Chinese seafarers
Dispatching contract Employment contract
Foreign ship-owners Chinese crewing agency
As can be seen from the chart, different sorts of contractual relations are involved in the manning process. Seafarers first sign an employment contract with an ISCA, which consequently becomes the buyer of the seafarers’ labour-power and decides all the employment issues; then, the ISCA signs a manning contract with the foreign ship-owner, which is the user of seafarers’ labour, paying the agencies for the labour of seafarers. Consequently, seafarers rely directly on the agencies for employment.
3.1.2 Seafarer labour management in ISCAs
ISCAs manage labour flexibly. They manage officer seafarers and ratings in different ways.
Supported financially by the government, ISCAs employ a number of registered seafarers. They are more likely to be officer seafarers than ratings because of a shortage o f freelance officer seafarers in the Chinese labour market (the quantity and quality of Chinese freelance seafarers will be explored in a later section of this chapter). Many o f the new registered officer seafarers are graduates from maritime colleges and universities, recruited by ISCA through paying educational institutions a large sum of money (10,000 to 30,000 yuan for each student, though different schools required different payments).
ISCAs reserve a number of registered officers by signing a fixed-term contract with them (5-8 years). According to the New Labour Contract Law 2008, most of them are entitled to open-ended contracts after ten years of work. Registered seafarers’ employment issues are decided by the agencies, especially their onboard working opportunities. Unless deployed by the agencies, seafarers are not allowed to work onboard ship. To control this, agencies keep seafarers’ sailing certificates when they are on leave. In addition, ISCAs, like other state-owned agencies or companies, provide registered officer seafarers with training, social insurance and some non-wage benefits.
However, ISCAs do not keep a large number of registered officer seafarers. When the number o f registered officer seafarers becomes insufficient, ISCAs flexibly employ a small number o f officer seafarers from the market or temporarily borrow seafarers from other state-owned shipping companies.
In contrast to the management of the officer seafarers’ employment, the management of ratings’ employment is different. A rating’s job is low skilled. There are redundant ratings in the labour market and crewing agencies can very easily recruit enough ratings with a low salary from the market (Han 2008; Huang 2008). Therefore, the ISCAs recruit freelance ratings flexibly, signing a per-voyage contract with them, which enables the agencies to avoid paying them the benefits that are offered to registered workers.
Having a fixed number of registered officer seafarers and the fact that ISCAs are granted foreign manning qualifications by the government give ISCAs an essential foundation to develop their foreign manning business. These advantages come from the political and financial support of the government at several levels.
3.2 Subsidiary state-owned crewing agencies (SSCA) 3.2.1 The manning qualification
SSCA is another type of state-owned crewing agency in China. Unlike ISCAs, which are established by the government at several levels, SSCAs are set up by state-owned shipping companies through the reform o f ‘separating the management of the seafaring labour resource from the management of ships’ (ren chuan fenli). This
reform was based on the policies proposed at the 14th Party Congress in October 1992, with the aim of establishing a modem corporate system. The goal of setting up SSCAs was to improve the professionalism of seafaring labour management, thus providing more job opportunities to managers and workers of state-owned shipping companies and improving shipping companies’ profits by reducing labour costs. SSCAs were also expected to become market-oriented companies to develop the foreign manning business on a large scale. To this end, SSCAs were granted foreign manning qualifications in the late 1900s with the support of their parent shipping companies and the Chinese government. The contract relations involved in the foreign manning process are the same as those in ISCAs (see Chart 3.1).
3.2.2 Seafarer labour management in SSCA
In contrast to ISCAs, which manage labour flexibly, many SSCAs employ officer seafarers and ratings who are surplus to requirements elsewhere in the company. Except for newcomers, most of these seafarers are former employees of parent shipping companies, having been recruited in the 1970s and 1980s when the reform was not deep. At that time, the shipping companies were asked by the government to help realize full employment, which eventually caused a labour surplus for the companies. Despite the deepening of the reform in the 1990s, the firing of surplus workers was prohibited by the government in order to maintain societal stability. Even when the SSCAs are established to manage all the seafarers’ resources independently, the firing of surplus seafarers is still forbidden. As a consequence, with the support of the government and their parent shipping companies, the SSCAs employ surplus seafarers to fulfil their social responsibility.
