that as it may, the problems relating to flag state responsibility, or to put it precisely,
the lack thereof, has complex political and economic considerations.
It is significant that most open registry states including the top three, Panama,
Liberia and Marshall Islands happen to be developing countries. It is evident that
these countries have made political and economic decisions to be open registry flag
states with expectations of gaining considerable revenues from tonnage taxes. Many
of them have indeed made sizeable gains and others are aspiring. There is no doubt
that unless some other priorities in their political and economic agendas supersede
this policy, open registries are, and will, remain permanent fixtures in the world
shipping scene. For some of them, the ship registry is the principal source of national
revenue. In others, particularly some that are ex-colonies of traditional maritime
states it is a manifestation of their newly acquired independence and sovereignty.
The paradox is that these open registry states have virtually no beneficial ownerships
that are indigenous. This is in sharp contrast to the way in which traditional maritime
states developed their shipping prowess and maintained their competitive positions
in world trade. The open registry developing countries essentially operate a maritime
service industry by offering their flags to beneficial owners, the vast majority of who
are from the western traditional maritime countries. The verity is that in economic
terms the developing countries are stealing business away from the developed
traditional maritime countries.
Be that as it may, our concern in the present discussion is with sub-standard
shipping and how it can be minimized and eventually eradicated. In this vein, it is
true to say that fingers are pointed at developing countries that operate open
registries otherwise referred to as “flags of convenience”, an appellation that is, in
the view of this author, patently misconceived simply because any notion of a flag
that is of inconvenience to the owner and other interested parties is undesirable.
Casualty statistics over the last several decades indicate that a vast number of
maritime casualties involved ships of open registry persuasions.
92 By contrast, the
so-called traditional or closed flag states, which are mainly developed western
countries are considered as maintaining the requisite standards dictated by international law, a proposition that is imprecise at best. Whether or not open registry states
are the sole cause of sub-standard shipping is arguable even though this is the
popular belief among those who are supposedly in the know. Open registry ships
are considered as substandard because of the popular perception that they are
inadequately regulated by their administrations and the crew are ill-trained and
incompetent. No doubt the statistics speak for themselves. But there is the other
side of the coin. It is a fallacy to assert that substandard shipping is solely attributable
to open registries. No developing country open registry had anything to do with the
infamous sinking of the Titanic in 1913 or the disasters of the Estonia, Herald of
Free Enterprise, and Costa Concordia among others, all of which were flagged in
92 Ready (1998), p. 22.
Ship Nationality, Flag States and the Eradication of Substandard Ships:. . .
601
the lack thereof, has complex political and economic considerations.
It is significant that most open registry states including the top three, Panama,
Liberia and Marshall Islands happen to be developing countries. It is evident that
these countries have made political and economic decisions to be open registry flag
states with expectations of gaining considerable revenues from tonnage taxes. Many
of them have indeed made sizeable gains and others are aspiring. There is no doubt
that unless some other priorities in their political and economic agendas supersede
this policy, open registries are, and will, remain permanent fixtures in the world
shipping scene. For some of them, the ship registry is the principal source of national
revenue. In others, particularly some that are ex-colonies of traditional maritime
states it is a manifestation of their newly acquired independence and sovereignty.
The paradox is that these open registry states have virtually no beneficial ownerships
that are indigenous. This is in sharp contrast to the way in which traditional maritime
states developed their shipping prowess and maintained their competitive positions
in world trade. The open registry developing countries essentially operate a maritime
service industry by offering their flags to beneficial owners, the vast majority of who
are from the western traditional maritime countries. The verity is that in economic
terms the developing countries are stealing business away from the developed
traditional maritime countries.
Be that as it may, our concern in the present discussion is with sub-standard
shipping and how it can be minimized and eventually eradicated. In this vein, it is
true to say that fingers are pointed at developing countries that operate open
registries otherwise referred to as “flags of convenience”, an appellation that is, in
the view of this author, patently misconceived simply because any notion of a flag
that is of inconvenience to the owner and other interested parties is undesirable.
Casualty statistics over the last several decades indicate that a vast number of
maritime casualties involved ships of open registry persuasions.
92 By contrast, the
so-called traditional or closed flag states, which are mainly developed western
countries are considered as maintaining the requisite standards dictated by international law, a proposition that is imprecise at best. Whether or not open registry states
are the sole cause of sub-standard shipping is arguable even though this is the
popular belief among those who are supposedly in the know. Open registry ships
are considered as substandard because of the popular perception that they are
inadequately regulated by their administrations and the crew are ill-trained and
incompetent. No doubt the statistics speak for themselves. But there is the other
side of the coin. It is a fallacy to assert that substandard shipping is solely attributable
to open registries. No developing country open registry had anything to do with the
infamous sinking of the Titanic in 1913 or the disasters of the Estonia, Herald of
Free Enterprise, and Costa Concordia among others, all of which were flagged in
92 Ready (1998), p. 22.
Ship Nationality, Flag States and the Eradication of Substandard Ships:. . .
601