Analysis

Placing seafarers’ access to social security on the radar

Analysis

Placing seafarers’ access to social security on the radar

A new article published by the International Social Security Review offers a fascinating analysis of the implementation challenges for seafarers’ social security protection. With national economies increasingly reliant upon global supply chains and an international supply of labour, this article spotlights one sectoral challenge to the effective realization of universal social protection.

Much of human history is the history of seafaring cultures and the history of trade the product of the hard and often dangerous work of seafarers and other maritime professionals. The evidence of the current phase of globalization presents continuity in this regard. In 2020, figures from the International Labour Organization (ILO) suggest that maritime trade represents approximately 90 per cent of global trade. It is noteworthy that this is made possible largely by the work of a relatively small workforce of just over 1.5 million seafarers.

The ILO’s World Employment and Social Outlook 2020 reports that there are 3.3 billion employees worldwide. In absolute terms, seafarers represent a minute fraction of the global employed workforce. The relatively small size of the seafaring workforce, as well as the relative lack of visibility of this group of workers, means that the labour and social rights of seafarers are often less discussed than for other groups of vulnerable workers, especially those that are deemed to be more exposed to risks at work and whose livelihoods are less secure.

A case at hand is the current important focus of the ILO and other agencies and non-governmental organizations on the rights of the 2 billion workers, including over 720 million casual or salaried wage workers, engaged in informal employment. According to ILO figures, informal workers account for 61 per cent of the global workforce.

The policy priority given to workers in informal employment is clearly appropriate and necessary. Regardless, the purpose of this article is to focus on the challenges in accessing full rights to social security protection for one specific sector of the global workforce: employed seafarers.

The challenges that confront seafarers’ access to social security are worthy of reflection.

Seafarers, like other workers and employees, have fundamental rights to decent conditions of work. The International Labour Organization Maritime Labour Convention, 2006, as amended (MLC, 2006) asserts (Article IV) that:

  • Every seafarer has the right to a safe and secure workplace that complies with safety standards.
  • Every seafarer has a right to fair terms of employment.
  • Every seafarer has a right to decent working and living conditions on board ship.
  • Every seafarer has a right to health protection, medical care, welfare measures and other forms of social protection.

In principle, as determined by the broad coordinating framework of international legal instruments as well as regional and bilateral national social security agreements, seafarers have access to social security. In practice, seafarers may face obstacles when seeking to access this protection.

Coverage extension and access to social protection

Extending universal access to at least basic social security protection is a fundamental human rights issue. As a stated ambition of the global community, this is expressed through the ILO’s social security Conventions and Recommendations and the objectives of the United Nations Sustainable Development Goals for 2030.

Taking into account national conditions, the objective is to ensure sustainable and adequate coverage, adapted to the needs of different population groups. Nonetheless, achieving universal coverage, as a necessary step towards developing comprehensive systems of social security, is work in progress.
The socioeconomic fallout of the continuing COVID-19 pandemic has led the ILO Social Protection Department (Razavi et al., 2020) to report that in many countries, income inequalities have worsened and vulnerabilities have been exacerbated.

These developments have amplified existing trends witnessing a growth of dualistic labour markets. While some workers retain stable and permanent employment contracts and access to full labour and social rights, for others there is a shift towards greater flexibility in working conditions, shorter-term contracts, a growth in self-employment and own account work, atypical forms of work and informality, fragmented work histories and incomplete access to social security protection. At a global level, the ILO’s Global wages report 2020-21 reports that an emerging impact of the COVID-19 pandemic is to place downward pressure on wages.

In addition to the adverse labour market and employment impacts of the COVID-19 pandemic, wider ambitions to extend and improve levels of social security protection coverage have stagnated, and, in some cases, progress has been reversed.[1]

In this extraordinary global context, the predicament of seafarers has remained relatively under-reported. While the commitment of many “key workers” has been applauded, seafarers have only rarely been accorded the same recognition, despite their essential role in maintaining global supply chains, not least for medical supplies, food and fuel. One significant response has seen the Governing Body of the ILO adopt a resolution to assert that urgent action is required to address the needs of seafarers, some of whom have worked excessively long continuous periods at sea because of the COVID-19 pandemic.

The International Maritime Organization reports that the travel restrictions introduced in 2020 to alleviate the COVID-19 pandemic have left hundreds of thousands of seafarers either stranded on ships, thus extending their time at sea and separation from their families, or unable to join ships in order to work. The fact that the maritime labour force is increasingly international and that work contracts are increasingly short-term has left seafarers more vulnerable to social and economic risk during this crisis period.

Seafarers’ social protection needs

As a group of workers, seafarers face a number of challenges common to other groups of workers, such as the growing use of short-term employment contracts. Their situation also reflects that of other workers engaged in cross-border work and employment. Workers who cross national borders may not get access to any national social security scheme or get access only in a limited way compared to other national or resident workers in the country.

