Selecting the right shipyard: Human Rights Considerations

As the Corporate Sustainability Reporting Directive (CSRD) comes into force and the Corporate Sustainability Due Diligence Directive (CSDDD) has received final approval from the European Council, it has become more crucial than ever for shipowners to put their value chains under close scrutiny. A carefully vetted value chain allows shipowners to avoid complicity in human rights abuses, while also allowing shipowners to contribute towards the push for fairer labour practices.

Within the shipping industry, selecting the right shipyard is key. Shipyards play an important role in the value chain as producers of quality work for newbuilding and drydocking projects. Ensuring that a chosen shipyard respects and protects fundamental human rights is part and parcel of vetting a shipowner’s value chain.

When assessing a potential shipyard, some of the human rights issues shipowners should take into consideration include the following:

• Forced labour: Forced labour is one of the biggest risk areas facing the shipping industry. However, addressing this issue is difficult, in no small part because forced labour is not always easy to detect. Shipyards should have policies and procedures in place to address the following salient topics: vetting of recruitment agencies, protection of migrant workers, and guaranteed freedom of movement for their workers.
  
  
• Child labour: Shipyards should take measures to eliminate the use of child labour at their workplaces. In addition to complying with all legal age restrictions, shipyards must ensure they have procedures to verify the ages of all workers, including agency workers, contractors and subcontractors, prior to appointing them. Special accommodation, such as exemption from dangerous work, should be provided to workers who may be above the legal age restriction but are still considered minors.

• Health and safety: Within hazardous worksites such as shipyards, a strong health and safety system forms the backbone of operations. For shipowners looking to ensure that their chosen shipyard’s health and safety standards are in line with international human rights norms, these are some of the aspects to look into:
  
  
  • Culture and policy: A strong health and safety culture starts with a Health and Safety Policy that is communicated to all stakeholders. All workers should receive safety training, and health and safety should always be prioritised over commercial interests such as cost and schedule.
  • Organization: Health and safety responsibilities should be integrated into the shipyard’s management, and both workers and senior management should have a say in health and safety matters.
  • Identifying and mitigating risks: The shipyard should have a robust system to assess risks and identify hazards. Working areas should be ergonomic, and always be equipped with emergency equipment. Work areas and walkways should be marked, and hazardous materials should be appropriately stored with warning labels.
  • Welfare: Good health and safety standards also entail protection of workers’ welfare. Potential measures include providing health care for workers afflicted by occupational disease or illness, providing free access to potable water, and ensuring food, accommodation and transportation is provided in line with local regulations.
  • Monitoring and reporting: Last but not least, shipyards should have a system in place to monitor, document and report accidents. Its internal systems should auditable, and its health and safety KPIs should be reported to top management on a regular basis.  

• Working hours and remuneration: Shipowners should ensure that their chosen shipyards comply with International Labour Organization (ILO) conventions and national labour laws regarding working hours and remuneration of workers. This includes ensuring a minimum number of rest days, placing maximum limits on overtime hours and complying with minimum wage laws.
  
  
• Freedom of association: Shipowners should ensure that shipyards guarantee the right to freedom of association for their workers. This includes respecting their workers’ right to form or join trade unions, allowing workers to freely elect their own representatives, and accepting input on labour issues from elected representatives. These rights should also be extended to cover agency workers, contractors and sub-contractors.
  
  
• Freedom from discrimination: Shipyards should have policies to prevent discrimination and promote diversity and inclusiveness within their workplaces. This includes a policy on “equal pay for equal work”, equal recruitment opportunities, and equal opportunities for career development. Facilities and equipment at the shipyard should also be inclusive – sanitary facilities, changing rooms and PPE equipment should be provided as necessary to accommodate the needs of the workforce.  

As reporting requirements become more stringent, companies will need to look beyond their own operations, and will need to make use of the tools available to them to address the impacts of their value chain. Shipowners should work closely with their ship managers to ensure that these considerations are taken into account before selecting a shipyard. Addressing the human rights impact of shipyards is the first step towards the global push for better labour standards and a more sustainability maritime industry.