SEAFARERS VS SHIPOWNERS. FINDING A BALANCE

Thursday, July 20, 2006
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Make all men equal today, and God has so created them that they shall be unequal tomorrow – Anthony Trollope

In most maritime jurisdictions, seafarers are armed with the legal machinery to enforce their claims for arrear wages. [1] In the United Kingdom and South Africa, for example, they have a maritime lien in respect of these claims which entitles them to arrest their ship irrespective of its ownership. Upon the sale of the ship, in South Africa, their claims of less than one year old rank ahead of ships’ mortgages and the claims of necessariesmen. [2]

On the other hand, litigation against shipowners is complex and expensive and it has become clear that seafarers require more protection than is currently offered by the principles of contract law and the availability of a maritime lien in some cases. [3]

The Maritime Labour Convention adopted at the 94th session of the International Labour Organisation (“the ILO”) at Geneva in February 2006 is designed to move the emphasis away from the individual or collective enforcement of their rights by seafarers to the question of seaworthiness. Along the lines of the ISM Code, [4] member states will take responsibility for insuring basic minimum wages, regulating working hours and leave and living conditions. Compliance will be recorded in a certificate which will be open to inspection by port states and failure to comply could lead to the detention of the vessel concerned. [5]

THE PROBLEM

There are an estimated 1.25 million seafarers worldwide. Their importance to safety at sea cannot be over emphasized.

In a report by Lord Donaldson “Safer Ships, Cleaner Seas,” [6] human error was recognized as the cause of the majority of accidents at sea. [7]

Crew strength has progressively reduced from about 50 in the recent past to about 20.   Containerization has lead to vastly reduced vessel turnaround times and an intensification of work for the seafarer during port stays. In these conditions, minimum rest periods are vital. Minimum wage levels are important, at least, for motivational reasons.

The vulnerability of seafarers has long been recognized by the law:

“The court of admiralty always sought to protect [seamen] against circumvention, oppression and injustice and even against misapprehension and error and was anxious that they should not be harassed with litigation and that the question of wages should be speedily settled.” [8]

By and large, seafarers are deprived of that heavy canon available to ordinary workers, the right to collectively withhold their labour. In South Africa, it is an offence for seamen to strike while their ship is at sea. [9] Physically scattered over the globe the cohesion required for successful collective action is almost impossible to achieve.

Global interference in the powerplay between seafarers and shipowners has become imperative.

THE HOUDA PEARL

The Filipino crew aboard the Houda Pearl, although ultimately successful, could attest to the difficulties in obtaining redress against powerful ship owning interests. The Houda Pearl was flagged in Cyprus and owned by a Cypriot corporation. The original employment contracts were entered into in the Phillipines.

The crew were engaged at rates well below ITF [10] minimum rates.

As a result of the “blacking” [11] of a sister ship, the Houda Star, in La Spezia, Italy, the owners of the Houda Pearl were induced to enter into new contracts with the crew at ITF minimum rates. In addition, the owners undertook to pay a substantial sum of back-pay.

While the Houda Pearl was alongside in Durban, the crew, assisted by the ITF, instituted action in rem for payment of back pay and arrear wages. The owner put up security and the ship was allowed to sail. Protracted litigation followed.

Although admitting that the South African court had jurisdiction, the owners made a forum non conveniens type application requesting the court to decline jurisdiction in favour of Courts of the Philippines. [12] When the crew filed affidavits indicating that the Courts of the Philippines would be likely to refuse to assume jurisdiction, the owners promptly sought to re-direct the matter to Cyprus. Applying English law, the court refused to exercise its discretion to decline jurisdiction.

In the main action the owners contended that the new contracts were void for lack of consideration alternatively, void on the grounds of economic duress. The lack of consideration point was based on a line of English cases holding that once consideration has passed in the original contract, an undertaking by one party to supplement its performance required further consideration from the other party to be binding. In the event, the defence of economic duress was upheld.[13]

The Appellate Division (now the Supreme Court of Appeal) rejected both defences. [14] The consideration point was rejected on the basis that the original contracts had been rescinded and the new contracts were accordingly supported by consideration on both sides. The economic duress point was rejected on the basis that the duress was imposed by a third party, in this case, the ITF, and there was no proof that the crew was aware of this.

To make seafarers go to these lengths to enforce their basic rights is clearly unsatisfactory and explains the paucity of this type of litigation.

REMEDIAL LEGLISATION

Even though countries with large open registers, notably, Panama and Liberia, have laws regulating employment conditions, enforcement of these provisions against non-resident, anonymous owners is illusory. [15] The company laws of Panama lend themselves to anonymity by, for instance, allowing bearer shares and Panama prides itself in not allowing any “piercing of the corporate veil”.

Even in countries that do require a genuine link to the shipowner,[16] for example, South Africa, regulatory measures are disjointed and of uncertain application.

