Problems in Maritime and Shipping Laws - Assignment Example

Problems in Maritime and Shipping Laws Problems in Maritime and Shipping Laws According to Wijnolst (2006), the maritime law assumes an international character when it comes to ownership and flagging. Song and Panayides (2012) hold that the law of ownership of vessels or ships is very broad and could at times be complex. For instance, somebody from the UK may own a vessel, and because the regulations on ship ownership in the UK are tough, the owner may seek to flag his ship in another country, such as Liberia, where rules are not punitive (Lewis and Coulter, 2000). This legal registration procedure acts as a “flags of convenience". Some legal advantages come with using flags of convenience, including; obtaining lower registration fees, fewer restrictions, and lower costs of operation (Lewis and Coulter, 2000). When compared with the past, the laws in maritime industry are currently restrictive due to changes in technology, containerization processes, as well as open registry that allow ships to operate under concealed nationalities (Chin, 2008). In fact, the biggest problem facing the maritime and shipping industry is the widespread failure to adhere to domestic and international conventions on vessel management and safety, which results from increase in the number of countries offering bareboat and open registration of ships. This paper, therefore, critically explores problems facing the maritime and shipping industry with respect to the failure to adhere to domestic and international conventions on vessel management and safety, stemming from the increase in the number of countries offering bareboat and open registration of ships. The paper will begin by looking at the different forms of shipping and then explore issues that lead to noncompliance of both local and international laws by ship-owners. International conventions Sjögren, Lennerfors, and Poulsen (2012) indicate that the operation of "conferences" is a key historic aspect for oceanic liner transport. Conferences, under maritime law, are formal agreements amongst different stakeholders operating in the maritime shipping industry. They are important in the maritime shipping industry as they help in fixing the rates charged on clients by individual lines. Birnie (2000) holds that such conferences have been consistent for over eleven decades. Whereas the conference systems are perceived as anti-competitive, it has always circumvented prosecution from anti-trust agencies (Ebora, 2014). Mainly, the conference systems are considered as a tool or instrument that helps to stabilize inherently unstable rates in the maritime shipping industry, particularly when there are considerable deviations in market demand and supply of vessel capacity (Ebora 2014). Thus, by stabilizing rates, maritime exporters are provided with protection from unpredictable shifts in price and are assured of regular provision of shipping services. It enables maritime companies to compete, not on basis of the price charged, but on the level of service provision (Sodik, 2009). Safety and management of vessels States have adopted varied provisions of law relating to safety passed in international conventions. For instance, the SOLAS Convention, adopted in 1914, relates to global treaties concerning the safety of merchant vessels (Vorbach, 2001). Mainly, the SOLAS convention helped to specify acceptable standards for the construction, operation and observance of the set safety standards (Luoma, 2009). In this case, Flag States are accountable for making sure that vessels under their flag adhere to its requirements. The other convention on safety of vessels is the International Convention for the Prevention of Pollution from Ships (MARPOL), adopted in 1973. The Convention mainly aims at preventing and minimizing pollution from vessels. The convention provides that flagging states have ensured that ships do not discharge any form of dangerous substances into seas unless treated (Odeke, 1998). The STCW Convention was first held in 1978 with the aim of establishing fundamental requirements on training, certification as well as watch keeping for seafarers, particularly on a global level (Luoma, 2009). The convention was necessitated by the fact that previously, individual countries had their own practices and standards, which did not take the laws of other countries into consideration ( Kwiatkowska, 2000). Thus, the Convention aimed at prescribing minimum standards relating to not only to certification, but also to training for seafarers which states are obliged to satisfy. However, in response to the Amoco Cadiz oil spill in 1982, different states, especially in Europe, demanded for strict rules to curb adverse effects of sea pollution (Luoma, 2009). This led to the Paris Memorandum of Understanding where fourteen European countries were involved. These conventions helped in creating a breakthrough on international maritime laws, especially relating to flagging of ships. Flagging and International law A very important aspect of law to consider when acquiring a ship or water vessel is flagging. The United Nations (2012) holds that in maritime law, the flag concept goes hand in hand with the nationality and registration of a ship. As such, there are some implications involved when it comes to the choice of flag. From the perspective of the ship owner, economic factors override other factors