Asean shipowners oppose ITF model wage scale

The Federation of ASEAN Shipowners’ Associations (FASA) has expressed opposition to the unilateral decision by the International Transport Workers’ Federation (ITF) to establish an ITF model wage scale, a benchmark on minimum wage for non – domiciled seafarers employed on national flag vessels.

In a recent general membership meeting, FASA viewed this initiative as a strong attempt by the ITF, a non-governmental organization (NGO) to unilaterally dictate a minimum wage scale on national flag vessels and which it opined is a clear violation of national policies.

“The underlying intention of this move by the ITF is also viewed as an attempt to force an increase in the International Labor Organization (ILO) minimum basic wage rate for able seaman,” said FASA.

 As the shipping industry has not fully recovered from the impact of the recent global financial fallout, and in light of a potential surge in crude oil prices, FASA is strongly against any impending move by any international seafarers employers’ organization to enter into any direct negotiation with the ITF on any future increase in the ILO minimum wage rate.

FASA stressed that any such increase will put additional stresses on the financial strength of the shipping industry.

Following concerns about climatic changes and rising sea levels, FASA has reiterated that protecting the marine and air environment is one of the primary concerns of the shipping industry.

FASA members have pledged to work together to bring about reduction in greenhouse gas emissions from international shipping.

It also noted with concern a revised accounting standard proposed by the International Accounting Standards Board (IASB) that will remove the distinction between finance and operating leases, forcing owners that charter in tonnage to record period time charters as finance leases and place them on their balance sheets as liabilities – such a standard may force owners into breach of covenant with their lenders and impact on owners’ credit ratings, equipment financing strategy and forecasting models, thereby restricting owners’ flexibility and ability to maneuver.

FASA is of the strong opinion that the proposed revised standard should not be supported as the proposed changes may not achieve the desired effect of comparability but could instead lead to misleading information being provided as well as place a significant burden on the shipowning and ship chartering industry.

FASA chairman Johnson Sutjipto thanked all the FASA members for their strong support and cooperation.

He also urged members to continue and serve the federation with full dedication in the interests of ASEAN shipping.

Sutjipto expressed deep appreciation for the strong confidence and encouragement accorded to him in 2010 and agreed, with the full cooperation of all members, to continue promoting FASA as a voice for ASEAN shipowners.