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STATE OF PENNSYLVANIA Good morning. I am pleased to be here this morning to discuss H.R. 1517. I have been working unsuccessfully with this legislation for a number of years, and I am hopeful that our new President will be more interested and cooperative than the last.

At previous hearings I have listened to many people speak about the need for this legislation. My staff has traveled to listen to firsthand reports of those who labor on foreign ships. Their stories are chilling and sad. The experiences of some onboard shipworkers remind me of the terrible and frightening stories of sailors from centuries long past. I was astounded to learn of the many abuses that routinely take place onboard some foreign flag ships.

The success of foreign ship lines cannot be disputed. For years now they have freely operated in American ports, been generous benificiaries of our free market economy and earned millions of dollars in profit. But, simple business acumen does not fully account for all their success. It is fair to say that much of the profits enjoyed by foreign shipping companies are earned at the expense of shipboard employees. Foreign maritime workers do not enjoy the same statutory protections and benefits as Americans. Because of this lack of protection their employers are able to reap huge profits.

This situation is clearly disgraceful. Profits gained at the expense of exploited workers represent a scandal of enormous proportions. The stories of abuse and exploitation onboard foreign flag ships are too numerous, and the continued existence of such activities is shocking. Many people have worked long and hard to develop our national labor code to provide a reasonable minimum standard for the modern world of the late twentieth century. Unfortunately, this enlightened work has ended at the shoreline, because the law of the sea seems mired in the middle ages.

This legislation though, is not strictly aimed at correcting numerous labor abuses. Foreign ship operators gain all the benefits of American commerce without having to obey any American worker protection statutes. These shipping lines find themselves in the enviable position of having their cake and eating it too. This situation creates an unfair double standard, and leaves American shipping at a decided disadvantage.

In this time of great world turmoil, America needs to regain its stature as the world's foremost economic power. H.R. 1517 puts the American shipping lines and the foreign shipping lines on a level playing field. The unfair advantage that foreign lines have over American lines is wiped away when this legislation is enacted. H.R. 1517 sharpens America's competitive edge.

America has made itself a great Nation through hard work and sacrifice. But we have always tried to balance our striving for economic success with a compassionate outlook towards workers. We have attempted to create laws that humanely and fairly protect the lives of workers. Unfortunately, we are one among few nations that follow this course. No responsible maritime nation would choose to maintain a flag of convenience registry that supports such willful and careless disregard for the lives of people.

This legislation will help legions of people from less fortunate nations working on the sea by stopping exploitive labor practices that occur in our territorial waters. H.R. 1517 may also help more American workers to find gainful employment in a revived U.S. maritime trade, so much of which is conducted under runaway “flags of convenience." I look forward to prompt action on this legislation.

Chairman MURPHY. Mr. Fawell, do you have an opening statement?

Mr. FAWELL. Yes, I do, Mr. Chairman. I am looking forward to hearing the testimony today from our witnesses on this legislation which extends the Fair Labor Standards Act as well as the National Labor Relations Act to foreign flag ships.

I remain concerned that this bill, however well-intended, would have a number of harmful effects. My first concern is that H.R. 1517 would conflict with well-established international and maritime laws. It is the established rule of international law that the internal affairs of a ship are ordinarily governed by the law of the flag state. How we would impose and enforce U.S. labor law on foreign flag ships presents another interesting issue.

We are, today, in a global economy, with people and goods flowing at an increasing rate from country to country. Actions such as these will only lead to friction where comity should exist. International conventions codifying long established principles have been created to develop and secure uniform standards for vessels operating internationally. Organizations such as the International Maritime Organization and the International Labor Organization have dealt with issues governing jurisdiction over the employment relationships aboard these vessels.

The U.S. is already a party, in fact, to International Convention 147, which establishes minimum standards in merchant ships and provides for protection against poor working conditions on vessels. The treaty allows port states to exercise appropriate authority in response to complaints of foreign seamen about working conditions on foreign flag ships.

In previous years, I have asked for a study of how ILO 147, which is the international law to which I make reference, is working and whether or not it is effective. If changes are needed and the enforcement mechanisms under ILO 147 are not effective, then we obviously should work with international labor organizations to address those issues.