The Labour Relations Act 66 of 1995 guarantees the right to strike and protects workers against unfair dismissal. The usefulness of these provisions for seamen is rendered nugatory by the presumption against extra-territorial application. [17] Generally, seamen to whom the Merchant Shipping Act applies, are excluded from the provisions of the Basic Conditions of Employment Act, 75 of 1977 regulating basic conditions of employment in line with the recommendations of the International Labour Organisation. [18] In any event, statutory minima are cold comfort to seafarers who must have first recourse to the provisions of their contracts and the complex rules of private international law. [19]

Extra-territorial jurisdiction is expressly provided by the Merchant Shipping Act with its draconian disciplinary provisions. [20]

Both the Merchant Shipping Act, severely curtailing the freedoms of seafarers and the more benign Labour Relations Act apply to installations (as defined) including ships, operating on waters above the continental shelf. [21] In this area it is not clear that the legislature intended the LRA to have ascendancy over the MSA in terms of its section 210 [22] or that this is desirable.

The new Maritime Labour Convention is therefore to be welcomed for three main reasons:

(1)        It assists seafarers.

(2)        It enhances global safety standards and

(3)        It facilitates the attainment of a consolidated and coherent set of employment rules.

THE NEW CONVENTION IN BRIEF [23]

The new Convention sets out in plain language a seafarers’ bill of rights while allowing a sufficient degree of national discretion to deliver those rights with transparency and accountability. The Convention will apply to all ships engaged in commercial activities with the exception of fishing vessels and traditional ships such as dhows and junks.

The Convention sets minimum requirements for seafarers with regard to hours of work and rest, accommodation, recreation, food and catering, health protection and social security.

The new Convention is designed to encourage compliance by operators and owners of ships and strengthen enforcement of standards at all levels including provision for onboard and onshore complaint procedures for seafarers.

Article V of the new Convention requires each member to effectively exercise its jurisdiction and control over ships that fly its flag by establishing a system for insuring compliance with the requirements of the Convention, including regular inspections, reporting, monitoring and legal proceedings. It provides for port inspection by members other than the flag state to determine the compliance with the Convention and requires that each member effectively exercise its jurisdiction and control over seafarer recruitment and placement services.

CONCLUSION

If all goes according to plan, the Maritime Labour Convention will become the fourth pillar of the international maritime regulatory regime under auspices of the IMO, along with the International Convention for the Safety of Life at Sea (SOLAS), the Standards of Training Certification and Watchkeeping Convention (STCWC) and the International Convention for the Prevention of Pollution from Ships (MARPOL).

The Convention will come into force after it has been ratified by 30 ILO member states with a total share of at least 33% of the world’s gross tonnage.

POSTSCRIPT

A notable omission from the new Maritime Labour Convention is the question of the right to strike. As set out above, there are conflicting statutory provisions dealing with this question in South Africa and this may hold true of other jurisdictions also. Global uniformity in this area requires further attention. [24]

 

 

[1] Staniland “Should a seaman sue for his wages as a favoured litigant?” (1986) 7 ILJ 451

[2] Admiralty Jurisdiction Regulation Act 105 of 1983 – Section 11(4)(c)(i)

[3] There is no lien for severance pay. The Tacoma City [1990] 1 Lloyd’s Rep 408; The MV Kingston v Credit

Corp. Durban and Coast Local Division. Case number A161/89. 24 January 1991, unreported

[4] International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention

incorporated into Chapter IX of the Safety of life at Sea Convention (SOLAS) 1974

[5] The Convention was adopted by a vote of 314 for, with no votes against and 4 abstentions. Press release

ILO/06/07. www.ilo.org

[6] Report of Lord Donaldson’s Enquiry into the Prevention of Pollution from Merchant’s Shipping, presented to

Parliament by the Secretary of State for Transport by Command of Her Majesty, May 1994.

[7] “Safer Ships Cleaner Seas” paragraph 7.9

[8] Kay Shipmasters and Seamen (1825) 330 – quoted in the article by Staniland cited above

[9] Merchant Shipping Act 57 of 1951 – s355(4)

[10] A federation of seaman’s trade unions with branches in many parts of the world and headquarters in

London.

[11] Collective action orchestrated, in this case, by the ITF, in which stevedores, dockers, tugmen and pilots

refuse to handle the ship so that it cannot be loaded or unloaded or leave the port.

[12] Magat and Others v MV Houda Pearl 1982 (2) SA 37(N)

[13] Magat and Others v MV Houda Pearl 1983 (3) SA 421(N)

[14] Malilang and Others v MV Houda Pearl 1986 (2) SA 714 (A)

[15] Neither register requires a genuine link to the ship owner.

[16] The South African Ship Registration Act 58 of 1998 requires some local presence (s16)

[17] Chemical and Industrial Workers Union v Sopelog CC (1993) 14 ILJ 144 (LAC)

[18] Section 3(3)

[19] Parry v Astral Operations Ltd (2005) 26 ILJ 1479 (LC)

[20] The Act applies to vessels registered or licensed in South Africa “wherever such vessels may be”

(s3(4)).

[21] s1 read with ss4 and 8 of the Maritime Zones Act 15 of 1994.

[22] Section 210 of the Labour Relations Act provides “If any conflict relating to the matters dealt with in this

Act, arises between this Act and the provisions of any other law save the Constitution or any Act expressly

amending this Act, the provisions of this Act will prevail”.

[23] Press Release ILO/06/07

[24] The limitation placed on striking in the United Kingdom is similar to that in South Africa. Fitzpatrick and

Anderson Seafarers’ Rights (Oxford 2005) 489. Liberia, one of the most significant registers in

terms of size, also places restrictions on striking not found elsewhere. Ibid 340.