Investment manager Fidelity International is inviting investors to co-sign a letter to the UN urging swift action by governments to tackle the unfolding “humanitarian crisis” in the shipping sector, caused by restrictions brought in because of the pandemic.
Fidelity reports that more than 400,000 seafarers are stranded aboard vessels and the same amount again remain ashore without work because of strict national restrictions on movement, which prevent crews from disembarking and being replaced. The International Chamber of Shipping, the industry’s representative body, has warned that this number could soon reach one million, if action is not taken.
A key measure called for in the letter to the UN Secretary General, António Guterres, is that all governments classify seafarers as ‘key workers’ and establish “systematic processes to enable safe crew changes such as safe corridors and testing regimes”.
Fidelity’s Global Head of Stewardship & Sustainable Investing, Jenn-Hui Tan, highlighted the importance of this designation by comparing shipping with the airline industry, where this issue hasn’t arisen “because airline crews are classified as ‘key workers’”
He suggested that the shipping sector has been overlooked and “maybe hasn't been regarded as the highest priority area for industry or for governments”.
The letter, however, stresses the significance of the shipping industry for the global economy, describing it as the “key not just to a global economic recovery from the devastation of COVID-19, but to maintaining our current way of life”.
It adds that the current situation is a threat to supply chains and has the “potential to result in major safety risks when exhausted seafarers handle dangerous or perishable cargoes”.
‘Working in this industry before the current pandemic was demanding and stressful, but now, with no chance of the occasional trip ashore, and little chance of being repatriated at the end of your contract, life is very difficult’ – Captain Brian Jennings, who was stuck at sea for three months because of Covid-19 restrictions
Many crew members have been working for up to 15 months, much longer than the industry norm and the regulatory limit of eight months.
“The environmental consequences of a serious maritime accident involving these cargoes could be catastrophic for our oceans and our security,” the letter warns.
Fidelity is already engaging with portfolio companies across the shipping, cargo, airline and retail industries to encourage them to support efforts to address the issue, but notes in the letter: “As investors, we acknowledge our responsibility with regard to the companies of which we are lenders or owners to raise our concerns and seek constructive responses. However, this is not sufficient of itself and governments must also classify seafarers as the ‘key workers’ they surely are to enable them to continue to perform their essential services in a safe and secure manner”.
In consultation with the International Labor Organization and the International Transport Workers’ Federation, Fidelity puts forward a number of recommendations, including:
- Ensuring seafarers do not spend more than the legal maximum of 11 months on board ships
- Urging charterers, especially those that charter vessels on a frequent basis, to be flexible with route deviation requests from shipping companies to facilitate crew change and to consider financial support for the costs of crew repatriation
RI spoke with Captain Brian Jennings, who was stuck off the coast of India for three months with his crew because of Covid-19 restrictions.
Jennings, who has just retired, captained the Melanesian Pride, a merchant ship owned by Singapore-based China Navigation Company, which was due to be taken to a scrapyard in India in March.
He told RI that despite the efforts of the company, the crew were not permitted to disembark in India, Sri Lanka, Pakistan or the United Arab Emirates – and were only able to disembark in India at the end of June, when restrictions were eased.
He said the situation “remains difficult with most countries being uncooperative to expediting crew changes”.
“Working in this industry before the current pandemic was demanding and stressful,” he told RI. “But now, with no chance of the occasional trip ashore, and little chance of being repatriated at the end of your contract, life is very difficult for those people stuck at sea and not much better for those waiting ashore with no money and no chance of getting back to work”.
Fidelity posted details of the engagement on the Principles for Responsible Investment (PRI) collaboration platform.