Globalisation and de-regulation in the maritime industry - CiteSeerX

Marine Policy 26 (2002) 35–43

Globalisation and de-regulation in the maritime industry Tony Alderton, Nik Winchester* Seafarers International Research Centre, Cardiff University, PO Box 907, Cardiff, CF10 3YP, UK Received 12 August 2001; accepted 27 September 2001

Abstract The development of the Flags of Convenience (FOC) system has had serious repercussions for labour as shipowners, in search of cheaper crews, have recruited ‘crews of convenience’ from developing nations. This paper examines the record of FOCs to analyse the effects of globalisation upon the working lives of seafarers. The method used will be to compare the regimes of FOCs, and this will be done by the analysis of a flag state conformance index (FLASCI) created by the authors, which utilises a large number of measures of a state’s capacity to maintain and enforce a regulatory regime for the vessels flying its flag. r 2002 Elsevier Science Ltd. All rights reserved. Keywords: Globalisation; Flags of Convenience; Regulation

1. Introduction The shipping industry is central to world trade, carrying, as it does, some 90% of internationally traded produce. It also has a lengthy experience of both national and international regulation. In recent decades, and despite the attempts by some shipping companies to move beyond the reach of regulatory-efficient nations by resorting to Flags of Convenience (FOC) [1], a powerful countervailing trend towards world-regional and global regulation has occurred, partly because of a long and still continuing sequence of much-publicised environmental disasters attributable to shipwreck. This trend towards regulation has been reinforced by a series of critical reports on both the social and operational practices of the ship-owning community. In the wake of these reports the regulatory roles of the International Maritime Organisation (IMO) and the International Labour Organisation (ILO) have been simultaneously enlarged and deepened. Seafarers literally live at the point of convergence of the decisions and procedures emanating from the interlaced network of national and international organisations and institutions which define, and then attempt to enforce, the regulatory framework of the maritime

*Corresponding author. Tel.: +44-29-2087-4740; fax: +44-29-20874619. E-mail address: winchestern@cardiff.ac.uk (N. Winchester).

industry. Although most international conventions and regulations are, of course, aimed at ship owners, the very fact that few ships ever spend more than 20% of their operating time in ports and that very few owners ever sail on the ships that they own, means that seafarers are the only actors within the industry who have practical day-to-day experience of the outcomes of these attempts at regulation. However, the facts of mixed nationality crews; the absence of consultation and negotiation procedures; tours of duty that vary with both nationality and rank; and fragile trade union organisation effectively mean that the knowledge and experience of the seafarer is scarcely entered into the information networks which inform the rule-making process. This paper represents the first coherent attempt to compare the records of flag states in this globalised arena and seeks to define the extent to which attempts at global regulation percolate down to the level of the state and thus affect the everyday working conditions for the seafarer.

2. The emerging forces of globalisation—the advent of Flags of Convenience There has long been a tradition that the law of the sea has been grounded in the notion of the freedom of the high seas. This freedom has, historically, three underlying principles: a ship of any nation can navigate the

0308-597X/02/$ - see front matter r 2002 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 8 - 5 9 7 X ( 0 1 ) 0 0 0 3 4 - 3

