Flagofconvenience and atypical business models facilitate these airlines practice to undermine workers pay, benefits, and work rules. There are several advantages of the flag of convenience such as. Over 4,400 vessels about 12% of global shipping fly its flag. 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 often contain additives and preservatives that may be harmful to health. Known as flags of convenience foc, many of these countries lack the resources or the will to monitor and control vessels. The development of open registries in the global maritime business and implications for modern seafarers william r. Article 6 2 goes further to state that a ship which sails under the flags of two or more states, using them according to convenience, may not claim any of the nationalities in.
Why ship owners responsibility to ensure sustainable ship. The only certainty is that a vessel must sail under. Opinion flying the flag, fleeing the state the new. Goldiet introduction maritime flags are a symbol of nationality. Concept of ship registration yichih yang associate professor. A ship may not change its flag during a voyage or while in a port of call, save in the case of a real transfer of ownership or change of registry. The nationality allows a ship to travel internationally as it is proof of ownership of the vessel. The owners enjoyed lower operating costs in addition to the substantial tax benefits of flying a flag of convenience. Pdf restricted to registered users only download 2819kb item type. The disadvantages of focs are potential increased port state. A flag of convenience ship is one that flies the flag of a country other than the country of ownership.
Its flag offers the advantages of easier registration often online and the ability to employ cheaper foreign labour. When a vessel is flying a flag of convenience, she is most likely flying the flag of a country other than her origin and most certainly different from her owners. As this section will discuss the advantages attached to the flag of convenience foc but those advantage tends to represent the perspective of the owners. Environmental catastrophes and flags of convenience does. Definition ship registered under the maritime laws of a country which is not the home country of the ships owners. The term is often used pejoratively, citation needed and the practice is regarded as contentious. There are specific advantages for using flags of convenience instead of the traditionalclosed flag registries the most important of which are the following. Economics, politics, and alternatives, supra note 4, at 143.
Each merchant ship is required by international law. Flag of convenience foc trading, the practice of registering a merchant ship in a sovereign state other than that of the ships owner and flying that states flag, has been a growing trend on the h. Consequently, the ship owners take advantage of the inability of the flag of convenience to govern its own ships, which compromises important. The white, grey and black wgb list presents the full spectrum, from quality flags to flags with a poor performance that are considered high or very high risk. The flag of convenience, more politely known today as an open registry, is supported by some and damned by others in the international maritime trade. Why so many shipowners find panamas flag convenient bbc. Flag registries that do not have nationality requirements for the shipping companies that use their flag often because they actually do not have any shipping companies incorporated and that provide financial benefits, such as lower taxes, are commonly known as flags of convenience focs. But there are some disadvantages that go with the designation, too. If a ship sails under a flag of convenience, it means it is operated or taxed under the laws of. Introduction the sea is the last place on the globe that remains free from control by government. As such, they are generally thought to be important in determining when a relationship exists between a state and a ship and, thus when a.
The wave of the future many articles and books have been written to extol the advantages and virtues of flags of convenience foc shipping, argue its necessi ty, and defend the practice. Many businesses feel driven to have a flag of convenience to remain competitive. The term flag of convenience refers to registering a ship in a sovereign state different from that of the ships owners. Flags of convenience the development of open registries in. A threat to maritime safety and security article pdf available january 2016 with 4,428 reads how we measure reads. Why ship owners responsibility to ensure sustainable ship recycling needs to go beyond flag state jurisdiction briefing paper. Caring about the people who frequent your store will give it a strong reputation in your neighborhood. There is no enforcement of any policies and rules which makes them independent of such implications. United nations has characterized flags of convenience as shipping under which there exists no genuine link between the state and the ships and, in particular, under which the. Crimes under flags of convenience yaleglobal online. The right of states to confer nationality to ships comes with a number of responsibilities. According to ship inspection, companies opt for flags of convenience foc for the following reasons. Ship registration is the process by which a ship is documented and given the nationality of the country to which the ship has been documented.
