Seafarer’s loans and prohibited recruitment acts

ATTY. DENNIS GORECHO

Despite the perceived high income they receive, it becomes difficult for some Filipino seafarers to make the earnings last for the period of vacation and examinations, which in recent times can be inordinately long.

Not all seafarers have the privilege of getting redeployed immediately after their disembarkation making it problematic to have any cash reserves.

Difficult times and immediate need for money will lead seafarers to people known as loan sharks to be able to finance certain expenses.

Loan sharks can be a person or entity that allows you to borrow a certain amount of money and charge with higher interest rate, usually above established legal rates. They are also illegal financing companies that usually targets people who are in desperate need of money.

Taking advantage of such situation, there are employers or manning agencies that impose a compulsory and exclusive arrangement whereby a seafarer is required to avail of a loan from a specifically designated institution, entity, or person.

Such act is considered as one of the prohibited acts under the Amended Migrant Workers and Overseas Filipinos Act (AMWA) or R.A. No. 10022 and the POEA rules in relation to the recruitment and employment of Filipino seafarers wherein the company or person can be held criminally or administratively liable.

The POEA’s revised rules was passed in accordance with the government’s policy, among others, to uphold the dignity and fundamental human rights of Filipino seafarers navigating foreign seas, and promote full employment and equality of employment opportunities for all.

Other prohibited acts that involve loans include (a) withholding or denying travel or other pertinent documents from an applicant seafarer for monetary or financial considerations, or for any other reasons, other than those authorized under the Labor Code; (b) withholding of seafarer’s salaries or remittances, SSS contributions and loan amortization or shortchanging/reduction thereof without justifiable reasons; (c) granting a loan to a seafarer with interest exceeding eight percent (8%) per annum which will be used for payment of legal and allowable fees and making the seafarer issue, either personally or through a guarantor or accommodation party, post-dated checks in relation to the said loan; and (d) refusing to condone or renegotiate a loan incurred by the seafarer after the latter’s employment contract has been prematurely terminated through no fault of his/her own.

Under the AMWA, any person found guilty of any of the prohibited acts shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years and a fine of not less than five hundred thousand pesos (P500,000.00) nor more than one million pesos (P1,000,000.00).

Under the 2016 Revised POEA Rules and Regulations, penalties for the offenses may vary based on the frequency of violations from suspension of license (two months to two years) to its cancellation on the fourth offense.

Money claims arising from recruitment violation may be awarded in addition to the administrative penalties imposed. In lieu of the penalty of suspension of license, the POEA may impose the penalty of fine which shall be computed at Fifty Thousand Pesos (P50,000.00) for every month of suspension.

The penalty of cancellation of license shall be imposed by the POEA upon a respondent found liable for committing an offense, regardless of the number or nature of charges, against five (5) or more workers in a single case.

All cases shall be barred if not commenced or filed within three (3) years after such cause of action accrued.