36

T. Alderton, N. Winchester / Marine Policy 26 (2002) 35–43

oceans freely; the ship’s national state has exclusive dominion over the ship; and no other nation can exercise dominion over that ship. Freedom is thus the guiding principle of the law of the sea, but it is a principle strongly mediated by nationality. There has been a very long history of shipowners flagging their vessels to states other than their own country of origin. The earliest examples of such a phenomenon were usually for political or military reasons, whilst the more recent examples are much more likely to be on economic grounds. It is only in the period between the two World wars, however, that certain nations were specifically developed as ‘open’ registers, i.e. states that will accept the registration of vessels from any other nation with virtually no restrictions [2]. In this inter-war period, a number of United States owned passenger ships were transferred to the Panamanian registry in order to avoid the prohibition laws. In the early 1920s a treaty between the US and Panama exempted shipping profits from taxation and this, in conjunction with laws that had raised labour costs in the US, gave further incentives to US owners to flag to Panama. The first European ships were also re-flagged to Panama in this period, when some Spanish owners felt that social reforms in their own country had increased their operating costs to unacceptable levels [3]. The US Ship Sales Act of 1946 gave an additional boost to the Panamanian registry through the sale of 1113 US ‘Liberty’ ships to owners operating under foreign flags, whilst Liberia entered the open register scene in 1948 with the drafting of the Liberian Maritime Law. This piece of legislation established a system for recording mortgages that was acceptable to lending institutions [2]. By 1939, the Panamanian register was already being thought of as ‘convenient’ in shipping circles, but the actual term ‘Flag of Convenience’ was not utilised until the early 1950s, and followed on from the Campaign Against Flags of Convenience inaugurated by the International Transport Workers’ Federation (ITF) at its 1948 World Congress in Oslo. In 1974 the ITF defined an FOC quite simply as being: ‘where beneficial ownership and control of a vessel is found to be elsewhere than in the country of the flag the vessel is flying’ [4]. In 1982, the United Nations Convention on the Law of the Sea (UNCLOS) was established, and article 91 also gives great weight to the idea of a ‘genuine link’ between the ship and the flag of the vessel and states that:

Every State shall fix the conditions for the grant of its nationality to ships, for the registration of ships in its territory, and for the right to fly its flag. Ships have the nationality of the State whose flag they are

entitled to fly. There must exist a genuine link between the State and the ship. [5]. The last 50 years or so has seen the evolution of the FOC system to the extent that, by 1998, 51.3% of the world’s total gross tonnage Gross Tonnage (GT) was registered to FOC fleets [6]. This development has generally been viewed in a somewhat negative way by various players within the global maritime industry, in that there is an assumption that owners who flag to open registers do so, mainly, in order to make savings in operational costs [7–10]. In 1998 the ITF held its World Congress in Delhi, at which a new policy on FOCs was unveiled. In recognition of the fact that pay and conditions on nationally flagged vessels can be worse than on some FOC vessels, the ITF included non-FOC sub-standard ships within the campaign. There has, therefore, been a move away from the simple definition given above, towards a more all-embracing notion of regulation, standards and enforcement. This is, perhaps, in recognition of some of the reasons why owners may now flag to open registers, which are often complex and not necessarily equated to labour issues of pay or conditions. In the period from the 1950s onwards, more and more open registers have come into being with 29 registers now being classed as being FOCs by the ITF and, partly as a response to this, some ‘traditional’ maritime countries have set up second registers offering more beneficial environments for ship owners than in the state itself. This has been partly successful in slowing the reflagging of ships from such flags to FOCs, although by 1998 the majority (51.3%) of the world fleet was flagged to FOCs [6]. The maritime industry is thus not only pivotal to world trade, but is also the only example of a fully globalised industry. The ship and the seafarers aboard, are at the centre of a complex constellation of multiple interests which situates ship owners and seafarers in fluid and, sometimes, volatile legal, political, and social circumstances.

3. FOCs and working conditions The evidence presented against FOCs in terms of vessel safety appears overwhelmingly deleterious. Taking for example, the International Transport Workers’ Federation (ITF) they indicate in their ‘Flag of Convenience Campaign Report’ for 1998 [6] that of the worst 20 flags both in terms of absolute numbers of vessels and absolute tonnage lost in 1998, ten are FOCs. They also point out that whilst these flags only account for 20% of the number of vessels and 47% of the world’s tonnage, they account for 55% and 66% of the number of losses and total tonnage lost respectively

