Maritime Union of Submission to the Senate Inquiry into the increasing use of so-called shipping in Australia

Joe Fleetwood National Secretary Maritime Union of New Zealand

11 August 2015

1 1. Introduction

1.1. The Maritime Union of New Zealand (MUNZ) is New Zealand’s main union in the maritime industry, with approximately 3,000 members mainly comprising waterfront workers and seafarers, many of whom work in high risk environments.

1.2. MUNZ is an affiliate of the New Zealand Council of Trade Unions (NZCTU), the International Transport Workers’ Federation (ITF) and the Maritime International Federation (MIF).

1.3. Through the ITF and MIF, MUNZ has a very strong relationship with the Maritime Union of Australia, both historically and in modern days.

1.4. There is a substantial cross flow of maritime workers especially in the seafaring sector between the two countries.

1.5. Australia and New Zealand share similarities in terms of their maritime regulatory frameworks, skill base, economic development, and employment relations systems.

1.6. Both are maritime trading nations that depend on shipping for export and import.

1.7. Flag of Convenience (FOC) vessels are registered in countries with very lax or non-existent regulation of the maritime industry.

1.8. Flag of Convenience is a term coined by the ITF, used to describe the flag of a ship whose ownership/control lies outside the country of the flag. Certain countries such as Panama and are declared FOC countries; so all vessels flying their flags are considered FOC.

2 1.9. FOCs provide a means of avoiding labour regulation in the country of ownership, and become a vehicle for paying low wages and forcing long hours of work and unsafe working conditions.

1.1. The use of Flag of Convenience shipping is of major concern to MUNZ and the purpose of this submission is to alert the Australian people to the problems that have resulted from FOC shipping in New Zealand.

1.2. There are two main objections of MUNZ to the use of FOC shipping in the New Zealand context: (a) the problems with FOC ships themselves, including seaworthiness, health and safety, competence and skills of crew, rights and employment conditions of crew; (b) the negative effect of FOC shipping on local shipping, employment, skills, economic security and the environment.

2. Flag of Convenience Shipping in the New Zealand context

2.1. New Zealand coastal shipping is regulated in the main under Section 198 of the Marine Transport Act 1994 and related provisions of the NZ Ship Registration Act.

2.2. Section 198 restricts access to coastal trade to New Zealand ships; foreign ships on demise charter to a NZ based operator; or a foreign ship that is passing through NZ waters while on a continuous journey from a foreign port to another foreign port, and is stopping in NZ to load or unload international cargo.

2.3. This so-called “open coast” policy which was introduced in the early 1990s has resulted in a major decline in New Zealand shipping, to the extent that New Zealand now only has a very small number of larger flagged vessels in its domestic freight fleet, including inter island ferries,

3 bulk carriers and container vessels.1

2.4. This has led to a decline in employment for New Zealand seafarers, and a low number of trainees coming into the industry, which given the growing importance of maritime transport and maritime resources for New Zealand is of grave concern.

2.5. There have been frequent and serious safety incidents involving FOC vessels in New Zealand ports and New Zealand waters. These have included equipment failure, unsafe conditions, and the grounding of the Rena in 2011.

2.6. The conditions for crew members aboard Flag of Convenience vessels can be poor, and on many occasions the Maritime Union of New Zealand, working with the ITF, have intervened on behalf of distressed foreign crew members in cases involving repatriation, back pay and other welfare issues.

3. The Rena

3.1. The 2011 grounding of the FOC Rena was the worst oil spill in New Zealand history.

3.2. The Rena was a Liberian flagged container ship with gross tonnage of 37,209 tonnes. It was owned by a subsidary of the Greek company Costamare Inc. and chartered by the Mediterranean Shipping Company.

3.3. At 0214 hours (New Zealand daylight time) on 5 October 2011 the Rena grounded on the Astrolabe Reef, , New Zealand, en route from Napier to the Port of Tauranga.

