Flagstates - Seafarers' Rights

History and role of the Flag State

The flag of a ship has, from earliest days, provided an indication of that vessel’s nationality – the country under which it derived its legal status and whose laws applied to its operations. It was, in practical terms, necessary to fly a flag which was a visible indication of the state under whose protection that ship operated, backed up with the papers which would be carried by the Master. And as international trade developed in the Middle Ages, protection was important as warring nations and city states built naval forces to establish their writ at sea and control seas they claimed as their own. The earliest examples of what have become known as “open registers” or “flags of convenience” stem from the Classical period when Roman and Greek ships used the flags of the other country to secure trading advantages. In the Middle Ages, ships trading in areas far from their homes might arrange to fly the flag of the “controlling” state so to gain its protection and cargo rights. There were examples of British-owned merchant ships trading in the Mediterranean flying the flag of Venice or Genoa, also of ships with papers of more than one state on board to insure themselves against capture. The concept of flags of convenience re-emerged in the 1920s when a number of US passenger ships were re-registered under the Panamanian flag to avoid prohibition restrictions. In the early days of WWII, many US-owned ships traded under the Panamanian flag to facilitate their operation in the European war zone. The freedoms enjoyed under flags of convenience (FOCs) were noted closely by many more US owners and in the 1950s there was an explosive growth in US-owned tonnage operating under the Panamanian and Liberian flags. The US flag had become expensive for owners and the attractions of an FOC – freedoms from tax and fiscal control, minimum regulatory oversight, no restrictions on crew nationality, restricted financial liabilities facilitating “single-ship companies”, minimum legal formalities, simple mortgage arrangements and no political interference – were overwhelming. All added up to substantial cost reductions and both US and Greek owners, and increasingly those from Norway, sought to take advantage of these freedoms. In a relatively short time, the Panamanian and Liberian flags were dominating the world’s sea lanes at the expense of the traditional maritime nations whose owners increasingly found themselves disadvantaged by the costs and freedoms enjoyed by FOC operators. Seafarers, especially from the traditional maritime nations, have been the big losers in this flight to the FOCs in which there was brisk competition between registers to offer the cheapest registry fees and greatest freedoms. Shipping standards under many of these flags were lax, notably on the manpower front, with poor standards of oversight. Some of these flag states, while they might have been nominally members of the International Maritime Consultative Organisation (later to become the International Maritime Organization or IMO), took little part in its affairs, being focused entirely on the need to raise revenue from registration fees and building their market share. Later, as a result of a number of high profile accidents that had exposed the term “flag of convenience” to a great deal of political and public opprobrium, some FOCs have made strenuous efforts to improve their oversight standards and to rid themselves of the less scrupulous owners and their “rustbucket” tonnage. Some established effective inspection systems, while others have, in recent years, moved to open their maritime authorities to the scrutiny of IMO auditors. The division of ship registers into classes graded by quality has been a positive move that has encouraged better standards. There has, however, been no shortage of alternative registers to which shipowners can relocate their ships expelled from the more reputable flags.

Emergence of the “international registers”

Alongside these developments has been the growth of the “international” register – a flag open to foreign tonnage, located in its home nation state (or in some offshore location associated with it) but closely associated with its home domestic administration. The international register grew out of necessity, and the need to provide some adequate reaction to the disappearance of tonnage to the FOCs. The host home state regards the international register as a means of maintaining a base of maritime expertise which would otherwise disappear if the whole fleet sailed away to FOC havens. But most international registers, whether they are located in improbable offshore islands, or permitted to operate in an office down the road from the domestic maritime authority, offer exactly the same advantages provided by the flag of convenience or open register. Not surprisingly, seafarers and their representative organisations have been able to find little that is positive in these moves towards international registers, noting only the continuity in the numbers of jobs lost. At the same time as the creation of the international registers, the pressures led to some deregulation of national flag requirements, particularly the relaxation of national crewing and labour conditions, often leaving shipowners themselves as the self-regulators.

Port state oversight

Flag states are provided with extensive powers of oversight and control of the safety of ships flying their flags, with specific obligations for the inspection of their ships, jurisdiction and administration of the owning entities, the Master and officers and crew of the ship. They are required to provide “their” ships with appropriate certificates that demonstrate that the ship has been inspected and complied with international rules and standards. The SOLAS and MARPOL Conventions are highly detailed documents which do not permit flag states much “wriggle room” for interpretation. The flag state is also firmly in control of criminal and disciplinary powers with the duty to enforce penal jurisdiction where there have been breaches of regulations that have led to incidents such as collision, stranding or pollution. In such cases, it is required to respond to reports of violations involving ships flying its flags, institute proceedings and to inform the informing state of its action. Similarly, the Law of the Sea Convention, IMO conventions and ILO instruments all make the flag state responsible for inquiries into the circumstances surrounding casualties, which importantly are obligations and not “options”, that may or may not, be exercised. This panoply of responsibilities and obligations laid down by international law and conventions ought, in a perfect world, to ensure that there is an effective global regime that exercises adequate controls on maritime standards. It was accidents which resulted in terrible pollution which inexorably drove the move towards strengthened port state action. The incapability of such flag states, together with the difficulty of ascribing liabilities to a single-ship company registered in an unhelpful state, convinced coastal states that there was a need for a means of protecting themselves and their citizens against the dangers represented by substandard ships. Port state powers were to become a final safety net, should all the other measures to enforce standards fail. There were, not surprisingly, considerable worries in the industry about the emergence of a “patchwork” of port state controls in which an internationally trading ship would be faced with different rules in every port it arrived at. Such fears were behind the establishment of the Paris MOU, which endeavoured to ensure that the same rules applied in the ports of all subscribing members, and the Tokyo MOU was quick to follow suit. The IMO has been keen to see other regional MOUs rolled out around the world, and has used its influence, and its facilities for offering technical assistance to encourage this. Port state control may not be entirely uniform in scope or thoroughness, but the bones of a workable system are in place.