37


(p. 38). The International Underwriting Association (IUA) data add weight to the ITF’s argument. Their figures show those states with losses above the world average based upon a 5 year average for the years 1994– 1998. The figures reveal that, in terms of vessels numbers, 8 of the 33 nations exceeding the world average are FOCs, whilst, in terms of tonnage, 9 of the 28 states are FOCs [11]. An international system of vessel inspection and control has been developed since the mid 1980s, with the emergence of the Port State Control system. The system is designed to ensure that at least 25% of all vessels calling at ports around the world will be inspected and, if any faults are found, will be detained until such time as the faults are rectified. The ITF suggest that FOCs account for: 8 of the top ten flags in terms of absolute numbers of vessels detained; 9 of the 39 countries who exceeded the average 6% detention rate; and 1526 (59.2%) of the total number of ships detained [6]. In the ‘traditional’ maritime states there have historically been some restrictions on labour, both in terms of their nationality and pay and conditions. FOCs, by contrast, have few such restrictions and the crews aboard vessels flagged to these states are often labelled ‘crew of convenience’. This is for a number of reasons. Firstly, such seafarers tend to be from the less developed countries of the World. Secondly, and partly as a result of the former point, they tend to be less well paid than their counterparts from the more developed nations of the World. Lastly, such seafarers, partly because of lower levels of union membership and recognition, are subject to inferior working conditions. The industry has also been in the forefront of new developments in new technology, for example containerisation, and extensive computerisation of shipboard operating functions which have had significant effects upon skilling, personnel and industrial relations issues [12–13]. All of these factors, taken together, have intensified work and increased stress levels for seafarers of all nationalities working aboard all vessels, but it is particularly the case for seafarers from the developing nations working aboard FOC vessels. The most important change in shipping technology in recent years, in terms of the nature of the working lives of seafarers, has been the advent of containerisation. This has led to vastly reduced vessel turnaround times, and an intensification of work for the seafarer during port stays. This trend is revealed, very clearly, by an examination of port turnaround times between for 1970 and 1998, as shown in Table 1 below. In addition to these significant decreases in turnaround times over the last 30 years, there has also been a general, cost based, decline in crewing levels over the same period. Couper et al indicate that crew levels have decreased from an average of 40–50 to 20–30 over this

Table 1 A comparison of port turnaround times 1970 and 1998a Average turnaround times 1970

Average turnaround times 1998

Percentage decrease

Hours 138

23

83

a

Source: [14].

period because of the introduction of multi-skilling, labour saving equipment and the advent of un-staffed engine rooms [8, p. 11]. All of these points, taken together, mean that seafarers now have few rest periods or opportunities to go ashore whilst in port. In 1996 the ITF commissioned MORI to undertake questionnaire survey of seafarers. Over 6000 seafarers responded and answered questions on all aspects of their working lives. Table 2 below gives a number of comparisons between the answers from seafarers working aboard FOC flagged vessels and those working on board vessels flagged to, what may be termed ‘traditional’ maritime countries’.1

4. Towards a new categorisation of maritime flag states It is in the light of all the factors cited above that the ITF commissioned the present study by the authors which forms the basis for this paper.2 It has been seen that the ship and the seafarers aboard, are at the centre of a complex constellation of interests. The aim of the present study is to analyse the structures, impacts, processes and implications of the interactions of these interests in number of substantive areas. The authors have attempted to measure the capacity of a flag state both to enact relevant maritime legislation, and to enforce it effectively. The study also analyses such attempts insofar as they relate to both vessel maintenance and safety, and the employment rights and conditions of seafarers. In more detail the component parts of the analysis are outlined below. Firstly, the exact nature of the maritime administration is considered, and whether the extent of its 1 It is important to note that we are not making a distinction between developed states and developing states in a ‘core-periphery’ sense here. The distinction, rather, is between the owners (predominantly Western European) who flag their vessels to Western European states, and those owners (who may be of any nationality) who flag their vessels to states other than their own (usually FOCs). 2 The ITF study was commissioned in May 1999, and was completed on 30th June 2001. It is, in essence, a legal, social and political audit of the majority of FOCs, all second/international registers and some selected national flags. It is difficult to extract the impetus behind this decision making process and whether it derived from within the state or external to it, hence we will not speculate on this process.

