk that the ship will not receive a Safety Management Certificate and will
not be able to trade. Thus the DP must be readily identifiable. The role of the
company as the operator of the ship is crucial to the process of safety management. If
the owner (as distinguished from the operator) actually manages and operates the
ship, he will also need to have a Document of Compliance (DOC) and his office will
have to be audited under the ISM Code.
The flag state Administration is linked to the owner in the ISM Code scheme
through the requirement of flag state audit. The company must submit itself to the
audit. It is incumbent upon the Administration to observe closely all aspects of the
operation of the ship from the perspective of safety and environmental protection. It
would be impossible for the Administration to conduct an ISM audit if the identity of
the company is not known to it. Knowing the identity of the beneficial owner is of
little help in this regard. The Administration must be able to zero-in on the operator
in order to fulfil its responsibilities under the ISM Code in relation to the oversight of
safety management which invariably includes matters pertaining to safe manning and
crew welfare. In this regard there is no doubt that the responsibilities of the flag state
vis a vis compliance and enforcement relating to a ship flying its flag has little to do
with the nationality of the beneficial owners and everything to do with the flag state
Administration’s ability and competence to regulate its ships.
33
If the owner contracts out the management of his ship to a ship management
company, he is obliged to inform the Administration. The ship management
company should know who has contracted with them and who is paying them. Even
if this is concealed for whatever reason it is now the ship management company
which carries the responsibility for ISM Code compliance including providing the
DP and the CSO and putting into place the Safety Management System (SMS). If
under the management contract, the operator or manager is the “company” pursuant
to the ISM and ISPS Codes, then the identity of the owner becomes irrelevant. The
company, as defined in these Codes, has responsibility for the operation of the ship.
In other words it is not the link between the beneficial shipowner and the ship
that is important but the link between the operator, otherwise referred to as the
“company” in the ISM and ISPS Codes, and the ship. Needless to say, the flag state
is concerned with the ship, and its safety and security. Therefore a meaningful
definition of genuine link is link between the flag state, the company and the ship.
Any link between the beneficial owner and the ship through common nationality is
irrelevant and insignificant in this context.
In the opinion of this writer, it does not matter whether the flag state allows
its ships to be beneficially owned by non-nationals as it is done in the open registry
systems, or if the registry only for exclusive benefit of national shipowners which is
typical of closed registries. What is material is the link between the flag state and the
ship and how the flag state exercises its responsibilities over the ship. Thus, “open
registry” or “flag of convenience” is not necessarily synonymous with substandard
shipping; and conversely, a closed registry is not necessarily synonymous with
quality and responsible shipping. (Gallagher, 2004)
However, as the open registry systems are growing phenomenon in the
current milieu and any reversal of the situation is highly unlikely in the foreseeable
future, care must be taken to maintain the registry at a high quality level. Those
registries of the hybrid type who refuse to be identified as FOC’s or open registries,
pride themselves as being responsible registries with quality standards which are
34
sometimes even superior to the standards maintained by some traditional closed
registries. (Mukherjee, 2000, p. 114) Some of these claims are borne out by port state
control detention and deficiencies statistics.
The other side of the coin becomes apparent when a registry fails to exercise
its convention responsibilities properly. Examples of shoddy oversight are
acceptance of a ship into the registry without a flag-in survey or without a proper
check on a vessel’s DOC or without verifying the identity of its operator. (Whitlow,
2004) A flag state of any persuasion can be reduced to a level of sub-standardness if
it fails to comply with its international convention obligations. (Mukherjee, 2000, p.
114)
The duties of flag states are outlined in various international conventions and
regulations, such as The International Convention for the Prevention of Pollution
form Ships (MARPOL 73/78), the International Convention for the Safety of Life at
Sea (SOLAS), the International Convention on Standards of Training, Certification
and watchkeeping for Seafarers (STCW 78/95), the Convention on International
Regulations for the Prevention Collisions at sea (COLREG) 1972, the International
Convention on Load Lines (LL) 1966, and the 1982 United Nations Convention on
the Law of the Sea (UNCLOS). Articles 94 (Duties of Flag States) and 217
(Enforcement of Flag States) in particular clearly defines the role of the flag state.
(Gallagher, 2004)
The most important areas for the efficient flag state administration are
considered to be registration of ships and mortgages, the conduct of surveys and
certification and the engagement and welfare of seafarers. The third area includes
maritime training and education of seafarers (Mukherjee, 2000, p. 113) and is tightly
connected with STCW implementation. In this respect it is needless to say that the
provisions of STCW 95 should be incorporated into the national legislation of flag
states. Provisions relating to safe manning following the requirements of SOLAS,
IMO Guidelines on Safe Manning and ILO Convention C180 of 1996 relating to safe
manning, should also be incorporated. It is to be noted that the fundamental principle
35
is that a ship must be manned sufficiently, efficiently and safely. (SOLAS 1974,
Chapter V, Regulation 14; ILO 109, Part IV, Article 21; ILO 180) The failure of flag
state Administrations to adequately fulfil their obligations has led to the creation and
proliferation of the phenomenon port state control and the introduction of the flag
state implementation initiative at IMO. It has also fuelled increased enthusiasm, quite
justifiably so, within institutions such as the ITF and the Paris MOU, for the
eradication of substandard ships.
Given that the driving force behind the open registry activity is economic
considerations, the legal notions of nationality and registration are manipulated to
accommodate the economic interests of flag states and their constituent shipowners.
By contrast, the flag state in a traditional closed registry assumes the role of a
regulator, and the shipowner is forced to operate within the bounds of the regulatory
regime. (Mukherjee, 2000, p. 114)
Therefore, only the highest levels of quality are acceptable in any ship
registry, whether they are open, closed, secondary or hybrid; and no compromises
should be made on safety and environmental standards. Only if the international
obligations of a flag state are properly fulfilled and no trade-off is made between
standards and fiscal interests, genuine link between ship and flag state will be
maintained regardless of the nationalities of the beneficial owner and the crew.
3.3.2 The ITF perspective: crew nationality and socio-economic
interests
The other major objectives of the ITF campaign are to improve wages and
employment conditions of seafarers serving on FOC ships, to ensure their protection
from exploitation by shipowners and the freedom to exercise their trade union rights.
