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Saturday, October 22, 2016

Flag of Convenience Embraces UAE's Decision To Crack Down on Corruption

May 30, 2001

A leading maritime Flag of Convenience (FOC) has welcomed the United Arab Emirates' (UAE) decision to clamp down on the industry and has called for more regular sanctions against widespread corruption and underperformance.

Clay Maitland, managing partner of International Registries Inc (IRI), which manages the Marshall Islands FOC and managed the Liberian FOC until last year, said some FOC's habitually ignored their responsibilities for safety and were riddled with corruption.

"Is there some way (FOC) registries can be called to book?" asked Maitland. "There should be sanctions against them. It's time for a convention with teeth."

Ship operators pay many millions of dollars each year to fly FOC flags such as those of Liberia and Panama over their ships, and in return enjoy a favorable commercial and regulatory environment for shipping.

Last week a UAE minister said the cabinet had decided to ban from its territorial waters vessels registered in Albania, Belize, Bolivia, Cambodia, Comoros, Georgia, Honduras, the Maldives, Mauritius and Saint Vincent.

The decision followed one of the worst oil spills to affect the country's coastline in years after a sanctions-busting Iraqi tanker sank in April. The Georgian-registered Zainab was carrying 1,300 tons of fuel oil.

Maitland pointed to a recent scandal of fraudulent certification at the Panamanian Maritime Authority. Nearly all members of one certification division were suspended in March during a government fraud swoop.

Last month the International Tanker Owners Federation, Intertanko, also criticized the Panamanian FOC for dragging its heels on investigating accidents at sea. Such investigations are as vital to maritime safety as the black-box searches after airline disasters. --(Reuters)

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