38


Table 2 A comparison of working conditions (FOCs and Western European states)a Type of register

FOC Traditional maritime states a

% Monthly pay is more than $1500

Stress levels are acceptable

Working day over 18 h

Over 12 months without proper leave

No relief system with paid leave

27.6 36.8

48.7 53.2

3.4 2.8

8.7 5.1

42.1 23.9

Source [15].

responsibilities and degree of efficiency legitimately place it into the category of national, second or international ship register. The distance, if any, between the geographical location and true ‘ownership’ of the register is considered, as are the restrictions placed upon crewing and certification requirements. The extent to which the register is genuinely ‘open’ is also examined, as are the scale of registration fees and taxation structure. Secondly, an examination is made of a wide range of measures that describe the characteristics of the flag state fleet of vessels. As well of indicators of the current status of the fleet, a range of measures are examined that depict trends over the last 10 years. Such indicators include the size, tonnage and age of the fleet, as well as measures depicting the relative quality and safety of the fleet, such as PSC detention rates, casualty statistics and pollution figures. Thirdly, the study looks at provisions made for seafarers’ safety and welfare by each administration, and those cases either where such provisions fail, or are absent, and seafarers are forced to seek the assistance of other bodies such as the ITF or Missions to Seafarers. Fourthly, the nature of national labour law is also examined in some detail. Relevant legislation is reviewed, in order to establish if nationals of the state are allowed to form and join trade unions; whether such unions have rights to collective bargaining; and whether, in the case of a dispute, the parties to collective bargaining have access to independent arbitration. An examination is also made as to whether the rights inherent in state employment law are extended to nonindigenous seafarers. Fifthly, company law is also an important consideration in determining how far a ship owner can legitimately place themselves at arms length from their interests in their vessels. In keeping, therefore, with ITF policy concerning the need for a substantial entity which over which control can be exercised. The status of company incorporation is considered. This analysis is approached from the perspective of the benefits to be gained from registering an offshore company in a particular jurisdiction. There seems to be no particular gain to be made from analysing the onshore incorporations as the profits made from shipowning are irredeem-

ably offshore. Whereas the registration of a ship under a flag will confer taxation advantage the incorporation of a company under that flag (whose assets are limited to that ship alone) attracts the additional advantage of limiting liabilityFboth in terms of a. limiting financial liability through restricting company assets to a minimal level b. prevention of the arrest of sister ships in lieu of a maritime lien. Lastly, the nature of governance in particular maritime states is considered. This does not constitute a discussion of the political situation within a country but a consideration of a number of salient points that contribute to the situation of both shipowners and seafarers, namely: the degree of politico-economic risk; levels of corruption; and the government’s relationship with capital. The overall aim of the study is to operationalise all of these key concepts into variables that can be scored and weighted, such that an overall score can be assigned to each flag state. An index of these scores can then be utilised to compare the records of flag states. The resulting Flag State Conformance Index (FLASCI) is, thus, a highly accurate and robust means of measuring the performance of flag states on a wide range of variables. Table 3 shows the FLASCI scores and rank for all those states that have been analysed to date. It can be seen that not only are there marked difference between FOCs and national flags, but there are also differences within the FOC group itself. The scores do, indeed, tend to cluster into certain groupings as shown in Table 4. When we speak of open registers, nations such as Panama, Honduras, Liberia, Cyprus and Malta, spring to mind. However states such as Belize, Equatorial Guinea, Cambodia and Bolivia are less likely to be mentioned. Yet it is these emerging FOC nations whose registers have shown exponential growth over the past 5 years. Whilst the absolute size of these registers are different, their relative histories show the same pattern. The decision3 to re-energise a dormant register and attract tonnage, was made, followed by a period of significant growth. This may seem a rather trite 3 On this point see: http://www.imo.org/htbin/htimage/imo/imagemap/navbar.map?128,11.

