Why Polish ships need a Polish flag

Why should we have a Polish flag on our ships? What approach do other countries of the European Union have towards ships flying their own flag? The Captain of the Great Shipping, Tadeusz Hatalski, writes about these and other matters related to shipping and the Polish flag.

The history of capitalism is in fact a constant struggle for market boundaries. Many of the things that are out of the market today have been removed from it by the power of political decisions rather than by market processes.

Ha-Joon Chang [Korean economist, lecturer in development economics at Cambridge University]

Our world, our planet we live on, we call Earth. But our planet is not just earth. Our Earth is also seas and oceans. Actually, it's mostly the seas and oceans. Areas covered by sea waters occupy 3/4 of the surface of our globe. There are three times as many seas and oceans on our Earth as the land we live on.

This results in certain consequences, which are about to happen. Because people want to live in better conditions. And this human desire for a better life lies at the root of development and economic growth. And since homo sapiens has settled virtually all the corners of the world, in order for this development and growth to take place, various kinds of goods are needed in all these parts of the world. However, as I have already mentioned, the vast majority of our globe covers the seas and oceans. So – which we do not always realize – most of the goods are transported in these seas and oceans. In figures, 75% of world trade goods are carried by sea, 90% of EU trade goods are carried by sea with the rest of the world, 40% of EU domestic trade goods are carried by sea.

Expanding the flag is...

For many years Poland was on the sidelines of these maritime transports. As long as we didn't have roads, the shipping companies were bypassing our ports. Because what was the point of bringing containers to Polish ports from Japan, for example, when a truck with such a container had to break for twenty hours after Polish ‘field’ roads to reach, for example, Slovakia. It was better to drive him to Hamburg and recharge him there to the truck, which, although from there on, got faster. But since we've had better roads, particularly those north-southwards, the situation has changed. As a result, transshipments increase in Polish ports. The port in Gdańsk plans to build a central port, the port in Gdynia provides for the construction of an external port. All to meet the challenges posed by this increase in transhipments. So that it can wrap and moor more ships at the same time.

Yeah, more ships. We have roads, we have ports, do we have ships? To participate in the split of this world freight cake? And the money involved to make? Well, unfortunately, we still don't. Then we have to ask, what causes Polish shipowners to exploit ships owned by the Polish Treasury under other foreign flags? The answer is labour costs. Well, a Polish shipowner engaged in international shipping, if he re-records his ships under the Polish flag, the next day he will have to... close the business. The increase in labour costs will result in a loss of liquidity. And here's the word of explanation.

Why are labour costs (as a result of social security) destroying Polish shipping companies (and consequently Polish flag)? But they do not destroy other Polish entrepreneurs. After all, these others also bear these costs, and yet they are able to stay on the market. And in this market, we often compete with good results! Let me explain. Well, let us assume that there is company A. This company A competes with Company B. It doesn't matter what business these companies are in. The essence of the matter is thisthat they both compete under the same rules. I mean, they have the same social security legislation. Even if Company A competes on the European market, the rules are still similar if they are not the same. Social security in Europe varies in detail, but the level of these safeguards is the same. Thus, the resulting additional labour costs are similar.

Not obvious to everyone.

The issue of international shipping is completely different. Let us refer again to the example of two companies, this time shipping. The shipping company A with ships under the Polish flag (theoretically, because such losers are virtually absent) competes with Company B, which operates ships still under the foreign (comfortable) flag. Polish legislation on social security applies on a ship under the Polish flag. And the resulting additional labour costs. On ships operated under comfortable flags, the legislation of the comfortable flag state, namely the Bahamas, Liberia or Panama... And there's no social security for sailors. And shipowner B doesn't have to pay any social security contributions. And here's one more thing to say. Well, the shipowner lives from the freight he receives for transporting the cargo. And freight rates shape a market where convenient flags dominate. Who's gonna win this competition? Shipowner A paying high insurance premiums or shipowner B not paying these premiums at all. I guess I don't have to say it's rhetorical.

