Shipping at a crossroads
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With global concern over the effects of substandard shipping reaching unprecedented levels, international governments have never been more attuned to the need for change
The sinking of the ageing single-hulled oil tanker, the Prestige, off the coast of Galicia in November last year came after a string of remarkably similar disasters. Meanwhile illegal fishing operations have continued their devastating effect on depleted fish stocks. And US government investigators on the trail of terrorist assets have failed to penetrate the corporate secrecy offered by flags of convenience. Pressing problems like these have forced governments to confront the fact that there is an unacceptable gap in the international governance of the oceans and seas. Some are turning to unilateral measures to address the deficit created by irresponsible flag states.
There is a growing sense that the governance of the oceans and seas is at a crossroads. A choice has to be made: proper flag states, which take responsibility for enforcing international standards on ships flying their flag, or a gradual dismantling of the current legal regime. The second option comes as coastal states or regional bodies, such as the European Union, dissatisfied with the failure of recalcitrant flag states, take matters into their own hands to try to arrest the downward spiral.
Two key processes have been set in motion this year which could pave the way for more effective international governance and lead to the demise of flags of convenience. The first is the convening of a United Nations inter-agency Consultative Group to address the problems caused by ineffective flag states. The work of the Consultative Group, resulting from pressure from the ITF and two of its civil society partners, Greenpeace International and the World Wildlife Fund, is expected to run into 2004.
The other relates to the UN Informal Consultative Process on Oceans and Seas, which was held in June. ITF representatives attended the conference and, together with major international NGOs, lobbied hard for the UN Secretary General's Report - which addressed many of the problems existing within the current legal regime - to be adopted and further developed at the UN General Assembly later this year. Key issues included defining the relationship between a ship and the state whose flag it flies, giving clarity to the existing requirement for a "genuine link" in the UN Convention on the Law of the Sea - an issue promoted by the ITF for many years.
In a document prepared for the conference entitled Steering the Right Course the ITF brought together the opinions of a wide range of authoritative bodies and national and intergovernmental agencies, who have all reached the conclusion that flags of convenience negate international law.
The big issues
Substandard shipping means unsafe shipping, with major implications in such a vast globalised industry. At any one time, there are around 45,000 merchant ships moving around the world's sea lanes, in and out of hundreds of coastal jurisdictions and through international waters. In 2000, according to the International Shipping Federation (ISF), the industry shipped around 5,000 million tonnes of goods over a distance of about 4.6 million miles, giving roughly 23,000 billion ton-miles of total trade.
The cargo that is transported includes millions of tons of highly dangerous goods, such as liquid gas, toxic chemicals and oil, which are potentially harmful to ecologically sensitive coastal environments and coastal livelihoods. The oceans and seas are also exploited by a world fleet of fishing vessels operating across increasingly fragile fishing grounds.
With fish stocks in a critical situation, the rise of illegal, unregulated and unreported fishing has become one of the most serious threats to the conservation of the marine environment. Like seafarers, fishers are frequently subjected to appalling working conditions. Indeed, there is evidence that the situation is much worse in the fisheries sector, particularly on board vessels carrying out illegal fishing.
The problems associated with the small but highly dangerous minority of substandard shippers are many and various - accidents, causing loss of life, loss of cargo, and environmental disaster, violations of seafarers' human rights and a variety of criminal and terrorism-related activities, including people smuggling and trafficking, drugs running, arms smuggling and money laundering.
New perceptions of urgency
Increasingly, governments, intergovernmental organisations and civil society have woken up to the fundamental problems at the heart of the current system of international governance of the oceans and seas. These problems stem from the tension between the principle of flag state sovereignty, which underpins the existing legal framework, and the flags of convenience system, where owners register vessels in countries other than their own in order to avoid binding regulations or controls. When subjected to the pressures of globalisation and the demands of global business, this system of governance collapses, leading to widespread non-compliance with international minimum standards, and paving the way for the problems highlighted above.
There is also alarm over the fact that the evasion of international standards, facilitated by this system, is being financially rewarded through higher profit margins, while compliance is penalising ship owners, inevitably leading to the growth in substandard shipping. In some market sectors of shipping, the number of ship owners ready to make cost savings by ignoring international safety standards has made it almost impossible for any ship operator who complies with these standards to stay in business.
This concern appears to be borne out by the fact that the tonnage registered to flags of convenience states continues to rise. Nearly 50 per cent of the shipping industry is now registered under flags of convenience (by gross tonnage), which allow shipowners to evade international maritime rules and standards at will. Furthermore it is those states with the most lax regimes that are growing the fastest. Meanwhile more and more countries are also trying to join the flags of convenience ship registration business.
According to the Organisation for Economic Co-operation and Development (OECD) the amount of goods carried by ship doubled between 1970 and 1998 (from 2.5 billion tons to 5 billion tons). Ships carried 5.83 billion tones in 2002. While 2002 saw a flattening of this growth due to a worldwide economic slowdown, the ISF says that forecasts show a resumption of long term growth with a predicted near doubling of world seaborne trade over a 15 year period. If the flag of convenience market continues to grow at a pace to match the growth of shipping itself, then the scale of the substandard shipping problem can only escalate.
The current state of affairs, which not only tolerates but facilitates substandard shipping as well as illegal, unregulated and unreported fishing, is untenable. The shipping and fishing industries must be run on a rational and sustainable basis. That requires responsible flag states and effective international governance of the oceans and seas.
The next stage in the ITF campaign will involve following closely the work of the UN Consultative Group and working towards a tightening of the legal regime on oceans and seas.