FLEET OF CLAY

In the seas off the Shetland Islands, scores of rusting factory ships f rom the former Soviet bloc have settled more or less permanently.Their presence is causing increasing problems both on and off shore

LERWICK, in the Shetland Islands, the most northerly town in Britain, is something of an economic miracle. It thrives on revenue from North Sea oil. It also thrives - unusually in these difficult times for British fishermen - on revenue from Nort h Sea fish. But it is not, at the moment, a particularly happy town.

Look out over Lerwick harbour, and the first thing that catches your eye is the winter sun glinting off the ships. There are around 80 of them: factory ships, each capable of processing hundreds of tonnes of freshly-caught mackerel and herring every week, preparing them for distribution all over the world. But they are less pristine than the glittering sunlight suggests. "We have," says Glen Oldbury, a local helicopter captain, "blue and rust, cream and rust, red and rust. And that one, that's rust on rust."

They come from eastern Europe and what used to be the Soviet Union. But their name is drawn from a different culture, and a different age. They are known as Klondikers.

When they first arrived, initially in twos and threes in the late Seventies, then by the dozen after the ban on herring-fishing in British waters was lifted in 1982, it would never have occurred to anyone to use such a nickname. The fleet was a model of Communist bloc discipline. Most of the ships were Soviet-owned, and most of the fish ended up - frozen, canned o r otherwise processed - feeding the Soviet people. Then came the collapse of Communism, and a new set of forces came into play.

Today, the ships are on contract to a variety of British fish processors and distributors, and the processed fish is sold everywhere from the USA to Japan. Local fishermen do well out of the arrangement: the Klondikers can process their catch far more cheaply and efficiently than land-based factories can (partly because they can follow fish and fishermen as the shoals migrate westwards in the course of the winter). The British companies do well out of it too, as do the various Russian, Bulga r ian, Estonian, Lithuanian, Polish and Romanian entrepreneurs who now own the ships. As with the original Klondike gold-rush, though, there are casualties.

Chief among these is safety. Very few of the Klondiker ships meet European health and safety requirements, or pay their workers anything approaching European levels of wages. That is why they are so cheap. It is also why Shetland Islanders who do not directly benefit from their presence are viewing the Klondiker phenomenon with increasing concern.

It is only two years since the wreck of the Braer oil tanker caused a major ecological scare in the Shetlands, and there are understandable fears about the possibility of further disasters. In 1994, the Department of Transport's Marine Safety Agency (MSA) found that more than 50 per cent of the Klondiker fleet had serious defects and should, in theory, have been detained in port until fixed. The trouble is that they cannot be. As long as the ships remain anchored outside harbour, as most of t hem do, the MSA has no powers to detain them or to enforce UK safety standards. And, as Ian Brown, of shipping agents Hay & Co, explains: "The boats don't have the money for basic equipment. It is only a matter of time until there is a serious incident."

Just over a year ago, as winter gales swept the seas around Lerwick, two ships, the Lunokods and the Borodinske Polye, were wrecked on the Shetland coast, and it was only through luck and the considerable skill of the rescue services that there was no loss of life. This winter's problems have included the Pionersk running aground and another incident in which a man died when a lifeboat ferrying people ashore capsized. No one is surprised by such incidents: the waters are pierced by any number of sharp rocks, and the Shetland winds are vicious, but often market forces are to blame as well as the forces of nature. The Lunokods, for example, might have avoided trouble if only it had had enough fuel to motor well clear of the danger area; like many Klondikers, however, it could not afford to fill its tanks. The ships' owners may be doing well, but not well enough to spend a penny more than absolutely necessary on their upkeep.

Lesser incidents can usually be traced to the same cause. "People are pretty mad about deliberate pollution," says Dr Jonathon Wills, local councillor and wildlife expert, "which is the result of cutting corners." Oil is frequently pumped out of bilges at night, he claims, because ship-owners refuse to pay to use the Shetlanders' on-shore waste systems. The ships, he adds, "are rust buckets".

