Grappling with Crew Claims in the Philippines? Here’s a Doable Solution
The United Nations Conference on Trade and Development (UNCTAD) report placed the Philippines as the top-ranking supplier of ratings and officers to the world’s fleet. The Filipino seafarers earned USD 6.5 million in 2019. And, despite the huge challenges brought about by the COVID 19 pandemic, the Filipino seafarers still earned a total of USD 6.4 million in 2020.
The Filipinos being the preferred seafarers by shipowners comes certain legal risks - crew claims. Since 2004, the Philippine government, local manning agents (LMA) and foreign shipowners have been grappling with this problem that threatens to annihilate the crew supply industry.
In 2000, the POEA Standard Employment Contract for Seafarers (SEC) came into force. This is when the claims number began to spiral out of control. The 2000 POEA-SEC introduced for the very first time the phrase “work-related” in relation to the liability of LMAs and Shipowners for injury, sickness or death that the Filipino seafarer may suffer. That in order for the Filipino seafarer to be entitled to medical benefits or disability compensation, the sickness or injury must be “work-related”. For his/her legal heirs to receive death compensation, the death of the seafarer must be “work-related”.
The seemingly innocuous phrase “work-related” cost the Shipowners a whopping USD 359.5 million in judgment awards from 2013-2018 in claims filed by Filipino seafarers before the Philippine labour court and arbitration body whose rulings at their level are immediately executory.
The worse part is that once the judgment award is paid to the seafarer and his lawyer, there is Zero chance of recovering the judgment award even if the ruling is reversed by the appellate court or the Supreme Court. The money paid just magically disappear. The Shipowners must file a separate lawsuit before the regular courts of law in order to recover the judgment award which is sadly an exercise in futility.
WHAT IS THE SOLUTION?
Align the POEA-SEC to Regulation A4.2 on Shipowners Liability of the Maritime Labour Convention 2006. The relevant provisions are set out below, viz:
a) “Shipowners shall be liable to bear the costs for seafarers working on their ships in respect of sickness and injury occurring between the date of commencing duty and the date upon which they are deemed duly repatriated, or arising from their employment between those dates.
b) Shipowners shall provide financial security to assure compensation in the event of death or long-term disability of seafarers due to an occupational injury, illness or hazard, as set out in the national law, the seafarers’ employment agreement or collective bargaining agreement.”
According to quoted MLC 2006 provisions, for as long as the illness, injury, or death occurred whilst the seafarer is serving his/her contract on board, the seafarer is entitled to medical benefits, disability compensation and death compensation. It is simple and straightforward – Zero ambiguity. We discovered during our research that the highest number of claims stems from the evaluation and determination by the LMA appointed doctor of whether or not the sickness, injury or death is work-related. A pronouncement of “not work-related” is like waving a red flag in front of a raging bull.
The Philippines is a signatory to the MLC. There were efforts to align the 2010 POEA-SEC with MLC 2006. I was part of the Tripartite Task Group consisting of Government, Union and Employers who drafted the 2010 POEA-SEC, we were unfortunately overtaken by events that prevented us from tackling the POEA-SEC section on Compensation & Benefits.
HOW TO EFFECT THE CHANGE ASAP?
By simply stipulating the quoted MLC provisions in the Collective Bargaining Agreement (CBA). Setting out in the CBA that Shipowners shall be liable for the sickness, injury, or death occurring whilst the Seafarer is serving his/her contract on board is more advantageous to the seafarer than the POEA SEC where the liability of Shipowners is qualified with “work-related” only.
The 2010 POEA-SEC was short of four (4) years in the making. Given the national elections in May 2022 and the ensuing change in the administration, it may take longer than four (4) years to draft amendments or revise the POEA SEC to align the section on Compensation and Benefits with the Article on Shipowners’ liability of the MLC. Writing the relevant MLC provisions in the CBA is the quicker route.
Attorney Imelda L. Barcelona is a maritime lawyer, owner and CEO of AGILE Maritime Phils. (www. agilecrew.com), owner and CEO of Lubeca Protection & Indemnity Phils., Inc. (www.crewclaims-lubpi.com) and President of Woman's International and Trading Association (WISTA) Philippine Branch.