Abstract
The concept of ‘flag of convenience’ is ubiquitous in literature on maritime governance. First popularised by the International Transport Workers’ Federation (ITF), it has served as a touchstone concept in maritime policy discourse, and as a metaphor for the interaction between state and corporate actors in both maritime affairs and the globalised economy more broadly. This article argues, however, that the conceptions of public and private as ontologically separate that underpin existing literature on maritime governance have obscured notable shifts in the practices of flags of convenience in recent decades. More specifically (and drawing on assemblage theory), it argues that while flags of convenience have been framed exclusively as entities that allow shipping interests to escape regulatory control, certain open registers have been re-constituted as hubs of knowledge and materiality that ease and accelerate commercial circulation in a variety of ways. The article concludes by drawing attention to the volatility of the politics and practices of flag statehood at large; additionally, it highlights the insights that can be yielded for International Relations by the examination of maritime governance using novel theoretical tools.
Introduction
The study of maritime affairs represents an increasingly vibrant sub-field of research in International Relations. While it has long been recognised that the seas are an arena into which ordering practices in global politics are translated (via naval conflict, for example), there is now a consensus that maritime affairs not only warrants its own theoretical inquiry, but that it can be used to shed light on scholarly questions with broad purchase in IR. Some scholars, for example, have foregrounded trajectories of oceanic politics in understanding the historical development of states and political orders on land, 1 while others have used contemporary maritime institutions and issues as a platform from which to draw conclusions about global security innovation or international organisation. 2
Others, meanwhile, have placed the world-ocean at the centre of analyses that link capitalism, sovereignty and globalisation 3 ; private authority has long been a significant aspect of accounts of the trajectory of oceanic politics and maritime governance. Steinberg argues that ever since the emergence of the oceans as a ‘space of social utility’, they have been crucial in ‘facilitat[ing] the movement that is crucial to capitalist. . .economic processes’, and central in the ‘annihilation of space’ inherent in modern capitalism. 4
The concept of ‘flag of convenience’ (FoC) 5 has been a touchstone of conceptualisations of how corporate actors interact with governmental authority in maritime affairs. Where merchant vessels were once typically registered in the countries where their owners were domiciled, they have increasingly come to be registered in countries with which the shipowner has no connection beyond ship registration. According to UNCTAD’s 2021 Review of Maritime Transport, around 73% of merchant vessels globally are registered in a country separate from the nationality of the beneficial owner. 6 In a literal sense, most (if not all) of these vessels are registered to flags that are ‘convenient’ for the owner, but the term ‘flag of convenience’ is generally reserved for those registers whose fleets are overwhelmingly foreign-owned, and may be small states with limited shipping tradition. Panama, Liberia, the Marshall Islands, Malta, the Cook Islands and Bermuda are among the flags most commonly described as FoCs.
Theorisations of such flags in academic literature have been largely stable in recent decades, with scholars arguing that they represent voids of state authority, and that their popularity among shipowners reflects the latter’s desire and ability to evade both taxes and national and international regulation. Such narratives both draw from and reinforce prevailing ideas about the mobility and instincts of capital in the global economy. Ogle, for example, writes of flags of convenience as one of a number of elements of ‘archipelago capitalism’ that emerged in the latter half of the 20th century (others include tax havens and offshore financial markets and institutions) which allowed corporate capital ‘to flourish on the sidelines of a world increasingly dominated by larger and more interventionist nation-states’. 7 Llácer, similarly, describes the ‘lower crew costs, freedom to use foreign labour. . .[and] low taxes’ associated with open registers as ‘essential pillars for consolidation of [the FoC] system’. 8
As this article will demonstrate, however, scholarly understanding of the politics of flags of convenience (and flag state relations in general) is limited. Existing scholarly accounts of flags of convenience are founded on fixed notions of the enactment of state and corporate power in global governance, and as a result, emerging dynamics in these registers, in which new sets of practices have portended the emergence of distinctive linkages between flag states and maritime commerce, have been obscured. To illuminate these dynamics, the article draws on assemblage theory. There is now a substantial body of literature that argues that in (global) governance, actors, knowledge and material objects constantly interact in structures of power relations to form new governance terrain. Scholars of this perspective argue that the fixed binaries historically used to frame the politics of governance arrangements (e.g. public/private or local/global) obscure new subjectivities and practices associated with constant, and potentially infinitely diverse, ‘process[es] of. . .disassembly and. . .reassembly’ 9 through which elements of governance and the structures of which they are part are reconfigured. As the article will demonstrate, the use of assemblage allows the evolving practices and relations of maritime governance (and their relevance for International Relations) to be fully explored and understood.