Bilateral social security agreements, and to a lesser extent multilateral agreements, represent important responses to improve access to social security for these workers. In practice, however, bilateral agreements, which are the most prevalent instruments, are not uniform, with divergence in terms of the coverage they may provide to workers.

Furthermore, to access full social security entitlements, seafarers also face challenges that are particular to the nature of their maritime professional activities. These challenges can relate to identifying:

  • the national jurisdiction where the employer is domiciled;
  • the jurisdiction of the seafarers’ place of residence;
  • the jurisdiction for the collection of employee income taxes; and
  • the jurisdiction for payment of employee social security contributions, as well as for designating the social security institution that should pay benefits for which the seafarer may be eligible.

Implementation challenges for seafarers’ social security protection

These important questions underline that greater consideration must be given to the challenges that accompany the realization of accessible social protection for seafarers. They also help to explain why private insurance arrangements for workers often remain the norm in the maritime sector.

Drawing attention to these challenges, the International Social Security Review (Vol. 73, No. 4) has published an open access article by Laura Carballo Piñeiro entitled “Implementation challenges for seafarers’ social security protection: The case of the European Union”.

Though the article has a selective focus on the particular case of the European Union and its Member States, the author offers a number of general observations of global relevance.

A key observations is that full access to social security benefits is often a difficult, if not impossible, task for many seafarers. As Carballo Piñeiro explains, “the challenge of seafarers and other maritime professionals is that their services are provided on board a ship that navigates through different jurisdictions and the high seas, thereby they do not carry out their activities in a territory”.

To resolve the challenge posed by the lack of a single national jurisdiction, legal responses have resorted commonly to allocating all matters on board a ship to the law of the “flag State”. Article 94 of the United Nations Convention on the Law of the Sea (UNCLOS) specifically requests States to “assume jurisdiction under its internal law over each ship flying its flag and its master, officers and crew in respect of administrative, technical and social matters concerning the ship”.

However, in practice, this has led to legal disputes involving seafarers, shipowners, employers as well as national authorities regarding the enforcement of responsibilities and the recognition of liability for the provision of entitlements. As a consequence, the ILO’s Maritime Labour Convention, 2006 (also known as the Seafarers’ Bill of Rights), has abandoned the flag State principle in favour of the residence principle. In other words, this places labour-supplying countries at the centre of the seafarer’s right to social security.

Moving from the flag State principle to the residence principle

The residence principle offers advantages including improved administrative efficiency and effectiveness and enhanced coordination between institutions responsible for social security contributions and personal income tax in cross-border situations. Specifically, for seafarers who have worked in more than one country, social security contributions are to be paid to one system only at any given time.

In turn, the States concerned are obliged to coordinate and ensure the principles of aggregation and the maintenance of acquired rights for those workers in the course of acquisition. They are equally obliged to ensure the payment (portability) of benefits to beneficiaries residing abroad. These are principles that are common to the protection of the social rights of cross-border workers generally.

Adequate social security protection for seafarers

Clearly, the goal is to permit access to adequate social security protection for seafarers. Yet, while the MLC, 2006, provides an international legal instrument to support the realization of this goal, a number of practical challenges remain.

Though the MLC, 2006, entered into forced in 2013, many countries have not yet implemented its provisions. Another challenge is the lack of coordination between systems of personal income tax and social security provisions in many countries. With seafarers engaged often in cross-frontier work, in the absence of clear bilateral agreements regarding the payment of income tax as well as social security contributions, seafarers may face a risk of double taxation – or no taxation at all.

As such, in addition to the slow implementation of MLC, 2006, not only is cross-border cooperation among social security authorities challenging but cooperation can be more challenging, and even non-existent, between different national tax and social security authorities. As a consequence, seafarers may continue to be deprived of their full taxation and social rights.

In conclusion, in Carballo Piñeiro’s view the amended MLC, 2006, which has formalized a move from the flag State to the residence principle, is to be praised. While practical as well as legal obstacles to improved coordination remain to be overcome, the Convention “acts to remind us that seafarers are no less entitled to the human right to social security, and it lays the foundations upon which to provide it”.

Key reading

Carballo Piñeiro, L. 2020. “Implementation challenges for seafarers’ social security protection: The case of the European Union”, in International Social Security Review, Vol. 73, No. 4.

Razavi, S. et al. 2020. “Reinvigorating the social contract and strengthening social cohesion: Social protection responses to COVID‐19”, in International Social Security Review, Vol. 73, No. 3.

Contact information for the International Social Security Review: The Editor, at mckinnon@ilo.org.

Footnote

  1. Policy responses to the socioeconomic impacts of COVID-19, not only to alleviate the shock to national labour markets and the economy, but also to prime national economies for a relaunch of activity once the pandemic is controlled, are many. The International Social Security Association’s (ISSA) COVID-19 Social Security Responses online monitor has become a hub for the collection and sharing of good practices in this regard.