… and some with a “flag of convenience” that allows shipowners to avoid millions in taxes, not to mention environmental, health & safety regulations. Rose George in the NYTimes discusses “Flying the Flag, Fleeing the State“:
Four American yachters killed; a Danish family of five and two crew members kidnapped: these events in the space of a week early this year may finally fuel a consensus that something needs to be done about piracy in the Indian Ocean and Gulf of Aden. And something should be done: in addition to the yachters, nearly 700 sailors, mostly Filipino, Bangladeshi and Russian, are being held hostage. Often forced to operate their captured ships at gunpoint, with little food or water, some of them have been prisoners for months.
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But maritime lawlessness isn’t confined to pirates. Thanks to a system of ship registration called “flags of convenience,” it is all too easy for unscrupulous ship owners to get away with criminal behavior. They have evaded prosecution for environmental damage like oil spills, as well as poor labor conditions, forcing crews to work like slaves without adequate pay or rest. But unlike piracy, which seems intractable, the appalling conditions on some merchant ships could be stopped.
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Ships used to fly the flags of their nation. They were floating pieces of their home country on ungovernable seas, with all the advantages and disadvantages of government oversight: if things went wrong, seafarers were protected by their governments. If they did wrong, they could be punished.
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But in the early 20th century, this began to change. Panama, seeking to attract American ships avoiding Prohibition laws, allowed non-Panamanians to fly its flag, for a fee. Liberia and other countries followed suit. Today these “open registries” are used by over 60 percent of shippers, up from 4 percent in the 1950s.
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Under the flags of convenience system, registries have been divorced from government oversight. North Korea has a thriving registry, as does landlocked Mongolia. Liberia’s registry, the second-largest in the world, flourished even during a dozen years of civil war. Some registries allow ship owners to change the flags they’re registered under within 48 hours; some require little more than a signature or an online form from an owner. Many don’t require owners to disclose their identities at all…
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Many state registries lack the capacity or will to monitor the safety and working conditions on ships, or to investigate accidents. Instead, ship safety certificates are given out by private classification societies. Owners are allowed to choose which society they want — and the worst predictably choose the least demanding.
I originally typed that title as “fleecing the state”, but of course that’s not allowable under the Grey Lady’s style guide. Click through and read the whole article, you won’t regret it. And if you’ve got a few extra minutes, George’s “All at Sea: Five Weeks on A Container Ship” dispatches for Slate at the end of last year will tickle anyone who ever read the ripping maritime yarns of Kipling or Jack London, or Mark Twain’s Life on the Mississippi.
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The Snarxist Formerly Known as Kryptik
But isn’t this kind of regulation dodging and legal voodoo exactly what the Republicans deify and exalt? Why would they ever want to fix that? Especially when it means “businesses” get to work around and avoid all that “big government” “job killing” law stuff?
Villago Delenda Est
“Job killing” In this case, and all others, means “killing our ability to steal labor”.
WereBear
But, but but… all we have to do is boycott these shippers!
Then they will stop.
/libertarian idiocy
existential fish
Good luck fixing this. Congress won’t even ratify the vanilla and military-endorsed UN Convention on the Law of the Sea because conservatives think it’s world government in disguise.
Dennis SGMM
Flying a flag of convenience will in no way deter American ship owners from demanding that the US do something about the pirates.
danimal
If the shippers relied on the Liberian Navy or the Panamanian Armada to protect them, they would reconsider the flag under which they sail.
Ivan Ivanovich Renko
I don’t see it as feasible to restrict the anti-piracy efforts of the USN to only protecting American-flagged vessels. It should be part of a navy’s job– arguably the biggest, outside of conduction operations against seaborne combatants– of any navy worth it’s grog ration.
US owners, however, whose vessels are supported or aided in any way by the USN (or any other naval power, for that matter) should have to pay for it. Big time, and in spades. American-flagged vessels or those flagged by the nations of NATO signatories would be covered for “free.”
piratedan
well its strange that this article follows the Gitmo one and I think its an elegant solution, we simply repatriate those Gitmo detainees of dubious status to one of those Mongolian flagged freighters and they can be like “The Terminal meets Ship of Fools” forever sailing the high seas, never finding a port of call that can be home.
Left Coast Tom
@Dennis SGMM: You beat me to that comment…it seems like we could combine these two problems, and tell U.S. ship owners flying Mongolian flags to ask the Mongolian “Navy” to help them out with their piracy problem.
burnspbesq
Got any evidence of tax evasion as a result of the use of offshore registries? Because I know that my shipping industry clients pay lots of US income tax on income that they earn in the United States, and they also pay tax to other countries where they earn income. And none of their ships are registered in any major industrialized country.
El Cid
This is why the ultra-crazy and abusive L. Ron Hubbard launched his fake naval “Sea Org” to avoid tax dodging investigations of his ‘church’.
Well, also so he could torture ‘scientologists’ who had either strayed or which someone imagined they had.
They had nice outfits pretending there were military (or, conversely, space military) hierarchical uniforms. And the loyal recruits signed a billion-year contract.
This according to many sources, including Hubbard’s own son (whose book about his crazy pop was quite funny as well as dark).
Scott P.
Ships flying false flags in time of war is a practice centuries old. Privateers would do it to fool their prey, the British and Germans did it in WWI to attempt to avoid surface raiders/U-boats/blockade patrols. I’m not even sure how you stop it. If you say that every ship has to be flagged under the corporation that controls it, you just get shell corporations formed in the country whose flag you desire.
Jay C
Despite Rose George’s fine reportage, this is scarcely “news”; the international shipping industry has long since been engaged in a “race to the bottom” AFA wages, fees, registrations, etc. have been concerned; and the economics of the business not only haven’t changed as the vessels themselves have gotten larger, but gotten worse. The main difference of late is the rise in piracy off Somalia, and in certain Asian waters necessitating a sizable naval presence: paid for, of course, by various governments.
Maineiac
Evidently this was news to the U.S. Coast Guard as they are responsible for advising congress on martime safety. The Deepwater Horizon was registered in the Marshall Islands to avoid strict oversight.
Pococurante
The current situation benefits nations, or at least the politicians that run them. It will not change easily.
Michael E Sullivan
It seems to me that the obvious solution here is for a bunch of countries who have actual navies that protect merchant ships to get together and establish some minimum standards, put together a document and any country that doesn’t sign it, their ships are not entitled to naval protection from counties who do sign it. If, say US, UK, EU, China, Japan, Russia all sign, then pretty much anybody else who wants the business has to agree to whatever baseline those entities come up with. Ships who ignore this and sign with the DPRK anyway will face piracy alone, and can’t leech off the resources of the rich world while flouting labor standards.
It’ll never happen though.
maineiac
Ships for the most part are not being protected in the Horn of Afirca region, anyway owners aren’t going to lose any sleep over a ship getting captured as insurance covers the losses. It’s the crews that suffer not the owners.
Kewalo
Very interesting article, thanks for posting them.
I read them a little differently then most of you since I worked as a Merchant Marine for 10 yrs. If I hadn’t gotten sick I’d probably still be shipping.
For the most part she was right on, but when I read that sleeping was a problem it floored me. I have never slept so well, the sea rocked me like a baby. It was wonderful and I’ve never heard anyone say they had a problem sleeping on board ship.
Another it that most of us that ship in this country is we work 3 mo. on 3 mo. off.
On one of the ships I was on management had us practice using the fire hoses to go after pirates. As you can imagine this idea was met with derision.
Damn I miss shipping. Here’s a link to the union school I attended.
seafarers.org/phc/