Creative accountants tell us that there is a subtle difference between avoidance, the legitimate use of every available legal means to minimise one’s financial responsibilities to the state, and evasion, which is a polite term for thievery, and thus incurs criminal sanctions.
There is a something of this in the increasingly opaque world of ship registration, where there has been a sudden spectacular growth in a number of what might be described as “ultra-convenient” flag states, among which are failed and corrupt states, improbable autocracies, micro- states and developing nations, with no particular history of, or interest in, maritime commerce.
Some might suggest that this is just the concept of the flag of convenience going back to its ancient roots, in an era where the prudent shipmaster operating in dangerous waters was able to lay hands on alternative ensigns and facilitating papers should a potential enemy haul over the horizon. Or, in a more modern iteration, it is the use of a financially derived registration to enable a ship to avoid certain prohibitive laws obtained in the country where the management of the ship originated.
Some might ask whether there is any difference between the old “PanHonLib” concept – devised by clever US citizens – and the current “dark fleet” of ships able to change their identities almost at will, principally to evade sanctions on Russia, Iran, and Venezuela. Or is this simply – returning to the analogy of accountancy – a difference between avoidance and evasion?
Wherever one sits on these arguments, it is difficult not to conclude that the present situation – with a substantial fleet of ships operating under some very odd flags and registered in peculiar places – is a huge and regrettable step backwards.
Every time I used to refer to a ship under a “flag of convenience,” somebody would object to what they regarded as a pejorative term and point out, usually politely, that “open register” was a more suitable assignation. And it was undeniable that under the largest of these structures, there was to be found a respectable, exceedingly well-organised maritime administration, especially in recent years.
They took a leading role in international regulation, they have become respectable members of the International Maritime Organisation (IMO), operated inspection regimes to ensure that ships flying their flags were of good quality, fulfilled all convention obligations, and promptly investigated casualties.
It is no exaggeration to suggest that these flags might be considered model administrations, and put many “traditional” flag states to shame. The proof of their capabilities is reflected in the large number of very high-quality shipping companies that have no reservations about flying their ensigns.
It might also be argued that, with this example, a number of small registries – which hitherto had a very poor reputation, but mostly took smaller, more decrepit tonnage on their books – took steps to become respectable, moving up the graduations by which the flags have been rated. Whatever might be one’s political position on open registers, and organised labour has still to be convinced, this movement towards quality must surely be viewed entirely positively.
This long march towards better quality, capable administrations, proper responsibility, and improved maritime safety has been abruptly put into reverse by the emergence of the dark fleet and their improbable flag states. There will be no “implementation” of international rules, the ships may be unsafe and possibly uninsured, their AIS has been extinguished or faked at will, and their class certificates are null and void. In effect, this is evasion on a global scale – evasion of sanctions, of regulation, of safety and all the other advances brought about by 70 years of regulatory improvement.
It might be safely said that most of these flag states, so terribly convenient to the evaders, would be unable, even if they were willing, to regulate the ships who are on their books. Whatever some smooth representative of these flag states might say in the chambers of the IMO or the International Labour Organisation (ILO), these boats are not going to be rocked. It is useful revenue, and there is no more to be said.
Inadvertently, those who have resorted to these evasions have brought into disrepute the whole system of ship registration, harmed real progress on marine safety and maritime employment and hazarded the environment. They probably don’t care.
