Convenience flags spur layoffs

Fear a part of the package of unemployed Coastal Shipping employees

Patrick Murphy
Published on November 25, 2016

The tanker Alsterstern, already reflagged to Marshall Islands, has sailed to Las Palmas.


LEWISPORTE, N.L. — There is real sense of fear surrounding the recent layoff of Coastal Shipping employees.

So much so that workers desperate for answers are afraid to speak openly.

“I willing to tell you whatever,” one employee, who wished to remain anonymous, told TC Media late Thursday.

Coastal Shipping Ltd, a division of the Woodwards Group of Companies based in Lewisporte, has announced the layoff of an undisclosed number of employees.

The impact of the job losses was felt immediately according to the anonymous employee.

“I’m going to have to sell my vehicle, you know,” said the anonymous employee. “One ship’s been flagged out, it’s called the Alsterstern, its in Las Palmas right now. They (employees) got two days’ notice.”

Woodwards Group Lewisporte
Christy Janes/TC Media

The move could affect between 60–100 local employees according to the Seafarers International Union of Canada (SIU), which represents the employees.

The layoffs result from the company’s decision to reflag several of its vessels.

Coastal Shipping currently has five vessels in its fleet of oil tankers.

All the vessels are expected to change flags.

The union fears the problem may soon become a national issue.

“If ever CETA, the agreement between Canada and Europe, goes ahead chances are that flags of convenience may be allowed to carry this work,” said Patrice Caron, executive vice-president of the SIU. “So we’re still in a big huge fight against the Canadian government on this.”

The practice of reflagging seafaring ships is not new.

The practice of flying a "flag of convenience" has been in use since the 1950s.

Commercial ships operate under the laws of its flag state, and these laws are used if the ship is involved in a case under admiralty law.

Owners of a ship may register the ship under a flag of convenience to reduce operating costs or avoid the regulations of the owner's country.

“I guess they immediately saw the benefit of foreign seafarers working at $2 per hour in slavery conditions, so they wouldn’t go with Canadians anymore,” said Caron. “You have to remember that last year, I think it was two (Coastal Shipping) vessels were operating worldwide and they kept their Canadian Flag and Canadian crew and everything went fine. So the only reason they changed the crew to flag of convenience is because of benefit to the company.”

The union is exploring “any possible action they can take” according to Caron, and they have a message for Canadian ship owners and include Prime Minister Justin Trudeau in their anger.

“We’re totally fed up with ship owners using this tactic,” said Carron. “At the end of the day, if the companies don’t want to use Canadians because they are too expensive, why isn’t Justin Trudeau making tax breaks for seafarers in order for them to work on foreign vessels.”

In a statement directed to affected employees making rounds on social media the company said “Whilst we will make every endeavour to retain the top four ranks onboard, where licences allow, it is also very much our intention to recall all of our regular crew for the Artic/summer season.”

TC Media has reached out the company for comment, but had not received a response as of deadline.