The proposed Magna Carta of Filipino Seafarers is designed to provide comprehensive protection for seafarers before, during, and after employment especially in the event of maritime accidents, pandemics or epidemics, or other natural or manmade disasters. It codifies the rights of seafarers into a single reference law.
Who are the seafarers in the Magna Carta. This Act shall cover Filipino seafarers who are employed or engaged or work in any capacity on board foreign-registered ships and Philippine-registered ships operating internationally. This Act shall not cover seafarers on board the following categories of ships: (1) Warships and naval auxiliaries; (2) Government ships not engaged in commercial operations; (3) Ships of traditional build, as may be defined under existing rules and regulations; and (4) Fishing vessels. The bill further noted that “Seafarers who are employed or engaged or work in any capacity on board merchant ships operating domestically shall be covered by the Labor Code of the Philippines, and by other applicable laws, executive issuances, rules and regulations.”
Role in the Philippine economy. In 2019 alone, it was estimated that 519,031 deployed Filipino seafarers remitted US$6.5 billion to the Philippines. This is practically 1.7% of the country’s GDP that year. Throughout the pandemic, the world’s 1.9 million seafarers played a vital role in keeping ships moving and ensuring critical goods such as food, medical equipment, and vaccines are delivered. In 2022, 489,852 Filipino Seafarers were deployed, making 25% of the world’s seafarers Filipino.
Why does the Magna Carta of the Filipino Seafarers need to be passed?
- It is a highly regulated Industry. Seafarers are governed by International Conventions, Laws and Practices that are particular to Sea based OFWs and not Land based OFWS.
The Philippines’ distinction as the seafaring capital of the world was sustained through its strict compliance to the requirements imposed by the ILO’s Maritime Labour Convention or MLC 2006 and International Convention on Standards of Training, Certification and Watch keeping for Seafarers or STCW.
The MLC 2006 is also known as the seafarer’s bill of rights. The Convention sees that that every seafarer has the right to secure workplace that complies with safety standards.
The Standards of Training, Certification and Watch keeping for Seafarers SCTW was created to clarify the standards of compliance and introduce qualification requirements for trainers and assessors, provide effective mechanisms for its enforcement and allow greater flexibility in the assignment and functions onboard ship.
- Well Compensated Work for a high skill set worker. Even the low ranked crew mess man‘s salary ranges from Php78,400 to Php140,000 and that is about 10 times the minimum wage.
- The Viability of the Filipino Seafarer in the Global Industry will be protected by the Magna carta. Though the Philippines, Russian Federation, Indonesia and China are the largest supplier’s ratings and officers to Merchant ships, more seamen are being hired by Vietnam, Myanmar, Africa and China. This is an ongoing concern we have been addressing the grievances and shortcomings of past EMSA audits and continuously improve our Maritime Education and Training. The Magna Carta has provisions on training and Education for both Non-Degree and Degree Courses.
- The Magna Carta will empower our Government Agencies to Help our Seafarers. The law will be a compass for our government agencies especially the relatively young Department of Migrant Workers who is still adjusting to its new jurisdiction and with the legislative measure being able to outline the seafarer’s primary concerns, this will aid them in helping our seafarers as well as the manning agencies.
- Inform our Seafarers of their Rights. Lastly, the charter will be the map of the seafarer along its journey giving information about how to go about their concerns their rights and how to enforce their rights and how to avail of them. According to the measure, Filipino seafarers have a right to:
- Safe and secure workplace that complies with safety standards;
- Fair terms and conditions of employment;
- Decent working and living conditions on board a ship;
- Health protection, welfare measures, medical care;
- Self-organization;
- Information about seafarer’s family;
- Against discrimination;
- Educational advancement and training;
- Relevant information;
- Free legal representation;
- Appropriate grievance mechanism;
- Access to communication;
- Fair treatment in the event of a maritime accident; and
- Fair medical assessment.
The House of Representatives has already approved on its third and final reading House Bill (HB) No. 7325 or the proposed Magna Carta of Filipino Seafarers, with 304 affirmative votes, while the Senate has yet to approve this. The legislative status of the Magna Carta bill as per the Senate Website states that as of 22-May-2023 the Bill’s second reading is still pending and its committee report is referred to the calendar of the special order of business. It is also worth noting that the Senate version of the bill removed the escrow provision of the bill.
