The Philippines has called on shipowners not to assign Filipino seafarers to vessels crossing the Red Sea because of the heightened security risk.

A government advisory, issued by the Department of Migrant Workers, follows a deadly escalation in Houthi attacks on Red Sea shipping. Thirty-eight Filipino seafarers were caught in two incidents this month. At least three are feared dead and several remain missing.

The Department of Migrant Workers’ intervention could have a far-reaching impact on global shipping. Although it cannot compel shipowners to act, it licenses the Filipino labour agencies that provide their crews and can punish any that do not comply.

Filipino seafarers make up roughly 30 percent of the world’s maritime workforce and industry experts warn that the advisory issued on July 10 may affect up to half of the vessels passing through the Red Sea.

“This is likely to seriously reduce the number of vessels willing and able to sail through the Middle East region, and place further strain on regional and global trade,” said Cameron Livingstone, a maritime lawyer based in Dubai.

Under the standard employment contract used by all Filipino labour agencies and seafarers, crew members have long had the right to refuse to sail through conflict zones. However, the clause is rarely invoked due to workers’ fears of losing their jobs or the logistical difficulty of offloading personnel.

Recent updates to the contract grant seafarers an absolute right of refusal to sail through war zones. The shipowners and labour agencies must provide the Philippines government with the names of any seafarers who choose to remain onboard after being informed of their right to disembark.

Crew members who opt to leave must be replaced, potentially causing delays and additional operating costs at a time when war risk premiums are already climbing.

Insurance rates for vessels crossing the Red Sea surged last week to as high as 0.7 percent of a ship’s value, up from 0.3 percent before the attacks, according to industry sources cited by Reuters. Some underwriters have paused coverage for voyages in the region altogether.

“Ultimately, these costs will be passed on to the end user,” said Captain Abhijit Naik, managing director for marine and cargo at insurance broker Marsh India and Middle East.

The Houthi militant group began targeting commercial shipping in late 2023, prompting major carriers to reroute vessels around the Cape of Good Hope, a longer and more expensive alternative to the Suez Canal.

An easing of tensions in May raised hopes for de-escalation, but the latest attacks have renewed uncertainty over the security of one of the world’s most vital trade routes.
Source: AGBI