(ITF, 2006) The ITF campaign is implemented in tandem with ITF affiliated dockers
and seafarers’ unions through inspection of FOC vessels and refusal to load or
discharge such ships. (Coles and Ready, 2002, p. 24)
36
A survey on the working conditions of ratings reported in the ITF Journal
revealed that seafarers feel happier, healthier and more valued when employed on
national carriers rather than on open registry vessels. In turn, those on open registry
vessels feel better off if they are serving under an ITF agreement. (Erol, 2006, p. 8)
The survey was based on the interviews with and on board observations of 627
ratings over a 21- month period. The ITF insists that shipowners operating vessels
under open registries must have on board an ITF Collective Agreement which
contains terms and conditions for the employment of seafarers. Evidence of this
agreement is issuance of a “Blue Certificate” which must be kept on board of the
vessel. Non-availability of this certificate on board may lead to industrial action
against the vessel. (Coles and Ready, 2002, p. 24)
The following conditions must be satisfied for providing a Blue Certificate:
(a) the ITF Collective Agreement or an ITF-approved national
agreement must be signed by the shipowner. One of the
conditions of these agreements will be the same wage level
for the seafarers as the average European wage level
increased to allow for inflation;
(b) each crew member receives an individual contract of
employment incorporating the current ITF wage scale
endorsed, if necessary, by the authorities of the laboursupplying country;
(c) all crew members not already belonging to a union
affiliated with the ITF are enrolled in the ITF’s Special
Seafarers’ Department;
(d) the shipowner makes an annual contribution in respect of
each seafarer to the Federation’s Seafarers’ International
Helpance, Welfare and Protection Fund;
(e) the Federation is advised of future crew or contract
changes and have access to all records;
37
(f) on demand, the crew are paid back-pay covering the
difference between the ITF rate and the previous rate to the
date of commencement of the ITF-approved contract.
(Coles and Ready, 2002, p. 24)
It was estimated by the ITF that the number of vessels of all types under open
registries constitutes about 60 per cent, and under national flags about 40 per cent. Of
the 60 per cent, the ITF estimates that about 30 per cent are covered by collective
agreements. (Erol, 2006, p. 8)
The ITF survey found a considerable difference between national flag, open
registries with ITF agreements and open registries without ITF agreements in terms
of ratings’ relationships with the company, crewing agency, ratings’ loyalty and
pride, social welfare, hours of work, job intensity, satisfaction with pay and physical
conditions. (see Appendix 4) An important factor is training and skills. The ITF
claims that ratings who are serving on vessels under national flags have better
relationships with their company and crewing agency (which in the case of national
flags are usually company specific) than those working on open registry ships with
agreements. (Erol, 2006, p. 8) This difference is not in favour of open registry ships
without agreements because indicators of good relationships are lowest. The same
trend is followed when loyalty and pride of the companies were asked to be
evaluated by seafarers. On matters related to training and skill development the trend
is the same again. Training provided by the company over the last twelve months
constitutes 67 per cent under national flags, whereas under open registries with and
without ITF agreements, only 40 and 10 per cent, respectively. In terms of
encouragement to develop skills, the percentage for national flags was even higher at
84 percent. For others, the percentages were 51 and 40 percent, respectively.
Some may find it strange that such Assessments on officers’ performance by
ratings were also carried out in the survey. This was done on the premise that
Assessment of performance of ship officers by ratings was not adequate in all cases. In
38
the case of open registries many such Assessments were done by the company or
crewing agency.
The survey also found that the same general trend is peculiar to ratings’
satisfaction with pay, physical working conditions and the extent to which they
report suffering physical pain or discomfort in work.
The problems of pension and medical care of the seafarers were also raised in the
survey. In was pointed out that ITF agreements are not fully comprehensive. In some
instances, for example, there was no coverage for pensions. It was observed that
seafarers from Asian countries, excluding Singapore, did not enjoy pension benefits
as good as their counterparts from India and Eastern European countries. Most
seafarers from the Asian countries did not have medical care coverage during their
leave periods, except Filipinos who have health coverage for six months when on
leave, and it is mandatory for them to contribute to a medical insurance system. (Erol,
2006, p. 9)
The overall results of the survey concluded that ratings working on open registry
ships without ITF agreements suffer the most disadvantages. They are less likely to
be encouraged to develop their skills, to feel that their jobs are secure or be consulted
on crewing, wages, medical care and other issues. As we know from the previous
chapters, welfare of seafarers, competence and professional standards are major
components of maritime safety. On the basis of the above-mentioned ITF-sponsored
survey it might be concluded that in open registry ships maritime safety is of less
concern than in closed registry national flag ships.
The other side of the coin, however, needs to be noted as well. One commentator
has pointed out that “although the ITF campaign is expressed to be directed against
allegedly sub-standard labour conditions on board flag of convenience ships, the
chief motivation has been to prevent loss of work opportunities for seafarers in the
traditional maritime countries where spiralling wage costs have rendered the
operation of ships increasingly uneconomic.” (Coles and Ready, 2002, p. 24) Thus,
39
the International Bargaining Forum established by the ITF in 2002 with the objective
“of increasing the number of vessels covered by ITF agreements and encouraging
more shipowners and managers to negotiate with the ITF” (ITF, 2006) is just one
example of such “motivation”. It has been reported in the maritime media that the
actual reason for a forum is to increase employment opportunities for developed
country ratings even by using such methods as taking money from Filipinos to pay
for expensive Danish ratings. (Guest, 2006)
40
CHAPTER 4
COST/BENEFIT FOR SHIPOWNERS IN TERMS OF CREW
NATIONALITIES
4.1 The flag state versus shipowner perspectives
From the perspective of the flag state, it can be said, that lowering of
standards in order to attract more tonnage may backfire on the flag state because of
possible maritime disasters or accidents. In its turn it can negatively affect
attractiveness and reputation of the flag state and decrease the tonnage. Therefore,
fiscal success in the long-term is not attainable by simply compromising safety
standards in respect of safe manning from the perspective of both – the shipowner as
well as the flag state. (Mukherjee, 2000, p. 111)
The global recession in shipping during the 1980s, due to an over-supply of
vessels, necessitated the curtailment of crew costs. The compounded effect was that
approximately 50% (Stopford, 1997, p. 161) of operating budget of a ship was
attributable to crew costs. The aspiration to succeed in a fiercely competitive global
market forced shipowners to employ seafarers from low cost labour supply countries.
Seafarers from traditional maritime countries were thus replaced. The recession of
the 1980s also forced many shipping companies to cut back on their training budgets.
Since then employment of seafarers from developed countries has been on the
decline, much of it being attributable to significant reductions in recruitment.
Furthermore, the prolonged retention of seafarers in service has resulted in a
relatively old average age among active seafarers in the traditional maritime states.
The scarcity of suitable seafarers from developed countries combined with reduction
in shipboard labour costs has created an increasing demand for seafarers from
developing counties. In turn this has introduced the phenomenon of the crew-supply
state. In this context Heather and McConville have erroneously commented that the
majority of these states have no maritime tradition. (Leggate and McConville, 2002,
p. 449) This is certainly not true of countries like China and India whose nationals
41
have for generations served quite competently on British ships during and after the
colonial era.
The substantial wage difference between EU and non-EU seafarers is
certainly a key factor in shipowners’ employment policies. The cost per crew may be
more then 50 per cent higher for a vessel registered under a European flag than for a
comparable “flagged out” vessel of “user-friendly” flags such as Panama, Liberia,
where employment regulations are less strict (see Table 3 below).
