Sailors caught in Australia–China trade war
A message from Virendrasinh Bhosale pops up on my phone: “Free, I feel free like a bird. Soon I’ll embrace my son in my arms.” Bhosale is one of 23 Indian sailors stranded onboard the Jag Anand, which has been anchored in Chinese waters for six months with Australian coal in its hull. The bulk carrier was finally given the green light to divert to Japan for a crew change on January 10. For many of the men, the seafarers caught in the crosshairs of China’s trade stoush with Australia, it’s the first time they will be able to stand on solid earth in 21 months.
Bhosale’s wife, Shweta, is living in the city of Pune in India’s west. She is an anaesthesiologist, working during the Covid-19 pandemic. She and Virendrasinh have a five-year-old son. “My son keeps asking about his father,” Shweta has told me in earlier exchanges. “I don’t know what to tell him”. Today though, her response is swift: “There are butterflies in the stomach.”
Meanwhile, onboard the Anastasia – another ship with Australian coal in its belly and no Chinese clearance in sight – Indian seafarer Gaurav Singh asks, “Why can’t we leave?”
“We have lost all spirit,” says Singh of his crew – 16 Indians, one Filipino and a Russian who have been stuck in limbo for six months awaiting permission to berth at Caofeidian port.
Singh sends a photo of chunks of ice surrounding the vessel. “It is minus 3 outside. We are like zombies, not interacting, just thinking about the worst things in the world.”
Last month, one of the Anastasia’s crew cut his wrists after learning his wife and two sons had Covid-19 and that he would not be allowed to go home, despite his contract expiring six months before. Singh lists his crew’s struggles: they are sick, their families need them, the drinking water is contaminated. He sends photos of rashes that weep with fluid. “We think it’s the water,” he says.
To rub salt into the wound, the crews watch as newly arrived bulk carriers from Russia, Canada, South Africa and elsewhere are allowed to berth in Chinese ports, discharge their coal and leave within days.
There are about 1200 seafarers on 70 ships carrying Australian coal anchored off the coastline of China. They are stuck in an unprecedented stalemate as the Chinese ports refuse to discharge the coal due to Beijing’s unofficial Australian export ban, while the ships’ charterers – some engaged by Australian importers, others by Chinese – claim the Chinese coal buyers are refusing to let the ships leave until they discharge their cargo.
Much as Covid-19 has revealed the precarious gig economy that exists in our suburbs, cities and in the regions, this crisis has brought to the fore the far larger plight faced by seafarers. A complex constellation of companies hold an interest in the 70 ships and their cargo, obscuring responsibility for seafarers onboard and their wellbeing. On the sea, workers’ rights are a distant priority.
Consider, for example, the supply chain of the Anastasia. Last year, 90,000 tonnes of coking coal, purchased from Fitzroy Australia Resources, was loaded onto the ship with “free on board” terms. This means the cargo is automatically the property of the customer, Chinese company E-Commodities Holdings, and it is in charge of the shipping. But there are many other players involved. Jiangsu Steamship has been reported as the ship’s voyage charterer, which means they have leased the vessel with its crew already onboard to deliver the cargo, and the transaction has been overseen by the Chinese shipping agency Tangshan Hongyuan International.
Fitzroy Australia Resources declined to comment on the stranded seafarers, pointing to the free on board terms. E-Commodities Holdings and Kevin He at Jiangsu Steamship did not respond to repeated requests for comment. The agent, Zhao Liwei, said he deals only with the paperwork. From Geneva, a spokesperson for the ship’s technical operator, the Mediterranean Shipping Company (MSC), stated the company has been “continuing to urge on a daily basis that a solution be found for the seafarers onboard”. But, they added, the company is “not in contact with the voyage charterer or the cargo owner/receiver, if there is one…”
“Welcome to the Wild West,” one maritime lawyer says when asked how many charterers a single vessel can have. “Some ships might come with their own crew and have a ship operator who then engages voyage charterers, or time charterers who lease a vessel for a period of time, and they engage sub-charterers.”
Adding another layer of complexity, MSC has registered the Anastasia in Panama, a tax haven with a track record of failing to investigate deaths at sea and turning a blind eye to poor working conditions, such as forcing seafarers to serve longer stints and underpaying crew.
“The situation is unprecedented,” says Gavin Vallely, an international lawyer at Holman Fenwick Willan with more than two decades’ experience in shipping and trade. Vallely has kept a close eye on the stranded Australian coal carriers and says several of the charterers are Australian and have been engaged by Australian coal sellers. In instances where the Australian coal has been sold to Chinese buyers on a “cost and freight” basis, rather than free on board terms, the onus is on the Australian seller to deliver the cargo.
