The utter meaninglessness of any flag a ship flies


#1

why do we even bother with flagstates when in 2015 they truly are without any meaning or validation whatsoever when a ship can fly the flag of a nation without even a saltwater coastline? I fear that they really are a meaningless anachronism now…

Bolivia today, Mongolia tomorrow!


#2

Hear, hear! This is one of the most pertinent questions I’ve seen on here in a while.

Relating the ability of a nation to be a flag state to its geography might not be the best test though. How about citizenship, corporate or individual? If the Marshall Islands have nothing to do with the actual owner, operator, crew onboard, etc why other than “global economy” and capitalistic competition (race to the bottom) are they or Bolivia or whoever allowed to register ships when they have no intention of putting together the organization required to inspect and enforce? Heck just get rid of all these paper tigers and just jump to the end of this race and let owners use a class to confirm compliance with IMO rules and regs (which is what these FOC states do anyway only the shipowner gets to pay class and the flag state fees). But of course all nations reserve the right to regulate what goes on in theit own waters or regulate “above” the minimum of IMO so this would never work. How about no register ship in a place the active day to day management or trade does not occur?


#3

Pop a UN flag on all this ships meeting minimum IMO regs, let the IMO issue COC licenses, sounds like a plan.


#4

When the Europeans were planning to build a massive 800 million euro polar research icebreaker, Aurora Borealis, there were actually plans to register it under the flag of the European Union. Later they found out it’s not legally possible and by that time we had also run out of money anyway.


#5

[QUOTE=KPChief;174045] How about no register ship in a place the active day to day management or trade does not occur?[/QUOTE]

I’ve been proposing that for years. I believe that the owning “company” and all its management should have to be legal residents in the flag state. Not just paper residents but physically resident with personal roots and citizenship in that state. Let the owner, president, their families, and their bank accounts reside in the flag state and be subject to all the national laws that apply to every peasant farmer in that country.

Harsh? Hardly, look at the history of Carnival Cruise Lines as an example of why the FoC system and its defenders need to go the way of countless other robber barons and jungle kleptocrats.


#6

I am in Total Agreement with the OP and we all know that it has become a joke with where some of these vessels are flagged. Hopefully, in my lifetime, I will get to see a stronger US Flag Fleet but I will not be holding my breath.

Now Please take this next part for what it is, just a statement from Foreign Merchant Sailor. Years ago, I was working Ship Docking Tugs in N.Y. Harbor and had a couple guys on Foreign Flag Ships remark on how Wilmington, Delaware must be a VERY large port with the number of ships that hailed from there.

I guess that as long as the Tax System in place (Both Here in the States and Foreign Countries) that not only allow the FOC nothing will be changing for the good. As far as I am concerned, if a Company is Home-based in this Country then their ships SHOULD be Flagged and Manned with US Citizens! But there again I still believe Santa Claus and the Easter Bunny.

Maybe just Maybe if someone can get an Overhaul of the IRS or even better get rid of it all together and just have a Flat Tax we will see some changes to all of the FOC that we see now!


#7

Maybe a bit of facts about FoCs are in place here.

Here is a simplified explanation and a list of the countries that come under that definition: http://maritime.about.com/od/Vessel_Operations/a/What-Is-A-Flag-Of-Convenience.htm

These flags are wide open and has no requirement to Ownership or management or nationality of the actual controlling Owner.
If you have the time you can check the address of these registers and you will find that many of them are actually controlled from the US by Americans. Others are controlled from London, Piraeus or Singapore.

Here is an example of a flag that is VERY popular among US Offshore vessel owners: https://www.google.com.sg/search?q=Vanuatu+ship+regs&rlz=1C1DIMA_enSG610SG610&oq=Vanuatu+ship+regs&aqs=chrome..69i57.13927j0j7&sourceid=chrome&es_sm=122&ie=UTF-8#q=Vanuatu+ship+registry

There are other “Open” Registers where there are requirements for where the official Owner or Management companies are situated. 100% foreign ownership is allowed, however. Singapore is such a register, as is NIS, DIS, FIS etc. These does NOT “qualify” as FoCs.
100% foreign crew is allowed, but subject to CoC per STCW issued by accepted national authorities and corresponding to the passport held by the individual.(No Panama CoC and US Passport) IMO rules and regulations apply in full, plus any additional requirements by flag state authorities.

The fleet under US flag may be small, but it may not surprise anybody that a large part of the ships under FoCs are actually owned and sometime operated by American corporations or individual. Here the latest figures (2014): unctad.org/en/PublicationChapters/rmt2014ch2_en.pdf

What may be surprising is that these Owners doesn’t appear to be keen on putting some of their ships under US flag to take advantage of US Government grants and privileges, like preference cargo etc. while foreign companies like Maersk does??


#8

[QUOTE=ombugge;174063]Maybe a bit of facts about FoCs are in place here. [/QUOTE]

Save us the patronizing explanation of a FoC please.

I seriously doubt there are any professional mariners on this site who are not painfully aware of who, how, and what a FoC is and why it exists. We don’t need a high school level explanation from someone who appears to be here just for the sake of building a post count.