Table 3 – Crew costs differences
Shiptype EU flags Open
Register
Cost Index
A B C A B C
Tankers
Suezmax Italy Greece Panama 368% 140% 100%
Product
tanker
Italy Greece Panama 370% 141% 100%
Bulkers
Cape
Size
Italy Greece Panama 313% 138% 100%
Panamax Italy Greece Cyprus 304% 137% 100%
Handy
size
UK Greece Panama 227% 139% 100%
Containers
Large Netherlands Denmark Panama 279% 208% 100%
LineHaul
Germany France Panama 433% 427% 100%
Feeder Germany Greece Panama 433% 126% 100%
General Cargo
Break
Bulk
Germany Greece Cyprus 383% 122% 100%
Ro-Ro Italy Greece Panama 265% 123% 100%
Source: Peeters, C. (2003). Crew costs differences. Unpublished lecture notes, Institute of
Transport and Maritime Management of Antwerp
According to another source the highest EU wage for an able seaman is some 15
times higher than the lowest non-EU wage (both wages including social costs) and
5.6 times higher for chief officers. (ECSA, 1998) These wages differences are even
42
more significant if consideration is given to the fact that manning costs account for
50% of daily operating costs of the vessel and represent the largest single variable
cost in ship operations. (Stopford, 1997, p. 161)
Aside from the cost factor, another significant issue is that qualified European
seafarers are in short supply. As pointed out by the Commission of the European
Communities, fewer European young persons today are choosing maritime careers.
The younger generation evidently consider a career at sea socially and financially
unattractive compared with careers ashore. It appears thatyoung people are increasingly unwilling to spend long periods of
time at sea far away from home, from their families, friends,
relatives and children. Even the more attractive sides of the job,
such as the possibility of exploring the world and visiting exotic
places, seems to have disappeared as a result of modern
navigational practices, whereby ships only stay in port for short
periods, or remain outside the harbour for their commercial
operations.
Furthermore, today’s ships carry a small crew complement who often hail
from different alien nationalities and speak different languages. This state of affairs
frequently results in social isolation.
The high drop-out rate from maritime education and training institutions
points to the relative unpopularity of seagoing professions among the younger
generation. It is reported that the average drop-out rate in the EU is between 22% and
32%, and in some member states could be as high as 60% or 70%. (Commission of
the European Communities) All these factors have forced shipowners to employ
seafarers from low-cost labour supply countries and to substitute seafarers from
traditional maritime countries within the OECD in order to be successful in an
increasingly fierce global competitive shipping market and in turn caused changes in
nationalities of seafarers.
43
The determining role of wage factors can be explained by reference to the
economic implications. The standard measurement for ratings’ wages is based on the
ITF levels. By contrast, market rates, which can be in excess of ITF rates in some
countries, influence the wages of officers especially those in senior ranks. Supply
and demand is an important factor in some countries. The general wage level for
seafarers within the country of their domicile can affect the global wage level. The
wage differences between a master and an able seaman of a tanker in such instances
is illustrated by Leggate and McConville in the table and explanation below.
Table 4 – Wage differences of a master and able seaman employed in different
countries
Master Countries AB Countries
Grade A <$4080 <$1300
Grade B
(Benchmark)
$4080 $1300 Croatia : India :
Philippines : Poland :
Russia : Ukraine
Grade C $4081- $5100 India :
Philippines :
Russia :
Ukraine
$1301 – $1625 South Korea
Grade D $5101 – $6120 South Korea :
Croatia
$1626 – $1950
Grade E $6121 – $7140 Greece :
Poland : Spain
$1951 – $2275
Grade F $7141 – $8160 Italy : The
Netherlands
$2276 – $2600 Greece : Italy
Grade G $8161 – $9180 Germany : UK $2601 – $2925 Germany : The
Netherlands : Spain
Grade H >$9180 Denmark :
France :
Japan :
Norway
>$2925 Denmark : France :
Norway : Sweden
Source: Availability and Training of Seafarers. (2003, January). Prepared for the OECD Maritime
Transport Committee by Precious Associates Limited. Retrieved 02 June 2006 from the World Wide
Web:http://www.oecd.org/dataoecd/32/62/2489394.pdf#search=%22Availability%20and%20training
%20of%20seafarers%2C%20Prepared%20for%20the%20OECD%20Maritime%20Transport%20Co
mmittee%20by%20Precious%20Associates%20Limited%2C%20January%202003%22
The Grade B (Benchmark) comprises the ITF monthly costs covering basic
wages and vacation overtime. For a master it is USD 4080 and for an able seaman it
is USD 1300. The escalating grades identify the relevant nationality, which fits in
44
with the appropriate Grade level. It can also be seen from the above Table 4 that
Indian, Philippine, Russian and Ukrainian wages are lowest and therefore shipowners
and ship managers will prefer to employ them. By contrast, a higher rate of wages for
OECD seafarers will raise the manning costs and therefore will increase the manning
costs considerably. As mentioned earlier, such factors as high wastage level,
inappropriate inflow and age profile of OECD seafarers make them an expensive and
ageing workforce.
It is obvious that the shipowner pays different wages for similar work and
approximately the same level of efficiency. The economics of the seafaring labour
market in the theory of “discrimination monopsony” clearly explains the economic
reasons for the shipowner or ship manager’s choice. Discriminating monopsony
occurs in circumstances where the shipowner is able to distinguish between several
groups in the seafaring labour market, with different supply functions. (Leggate and
McConville, 2002, p. 460) The shipowner can make his choices for particular groups
on the basis of skills, nationality, costs and loyalty of seafarers. Shipowners and ship
managers are quite selective in terms of deciding which individual seafarer should be
employed on their vessels. Such factors as loyalty are important considerations as
they prefer long-term engagements with the same crew complement who know their
tasks, their ship and their fellow seafarers, and are eager to forge long-term
employment relationships with one employer. They prefer individuals who can
demonstrate support for the employer in difficult situations. A shipowner or ship
manager usually has a preference for a certain group which is based on his
experience and perception. Some shipowners and ship managers have particular
requirements for engineers with proper technical skills and the ability to use
equipment requiring specialised knowledge. Some may prefer one type of crew to
another regardless of the fact that both may have the same qualifications and skills.
