Re-flagging can have severe political consequences

UNDER maritime regulations, each merchant ship has to be registered with one country. While the UN Convention on the High Seas states that a vessel should have ‘a genuine’ link with its flag state, current rules permit ships to sail under any flag regardless of their ownership. This is known as a ‘flag of convenience.’

‘If you’ve got a credit card, and you’ve got 15 minutes, you can re-register your ship under any flag you want,’ said University of Plymouth maritime logistics policy professor Michael Roe, reported CNN.

A very common practice

The practice is very common given that some 40 per cent of the global fleet is registered in Panama, Liberia and the Marshall Islands, which are three countries that collectively own just 169 ships.

‘Without being too insulting, these are totally irrelevant countries when it comes to shipping, except they’ve got cheap flags with low standards of regulation,’ Mr Roe said.

Greece, which owns the world’s largest fleet, is sailing most of its ships under a foreign flag because shipowners want to avoid Greece’s high taxes.

Flag of convenience

Richard Coles, who is a senior research fellow at the Institute of Maritime Law at the University of Southampton, said the term ‘flag of convenience’ is considered derogatory in the shipping industry because under international conventions, every ship has to comply with common safety, environmental and labour law standards, regardless of its flag.

‘Now here is the rub,’ Mr Coles said. ‘A British-flagged vessel or an American-flagged, these are flag states that rigorously enforce their safety rules, whereas if you have a small Caribbean island which doesn’t have a large civil service and the means of enforcing the rules, obviously, the standards are not likely to be as good.’

Huge impact on crews

But the flag decision can have a huge impact on crews. Stena Impero, the Swedish-owned tanker that was seized by Iran earlier this month in the Strait of Hormuz, was targeted because if was flying the British flag.

The crew aboard Stena Impero comes from India, the Philippines, Russia and Latvia, countries that are mostly not involved in the current spat between the Iranians and the West.

David Heindel, the chairman of the seafarers’ section at the International Transport Workers’ Federation, said the ITWF has been campaigning against flags of convenience for decades, saying the practice puts crews at risk of exploitation.

Different flag, different rights

‘On flag of convenience vessels non-national seafarers simply don’t have the same rights that national seafarers would have if they were employed,’ he said.

Mr Heindel said seafarers sometimes find it difficult to get help from their vessel’s flag state if they are not its citizens. That is especially true when the flag belongs to a developing country with little diplomatic power and no real labour protections.

At the same time, Mr Heindel said, the diplomatic missions of the seafarers’ own countries may not be able to help either. It may be their citizens who are involved, but they have no power over the vessels.

To make the matters even more complicated, ships are allowed to switch flags and re-register as they please, even mid-journey. For example, in a conflict situation when security becomes a concern, re-flagging could provide respite.

According to Stena Bulk, Stena Impero’s owner, the British and Swedish governments are leading the diplomatic efforts to have the ship and the 23 crew members released, keeping the Russian, Latvian, Philippine and Indian embassies informed.