New Zealand’s Associate Transport Minister James Meager has declined an application by NovaAlgoma Cement Carriers (NACC) to operate a foreign-flagged vessel on domestic coastal routes, a decision that has been welcomed by maritime unions as a victory for local jobs and supply chain resilience.

The ruling blocks NACC’s attempt to use the Panamanian-flagged, internationally crewed NACC Vega to replace the New Zealand-flagged and crewed MV Buffalo on a cement transportation route for Holcim. The application sought an exemption under Section 198 of the Maritime Transport Act.

Maritime Union of New Zealand (MUNZ) National Secretary Carl Findlay praised the minister’s decision, stating it sends a clear message about protecting domestic employment. “This is a win for local jobs and New Zealand shipping,” Findlay said. “Holcim must now accept that its plan to replace experienced New Zealand crews with foreign labour has failed. The highly skilled crew of the MV Buffalo is ready, willing, and able to continue serving New Zealand’s coastal distribution network.”

The International Transport Workers’ Federation (ITF) also applauded the outcome, framing it as part of a broader global recognition of the importance of strong maritime cabotage protections. ITF Cabotage Task Force Chair Chris Given emphasized the risks of undermining national maritime workforces. “This decision reinforces what our international research makes clear: foreign-flag shipping cannot be treated as a cheap substitute for a national maritime workforce,” Given said.

The dispute comes after Holcim gave notice of redundancy to 32 New Zealand seafarers crewing the MV Buffalo in November, after signing a contract with NACC to transport cement for up to three years. MUNZ has called on Holcim to commit to supporting New Zealand shipping and retaining local jobs.

The case has highlighted concerns about Flag of Convenience (FOC) shipping, a practice where shipowners register vessels in foreign nations to bypass labor laws, tax obligations, and safety standards. Critics argue that FOC operations create “floating sweatshops” with minimal worker protections and undercut responsible operators.

For New Zealand, the encroachment of FOC shipping represents a threat to economic sovereignty, biosecurity, and local employment, according to maritime advocates. The practice allows multinational companies to displace domestically flagged and crewed ships on coastal routes, eroding the country’s maritime capability.

MUNZ has emphasized that the episode underscores the vulnerability of New Zealand’s maritime trade and the need for a robust policy framework to rebuild the domestic coastal shipping fleet. “New Zealand requires a robust and permanent policy framework to rebuild a dedicated New Zealand domestic coastal shipping fleet, crewed by New Zealanders, ensuring security and resilience in our supply chains,” Findlay said.

The union pointed to the critical role domestic shipping played during national emergencies including the Christchurch and Kaik?ura earthquakes and Cyclone Gabrielle as evidence of the need for a strong national maritime capability.

NovaAlgoma, founded in 2016 as a joint venture between Nova Marine Carriers SA of Luxembourg and Algoma Central Corporation of Canada, operates three fleets including NovaAlgoma Cement Carriers. The company had sought to secure the Holcim contract using its foreign-flagged vessel rather than the existing New Zealand-crewed option.

The Maritime Union has indicated it looks forward to ongoing discussions about the future of the maritime industry with Associate Minister Meager in the new year.