The subsidiary state-owned crewing agencies’ (SSCAs) management of the registered seafarers is almost the same as that of the ISCAs. In some cases, SSCAs’ seafarers can enjoy better social insurance and non-wage profits due to better and more direct support from parent shipping companies. However, it is possible for SSCAs’ seafarers to have fewer promotion and job opportunities than ISCAs’ seafarers due to the labour surplus in SSCAs.
register, their situations will not be discussed in this thesis. The following section focuses on the hundreds of newly established POCAs, which are expected to contribute substantially to the seafaring labour export in China (Wu 2004a; Wu et al 2007; Yin et al 2008, p202).
3.3 Private-owned crewing agencies (POCAs)
It is a mistake to think of SOCAs and POCAs as having equivalent rights or importance in China’s shipping industry. Since the labour resource and foreign manning qualifications are two significant factors influencing the foreign manning business, the POCAs’ situations will be analysed by looking at these two aspects, respectively.
3.3.1 Lacking foreign manning qualifications
Unlike Chinese private enterprises in other industries, which were encouraged to develop and were offered preferential policies by the government as early as the mid- 1990s, POCAs were not allowed to register until 2004 with the implementation of the policy “The management measures o f the credentials o f labour service cooperation with foreign countries”.
The reason for this policy release is related to the deepening reform o f China’s economy, particularly the changes in the following two aspects after 2000. On the one hand, a prosperous shipping market emerged in China and, consequently, there was a rapid increase in the number of private and foreign-owned shipping companies. Unlike their state-owned counterparts, many of these shipping companies operated on a very small scale and did not have their own seafarers. Therefore, a great demand for seafaring labour was produced by these non-state-owned shipping companies. On the other hand, due to the restructuring reform in China, many shipping companies went bankrupt and some o f their workers were laid off. The crewing agencies needed to distribute the labour resources. These factors contributed to the changes in the regulations concerning the registration of POCAs.
Despite this new policy, most of the POCAs are still unable to register to operate a labour service in cooperation with foreign companies in the same way as the SOCAs because of the stringent requirements of the registration policy.
The policy, “The management measures o f the credentials o f labour service cooperation with foreign c o u n tr ie s implemented on 26 August 2004 by the Ministry of Commerce, requires any company that applies for these credentials to have been registered for at least three years, with a registered capital o f more than 5,000,000 yuan (3,000,000 yuan for companies in central and western areas of China). The asset-liability ratio of the company must be no more than 50% and the company must have no negative record. The company must be equipped with a sound management system and so be granted an IS09000 Quality Management System Certification. Adequate reserve funds for labour service cooperation with foreign countries must be paid (1,000,000 yuan and 900,000 yuan for companies in central and western areas of China). The business place must be fixed and no less than 300 square meters; there must be no fewer than ten professional administration staff (including more than five professionals with college or higher educational qualifications regarding labour service cooperation with foreign countries with colleges, more than two training and administration staff, more than two financial staff and more than one legislation consultant); in the previous three years, the company must have supplied no fewer than 300 workers to enterprises that have the business qualifications of labour service cooperation with foreign countries approved by the Ministry o f Commerce; and the regulation system o f the company must be complete (Ministry o f Commerce, 2004).
Due to these high requirements, apart from those SOEs that are supported by the government, very few POCAs can meet these criteria. Consequently, most Chinese POCAs are unable to obtain the credentials of Labour Service Cooperation with Foreign Countries.
Therefore, in terms of being authorized to crew foreign ships, Chinese crewing agencies can be divided into two categories (Chart 3.2).