when making decisions regarding flags. However, it must be understood that there are other factors considered, including; legal aspects and practical considerations: both in terms of national registration regimes incorporating national policies, and interests of the shipping community. In effect, there are at least three interests that play out, including; the interest of the shipowner, the national interest of the flagging state, and the international shipping interest. Generally, from an international law point of view, there should be some balancing of the three interests. It must be recognized that attempts have been made at a global level to harmonize the three sets of interests via conventional laws, but it has not been possible to come up with a uniform global standard. As a result, the ship owners continue to have many flagging options to choose from. Legal Rationale According to the United Nations (2005), the conceptual aspect of ship nationality emanates from the functional characteristics of a ship mobility beyond the jurisdictional limits of state into the high seas, where there is no existence of jurisdiction. Since a ship operates or plys in a territory that belongs to a certain state, and also has people on board, it should be subject to legal processes of the state in which it operates. However, the challenge arises when the ship is in high seas; here, the legal regimes of a flagging state cannot be enforced, as the ship is not operating within its boundaries. In short, this rationale is what underlies maritime shipping. However, when crossing through other jurisdictions, other than the flagging state, the vessel may be subject to more jurisdictions. In fact, the term ‘territorial extension’, also known as “the doctrine of a floating island” has been judicially confirmed in some cases. For instance, In Rv.Anderson, the court held that: On high seas, a ship carrying a national flag, is part of the territory of the flag nation, and all persons on board are subject to the jurisdictions of the laws of that state, just like they would have been on land within that state. ( Kwiatkowska, 1987, p. 55) On the other hand, in the LOTUS case, the parmanent court of international justice held that, “on the high seas, a ship is assimilated to the flag state, for just like in its own jurisdiction, the state exercises its power upon it, and not another state” ( Kwiatkowska, 1987, p. 55). This is well captured in the United Nations’ Convention on the law of the sea. Under article 97 of UNCLOS, only the jurisdiction of the flagging state is appled in the case of an accident involving their registered ship in high seas. Genuine Link Under the international law, as captured in article 97 of UNCLOS, states are supposed to fix or establish conditions for the grant of nationality to ships. Under the doctrine of genuine link, the courts may attempt to show, by way of flag, that some connections exist between the vessel and the country in which it is registered under. However, this presents a big problem in maritime law as there is no clarity on what consititutes a genuine link (Odeke, 1998). Different interpretations of the term have been tied to political, administrative, sociological and economic links. As such, this is challenging for both ship-owers and flagging states. With this loophole or the absence of a clear definition of the term in legal terms, different flagging states use their own interpretation as long as it suits their interests, and in the end avoid compliance with international laws and procedures. Nationality, in maritime law and international law, is purely a substantive matter, but registration is more of a procedural undertaking through which nationality is both evidenced and conferred. Per se, registration simply means entering details in public records. One reason why ship owners have been evading compliance with domestic and international law is because of the existence of two functions of ship registration. The first function touches on public law (Kwiatkowska, 1987). Under this function, national interests are taken into consideration. Where national interest surpass the ship-owners’ interests then, in such cases, the owners look for another jurisdiction to register their vessels. Some of the issues considered include: a) The duty to confer permission to a ship to bear the national flag; b) National regulatory jurisdiction over matters such as maritime safety, labor conditions, and pollution matters, and c) The right of a ship to naval protection by the flagging state. The second function is private law. In this case, emphasis is given to private rights, particularly to the protection of prim facie evidence. After the owner has succefully registered and secured a ship nationality, what follows is abiding by the rules and regulations set by the country or state of registrations. Usually, such a process helps the ship-owner to evade tougher regulations, as observed in domestic jurisdictions. Open Registry system challenges A good number of ship owners prefer this legal registration to other forms because; the state in which the ship is registered allows the owner to have full control and management of his ship without interference. In addition, unlike other forms, in open system, the ship may be registered at a consul office abroad; also, the owner is not restricted to transfer the ownership of the vessel (Edgerton, 2014). There is also freedom