FLAGS OF CONVENIENCE SMALL REPUBLICS REGISTER LARGE FLEETS OF TANKERS

Press, Volume CVI, Issue 31340, 10 April 1967, Page 12

FLAGS OF CONVENIENCE SMALL REPUBLICS REGISTER LARGE FLEETS OF TANKERS

(By a shipping correspondent of the “Yorkshire Post") I Reprinted from the “Yorkshire Post" bu arrangement) Before any bill can be presented for cleaning up the mess left by the Torrey Canyon the question of who is legally responsible for the ship will have to be decided according to the dictates of maritime law, no mean feat with a ship owned in the United States, registered in Liberia, manned by an Italian crew and chartered by a British company

Taking statistical tables at their face value Liberia—a tiny Negro republic on the coast of West Africa which was founded in 1822 in a move to return American slaves to the home of their fathers—owns very nearly as many ships as Great Britain.

Of the 171 million gross tons of shipping in the world fleet at the end of last year 12.5 per cent flew the Red Ensign of Britain and 12.04 per cent the flag of convenience of Liberia. Many of the so-called Liberian ships are in fact owned in the United States, largely because American taxes and salary scales make it too expensive for them to be registered in an American port. Loopholes Sought The United States is dependent upon foreign resources for many of the raw materials vital to her industry. It has been estimated that by 1975 the United States will be importing at least 25 per cent of her petroleum and iron ore. These materials must be moved at costs which will meet world-wide competition, which means they cannot be carried in expensively built and expensively manned American ships.

Faced with this problem, American company lawyers looked up the maritime legislation of other countries and found three which offered promising loopholes. These three were Panama, Honduras and Liberia. These were not flags of convenience, said the Americans. Britain, Norway and other traditionally maritime nations, they claimed, gave their shipowners tax remissions, depreciation allowance and other advantages which could not be matched in the United States. Therefore, they were flags of necessity. Although the merchant fleet is looked upon by the United States Government as fulfilling an essential role in the nation’s defence it gave permission for United States ships to be registered abroad as long as those ships remained available to the United States in time of military need.

The laws of Panama, Honduras and Liberia permit this requirement, a fact which allows supposedly foreign ships to sail side by side with truly American ships to Viet Nam. No Cost To Taxpayer Because of the advantages of flag of convenience registry, American owners have built up a large fleet of oil tankers and bulk carriers, which permit them to compete with European maritime

nations at no cost to the American taxpayer. It has been estimated that if Congress had passed some kind of an amendment to the Merchant Shipping Act of 1936, which provided construction and operating subsidies for this fleet under the American flag, the annual cost to the American people would be somewhere between £l5O million and £2OO million a year. British and European shipowners have criticised the operation of ships under flags of convenience on the ground that the competition they offer is unfair. A convincing argument can be made out along those lines but it is no longer fully substantiated by the facts. Liberian ships are not cheap to operate. All that can be said for them is that they are cheaper than they would be if they flew the Stars and Stripes, and even that differential is narrowing. A few months ago, it could be alleged that flag of convenience ships, particularly those registered in Panama, were not up to the international standard of safety and that seamen sailing in them had little redress if anything went wrong. A British seaman, accustomed to the protection afforded by the Merchant Shipping Act of 1894, had no legal standing if his ship was registered in a country which did not recognise his right to wages, decent food and clean accommodation. Trade Unions Active

That is not so today, largely because of the activities of the International Transport Workers’ Federation and its affiliated unions, including the British National Union of Seamen. An inspection of one typical Greek-owned Panamaregistered ship by a National Union of Seamen official revealed that of the 12-man crew, seven were on their first voyage at sea. For the six crew members who were not Greek, a document in the form of a contract was produced which bore neither the name of the company nor any indications as to the nature of the work, working hours or discipline. Wages were between £l2 and £3O a month: only the bos’n and the cook received more. A seaman whose contract entitled him to £3O said that he got only £25. The ship and her equipment were in a state of neglect. Recreation rooms were dirty, the toilets were blocked (the shower being apparently used as a toilet), the wash basins were dirty and blocked up, one cabin was not water-

tight and most cabins had no light and the doors had no handles. The paintwork was peeling away and rust was to be seen everywhere. Bed linen was changed only once every two months. The food was of an equally bad standard. Mr Hans Imhof, general secretary of the International Transport Workers’ Federation, to whom the ship was reported, commented: “These conditions are the products of flag of convenience shipping, the fruits of the profit greed of owners who have nothing but contempt for their crews. Leader’s Comment “Governments are content to ignore the situation and if owners resign themselves to face competition which is dirty in the literal sense of the word that is their business and the most we can do is to raise our voice in protest against it. “The saddest aspect of the situation is that in many countries, through devious legal procedures, the authorities can be induced to make our staiggle more difficult.

“What does it matter, they seem to ask, if sources of tax revenue disappear, if shipping has no strict safety regulations to adhere to, or if thousands of seafarers are left to be exploited by profithungry shipowners without the protection of proper collective agreements? What does it matter if unprotected Asian crews replace crews from the traditional seafaring countries working under the protection of progressive laws and agreements and threaten decades of social progress in the seafaring industries? “The runaway shipowners may sometimes offer good conditions aboard their new vessels during a freight boom. But at best such conditions would be a temporary phenomenon! as long as they were not fixed by an agreement.” The International Transport Workers’ Federation staged a succession of boycotts against flag of convenience ships which left them tied up and ignored by dockers in ports throughout the world. Gradually the quality of “Pan-Li bHon” ships increased and today—with very few exceptions —they can be classed among the finest in the world, built to international standards of safety, fully equipped and manned by qualified, well-paid seamen. Sail Under Hire Many of them, like the Torrey Canyon, sail under hire to British companies. This increase in quality with its corresponding increase in costs has reduced the advantage of sailing under a flag of convenience and in America, particularly because of pressure from the seamen's unions for more employment for their members, there has been a gradual return to the United States flag. Paradoxically, British ship owners who once protested the loudest against flags of convenience have found tax advantages in the practice themselves and more than one British shipping company has a subsidiary registered in Bermuda. In quite the reverse direction the Red Ensign itself has been used as a flag of convenience—by Canadian shipowners who found it cheaper to operate their ships under British registry rather than their own.