Flag more than a matter of convenience advising a client of the appropriate flag state for his or her vessel is a challenging retainer, requiring consideration of almost every commercial issue from vessel ownership, labor and manning issues, and even the reputation of the flag state. Flag discrimination thus places impediments in the path of the free flow of international trade, disturbing trade between all countries and all sectors of the economy. What are the advantages and disadvantages of flags of. The response of a number of the traditional maritime powers has been, often additionally to the traditional tax and other financial incentives to the shipping sector, either to enable the bareboating out of vessels under their flag e.
The pros and cons of owning a convenience store show that the experience is generally positive for owners who are invested into their business. Business owners dont feel they can provide the same level of service as other companies without the same financial advantages. Provides that a merchant ship is part of the territory of the country whose flag she flies and that. Corporate ownership in almost all instancesto register a ship or boat under a flag of conveniencethe owner sets up a corporation in the foc country. It believes the world economy could survive a ban on flags of convenience. Over 40,000 large merchant ships, and innumerable smaller coastal craft,1 ply the seven interconnected oceans comprising nearly threefourths of the earths surface. They may contain gmo ingredients nutrients are often lost during processing. Flag of convenience foc is a business practice whereby a ships owners register a merchant ship in a ship register of a country other than that of the ships owners, and the ship flies the civil ensign of that country, called the flag state. The term flag of convenience, as noted in the introduction, is a customary laymans term for a vessels flag when registered in an open registry. The secret of this maritime success is an old practice known as the flag of convenience. However, from the earliest days there has been opposition to foc shipping, and lately the disenchantment over. The foremost advantage posted by the flag of convenience foc is that it tends to provide employment to the citizens of the country which the owner has opted to fly with the flag. Each year a new white, grey and black list will be published in the paris mou annual report. The practice of registering merchant vessels under a foreign flag is wide.
There are no liabilities as there is a sort of mark on every ship which makes it authentic. Flag of convenience meaning in the cambridge english. A ship operates under the laws of its flag state, so vessel owners often register in other nations to take advantages of reduced regulation, lower administrative fees. But the financial benefits came at the expense of poor training, poorly maintained equipment, and even poorer safety procedures which resulted in inoperable alarms and failed shutdown systems. There are specific advantages for using flags of convenience instead of the traditionalclosed flag registries, the most important of which are the following. Flag of convenience and abuse of international maritime law. Many of these nations that provide flags of convenience at a price lack the capacity or will to monitor the safety and working conditions on ships or to investigate accidents, said george. Low tax in trading ship, low registration fee, has the right to hire officers and crew members that are accepting low salary the best advantage, the cost was reduced.
Abstract flags of convenience, a tool developed by the modern maritime business to circumvent western labor and tax regulations through international vessel. Developing countries see the growing use of flags of convenience by shipowners in developed countries as a substantial impediment to their efforts to expand their own merchant. Consequently quasi flags of convenience may be defined as the flags of those countries or areas that offer some or even all the advantages of foc to attract tonnage to their registry, but which differ from foc because they or their metropolis or historical home countries, a have or can develop the administrative machinery effectively to. The itf has a powerful influence on the wages and conditions of seafarers working on ships flying flags of convenience focs. It might come as a surprise that while a large majority of cruise lines visit us ports and even have headquarters in the us with american owners, their flags indicate affiliation to another country. Ending the use of flags of convenience by pirate fishing vessels pdf. Protected by this convention, large shipping companies and cruise lines choose to register their vessels in certain countries, taking advantage of their lax laws of convenience, avoiding high international standards this practice is known by the term flag of convenience. Owing to this, the flags they flew began to be known as flags of convenience. The article about flags of convenience on wikipedia further indicates. International law requires that every ship be registered in a country, called its flag. Once you achieve that, you can begin building a foundation for longterm success. In addition, the model risks eroding the proactive safety culture fostered by many countries regulations to the detriment of airline passengers and cargo shippers. Flags of convenience and iuu fishing winners iuuoperators signi.
Flag of convenience foc is a business practice whereby a ships owners register a merchant. The international transport workers federation itf website says that focs provide a means of avoiding labor regulation in the country of ownership, and become a vehicle for paying low wages and forcing long hours of work and unsafe working conditions. When registering a vessel for international travel, one must choose a nation under the flag of which that vessel will sail. Definition ship registered under the maritime laws of a.