Vallely points to the notion of demurrage, which is built into freight contracts to ensure costs can be claimed when delays occur. In the first instance, vessel owners or the lead charterer can claim demurrage from the charterer in charge of the delivery and in turn that charterer can recoup these costs from the company – be it the importer or exporter – who engaged them, and so on. There is a hitch though. The most common position in these sorts of contracts, says Vallely, is that the entitled demurrage and recouped costs cannot “crystallise” until the discharge of the cargo has been completed.
Vallely says one argument the buyers in China will be advancing to ship owners and charterers is that “you have no contractual basis to take your ship away because your compensation is demurrage”. Vallely explains this can be used as a legal argument to threaten the vessels with arrest if they attempt to leave with the buyers’ cargo still onboard.
“These Chinese buyers have huge exposure to demurrage,” Vallely says. “It is said there are some ships where the demurrage bill is now in several millions of dollars.” When I ask Vallely if there are any references to crews and their welfare in these contracts, he points to liberty clauses – “standard clauses that incorporate international conventions which allows the [ship] owners to do things to comply with their obligations”.
And the buyers of the coal, do they have any duty or responsibility to the crew?
Vallely pauses. “I can’t immediately think of a legal liability to the crew that deals with this situation. They have other duties of care to the crew – for example if someone was to load an explosive cargo and they were injured, there’s definitely duties there, but this is such a unique situation and one of the reasons these vessels have been there for so long is due to the fact that there isn’t really any established law to deal with the scenario.”
The International Transport Workers’ Federation says there are up to 400,000 seafarers trapped at sea on expired contracts, pinging between ports as countries refuse to let them disembark for fear of Covid-19. It’s a recipe for disaster, says a federation spokesperson. “These are seven-days-a-week, 12-hours-a-day, always-on-call contracts,” the spokesperson says. “Fatigue”, they note, was found by the Australian Transport Safety Bureau to be the major culprit in a shipping accident in 2010 that caused a Chinese-owned coal ship, Shen Neng 1, to run aground on the Great Barrier Reef. The crash left a three-kilometre scar and caused oil tarballs to wash up on nearby islands.
Today, more than 90 per cent of Australian trade is carried by sea. Seafarers are integral to these supply chains and yet Australia was conspicuously absent at last year’s virtual International Maritime Summit on Crew Change. Organised by the British government, the gathering saw 15 countries – including the United States, France and Indonesia – take a unified stance to reaffirm the Maritime Labour Convention, to which Australia is a signatory, which states a seafarer’s tour of duty is kept to a duration of no more than 12 months.
“Australia didn’t even dial in,” said Paddy Crumlin of the Maritime Union of Australia.
Held in July, the summit urged Maritime Labour Convention signatories to recognise seafarers as “key” workers in order to facilitate safe crew changes despite the pandemic. In December, the United Nations General Assembly and the International Maritime Organization restated with some urgency that seafarers are key workers, noting the dangers of fatigue at sea, as well as that holding seafarers hostage in their workplace is a human rights violation. To date, 45 IMO members recognise seafarers as key workers. Australia is not among them.
Four years ago, an Australian senate inquiry into the contentious practice of “flag of convenience” took the view that if the current state of the maritime sector wasn’t reviewed in Australia, “the government is failing to address the serious security, economic, human rights and environmental vulnerabilities in the sector”.
As yet, the federal government has not conducted a comprehensive review. If there had been one, it might have resulted in a more robust framework to protect the rights of seafarers involved with Australian resource exports, including those now caught up in the coal standoff in China.
The Australian Maritime Safety Authority oversees port state control, which conducts safety and welfare inspections on random commercial vessels. Last year – from May through to November – the authority detained a total of 12 vessels Australia-wide for non-compliance with the Maritime Labour Convention. This included 11 crew with expired contracts, unpaid crew wages and poor living conditions. Two of the vessels were coal carriers, neither bound for China.
Gavin Vallely has no doubt international freight contracts will be negotiated differently from now on. “Whether they change globally or simply in relation to shipments to China, there will be contractual changes where if cargoes are not discharged within a certain amount of time, there will be options to terminate.” But it’s notable the liberty clauses, already in place to protect crew, don’t work. Demurrage holds serious weight in the shipping world; the wellbeing of the crew onboard holds very little.
Earlier this month, in Western Australia’s Albany port, a Vietnamese seafarer jumped the railing of his ship, 20 metres above sea level. Swimming to shore, the man disappeared, triggering a manhunt over concerns a Covid-19 super-spreader was on the loose. Later, when he was caught and tested negative, radio hosts joked about the sailor who swam to shore and caught a bus to Perth.
At no point did anyone consider the desperation that compels a man to jump over the side of a massive ship into a foreign sea.
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This article was first published in the print edition of The Saturday Paper on Jan 23, 2021 as "Cruel seas".
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