The future of the Brazilian seafarer
is on the line

 

The current scenario 

Despite the constant complaints, the future of the offshore industry is promising

The wails of some Brazilian ship owners are so constant that they may even lead the uninitiated to listen to them at first. The drama usually begins with the Custo Brasil – the cost of doing business in Brazil – and goes on to include labor costs, which they claim to be high, and end with government bureaucracy, which they claim to be harmful to business. Very often the story ends with the crisis of the moment, which they claim affects them in such a way that they have begun to fear for the future of their companies. They repeat these arguments time after time and all the while they continue to operate and add to their profits.

The crisis discussion serves, in great part, to justify the strategic moves by the ship owners to defend their interests. On the one hand, they seek to reduce the salaries of the crew and establish precarious working conditions on board. On the other hand, they try to encourage an awareness in the Congress of the need to create – and maintain – subsidies for companies. Workers and taxpayers are “invited” to collaborate in the maintenance of the high profits obtained in the sector, where the benefits are limited to the companies and their investors.

A more careful examination, however, enables to identify the clear signs that immediately contradict the talk of a constant crisis by the ship owners, both in cabotage and offshore shipping. Those are different sectors, which may perform differently. At the moment, however, both share the same horizon of good prospects.

Cabotage has grown by a remarkable 10% per year for almost a decade, and the increasing participation of investment funds as shareholders in Brazilian shipping companies is another strong indicator of the growth in this sector. The companies representing international maritime support activities, in turn, continue to position themselves strategically in Brazil, and they make no attempt to hide the fact that they want to be ready for the new stage of expansion of the pre-salt.

 

Offshore industry companies sign labor agreements with an eye to the growth of activity in the oil sector

Pan Marine and Maré Alta have signed a Collective Bargaining Agreement – CBA which, in addition to restoring purchasing power lost to inflation over the past four years, will preserve previous contractual clauses as well as the new ones established by the recent CBA until a new one is signed. The negotiations began in 2015, when the two companies, which belong to the same group, presented an unfavorable proposal, calling for a freeze and/or a reduction in wages, in addition to reducing benefits and changing the regime. This proposal was rejected by SINDMAR, and the negotiations were transferred by the companies to the mediation chamber in the Labor Ministry, where the proposal was also rejected.

In 2016, Pan Marine and Maré Alta attempted to get a CBA with the Regional Labor Court in Rio de Janeiro, again without success. SINDMAR remained adamant in its decision not to sign an agreement that would be potentially harmful to its members, and in 2018 the negotiations were resumed. The companies then demonstrated a change of position that allowed progress on significant points, until a consensus could be achieved.

Compensation for losses

Pan Marine and Maré Alta made wage adjustments in 2015 (7.13%) and in 2016 (7.5%), and wanted to apply these percentages to wage adjustments in their proposal for the period 2015/2017. The percentage proposed in February 2016, however, was less than the accumulated inflation. In response to SINDMAR’s objection to any type of loss for its members, companies proposed to adopt percentages higher than inflation for the period 2017/2019, offsetting the difference from the previous period and thus ensuring a fair settlement.

The percentages offered by the companies for the period 2017/2019 represented gains that were greater than the losses from inflation. The wages adjustment was 2.69% higher than inflation, while the meal ticket and cost-of-living allowances were increased by 8.69%. SINDMAR considered the proposed compensation to be satisfactory, since it meant that there were no losses in the total amounts paid to Officers and Electricians.

More protection for workers

An important issue of the CBA was to preserve clauses of the previous agreement, and that the companies were also committed to maintain the current clauses for the negotiations of the 2019/2021 CBA. Since the reform of labor legislation, this is a fundamental tool for the protection of worker’s rights. With this commitment, the possibility that companies might try to shift the burden of any losses to the seafarers is reduced.

 

“There is no denying that a crisis exists, but we did strive, very smoothly, to get to this point, and make an agreement which puts the welfare of crew members on board first and foremost.”