1 Coastal Shipping and Modal Freight Choice, NZ Transport Agency, 2009

4 3.4. 1,733 tonnes of heavy fuel oil (HFO) were on board Rena when it grounded, with around 350 tonnes estimated to have been lost overboard in the first week and further smaller amounts subsequently. 1368 containers were listed on the original manifest. Salvors recovered 1039, with 329 unrecovered, either trapped in inaccessible parts of the wreck or lost to the sea.2

3.5. The grounding received world wide attention with attention being drawn to the lack of regulation and accountability of FOC shipping. 3

3.6. The ransport ccident nvestigation ommission ound that the grounding was due to several factors: • not following standard good practice for planning and executing the voyage; • not following standard good practice for navigation watchkeeping; • not following standard good practice when taking over control of the ship. 4

3.7. In the aftermath of the Rena grounding, Russell Kilvington, former director of the New Zealand Maritime Safety Authority (now Maritime New Zealand) noted with reference to the accountability and quality of international shipping such as the FOC Rena: “Another lesson that is bound to emerge from the Rena grounding is the fact that New Zealand relies entirely on foreign flagged vessels with foreign national crews as a means of importing and exporting. I think that the most obvious thing that will come out of this . . . [is] New Zealand’s all time reliance on international shipping over the years, and as one sees the link between almost everything, owners, charterers, ship management companies, classification societies; as that link continues to fragment and the standard of crews is potentially in danger of declining

2 Maritime New Zealand website 29 July 2015 www.maritimenz.govt.nz 3 Maritime business practice threatens accountability,‬‬ Al Jazeera Television https://youtu.be/XjC8LaCfPRo 4 p.1, Final Report Marine inquiry 11-204 Container ship MV Rena grounding on Astrolabe Reef, 5 October 2011, Transport Accident Investigation Commission (November 2014)

5 for a variety of reasons . . . then if a coastal state wants to have greater control and greater ways of trying to prevent these things happening, one imagines that would be the way to go.”5

3.8. MUNZ has called for dedicated shipping lanes on the New Zealand coast, on the basis that if ships had to follow dedicated shipping lanes this would end the problem of pressure to divert course to meet tight time windows, which was apparent in the Rena case.

3.9. The cost of the Rena disaster, on top of the environmental damage, was severe, with a bill of over $46 million to the New Zealand taxpayer as at 29 January 2013 – a substantial proportion of which was not covered by compensation. 6 Foreign ship owners must be made to pay for full clean up, not the taxpayer. This factor must be taken into account when the “cost savings” of FOC shipping are touted.

4. Health and safety implications of FOC vessels

4.1. There have been a substantial number of safety incidents with other FOC vessels that have resulted in death, injury and near misses to crew and port workers in New Zealand.7

4.2. The previous grounding of the Panamanian flagged log ship Jody F Millenium at Gisborne in 20028 with subsequent oil spill is another example of serious FOC vessel incidents in New Zealand at a multimillion dollar cost9.

5 pp186–187, Black Tide: the story behind the Rena disaster, by John Julian (Hachette, 2012) 6 http://www.treasury.govt.nz/publications/informationreleases/renacosts 7 http://www.radionz.co.nz/news/regional/267564/port-fatalities-under-scrutiny 8 https://www.maritimenz.govt.nz/Publications-and-forms/Accidents-and-investigations/Accident-reports/Jody-F- Millennium-022828-mnz-accident-report2002.pdf 9 http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=1843183

6 4.3. Two foreign crew members died and a third was hospitalized after being asphxiated on the FOC vessel TPC Wellington at Marsden Point in 2010 after entering a hold without correct breathing apparatus. 10

5. Issues for Crew of FOC vessels in New Zealand waters

5.1. The Maritime Union of New Zealand working with the ITF has repersented distressed crews on many occasions.

5.2. Issues dealt with on FOC vessels range from underpayment of wages, failure for crews to be returned home at the end of their contracts, mistreatment and abuse, all the way up to serious injuries and deaths, and the sinking of vessels.