Escrow Provision in HB7325
Sec. 51. Escrow as a manner of Execution
“Any Monetary award by the arbitrator to the seafarer or the seafarers’ successor-in-interest, made whether in a voluntary or mandatory arbitration, or by the National Labor Relations Commission, shall be placed in escrow if the employer or manning agency has raised or intends to raise the decision for judicial review in accordance with the Rules of court. The amount in escrow shall not include the claims for salaries, statutory monetary benefits, or those originally determined by the employer or manning agency to be legally due to the seafarer.
WHAT IS THE ESCROW PROVISION?
Photo credit: The Philippine Daily Inquirer
The amount shall remain in escrow until the issuance of an entry of judgement by the appropriate reviewing court or when the employer or manning agency fails to perfect the appeal or petition for review. The fees in obtaining or maintaining the escrow account shall be paid by the employer or the manning agency. The interest earned by the amount in escrow shall inure to the benefit of the prevailing party.”
Groups Supporting The Escrow Provision
European ENVOYS. European envoys urged the Senate to reinstate a provision in the proposed Magna Carta Seafarers bill that would correct what it called a “flawed” system of compensation in the industry that resulted in Php2.5 billion in questionable claims.
The JMC. The Joint Maritime Committee (JMC) of the Dutch, German, Nordic, and Norwegian Chambers of Commerce expressed their concern regarding the removal of the escrow provision in the Senate Bill Number 2221. The version of the House of Representatives includes an escrow provision designed to protect workers and employers from “ambulance chasers” which are unscrupulous lawyers who encourage those with work-related injuries to file cases against their employers, seeking exorbitant damages.
IMEC and ICS. For 15 years, the International Mariners Employers Council and International Chamber of Shipping have been asking the government for an escrow mechanism.
AMOSUP. The Associated Marine Officers and Seafarers Union of the Philippines (AMOSUP), the largest seafarer union in the country is supporting the escrow deposit provision in the Magna Carta of Filipino Seafarers that the House Committee on Overseas Workers included in House Bill No. 7325, also known as “An Act Instituting the Magna Carta of Filipino Seafarers.”
In a statement on 2-March-2023 to the Joint Senate Committee on Overseas Workers Affairs, Foreign Affairs, and Finance Technical Working Group, AMOSUP said that its leadership and members favor the insertion of the escrow deposit provision in the Magna Carta of Filipino Seafarers because it protects seafarers from the predatory practices of ambulance chasers.
AMOSUP made this clarification in response to published reports indirectly alluding that the union is supporting quarters not in favor of the bill’s escrow deposit provision because it is against the unscrupulous activities of ambulance chasers in the local maritime industry.
ALMA. Association of Licensed Manning Agencies (ALMA) Chair Iris Baguilat said that more than Php.5 billion worth of claims awarded by the NCMB alone from 2018 to 2022 had been reversed by either the CA or Supreme Court, illustrating the magnitude of the problem. “The seafarers were ordered to restitute the amount to the ship-owners but were unable to do so because more than half of the claims that they got had already gone to ambulance chasers whom they contracted to file and claim on their behalf,” Baguilat said.
AMBULANCE CHASING. By Definition, ambulance chasing occurs when lawyers or their subordinates actively go after victims of accidents or individuals involved in potentially big legal issues with the intent to file cases on their behalf in exchange for an exorbitant fee that will be deducted from the monetary claim or benefit granted to the seafarers or their heirs. For the fines and penalties please refer to the image below.
Photo credit: The Philippine Daily Inquirer
For those against the escrow provision, the issue of ambulance chasing can be addressed by strictly implementing and applying the existing law in ambulance chasing in RA 10706 which is otherwise known as the seafarers protection act. The Department of Labor and Employment’s Department Order no. 153 Series of 2016 is implementing Rules for Republic act 10706.
As an example in 2018, a father and son team of lawyers faced a two-year suspension for ambulance chasing and failing to account for the monetary award of the seafarer who sued his employers due to serious work related injuries.
The seafarer won US$95,000 in a settlement but the lawyers deducted a 35% share leaving only US$20,000 to the seafarer. Later, the Supreme Court ruled in favor of the seafarer, found the lawyers conducted malpractice and violated several provisions of the Code of Professional Responsibility for lawyers.
