Seafarers Count in Ethical Purchasing Decisions

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Published May 22, 2018 7:00 PM by Mark Dickinson

Cast an eye around your home. Much of what you see arrived by sea. Furniture, washing machines, crockery, clothes, home entertainment systems and food – 90 percent of all the world’s goods in fact have been packed in containers and spirited across oceans before they arrive in our shops.

Crewing the world’s roughly 52,000 ships are approximately 1,647,000 seafarers many of whom work dizzyingly long hours, in dangerous conditions, and for far too many, in return for a pittance.

Despite our dependence on their toil, it is surprising how little most people know of these maritime workers.

Most are required to put in a 90-hour week when they are at sea. Stopovers in port can often be just 24 hours – leaving scarcely any time to leave the ship. And for this, far too many receive the globally-agreed minimum wage of just £440 a month ($614, at the current exchange rate of £1=$1.40).

Bananas might well be organic or fair-trade and timber sustainably sourced, but the human cost of shipping goods remains well beneath the public radar. The International Commission on Shipping (ICONS) put the situation in strikingly bald terms. “10 – 15 percent of the world’s seafarers work in slave conditions, with minimal safety, long hours for little or no pay, (and) starvation diets.”

Many shipowners offer far better conditions than the worst, but even the best require longer hours, in hazardous conditions, and greater personal privations than almost any other line of work.

Although in most aspects of their lives seafarers are beyond the reach of domestic laws, they are covered by a global minimum wage agreement. This is negotiated under the aegis of the International Labour Organisation in Geneva and is based on a formula that seeks to maintain the purchasing power of an agreed minimum monthly basic wage for an AB originally set at £16 in 1947 (ILO Convention 76). The good news is that the rate of pay has been regularly reviewed and updated and over the decades has been increased but still only stands at £440 per month.

The bad news is that the basic pay is so shockingly low. The current rate is around £2.12 ($2.85) an hour – a rate that should surely shame us all?

The better shipping lines pay better, it is true, but the global minimum is the peg from which everything starts. A rise in this basic rate would benefit all seafarers.

Negotiations to set the global minimum start in June in Geneva – it is the only internationally-agreed pay floor applied to an entire industry. The talks take place within the Joint Maritime Commission, an ILO standing body that has brought together ship owners and seafarer representatives since 1920.

I will be leading the seafarers’ delegation on behalf of the International Transport Workers’ Federation (ITF) – the organization that brings together the world’s maritime trades unions.

The global minimum wage is based on a formula related to currency fluctuations and buying power in a number of countries that reflect the main shipowning and the countries of labor supply. When you consider what seafarers endure at work and the efficiencies that the merchant navy has achieved in recent years, as well as the importance of cargo carrying to the global community, it is clear that the time has come for a significant rise, whatever starting point is delivered by the ILO formula.

Independent evidence of falling costs and greater efficiency is plentiful. Maritime business consultants Moore Stephens, for example, undertake an annual survey that shows that operating costs are on a downward trajectory across all types of carrier. Richard Greiner, Moore Stephens shipping partner, says: “This is the fifth successive year-on-year reduction in overall ship operating costs.” 

Localized studies reflect this. One by Maritime UK, for example, revealed that: “over five years, the British maritime sector experienced a 12.7 percent increase in turnover, 6.6 percent increase in gross value added and 3.9 percent increase in employment.” 

These studies come at the end of a long period of cost reductions for shipowners. Viewed over a couple of decades, shipping has become significantly more efficient and the number of seafarers has tumbled. Operators now accept that staffing levels are as low as they can safely go with ordinary seafarers now doing demanding and complex jobs. The time has surely come to pass on some of these efficiency gains to these lower-paid workers on whose almost unseen toil we rely so heavily?

There is precedent elsewhere in our industry for a rise. The International Bargaining Forum, which covers around 10 percent of the world’s ships, recently concluded a deal that will see wages increase by 2.5 percent. 

The case I will be making in Geneva, is fundamentally a moral one, and it is one for which I think there is an increasing public support.

Research by Morgan Stanley shows that today significantly more consumers base purchasing decision on perceptions of how ethically companies act, than they did six years ago. And ethical considerations are more important among young consumers than the general population. 

Of course, we will need to build awareness of conditions at sea. That is why we have launched an information campaign fairpayatsea.org. I hope that soon bringing the welfare of seafarers to mind will be an instinctive reflex among consumers. Campaigners against third-world clothing sweatshops have already achieved this, as several retail multinationals have discovered to their cost when their suppliers’ unacceptable labor practices have been publicized.

There is no shortage of raw material when it comes to seafarers’ conditions. Theirs’ is the most physically dangerous, emotionally destructive and socially-isolating occupation on earth. Many circle the globe in penury, as their wages are unpaid - the ITF routinely collects over £30 million ($40 million) a year in unpaid back wages. Port chaplains, describe the heart-breaking gratitude they experience when the give seafarers £10 phone sims, allowing them their first contact with home for weeks.

I will also be pointing employers to a fascinating study by a group of British-based economists which shows that raising minimum levels of pay – particularly in traditionally low-paid sectors – can have a significantly beneficial impact on productivity. Drawing on aggregate data from the British economy since the 1999 introduction of the minimum wage, Professors Richard Croucher, Marian Rizov and Thomas Lange conclude that: “our results support suggestions that public policy has not fully realized the potential benefits of a fair minimum wage.” 

I’m optimistic for the seafarers’ prospects at the Geneva negotiations. And whatever progress the union side makes, it will allow us all to scan retail aisles in slightly better conscience. Whatever sweat seafarers might expend in future to fill those shelves, I am determined that in future it will be better rewarded.

 Mark Dickinson is General Secretary of Nautilus International.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.