from taxation; a registration fee may be the only expense incurred. The most important thing why shipping vessels under this system do not adhere to international rules and regulations is that: the country of registry does not have the power and administrative capability to effectively impose or enforce any international, or even governmental regulation. Also, the flagging state has no authority to micromanage ships or maritime firms. As such, the open registry system attracts not only lawlessness, but also sub-standard ships. Basically, the sub-standardness of a ship is not just characterized by physical conditions that are not safe, but also by the lack of important skills on the part of officers (Wilmsmeier, 2014). Another factor at play with this registry system is the linguistic challenge between officers on the ship. This is partly because, some of the ship owners cheaply employ people who are not qualified. Bareboat Charter Registration Based on different studies on flagging options, bareboat charter registration is becoming more popular today than any other form of registration. It simply means that the owner can temporarily change the flag for the duration of the charter (The United Nations, 2012). What motivates ship owners to take up this form of registration is that it involves two parties; they include the country in which the owner is domiciled, and the flagging country in which the charter is recognized. This kind of arrangement leads to the establishment of a parallel registration regime. Most ship-owners prefer this kind of arrangement because they easily benefit, and are not accountable should anything go wrong. In other words, the owner of the ship earns money without operating his vessel or even managing it. Under the charter, the ship-owner enjoys all the advantages provided by the flagging state. Alternatively, the flagging state enjoys economic benefits resulting from additional tonnage to its national fleet in addition to employment opportunities for its people. Most countries have adopted the bareboat charter because, in the event of a dispute, they will not be bound by the international law. This is mainly because there is no uniform international regime that governs bareboat registration. Article 97, of the UNCLOS, is the only available international regulation that provides some procedural guidance by making a distinction between the state of registration and a flag state. Conclusion As it has been seen, the legal aspects are factors that are highly considered by ship-owners when choosing a flag. However, the primary concern would be whether the ship owner would be wishing to flag his vessel domestically or abroad. This calls for the adoption of different legal requiremets. For instance, in jurisdictions where a statute prohibits nationals against flagging out, the ship owner, whether natural or legal, obviously will not have a choice. Given a choice, the ship-owner would rather flag in his own country, provided that such a move would not occasion unenecessary litigations in courts. In other words, the best choice to flag is through open registry system, either through a bareboat charter or any other option that is friendly to the investor. Reference List Birnie, P., 2000. New Approaches to Ensuring Compliance at Sea: The FAO Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas. Review of European Community & International Environmental Law, 8(1), pp. 48-56. Chin, C., 2008. Labour Flexibilization at Sea. International Feminist Journal of Politics, 10(1), pp. 1-18. Ebora, E., 2014. Compliance of Domestic Shipping Operators at Batangas Port to RA 9295. Asia Pacific Journal of Multidisciplinary Research, 2(2), pp. 89-99. Edgerton, M., 2014. A practitioner's guide to effective maritime and port security. Hoboken, N.J: Wiley. Kwiatkowska, B., 2000. International organizations and the law of the sea: documentary yearbook. Vol. 1 (1985). London: Graham & Trotman. Lewis, I., and Coulter, D., 2000. The Voluntary Intermodal Sealift Agreement: Strategic Transportation for National Defense. Transportation Journal (American Society of Transportation & Logistics Inc), 40(1), pp. 26-34. Luoma, E. (2009). Oil Spills and Safety Legislation. Publication from the Center For Maritime Studies, 1-42. Odeke, A., 1998. Bareboat and charter (ship) registration. Boston:: Kluwer Law International. Sjögren, H., Lennerfors, T., and Poulsen, T., 2012. The Transformation of Swedish Shipping, 1970-2010. Business History Review, 86(3), pp. 417-445. Sodik, M., 2009. IUU Fishing and Indonesia's Legal Fra mework for Vessel Registration and Fishing Vessel Licensing. Ocean Development & International Law, 40(9), pp. 249-267. Song, D. W., and Panayides, P., 2012. Maritime logistics: a complete guide to effective shipping and port management. Philadelphia: Kogan Page. THE UNITED NATIONS, 2012. The United Nations Convention On The Law Of The Sea. International Debates, 10(6), pp. 4-20. UnitedNation, 2005. Convention on the Law of the Sea. International Debates, 3(4), pp. 100-128. Vorbach, J., 2001. The Vital Role of Non-Flag State Actors in the Pursuit of Safer Shipping. Ocean Development & International Law, 32(1), pp. 27-42. Wijnolst, N., 2006. Dynamic European maritime clusters. Amsterdam: Delft Univ. Press. Wilmsmeier, G., 2014. International maritime transport costs: market structures and network configurations. Burlington, VT: Ashgate Publishing Company. Read More