However, the cost differential is still the most influential factor in the
shipowner’s choice which depends largely on the elasticity of the particular seafaring
labour market. (Leggate and McConville, 2002, p. 460) The elasticity of supply is
45
different in each market which means, for example, that a decrease in wages of
Ukrainian seafarers will not cause significant changes in the supply of Ukrainian
seafarers. In other words, supply is inelastic. By contrast, a decrease in wages for
German seafarers will result in a considerable decrease in the supply of German
seafarers. Here the supply would be elastic. The reason for this situation with
Ukrainian seafarers, for example, can be that the seafaring labour market is only
limited by foreign shipowners, the absence of a national fleet and the possibility to
transfer seafarers’ labour to an alternative labour market. All these conditions will
allow the shipowner to have the ability to discriminate by giving different levels of
income in each market. (Leggate and McConville, 2002, p. 460) In reality, this is
achieved by decreasing the level of employment in the more expensive market and
substituting the seafarers from the cheaper market where the marginal cost of labour
is lower and where the elasticity of supply is not high. (Leggate and McConville,
2002, p. 460)
As mentioned earlier, there is a significant difference in wages between
national and non-national seafarers even where qualifications are the same, the work
is similar and the level of efficiency is the same. Leggate and McConville state that
only 40% of seafarers polled denied that there was any wage discrimination. As
explained earlier, discrimination can take various forms. In Yemen, for example nonnationals receive higher wages then national seafarers. In Peru, non-national
seafarers from EU countries and North America receive wages that are 50% higher
than the wages of nationals (Leggate and McConville, 2002, p. 460). By contrast, in
Papua New Guinea, Malaysia and Japan, non-nationals receive lower wages. In
Denmark, Italy, Norway and other European countries non-national seafarers receive
lower wages than EU domiciled seafarers. A detailed examination of wages in
Denmark, India, the Philippines and Panama was carried out by Leggate and
McConville. They pointed out that in Denmark wages are determined by collective
agreement between the Danish Shipowners Association and relevant Trade Union for
ships registered in the Danish International Ships Register (DIS). (Leggate and
McConville, 2002, p. 460)
46
Table 5 – Monthly wage comparison
As at 1 April 2001 Wages of national
seafarers
Wages for nonnational/domiciled
seafarers (Filipino)
1st Deck Officer Dkr.14 648 Dkr. 8 918
1st Engineering Officer Dkr. 14 648 Dkr. 8 918
Chief Steward/Chief
Cook
Dkr. 16 005 Dkr. 9 645
A.B. Dkr. 12 908 Dkr. 8 689
Source: Heather, L. & and McConville, J. ( 2002). The economics of seafaring labour market. In
Grammenos, C. (Ed.), The handbook of maritime economics and business. LLP: London, Hong-Kong
It can be seen from the Table above that the employment of Filipino crew can
reduce manning costs considerably. As shown in the study, a Filipino deck officer
receives 39% less wages than the lowest rate of a Danish deck officer. The difference
is similar with regard to engineering officers while in the case of a chief steward and
chief cook it is 40%. The difference in the case of an able seaman is somewhat less
at 37%. But, if a comparison is made with wages a Filipino seafarer can get in the
Philippines under the national legislative standard, the DIS wages are considerably
higher. The monthly minimum wage for seafarers in the Philippines is USD 385,
whereas a seaman on domestic flagged vessels can only earn the equivalent of 134
USD per month. (Leggate and McConville, 2002, p. 460) As pointed out by Leggate
and McConville, there is a general perception that Indian seafarers command higher
than average wages on the international which is attributed to the high quality of
their performance. However, it is apparent that at the time the analysis was
conducted it was only in the case of ratings that the wages were higher and
questionable in the case of officers. According to the Maritime Union of India,
masters and chief engineers receive wages lower than those provided in the ITF and
second registry scales as illustrated below:
47
Table 6 – Officer wages (USD per month)
International Transport Workers
Federation
3899
Second Registers 4030 (NIS)
Indian National Shipowners’
Association
3707 (pre-tax)
2595 (post)tax)
Source: Heather, L. & and McConville, J. (2002). The economics of seafaring labour market. In
Grammenos, C. (Ed.), The handbook of maritime economics and business. LLP: London, Hong-Kong.
Primary source: Maritime Union of India (MUI) estimates, November 2001.
The wages depicted above under the domestic Indian scale are net after tax.
Taking that into account the difference is roughly 36 %. As such, foreign shipowners
can offer wages less than the international but higher than the domestic scale, and
this usually acceptable. In this scenario the shipowner wins by reducing his crew cost
and the seafarer gains from a wage higher than what he can receive under the
national scale. Both parties benefit and nobody is the loser.
4.2 Supply and demand of seafarers
It is reported in the maritime media that in relation to the issue of current
demand and supply of seafarers, organisations like International Shipping Federation
(ISF) and BIMCO prefer not to characterise the situation as a crisis (Guest, 2006) but
rather as an imbalance. In line with that jargon, it appears that the current imbalance
is represented by a shortage of 10,000 officers or 2% of the demand; and there is a
sizeable surplus of 135,000 ratings. The current demand figures for officers,
including back-up requirements add up to 476,000 against a supply of only 466,000.
By contrast, the current demand for ratings stands at 586,000 against a global
oversupply of 721,000.
The trend in the supply of seafarers in different countries is depicted in the table
below:
48
Table 7 – Recent Trends in Supply by Area
2000 2005 2005
Index
(2000=100)
Officers Ratings Officers Ratings
000s % 000s % 000s % 000s % Offic
ers
Rati
ngs
OECD 147 36.4 191 23.2 133 28.5 174 24.1 90 91
Eastern
Europe
62 15.2 107 13.0 95 20.3 115 16.0 154 107
Africa/La
tin
America
35 8.7 89 10.8 38 8.1 110 15.2 107 124
Far East 128 31.7 332 40.3 133 28.5 226 31.3 103 68
Indian
subcontinent
32 7.9 104 12.6 68 14.6 96 13.4 214 93
404 100 823 100 466 100 721 100 115 88
Source: BIMCO/ISF 2005 Manpower Update. (2005). Institute for Employment Research, University
of Warwick.
It is evident from the table above that the number of seafarers from OECD
countries has decreased significantly, both in terms of officers as well as ratings. By
contrast, in crew-supplying countries in Eastern European, Africa, Latin America and
the Indian sub-continent, there is a marked increase in the numbers of officers.
Within those countries the growth rate in the pool of officers is highest in the Indian
sub-continent depicted by a 213 % growth between 2000 and 2005. By comparison,
the growth rate in the Eastern European countries is 153 % over the same period. It is
interesting to note that the numbers of officers in the OECD and Far East countries
rose to the same figures in 2005, i.e., to 133,000 or by 28.5 %, whereas in the
previous years OECD countries represented the largest proportion of available
officers globally, i.e., 147,000 or 36.4% against 128,000 or 31.7 % in Far East.
This decrease in OECD country seafarers is illustrated by latest seafarer
analysis published by the Department for Transport of the United Kingdom. The
forecast is that the current pool of 13,200 deck and engine room officers will be
reduced by more than 50% by 2021. This prognosis is attributable to a high average
age, wastage rates and inadequate cadet recruitments. The study states that the
number of officers in regular service at sea has fallen considerably by some 7% since
49
1997. In the deck department the decrease is 2% whereas in the engine room it is
12%. In 2002, the number of ratings was 9,300 representing a decrease of 2%. This
year was chosen in the study as the one most relevant in statistical terms. The
number of cadets in 2005 was 1,000 which included 500 new entry cadets. This
represented a drop of 11% from the previous year. A government report states that
the pool of domestically trained officers in the United Kingdom is likely to fall
dramatically over the coming 15 years. (Guest, 2006)
It was estimated by the BIMCO/ISF that the total numbers of Eastern and
Central Europe pool represent a growing component of available officers (95 000 in
2005) and a significant proportion of ratings (110 000 in 2005). (BIMCO/ISF, 2005,
p. 10) Even though Indian sub-continent has a highest rate of growth of officers, total
number in global terms represents only 68 000 officers and 96 000 ratings. While the
shift in supply from the developed world to the Indian subcontinent, Far East and
Eastern Europe has continued, the report claims that OECD countries still account
for 133,000 officers and around 30% of senior officers and 174,000 ratings out of a
total workforce of 1.2 million.
