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Ship owners are increasingly using private military and security companies (PMSC’s) on merchant ships in response to growing levels of pirate violence off the coast of Somalia. The use of these companies to protect ships falls into an international “legal grey area” making regulation and monitoring of their actions difficult. Some commentators have suggested the PMSC’s resort to violence too readily, rather than pursuing the non-violent international guidelines to prevent pirate attacks. The German government is now relying on a vote next month at the International Maritime Organization to clarify the legal standing of the use of PMSCs in international waters. (Spiegel Online)
The exploitation of factory sweatshop workers in countries with cheap labor is well-known. There is also serious exploitation in another sector of the labor market. Seafarers are essential to the operation of the global economy with about 90 percent of all international cargo transported by sea. These workers are underpaid, overworked and subjected to dangerous onboard conditions. Limited international regulation of maritime labor and "flags of convenience" exacerbate the problem, leaving crews with little recourse against exploitative practices. (Alter Net)
This report discusses the problems that Flags of Convenience (FOC) pose to people, countries, and the environment. Governments are responsible for ensuring that ships flying their flag conform to international law, but they do not always enforce the United Nations Convention on the Law of the Seas (UNCLOS). Many ships flying FOC engage in illegal fishing, transport illegal weapons and substances, and have poor working conditions for the seafarers. The report recommends establishing a UN committee to "address deficiencies in flag state implementation of the current system and to negotiate a new implementing agreement to UNCLOS." (World Wide Fund for Nature and International Transport Workers' Federation)
This Asia Times article reports on flags of convenience whereby smaller countries including landlocked ones such as Mongolia register other nations ships under their flag in return for financial compensation. The author argues that many ship owners buy the flag of another country in order to make their operations, often illegal, hard to trace. These illegal operations include arms smuggling and human trafficking.
The Maritime Administration of Mongolia, the largest landlocked country in the world, is selling its flag to ships in an â€œunlikely venture [that] is part business, part comedy and part international intrigue.â€? Its customers likely include North Korea, which could use Mongolia's flag of convenience to evade the increasingly intense international monitoring of North Korean-flagged vessels. (New York Times)
Every aspect of the sunken Prestige oil tanker was calculated to avoid tax, ownership obligations and regulatory scrutiny. The disaster, and the general confusion over who should pay for it, brings to the forefront the pressing need for broader and binding corporate regulation. (Observer)
Interestingly, flags of convenience occupy not only the bottom end of the Flag State Conformance Index, which measures the performance of shipping administrations, but are also among its top registers. (Business Times Singapore)
International Transport Workers' Federation reveals more abuses permitted by Flags of Convenience states. Its general secretary bought a certificate and sea book issued by Panama despite his lack of marine training and skills. (The Business Times Singapore)
A strong new competitor enters the market of untrustworthy shipping registries in Flags of Convenience countries. (Lloyd's List)
A little-known coalition of international financial intelligence (named the â€œEgmont Groupâ€?) scrutinizes prospering links unchecked for years between Flags of Convenience (FoC) and money-launderers.(Lloyd's List)
Bolivia launches its new flag-of-convenience in the hopes of attracting foreign ship owners' business as well as adding legitimacy to its claim to part of the Pacific coastline which now belongs to Chile. (The Economist)
New York Times article about a union campaign being waged to protest foreign ship registration that allows tax evasion, exploitation of workers and dangerous working conditions.
The Liberian government, home to many vessels registered under the flags-of-convenience system, has filed a lawsuit against the US company which is in charge of registering these vessels in Liberia. Liberia charges that International Registries Inc.
, has been using the Liberian civil war as an excuse to convince ship owners to register their vessels in the Marshall Islands. (Inter Press Service