#9

C. Captains original post brings an interesting question. Why are there no incentives for these these American FOC owner to hire Americans on their vessels. Flag makes no difference when it comes to manning, as the vessel must be crewed. Like Tugsailor said in an earlier post, allow the owner to write off purchases of distressed vessels and crewing them with Americans, even if it is only the Senior officers. I don’t see the need for the Flag as much as I see the need for the billets. Like a Brit told me once, “the flag doesn’t matter, only the pay matters.”


#10

[QUOTE=lm1883;174069] Why are there no incentives for these these American FOC owner to hire Americans on their vessels. [/QUOTE]

If that doesn’t win the Rhetorical Question of the Year Award it is only because “why do our politicians not care about working class Americans?” is still the most obvious.


#11

[QUOTE=ombugge;174063]
100% foreign ownership is allowed, however. Singapore is such a register, as is NIS, DIS, FIS etc. These does NOT “qualify” as FoCs.
[/QUOTE]

That’s your opinion. Open register, FOC. Allowing 100% foreign ownership and crews, sounds like a distinction without a difference.

I think the point being made was that if more corporations were good corpoarte citizens there would be more ships flying US flag whether in Jones act trade or not.

It seems on the surface corporate citizens want it both ways. The benefits of a US legal system, a military to protect their interests overseas, banks and US govt to bail them out but if it comes to paying taxes or maybe operating in a way that returns something (like sea going jobs) whoa! Unless you include returning cash to lobbyists/politicians.

Maybe a US “open” register is a distasteful but necessary first step to get ships / jobs back. I don’t pretend to have an answer but this ‘financialization’ of the world economy apparently gives lie to the old saw that a rising tide lifts all boats.

Does anyone have links to any editorial content on this subject?


#12

Finally got my copy of “Sailing on Friday”, which I believe was suggested by C.Captain. What a fascinating read! Can’t recommend it enough to my fellow mariners on here. Anyway, more pertinent to this conversation, I am continually shocked to read how events unfolded in this industry well over a hundred years ago, and how much we are still feeling the repercussions of those events today. It seems that in light of the confederate raiders during the civil war (i.e. Alabama, Shenandoah, etc.) Yankee shippers were forced to re-flag their vessels either British or French in order get the target off them and they just never went back after the war. In more recent times smaller countries have offered cost savings over larger, more heavily regulated countries like the US and Britain, but the principle has always been the same. Over-regulation by government drives business to other markets, or out of existence entirely. The Jones Act is a red herring for the woes of American merchant shipping. We didn’t need it to save the industry when it was written in 1920, it was put in place as a protection for the rainy day when things got really bad for the USMM (today!). The Jones Act didn’t drive businesses to flag their vessels over-seas, the Jones Act didn’t incentivize companies to hire foreign crews, the Jones Act didn’t drive up the cost of ship-building in the United States. Woefully over-zealous federal regulation perpetrated all of the above! “Sailing on Friday” even cites federal regulations as one of the big reasons merchant shipping didn’t return to the US in the wake of the civil-war. That was 150 years ago! If federal regulations were that bad then, imagine how much worse they really must be now!


#13

Yes I agree, But on the same note as overbearing regulations you can say look at regulations that allow uninspected towing vessels, AB-OSV, GRT, ancient steam ships to still operate (el faro, energy enterprise).


#14

[QUOTE=Steamer;174064]Save us the patronizing explanation of a FoC please.

I seriously doubt there are any professional mariners on this site who are not painfully aware of who, how, and what a FoC is and why it exists. We don’t need a high school level explanation from someone who appears to be here just for the sake of building a post count.[/QUOTE]

I’m sorry if you feel offended by my “patronizing” explanation of FoCs and I agree that the professional Mariners here know, but there are obviously many on this Forum that does NOT.

Having been on this Forum for nearly two months now I have noticed that knowledge of how things are done in the shipping and offshore industry outside the US is not very widespread. (Most “Professional Mariners” exempted)
I do not know whether that is because they have no need, opportunity or interest in learning anything about it.

Those who hasn’t been exposed to anything but US ships/boats/rigs and US waters may find it difficult to see that there may be different ways of doing things.

The fact is that the US Maritime system is VERY different from most other countries;

  • Your “multi-layer” Certification vs. most other countries having only STWC compliant CoCs.
  • Your sharp distinction between “Haws-pipe” and “Academy” rout to certification.
  • Your “Day Rated” system of wages vs. permanent employment on salary.(12 mths./yr)
  • Your Social system versus Universal Health care and Welfare system, which is common in other developed countries
  • Your Taxation system, which is based on Citizenship versus residence based system, which is common in the rest of the world.

The above (+ other factors) may be a reason it is difficult to understand and compare how things are done in the US and most other countries? (The opposite applies to foreigner who hasn’t experienced the US system)

NOTE: I’m asking, not implying ANYTHING.


#15

[QUOTE=KPChief;174085]That’s your opinion. Open register, FOC. Allowing 100% foreign ownership and crews, sounds like a distinction without a difference.[/QUOTE]

No it is not my “opinion” it is the definition of FoC registers.