The demand for seafarers depends mainly on two factors, namely, the
size of the world merchant fleet and manning levels. The latter, in turn, depends on
the size of a particular ship. On the basis of these two factors it is concluded in the
BIMCO/ISF report that the aggregate demand for officers is in the range of 476,000
and for ratings is 586,000. (see Table 8 below)
Table 8 – Trends in Demand
000s
1995 2000 2005
Officers 427 420 476
Ratings 606 599 586
Total 1 033 1 019 1 062
Source: BIMCO/ISF 2005 Manpower Update, Institute for Employment Research, University of
Warwick.
50
By comparing the current data for global supply and demand a negative
imbalance was found to exist for senior level personnel, particularly engineer officers.
(see Table 9 below)
The current situation of shortage of officers and surplus of ratings can be
explained by the fact that the career path of an officer from a trainee to a qualified
junior deck officer or engineer takes at least three years of theoretical and practical
training. Beyond that level, another 36 months of sea-service and one or two years of
theoretical training are required to qualify as master or chief engineer, i.e., to obtain
an unlimited Certificate of Competency. It is evident that in most cases the time
period for reaching the highest level on deck or in the engine room takes
approximately 10 years. A new recruit is admitted to these ranks only at such
intervals. By contrast, the surplus of ratings is explained by the fact that it is a far
easier career path. The duration of training for a deep-sea cargo rating is much less.
Jobs at the lower levels require only a short introductory safety course and the
position of a watchkeeping rating requires about 12 months of sea-service and little if
at all, formal theoretical training. (Nielsen, 2005, pp. 84-85)
Table 9 – Supply and demand of seafarers by different national groups
000s
Current Supply Calculated Demand Difference (supplydemand)
Officers Ratings Officers Ratings Officers Ratings
OECD 133 174 168 218 -35 -44
Eastern
Europe
95 115 30 29 65 86
Africa/Latin
America
38 110 144 166 -106 -56
Far East 133 226 117 149 15 76
Indian subcontinent
68 96 18 23 51 73
All national
groups
466 721 476 586 -10 135
Source: BIMCO/ISF 2005 Manpower Update. Institute for Employment Research, University of
Warwick.
51
4.3 Future prognosis in the demand of competent crews and efficient
supply
With an assumed benchmark projecting an increase in the world fleet of around
1 % per annum together with recruitment and wastage levels, age structure and
manning levels, the report (“BIMCO/ISF Manpower Update 2005”) forecasts that by
2015 the demand for officers will increase to 499,000 and for ratings to 607,000.
Thus, it is estimated by BIMCO/ISF that by the year 2015, the total supply of
officers is projected to increase marginally to around 472 000 and ratings to 774,000.
This will result in a shortfall of 27,000 officers and a surplus of 170,000 ratings. (See
Tables 10 & 11 below). The BIMCO/ISF report states that many of these seafarers
may not be suitably trained and qualified to serve on ships engaged in international
trade.
Table 10 – Projected Supply by Broad Area
000s
2005 2010 2015
Officers Ratings Officers Ratings Officers Ratings
OECD 133 174 116 154 102 136
Eastern
Europe
95 115 95 130 95 148
Africa/Latin
America
38 110 42 118 47 126
Far East 133 226 139 211 145 196
Indian subcontinent
68 96 75 127 83 167
All national
groups
466 721 467 740 472 774
Source: BIMCO/ISF 2005 Manpower Update. Institute for Employment Research, University of
Warwick.
The BIMCO/ISF report also claims that wastage, in effect, cancels out
increases resulting from new training. The forecasts are that the current moderate
shortage of officers will become more severe unless maritime training is further
52
increased and measures are taken to address the rate of wastage. (BIMCO/ISF; 2005,
p. 35)
Table 11 – Supply/Demand Balances
2005 2015
000s % 000s %
Officers -10 -2.1 -27 -5.9
Ratings 135 18.8 167 21.6
Source: BIMCO/ISF 2005 Manpower Update, Institute for Employment Research, University of
Warwick.
The BIMCO/ISF report forecasts that in Eastern Europe, the numbers of
officers will eventually stabilise, while ratings numbers will rise. However, a senior
executive of a leading ship management company has warned that as soon as the
economies of the countries that were part of the former USSR improve, Russian and
Ukrainian seafarers will likely move to jobs ashore. (Leca da Veiga, 2001, p. 145) In
an IFSMA Newsletter the point was made that countries like Croatia, Estonia,
Georgia, Latvia, Romania, Poland and Russia will probably not remain as crew
supplying countries in the long term. Such an eventuality will be attributable to
various macroeconomic factors including low or negative population growth, high
per capita income and more positive interaction with the European Union. It appears
that the Ukraine will remain as the only country with potential growth and will
continue to pose a challenge to the Asian crew supply countries because of its large
population and low per capita income. (IFSMA, 2003, p. 7)
According to the BIMCO/ISF report, crew numbers are likely to increase in
other parts of the world especially in the Far Eastern countries and the Indian subcontinent. The report states, however, that in the Indian subcontinent there are
serious shortages of officers due to the availability of more attractive jobs ashore. To
counter this trend a significant drive to increase manning prospects has been initiated
by owners and management companies coupled with wage increases. (BIMCO/ISF,
2005, p. 4)
53
Within the international maritime community there is currently a raging
debate over the BIMCO/ISF report 2000. While some are supportive of the
predictions of gloom and doom in the manpower industry, others have serious doubts
about prognosis of future shortage becoming a reality. (Leggate, 2004, p. 3) Others
are even of the view that the report contains a degree of bias and its projections are
questionable in terms of usefulness to the industry. (Danzie-Black, 2005, p. 76) After
the publication of the previous BIMCO/ISF report Leggate pointed out a number of
contradictions with other reports produced by the International Commission on
Shipping and the International Labour Organization (ILO). Apparently, the real
number of Filipino seafarers as stated by the Philippines’ Overseas Employment
Administration (POEA) was higher than the BIMCO/ISF figure. It seems, also, that
according to information provided by the Ministry of Communications of China, the
number of Chinese seafarers was substantially higher than the BIMCO/ISF figures.