Specifically, the article draws on this concept to illustrate how flags of convenience have been re-constituted (amid competition between registers and new, extra-territorial regulatory mechanisms) towards an evolved role for certain FoCs in the alignments of actors, technologies, practices and norms that constitute maritime commerce and governance. In making its case, the article will focus in on two areas of FoC activity – the provision of support services to global shipping, and the shaping of international maritime policy (focusing on the International Maritime Organization). In these areas, new practices in flag state relations have emerged, and existing ones re-imagined, such that the enaction of flag statehood has become integrated in intricate and (in existing FoC literature) unrecognised ways into the endeavour of easing and accelerating commercial circulation.
Overall, the article seeks to make two primary contributions to the literature. Firstly, it contributes a more theoretically rich and up-to-date empirical account of flags of convenience (and flag state relations at large) than currently exists, casting new light on a concept with enduring significance in academic and policy discourse on maritime affairs and economic globalisation. Secondly, against restrictive theoretical framings in existing literature on maritime governance, it demonstrates that novel theoretical accounts of (global) governance can illuminate noteworthy and previously un-researched dynamics of maritime affairs. As first point of inquiry, it will outline the concept of ‘flag of convenience’, before exploring its contemporary usage and theoretical underpinnings.
Flags of convenience and globalisation
Per customary international law, seagoing vessels must be registered to a state, which has legal jurisdiction over vessels and those aboard them; the UN Convention on the Law of the Sea (UNCLOS) asserts that states must ‘fix the conditions. . .for [ships to have] the right to fly [their] flag’. 10 These ‘flag’ states, which have legal responsibility for ensuring the safety of their ships, are widely recognised as being of great importance in the ‘maintenance of good order and governance’ of the seas. 11
The term ‘flag of convenience’ was originally conceived by the ITF, whose campaign against FoCs began in 1948. 12 While the practice of shipowners registering their vessels in foreign countries has existed for hundreds of years, Toh and Susilowidjojo identify Panama’s opening of its registry to foreign ships in 1919 as a crucial inflection point in the ‘institutionaliz[ation]’ 13 of the FoC system. The proportion of the world’s fleet registered to OECD countries declined from around two-thirds to one-third between 1970 and 1987 alone (with this decline largely attributable to FoCs). 14 While UNCLOS asserts the need for there to be a ‘genuine link’ 15 between the state and vessels flying under its flag, a precise articulation of this concept has never taken hold in international maritime law. In popular usage, the term ‘flag of convenience’ captures the practice of shipowners registering their vessels with particular flag states to access advantageous regulatory or financial conditions, rather than because there is such a ‘genuine link’ between a vessel and the flag state. In a 1970 UK parliamentary committee report, features attributed to flags of convenience included ‘taxes levied on income [of vessels] are not levied locally or are low. . .a registry fee and an annual fee. . .are usually the only charges made’, ‘manning of ships by non-nationals is freely permitted’ and ‘the country of registry has neither the power nor the administrative machinery. . .to impose any government or international regulations’. 16 The ITF, long at the centre of the global anti-FoC regime, publishes a list of FoCs on its website (at the time of writing, listing 42 flag states), and similarly frames ‘flag of convenience’ as constituted by the realities of lower pay and poorer working conditions for seafarers enabled by minimal regulation and shipowners’ access to a global labour pool. Overall, a significant majority of the global merchant fleet is flagged by registers described by the ITF as FoCs – the eight largest flags are now Panama (15.9% of the world’s fleet by deadweight tonnage), Liberia (15.2%), the Marshall Islands (13.2%), Hong Kong (9.5%), Singapore (6.0%), China (5.2%), Malta (5.2%) and the Bahamas (3.3%). 17
Scholarly literature, which has theorised FoCs’ role in maritime commerce as well as the social and environmental implications of their proliferation, has been largely stable in recent decades. Overall, research generally emphasises that (i) FoCs represent voids of state authority (to some degree), (ii) their main utility is for shipowners seeking to evade the regulatory or tax burdens of their own countries and (iii) their existence poses significant risks to the environment and maritime social affairs. As Negret puts it, ‘most shipowners wishing to cut costs or evade scrutiny register under foreign flags where fees, taxes, regulations and laws protecting seafarers are often minimal or nonexistent’, 18 while Barton argues that ‘ship owners [use FoCs to] exploit the less regulated spaces of the geopolitical economy’. 