Wednesday, February 8, 2012

European Maritime and Other Freight and Logistics Sector Jobs Subject to 'Social Dumping'

Unions Protest and EU Admits Legislation Required
Shipping News Feature

EUROPE – The men who served the merchant marine in time of war were remembered yesterday in a touching memorial service in the harbour at Aberdeen as North Sea Trades Unions and affiliates to the International Transport Workers Federation (ITF) made their point regarding ‘Social Dumping’ in an industry they witness being devalued despite EU recommendations to halt the practice. A resolution adopted last year by the European Economic and Social Committee (EESC)admitted that the various freight sectors of transport in the EU, including road haulage and short sea and ocean shipping had been ‘severely affected’ and outlined methods by which the situation could be ameliorated and unions insist that action must be taken immediately.

The ITF affiliated unions representing Norway, Denmark, and the UK are concerned about the increasing number of ‘Flag of Convenience’ (FOC) and so-called “national” registered vessels operating on a regular basis in the North Sea. The impact of this is dramatically reduced opportunities for traditional national seafarer jobs, as companies employ and exploit low cost labour from countries such as Lithuania, Latvia, India, Romania and the Philippines.

In addition, Vessels registered in the Norwegian 1st registry (NOR) are now being reflagged, as a consequence of the unfair competition from other registers. They continue with regular operations on the Norwegian Continental Shelf but are replacing Norwegian Seafarers with other nationalities on wages and working conditions far below Norwegian standards, more details of the unions’ dispute with Norwegian ship owners was given in an article of ours in November last year.

The ITF case is directed particularly at the moment toward the North Sea Offshore Oil and Gas Industry but is applicable in some degree to other facets of maritime cargo transport and the ITF says it is deeply concerned that in the near future there will no longer be any Norwegian flagged vessels on the Norwegian Continental Shelf and consequently no Norwegian Seafarers on board offshore supply and service vessels operating in Norway.

This is clearly the type of practice frowned upon in the EESC’s recommendations and Captain Hans Sande of the Norwegian Officers’ Union pointed out that the process of reflagging is simplicity itself with a list of several second registers for owners to ‘shop amongst’ creating a situation in which the traditional registers cannot compete. The captain emphasised that this is also a problem facing Danish and British seafarers’ with regard to North Sea energy activities but in fact can be extrapolated to a far wider employment sector.

The opinions expressed in the report prepared by the Section for Transport, Energy, Infrastructure and the Information Society covers all modes of freight and passenger transport and were formally adopted in full by the European Economic and Social Committee by 150 votes to 2 with 8 abstentions on the 15th June last year and can be read in full HERE. A short précis relevant only to the maritime sector however is as follows:

The transport sector accounts for 4.4 % of the total EU workforce and further legislation on compulsory training and continuous training for all modes of transport is required to ensure acceptable standards and that the maritime sector should promote the move from rating positions to officer status. Further steps towards employment liberalisation, if any, should be proposed only after serious analysis of the social consequences of previous liberalisation steps, a meaningful social impact assessment and with an inbuilt guarantee that competition is not based on cheaper labour costs but on the quality of the services.

The EESC recommends introducing additional legislative measures on manning standards on board maritime and inland waterway vessels in order to guarantee quality and safety plus better and stricter use of State Aid Guidelines (SAG) schemes and sector-specific health and safety legislation for the different transport modes.

Proper legislation is needed in order to avoid "flagging-out" of work contracts and the EU needs to establish a Social, Employment and Training Observatory in the transport sector, which should provide substantial information for a better assessment and ex-post evaluation of the social impact of transport policy measures and, as stated above, transport employment in was severely affected by the economic crisis in 2008 and 2009, particularly in the freight sector.

A major criticism is that when the internal market was established the high mobility of mobile workers, which facilitates delocalisation of transport jobs and social dumping practices to a higher degree than in other sectors, insufficient attention was paid to social legislation, accompanying social measures and measures to safeguard and avoid social dumping practices.

The EESC made a special point that freedom of establishment and open transport markets are often used in inland waterways, road transport or the maritime sector, to establish companies in EU countries with lower labour costs, lower social security contributions and/or tax advantages without offering services in these countries. They exploit social and wage differences between countries for competitive advantage resulting in difficulties in tracing work contracts, ensuring social security schemes, and controlling and enforcing health and safety rules. In order to avoid social dumping it is necessary to ensure that the host country principle is applied, which means the application of the social conditions of the country in which the service is carried out.

The resolution continues: The major challenge in the maritime transport sector is the long-term decline in the employment of European seafarers with the associated loss of European maritime know-how. Flags of convenience (FOC’s) and low-cost crews from developing countries are still being used. International trade by European-owned and controlled vessels is dominated by an almost entirely non-domiciled crew, particularly for ratings, and the report refers to its conference report of March 2010 which highlights the need to upgrade the merchant marine professions.

There is a clear need to create an environment which facilitates the recruitment and training of European seafarers and the progression from rating to officer. This could be encouraged through a better and stricter use of State Aid Guidelines (SAG) schemes, in particular by strengthening the link between the granting of public subsidies or tax exemptions and both employment guarantees and training obligations. Ship owners are shifting business away from Europe and investing more and more in training centres and maritime academies in third countries, especially in the Far East. There is a need to develop a network of Training and Education Institutes in Europe in order to create maritime education systems that both reflect and adapt to new emerging skills needs.

Problems with working conditions at sea are being exacerbated by, the increasing use of manning agencies and the lack of a direct or only a remote employment relationship with the shipping companies. Often, working and living conditions onboard are poor and accommodation on board inadequate, especially for women and cadets, and communication facilities are lacking. Furthermore, inadequate manning levels increase fatigue and put the safe operation of vessels at risk. The problem of piracy and criminalisation of seafarers have contributed to a deterioration in the image of the industry and the willingness of youngsters to consider a career at sea.

As stated above the report covers more than the sections applicable to the situation of merchant mariners and those affiliated to different transport, freight and logistics sectors would do well to study it however as far as the current situation with regard to crewing of North Sea and other ocean going vessels are concerned it would appear that both unions and the EU are in agreement that more needs to be done to ensure fair play for all involved in the maritime trade.

With a comment this week from one union representative that Indian crews are working aboard vessels registered in India for less than a pound an hour Abdulgani Serang, General Secretary, National Union of Seafarers of India (NUSI) supported the ITF position and has also demanded that the unhealthy practice of reflagging which directly contributes to social dumping is not acceptable and that all crew are paid at the rate outlined in the ITF’s own total crew cost agreement.