Finally, I believe that many who support this legislation are frustrated with the amount of business that is leaving the U.S. and moving into foreign countries. I share those concerns. Testimony heard by the labor-management subcommittee in 1989, as well as by this subcommittee 2 years ago, convinced me that our laws and government policies actually force many U.S. shipowners to operate under the flag of another country.

We need, therefore, to simplify and to reduce the taxes and subsidies we employ in regulating the shipbuilding industry. Only in this way will the U.S., I believe, acquire a competitive maritime force. I do not believe that we are competitive at this particular time, except with the cabotage laws that may apply or in other areas where subsidies are granted to shipping.

I have two statements, Mr. Chairman from the Council of European and Japanese National Shipowners' Association and the Federation of American Controlled Shipping—as well as a letter to the State Department from the governments of 14 other countries. I would ask at this point unanimous consent that they be included as a part of the record.

Chairman MURPHY. Without objection, we will certainly admit the letters as requested.

Mr. FAWELL. Thank you, Mr. Chairman. [The material referred to follows:]



MAY 13, 1993

The Council of European & Japanese National Shipowners'

Associations, known as CENSA, is pleased to present this

statement for the Committee's consideration.

CENSA is comprised

of the National Shipowners' Associations of Belgium, Denmark, Finland, France, Germany, Greece, Italy, Japan, the Netherlands,

Norway, Sweden and the United Kingdom.

The International

Shipping Federation joins in these comments.

The International

Shipping Federation is the international employers' organization

for shipowners and is concerned with labour affairs and manning

and training issues at international level.

Membership comprises

national shipowners' operations of over 20 countries including

all the members of CENSA, and together represents more than half

of the world's merchant tonnage.

The American Institute of

Merchant Shipping is a member of ISF.

CENSA opposes enactment of H.R. 1517 for the following


The Bill would place the United States in conflict with

international law which has recognized that laws of the

flag state should govern vessels and the Bill would

reverse Supreme Court precedent and practice.
The Bill would violate and undermine existing

International Agreements to which the United States is

a party and which now protect merchant seamen,


The International Labor Organization Convention


The 1958 Convention on the High Seas.

Existing Treaties of Friendship Commerce and


Vienna Convention on Consular Relationship and

Optional Protocol on Disputes of 1963.

The Bill would intrude on the sovereignty of foreign

nations, invite other countries to react in the same manner against United States flag vessels and adversely

affect international trade.




The present bill seeks to impose United States laws of

collective bargaining, union elections and representation, United

States unfair labor practices and wage control over foreign

vessels calling at United States ports.

It would do so by making

foreign vessels subject to the full reach of the National Labor

Relations Act, the NLRB and the Fair Labor Standards Act of 1938.

It would bring the United States in conflict with the laws of the

countries of registry of foreign vessels, would violate long

standing rules of comity and international law and practice,

would intrude into the labor relations of foreign vessels,

adversely affect international trade between the u.s. and foreign countries and injure international shipping, including U.S.-flag


Under both international and domestic law, vessels have long

been considered as an extension of the state in which they are

registered. This doctrine, i.e. giving recognition to a vessel's country of registry, called the flag state, has been followed for very practical reasons. Unlike facilities such as manufacturing plants which have fixed geographic locations, vessels constantly move, spending limited periods of time in ports of many countries

and most of their time on the high seas beyond the territorial

jurisdiction of any country.

To foster a legal regime for

vessels which would impose differing and changing national rules

based on temporary contacts, would foster chaotic and contradictory regulation. It would make the uniform application of any law and foreseeability of long term relationships impossible and disrupt trade by the resulting inefficiencies and clash of sovereignty and rules. It is for these very practical reasons and to reflect the sovereignty of the state where the vessel owners are incorporated and flagged, that flag state regulation has been uniformly accepted by the nations of the world under international law and comity. In any event, the

absolute jurisdiction of all sovereign states, including the

United States, does not extend beyond their own territorial

waters. This approach based on the flag state concept has permitted a single and predictable legal regime for each vessel.

This long-standing position of the nations of the world has

been recognized and followed by the United States as a matter of

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