19 Roe refers to a ‘clear regression to the lowest standard’ in terms of how FoCs regulate their fleets, 20 while others have pointed to the ‘overwhelmingly deleterious’ impact of open registers on maritime safety. 21 A number of scholars have argued, furthermore, that FoCs enable illegal activity due to their lack of law enforcement capacity; as Petrossian et al put it, the FoC system ‘provides opportunities for. . .vessels to carry out. . .illicit activities, including drug and human trafficking, maritime terrorism, and weapons trafficking’, 22 linking open registers to illegal, unregulated and unreported (IUU) fishing in particular. FoCs have also been cited as being at the root of human rights abuses in the fishing industry. 23 Ford and Wilcox, in a 2019 article, construct an innovative statistical method for judging whether a given country is likely to be used as an FoC. The inputs used in their method stem from an understanding of flags of convenience as outlets for overseas shipowners to ‘avoid regulation, and minimise taxes and. . . [seafarer] wages’. 24
Such accounts are part of a body of thought that frames the tendencies of the shipping industry as reflecting the footloose instincts of capital in the global economy. Dale Murphy, for example, highlights shipping as ‘among the clearer examples’ of sectors whose governance is characterised by ‘lower common denominator’ outcomes, where the ease and low cost of relocation enables corporate actors to take advantage of ‘competition-in-laxity’ among states for financial gain. 25 Vuillemey, likewise, asserts that the political logic of global shipping is one of ‘liability and regulatory evasion’. 26 Other scholars have written of the shipping industry as a ‘compliance laboratory’, whereby the institutional architecture of maritime governance allows operators to escape ‘effective enforcement’. 27 Yliskylä-Peuralahti and Gritsenko, similarly, write that hyper-mobility and uneven enforcement capacity enables shipowners to find the path of least resistance in regulatory and financial terms. 28
Scholarship on flags of convenience, like much of the literature that explores the ‘proliferation (and empowerment) of private actors and private authority’ in international politics 29 is ultimately underpinned by a view that public and private are ‘ontologically separate domains of social life, governed by different logics and associated with specific sites’. 30 Hall and Biersteker, for example, proceed ‘from the notion that the sphere of the “private” can be defined in terms of what is not in the realm of the “public”’ 31 ; that while public and private actors can collaborate or influence each other, their authority is clearly divisible in both its enactment and logic. More specifically, analyses of maritime commerce have generally been beholden to fixed notions of the roles of state and corporate actors in global governance. In theorisations of FoCs, of first importance is a view of ‘stateness’ 32 that foregrounds capacity to govern within a given space – a (largely intuited) lack of FoCs’ material capacity or willingness to fulfil such a role is seen as an indicator of their illegitimacy in maritime governance. Jointly, the elevation of practices associated with economic globalisation, where commercial organisations have sought to take advantage of overseas labour pools and regional or national differences in taxation or regulation, has dictated that private actors have instrumentalised this state incapacity for material gain.
In this binary framing, in summary, it is the role of states to impose regulatory governance and corporate actors are solely the subjects of regulatory authority, and flags of convenience represent politico-legal aberrations that enable private actors to escape regulatory enforcement. The picture, therefore, is one of ‘Westfailure’, 33 in which the states system is seen as having been overtaken by the mobility of corporate power in the global economy. Undoubtedly, the picture painted in the literature is partly a reflection of the historical origins of certain open registers; the initial expansion of the Panamanian and Liberian registers, for example, undoubtedly begins with American corporations seeking to ‘exploit socio-juridical asymmetries’ in shipping and ‘undermine previous political victories by organised labour as enshrined in national legislation’. 34
Overall, literature on maritime affairs at large has been largely closed off to the insights of an increasingly significant tradition in global governance research, which foregrounds the business of doing 35 rather than actor constellations in framing governance. As the next sections of this article will argue, the use of novel theoretical tools – which emphasise the role of practice in constituting order and change in social structure – enables the illumination of certain FoCs’ evolving roles in dynamics of maritime commerce and governance. While existing conceptualisations of FoCs are not wrong (far from it), the article will demonstrate that the use of such tools, in particular assemblage theory, throws into relief the full range of practices and relations through which they are entwined with maritime commerce.
