Reasons for Opposition to the International Registration of Ships

Reasons for Opposition to the International Registration of Ships

To examine the reasons some states oppose the international registration of ships, it is necessary first to define the concept of the flag of convenience.

From the twelfth and thirteenth centuries AD onward, shipowners were required to register their vessels. This development was partly attributable to the emergence of city-states and nations in Europe, such as Pisa, Genoa, and Catalonia, a change driven by competition and warfare among major maritime powers.

These conflicts gradually altered the traditional view that vessels must be registered exclusively in the state of the owner’s nationality. As a result, interest in using registration services offered by other states grew, leading to the emergence of the phenomenon known as flags of convenience.

Under flags of convenience, shipowners sought to avoid difficulties associated with hostile nations while also benefiting from prevailing conditions.

Why Do Some States Oppose International Ship Registration?

For this reason, states may be broadly divided into two main groups:

• States that insist on the necessity of the shipowner’s adherence to the flag state and that seek to protect national interests by granting nationality primarily to vessels genuinely connected to them.
• States that, with an economic approach, seek profit by granting nationality to applicant vessels, whether or not the owners hold the nationality of the registering state.

States in the second group are commonly described as providers of flag-of-convenience services. Some states, however, adopt an intermediate approach.

In other words, they are neither as strict as the first group regarding the requirement of a real link between the owner and the registering state, nor as permissive as the second group.

Principal Grounds for Opposition

As noted in earlier discussions, within international registration, certain states grant their nationality to ships without a genuine and substantial connection between the vessel and the state.

They permit the use of their flag and, in practice, confer nationality on foreign ships under exceptionally simple conditions. Over time, both in public perception and within the customary practices of the maritime industry, the view emerged that the flags-of-convenience system had become a pervasive harm whose elimination was overdue.

It must be acknowledged that open registries have, in effect, bypassed the complex procedures associated with traditional registries and, by removing burdensome obstacles, have attracted considerable support. This development has also produced significant consequences. Critics focus their objections on three principal areas and argue that open registration produces its most negative effects in these domains.

These areas are safety, labor, and economic distortion, all of which are influenced by the absence of a genuine national link between the shipowner and the flag state. More recently, concerns have also extended to the risk that this lack of national link, together with insufficient oversight by flag states, may contribute to international security threats and terrorism risks.

Safety

It is an undeniable fact that many of the most prominent and controversial maritime disasters of the late twentieth century involved ships registered under flags of convenience. Such incidents caused substantial economic loss and environmental harm and triggered strong opposition from diverse groups, including legal scholars, environmental advocates, and economists. It is also a recognized reality that, compared with long-established maritime states that maintain the requirement of a genuine link between the shipowner and the flag state, ships operating under open or international registration often exhibit higher figures not only in the number of incidents but also in the scale of damage and loss.

The reasons for the higher incidence of maritime accidents in open registry systems include the following:

• The true owners are not easily identifiable.
• True owners may alter or conceal their identities by manipulating corporate documentation.
• The master and crew are not nationals of the flag state.
• Open registry shipping lacks a unified and coherent structure.
• Open registry owners may more readily pressure masters and crews to undertake risky operations because there is no adequate forum for crew members to effectively bring claims.
• Port state control is, in practice, weaker than flag state control in this context.

Labor

The inequality between the two parties to the employment relationship, namely the worker and the employer, is observable across many areas and may be regarded as inherent to labor relations.

The social and economic transformations following the Industrial Revolution gave rise to labor movements, and, through the adoption of labor laws, treaties, and conventions, some aspects of this inequality were mitigated.

Registration under open registry systems, however, to a significant extent disregards well-established and recognized workers’ rights in the maritime transport sector. This is considered one of the most important criticisms directed at international or open registration.

Frequently Asked Questions About Opposition to the International Registration of Ships