Despite this, the CHR noted that the issue about ambulance chasers should not create a process that further delays the compensation for seafarers who suffer from maritime work- related injuries.
Several groups have protested the escrow provision of the proposed Magna Carta of Filipino Seafarers, raising these issues: (1) Delayed Compensation for victims of maritime-work related injuries; (2) Discrimination against seafarers, violative of the equal protection clause of the Constitution; and (3) The provision discourages the solicitation of legal services.
Photo Credit: FrontpagePH
Groups not in favor of the escrow provision
Labor groups: Escrow provision condemns our seafarers to years of legal Battles
Labor groups have also chimed in on the issue and called on lawmakers to scrap the escrow provision. The Association of Marine Officers and Ratings (AMOR) and the Federation of Free Workers (FFW) said that the escrow clause violates the equal protection clause of the Constitution. The president of the FFW Atty. Sonny Matula said the provision is discriminatory since no such provision applies to the claims of local workers or land-based OFWs.
He said that if the Magna Carta is passed into law with the provision retained, the High Court should declare it unconstitutional. “This escrow provision condemns our seafarers to years of legal battles with their manning agencies or employers before they can take hold of their claims. It makes those who already have less in life, even have less protection under the law,” he said.
The National Union of People’s lawyers. The NUPL in its position paper said escrow power is also unilaterally given to the employers who can decide how much would be released and how much would be put in escrow. The seafarers, the group pointed out, have no say in this, and neither does the Labor Arbiter nor the NLRC Commission.
“The legislature would be surrendering the quasi-judicial power to determine the amount of Escrow to the litigant employer. This is one-sided against labor,” said Cortez.
Summary and Conclusion. As of this writing the senate’s version of the Magna Carta of Filipino Seafarers (SBN-2221) has deleted the Escrow provision found in HB 7325. If the escrow provision will not be reinstated after the third reading then it will have to go to a bi-cameral conference to resolve the differences.
Those for the escrow account provision like the European Envoys, the Dutch-German Joint Maritime Committee, AMOSUP, AMOR, UFS etc. are unanimous about the prevention of ambulance chasing by unscrupulous individuals.
From 2018-2022 a total of Php2.5 Billion already awarded to the seafarers was reversed by the Court of Appeals and Supreme Court, and the Seafarers could not return them because most went to ambulance chasers. If this persists, the risk of Ship-owners shunning Filipino seafarers due to ambulance chasing is quite dire. Seafarer groups like AMOR, the Federation of Free Workers, believe that the escrow provision will condemn our seafarers to years of legal battles before they can get hold of their claims. AMOR and FFW believe that the escrow mechanism is discriminatory against seafarers because there is no such provision for land-based workers or other OFWs.
Both the NUPL and the CHR said the inclusion of the escrow provision runs counter to the law’s objective to protect and promote the rights of the seafarers. In addition, the NUPL thinks that the escrow provision would set a precedent that would make land-based labor and other OFWs be subjected to escrow.
Ambulance Chasing persists in the country despite the law passed on 2015, Republic Act 10706. Will an escrow mechanism sought after by the IMEC and the ICS among others for so long be reinstated by the Senate before the bill reaches the third reading; and if they do not, will that mean we risk being shunned by the International shipping lines?
As Cristina Garcia of ALMA puts it: “Once we protect our ship-owners, at the end of the day our seafarers will benefit from it because they are the ones that are providing jobs to our seafarers. The bottom line is there is no guarantee of winning a case, and one’s right to appeal should not be taken away from anyone. If a seafarer wins initially, but eventually loses the case in the Court of Appeals, then in my opinion the escrow provision would be justified because the seafarer has to return the money awarded to him.”
In closing, the Magna Carta of Filipino Seafarers (MCFS) bill is intended to protect both Seafarers and their employers. If the law against ambulance chasers does not penalize the offending parties enough to stop ambulance chasing, perhaps they should also amend RA 10706 through the MCFS legislation. There is a need to pass the MCFS, and to make the issues of escrow and ambulance chasing be debated thoroughly with the hope of having the bill passed into law as soon as possible.
SOURCES:
https://legacy.senate.gov.ph/press_release/2023/0522_tulfo1.asp
https://malaya.com.ph/news_business/escrow-provision-to-correct-flawed-compensation-system/
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