Assemblages, practice and maritime affairs
In recent years, assemblage theory (along with similar practice-theoretical concepts such as actor-network theory) has become a conceptual touchstone for many scholars of (global) governance. An assemblage, overall, is a configuration of different elements (e.g. objects, practices or actors) that governs a space or territory, but with no conceptual priority assigned to any element or relation of governance. Therefore, assemblage theory enables scholars to explore the heterogeneity, fluidity and diversity of both social structures and the processes through which they are constituted. Bueger argues that assemblage theory can enable analysis of the ‘unstable, fuzzy picture’ of ‘complexity and contingency [in]. . .contemporary global governance’. 36 With ‘structural stability’ understood to be the ‘exception rather than the norm’ 37 in assemblages, assemblage theory is in some ways a reaction to scholarship that understands governance through pre-determined hierarchies or social categories, or corresponding, fixed ideas about the practices through which different actors interact. Assemblage theory is therefore a methodological approach, or structural metaphor, rather than a theory of social relations. Of interest to assemblage researchers are processes and outcomes of assembling – the mechanisms by which actors, objects and norms (as well as other elements of the assemblage) interact to form governance terrain. Assemblage thinking has recently been deployed to think about the volatility and heterogeneity of the governance of cybersecurity, 38 urban planning, 39 trade borders 40 and conflict termination. 41
As alluded to above, a focus on practices is common to both assemblage scholarship and third generation global governance research. Adler and Pouliot define practices as ‘socially meaningful patterns of action, which. . .simultaneously embody, act out, and possibly reify background knowledge and discourse in and on the material world’. 42 Practice literature foregrounds not the forms of ‘routinised behaviour’ 43 at the root of these patterns of action, but their capacity to ‘structure interaction’ 44 and make the world ‘hang together’. 45 Consequently, agency and power can be understood as working through potentially infinitely diverse sets of practices (e.g. data gathering) that destabilise, dismantle and then re-territorialise governance terrain in innumerable ways. In these processes, the disassembling and re-assembling of particular actors, institutions and processes is part and parcel of the constitution of new governance terrain. As an example of this, Abrahamsen and Williams account how the presence of mobile Securicor patrols in Cape Town’s city centre and their operational interfacing with City Police represent practices that entrench the re-configuration of the state in the security landscape, and its role in constituting new assemblages of public and private knowledge, authority and technology in the provision of policing. 46
If maritime commerce is understood as an assemblage of, among other elements, practices (such as insurance underwriting or seafarer recruitment), technologies (fuel or engine technologies) and actors (shipping companies or classification societies) – and the possible flux of these elements is acknowledged – many lines of empirical enquiry relating to the assembling of maritime affairs are opened. This article, however, will focus on novel practices that illustrate the re-constitution of certain flags of convenience in the assembling of state and corporate power in maritime affairs. The ontology of public and private that underpins extant literature on flags of convenience (and that on maritime affairs at large) has rendered it largely unable to engage with these dynamics. 47 While scholars to have written on FoCs might acknowledge that those flags, as voids of authority, are part of systems or networks of maritime commerce, their presentation of the associated practices as fixed, and a lack of awareness of how their evolution might reflect the re-constitution of governance institutions and arrangements, means that they notably understate the complexities of how contemporary FoC operations relate to shipping, international organisations and other elements of maritime commerce. Digging into these relations, the article will start by exploring shifts that have precipitated the emergence of customer service-oriented modes of operation in FoCs. Following this, it will examine emerging and transformed practices in two areas that portend new linkages between FoCs and corporate actors in the assembling of maritime commerce. In addition to contributing to the literature on flags of convenience and flag state relations more broadly, this will highlight the utility of novel theoretical tools in the study of maritime affairs.
The article’s analysis is based on mixed-methods research. Carolin Liss has highlighted the difficulties of research on shipping, writing that the maritime industry ‘has established the norm of providing as little information as possible to anyone asking’ 48 ; she points to shipowner associations as examples of entities typically unwilling to engage with researchers. As a result, it is especially important that research on maritime commerce triangulates arguments using multiple sources, particularly where there is an aspiration to re-construct fields of practice.