T. Alderton, N. Winchester / Marine Policy 26 (2002) 35–43 Table 3 FLASCI rank ordered scores Rank

Country

Flasci score

1 2 3

Norway United Kingdom DIS NIS Netherlands GIS Kerguelen Islands Hong Kong Isle of Man Madeira Bermuda Cayman Islands Canary Islands Latvia Estonia Singapore Cyprus Malta Netherlands Antilles Russia Philippines Vanuatu Bahamas Liberia Antigua and Barbuda Barbados Panama Turkey Marshall Islands Ukraine Honduras Lebanon Bolivia Saint Vincent and the Grenadines Belize Equatorial Guinea Cambodia

84 80 77 77 76 75 72 64 64 64 63 62 60 60 58 58 50 49 48 48 46 44 43 43 42 42 41 41 36 36 35 35 30 30 27 24 19

5 6 7 8

11 12 13 15 17 18 19 21 22 23 25 27 29 31 33 35 36 37

Table 4 Grouped FLASCI scores and the characteristics of those groups Category

Range of scores

General characteristics

High

72–84

Med-high Med

58–64 41–50

Low-med Low

35–36 19–30

Traditional maritime nation and second registers that are centrally operated and controlled Semi-autonomous second registers More established open registers with higher scores belonging to those states seeking EU membership. National registers Newer open registers New entrants to the open register market

observation but this pattern is repeated across these four registers with unerring regularity. Hence it is worth asking why this pattern should be reproduced so successfully across these new entrants.

39

It would appear that the newer entrants to the FOC market are aggressively marketing themselves as providers, solely, of a commercial service of ship registration. For these states such registration carries only minimal notions of any regulatory burden, whilst for the unscrupulous owner it represents an escape from any such burdens. The advent of the Port State Control system of vessel inspection has, paradoxically, been a factor in the emergence of these latest additions to the FOC group of nations. As the PSC system has become more effective, so the older, larger, more established FOCs have sought to conform to internationally accepted standards. This increase in standards has left a gap in the flag market for both ships that have been deleted from more established FOCs, and shipowners who do not wish to, or cannot, incur the cost implications of increased regulation. It is this very space at the bottom of the market that these new registers enter and fight for amongst themselves. The question is, how does this, seemingly spurious, development occur? This situation is due to two main factors. The exercise of sovereignty. The method by which international regulation is enacted.

* *

Put simply international regulation in the maritime industry is enacted on a state-by-state basis and, to quote from the ILO’s document Characteristics of International Labour Standards, ‘transforming these universally accepted goals and rules into a binding legal obligation is each State’s sovereign privilege’ [16]. The state exists in a state of privilege, yet privilege is not only the freedom to act, it is the freedom not to act, since it is freedom simpliciter. In the case of these new entrants the privilege is expressed as the freedom to act such that power cannot be exercised, they are binding themselves to the de-regulation route. Although it is the case that a number of IMO Conventions apply to more than 98% of world merchant shipping tonnage,4 where privilege is exercised is this way, such statements lack explanatory power. Where the nation state is the bulwark of international regulation, sovereignty is for sale in the context of ship registration, and the state enjoys privilege. There is always the possibility for a state to enter into this gap within the flag market, one which is opened up by the attempt at, and limited success of, international regulation itself. The debate concerning globalisation has been marked by a consideration of the value of the concept of the nation states, what are its limits, its power, within this irredeemably internationalised world. It is argued that the state as a site of political power is problematised in 4

On this point see [18] and [19].