The FoC countries are:

Antigua and Barbuda, the Bahamas, Barbados, Belize, Bermuda, Bolivia, Burma, Cambodia, the Cayman Island, Comoros, Cyprus, Equatorial Guinea, Georgia, Gibraltar, Honduras, Jamaica, Lebanon, Liberia, Malta, the Marshall Islands, Mauritius, Mongolia, Netherlands Antilles, North Korea, Panama, Sao Tome and Príncipe, St Vincent, Sri Lanka, Tonga, Vanuatu.

Note: This list is a bit old, there are several small islands in the Pacific who have joined since.

Singapore is “struggling” to stay off this list, but the requirement of some involvement in Ownership or Management is required, same as the “Open” registers of Norway,(NIS) Denmark,(DIS)France,(FIS) and others, which nobody (other than maybe Americans) regards as FoCs.


#16

[QUOTE=KPChief;174085]
Maybe a US “open” register is a distasteful but necessary first step to get ships / jobs back. I don’t pretend to have an answer but this ‘financialization’ of the world economy apparently gives lie to the old saw that a rising tide lifts all boats.

Does anyone have links to any editorial content on this subject?[/QUOTE]

You may have a point. That is/was the reasoning behind starting “open” registers of other OECD countries.
But it is going to be hard to convince anybody to register if they don’t have the same freedom as in other “open” registers, especially in a hard nosed capitalist country like the US.

Maybe some incentive, like tax freedom for US seafarer in foreign trade? (less tax/less wages paid)
Some European countries has such arrangement (Norway for one)
Unfortunately, if Seafarers were granted such privileges shore based population would get jealous and try to block it, I’m afraid.

“Guarantee” against being sued under Jones Act ruling may also help?

PS> IF any ship in an “Open” US Register is be banned from trading domestically would that also apply to vessels in the GOM etc.?
(Same rule applies in European waters)


#17

[QUOTE=z-drive;174090]Yes I agree, But on the same note as overbearing regulations you can say look at regulations that allow uninspected towing vessels, AB-OSV, GRT, ancient steam ships to still operate (el faro, energy enterprise).[/QUOTE]

I have been wondering about the large ATBs widely used in US waters and how they are being classified as far as certification and manning.
I believe the tug is classed and certified as a Towing Vessel like any other tug and the barge as a non-propelled vessel, but when they are rigidly connected do they keep that same status?

I.o.w. Can a tug crew of 7-10 people or whatever connect to a 50,000 DWT fully loaded tank barge and proceed to say Alaska or Puerto Rico??
I can see that was long as they never leave US water, incl. the OCS claimed by US they are only regulated by US Law and Maritime regulation, but you can hardly claim that on those two routes.

I realize the “rational” behind the ATB configuration; being able to operate a large vessel with a small crew, which is fine in your own inland and territorial waters, but how is it justified when sailing in international, or in somebody else waters?

Some more questions:

  • How many crew and what certification is required to operate a large ATB in international waters?
    (Even if sailing between two US ports)
  • How many crew and what certification is required to operate a US tanker of equal size?
  • Are there any ATBs even on the Hawaii and/or Guam runs?
  • Are there any of these large US owned ATBs registered under foreign flag?
  • Are the tank barges now required to be double hull? (Like eqv. tankers)

I have even seen some ATBs here in Singapore for repairs, which is definitely an international voyage by IMO SOLAS rules.

Here is one seen earlier this year:


#18

[QUOTE=LI_Domer;174050]Pop a UN flag on all this ships meeting minimum IMO regs, let the IMO issue COC licenses, sounds like a plan.[/QUOTE]

Why not do away with ALL of that. Here is an idea:

The officers and crew gets their qualifications loaded onto a chip inserted under their skin.


#19

I must admit I’m surprised your still here. As a cross cultural exchange of knowledge maybe this is beneficial. I think everyone on here knows what a FoC, but there are other industry aspects Americans aren’t familiar with because we don’t work in those regions.
Not for lack of interest, because a job on the water is, basically, the same anywhere in the world. It’s always interesting to see how other nations approach maritime education, regulations, licensing, and etc.

We have a lack of need: 1) Our shipboard jobs, in general, pay far more than we could make in other parts of the world. How much does an FoC deckhand make vs how much does an SIU deckhand make. It’s pretty obvious.
2) If they didn’t, they would be in lines of work in other sectors of the American economy. There is after all free movement of labor. The labor market is subjected to the same forces of supply and demand.

We also have lack of opportunity: FoC vessel operators or crewing agents don’t recruit Americans, and why would they.


#20

[QUOTE=LI_Domer;174101]I must admit I’m surprised your still here. [/QUOTE]

I am more fed up than surprised. There isn’t much worse than a patronizing troll and we seem to have attracted a good example for some reason.

Why some pedantic twit from Singapore feels it is his obligation to tell American mariners and rest of the world how the US maritime industry works while at the same time claiming his “facts” are merely questions is beyond me.

I just wish the miserable maven of maritime matters would find another hobby.