In doing this, this article draws on two types of source. Firstly, it uses open-source documents, in particular from flag states and the IMO. Documents and publicity materials issued by FoCs are notably useful in studying their commercial activities. While these materials may not be authoritative if used in isolation, they provide an invaluable guide to those registers’ perceptions of how their activities fit into contemporary maritime affairs, and to how their services are marketed to clients in the shipping industry. This is particularly important in the context of the argument of this article, which centres on the relationships between shipowners, commercial circulation and FoC practices. IMO documents (sourced using IMODOCS, the IMO’s document repository), furthermore, show how these practices have been framed in relation to maritime policy debates, as well as providing evidence relating to FoCs’ engagement in IMO policy deliberations. Secondly, the author conducted five formal interviews – with employees of shipowner associations, ship registers and maritime trade unions, IMO representatives and members of the IMO secretariat – to gain the perspectives of entities that engage with flags of convenience. These interviews were used primarily to provide triangulating detail of FoCs’ practices. Informal engagement and discussion with personnel from open registers and the shipping industry as part of a prior research project also contributed to the shaping of the argument.
The (re-)constitution of flags of convenience
Integral to traditional perspective on FoCs are the realities of the mobility of shipping capital and the financial incentives of flagging commercial tonnage. If shipowners are unhappy with their register, they can simply move their vessels to another flag, creating competition among registers to draw in shipowners with ever greater incentives. 49 Generally, literature on FoCs has asserted that this competition has engendered the aforementioned ‘race to the bottom’ in terms of regulatory enforcement; however, some recent scholarship has challenged the veracity of this account. Elizabeth DeSombre, most notably, draws attention to improvements in the enforcement of regulatory standards by open registers, which, she argues, reflects a ‘race to the middle’. 50 DeSombre argues that new regulatory mechanisms of exclusion that penalise shipowners whose vessels are flagged by non-compliant registers – specifically, port state control regimes and ITF-led boycotts – have encouraged greater adoption and enforcement of maritime regulations by large FoCs (even while it is not necessarily the case that the expansion of port state control regimes causes more ‘flagging in’ 51 ). In the 2022 statistics published by the Paris MOU on Port State Control, six flags considered to be FoCs by the ITF were ranked in the 17 flags most compliant with international regulations; Bahamas, Bermuda, Cayman Islands, Marshall Islands, Liberia and Malta. All of these are ranked as more compliant than the United Kingdom, Sweden, Germany, China, France and the United States. Panama, the world’s largest flag state, is also on the white list of the most compliant flags. 52
DeSombre’s argument is important, because it highlights how changing (regulatory) practices and political conditions have caused shipping interests to contest and effect shifts in how flag states operate. 53 She specifically traces the improved regulatory performance of certain open registers to shipowners’ desire to avoid the detentions and reputational damage associated with the use of sub-standard registers. 54 Her account, however, is limited by its framing of the relationship between the shipping industry and ship registers through the prism of regulatory enforcement and compliance. It is a key insight of assemblage scholarship that the forms of practice through which governance terrain is constituted are potentially endlessly diverse, and should be left ‘open to research’. 55 Indeed, while the incentives of flagging commercial tonnage have not changed, and as such the power imbalance between ship registers and the shipping industry remains, new forms of practice have constituted new governance arrangements in open registers, re-imagining flags of convenience in ways that existing literature is conceptually unable to account for. The use of novel theoretical tools, conversely, enables appreciation of how these flag state practices portend evolving linkages with the shipping industry and other elements of assemblages of maritime governance.