40


that its attempts to exert its power confronts an amorphous and complex global network of forces, which provides a situation in which it is possible to opt out of the process of control exercised by a nation state. In the above discussion we have seen, not the attempt to exercise power but the deliberate attempt of the state to restrict the possibility of exerting its authority as an explicit economic decision. These registers are formed in such a way that a path between the flag state and the ship owner is, at best, obscure and minimal. Rather than the successful exercise of power becoming a problem, it is the possibility of success that is the problem itself. In contrast to the famous statement made by Daniel Bell in 1988 namely, ‘The common problem, we believe, is this: the nation-state is becoming too small for the big problems of life’ [17], the problem is that these states consider themselves not small enough. The act of sovereignty that is, in part, implied by the act of registering a ship, is at the same moment an act of distancing from sovereignty or, to put it in another way, the negation of sovereignty is enacted at the moment of its inception. It has been argued elsewhere5 that this problem stems from the international rules governing the registration of ships, that in effect allow any state to determine the conditions for the registration of ships to that flag in an entirely autonomous manner. However we wish to take a different tack in this discussion and consider the question of international regulation. In the preceding discussion we noted that these new entrants exploit a number of gaps in the market where ship owners wish to decrease their regulatory burdens. This factor, for the most part, derives from the attempt to regulate the shipping industry. The decisions taken by established open registers, to delete ships that are likely to be detained by PSC inspectors is a recognition of the increasing attempt to enforce international standards. If a ship owner wishes to avoid deletion then they must conform to minimum international standards, which, of course, entails a cost implication. The net effect of this process has been to slowly and incrementally increase standards in the established open registersFalthough it would be false to claim that standards have risen exponentially. This increase in standards has left a gap in the flag market for both ships that have been deleted, and ship owners who do not wish to, or cannot, incur the cost implications of increased regulation. It is this very space at the bottom of the market that these new registers enter and fight for amongst themselves. It seems that paradoxically this attempt at international regulation has resulted in the creation of new division

5

Wherever the term ‘significantly different’ is used in this paper it should be taken to mean that the differences are significantly statistically different at the 0.05 level.

Table 5 Seafarers’ perception of workloads and working hours by FLASCI score group FLASCI score group

High Med-high Med Low-med Low

% of seafarers who are dissatisfied with Workloads

Working-hours

19 22 18 20 29

14 11 14 21 31

within the flag market that is even less regulated that the previous one.

5. Globalisation, deregulation and intensification It has been argued, so far, in this paper that the forces of globalisation in the maritime industry, operating specifically through the FOC system, have resulted in deregulation of the global labour market with its consequent effects upon the working lives of seafarers in terms of work intensification and stress levels. It has also been argued that there are divisions within the FOC sector itself, and that some states, indeed, are much less regulated than others. In order to show, more clearly, these delineations within the FOC group itself, we will now present further analysis of the MORI data used earlier, but the results will be grouped according to the FLASCI score groupings as shown in Table 4. If we look, firstly, at workloads, then it can be seen from Table 5 that there are significant differences6 between seafarers’ perceptions of their workloads dependent upon the grouped FLASCI scores. Table 6 examines seafarers’ perception of the time allotted for rest and recreation, and again shows that worker satisfaction diminishes correspondingly and significantly with FLASCI score. Given that seafarers feel that they both work harder and longer aboard vessels flagged to low scoring flag states, and that they have less opportunities for rest and recreation, then it is not surprising to find that the lower the FLASCI score then the more that seafarers tend to be under some from of stress in their working lives. Table 7 shows worker perceptions of stress levels by grouped FLASCI score, and the results again show that, in general, the lower the FLASCI score the greater the percentage of seafarers who feel dissatisfied with their 6 For example Bergantino and Marlow in their analysis of flagging out state that ‘we are dealing with a binary choice: either the vessel does or does not fly its national flag’ and therefore make no mention of the internal differences that appear within open registers themselves [7].

41

T. Alderton, N. Winchester / Marine Policy 26 (2002) 35–43 Table 6 Seafarers’ perceptions on rest and recreation periods by FLASCI score group FLASCI score group


% of seafarers who are dissatisfied with Time for sleep/rest

Shore leave

Tour lengths

15 13 15 16 25

25 24 23 29 43

14 17 19 30 35

Table 7 Seafarers’ perceptions on stress levels by FLASCI score group FLASCI score group

% of seafarers who are dissatisfied with stress levels


22 24 25 29 37

Table 9 Seafarers’ perceptions on racism by FLASCI score group FLASCI % of seafarers reporting that they have experienced score group Unfair treatment Physical abuse Mental because of their race from officers abuse High Low

