Ten seafarers from Aframax oil tanker Wind (IMO: 9252967) have been freed from slave-like conditions only after the International Transport Workers’ Federation (ITF) demanded their release. Many of the crew were more than two months over the end of their contracts, raising safety concerns, and had not been paid for months at a time (currently, one-month’s pay is owned).
The ITF wrote to the ship’s operator, SR Navigation, on 29 October 2021 and again on 3 November 2021 demanding that the seafarers be released and their full pay restored. Although there was no response from SR Navigation, the crew were put ashore in Côte d’Ivoire in early December. They are now back at home safe in the Philippines.
The ship is registered in Panama giving that country responsibility for crew welfare under the Maritime Labor Convention (MLC). However, the ITF received no response from the Panama authorities when it raised the issue of the crew’s abuse on 3 November nor when the ITF reported the ship’s abandonment to the ILO on 5 November.
“This is typical of Panama’s attitude,” said Steve Trowsdale, the ITF’s Inspectorate Coordinator. “They are the biggest register in the world, yet they duck the responsibilities that come with that. The Wind case throws into sharp relief the fundamental failure of the flag of convenience system. It seems likely that crew non-payment and poor conditions are only part of the story. Panama seems to be wilfully ignoring a whole range of questionable activities by this ship and its owners.”
Interviews with crew members under condition of anonymity revealed the ship to have been involved in a range of dubious actions. Its automatic identification system (AIS) has been turned off since 26 June 2021 (suggesting the owners does not want its location to be known). Conditions on board are poor. Crew were asked to carry out a number of unsafe duties including rust flaking using electrical rather than compressed-air equipment (this is dangerous on an oil tanker where one spark could put the whole ship at risk). The crew also reported the dumping of substantial quantities of waste at sea.
“It’s a ship’s registry’s business to investigate this type of activity and ensure a vessel is operating legally,” said Trowsdale. “This is true whether there are contraventions of the MLC governing crew pay and welfare, the International Convention for the Safety of Life at Sea (SOLAS), or other international laws such as oil sanctions. Panama has a duty to be aware of the activities of the ships it registers and investigate anything suspicious. In the case of the Wind, the clues are plentiful yet Panama neglects to take any action.”
There are currently around 8,500 ships registered in Panama representing 230 million gross tonnes and about one in every six commercial ships at sea. This is more ships than the next two largest registers added together — China (3,700) and the USA (3,600). Yet Panama only has a population of 4.3 million people and a GDP of US$53 billion compared with the US which has a population of 329 million and a GDP of US$ 21 trillion.
The truth is Panama cannot afford to properly regulate the ships it registers,” said Trowsdale. “It has far too many for the scale of its resources. This means it cannot help seafarers in trouble, like the crew of the Wind. The system is at fault and we call on all the world’s economies to rethink flags of convenience and allow registrations only in countries where ships’ owners or operators have a genuine link. Until we change the system, we will keep seeing these cases of seafarer abuse.”
Reputable ship owners supporting crime
Many reputable companies register their ships in Panama, seeking advantageous costs and taxes. However, registering there also allows them to avoid employee protection and minimum wage rules in their own countries. This is morally questionable.
Panama permits ship ownership through anonymous Panamanian companies, allowing unscrupulous operators to keep their activities secret. Many of the worst offenders under international law choose Panama as the country in which to register their ships.
“We call on the reputable ship operators to stop registering in Panama,” said Trowsdale. “It may save you a little in operating costs, but in doing so, you are associating yourselves with the worst of the worst in the maritime industry. It is time you cleaned up your act.”
Trowsdale also issued a warning to seafarers: “It’s our experience that a flag of convenience state will offer none of the assistance it is legally obliged to give you if you run into difficulty with your employer, or if the ship gets into trouble at sea.”
Wind highlights the worst failings of FoC
In fact, the Wind exemplifies the worse of failings in the flags of convenience system. Underhanded owners use the anonymity offered by Panama’s company and ship registers to keep their identity secret. They use a series of shell companies to make it difficult to trace their identity. They change the names and other details of ships often, to make it difficult for authorities to keep track.
They mortgage their ships to the hilt. Mortgage providers take priority among creditors. This provides a liability shield for the owners because creditors (a crew claiming unpaid wages, for example) will find any value from selling the ship has already been allocated to the bank.
Although the Wind has had its AIS turned off for long periods, the crew says it has been both to Venezuela and China. This is a route for busting US oil sanctions — illegal but highly lucrative. It may explain why the ship’s owners have gone to so much trouble to hide from authorities. The Wind’s sister ship (IMO: 9252979), also operated by SR Navigation and flying the Panamanian flag, was also believed to be in Venezuelan waters when its AIS was turned off between June and September, and was later seen in Chinese waters. The vessel now appears to have been broken up in Bangladesh.
The seafarers would have had no knowledge of any nefarious activities at the time they signed on but, although innocent, may have been held liable had authorities caught the ship in the act of sanctions busting. This puts them in a terrible situation, discouraging them from reporting wrong-doing but at the same time seeing them under the control of operators who do not value their safety or financial wellbeing.
“Flags of convenience make it all too easy for dubious operators to circumvent sanctions, at great profit to themselves,” said Trowsdale. “One wonders why the US State department is not calling for changes to the flag system as a necessary precursor to enforcing sanctions. In the meantime, sanctions create an opportunity for criminals that is putting innocent seafarers’ lives at risk.”
Hiding the crimes
The name showing on ship appears to have been repainted when it entered Venezuelan waters allowing the owner to create further confusion. A handwritten diagram found on the ship shows how to repaint “Wind” to show the name “Vine”. There is no paperwork indicating this change was made officially. The Vine (IMO: 9008744) was a crude oil tanker but it was broken up 10 years ago.
“There will always be people who see ways to make a great deal of money by flouting the law,” said Trowsdale. “But by allowing the flags of convenience system to continue, we are making it too easy for them. This puts the lives of innocent seafarers on the line. Things simply have to change.”
The ITF demands change
- Ships should only be allowed to register in countries where owners or operators have a genuine link
- International company and shipowner rules should change so that ownership is transparent
- Payment and repatriation of crews should take priority over banks calling in mortgages
- The US State Department should rethink its policies on oil sanctions. Scrapping flags of convenience would allow for better enforcement and at the same time offer better safety and financial protection for seafarers.
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