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MARE FORUM 2002 Athens 19-20/9/2002
Flag State Quality and Regulatory Governance
Chairman's Summary of Conference
In this good natured
and free speaking meeting, covering a complex and difficult issue
, it would be surprising if there were not many often
contradictory views expressed and the following is necessarily a
synthesis of these. They contain, perhaps , many points to ponder
, and fewer hard and fast conclusions, that some might prefer.
Thus, there is broad agreement that the efficiency and regulatory
governance exhibited by a flag state can be influential in
determining the quality of ships which fly the colours. It is
equally clear that it is possible for high quality owners, for
whatever reasons they might have for their choice, to regard the
flag as a convenience or legal necessity, and operate to their own
high standards. Thus the influence of the owner , which after all
is responsible for the quality of the ship on a day to day basis,
cannot be diminished.
A term such as "quality" is subjective and open to
interpretation and there is a suggestion that it encompasses
something rather more than "mere" compliance". But
if compliance is the careful implementation of all current
regulations, should compliance alone not be judged as adequate
quality? Excellence should be added value and an optional extra.
There remain different views of the measure of the problem of poor
quality ships and shipping operations. While some will incline to
the view that "port state inspections reveal an upward trend
in deficiencies" others believe that a "strong PSC
regime demonstrates a trend of improvement". Once again, it
depends upon the aspect of the target, and the perception of the
viewer. Nevertheless, there is a fair measure of agreement that
there is a qualitative improvement taking place in many parts of
the industry, leaving perhaps an irredeemable 10% of the global
industry that requires policing.
There is plenty of debate about the respective benefits of the
carrot as opposed to the stick approach to regulations. We heard
exponents of the harsher regulatory regime ; the "throw the
book at them" view that will have poor performing ships
banned from ports and regions, to more conciliatory approaches
that through communication and education can convince the owners
of these ships that they must change their ways, or withdraw from
the market.
There is plenty of agreement ( at least on the shipowners' side)
that the industry is over-regulated and over-inspected, and that
this regime is caused by the poor performance of the non-compliant
minority. The "carrot" of incentives is still clearly
being cultivated , but it is clear that a less intrusive regime
and more communication between PSC and other inspection agencies
would be hugely welcomed by the quality operators who would benefit
from a hands-off approach. But self-regulation, it is cautioned,
can only function adequately with a quality culture.
On the issue of auditing flag states , there is broad agreement
that flags need to comply with some universal quality criteria,
although not so tightly drawn that each is a clone of the other.
There is a need for variety in the market place, and different
ways of achieving quality. There is concern about the mechanics of
auditing, and its effectiveness; whether it will be a mere paper
exercise or, conversely, become a needless burden on flag states
with limited resources. The debate about flag state auditing will
soon have to consider the detail, but it is perhaps worth
considering the practical differences between flag states'
maritime administrations and shipping registries, and the
distinctions between state-run and commercial ship registries.
There is growing concern about the expanding "market" in
open registries and the possible effect upon quality of flags.
There is worry about the increasingly intense competition for
tonnage and for the effect price competition might ultimately have
on the quality of the services offered. Many registers, it is said
fail to supply the services that are needed in a turbulent world
and provide the legal framework, jurisdiction and protection that
are needed by internationally trading vessels. At the same time,
it is clear that the improvement of flag states and maritime
administrations is neither quick nor easy, requiring determination
and patience to take a long term view and to persuade governments
of the need for comprehensive legislation, against their many
other priorities.
As always, the analogy with aviation is regarded as an attractive
area for exporation , although the differences such as a
manufacturer's lifetime interest in an aircraft, and the
relatively few manufacturers suggest that there are very basic
differences between the industries.
The role of class in the issue of flag state quality was both
explored and defended. Class
was "a unique technical resource" , but was not a
policeman and cannot fix problem flags, although it can help the
weaker brethren to improve. The jury is probably still out on
whether class ought to be so assiduously assisting some notorious
registries with their delegated powers. But if they do not, what
sort of awful "responsible organisations" might step in
to offer their services, for the ships, which remain in being.
The ancient argument of whether there should be a "genuine
link" between the owners of ships and the flag states lives
on, and it is clear that the passage of more than a quarter
century has not convinced the two sides of the veracity of the
views of the other camp. It is however interesting that there are
a growing number of open registers which specify that there must
be a responsible identity that is more than a brass plate in the
country of register. Arguments of transparency and of owners'
identity rage on, and these have been given fresh impetus by the
new security dimension.
There are encouraging technical developments that are taking place
which have useful functions in reducing the level of bureaucracy
and the mounds of paperwork, while empowering surveyors on the
spot. Systems of computerising regulations, connecting the field
surveyor on-line to his home databases and providing an accessible
electronic archive that will be of use to both ship managers and
flag states alike look promising, while the quality of a
transparent ship database that is of use to all the links in the
quality chain is being constantly improved. All will hopefully
combine to remove the opacity of much of the industry's workings
that has been a source of public suspicion. Better and more
accessible information about ship quality and history will have
wide benefits , so long as the information is accurate.
The provision of skilled and competent people is, perhaps, the
hidden component that affects the efficiency of a maritime
administration , just as it ultimately determines the quality of a
ship. Thus the means whereby a flag state acquires sufficient
expertise, and takes responsibility for training or supervising
the quality of seafarers is crucial, as is its ability to respond
to the need for adequate social provisions for seafarers aboard
its ships. Competence and resource between them are twin pillars
of a quality maritime administration and which surely governs the
effectiveness of a flag state.
The conference , unsurprisingly, was unable to produce hard and
fast criteria for a "model" flag state, and it would
have been unrealistic to expect the same in such a crowded
programme . Nevertheless, virtually all the "building blocks
" necessary for a functioning administration have been
identified . Fashioning these into some sort of Flag State Code or
an acceptable auditing mechanism will be a challenge hopefully
taken up at the International Maritime Organisation, where this
might give fresh impetus to the Flag State Implementation process.
Michael Grey
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