ON BOARD, the sense of despair and decay is, if anything, stronger. The Klondikers' hospitality is legendary - even among the Shetlanders, whose hospitality is a legend in itself - but no amount of10am vodka can disguise the seriousness of the situation as Alexander Karakulov, captain of the 26-year-old Krasnoputilovets, telephones his employers in Russia on a borrowed mobile phone to discuss the ship's latest marine safety report. The ship, it seems, lacks basic safety equipment and would be compulsorily detained if it ever moored in the harbour; yet there seems little prospect of anyone paying to make things better. "Nothing could make this a safe vessel," says Karakulov. "This boat is scrap."

The harsh economic climate in the former Soviet bloc means that there is no shortage of volunteers to crew such vessels. Yet it is difficult to contemplate their lot without pity. Each boat has between 40 and 250 crew, working in shifts around the clock.Wages rarely exceed £30 or £40 a week and are often considerably less. In addition to the dangers of living in boats of questionable seaworthiness in seas notorious for their unpredictability, Klondiker crews have to endure cramped living conditions andpoor diets whose effects are seen in their invariably pallid complexions. Joan Walley MP, Labour shipping spokeswoman, says: "We are concerned about the human rights of some of the crews. It seems wrong that people working in British waters can suffer these squalid, dangerous conditions."

They seek relief by coming ashore, in lifeboats, hundreds at a time; but there is nothing to do there, and, anyway, no one has any money with which to do it. There have been reports of friendships and romances with locals springing up, but on the whole language difficulties make such consolations rare. Instead, Klondikers usually keep to themselves, wandering around looking lost, or browsing in shops, where they have a reputation - in the words of Lerwick pharmacist Alex Johnson - as "not the most honest or profitable of customers".

Some locals, such as schoolteacher Derick Hearning, look fondly back on the stricter days before perestroika, when each Russian ship "used to have a commissar on board responsible for the moral education of the crew". Now, he adds bitterly, "it is a free-for-all." Recent scandals reported from on board the ships include numerous incidents of drunkenness and violence, an outbreak of tuberculosis and, this autumn, a murder.

On shore, growing numbers of Klondikers can be found at Lerwick municipal dump, picking through the rubbish, looking for unwanted fridges, televisions, bicycles and other cast-offs of the Shetland Islands' affluent society. They are invariably polite andfriendly, but they are not happy, and many maintain a distinct reserve. "I am an educated man," said one of the scavengers, refusing to give his name when I asked him. "I am not always at the dump. I am not proud to be here." As a further constraint on integration with Lerwick society, everyone has to be back on board before dark - which in the depths of the Shetlands winter falls at 3pm.

THE PEOPLE of Lerwick have mixed feelings about the Klondikers. On one level, they resent them in much the same way as mainland communities often resent "travellers" and gypsies. But they also respect them as fellow seafarers; and, on another level, there is no denying the benefits they bring. Without them, not only would some 60,000 tonnes of mackerel go unprocessed each winter, but millions of pounds' worth of business - in supplies, services and harbour dues - would be lost to the local economy.

But if the current state of affairs has its benefits, there is also a widespread sense, both at land and at sea, that it cannot continue. Recently, two Bulgarian vessels, Aktinia and Rotalia, were detained in port by creditors. Their crews had hardly been paid in eight months, and when I visited Aktinia one of its crew members was on hunger strike. Another, an engineer called Velvo Zahor, made me "coffee" - water passed through coffee grounds so old that they did not even stain it - while showing me tourist brochures of his home town on the Black Sea. He was, he said, sick of this "prison ship". There were tears in his eyes as he spoke.

There is little food on Aktinia, and little to do except hope that the ship's problems will be resolved. But it is hard to see how they can be resolved. Short of the old Soviet system being restored, or a disastrous shipwreck forcing the Government to close the legal loopholes that keep the Klondikers beyond the grasp of the Marine Safety Agency, it seems probable that the Shetland Islands will continue to play host to Eastern Europe's floating rust-belt for many winters to come.