FLASCI score group


Table 8 Seafarers perceptions on pay and working condition by FLASCI score group


% of seafarers who are dissatisfied with Pay levels

Job security

Morale generally

Support/help with problems

25 28 35 52 52

18 25 27 49 39

16 18 17 26 29

14 22 24 34 43

stress levels, with these differences, again, being significantly different. Even where seafarers are worked hard and are under constant stress, it could be the case that seafarers will feel, in some sense, compensated for this because of good pay and conditions. Table 8 reveals, however, that, as with the other factors, seafarers’ who work on board vessels flagged to the highest FLASCI scoring states have images of their pay and working conditions that are significantly more positive than those of their colleagues working aboard vessels flagged to the lower scoring states. Given that seafarers working aboard have a range of negative perceptions about their working conditions, it might be expected that they would be more likely to seek the help of their trade unions. Whilst this may be the case, those seafarers working aboard vessels flagged to the lowers FLASCI scoring states are more likely to

9 19

17 34

Table 10 Seafarers perception on the safety and seaworthiness of their vessels by FLASCI score group

n

FLASCI score group

22 33

% of seafarers rating their vessels as being In poor safety condition

In poor state of repair

2 3 5 10 17

n n n

1 3

Less than 1%.

perceive that their employers actively prevent them from seeking such help. For example, 7% of seafarers working aboard vessels flagged to the ‘high’ FLASCI scoring group of states report that they had been warned not to contact their trade union, whilst amongst seafarers working aboard the ‘low’ group this rises to 35%. Similarly 6% of seafarers in the high group reported attempts to stop their union membership, whilst this rises to 19% amongst the low group. It is the case that, given the nature of the multinational crewing system aboard most vessels, that the potential for racism is, unfortunately, both present and, it would seem amongst certain groups at least, quite likely. Table 9 summarises seafarers’ experience of various forms of racism, from which it can be seen that amongst the lowest FLASCI scoring states, seafarers are much more likely to have experienced some form of racism. Finally, it is also the case that seafarers are often in the best position to judge the safety and sea-worthiness of their vessels, and Table 10 shows that the seafarers working aboard vessels flagged to the lower FLASCI scoring states tend to believe that the vessels are much less safe than their colleagues working aboard vessels flagged to higher scoring states. This all tends to suggest that the FLASCI scoring system, far from being a distant, academic exercise in comparing the records of administrations, is also an invaluable aid in determining the effects of lax regulatory and enforcement regimes upon the everyday working lives of seafarers. The strong correlation

42


between inefficient regulation, and thus low FLASCI scores, and inferior working conditions for seafarers should not be ignored. Where the aim of owners flagging to the low scoring states is, invariably, to cut costs, then this has measurable, and significant, effects upon the working conditions and safety of those who toil at the sharp end of the maritime industry.

6. Conclusion In the context of the debates surrounding ship registration, contrast is often made between ‘traditional’ maritime nations and Flags of Convenience Distinctions are drawn between the different forms of regulatory regime that occur between these two conceptual types. However, this dualistic characterisation of types of flag states within the analysis of the flag market may serve to limit our understanding of the fundamental dynamism that is inherent in this market. This is an example of the tendency to conceptualise open registers as an undifferentiated mass which are virtually indistinguishable from each other and presented as an ‘other’ to traditional maritime nations. Whilst this may have been a reasonably accurate presentation of the flag system a number of years ago, changes in the structure of ship registration have made this way of proceeding to be less than ‘ideal’. In our analysis we have discovered that there are distinct differences within the FOC group itself. Amongst the new entrants to the FOC market there is both a total lack of formal regulation, and a capacity and willingness of the state to take responsibility for these actions. The key difference between these new entrants and the established open registers lies in this explicit resentment of the possibility of regulation, regulation is a threat to the income generating powers of the register. The characteristics of the gap in the flag market within which these new entrants compete means that every piece of regulation threatens the value of this system, therefore these regimes enter into a race to the bottom. The Prisoners Dilemma game of regulation is resolved, as it were, in an entirely negative fashion. These new entrants exercise sovereignty only to negate it. Counter-intuitively in this fully globalised industry it is not the problem of too little power accruing to the state, but too much that drives the quality of these registers. The ship owners who flag their vessels to these new entrants to the FOC scene, are protected in two ways from the possibility that the enforcement of international regulation will occur: *

