Flags of Convenience Term Paper

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Flags of Convenience as they pertain to maritime oil pollution. The writer explores UN and MARPOL mandates and discusses the Flags of Convenience. The writer then ties them into maritime oil pollution and presents recommendations for how this might be solved. There were 15 sources used to complete this paper.

As the world populations continues to grow and live longer than ever before it has become apparent that natural resources must be guarded with the utmost care and protection. It is those natural resources allow mankind to survive therefore their preservation is paramount to the success of the future. One of the biggest threats to the eco-system today is the threat of oil pollution. Through spills, dumping and other accidents the oil pollution in the world has threatened significant areas of the eco-system that are depended on. In recent decades there have been measurements taken to prevent oil pollution from destroying the eco system, and many of the mandates in place are indeed strong statements of protection, however, with the advent of "flags of convenience" states those mandates have lost their clout and power, therby rendering them ineffective. Even MARPOL and the UN Convention on the Law of the Seas have been disabled by the FOC provisions. The problems with oil pollution have been aggravated for several years by FOC states and agencies, grass root organizations and other attempts are being made to change the current path of destruction being caused by FOC states and their blatant disregard for the eco system and those who depend on it.


Both Marpol and the UN Convention on the Laws of the Seas implemented articles and mandates to protect the eco system and those who depend on it from oil pollution. Oil spills in the 1970's and 1980's gave a wake up call to those organizations who worked hard to remedy the situation from their positions. Maritime oil pollution is not a new factor in ecological discussions but the past few decades have seen an increase in their occurrence. In addition the fact that the world is becoming more populated and more technologically advanced has translated for the need for more oil and oil-based products. This has caused many additional transports which in turn create a greater risk for maritime oil pollution through an accidental spill or an illegal dumping.

The 1973 Convention maintained the oil discharge criteria prescribed in the 1969 amendments to the 1954 Oil Pollution Convention, without substantial changes, namely: (http://www.imo.org/Conventions/contents.asp?doc_id=678&topic_id=258#7)

To overcome the possibility of oil pollution being caused with the increase MARPOL devised several mandates to regulate the discharge and discarding of oil products at sea. These mandates include:

the total quantity of oil which a tanker may discharge in any ballast voyage whilst under way must not exceed 1/15,000 of the total cargo carrying capacity of the vessel;

the rate at which oil may be discharged must not exceed 60 litres per mile travelled by the ship; and no discharge of any oil whatsoever must be made from the cargo spaces of a tanker within 50 miles of the nearest land.

An oil record book is required, in which is recorded the movement of cargo oil and its residues from loading to discharging on a tank-to-tank basis.

MARPOL also placed a limit on the maximum allowed quantity of oil permitted to be discharged. The Convention spent years creating and then amending the mandates regarding maritime oil and its possible pollutant factors. It appeared that the world was on the right track until the members of the already existing FOC states figured out how to use the system to ignore the mandates set forth by the Convention. (Shorrock, 1998) The FOC or Flag of Convenience system was first introduced in the world following World War II. The system allows ship owners to register their ships in other nations. It was originally thought of by the United States with the shipping companies designing the plan, getting the government to assist in pursuing it and getting it put into place.

It was designed to provide revenue to developing countries in Africa, Latin America and Asia and give the U.S. maritime industry, which was then the world's largest, greater operating flexibility."

It was not long however before shipping companies figured out that they could register their vessels in nations with less stringent fines, fees and employment rules. The shipping comp anies and their mother nations began to use the system for abuse registering ships in other nations for less than honorable reasons.

Labor unions in the United States, Europe and Japan have long opposed the "flags of convenience" -- accusing employers of avoiding safety regulations and labor agreements in the own maritime industries by switching their ships to the laws of another country. Liberia, Panama and the Marshall islands, a former U.S. Pacific territory, thus became "home" to a huge fleet of ocean-going cargo vessels."

Recently a law suit was filed by the government of Liberia "International Registries Inc. (IRI) of Reston, Virginia, is giving the unions more ammunition in their fight. IRI operates both the Liberian and Marshall Islands maritime registries and advertises its services on the Internet. "This lawsuit is a perfect example of the inherent corruption of the flag-of-convenience system," says Bruce Vail, spokesman for the Marine Engineers Beneficial Association. The Washington-based labor union represents 4,500 shipboard engineers working on U.S.-flagged vessels, and recently lost several hundred jobs when American President Lines Ltd. (APL) registered its fleet of containerships in the Marshall Islands. Liberia's Bureau of Maritime Affairs earned more than $17 million per year in revenues from its FOC registry, making it the largest such registry in the world."

All of this leads to corruption and the corruption has been involved in not following the mandates set forth by the convention regarding maritime pollution. If shipping companies are allowed to register their vessels in other nations then the balance of the system can be thrown off. If one nation is known for having less strict regulations, and less stringent checks and balances then the lion's share of the world's shipping companies are going to register in that nation. This has the potential to create maritime oil pollution problems because they overload the system with the effort to get away with breaking the rules. (Shipping, 1997)

Long before the phrase "social dumping" was invented, the merchant fleet scoured the world in search of cheap labour and slack regulations. Thus was created the nearest thing to a global trade union."

FOCs now rule the waves. About 55% of the tonnage of the leading maritime nations flies FOCs. The biggest users of flags of convenience are the shipping industries of America, Britain, Hong Kong, Greece and (since the 1970s) Japan. Of the top 35 maritime countries, only China, South Korea and a handful of others fly more home flags than foreign ones. Panama and Liberia have the biggest fleets in the world and together account for about a quarter of total tonnage; this brings in foreign earnings worth tens of millions of dollars a year. Since registering under a convenient flag saves a fortune, the ITF's attempt to end the practice may have been doomed from the start. Shipowners pay only a few cents in tax per ton, which might work out at well under $10,000 a year, even for a large supertanker. The European Commission has calculated that tax breaks and lower labour costs save an owner about $1m a ship each year. Savings for the unscrupulous come on top of that. Some owners neglect safety and maintenance on board. The Organisation for Economic Co-operation and Development estimates that the worst owners spend barely $3,000 a day on a ship's maintenance, while a scrupulous owner-such as a big oil company, mindful of its responsibilities and its image-would spend nearly $10,000, a difference that amounts to $2.5m a year." (Asia, 1998)

FOCs are not only a danger to the lives of seafarers on board, they are a threat to our coastline," said ITF Australia coordinator Trevor Charles." The mindset is that the ships belonging to the Flag of Convenience system disobey rules are also going to ignore the mandates about oil discharge. If they feel comfortable refusing to pay employees, and they do not feel anything is wrong with abandoning their sailors at sea, it is not a far stretch for them to over spill or illegally discharge larger quantities of oil than they are allowed to.

What's worse is that it's mostly the big ships -- bulk carriers and oil tankers -- that fly flags of convenience. At last count, in 1996, 46% of the world shipping in tonnage was FOC," he said.

THE REAL ISSUE (Braces, 2002)While issues of employment and humane treatment can be dealt with as the future marches in the issue of oil spills by FOC states is something not so easily addressed. One example of the way an FOC state has taken…[continue]

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