Leandro Alves
HR Manager at Pan Marine and Maré Alta

 

Carlos Müller, Director of SINDMAR, believes that Abeam, if it wished, could go down the same path.  “Pan Marine and Maré Alta are by no means among the largest companies in the industry, but they have demonstrated that it is possible to agree to a CBA by maintaining the existing clauses and that the company can operate under healthy conditions for it and its employees, keeping the system that has been in practice over the years”, Müller said.

The HR Manager in charge of both companies, Leandro Alves, praised the negotiation process with SINDMAR, which he called friendly and cooperative. “We were happy to start 2019 with this encouraging sign for our employees. There is no denying that a crisis exists, but we did strive, very smoothly, to get to this point, and make an agreement which puts the welfare of crew members on board first and foremost”, he said.

 

Oceânica’s CBA also shows real gains

Another company that is moving in the opposite direction, away from the crisis talk, is Oceânica Navegação, which offered a proposal with clauses that represent real gains in remuneration and establish fair working conditions for its crews.

The negotiation process was complex. Oceânica started operating in maritime support in 2017 and, in April 2018, its proposed CBA was rejected in a poll organized by SINDMAR among company Officers and Electricians. After much discussion and consideration on both sides, there was progress, and the first agreement was finally approved last December.

The new agreement will come into force from September 1, 2018 to August 31, 2020. It has, among other positive points, gains above the rate of inflation in the second year and a contingency bonus, paid in a single installment, for those who worked in 2017, the year before the current contract takes effect, as a way of compensating for the extended period of negotiations. In addition to the extra remuneration, the allowances for meal tickets and the remuneration for boarding and disembarking costs will be corrected.

Another point that should be stressed is the issue of maternity leave. The trade union organization obtained from the company the commitment to pay full compensation during pregnancy, offering the employee with peace of mind and security.

 

Now is the time to fight and win!

It is likely that the litany of the 30 owners that are members of the Brazilian Association of Maritime Support Companies – Abeam, complaining about the crisis that plagues the offshore companies, originated with the organization itself, given how often they resort to this kind of speech to justify their attempts to worsen working conditions.

These allegations, however, could not be further from the truth.  The offshore companies enjoyed yet another decade of expansion in their activities with exponential growth in the prices for the contracting of their ships.  Following an adjustment after the fall in the price of petroleum, between 2014 and 2016, they continue to operate their fleets profitably under lucrative contracts.

The long period of growth in offshore activities made it possible for them to enjoy very high profit margins and giving up these very high rates of return on their investments is not likely to please their shareholders and investors.  That is why they have begun to pressure the companies they control to search for ways to maintain the high profitability that they have achieved.  How can they do that? By demanding that workers in the offshore maritime industry contribute with substantial reductions in their salaries and accept harsher working conditions aboard so that the bosses can maintain their profits at extremely high levels.

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“The table presented by Abeam represented losses of 51% to 72% on the remuneration guaranteed in the previous CBA. In addition, the companies proposed to increase the onboard time to 42 days, along with modifications detrimental to crew members in the previously agreed clauses and the elimination of about 20 clauses in the previous agreement.”

Jailson Bispo
Financial Director of SINDMAR

SINDMAR’s continuing efforts for a fair CBA

SINDMAR’s negotiations with Abeam to conclude a Collective Bargaining Agreement – CBA, for the period 2016/2018, began in May 2015. Hoping for a negotiation without delays, a month later the Union made its first proposal. The companies, however, preferred to follow another tactic and adopted a posture of postponement. Initially, they used the same tired apocalyptic talk of crisis in the sector, proposing the reduction of worker’s rights and the elimination of certain clauses in the last CBA.

“Ship owners claimed that, given the crisis, they had hit the bottom of the well and, as usual, presented to the workers an accounting that does not conform to the truth. They have continually offered readjustments that are less than inflation and with losses in real wages for maritime workers”, recalls Edemir Ramos da Silva, Advisor for Agreements at SINDMAR. The delays lasted until mid-2017, when Abeam entered a long period of withdrawal, without showing any signs of continuing the negotiations.

