Flaying the flag of convenience: The Braer disaster has rekindled alarm about the growth in foreign registration of shipping. David Bowen reports

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The Independent Online
THE Braer disaster has brought the long-running debate over flags of convenience to the fore. Braer was registered in Liberia and was crewed largely by Filipinos. It did not take long for British unions and some MPs to make a link between this and the disaster.

John Prescott, shadow transport secretary, did so forcefully in the Commons, while his colleague Brian Wilson wrote in the Independent on Sunday that 'the inescapable truth is that flag of convenience vessels are more likely to be involved (in a disaster) than those sailing under flags which reflect a real connection with the country of ownership'.

The International Transport Workers Federation has long campaigned to outlaw flags of convenience - but it is swimming against an overwhelming tide. In 1965, 18.4 million gross registered tonnes (grt) of shipping were sailing under the Liberian flag; now there are 52.5 million, making it the biggest merchant fleet. Meanwhile traditional fleets have been shrinking. In 1939 the UK registry was the biggest in the world; now it is the 26th, with just 6.4 million grt sailing under the mainland (as opposed to Isle of Man or Hong Kong) red ensign. The Chamber of Shipping in London believes that unless the Government steps in, there will be no UK-registered ships left by the end of the century.

There is nothing new about flags of convenience. An 1865 Royal Commission complained that British ship owners were sailing under the Portuguese flag to give themselves trade advantages. Prohibition boosted flagging out in America, as ship owners moved to the Panamanian flag to allow them to serve alcohol on board.

But the real catalyst came in the early 1970s when the oil crisis put great pressure on operators to cut costs. Flags of convenience saved money not because of registration fees (which are much higher in Liberia than Britain), nor because of short cuts on equipment - but because the requirement to use national seamen disappeared. According to the Chamber, crew costs of a ship manned entirely by Britons are almost three times higher than for one manned by Filipinos.

But there is scepticism in the industry over the union claims that 'flagging out' inevitably leads to lower standards. David Dearsley, secretary of the International Shipping Federation, says 'there are sub-standard ships in all registers, flags of convenience or not'. As for the Liberian register, he says it has 'made a determined effort to upgrade standards and probably enforces them more strictly than many countries'. The registry is in fact run by a commercial company in Virginia, and is to all purposes American. An analysis of delays and detentions of ships in Europe - an indication of standards - shows that the worst offenders in 1992 were Romania, St Vincent, Malta and Iran; Liberia came 12th.

But there is a real question mark over training standards in the Philippines, from where so many flag of convenience seamen come. The training schools there find it difficult to attract the teachers they need, probably because wages at sea are many times higher. Nevertheless, according to Mr Dearson, 'a well-trained Filipino is as good as a well-trained Brit' and a properly managed shipping operation will ensure it employs only people with respectable certificates.

However, the British shipping industry is almost as keen as the unions to stop the UK register disappearing - partly through nostalgia and patriotism, and partly out of self-interest. The chamber claims it will be difficult for the City of London to keep its pre- eminence as the world centre of shipping services without a supply of trained seafarers to move onshore. Those seafarers will be trained only if there is a home fleet to join because they would not accept the lower wages paid on flag of convenience ships.

The industry's solution is not to ban flags of convenience, but to persuade the Government to cut wage costs. 'Everyone except us has some sort of tax assistance,' says Tim Brown, chairman of the Denholm Line. The industry has been campaigning long and hard - but so far in vain - for tax relief on ship purchase and on wage costs. Most EC countries do not make seamen pay National Insurance, and are more generous than the UK in giving income tax relief.

The chamber has produced a number of reasons why the Government should bend its free- market thinking on this matter. These range from balance of payments implications to damage to the City and, most credibly, defence. 'The number of British- manned ships, sailing under the British flag and available for defence purposes, is now at a crucial level and may already be too few. We ignore this situtaion at our peril,' the naval commander Lord Fieldhouse said in 1991.

(Photograph abd bar chart omitted)

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