However, as a result of inspections by the Netherlands Ministry of Social Affairs and Employment Inspectorate SZW (ISZW) on board Dutch-flagged seagoing vessels a few years ago, this government policy has come under severe pressure. The ISZW found that non-European seafarers should be paid in accordance with Dutch minimum wage requirements. These WML inspections concerned: i). a cargo ship in international scheduled service and ii). ships active in harbour towage operations.
The ISZW has withdrawn the case relating to the international cargo ship, after the Dutch Minister of Social Affairs and Employment wrote to the Lower House on 5 March 2019, stating that the WML does not apply to internationally sailing seagoing vessels.
The ISZW stood firm in the harbour towage case. The employer of the seafarers on board the harbour tugs therefore asked the Council of State to make a ruling on the applicability of the WML on seagoing vessels used for harbour towage operations. The Administrative Jurisdiction Division of the Council of State did this on 17 April 2019, concluding that the WML does apply to harbour towage operations within the port area of IJmuiden.
The clarity gained from the example of harbour towage operations is positive. However, the conclusions of the Council of State yielded a new problem. The Council of State introduced the so-called ‘home port concept’, which replaces the ‘country of residence principle’ that has always been used until now.
Country of residence principle vs. Homeport concept
The country of residence principle means that, in determining the wages of non-EU seafarers, the welfare situation of their country of residence is taken into account. These seafarers do not come into contact with the Dutch welfare environment. They work and stay on board and, during their leave, they stay in their country of residence outside the EU. On this principle, they do not have to be remunerated under Dutch WML laws. Furthermore, payment is always at least in accordance with the internationally applicable minimum wage for seafarers stated by the International Labour Organization (ILO). To this end, there is demonstrably no exploitation of foreign seafarers.
The government’s maritime shipping policy regarding non-EU seafarers working on Dutch-flagged seagoing ships is based on the country of residence principle. This policy guarantees a level playing field and therefore preserves the international competitive position for Dutch shipowners.
However, in April 2019, the Council of State concluded that the homeport of the ship should be used, meaning that, if a seagoing vessel has a Dutch homeport, the Dutch minimum wage should be paid. This could pose a threat to the future of the Dutch shipping industry and Dutch employment.
Many Dutch-flagged seagoing vessels could be said to have the Netherlands as their homeport, despite the fact that they regularly enter international waters. As a result, the wage costs of non-EU seafarers on these seagoing vessels would increase significantly, thus causing the international competitive position of those seagoing vessels to deteriorate significantly. In addition, foreign seagoing vessels with a non-Dutch homeport would also be favoured.
Therefore, in the interests of both shipowners and seafarers, consultation has taken place over the past two years between social partners the KVNR and Nautilus International trade union. Together with the Netherlands Ministries of Social Affairs and Employment, and of Infrastructure and Water Management, they have identified the scope of the WML regarding seafarers living abroad.