With the “S” in ESG finally garnering some attention (though next week we will get back to the “E” with “Mission Possible” coming out of land-locked Davos), the repatriation of seafarers had again emerged on the radar screens inside the shipping world, and increasingly, in the mainstream vantage points. For me, the role of influencers from inside the traditionally closed-off industry (and, these days, teaming up with outside voices) is a subject of fascination- though the mainstream media does take notice. In the same boat, the tendency for shipowners and vessel charterers to join together is a subject of awe and amazement for me, having grown up in a business where, traditionally, there was always some distance (a gulf?) between the two camps, with a reticence for any public pronouncements.
Having seen fuel spreads (the “E”) move back outward to $100/ton, we have financial outsiders now weighing in on the “S”. Just before Christmas, 2020, a group of investment managers (many with ties to religious organizations)controlling some $2 trillion (yes, with “T”) of assets, led by the London UK office of Fidelity International sent a letter on seafarer issues to the U.N.’s Secretary General. Industrial supply chains were very much on the minds of the letter’s authors. Consider that right up in the front of the communique, the writers state: “Collectively, we are invested in every part of the shipping transportation value chain, including ship owners, logistics providers, management companies and charterers.” In the second paragraph, the “…significant humanitarian crisis…underway at sea”, with something like 400,000 seafarers and a similar number of land-bound erstwhile replacements, is mentioned.
Now, in January 2021, we have the “Neptune Declaration”, coming from that influencer of influencers- the Global Maritime Forum, which is a high potency call for action on crew change issues, signed by 300+ owners, charterers, industry associations and others. The declaration emphasizes the human toll that seafarers have taken- encouraging them to be designated as essential workers (with a spot at the front of the vaccine queues). On an instantly practical level, charterers are implored not to impede crew switches by inserting “no crew change” (which begets deviations) into charter parties. A number of shipowners have come out issuing statements ( how times have changed!!!) of support. Back to them in a few paragraphs.
So, what does the voyage towards these investors’ “S” objectives look like? One course of action might be that investors -presumably most of the signers are in the “long only” category, simply dump shares, or pull the plug on debt financings, of shipowners, and more importantly- on charterers (who would be more likely to be listed companies and therefore subject discovery and scrutiny) who are not contributing to a solution. The investor letter specifically mentions “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.” The letter offers a veiled threat, suggesting that signers “…will engage our relevant portfolio companies to communicate our expectations around these measures.” Yikes, paranoia starts running rampant, at least for me.
I am envisioning some starting points- with a data infused approach towards compliance. Consider one situation that’s been in the recent news concerning numerous drybulkers in queues outside ports in north China, waiting to unload coal. Some of these ships have been waiting for at anchorages for several months- with seafarers stuck there. China’s rules, against the backdrop of an ongoing spat with Australia (where the cargoes were loaded) prevent unloading- and also prevent repatriation. Interestingly, charterers have been implored to deviate ships to repatriation-friendly places, with good travel arrangements, in the region. Anecdotal evidence suggests that few have done so.
I know that Neptune signers will not open up charter documents for scrutiny. But data can reveal a lot- this is an opportunity for influencers to put all the data to work. I, for one, would like to see who is taking steps towards “compliance” (this non-lawyer knows that there is no legal obligation hence the quote marks), and who is not. Perhaps the investment managers, along with the signers of the Neptune Resolution, and other assorted/ sundry influencers might caucus with vessel tracking services, and experts who are tracking workaday boring cargoes and can identify whose material is onboard those bulk carriers off China (and elsewhere). After all, the “E” part of ESG has been informed by AIS and other data on a massive scale. And then, let the discharging, and port calls in crew change friendly “jurisdictions” (just repeating, I’m not a lawyer) begin.