One significant factor in these emerging dynamics in FoCs is the trend DeSombre outlines – namely, that it may no longer be commercially profitable or viable for most shipowners to take advantage of wholesale vacuums of regulatory authority. In view of specific regulatory processes she describes that penalise non-compliant registers (and related, more recent initiatives such as the IMO Member State Audit Scheme, which came into force in 2016), vessel and cargo owners undoubtedly seek ‘respectability’; there is rising demand for ‘green or socially responsible services’ in shipping. 56 However, the aspiration to ‘frictionless’ 57 maritime commerce has not lessened in importance. Shipping, like many global industries, has long been characterised by the emergence of novel practices that promise ‘faster, more efficient, and lower-cost. . .operational procedures’, 58 some intertwined with new technologies – such as, recently, ‘real-time freight estimate and automation of repetitive tasks’ through artificial intelligence. 59
In recent years, importantly, bureaucratic innovations have rendered flag state operations an increasingly integral element of ‘sophisticated transportation, communications and logistical systems’ that transfer cargo between production facilities and markets. 60 As ship registers compete with one another to provide the most commercially advantageous home for (prospective) tonnage, relationships between shipping companies and many ship registers have become increasingly dictated by client-service provider logic, which has been manifest in emerging sets of practices that re-territorialise the governance terrain of shipping-flag state relations.
While the emergence of customer service-oriented practices and bureaucracies in flag state operations has not been restricted to any set of ship registers, it has loomed especially large in the evolution of large open registers. As John Ramage, then-Chief Operating Officer of the Registry of the Marshall Islands, said in 2017, ‘open registries are able to provide a. . .flexible and customer focused service’, with the ultimate goal of registry services being to ‘deliver business value’ to ‘customers’. 61 The RMI further states that it provides the ‘highest quality ship registry services found anywhere in the world’ 62 ; according to an interviewee working for a flag state, the reason that the largest open registers dominate the market is that they are ‘focused on delivering a service’ 63 for customers. This follows a pattern observed elsewhere of state institutions being ‘reoriented in terms of the social and economic functions they perform’ amid ‘competition for investment from mobile capital’. 64
The remainder of this article will examine two areas of flag state operations where, in this context, the practice of flag statehood has been substantially re-imagined in certain open registers, to the evolution of new relations in the governance terrain of flag states and maritime transport. Firstly, it will explore the expansion of commercial support services, before examining the activity of open registers in international maritime policy processes – focusing primarily on the IMO. For both, it will primarily deploy evidence relating to the three largest flags of convenience – Panama, Liberia and the Marshall Islands. Ultimately, it will conclude that these flags should be considered as hubs of materiality and practice that, in various ways, serve to accelerate and ease commercial circulation. The goal is not to dismiss existing thought on FoCs – it is clear that in some respects, traditional characterisations of open registers are not incorrect – it is to integrate practices of (for example) tax avoidance and labour exploitation into a more rounded conceptualisation of what FoCs do in assemblages of maritime commerce and governance. Having outlined some of these practices, the article will seek to elucidate how the same conceptual lens can be mobilised towards a more useful conceptualisation of flag states at large in maritime governance, drawing out further evidence relating to the UK ship register in particular.
‘Support and assistance’ and the acceleration of regulatory compliance
As was discussed earlier in this article, scholars have typically viewed flag states as primarily jurisdictional entities, whose ‘prime responsibility’ 65 is to ensure shipping safety and enforce national and international law on flagged vessels. UNCLOS states that the flag state must ‘effectively exercise its jurisdiction and control in administrative, technical and social matters over ships flying its flag’ and take ‘such measures. . .as are necessary to ensure safety at sea’. 66 Historically, this has hinged on the issuance of documents certifying compliance with international rules and regulations. However, the activities of certain flag states (most notably, the large open registers) have expanded considerably beyond their engagement with these basic legal obligations.
An important development here has been the operation of a number of these registers by private companies run from overseas – for Liberia, Liberia International Ship and Corporate Registry (LISCR) and the Marshall Islands, International Registries Inc (IRI), both headquartered in the United States. These registers, in particular, have demonstrated a certain agility to grow and re-constitute themselves bureaucratically to meet a customer need that frictions in maritime commerce and governance be flattened in new ways. As this section will highlight, in some areas this has involved the emergence of entirely new practices of ‘support and assistance’, 67 while in others, existing forms of practice (in particular, compliance enforcement) have been re-imagined and commodified, sometimes alongside the flag state’s implementation of new technical innovations. For both, the sovereign authority, bureaucracy and episteme of the ship register become intricately embedded in the endeavour of easing and accelerating commercial circulation.
