Lack of transparency and accountability causing a huge humanitarian crisis in the shipping industry

With 400,000 workers stranded on ships, a Bloomberg special investigative report found a humanitarian and environmental catastrophe in the making. And the worst part is that there is no way to fix the responsibility and hence, no way to improve the situation.

400,000 seafarers who have worked past expiration of their original contracts remain stuck on ships. They remain stuck on abandoned ships in foreign ports for several months - often without pay and sometimes without proper food, fresh water or electricity.

Corporate cost management turns massive ships into floating jails for the crew

It is a well known fact that shipping lines and shipping tycoons abandon ships that they hire or own or charter if it does not make financial sense to them. In 2020, cases of abandoned ships were up nearly 90% by even the most conservative accounting according to Bloomberg.

For people who work on land, this is unthinkable and absurd — as if your employer went bankrupt and left you locked in a rapidly deteriorating office for the foreseeable future. But hundreds of seafarers find themselves in exactly that situation, trapped aboard massive ships under the control of foreign ports. Some of the vessels could be sold for several million dollars, but the longer they sit, the further they fall into disrepair. With no one to take financial responsibility for maintenance or, eventually, safely dismantling a ship, some sit idle for years, clogging ports and threatening to leak fuel and waste. Some sink where they’re anchored.

Almost half the crew on-board the JY Ocean bulk carrier had been at sea for more than a year. Similar is the case of hundreds of stranded workers on ships. This leads to loss of physical and even mental health of those workers. But relief is not in sight...

Captain Samig Nabiyev and his crew stranded on a tanker spoke to Bloomberg about the living conditions of himself and his stranded crew.

"When the fuel ran out, so did the power and electricity. The crew stored the meat in the refrigerator of a ship anchored in the next berth. Twice a day, they cooked on a makeshift stove on the ship’s deck. They used water from the ship’s tank to shower, wash clothes and flush toilets. When it got too hot in their cabins, the crew slept on the deck on cardboard and blankets. After 40 days, the ITF arranged a fuel delivery to restore power on board."

There's no deterrence. There's no consequences, no punishment.

Rules are important for any industry to function in a manner that is beneficial to all. But in the case of shipping, the fragmented, global nature of the industry makes them nearly impossible to enforce any rules. Not only that - there is a cloud of obscurity perhaps designed to benefit and shield the large corporations that benefit from such obscurity.

A ship owner might live in one country, incorporate his company in another, and register his ship under the flag of a third. If he abandons it in a port that isn't subject to global labor protections for seafarers, he’ll have the advantage of less oversight and, possibly, favorable legal outcomes.

Whose responsibility is it? There are shipping lines and then there are owners, beneficial owners, staffing agencies and a big wall of obscurity and confusion created by complex legal contracts between them - making it almost impossible to pin responsibility.

"All those layers make it hard to hold anyone accountable" says Richard Meade, managing editor of U.K. shipping researcher firm Lloyd’s List, "or to solve problems when they arise."

Large shipping lines like Maersk, CMA CGM and other multi billion dollar corporations who hire or own or charter the ships in some form or the other to move cargo, are the reason the ships are at sea in the first place. But they flatly refuse to have anything to do with the crisis putting the blame on others and cite solid legal contracts in their defense.

Shipping lines blame owners who then blame operators who then blame staffing agencies and nothing gets done.

The Unison Jasper case illustrates how thinly responsibility can be spread. The ship is registered under the flag of Hong Kong, so the authorities there are responsible for the vessel’s seaworthiness and labor conditions on board. Then there are at least four companies in three jurisdictions with at least a sliver of oversight:

• Registered owner: Emerald Shipping (Hong Kong) declined to comment for this story.
• Beneficial owner and operator: Unison Marine Corp. (Taiwan) didn't respond to emails and phone calls seeking comment.
• Charterer: Lauritzen Bulkers A/S (Denmark): “We find the situation entirely unacceptable and do not want to be associated with this kind of behavior,” CEO Niels Josefsen said in an email.
• Sub-charterer: Pacific Basin Shipping Ltd. (Hong Kong) paid to transport the alumina. Said it knew nothing about the working conditions on board and wasn’t responsible.

The only thing that gets done is usually victimization of the seafarers who decide to blow the whistle and speak about the issue in public.

The shipping industry typically recruits from poor countries where wages are low and complaining is discouraged. Shipping lines and staffing agencies determine when and how workers will get home, down to holding their passports, and seafarers who spoke to Bloomberg asked to be anonymous because they feared speaking out would hurt future job prospects.

Shipping companies and regulators benefit from a complicated and fragmented system that rewards on-time shipments over the welfare of nearly invisible workers. It’s hard to drum up public outrage, said Teresa Lloyd, chief executive officer of trade group Maritime Industry Australia Ltd. “The consumer doesn’t know,” she said. “It’s not like when a sweatshop in Bangladesh catches fire—that’s horrific, and we should all be appalled—we don’t have the same visibility of what’s happening to seafarers.”

In-Depth Report compiled by IWACEF research