June 13, 2013

The shaky fourth pillar: Reneging on the MLC

One of the bedrock tenets of capitalism is that the capitalist investor bears the financial risk of the enterprise, and that workers’ wages are never on the line. This is only fair; after all, the capitalist does not share windfall profits he makes in good times with his workers, so why should labour share his losses when times are bad?

The Maritime Labour Convention- which, I have said before, will fail its stated intentions, since a piece of paper will not change attitude- was, amongst other things, supposed to formalise that capitalist tenet. It was going to ensure that seafarers’ unpaid salaries were protected in the event of financial default by a ship’s owners. Seacurus had even rolled out an insurance policy recently - CrewSEACURE- that covered wages, repatriation, medical and personal accident liabilities if owners defaulted.

In a singular gesture of bad faith, it now appears that shipowners and their P&I Clubs want to reinterpret the MLC regulations to wriggle out of their basic responsibility. They say that, in the event of an owner abandoning the crew, crew repatriation is covered under the MLC but wages are not.
In short- owners need not spend money buying insurance or making provisions for financial security for crew wages, since those poor suckers are going to be on their own for ‘several years’.

The UK P&I Club claims to insure 'over 200 million tonnes from more than fifty countries across the globe’. This is what the Club says, in a ‘clarification’ to its members:
“This Standard (they mean MLC and its guidelines) does not include a provision on outstanding unpaid wages following abandonment. Liability for unpaid wages following abandonment is a feature of the principles agreed in the International Labour Organisation (ILO) in 2009. These principles are not applicable at this stage and there is no requirement in the MLC 2006 to provide financial security by way of insurance cover for unpaid wages.”

They further claim, attempting to snidely pass the buck, “It has been suggested that that the MLC introduces an obligation on owners to maintain financial security for unpaid wages. As noted above in the context of insolvency this is incorrect. The MLC does not introduce a requirement on owners to provide financial security for the payment of wages. It does, however, introduce obligations on States Parties and in turn States will require owners to ensure seafarers are paid. This does not require owners to meet their obligation to pay wages through the provision of financial security”. 

Apologists for shipowners will undoubtedly claim that it is the provision of financial security that is a problem for cash strapped owners, many of whom have never- and have no intention of- defaulting on wages. They will add, no doubt, that P&I Clubs are in the business of addressing the collective risk their members are exposed to, and so obviously do not want to accept liability if they can wriggle out by claiming that none exists.

As the UK P&I Club happily claims in the same clarification, (after dismissing the MLC and saying that wages come under ILO rules instead): “The ILO principles (on unpaid wages, they mean) are subject to further discussion and negotiation and to take this forward ILO has scheduled a meeting for April 2014. It will then take several years for the principles to be considered in ILO, finalised and implemented in MLC Member States” (Italics mine).

In short- owners need not spend money buying insurance or making provisions for financial security for crew wages, since those poor suckers are going to be on their own for ‘several years’. 

To be honest, I feel for the shipowner of today; this is no time to look forward to additional high costs of compliance, whether it is in connection with the MLC, ballast water or environmental regulation. There is simply no money out there. But my point is that the MLC, the much overhyped Fourth Pillar of the maritime regulatory regime, does not subject shipowners to any additional obligation as regards crew wages. That obligation already exists- it goes way back to the birth of capitalism. The responsibility to pay crew their wages is a pillar of capitalism, and paying crew their wages, no matter what, has been a legal- and moral- duty forever. 

The formalisation- and the costs involved- of this basic responsibility are now being objected to. This absence of good faith underlines the propensity and ability of shipowners to disregard the much hyped ‘human element’ completely, and will be the undoing of shipping. For, if the MLC is today sought to be reinterpreted to dilute or negate the fundamental duty of paying wages, what are the odds that the other, lesser, elements of the MLC that hit owners’ pockets- pertaining to working conditions, for example, or fatigue- will be allowed to succeed tomorrow? 

I suspect that the shaking of this fourth pillar of maritime regulation will become a regular affair, as the industry seeks to dilute the MLC’s scope and short change the seafarer wherever possible. The problem is that, when pillars- whether of capitalism or maritime regulation- become shaky, they eventually collapse and bring down the entire house on one’s head. If you don’t believe me, ask Samson or the Philistines.

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