Australia's Flag of Convenience Review Rejected

Australia's Turnbull government has announced its recommendations on the interim report of the Senate Inquiry into Flags of Convenience, saying another review is unlikely to change the current decline of the Australian shipping industry.

The inquiry came about following revelations in a Four Corners episode aired in June 2015 regarding three deaths at sea on board the MV Sage Sagittarius, dubbed the Death Ship. The tragedy involved the deaths of two Filipino nationals - chief cook Cesar Llanto and chief engineer Hector Collado - and Japanese superintendent Kosaku Monji on board the Panama-flagged coal carrier in 2012. 

A coroner's inquest into the two deaths, which will hand down its findings next Friday in Sydney, heard that guns were being sold on board and that assaults on and intimidation of the crew was widespread. It also heard that the three crew members most likely met with foul play.

Previously, the Australian parliament investigated the inhumane treatment of international seafarers through the 1992 Ships of Shame report. Arrangements surrounding crimes committed at sea were also investigated by the House of Representatives Standing Committee on Social Policy and Legal Affairs following the death of Diane Brimble in 2002 on board the cruise ship Pacific Sky.

The terms of the inquiry called for a comprehensive whole-of-government assessment of the potential security risks posed by flag of convenience vessels and foreign crews. It also called for a review of the Australian maritime sector, with a view to building on 2012 reforms aimed at growing the Australian-flagged
shipping industry in the future. 

The government state that it does not support the need for these reviews as the Australian Government has already undertaken a number of reviews including the 2014 Tasmanian Shipping and Freight, Productivity Commission Inquiry Report, the 2012 Strengthening Economic Relations between Australia and New Zealand, Joint Australia—New Zealand study, the 2015 Competition policy review (Harper review) and the 2017 Regulation of Australian Agriculture, Productivity Commission report.
 
A review of the need to tighten temporary licenses granted to flag of convenience vessels being used on permanent coastal freight routes if they fail to pay Australian award wages to their crew was also rejected.

A recommendation that the Australian government look for ways to support the Maritime Labour Convention (MLC) to make flag of convenience shipping more accountable to international law and, when in Australian waters, to national regulations was noted by the government.

The Maritime Union of Australia has issued a statement saying that it rejects the Government’s responses. In support of the Union, Opposition Senator Glenn Sterle says:

“Through its response to the Senate's Rural and Regional Affairs and Transport References inquiry into the increasing use of so-called flag of convenience shipping in Australia, the Turnbull government has openly admitted that it does not care one iota about the future of Australian shipping. It has also given the green light to the world's worst practices on board flag of convenience vessels which involve the atrocious treatment of some of the most vulnerable and exploited workers on the planet,” he said.
 
“This inquiry has been looking into the shocking standards, decrepit conditions and rapacious culture of the flag-of-convenience industry. It is one that fills the void in our domestic trade once Australian-crewed, -managed and - registered vessels have been dumped for a cheaper and nastier option. This inquiry has heard of crew abuse, stolen wages, extraordinary security threats and a culture of lawlessness which exists on flag of convenience shipping.” 

Sterle said unscrupulous operators use flags of convenience to avoid paying tax, to avoid providing proper wages and conditions and to avoid responsibility. “Flag of convenience shipping represents a race to the bottom which Australia should not support. Flag of convenience shipping represents a serious threat to Australia's national security, environment and fuel security, as well as to the lives and welfare of international seafarers. Flag of convenience shipping should not become the new normal for vessels running around our coast.”

However, the government says it works closely with international agencies, including the International Labour Organisation (ILO), to ensure seafarers globally are afforded minimum rights and conditions of employment when engaged in international shipping. The MLC establishes minimum working and living standards for all seafarers working on ships and was ratified by Australia in 2011. It entered into force around the world on 20 August 2013. The MLC provides seafarers with fair terms of employment and guarantees them safe, secure and decent living and working conditions on board ship, said the government.