The Need for Human Rights Due Diligence of the Shipping Sector
August 10, 2023
By Bronagh Kieran
The shipping sector is responsible for the delivery of over 80% of global trade. Yet, it is often overlooked in human rights due diligence (HRDD) undertaken by businesses. This is significant because it means that even businesses who have carried out HRDD remain unaware of how they might be linked to risks to seafarers’ human rights. It also means that those businesses may fail to fully consider the risks within their own operations and within the supply chain.
This blog will provide an overview of the unique context on board ships and the specific risks to human rights that arise from that context, and offer some insight on how businesses can respond.
This blog will not address the contribution of the shipping sector to the climate crisis, though this undoubtedly impacts the enjoyment of human rights world over.
The UN Guiding Principles on Business and Human Rights (UNGPs), which were unanimously endorsed by the UN Human Rights Council in 2011, set out that business has a responsibility to carry out human rights due diligence. This responsibility is hardening into an obligation through the introduction of national and EU legislation.
Despite its crucial role in delivering goods across the world, the shipping sector has not been a focal point in HRDD. Three possible explanations are as follows:
- Absence of consumer interaction with the maritime industry: as consumers are not as aware of the risks associated with the shipping sector, they have not applied the same pressure on businesses to scrutinise it compared to other parts of the value chain.
- Many businesses use third-party logistics companies to organise transport of cargo, be it importing of supply chain parts or the distribution of a final product. Shipping becomes like a black box, and the knowledge vacuum contributes to impunity in circumstances where human rights violations have occurred.
- The UNGPs specify that when a company has a large number of entities in their supply chain, they can prioritise the general areas where the risk of adverse human rights impacts is most significant. It may be the case that certain businesses have de-prioritised the shipping sector and therefore omitted it from their HRDD. However, this blog argues that there is a unique risk context in shipping that justifies its prioritisation.
Unique Context and Risk Profile
Cargo ships travel across the world stopping at ports where they deposit and collect both raw materials and finished goods. Approximately 1.6 million seafarers are responsible for manning these ships globally. These workers are more vulnerable to abuses including charging of recruitment fees, as well as forced labour and gender based violence.
The impact of the flag State of a ship
The flag of a ship represents the country where that ship is registered and the jurisdiction under which it operates. The country whose flag a ship flies is known as the flag State. The flag State of a ship sets and enforces regulations to which the crew are subject, including in relation to labour laws, health and safety standards, and the protection of human rights.
Certain flag States demand higher standards than others. A practice known as flying a “flag of convenience” (FOC) is where a ship flies a flag that is not of the country of ownership. The motivations for flying a FOC can include tax purposes, cheaper registration fees and lower regulation. A 2022 UNCTAD report revealed that the vast majority of global shipping is carried out under flags of convenience.
The impact of FOC on workers can be detrimental in two distinct ways. In the first instance, when a FOC is flying, the ship will often be bound by less exacting standards, such that that workers are entitled to less protection. As a result, workers receive low wages and work in poor working conditions.
Second, FOC create issues around seafarers accessing justice. A seafarer who resides in a country different than the flag State of the ship on which they are working will face barriers if they attempt to access the Courts of the flag-State. These barriers include a different language and an inability to travel to that location due to cost. Difficulties in access to justice have led some commentators to argue for the establishment of an arbitration-based mechanism to address human rights abuses at sea.
The impact of a lack of transparency
Aside from FOC, another factor which contributes to the vulnerability of a ship’s crew is that they are frequently at sea for months at a time and have limited means to reach the outside world. This leads to a lack of transparency and visibility, so that members of the crew become a hidden workforce. In recent years, various entities have conducted research to bridge the transparency gap. These include:
- The NGO ‘Human Rights at Sea’ which has highlighted how this lack of transparency contributes to the prevalence of gender based violence and slavery at sea.
- The Institute for Human Rights and Business (IHRB) and the Sustainable Shipping Initiative (SSI) who together published a study in April 2023, which found that almost 40% of the approx. 5000 seafarers engaged reported an experience of unethical or illegal action in violation of international standards on worker’s rights. The most common illegal practice reported was the charging of recruitment fees. The charging of recruitment fees increases the risk of forced labour and debt bondage. It is also prohibited under the Maritime Labour Convention.
- International media, which during the Covid-19 pandemic, focused on the wellbeing of shipping vessels’ crews. Due to travel restrictions, a crew change crisis ensued leading to hundreds of thousands of seafarers being stranded aboard ships beyond the expiry of their contracts. This led to isolation from their families and serious humanitarian concerns over their well-being.
- Different bodies within the UN, which have highlighted the overlap between adverse environmental impacts of shipping and adverse impacts to human rights. For instance, the UN Special Rapporteur on toxic substances and human rights has within its mandate been investigating workers’ exposure to toxic and otherwise hazardous substances in the shipping industry. One element of the shipping industry that is particularly dangerous in this regard is shipbreaking.
- The OECD Innovation Policies for Space and Oceans (IPSO) Unit which publishes on the ocean economy and innovation which could contribute to its sustainability.
- Unions for transport workers, such as the International Transport Workers’ Federation (ITF), which advocate for seafarers’ rights on a global stage.