(Leggate, 2004, p. 6) Another commentator has explained that the difference in
seafarer statistics between the ILO study and the BIMCO report might be due to
differences in approach in data collection. The ILO statistics reflect persons
employed on board ships regardless the seafarer’s nationality whereas the
BIMCO/ISF report is based on numbers of seafarers from national pools regardless
of the ship’s flag. (see Appendix 5) (Nielsen, 2005, pp. 84-85)
In terms of shortage of officers and oversupply of ratings it was pointed out
by the Leggate and McConville that the statistics highlight considerable potential for
officers. It seems that officers have increased substantially in number by 131% but
they still represent less than 1% of the total new entrants in any given year. The
authors have stated that there is a visible decline in the number of ratings and that the
data is a strong indicator of future trends. (Leggate, 2004, p. 6) It was also mentioned
by the authors that in the near future it is expected that a large number of senior
officers from these countries will replace aging seafarers from OECD countries. The
ILO study suggested that the total supply was in fact higher than what was indicated
in the BIMCO/ISF report. (Leggate, 2004, p. 10)
54
Debates have also raged over the predicted shortage of seafarers. The General
Secretary of the National Union of Seafarers of India (NUSI) Abdulgani Serange
made the following in 2004 in this regard:
there is just too much of seafarers and not sufficient demand,
there are 30 institutions putting out 6,000 seamen annually.
Seamen today have to wait up to 30 months to get a job
compared to 6 months wait just 6 years ago. There are just not
enough jobs for the growing Indian seafarer population and
the situation is no different in China and Japan.”
(Danzie-Black, 2005, p. 75)
Leggate states that the international maritime industry, namely, shipowners,
shipmanagers, governments and unions think it is unlikely that there will be a
shortage of officers as predicted above. Their concern is not regarding the numbers
but rather the quality of future seafarers. (Leggate, 2004, p. 10)
Another point of view is that the European shipping media such as BIMCO
and Lloyd’s List, have erroneously branded this shortage as a manning crisis, which
is in reality a reference to European shortage. The shipping press appears to also
brand the European Seafarer as an endangered species using terms such as “rare
breed”. This whole notion seems to contradict the EU’s Economic Reports 2000
which encourages globalisation and its impacts and refers to the need to remove
protectionist markets. The fact that there is a shortage in Europe is not refuted but to
use the term “global” to refer to this shortage is misleading. (Danzie-Black, 2005, p.
75)
The latest BIMCO/ISF Manpower Update still attracts considerable debate
over the number of estimated seafarers in different countries and the future
prediction of shortage. Whereas the latest statistics in the BIMCO/ISF Manpower
report credits the Philippines with 46,359 officers and 74,040 ratings, totalling
120,399, the Philippines claims to have a figure that is 100% higher at 247, 707
(Guest, 2005) combining officers and ratings.
55
China similarly claims it supplies 28.5% of the global maritime labour market,
but the ISF/BIMCO estimate of 1.2m seafarers reduces the share of China to only
10%. (Guest, 2005)
In the BIMCO report 2005 a slump in the number of Filipinos qualifying for
deck and engine position was reported. Figures from the Professional Regulatory
Commission (PRC) of the Philippines show that no new second or third mates or
third and fourth engineers qualified in that year.
The total numbers for Filipinos have sharply declined from the 35,000 who
either qualified as new officers or rose to more senior positions at the end of the last
century, to the 5,000 to 6,000 in those positions now. In 1999 almost 3,000
candidates obtained their master’s certificates but the figures dropped to only a
couple of hundred in 2003 and further down to just about 500 in 2005. Similarly,
those qualifying as chief engineers numbered over 2,000 in 1999, a figure that sank
to a low of 324 in 2003 but the recover to finish at 424 in 2005. Other deck and
engine ranks show a similar course between 1999 and the year 2005, but the figures
for junior officers show the deepest decline with third mates dropping from 7,644 to
nil in both 2004 and 2005 and fourth engineers dropping from 9,330 to nil. It is
observed that the more recent decline is attributable to a combination of higher
standards in the examinations, a declining interest in seafaring careers, enhanced
bureaucratic hurdles and training costs being prohibitive for the average Filipino.
(Guest, 2006)
Christopher Horrocks, the Secretary General of the ISF, stressed that the
supply/demand calculations were an “art, not a science” and the report was a “backup tool” to the message to industry to train more, with a target of at least one cadet
per ship or around 50,000. (Guest, 2005)
The current debates and case studies reveal the uncertainty and inaccuracy of
the baseline data on the current position on the number of seafarers. The surveys
56
illustrate the paucity or absence of definitive data on seafarer statistics. It was
reported by Guest that the research undertaken by the Institute for Employment
Research at the University of Warwick, suffers from a disappointing lack of interest
by owners. Apparently, only 100 companies employing 12.5% of the total workforce
returned questionnaires with responses representing only a 20% return against a
target of 30%. As in previous surveys, data provided by national administrations are
unreliable, with researchers having to make adjustments to the figures provided.
(Guest, 2006) The reason seems to be that quantification of the seafarer population is
an extremely onerous task because many countries have no established system to
facilitate this. The figures are frequently based on employment statistics which is
problematic because it does not indicate the number available for employment or in
active employment. Furthermore, there are few records of seafarers leaving their
profession to pursue other careers. (Leggate, 2004, p. 4)
The following extract from Tradewinds illustrates how manpower surveys are
prone to statistical uncertainties:
… statistical uncertainty has always bedeviled the manpower
survey, hence its reliance on 100 companies’ replies to provide
reality filter. It also surveyed that 59 senior executives in
international shipping companies, with replies from 25, including
Bergesen’s Hugo Haeselich, Cosco’s Li Shanmin, Mitsui OSK’s
Toshiaki Sako and NYK’s Takao Manji. Of the 25 38% strongly
agreed and 54% agreed there was an officer manpower shortage
crisis and noted the “steep” increase in salaries. “Good freight
rates, lack of scrapping, more newbuildings coming into use and
rapid growth in some trading sectors” were among the main
causes of the shortage quoted. Even more, at 68%, strongly
agreed there were shortages in some ranks and on some ship
types, with senior deck and engineer officers most affected and
LNG carriers (particularly steam powered ones), chemical and
57
oil tankers the worst-hit types. Hopes that China (42,704 officers
and 79,504 ratings, the report says) can fill any gaps are deflated,
with only 41% agreeing there had been a “substantial” increase
over the past five years and 45% disagreeing.” (Guest, 2005)

The current shortage of officers, if any, may be compounded by the
restrictions on the use of foreign seafarers by the closed and hybrid registries.
According to the ILO study only 35 per cent of countries, have no restrictions on
foreign seafarers. The reference is obviously to open and secondary registries. The
ILO study stressed that 8.3 per cent of flag states require a full national crew
complement, 13.3 per cent require all nationals except where authorised, 6.7 per cent
and officers, whereas others 20 per cent of flag states require master and senior
officers to be flag state nationals (see Appendix 8). The restrictive policies of the
closed, hybrid and second registries in relation to masters and officers are the
probable cause of officer shortages and are viewed as an impediment to the global
balance of supply and demand. This state of affairs is not typical, however, for the
open registries or FOCs, where crewing is on an open global basis.