# The raison d’etre behind the existence of these registers is the offering of a regulatory free environment for the ship owner. The very success of the flag

*

depends on the continued and anticipated maintenance of this environment. The registration requirements for these registers exist in such a way as to keep the ship owner outside of any network which may provide a route for enforcement, i.e. the state neither attempts to encroach upon the autonomy of the ship owner, nor instaurates structures such that power could be exercised.

In the context where international regulation is enacted upon a nation by nation basis then it is no wonder that this situation occurs. Where legislation still relies on a state as a the analytical model, yet the context itself is irredeemably global, there is always a remainder, a remainder that, due to its sovereign privilege may create an unregulated environment where capital is free to act as it pleases, and the voice of labour is excised at its very source.

References [1] Lane T. Globalisation, de-regulation and crew competence in world shipping. In: McConville J, editor. Transport regulation matters. London: Francis Pinter, 1997. [2] IMA. Economic impact of open registry shipping. Report commissioned by the Bureau of Maritime Affairs, Ministry of Finance, Republic of Liberia. Washington: International Maritime Associates Inc., 1979. [3] Carlisle RP. Sovereignty for Sale. The origins and evolution of the Panamanian and Liberian flags of convenience. Annapolis, Maryland: Naval Institute Press, 1981. [4] ITF. The ITF Handbook. London: International Transport Workers’ Federation, 1999. [5] UN, United Nations Convention on the Law of the Sea. http:// www.un.org/Depts/los/unclos/closindx.htm, 2001. [6] ITF. Flags of convenience campaign report 1998. London: International Transport Workers’ Federation, 1998. [7] Bergantino AS, Marlow PB. An econometric analysis of the decision to flag out. Cardiff: Seafarers International Research Centre, 1997. [8] Couper AD, Walsh CJ, Stanberry BA, Boerne GL. Voyages of abuse. Seafarers, human rights and international shipping. London: Pluto Press, 1999. [9] Donn CB. National regulation of international industry. Industrial relations in the maritime industry. International Journal of Employment Studies. 1994;2(2):211–27. [10] Northrup HR, Scrase PB. ‘The international transport workers’ federation flag of convenience shipping campaign 1983–1995, Transportation Law Journal. 1996;23(3):369–423. [11] IUA, Marine and Casualty Statistics IUMI Conference Berlin 1999. London: International Underwriting Association, 1999. [12] Frenkel E. Shipping-choice of technology. Maritime Policy and Management 1983;10(1):1–15. [13] Morris R, Donn C. New technology and industrial relations in United States and Australian shipping. New Technology, Work and Employment. 1997;12(2):136–45. [14] Kahveci E. Fast turnaround ships and their impact on crews. Cardiff: Seafarers International Research Centre, 1999. [15] ITF/MORI. Seafarers’ living conditions survey. London: International Transport Workers’ Federation, 1996.

T. Alderton, N. Winchester / Marine Policy 26 (2002) 35–43 [16] International Labour Organisation (ILO). Characteristics of international labour standards, http://www.ilo.org/public/english/standards/norm/whatare/charact/index.htm, 2000. [17] Bell D. The third technological revolution, its possible socioeconomic consequences. University of Salford, Salford, cited in Kettl DF (2000) The transformation of governance: globalization, devolution, and the role of government, Discussion Paper Prepared for Spring Meeting National Academy of Public Administration, June 1–3, 2000, Albuquerque, NM, 1988.

43

[18] McConnell M. Business as usual: an evaluation of the 1986 united nations convention on conditions for registration of ships. Journal of Maritime Law and Commerce. 1987; 18(3):435–49. [19] Wefers-Bettinck HW. Open registry, the genuine link and the 1986 convention on registration conditions for ships. Netherlands Yearbook of International Law. 1987;18:59–119.