In March 2018, the companies returned to the negotiating table, still offering a CBA that did not cover the losses to inflation in 2016 and 2017.  If that were not enough, their idea was to propose a single schedule to equalize wages and salaries on the basis of existing levels, which were extremely low, and eliminating all bonuses related to the type and size of the vessel. “The table presented by Abeam offered reductions of 51% to 72% of the wages guaranteed in the previous CBA. In addition, the companies proposed to increase the onboard time to 42 days, in addition to making changes that were harmful to crew member in clauses that had been previously agreed upon and eliminating close to 20 clauses in the previous agreement”, said Jailson Bispo, Financial Director of SINDMAR.

 

Officers and Electricians vehemently refuse to accept losses

SINDMAR has repeatedly told the companies that are disposed to sign the CBA – including those from Abeam – that they would not sign an agreement that brings losses for its members. The reason is simple: these achievements do not happen by chance. The changes, when significant, usually take a long time to reach and demand great effort from those who decide to defend their collective interest and fight for them. “The improvements in the clauses of Abeam agreements are the result of more than 30 years of struggle, which required an investment of funds by the members and the courage and determination of the seafarers who took part in the mobilizations and successful strikes coordinated by SINDMAR. They were not offered to us at no cost, which means that we are not willing to give up what we have won at a significant cost”, explains Severino Almeida Filho, President of SINDMAR.

SINDMAR archives show that in 1985, the first strike involving offshore Officers took place, resulting in some demands being won. “At a time when different work and rest regimes were practiced, and 3×1 was the most commonly used; a minority of workers enjoyed the 2×1 regime and there were even those who used the 6×1 regime with annual leave, a situation usually found on smaller vessels used to support and supply larger vessels. This brief retrospective shows us that the working conditions on the vessels we now have for the crews are much improved. This is the result of many years of struggle and achievements under the guidance of our Union”, observes Severino.

“The improvements made in the clauses of the agreements with Abeam are the result of more than 30 years of struggle, which required an investment of funds by the members and the courage and determination of the seafarers who participated in the mobilizations and successful strikes coordinated by SINDMAR. They were not offered to us at no cost, which means that we are not willing to give up what we have won at a significant cost.”

Severino Almeida Filho
President of SINDMAR

Over the years, ship owners routine concerning CBA negotiations has become well known by SINDMAR. To maintain their profits, whenever Brazilian ship owners face problems, they try, as a rule, to share the sacrifices with their seafarers. Even in the periods of high productivity in offshore activity, they seek to retain the profits obtained by means of highly favorable contracts, without distributing the profits or sharing the results with the workers. “Even in years when they were stockpiling their profits, we have had to resort to strikes to ensure the indexing of our salaries to inflation and, eventually, obtaining adjustments compatible to the growth of the industry.  It is also rare for Abeam companies to offer the crew members profit and result sharing”, recalls the Advisor to Agreements, Edemir Ramos da Silva.

Given the modus operandi of the operators, Director Carlos Müller is firm when he says that signing a deal where workers lose ground is a path with no return. “It is important to keep in mind that, once the CBA has been signed, there is no way, in the short term, to go back and restore the concessions in working conditions and wages that have been granted. If there is an effective disposition to fight, it is possible that at some point something can be recovered. Still, it would require a lot of time and effort for whatever progress to be made”, explains Müller.

Merchant Marine Officers and Electricians have made clear on several occasions that they are not willing to ratify losses in their Collective Bargaining Agreements. The initial proposal that Abeam presented at the end of 2016, with no correction for inflation in remuneration, was widely rejected by the membership that participated in the consultation organized by SINDMAR. At three Joint General Assemblies held in 2018, its membership decided that the minimum conditions for CBA’s would comprise the correction for inflation and the preservation of the previous agreement as the basis for the new agreement, with no losses for workers. The most recent proposal by Abeam – which served only to continue its attempt to impose losses on workers – was also rejected at a bargaining table, this time at the end of the mediation held by the representative of the Ministry of Labor, from September to November 2018.