What about the budget burden? After all, the exemption of the shipowner from the share of the employer's contribution will result in such a burden. Because someone has to pay this contribution to ZUS. And it will be no one else but the state budget. So far there is no expenditure, because there are no ships under the Polish flag. However, there is no revenue either. On returning ships under the Polish flag But this expense will come. Here's a little digression. Newton's third principle of dynamics (in the greatest simplification) says that each action produces a reaction. In physics, the reaction is equal to the action, only the sign is opposite. In economics, in the case I am writing about, the reaction sign is also the opposite (expenditure is negative, revenue is positive), but the reaction is greater than the action. And this expenditure, which is action, will trigger a reaction, so the revenue of the budget and much more.

In pictorial terms, pulling out the spending drawer will open a much larger revenue drawer. The revenue to the budget only for seafarers' contributions will twice exceed the budget expenditure for the refinancing of the shipowner's contributions. If we take into account other revenues such as tonnage tax, registration fees, inspection fees, direct and indirect taxes on workers whose jobs will be generated by the larger Polish fleet and which will also trigger this expenditure, the benefits of the budget will be many times greater. It would seem simple, wouldn't it? However, there are people who seem to be unaware of it.

Poland breach

Now the second thing: the privilege of sailors. I mean, they're gonna be cut in social security. Why should sailors be given special treatment? To the point that they need to be reduced in insurance? After all, everyone else in Poland pays contributions. And they're alive. And sailors not only earn well, they want privileges! Well, there won't be any privileges. Lower contributions result in lower pensions. So lowering your premiums is not a privilege. If, on the other hand, a seafarer wishes to have a pension adequate to his earnings, this will only be possible if he pays for the difference in the contribution at his own expense. This provides for a voluntary insurance option. The reduction in the seamen's contribution has a very different purpose.

This goal is to reduce labour costs so that Polish shipping companies can compete on the world market. That's to stimulate business. The flat-rate contributions already apply in the Polish social security system, among others for self-employed people. The aim of this solution (reduction of insurance premiums) was not to favour but to revive the economy. The link between the contribution and the minimum wage in the national economy, not the seafarer's gross wage, has another important aspect. It will contribute to the reduction of the expenditure of the state budget for the exemption of the shipowner from the share of the employer's contribution. As the lower contributions will be exempt, the lower budget expenditure will also be paid to cover this exemption. As a result, it will result in a positive balance of financial implications for the budget – the revenue to the budget will outweigh budget expenditure.

Yes, but the exemption of the shipping entrepreneur (armator) from paying ZUS contributions is a breach in the Polish insurance system. Yes, it is. There's no denying it. The problem is that there is no other way to solve the problem of returning Polish ships to the Polish flag. So when considering this issue, you have to ask: what is more important – the benefits for the state budget (which will bring this breach) or the system and its inviolability. For a full picture of the situation, it must be said that various forms of State aid (i.e. breaches) are used in EU/EEA countries. It follows that in the Union it is Poland with a lack of State aid for maritime transport that is just a breach.

Meanwhile, in the West

And now a few (well, a little more than a few) words, as it is there, in the developed countries of the Union to which we aspire. In Belgium, shipowners are excluded from the obligation to pay social security contributions, seafarers are partially excluded from the obligation to pay contributions, contributions for accidents at work are reduced, as a result the difference between gross and net wages is 13%. In Finland for registered vessels In the second Finnish register, it is possible to reimburse the shipowner for the payment of social security contributions and taxes (approximately 25-30% of the wage costs in total). In France, seafarers' social security contributions shall be reimbursed to shipowners provided that they are allocated to training, employment and fleet development.

In Greece, shipowners and seafarers pay social security contributions lower than employers and workers from other sectors of the economy. Spain reimburses 90% of social security contributions paid by employers. In the Netherlands, shipowners have the option of deducting 40% of wages paid to seafarers from the required wage tax. In Ireland, the shipowner is reimbursed for social security contributions incurred in part per employee. And Germany – our neighbors – can be said a role model.

