Bloomberg
Fight between commodity giants and shippers leaves sailors trapped
(Bloomberg) – An impasse between commodity giants and shipping companies is prolonging the work crisis at sea, with some 200,000 seafarers still stuck on their ships after their contracts expire and beyond the requirements of globally accepted safety standards. In an effort to keep deliveries of food, fuel and other raw materials on schedule, some of the big commodity companies are avoiding hiring certain ships or imposing conditions that could block aid for exhausted sailors. Companies are trying to avoid crew changes, which have become much more expensive and time-consuming during the coronavirus outbreak. In an effort to keep shipments on schedule, some companies have asked their shipping partners to ensure that no changes will occur, according to emails and contracts reviewed by Bloomberg. These demands are at risk of aggravating a labor crisis already in its 12th month, according to owners, unions and the United Nations. More than a year after the pandemic began, hundreds of thousands of sailors are long overdue for a license to coast. Some have been working without pay or a firm repatriation plan and many have taken desperate measures: in one example, a captain diverted his ship to the middle of the ocean and refused to return to the course without guarantee of relief. pandemic, a shipowner could bring in a new crew during routine stops at the port. This common practice became a logistical nightmare with the curbs at the Covid border. Some ports require prolonged quarantines for workers entering and leaving, others refuse ships that have changed their crew in 10 to 14 days, for fear that sailors may spread the virus. In January, some 300 companies, including Vitol Group, the world’s largest independent oil trader, and Australian mining giant Rio Tinto Group, signed a pledge to take action to resolve the crisis for seafarers. Called the “Neptune Declaration”, the signatories recognized a “shared responsibility” and pledged greater collaboration between ship operators and charterers to facilitate crew changes. As of now, however, some shipowners and labor advocates say that little has changed, and not all major charterers have signed. “We chose not to sign because we believe that our current practices regarding crew changes are fair and fully respect the need for regular crew changes,” said a spokesman for Equinor ASA, a major oil, gas and energy company with headquarters in Stavanger, Norway. “We do not charter vessels for any voyage if a change of crew is required that cannot be accommodated in our delivery schedule.” Exxon Mobil Corp., the largest producer of oil and gas in the United States, also declined to sign. A spokesman said the company is “considering the next steps”. The pact is “a work in progress,” said Rajesh Unni, captain and executive director of Synergy Marine, which manages more than 375 ships, including container carriers and commodity transporters. Shipping has always had conflicting interests, he said, but the companies that sign the Neptune Declaration “at least are committed to following the standard protocol, which should give you much more comfort that we are all on the same page now. ”What you need to know: Tracking the labor crisis at seaThe fight over who should pay for the higher costs of crew changes is more acute for commodity companies and their transportation partners, which carry out what we call one-off charters. Manned vessels available on demand from a few days to several months, one-off charters account for 85% to 90% of shipments of solid bulk and oil tankers in the commodities industry, according to the industrial group BIMCO. Some companies did not stipulate any crew changes or requested verbal guarantees before hiring a charter, according to emails and contracts reviewed by Bloomberg. Charterers also used questionnaires to find out if ships are planning crew changes, according to ship owners. In one case, a shipowner told Bloomberg that, in order to secure a charter with Rio Tinto, he would have to extend workers’ contracts, pay an additional salary and promise to dismiss them when the trip is complete. He also had to confirm that no crew changes were planned for the duration. “Rio Tinto does not use ‘no change of crew’ clauses in charter contracts,” the company said in a statement. “Rio Tinto aims to support the shipping industry and the human rights of the seafarers on which it depends. This requires collaboration between shipowners, who employ seafarers, charterers and regional port authorities around transparency of information and flexibility in the schedule. ”The problem, say labor advocates and seafarers, is that workers have no choice in any way. Ship captains often have their crew’s passports – a convenience for port stops, they say – and ports are tightly controlled borders. Even if a worker wanted to get away from his ship, he would not get very far without a passport, visa or plane ticket home. The International Transport Workers’ Federation, or ITF, which represents seafarers, is calling on the industry to do more to alleviate the crisis, “said Stephen Cotton, ITF general secretary.” It may not be as obvious as putting it in writing , but it’s still happening. As long as the lives of seafarers remain in the background in relation to corporate profits, this crisis will continue to unfold. “Read more: What happens when tycoons abandon their own giant cargo ships The industry says that it is the shipowners’ responsibility to arrange for crew changes and to ensure the safety and well-being of seafarers on their ships. BIMCO encouraged charterers to share the costs of crew changes and developed a contractual language that requires companies that hire vessels for a fixed period of time – called time chartering – to do just that. Owners of ships available for punctual chartering, the group said, should change their crew when the ship is not being rented. to help alleviate the crisis in stranded sailors. Shareholders too: a group of 85 investors who manage more than $ 2 trillion in assets, including Fidelity International, said in January that frequent chartering Charterers should be flexible about allowing crew changes and should consider providing financial support for sailors who need to be repatriated. “Charterers, at this point, need to share the costs and take on the delays they may face,” said Laura Carballo, head of political maritime law at World Maritime University in Malmo, Sweden. “This is their biggest argument: it is about delays. We are all experiencing delays at the moment. The world is only working because the sailors are doing their job ”. Koch Industries of Wichita, Kansas, which has interests spanning oil and agriculture, has instructed ship owners not to conduct crew changes during chartering, according to a person with direct knowledge of the terms and who asked not to. be identified because the conversations were private. Requests were delivered verbally, not in writing. In response to questions about the stipulation, the company responded in a statement: “Koch works closely with shipowners to ensure the safety and well-being of crew members. This is a problem that we are watching closely and looking for ways to solve. ”Vitol, based in Rotterdam, demanded that shipowners do not make crew changes on some one-off charters, according to people familiar with the terms of the company’s contract who asked not to be identified because they were not allowed to speak publicly . Vitol says that “it has sought to manage our transportation business in accordance with the standards described in the Neptune statement”. “Whenever commercially and operationally possible, we facilitate crew changes,” said company spokeswoman Andrea Schlaepfer in a statement. “As a ship owner and manager, Vitol recognizes the challenges of the current situation, but believes that, with good management, owners can maintain high standards of wellbeing for seafarers.” The Neptune Declaration also calls on world leaders to change their port and border policies to ease the burden on seafarers, following a September statement by consumer companies, including Unilever Plc and Procter & Gamble Co., to do the same. Last month, the IMO recognized 55 countries that agreed to consider seafarers “essential workers” and encouraged nations that have not yet done so. This designation does not have an official definition, and countries were not specific about what changes it would bring to port procedures. On Friday, the shipping industry raised concerns that, while the number of seafarers retained has declined since its peak, improvements may be short-lived, as governments and port authorities respond to the threat of new variants of Covid-19 with stricter restrictions. Seafarers, many of whom are from developing countries, may also miss out on ongoing vaccination campaigns, risking further delays and disruptions in the supply chain. “The crisis is still ongoing,” said Guy Platten, secretary general of the International Navigation Chamber, which represents more than 80% of the world’s merchant fleet. “Governments will not be able to vaccinate their citizens without the shipping industry or, more importantly, our seafarers.” (Updates with recent statements from the shipping industry about the threat of new variants of Covid-19 to efforts to relieve seafarers.) For more articles like this, visit us at bloomberg.comSubscribe now to stay on top of the business news source more reliable. © 2021 Bloomberg LP