National laws do not apply on board a vessel flying a flag of convenience

Crew members of the Hoanh Son Star (Panama flag, IMO 92162120) do not know their health and life insurance amounts. The Inspectors of Far Eastern Territorial Organization of the Seafarers’ Union of Russia found it out during the inspection of the bulk carrier stayed at port of Vostochny. 

The vessel was loading coal destined for the ports of South Korea. According to FETO SUR Chairman Nikolay Sukhanov, the crew consists of 20 Vietnamese seafarers. The salary of an AB Seaman is $1,400, and a captain's salary is $4,500. There is no collective agreement on board, but there are certificates of insurance required by the Maritime Labor Convention and Declaration of Maritime Labor Compliance, Part II is in place on board, signed by the beneficiary shipowner, a Vietnam-based Hoanh Son Group JSC.

“It was not possible to find out anything regarding insurance, since the crew members do not know the amount of compensation in case of injury or death on a voyage,” Sukhanov explained. “This is not the first time we face the situation when the crew is convinced that their national laws apply on board the vessel, although the flag of Panama is raised on the Hoanh Son Star“.

The FETO SUR representatives explained to the crew that Panamanian legislation applies on the bulk carrier.

A flag of convenience vessel is a vessel that operates under a flag other than that of the shipowner's country. The system of cheap flags attracts shipowners by much more favorable conditions than national ones, which allow companies to avoid being subject to the laws of their country. The flag change increases the profitability of ship operations and the competitiveness of the fleet, providing a significant advantage in competition in the international market. Besides, this introduces other prospects: once a vessel is registered under a flag of convenience, an owner immediately employs the cheapest labor that can be found and pay them meager wages, saving on safety and cutting costs by deteriorating living conditions on board.

Seafarers' unions around the world are convinced that the working conditions of seafarers on board FOC vessels must meet minimum international standards. For example, the amount of compensation in case of a seafarer's death on a voyage should be within $110,000.

In addition to this information, the FETO SUR representatives gave the seamen books on the rights of seafarers working under flags of convenience and the latest issues of the “Maritime Unions Herald” magazine.

– We also informed the crew that this year, following the request of the crew of the Inlaco Bright (Panamanian flag, IMO 993862), the Vietnamese shipowner and SUR signed a collective agreement. This arrangement allowed seafarers to receive wages no less the minimum requirements. Having learned about this, they asked us to send a notice to Hoanh Son Group JSC, inviting the company to sign a collective agreement with the union, - Nikolay Sukhanov added.