Tuesday, March 19, 2013

Ocean Freight Problem Spreading to the World of Aviation

Transport Unions Concerned by 'Flags of Convenience'
Shipping News Feature

CANADA - WORLDWIDE - The ITF (International Transport Workers’ Federation), the global union organisation which represents around four and a half million people employed within various sectors of the transport industry, has long campaigned against the use of ‘flags of convenience’ which of course are a regular feature in the world of ocean freight transport with hundreds of merchant vessels registered in preferred states carrying cargoes of every type right across the world. The unions say the ships operators, usually themselves registered elsewhere, often use the lower standards of health and safety required on such craft to unreasonably abuse their crews and sometimes even endanger life. Now the ITF is to illustrate a practice they say is similar which is growing in the aviation sector as economic pressures affect the world's airlines.

At the sixth International Civil Aviation Organization (ICAO) Air Transport Conference, taking place this week in Montreal, the ITF civil aviation section secretary Gabriel Mocho will present a working paper, titled ‘The need for a strategy to address the negative consequences of continued liberalisation: Would maritime style ‘flags of convenience’ contribute to sustainable aviation?’. The submission states that there is growing evidence that airlines are increasingly restructuring their operations to reflect classic maritime ‘flags of convenience’ scenarios. Mocho commented:

“This event brings together stakeholders from across the world of civil aviation. Its core purpose is to develop the regulation necessary for a sustainable aviation industry, a matter of burning importance to us all. The ITF is deeply supportive of this aim. The ITF will be bringing its 65 years of experience in fighting the worst excesses of flags of convenience in shipping to the debate about the rise of flags of convenience in aviation. These have become increasingly visible and potentially risk undermining transparency, accountability and even safety.”

In the maritime sector, ships and fleets can be ‘flagged out’ to countries (including land-locked nations with no maritime tradition, like Mongolia) that offer tax avoidance, lower-cost safety and labour standards and conditions, and inadequate safety supervisory and inspection structures. ‘Flagging out’ is generally driven by the desire to save costs (including paying lower taxes) or to escape effective regulatory control by the State in which the vessel or fleet is beneficially owned. It is the ultimate privatisation of regulation, if a ship-owner does not like the policies of a national regulator it can quit the flag and find a more convenient or compliant one.

The growing number of parallels in today’s civil aviation to traditional maritime ‘flagging out’ scenarios is striking. Offshore registries for civil aviation aircraft exist and are growing in Aruba, Bermuda, Ireland, Malta, Georgia and Lithuania. Offshore registries for private aircraft also exist in the Cayman Islands, the Isle of Man, and San Marino. With the ever present risk of ‘copycat’ parts entering the aircraft spares supply chain the safety standards on all commercial aircraft need to be equally rigorous no matter where registered.

The ITF working paper concludes that air transport workers have been used repeatedly and increasingly since 2000 as the primary shock absorbers for managing the effects of deregulation, liberalisation, the periodic business cycles and external shocks in the industry, often with devastating social consequences.

Photo: A crash in 2009 saw this 50 seat aircraft veer into the VIP lounge at Kigali airport killing one passenger after experiencing difficulties shortly after takeoff and landing safely.