Global shipping stakeholders identify ambulance chasing and the Philippines’ mishandling of crew claims as the biggest threats to Philippine seafaring — an industry that remits $6 billion annually into the Philippines. The market share of Filipino crew has shown a steady decline of 50 percent in a short span of 20 years. In 2000, Filipinos consisted about 28.5 percent or more than a quarter of the global seafarer population onboard ships. However, in 2020, Filipino seafarers are down to only 14 percent. Foreign shipowners and the International Maritime Employers Council (IMEC) have fearlessly forecasted that Filipino seafarers can disappear from the market in the next 10 years despite previously enjoying the privilege of being the seafarer of choice. Over the past 10 years, Filipino seafarers have displayed relentless litigiousness fueled by ambulance chasers who prowl post-medical clinics, airports and streets to find potential seafarer claimants.

Unfortunately, seafarers have been winning overwhelmingly at the National Conciliation and Mediation Board (NCMB) level where, at times, the hearings do not inquire into the facts and law of the case but are reduced to negotiations on how much the shipowner shall pay regardless of the validity of the claim. Due to existing law, the shipowner pays the award decided by the NCMB immediately upon release of the decision even if a party appeals the NCMB decision.

Most of the time, when the Supreme Court or the Court of Appeals overturns or modifies the decisions in favor of the shipowners, the seafarers are unable to restitute the owners of the garnished amounts. Despite a categorical ruling by the appellate courts that judgments unduly awarded to seafarers were wrongfully made and should be returned to the shipowners, the Filipino seafarer claimants are unable to return the awarded amounts.

As of September 2019, the Filipino seafarer claimants were unable to return a total amount of $34,500,000 or about P1,748,891,250 to their employer shipowners. If the NCMB or NLRC rendered a quality decision in the first place, then, the number of reversals at the appellate courts should not be this significant.

 

Eroding Philippine seafaring from global shipping

It is widely known in the seafaring industry that the seafarers’ inability to return the award is mainly because they did not receive the full award in the first place. Many seafarers would eventually grumble that their lawyer receives up to 50 percent of the award and even more. This practice is so widespread that Republic Act 10706, otherwise known as the “Seafarers Protection Act” states:

“SEC. 2. Declaration of Policy. — It shall be the policy of the State to promote and protect every Filipino seafarer desiring to work overseas by securing the best possible terms and conditions of employment. As some unscrupulous individuals have taken advantage of the plight of our seafarers who met an accident, illness, or death in the course of their service by exploiting the compensation system, our seafarers have fallen prey to an unfair scheme where ambulance chasers charge exorbitant fees, with the promise of huge monetary award. Towards this end, such practice shall be declared unlawful.”

Unfortunately, RA 10706 was unable to curb the unbridled crew claims which continued to increase in numbers despite the law’s passage. More damaging is the persistent culture of employers “settling cases under duress” to mitigate their losses. Too often, considering that a just case has only a one percent chance of winning, the shipowner employer is forced to settle cases rather than drag itself into litigation which they know they would lose anyway. The total amount settled under duress has not been calculated, however, there are indications that it could be much bigger than the amount of quantifiable damages of P1,748,891,250.00.

 

Impact of unreturned P1.7B NCMB awards and settlement-under-duress culture

Aside from the Philippines’ striking reduction of market share in global shipping, there are other known consequences to this unbridled crew claims situation in the Philippines, including an increasingly stringent pre-employment medical examinations as well as the lowering of the age limit of the employable crew. Most shipowners now require a very thorough executive medical checks of their seafarers for every ship joining because there are many instances where the NCMB renders the shipowner liable for seafarers’ medical conditions that are not even work-related such as pre-existing conditions, congenital conditions or degenerative diseases.

There is a growing number of shipowners who avoid hiring a crew who are 55 years old or older as older age comes with higher risks of medical complications. Arguably, this age limit is more strictly enforced on the highly litigious Filipino seafarer than on any other nationality considering that any flexibility on the part of the employer shipowner could result in unnecessary liability.

Spurious seafarer claims have been ruled favorably by NCMB. For example, a seafarer involved in a fistfight onboard against another seafarer had been granted a “total and full permanent disability” amounting to P7 million to be paid for by the shipowner.

A growing number of domestic and international maritime stakeholders have come together to address this issue before the Philippines drives away the shipowner employers. These stakeholders include the ALMA Maritime Group, International Maritime Employers’ Council (IMEC), Associated Marine Officers and Seamen’s Union of the Philippines (Amosup), International Transport Workers’ Federation (ITF), Maritime Industry Authority (Marina), and United Filipino Seafarers (UFS).

Ultimately, these groups are fighting to retain the jobs of the Filipino crew; after all, over 400,000 people and families are affected plus the countless personnel employed in training centers, travel companies, medical clinics, manning agencies, and all ancillary and auxiliary sectors around seafaring. The government must recognize the problem and should be first to protect the jobs of the Filipinos and safeguard seafaring claims from mishandling.

 

The questions we need to ask government are:

1. Is there a policy shift of the Philippine government to step down from its position as a premier seafarer supplying country?
2. Considering that the Department of Labor and Employment’s primary objective is job generation and a commission under the Department itself has a key objective of forcing settlement by shipowners regardless of liability, thus, rendering Filipino seafarers not competitive, is it an explicit indication that the Philippine government would rather generate domestic employment rather than overseas employment? If such is a case, what is the locally generated employment prepared by the government for its 400,000 seafarers and the countless persons employed in seafaring ancillary businesses?

 

If it is not the Philippine government’s intended result to render Filipino seafarers not competitive, then, it is time for the government to stop killing the goose that lays the golden eggs.

Atty. Iris Baguilat is the current president of Döhle Seafront Crewing (Manila) Inc., and founding member and trustee of the Association of Licensed Manning Agencies (ALMA) Maritime Group Trustee, Maritime Law Association of the Philippines (Marlaw).