W Niemczech armatorzy otrzymują bezpośrednie subsydia związane z obniżeniem kosztów pracy (podatki płacone od wynagrodzeń, składki na ubezpieczenia społeczne), marynarze spoza UE są wyłączeni z obowiązku opłacania składek na ubezpieczenia społeczne (z wyjątkiem ubezpieczenia wypadkowego). I Norwegia, co prawda nie UE, ale EOG – tu armatorzy otrzymują pełen zwrot składek na ubezpieczenia społeczne wpłaconych w imieniu marynarzy. We Włoszech z kolei marynarze oraz armatorzy eksploatujący statki w drugim rejestrze włoskim (IIR) są zwolnieni z obowiązku opłacania składek na ubezpieczenia społeczne, ciężar ponoszenia opłat spoczywa na państwie. No więc jak to jest z tym wyłomem?

I jeszcze kilka słów o sprawach pozagospodarczych. Weźmy choćby prawa obywatelskie. Polacy pracujący w Wielkiej Brytanii, Niemczech czy we Francji, gdy są wybory, mogą pójść do konsulatu i głosować. Marynarze nie mogą. Będąc na środku oceanu, do konsulatu nie dojdą. A na polskich statkach pod obcymi banderami obwody wyborcze nie są organizowane. Inaczej będzie, gdy statki te wrócą pod polską banderę. I marynarze, polscy obywatele przecież, odzyskają czynne prawo wyborcze. Inna sprawa – obronność państwa. Mamy pokój i oby tak zawsze było. Ale jak mówił już cztery tysiące lat temu Sun Tzu, jeżeli chcesz mieć pokój, to szykuj się do wojny. A przy obecnym stanie, gdy polskie statki są eksploatowane pod obcymi banderami, polska marynarka wojenna jest pozbawiona rezerw transportowych. Wykorzystanie polskich statków eksploatowanych pod obcymi banderami do potrzeb morskiego transportu militarnego w sytuacji konfliktu będzie niemożliwe. Powrót polskich statków pod polską banderę rozwiąże ten problem.

All Benefits

Są też inne sprawy międzynarodowe o wymiarze społecznym. Choćby ratyfikowana przez Polskę morska konwencja pracy. Marynarze pracujący na statkach wygodnych bander to jedyna grupa zawodowa nieobjęta państwowym systemem ubezpieczeń społecznych. Powrót polskich statków pod polską banderę zmieni to. Polscy marynarze zostaną włączeni w system ubezpieczeń. A tym samym Polska wypełni zobowiązania wynikające z ratyfikacji Konwencji MLC z 2012 r. Po wprowadzeniu tej przyjaznej żegludze legislacji nastąpi również uregulowanie statusu podatkowego polskich marynarzy pracujących na statkach obcych bander (armatorów mających siedziby w krajach UE i EOG). To były społeczne (międzynarodowe) problemy, które w dużej mierze rozwiązuje powrót polskich statków pod polską banderę.

Ale są też i państwowe. Pozycja Polski w IMO i innych międzynarodowych organizacjach żeglugowych zależy od wielkości polskiego tonażu pod polską banderą. W międzynarodowym rankingu Polska ze swoim tonażem plasuje się za Litwą, Łotwą i Estonią. Jako państwo bandery o śladowej wielkości floty nasz kraj realnie nie ma możliwości wpływania na kształtowanie porządku w międzynarodowym systemie prawnym żeglugi morskiej. Zwiększenie liczby statków pod polską banderą w zdecydowany sposób wzmocni naszą pozycję. I na koniec Unia Europejska. Wcześniej pisałem o tym, jak morskie państwa UE wspierają swoją morską żeglugę międzynarodową. Formy tego wsparcia są różnorodne. W Polsce dotychczas takiego wsparcia dla naszej żeglugi nie ma. Gdy w sprawie sądów, w której z UE słychać oskarżenia, są one bezpodstawne, to w tej byłyby zasadne. Bo niestety faktem jest, że pod względem wsparcia dla żeglugi morskiej nie trzymamy standardów UE. I nie stosujemy się do wytycznych Wspólnoty z 2004 r. w sprawie pomocy publicznej dla transportu morskiego.

Signature: Tadeusz Hatalski, Capt. W.