SINDMAR sought mediation to encourage Abeam to negotiate

The unwillingness of the companies affiliated with Abeam to negotiate a fair agreement led SINDMAR to request a mediation process with the Labor Relations Secretariat of the Ministry of Labor. The sister maritime unions also applied for mediation in Brasília, considering that, since March 2018, they had received no real signals from Abeam regarding the CBA negotiations, after the companies had addressed an absurd proposal to eliminate several clauses of the previous agreement, reducing wages and lowering working conditions.

At the first mediation meeting in Brasilia, the ship owners’ representatives withdrew the proposal they made in March 2018, acknowledging that they had exaggerated with respect to the terms proposed before and committing themselves to submit a new proposal by the beginning of October 2018. The series of meetings mediated by the Ministry of Labor sought to identify and discuss the more sensitive aspects of the CBA, such as pay and work regime. Several proposals were suggested, stimulated by the Secretary’s efforts to mediate. The withdrawal by the companies of the proposal presented in March 2018 and the recognition that they had exaggerated their demands in the formulation of their proposal was effectively the only possible progress worth to mention.

The ship owners in Abeam offered a new CBA proposal in November 2018. SINDMAR’s response was a detailed analysis of the new document, clause by clause, which made clear that the proposal still was prejudicial to workers and that there had been no real progress over the previous proposal. The then Secretary of Labor Relations of the Ministry of Labor, Mauro Rodrigues de Souza, noted the deadlock in the negotiations and suggested ending the mediation meetings without an agreement.

“SINDMAR reiterated its efforts for a fair CBA, based on the previous agreement and without losses for its members. We remain willing to exhaust all possibilities at the negotiating table. However, in view of the ship owners’ refusal to submit a proposal without losses to our members, we will intensify our mobilization and increase the level of clarification aboard ships, returning to the visits to our members and those we represent, as discussed in the assembly”, said Carlos Müller, who participated in the mediation proceedings.

“Acting in an organized and orderly manner, under SINDMAR guidelines, with the engagement of the membership and their participation in our efforts, there is a real possibility of reaching a fair Collective Bargaining Agreement, maintaining good salaries and good working conditions on board.”

José Válido
Second-President of SINDMAR

 

The only chance of victory is in a collective effort

The ship owners still do not seem to understand, from the negotiations, that it is impossible to make crew members accept lower wages and worse working conditions just to sustain the stratospheric levels of profits that would flow to investors in countries socially more developed than ours. “The Merchant Marine Officers still are responsible for navigation, coordination of operations and the handling of ships’ engines and machinery. Ship owners need to recognize that our performance aboard, making ships meet with their schedules safely and efficiently, is a key factor in ensuring the financial returns on their investments. Crew members understand the affection and enthusiasm of the owners for high profits and understand that they seek profitability in their businesses. But this must take place at a civilized level, without corroding the working relationship”, Severino Almeida Filho points out ironically.

The intransigent and disrespectful attitude of the owners and the lack of willingness to agree to fair and economically sustainable conditions for crew members have greatly reduced the chances of success of our members getting negotiators to encourage the employers to make an acceptable agreement. “Among our options is, as a last resort, to rationally evaluate the opportunity of exercising our right not to offer our valuable work on board without there being a commitment on the part of the owners to respect and fair compensation for the important contribution which we offer to the rich offshore industry. Our future is at stake and it is up to each of us to offer our contribution to strengthen the defense of our collective interests. SINDMAR will continue the visits on board. We will be in contact and we will discuss together how to get respect from the owners for our demands. Acting in an organized and orderly manner, and following SINDMAR’s guidelines, and especially with engagement of our members and their participation in our efforts, there will be real possibilities to reach a fair Collective Bargaining Agreement, maintaining good salaries and good working conditions on board”, says José Válido Conceição, SINDMAR’s Second-President.