5.3. The most recent incident was the Lancelot V in Tauranga where the mainly Ukrainian and Filipino crew have been stuck on the vessel since it was arrested in Auckland in May following a dispute between the charterer and the owners of the Greek-owned, Panama registered ship. The ship came to Tauranga in June to complete its discharge and was re- arrested. While food supplies dwindled, action by the International Transport Workers Federation and the Maritime Union of New Zealand succeeded in getting the men fed and paid on ITF rates, which equate to more than they were being paid by the owners.11

5.4. In another example, MUNZ and the ITF came to the assistance of the Liberian flagged FOC vessel Annapurna in Auckland in 2009, and it was revealed that some had not been paid for over a year. 12

10 http://www.odt.co.nz/news/national/104819/safety-fears-delay-departure-logging-ship 11 http://www.radionz.co.nz/news/regional/279502/crew-of-arrested-ship-to-receive-some-money 12 http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10588749

7 5.5. The Liberian flagged FOC conatiner vessel Vega Auriga (2014) was banned from Australian waters, and described as "unseaworthy and substandard" by Australian Maritime Safety Authority manager Allan Schwartz.

5.6. The Vega Auriga was then detained in New Zealand ports and found to have multiple safety deficiencies in port state control inspections. These included: • Crew records relating to hours of rest not being recorded properly, and the crew not given copies. • Rest periods for watchkeeping do not conform to the International Maritime Organisation's Standards of Training Certification and Watchkeeping, minimum requirements. • The Global Maritime Distress Safety System log book is not signed off by the master as per instructions. • There is a fault in the forward mast navigation light that has to be repaired before the ship departs. • The Electronic Chart Display & Information System appears to be being used for navigation, which is against International Maritime Organization regulations. • There is no single working language on board, which is against regulations. • The Emergency generator air inlet shroud parted from frame, the purifier room self-closing door not closing fully. • The Garbage placard at garbage station out of date, and there are no local control procedures for controllable pitch propellor operation. The starboard life raft cradle is corroded and must also be repaired before the Vega Auriga departs. • The oily rag bin in the engine room has no lid, which is a fire hazard. • Communication between the wheelhouse and the enclosed wing bridge is inoperable and there is no procedure in place to compensate. “It is fair to say the deficiencies are an indication of poor management

8 and a lack of resources,” said Maritime NZ spokesman Steve Rendle. 13

5.7. Crew on the Antigua and Barbados flagged FOC vessel MV Charelle (2010) were owed back pay and required repatriation. 14

6. Conclusion

6.1. Writing in the aftermath of the Rena disaster, MUNZ National Secretary Joe Fleetwood summarized the situation: The incidents on flag of convenience vessels, including foreign charter vessels operating in the New Zealand fishing industry, makes for a long and grim list. Deaths by drownings, fatal injury or asphyxiation, severe injuries, physical attacks, underpayment, pollution and overfishing, abuse and exploitation are documented throughout the maritime industry. For years the problem has been out of sight and out of mind. There were no votes to be gained from impoverished foreign crews. Complacent politicians have come and gone, and the profits kept flowing to the shipping corporations. Now we are all reaping a bitter harvest from those irresponsible decisions. The only good thing that can come of Rena is that New Zealanders now understand we can no longer allow the current situation to continue. MUNZ have called for a dedicated fast response vessel for oil spill and similar emergencies funded by foreign shipowners and offshore corporations who profit from the industry. The maritime industry and flag of convenience shipping must be regulated and controlled to prevent a repeat.

6.2. The Maritime Union of New Zealand urges that Australia learn from the systemic issues experienced by the dominance of Flag of Convenience shipping in New Zealand over the last two decades.

13 http://www.sunlive.co.nz/news/81428 14 http://www.munz.org.nz/2010/04/28/crew-concerns-include-pay-and-pirates/

9 6.3. These include: • undermining a skilled workforce and national shipping industry and no commitment to training New Zealand nationals; • exposing the environment to hazards; • exposing crews and local workers to the health and safety problems on board FOC vessels; • perpetuating the global shame of a largely unregulated Flag of Convenience system with its resultant impact on safety, wages and conditions, corruption and environmental hazard.

ENDS

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