flags of convenience

flags of convenience, in some countries known as flags of necessity, a term applied to ships registered in countries by owners who are not nationals of those countries. This practice used to allow—and in a few cases still does—ships' owners to avoid the regulations, classification, and restrictions governing ships' crews that other maritime countries have imposed for reasons of safety and to discourage the exploitation of seamen. The phrase retains such a pejorative meaning that the International Maritime Organization prefers to use the term ‘open register’.

Flying the flags of another country probably goes back to antiquity, but it is known that during the Napoleonic Wars (1793–1815) British ships flew the flags of minor German principalities into order to avoid French blockades and privateers; and in the 1812–15 War with Britain, US merchant ships flew Portuguese flags for the same reason.

However, the modern use, and meaning, of flags of convenience (FOC) probably started in the shipping slump of 1920–30 when a few owners sought to evade the inspections and regulations imposed by traditional maritime countries. Also, in the same era, American cruise ships sailed under the flag of other countries during Prohibition so that there would be no restriction on carrying alcohol aboard. Whatever its origins, the real growth of the practice occurred after the Second World War (1939–45) when mainly Greek and Italian owners bought up war surplus tonnage, often with US finance, and registered it in countries such as Panama, Liberia, Honduras, or Costa Rica, thus evading state inspections of ships and crews, currency restrictions, and all but nominal taxes.

Up to the 1960s these fleets were considered sub-standard, but freedom from taxes on profits soon allowed conditions at sea to improve and old vessels to be replaced by large, modern ships. At the same time Liberia particularly attracted what the USA called ‘flag of necessity’ ships; these were a product of the huge US stake in the international oil industry and her inability to compete in the oil-carrying trade because of the high wages and conditions of US seamen; at the time an American tanker crew cost five times as much as a Greek or Spanish crew, though the Philippines is now the world's largest supplier of merchant seamen. Besides commercial necessity, the USA, as the world's greatest naval power, had a strategic necessity to maintain a bulk carrier fleet and a cargo fleet on important supply routes, recognizing that the backbone of this power was the merchant ship.

Since the 1960s the number of FOC countries has increased to around twenty. A few of them, according to the International Transport Workers Federation, whose website (www.itf.org.uk/seafarers/foc/report_2001) carries much useful information on the subject, are unwilling, or are unable, to enforce minimal international standards on their vessels. Though many do now maintain the necessary standards, 699 merchant ships were detained in ports in 2001 for contravening regulations imposed by the country where they were detained, or those introduced by the International Convention for the Safety of Life at Sea (SOLAS), or the International Maritime Organization. Fifty-seven per cent of these were FOC ships, a disproportionately high percentage considering that though flags of convenience were flown by five of the world's six largest merchant fleets (see table in merchant marine), only 23% of the world's fleet, in gross tonnage, were FOC ships.

Flying flags of convenience also raises environmental issues. Some fishing fleets pay FOC countries to allow them to fly their flag so that they can avoid the stricter controls imposed by some governments to conserve what remains of the world's commercial fisheries, a practice that some whaling fleets followed in the 1950s to evade the regulations laid down by the International Whaling Commission. Valuable species such as tuna are particularly vulnerable to pirate fishing and in 1999 one regional fisheries organization, the International Commission for the Conservation of Atlantic Tunas (ICCAT), estimated that around 345 FOC fishing vessels from sixteen different FOC countries were illegally fishing for tuna. In an effort to stop this type of pirate fishing some countries have taken action to ban the import of certain species from these sources. One, South Africa, where Cape Town was a favourite port for pirate tuna fleets, has said it will prohibit any fishing vessel from offloading in its ports if it is on the ICCAT's blacklist, or if it does not fly the flag of an ICCAT member.