In search of quality

WHILE all around them have been consolidating, ship registers appear to have been breeding. What was once the domain of a handful of traditional registers is now a bustling marketplace of national, second, open and even third registers. Amid such competition, how can you tell the good registers from the not-so-good?

Ship registers have been criticised for a variety of reasons. Open registers, in particular, have come under fire for being little more than revenue earners for their country. Campaigners against the open register system, such as the International Transport Workers Federation (ITF), claim that many open registers don't have the necessary technical expertise to ensure the safety of the ships flying their flags, and have insufficient legal knowledge to effectively implement the international codes and conventions they so swiftly sign up to.

In fact, the ITF has spent more than twenty years trying to abolish the open register system, but to little avail. Today, more than sixty per cent of the world's fleet is flagged with open registers, compared to just twenty per cent in the 1980s. Is there a lesson here for the ITF, rather than for the users of open registers?

One of the strongest criticisms against open registers is that they weaken safety at sea.

One of the most widely used criticisms of open registers is that they undermine safety at sea. This sweeping generalisation takes no account of the performance of individual open registers, but rather is based on a lack of belief in the open register system itself. Furthermore, it contributes nothing to a scientific approach to reducing casualties and improving register quality.

So how does a shipowner know if the register it has chosen is a good register or not?

In the late 1990s, a group was formed to explore the possibility of creating a network of quality registers. The idea was taken to IMO and the Flag State Implementation (FSI) sub-committee was born. Since then, however, it has seen little activity.

There are a number of stumbling blocks facing such a network. How do you decide what makes a good register, who would carry out the assessment of each register, would shipowners take any notice of it, and how effective would it be in improving standards throughout the ship register sector?

One of the most difficult tasks in developing such a network is defining what makes a quality register. The ITF recently tried to get the ball rolling by creating a scoring system for ship registers based on 97 individual measures of quality, including administration, seafarer welfare, etc. A selection of registers was measured against the criteria and a table was developed ranking the registers in order of performance. Not surprisingly, the two benchmark registers, Norway and the UK, came out on top, while some leading open registers languished nearer the bottom, despite their reputation for being well-run flags boasting some of the largest fleets in the world.

The idea of a network of quality registers seems fraught with problems. But shipowners do need to be steered away from bad registers towards good ones. So how can that be done?

One way would be to urge class societies to be more selective about which registers they work for. That way, some less competent registers might be forced out of the market. Banks could also play an effective role in influencing shipowners when it comes to selecting a register. Lenders have to take a variety of factors into account before approving a loan, from standards of administrative procedures to PSC detention rates.

Lenders are well placed to put pressure on owners to choose certain flags over others if the owners want to secure future funding. Similarly, insurers have the potential to exert influence over the choice of register by using the rate schedule to punish those flags with poor casualty records

Perception and prejudice are in danger of getting in the way of attempts to improve the overall standard of ship registers. Too many experienced shipping people still cannot bring themselves to put the words "quality" and "open" in front of the word "register". It is either one or the other. Indeed, there are still too many people who insist on referring to "flags of convenience" rather than open registers. The ITF plays a not-insignificant role in perpetuating this prejudice, which has little or nothing to do with quality.

A network of quality registers is a good idea in theory. If it was developed, it would not only provide the industry at large with a list of approved registers, it would also encourage other registers to raise standards in an effort to become part of the network. In practice, however, the network is flawed for a number of reasons.

A more likely outcome is that, faced with increased pressure from owners, class societies and banks to improve their performance, like-minded registers will begin to see the benefits of working together.
By exchanging information and ideas, they can improve their services and entice more owners to their flag. This way, while consolidation among registers is unlikely, a shake-out of the riff-raff is possible and very welcome.

The truth is that quality ship registers - whether open or national, second, third, fourth or fifth or tenth - would have no problem being part of a quality network of registers. But they would want no part of a quality network that based membership criteria on anything other than quality.

By the same token, quality owners will generally gravitate towards quality registers, and will retain their ability to see beyond the sort of rhetoric that does nothing for safety but plenty for the hot air industry.

Panama plans ahead

Dr Enrique de Alba, partner at Morgan & Morgan, comments on recent developments at the Panamanian Ship Registry

JANUARY, 1925, marked the creation of the Panamanian Ship Registry. In 1980, the General Directorate of Consular and Shipping Affairs, otherwise known as the General Directorate of Merchant Marine, was established, responsible for administering and managing the merchant marine of the Republic of Panama. Finally, in February, 1998, the Maritime Authority of Panama was created as an autonomous agency responsible for unifying the country's maritime sector.

These three developments have help form and administer what is today the world's largest ship register. Its growth has been due to a number of key benefits it offers, including competitive taxes and registration fees, no requirements regarding nationality, no age conditions for vessels, etc.

To help maintain its future role as a leading maritime nation, Panama is working hard to participate in developments at the International Maritime Organisation (IMO). For example, it has recently been included in the IMO White List after complying with the international convention on Standards of Training, Certification and Watchkeeping for Seafarers 1978 (STCW), as amended in 1995, and the ISM Code.

The last annual meeting, held in London on November 19-23, 2001, also saw Panama elected to 'Category A' within IMO's Executive Council alongside other leading maritime nations such as China, Greece, Italy, Japan, Norway, the Russian Federation, UK, and the US.

Panama has worked hard to develop its register and its maritime sector. Recent developments simply prove its determination to keep up with the times in rendering the best possible service to the global shipping community.

Madeira welcomes crewing legislation

NEW legislation has come into force which will enable the Madeira International Ship Register to recruit officers and crew from any European country.

To date, the register, which is Portugal's second register, has only been able to recruit from the EU. But finding enough qualified crew members has posed a problem for owners in the past. The new legislation, which will extend the crewing requirements to areas such as Eastern Europe, will provide the register with greater flexibility.