Can Collective Bargaining Overcome Institutional Arbitrage in International Employment? Evidence from China's Ocean Shipping Industry

• In Event: 20881 - Section on Labor and Labor Movements Roundtables
  In Refereed Roundtable (60 minute): Table 5: Rethinking Labor (New Perspectives)

Abstract

In 2006, the International Labour Organization promulgated the Maritime Labour Convention, which clarified the rights and obligations of ratifying countries and seafarers. However, there exists a room for institutional arbitrage—if a country's shipowner association signs a collective agreement with the seafarers' union, port state inspections will only examine the compliance of the collective agreement, rather than the individual contracts of each seafarer. The "Chinese Seafarers' Collective Agreement" emerged in this context. This paper aims to examine whether the "Chinese Seafarers' Collective Agreement" of 2022-2023 has improved the working conditions of Chinese seafarers. Using a difference-in-differences approach, the paper analyzes 130,394 inspection results from the 2020-2024 "Memorandum of Understanding on Port State Control in the Asia-Pacific Region." The empirical results show that the signing of collective agreements significantly reduces the proportion of labor-related deficiencies in port state inspections and lowers the frequency of deficiencies in labor clauses related to shipboard conditions, while having no significant effect on facility-related labor clauses. Mechanism analysis shows that the effect of collective agreements on improving labor conditions diminishes when inspections are conducted in the ports of contracting states. Heterogeneity analysis reveals that the signing of collective agreements has a more positive effect on labor conditions for flag-of-convenience ships and privately owned vessels. These results suggest that the enforcement of international conventions is non-compulsory, and in practice, sovereign states tend to implement flexible enforcement, engaging in institutional arbitrage. The protection of international seafarer labor standards and working conditions remains an issue that requires further improvement.

Authors

• Yi Sui, Renmin University of China

• Hao Zhang, Renmin University of China