The results confirm that the epicenter of the global market for seafarers
continues to move in the direction of the Asian continent and some countries in
Eastern Europe. In Asia the demographic and economic factors indicate that
availability of seafarers is not a problem in the foreseeable future. However other
factors must also be taken into consideration in predicting the long-term source of
crew supply. It was said that Pakistan and Bangladesh have problematic security
issues affecting seafarers, Sri Lanka has its own internal political problems that affect
seafaring. Indonesia and Myanmar are low in terms of quality of training and the
level of English which are major disadvantages. Myanmar’s political situation poses
concerns too. The Philippines has fundamental educational problems starting with
58
the elementary school system which will take time and determination to solve. The
Philippines undoubtedly has long term potential as a source.
59
CHAPTER 5
CONCLUSION
In this dissertation an attempt has been made to address the issue of crewing in
the context of the changing global environment of shipping. The principal parameters
in relation to crewing have been examined are the currently prevailing systems of
ship registration, the paramountcy of maritime safety and the socio-economic
dimension of shipping.
The global trend today, which started several decades ago, is a major shift
from traditional to functional ways of manning ships. Economic considerations, i.e.,
enhanced financial gains, are uppermost in the minds of shipowners and operators.
Numerous newly independent and emerging sovereign states view themselves as
aspiring flag states offering a service for a fee and have entered the field of ship
registries which until relatively recently has been dominated by the traditional
maritime states. The traditional maritime states’ vision of ship registration and
interpretation of the doctrine of genuine link is simply that the ship and the beneficial
shipowner must have a common nationality. In their view it is only under such
conditions that true genuine link can be maintained. The view of the open registries,
of course, is that genuine link is manifested through the measure and degree of
control and supervision that the flag state can exercise over a ship in terms of
administrative, technical and social issues. The so-called responsible or quality open
registries contend that this is achievable regardless of the nationality of the
shipowner. The proponents of this view find support in Article 91 of UNCLOS
which bestows on all states the prerogative to fix conditions for the conferment of
nationality on ships. They are also inspired by the advisory opinion rendered by the
International Court of Justice in the IMO Reference Case.
60
At the centre of this debate lies the core issue of this dissertation, namely, the
subject of crewing or manning. The traditional view advocated by the traditional
closed registry states with support from organisations such as the ITF, is that all three
entities, namely, ship, shipowner and crew should belong to the same nationality.
While open registry system is accepted as a reality predicated on the phenomenon of
the crew supply states, there are genuine concerns over inequitable labour conditions
and certain malpractices carried on by a number of dubious flag states. Among other
activities the ITF has been in the forefront of actions designed to prevent and punish
such deplorable practices. The IMO and ILO are also engaged in concerted actions in
this matter. On the other hand, there are obvious economic factors some of which are
undoubtedly justifiable that have fostered the growth of crew supply countries and
the engagement of their seafarers by developed countries’ shipowners. On this front
the ITF expresses concern over exploitation of third world seafarers in terms of wage
discriminations. However, there are counter allegations that these simply represent
protective measures for the first world seafarers. It is also well-known that the third
world seafaring population stands to gain much by accepting lower wages than those
paid to their first world counterparts.
There is also the question of substandardness in terms of crew competence.
On this issue there are allegations that third world crew (including Eastern European
countries) serving on open registry ships are inadequately trained and are less
competent than their first world counterparts. Apart from the efforts of IMO to
upgrade MET standards and levels of competency through STCW 95 and the
institution of the so-called “white list”, the allegations regarding third world
incompetence are not conclusively borne out by facts and evidence. This is illustrated
in the following table.
61
Table 12 – Selected disasters, flag of vessels and crew nationality
Vessel Flag Nationality of crew
Prestige Bahamas flag Greek master, the Filipino and Romanian
crew
Tasman Spirit Maltese flag Greek master and crew
Sea Empress Liberian a total crew of 27, all Russian nationals
Torrey Canyon Liberian Italian master
Exxon Valdez Liberian US master
Erika Maltese Greek master
Titanic British British master and crew
Zenobia Swedish Swedish master and crew
Marine Electric US US master and crew
Dara British All deck officers and most of engineers
were British
Scandinavian
Star
Bahamas Norwegian master, Portuguese and
Philippine crew
Estonia Swedish Swedish crew
Herald of Free
Enterprise
British British master and crew
Source: Cahill, R. (1990), extracts from different internet sources.
Comments: A sampling of major maritime disasters depicted in the table below indicates that the type
of flag whether open, closed, hybrid or secondary, that is the primary decisive factor in maritime
safety. All registry types are equally prone to human error. It is education, training, competence and
safety culture that determines quality regardless of the type of registry and the nationality of the crew.
In conclusion it is the view of this writer that crewing of ships in
contemporary shipping remains an issue that needs careful and serious consideration
by all parties concerned, namely, the shipping industry, flag and port state
administrations, MET institutions, unions, national and international, the
international regulatory institutions such as IMO, ILO and the community of
seafarers themselves. Issues such as the human element, training and certification,
placement of seafarers in rewarding jobs should all be considered fairly and without
discrimination as to nationalities and backgrounds of seafarers. The welfare of
seafarers on board ships as well as when they are ashore are intimately connected to
the safe operations of ships and this fact should be of paramount consideration in all
62
discussions and debates in all maritime fora. The harmonious resolution of
contentious issues is the only way forward if seafaring is to remain as a respectable
profession attractive to the younger generation. Without them shipping will
eventually come to a grinding halt.
63
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67
APPENDICES
Appendix 1 – SOLAS, Chapter V, Regulation 14
The provision in SOLAS, Chapter V, Regulation 14 reads as follows:
1. Contracting governments undertake, each for its national ships, to maintain, or, if
it is necessary, to adopt, measures for the purpose of ensuring that, from the point of
view of safety of life at sea, all ships shall be sufficiently and efficiently manned.
2. Every ship to which chapter I applies shall be provided with an appropriate
minimum safe manning document or equivalent issued by the Administration as
evidence of the minimum safe manning considering necessary to comply with the
provisions of paragraph 1.
3. On all ships, to ensure effective crew performance in safety matters, a working
language shall be established and recorded in the ship’s log-book. The company, as
defined in regulation IX/1, or the master, as appropriate, shall determine the
appropriate working language. Each seafarer shall be required to understand and,
where appropriate, give orders and instructions and report back in that language. If
the working language is not an official language of the State whose flag the ship is
entitled to fly, all plans and lists required to be posted shall include a translation into
the working language.
4. On ships to which chapter I applies, English shall be used on the bridge as the
working language for bridge-to-bridge and bridge-to-shore safety communications
on board between the pilot and bridge watchkeeping personnel, unless those directly
involved in the communication speak a common language other than English.
