The High Cost of Cheap Shipping: International Transport Workers Federation – Australia Submission to the Inquiry into the increasing use of so-called Flag of Convenience shipping in Australia September 21, 2015 Submitted by email: [email protected] Dean Summers, ITF Australia Coordinator 365 Sussex St, Level 2, Sydney, NSW, 2000 For inquiries contact: [email protected] Website: www.itfglobal.org 2 1. Introduction 1.1. This submission is made on behalf of the International Transport Workers' Federation (ITF) - Australia. The ITF is an international federation of transport workers' trade unions. Around 700 unions representing over 4.5 million transport workers from some 150 countries are members of the ITF. It is one of several Global Union Federations allied with the International Trade Union Confederation (ITUC). 1.2. The ITF has a particular focus on the shipping industry due to the early globalisation of the shipping industry. The ITF’s origins lie in unions representing seafarers. The ITF administers a unique system of global union agreements that cover approximately 12,000 FOC ships and protect the social, human rights and dignity of more than 250,000 seafarers from around the world. 1.3. In Australia, the ITF has four Inspectors that are employed full-time to inspect international ships and assist international seafarers in Australian ports, and a network of ITF Contacts that are trained in this work and assist on a part-time basis. These inspectors board approximately 700 ships per year, in addition to assisting multiple seafarers that contact them by text, email and telephone and through maritime workers in Australian ports. The Australian ITF Inspectorate has been active since the 1980s. 1.4. A short video title ‘Fighting for better seas’ explains the ITF’s campaigns in the shipping industry: https://www.youtube.com/watch?v=PwaE4S5Yb1g. 3 2. Table of Contents 3. Executive Summary and Recommendations...................................................................6 4. Number of International ships and FOCs trading in and to Australia ............................. 17 5. The Regulation of FOCs and International Shipping.................................... .................. 20 5.21. The ILO, the IMO and Port State Control ............................................................... 23 6. National Security................................................................................ ......................... 25 6.13. MSIC equivalent for international crew ................................................................. 27 6.22. High Consequence and Dangerous cargoes ........................................................... 30 7. The case of the Sage Sagittarius..................................................... .............................. 31 8. Australian Fuel Security................................................................. .............................. 40 9. Marine Environment...................................................................... .............................. 48 9.5. Enforcement of Marine Environmental protection acts and conventions .............. 49 9.18. Operational pollution: Dumping of oily wastes and the use of ‘magic pipes’ ....... 51 9.24. Operational pollution: Dumping of rubbish ........................................................... 53 9.31. Operational pollution: Ballast water ...................................................................... 53 9.37. Operational pollution: Anti-fouling paint ............................................................... 55 9.43. Major incidents: Bunker oil spills ........................................................................... 56 9.57. Major incidents: Oil Spills from tankers ................................................................. 59 9.61. Shen Neng 1 ............................................................................................................ 61 9.86. MV Tycoon .............................................................................................................. 69 9.91. Rena ........................................................................................................................ 70 10. Conditions and minimum employment standards for international seafarers .............. 72 10.3. Precarity of employment ........................................................................................ 73 10.14. Fatigue................................................................................................................... 75 10.36. Wages .................................................................................................................... 80 10.44. Repatriation and abandonment ........................................................................... 85 10.48. Hazards, fatalities and injuries .............................................................................. 85 10.57. Comparison of Australian and international working conditions ........................ 88 11. Minimum employment law standards for international seafarers in Australia .............. 92 12. The general standard of Flag of Convenience vessels......... .......................................... 94 13. Methods of inspection of Flag of Convenience vessels................... .............................. 96 14. Exposure to exploitation and corruption of international seafarers on FOC vessels ...... 99 4 15. Compensation for deaths and injuries............................................ ............................ 100 16. Legal remedies available to international seafarers....................... ............................. 104 17. The quality of the shore-based welfare for seafarers working in Australian waters .... 106 18. Progress made in the area since the 1992 report Ships of Shame ............................... 107 19. Any related matters: The AMSA levies........................................... ............................ 108 Annex A: Australian Marine Orders on hours of work and rest on international ships ...... 110 Annex B: Great Barrier Reef Marine Park Authority: stament on Shen Neng 1 .................. 112 Annex C: Main environmental conventions and legislation in Australia. ........................... 113 Annex D: Ships used to carry refined petroleum on domestic voyages in 2014. ................ 119 5 3. Executive Summary and Recommendations 3.1. The Australian shipping industry has suffered a steady decline through a number of contributing factors including unfair pressure of competition from cheap international shipping. 3.2. The current federal government is committed to removing any form of support for a domestic industry by even deeper deregulation of the coastal shipping trade. 3.3. While the three deaths on the Panamanian-registered coal carrier Sage Sagittarius are still being investigated by the NSW Coroner, they do highlight the potential for abuse of seafarers under a substandard regulatory regime - Flags of Convenience. 3.4. The ITF has been successful in having more than 12,000 ships regulated by international collective agreements but still need an ongoing active network of dedicated inspectors to police the agreements. One indication of the extent of violations is that this Inspectorate recovered almost $60 million USD in wages last year alone. Apart from stolen wages, the world wide inspectorate regime deals with an increasing list of breaches of human and workers’ rights. 3.5. If the Australian government's current agenda is realised, it will sound the death knell for Australian-flagged shipping. The Australian Senate and the Australian public should understand what the consequences could be and the potential impact it will have on our exposed and vulnerable coastline. 3.6. Central and most urgent of these considerations is national security. While every part of Australia's transport logistic chain has been strengthened and regulated in the wake of a heightened counter-terrorism environment, the opposite is true for coastal shipping. All Australian national maritime workers accept the most stringent and onerous criminal and security background checks, while the international workers that shipowners use to replace domestic crews need only apply online for a low grade visa. This in itself should sound alarm bells in our security and crime agencies, particularly in the multi-billion dollar domestic oil and gas industry, but has developed into a political lever at the expense of security. 3.7. Australia has failed to build strong social partners to include the maritime workforce in our national security framework. Rather, ideology has driven deep divisions between agencies, employer groups, workers and industry, leaving enormous gaps in domestic security. 3.8. We look to the US for the strongest example of how to build and sustain a shipping industry involving unions and its members as allies against national threats. The US Merchant Marine Act 1920 or "Jones Act" and associated regulations regard a robust and well trained national 6 merchant marine as an essential resource in the 4th line of defence behind Army, Air Force and Navy. 3.9. The environment and natural treasures like the Great Barrier Reef are put at immediate risk through irresponsible shippers and shipowners, and even the regulation around deliberate dumping and accidental spills is not enough to protect Australia from crippling cleanup bills. The very elements of cheap shipping are those that conspire to harm our pristine coast. 3.10. Australia's base of experienced