David Galea, a partner at Ince & Co, based in Dubai, has this contribution on how to solve ‘one of the most stark and shameful realities of our industry’ with the creation of a crew abandonment benevolent fund.
For the past seven years we have seen double-digit instances of crew abandonment. Those numbers spiked in 2017. The International Labour Organisation’s Database on Reported Incidents of Abandonment of Seafarers puts the number of reported incidents in 2017 at 61. As I write this piece, in mid-June 2018, there are already 16 incidents reported in that database.
The MLC amendments in 2017 have been a welcome addition to the options available to the crew in trying to make the best of a bad situation. Is the industry doing enough? I think we can honestly say that the answer is “no”. There is more we can and should do to deal with one of the most stark and shameful realities of our industry.
The human cost of crew abandonment should be measured not only by the suffering of the crew onboard. They go through hell, suffering from lack of food, water and other basic amenities. But the reality is that the suffering is compounded for them by the knowledge that they do not suffer alone. Their families at home suffer with them. How many of us (and our families) could profess to being able to survive for months on end without income? From my (admittedly limited) experience dealing first hand with this issue, it wasn’t the physical suffering which led the crew to the edge, it was the mental anguish of not being able to support their families, financially and emotionally. That medical treatment that the family can no longer afford, those school fee payments that are looming, rent or the mortgage. Payments that we often take for granted when the monthly paycheck comes in, but which become the source of endless anxiety and worry when those funds stop flowing.
It is precisely on this aspect that the industry is not doing enough and this is where, I believe, bankers and lawyers can come to the rescue (admittedly, not a phrase you will often hear!).
So what am I suggesting?
A crew abandonment benevolent fund can be another weapon in our arsenal to decrease the human cost of crew abandonment. A non-profit fund (possibly set up under the aegis of the seafarer charities who already do incredible work), dedicated to taking on the claims of abandoned crew.
How would it work?
Depending on the jurisdiction of the abandonment, the fund would take over the crew’s claims against the owners/vessel either by way of assignment or novation and run the claim (either in the fund’s name or on behalf of the crew). The fund would continue to pay the crew’s monthly salaries throughout this exercise and (again, subject to jurisdiction and the priority of the claim) victual the crew throughout this period, working with the vessel’s insurers, other creditors and other institutions active in this space. Once the arrested vessel is sold, the fund would recover its outlay (salaries, victualing costs and legal costs) as a priority debt and would get to keep any accrued default interest on the claim (which interest would be used to make the fund self-sustaining).
Why should the industry bother – we’ve got MLC?
While the MLC amendments go some way to reducing the gravity of these issues, the harsh reality is that some abandoned crew will be stuck oboard these vessels for much longer than the four months provided for under the MLC. Once those four months are over and the crew is unable to leave the vessel, what then?
Where would you get the money from?
The industry as a whole has a (charitable) contribution to make here. Owners, managers, bankers, lawyers, insurers all stand to benefit from contributing. Such a fund would not be expensive to set up, not be expensive to run, and the monetary size of a crew claim is often not particularly prohibitive. The fund’s mandate would be to recover the money it spent, so in itself, it could be a self-sustaining enterprise without the need for a constant inflow of cash if the fund size were sufficient to satisfy the ‘demand’ for it.
Innovation is not only about technology and improving processes. It is not always about reinventing the wheel. Most innovation is about small incremental improvements, the adoption of existing concepts in new fields or looking at a problem from a different angle. A comprehensive solution which eradicates crew abandonment is a while off. Plenty can be done to reduce its impact and disincentivise owners from abandoning crew but in the short term, while crew abandonment remains a reality, we need to do more to reduce its impact on the lives and families of its victims. We owe it to them and we owe it to our industry.
There are several organisations that should have a vested interest in progressing the above concept: the IMO, the ITF, seafarers’ charities (to name the most obvious ones). A discussion on the technicalities of creating, structuring and running such a fund together with strategies for fundraising would be obvious next steps. I, for one, would be very interested in progressing such discussions and I have a distinct feeling I may not be alone.