For a vessel flying a flag of convenience (FOC) and its crew not covered by an ITF-approved Collective Bargaining Agreement (CBA), the owner should pay especial attention to the ITF clause in the time charterparty, which basically requires signing of a ITF-compliant agreement with the employed crew. However, there have been cases where ITF does not approve the employment contract despite its conformity to national laws and International rules, further leading to charterer claims against the owner.

ITF clause examples

1. Owners guarantee that vessel’s crew are employed under terms and conditions approved by ITF or ITF affiliated.

2. Officers and crew of the Vessel are covered from the duration of the Charter Party by and I.T.F. agreement or other bona fide trade union agreement conforming to I.T.F. standards, acceptable to the ITF.

3. Owners warrant that the Officers and Crew are covered, for and during the currency of the Charter Party, by an ITF Agreement or other bona fide trade union agreement conforming to ITF standards acceptable worldwide.

In addition, an ITF clause may sometimes be incorporated into Vessel’s Description, usually the first of the rider clause:

1.      ITF TO BE IN ORDER;

2.      OWNS GTEE VSL FULLY ITF COMPLIANT…

ITF versus FOC

You might be wondering why ITF, as an unofficial organization which exists for the interests of workers in transport jobs, has a say in the shipping industry. The reason is rooted in its long-term campaign against FOCs since 1948. It has been working on protecting seafarers from being exploited by owners of FOC ships, and finally, towards the eradication of FOC registry. Currently, there are 32 countries that have been declared FOCs by the ITF.

FOC as an open registry does not have a nationality or residency requirement for ship registration. By “flagging out”, shipowners can take advantage of minimal regulation and very low taxes as well as the freedom to employ cheap labour from the global labour market. However, the ITF believes there should be a “genuine link” between the real owner of a vessel and the flag the vessel flies. Workers onboard a FOC vessel are not protected by the labour law in the owner’s country/region and may be working long periods in poor conditions with very low wages. FOC registry makes it more difficult for unions and industry stakeholders to hold shipowners to account.

Three categories of ITF Agreements

1.      Standard Agreement

2.      Total Crew Cost (TCC) Agreement

3.      International Bargaining Forum (IBF) Agreement

The ITF Standard Agreement is normally signed as result of industrial action or if a company is found to have broken a previous agreement. It is the most costly agreement for the shipowner. As IBF Agreements are only available to shipowners that are members of one of the shipowners’ associations that sit alongside the ITF in the International Bargaining Forum (IBF), the ITF TCC Agreement becomes the most common type of ITF Agreement among shipowners. Most affiliated unions use the ITF Uniform TCC Agreement. Several other ITF-approved TCC Agreements which have been adopted by affiliated unions worldwide based on different national legislation are also used.

Shipowners can obtain the ITF Blue Card by contacting local unions or ITF directly – fill out the 16-point questionnaire and submit it to ITF for approval (normally takes 2-4 weeks); sign the Special Agreement; pay union membership fees and the ITF Welfare Fund contributions; sign TCC Agreement and ITF issues the Blue Card.

ITF global influence

The ITF is having a growing global influence as it has developed an inspection network worldwide and it has been providing collective agreement coverage for all seafarers, irrespective of their nationality, for decent wages and conditions on board FOC ships. Once ITF inspectors find any incompliance with the agreement, ITF will interfere with the ship’s operation by engaging dockers, pilots, tug crew, cargo handlers and agencies in a strike through its affiliated unions, especially in North Europe, North America, Australia, Japan and other countries/regions where ITF plays an important role.

This may bring forth charterers’ claims if the owner fails to assume his responsibilities under the charterparty. Or the charterer may be subject to loss of profits if sub charterers know about the situation and refuse to take on the ship. Owners will then have to sign Special Agreement with ITF. Not only do they have to pay membership fees and welfare contributions, backpay will also be recovered in compensation to seafarers.

Ever since the entry into force of Maritime Labour Convention 2006, the international community has attached increasing importance to protecting seafarers’ rights. Standard employment contract has been developed in many countries and regions, including The Collective Bargaining Agreement for Chinese Crew developed by the National Committee of the Chinese Seaman & Construction Workers’ Union and the China Shipowners’ Association. In case the ITF does not approve, FOCs’ owners are advised to obtain the blue certificate if the ship will call on port with ITF inspectors.

Although ITF Agreements apply only to ships flying FOCs, ITF inspections may be carried out on ships registered in countries/regions other than FOC countries, demanding CBA coverage onboard ships. Nations with open registry but under strict supervision, for example Hong Kong, can be the target. There are three ITF affiliated unions in Hong Kong – the Merchant Navy Officers’ Guild Hong Kong, the Hong Kong Seaman’s Union and the Amalgamated Unions of Seafarers Hong Kong. Through HK Seafarers’ Coordination Committee HSCC established by the three unions, shipowners can obtain applicable certificates for ITF compliance.

Advice to Members

Although ITF is not an official organization, it has a powerful influence on the wages and conditions of seafarers working on FOCs. The Club would like to bring the problem to Member shipowners’ notice, especially those not using ITF standard CBA on its FOC ships that the ITF clause in the charterparty should be consistent with the actual requirement in the employment contract. In the event of any conflicting requirements, it’s advisable to revise the wording and expression when negotiating the charterparty. Contact ITF affiliated unions or the Club once there are any ITF-related problems during the execution of contract. More information can be found on ITF Seafarer official website https://www.itfglobal.org.

For further information, please contact CPI FD&D team.