Source: SOLAS, Consolidated Edition, Chapter V, Regulation 14, IMO, London, 2004, p.365
68
Appendix 2 – ILO 109, Part IV, Article 21
The provision in ILO 109 “Wages, Hours of Work and Manning (Sea)
Convention (Revised)”, 1958, Part IV, Article 21 reads as follows:
1. Every vessel to which this Convention applies shall be sufficiently and efficiently
manned for the purposes of–
(a) ensuring the safety of life at sea;
(b) giving effect to the provisions of Part III of this Convention; and
(c) preventing excessive strain upon the crew and avoiding or minimizing as far as
practicable the working of overtime.
2. Each Member undertakes to maintain, or to satisfy itself that there is maintained,
efficient machinery for the investigation and settlement of any complaint or dispute
concerning the manning of a vessel.
3. Representatives of the organizations of shipowners and seafarers shall participate,
with or without other persons or authorities, in the operation of such machinery.
Source: ILO 109 Wages, Hours of Work and Manning (Sea) Convention (Revised),(1958), Part IV,
Article 21. Retrieved 15 June 2006 from the World Wide Web:
http://www.ilo.org/ilolex/english/convdisp1.htm
69
Appendix 3 – ILO C180, Part III, Article 11, Paragraph 1
This provision in ILO C180 “Seafarers’ Hours of Work and the Manning of
Ships Convention, 1996”, Part III, paragraph 1 of Article 11 reads as follows:
Every ship to which this convention applies shall be sufficiently, safely and
efficiently manned, in accordance with the minimum safe manning document or an
equivalent issued by the competent authority.
2. When determining, approving or revising manning levels, the competent authority
shall take into account:
(a) the need to avoid or minimize, as far as practicable, excessive hours of work, to
ensure sufficient rest and to limit fatigue; and
(b) the international instruments identified in the Preamble.
Source: ILO C180 Seafarers’ Hours of Work and the Manning of Ships Convention, 1996, Article 11,
Part III, paragraph 1. Retrieved 04 June 2006 from the World Wide Web:
http://www.ilo.org/ilolex/english/convdisp1.htm, see Mukherjee, 2002, pp.183-184 and 209 for
commentary on the issue.
70
Appendix 4 – Ratings aboard national flags and flags of convenience (FOCs),
with and without ITF agreements
All ratings National flag
%
FOC with ITF
Agreement
%
FOC without
Agreement
%
Perception of shipping companies’ attitude to unions
In favour 27 17 7
Neutral 57 45 21
Not in favour 16 38 72
Good relationships
With the company 82 67 48
With the crewing agency 84 55 42
Between officers and ratings 70 71 54
Company loyalty and pride I feel
I feel loyal to company 86 78 72
I feel proud of who I work for 74 56 41
Social welfare provision-yes
Retirement plan with employer 68 28 20
Medical insurance on leave 74 56 41
Training and skills
Training provided by company over last 12 months 67 40 10
Encouraged to develop skills 84 51 40
Hours
Have 6 hours uninterrupted rest every day 27 8 3
Work over 72 hours a wee 43 84 80
Positive perception of officer performance
Keeping you up to date 85 59 42
Providing chance to comment 79 41 24
Responding to suggestions 77 42 27
Dealing with crew problems 81 53 42
Treating employees fairly 80 53 47
Consultation frequently or sometimes
Crewing issues 38 13 9
Change to work practices 38 20 9
Pay issues 34 15 7
Health and safety 68 63 42
Perception of influence – a lot or some
On range of tasks 56 36 20
On pace of work 57 21 23
On how work is done 61 25 15
Job intensity, work related stress and job security
My job requires that l work very hard 62 79 85
I never seem to have enough time to get my job done 34 57 62
I worry about work during my resting hour 34 68 80
My job is secure 70 37 29
Satisfaction with pay and physical conditions
Pay 82 73 40
Physical working conditions 78 44 30
Working in pain
Worked with physical pain or discomfort 9 23 24
Source: Seafarers’ International Research Centre, Cardiff, see Erol, 2006, pp. 8-9 for further
comments.
71
Appendix 5 – A comparison of seafarers employment statistics
State 1LO study
B1MCO
study
Algeria 35,605 2,635
Bahrain 423 unavailable
Bulgaria 31,761 5,147
Canada 900 14,633
Chile 19,882 3,110
China 340,000 82,017
Columbia 12 3,455
Croatia 6,500 19,500
Denmark 9,705 9,875
Egypt 114 9,140
Finland 10,400 10,000
France 9,522 6,330
Germany 11,818 14,483
Greece 45,363 32,500
Iceland 200 470
India 64,000 54,700
Israel 1,445 1,776
Italy 12,400 23,500
Japan 109,644 20,913
Korea 65,038 16,488
Lithuania 11,000 unavailable
Malaysia 61,830 12,671
Marshall Islands 17,805 40
Morocco 3,223 2,729
Netherlands 14,686 11,644
Norway 15,216 22,200
Pakistan 29,655 11,808
Papua New Guinea 2,530 987
Peru 3,240 1,700.
Poland 24 12,106
Portugal 229 2,221
Romania 1,099 10,257
Spain 2,243 10,000
Sweden 430 9,600
United Arab Emirates 1,080 unavailable
Uruguay 2,139 1,030
USA 15,000 15,207
Vanuatu 54,145 711
Total ILO respondents 1,010,306
Total ILO for comparison with BIMCO 997,803 455,583
Difference 542,220
Source: Leggate H. (2004, January-March). The future shortage of seafarers: will it become a reality?
Maritime Policy and Management, 1, pp. 10-12.
72
Appendix 6 – Top labour supplying countries in 2005
Country Officers Ratings Total
China 42,704 79,504 122,208
Philippines 46,359 74,040 120,399
Turkey 22,091 60,328 82,419
India 46,497 32,352 78,849
Ukraine 28,908 36,119 65,027
Russia 21,680 34,000 55,680
Indonesia 7,750 34,000 41,750
Greece 17,000 15,000 32,000
Mozambique 6,000 23,000 29,000
Italy 9,560 11,390 20,950
Source: Based on data compiled in (BIMCO/ISF Manpower 2005 Update)
73
Appendix 7 – Top labour supplying countries in 2000
Country Officers Ratings Total in
2000
Total in
1995
The Philippines 50,000 180,000 230,000 244,782
Indonesia 15,500 68,000 83,500 83,500
Turkey 14,303 48,144 62,447 80,000
China 34,197 47,820 82,017 76,482
India 11,700 43,000 54,700 53,000
Russia 21,680 34,000 55,680 47,688
Japan 18,813 12,200 31,013 42,537
Greece 17,000 15,500 32,500 40,000
Ukraine 14,000 23,000 37,000 38,000
Italy 9,500 14,000 23,500 32,300
Totals 206,693 485,664 692,357 738,289
Grand total 403,672 823,384
Source: Leggate H. (2004, January-March). The future shortage of seafarers: will it become a reality?
Maritime Policy and Management, 1, p. 4.
74
Appendix 8 – Foreign seafarers restrictions
Source: ILO Study, see Leggate, 2004, p. 7 for commentary on the issue.

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