How businesses can respond
As a first step, businesses should incorporate shipping operations and suppliers into the scope of their HRDD in line with the UNGPs. In conducting this due diligence, specific indicators may be helpful. In the same way that businesses may look at the inherent risk within a country, it is possible to also use the flag of a ship as an indicator of inherent risk on a vessel; a resource used to this end is the Paris white list, which is based on the International Chamber of Shipping flag State performance list. Other indicators include the actual cargo of the ship and information on the ships’ management systems regarding recruitment, labour conditions and health and safety.
When conducting HRDD, it is worth consulting relevant standards, resources and initiatives, including:
- the ILO Maritime Labour Convention (MLC),
- the UN Guiding Principles on Business and Human Rights (UNGPs),
- the UN Convention on the Law of the Sea, and
- the Hong Kong Convention on the Recycling of Ships.
To accord with the UNGPs and emerging regulation, businesses should ensure that workers throughout their value chain can access effective and independent grievance mechanisms to raise concerns about human rights. This will improve access to remedy and can be used an early warning system for human rights risk identification in the HRDD process.
If risks are identified, businesses can leverage their position as cargo owners to make demands for sustainable and human rights respecting shipping. Businesses can encourage the logistics companies they use to:
- adopt risk management measures, such as inserting terms in the Exporter Declaration,
- participate in international platforms for exchange of knowledge,
- utilise increasingly sophisticated technology to track compliance and good practice, and
- carry out their own HRDD.
Finally, while individual shipping companies have a responsibility to respect human rights, it is also incumbent on States to do more to close existing governance gaps. Both State and company action is essential to ensure that the human rights of seafarers are respected and that their exploitation is brought to an end.
 “Review of Maritime Transport 2022,” UN Conference on Trade and Development (UNCTAD), 29 November 2022, https://unctad.org/rmt2022
 “An authoritative global framework on business and human rights turns 10,” UN Office of the High Commissioner for Human Rights, 17 June 2021, https://www.ohchr.org/en/stories/2021/06/authoritative-global-framework-business-and-human-rights-turns-10
 “Article One Briefing Notes,” Article One Advisors, 2023, https://articleoneadvisors.com/our-insights/
 “Mind the Gap: Human Rights in the Maritime Industry,” IHRB, DIHR and the Rafto Foundation for Human Rights, November 2019, https://www.ihrb.org/uploads/meeting-reports/Mind-the-Gap-Report-2019-korr.pdf
 “What is the Crew Change Crisis,” IHRB, n.d.,https://www.ihrb.org/explainers/what-is-the-crew-change-crisis#:~:text=Since%20the%20start%20of%20the,to%20board%20ships%20to%20work
 “Review Of Maritime Transport 2022,” UNCTAD, 29 November 2022, https://unctad.org/system/files/official-document/rmt2022_en.pdf
 “Flags of Convenience,” International Transport Workers’ Federation (ITF), n.d., https://www.itfglobal.org/en/sector/seafarers/flags-of-convenience
 “Access to Justice,” Human Rights at Sea, n.d. https://www.humanrightsatsea.org/what-we-do/access-justice
 “Development of an Arbitration-based Mechanism for Resolution of Human Rights Dispute,” Human Rights at Sea, Law and Shearman & Sterling LLP, 25 January 2021, https://hrasarb.com/development-of-an-arbitration-based-mechanism-for-resolution-of-human-rights-disputes/
 “What we do,” Human Rights at Sea, https://www.humanrightsatsea.org/what-we-do/slavery-sea
 “Seafarers and Recruitment Fees Research Briefing,” IHRB and SSI, April 2023, https://www.ihrb.org/uploads/briefings/seafarers_and_recruitment_fees.pdf
 “Neptune Declaration on Seafarer Wellbeing,” Global Maritime Forum, January 2021, https://www.globalmaritimeforum.org/neptune-declaration
 The International Maritime Organization (IMO) is the specialised agency of the UN with responsibility for “the safety and security of shipping and the prevention of marine and atmospheric pollution by ships” – https://www.imo.org
“Special Rapporteur on toxics and human rights,” UN Office of the High Commissioner for Human Rights, https://www.ohchr.org/en/special-procedures/sr-toxics-and-human-rights/about-mandate; Degnarain, Nishan, “UN Opens Human Rights Investigation Into Global Shipping Over Use Of Toxic Fuels,” Forbes, 23 December 2020, https://www.forbes.com/sites/nishandegnarain/2020/12/23/un-opens-human-rights-investigation-into-global-shipping-over-use-of-toxic-fuels/; and Begum v Maran (UK) Ltd  EWCA Civ 326.
 “Ocean economy and innovation,” OECD Innovation Policies for Space and Oceans (IPSO) Unit, n.d., https://www.oecd.org/ocean/topics/ocean-economy/
 “Seafarers,” International Transport Workers’ Federation, 2023, https://www.itfglobal.org/en/sector/seafarers/what-we-do
“ White, Grey and Black List,” Paris MoU on Port State Control, https://www.parismou.org/detentions-banning/white-grey-and-black-list
 Mind the Gap: Human Rights in the Maritime Industry,” IHRB, DIHR and the Rafto Foundation for Human Rights, November 2019, https://www.ihrb.org/uploads/meeting-reports/Mind-the-Gap-Report-2019-korr.pdf