Essential to numerous aspects of this shift has been the emergence of expansive, global bureaucracies within certain flags of convenience. The largest open registers, generally unlike their ‘traditional’ counterparts, have offices around the world. In addition to its headquarters in Virginia, USA, LISCR (for example) has 25 global offices, 68 mostly in locations where there are high concentrations of ship ownership or commercial maritime activity – these include Piraeus, Hong Kong, Dubai, London, Tokyo, Shanghai and Singapore. The registry of the Marshall Islands and the Panama Maritime Authority, likewise, have 28 and 64 global offices respectively (Panama’s operating through consulates), many in the same locations. 69
This has enabled these registers to offer new forms of support and assistance to shipping actors. In particular, they offer 24/7 access to advice and guidance, as well as more general corporate administrative services – a number of interviewees suggested that shipowners desire constant responsiveness and open lines of communication with maritime authorities of all forms, such are the costliness of any delays to cargo transit. For technical and manning issues, ship operators with vessels sailing under the Liberian flag are advised to call any one of five regional offices, while for emergency matters (including port state detention or any issues that ‘require immediate assistance from the registry’), there is a LISCR duty officer contactable by phone or email 24 hours a day. 70 The Marshall Islands registry and Panamanian registry, likewise, offer 24-hour support via email and phone. Now central to registry operations is the ability to respond and act ‘when things go wrong’ 71 on all matters of maritime commerce, and it is through this bureaucracy that open registers are able to fulfil this role to a unique degree. As Bill Gallagher, President of IRI, claimed in 2021 – ‘there is no doubt that our degree of localization makes us a unique registry. With. . .offices around the world and over 400 personnel, we service clients in their own time zones, simplifying daily operations and complex transactions. We are the world’s local flag’. 72
Underpinning this bureaucratic architecture, moreover, are distinctive concentrations of expertise in open registers, which are of particular importance in assisting shipowners and operators to navigate the frictions and regulatory hurdles associated with global shipping. Brochures for the Liberian registry boast of a staff of the ‘world’s best trained and most experienced maritime experts’, 73 providing direct access to sets of individuals with dedicated portfolios relating to, among other things, safety, registration, MLC audit and port state control. The largest open registers also frequently issue marine notices and circulars, which provide interpretations of new regulations, security advice, documentation templates or guidance on new policy from the register, or updates and revocations of these. In 2021 alone, the Liberian registry published six Marine Operations Notes, 14 Marine Advisories and four Marine Security Advisories, on subjects including the carriage of liquid chemicals, measures to mitigate port state detentions in Australia, the provision of medical oxygen on vessels amid the COVID-19 pandemic and piracy in the Gulf of Guinea. The Panamanian registry states that the issuance of such documents is essential to ‘maintain[ing] the competitiveness of the National Merchant Marine’, 74 seeking to mobilise registers’ expertise to demystify regulatory directives and processes for clients in the shipping industry.
Also important, however, is the re-imagination and commodification of practices of regulatory enforcement and compliance for these registers. While, as was previously discussed, issuance of compliance certificates is among the primary obligations of flag states, this practice has been transformed in recent years; key to this is the globalised network of surveyors and inspectors that the largest open registers employ. The Liberian and Panamanian registries have over 400 and 200 nautical inspectors based across their global networks of offices, respectively. 75 According to the Liberian registry, its ‘world-wide network of inspectors and auditors. . .perform a large percentage of the Code and Convention approval and certification tasks for the Liberian fleet’. 76 One non-FoC registry employee said it was open registers’ quality of surveyors, in conjunction with their global presence, that has solidified their position at the top of the market for tonnage. 77 While he asserted that the largest registers do not overtly compromise on safety, he stated that their breadth of expertise enables ‘agility’ in the interpretation and enforcement of international maritime regulations, while the registers of traditional maritime nations have been criticised by shipowners for being too ‘overzealous’ in aspects of their compliance regimes. As another interviewee put it, ‘if you need a SOLAS [Safety of Life at Sea] certificate issued on a Saturday morning, well, you need to be there Saturday morning. You can’t say, come back on Monday. We don’t work weekends’. 78
Moreover, some registers have constructed systems for harmonising inspection and certification; per the Liberian register, ‘certification audits can be combined with Annual Safety Inspections. By harmonizing the overlapping requirements of these International Codes. . .and Liberian Regulations, the Liberian Registry provides shipowners convenient, efficient and cost-effective certification services’. 79 In April 2020, the Panama Maritime Authority wrote to the IMO to communicate its intention to ‘facilitate the postponement’ of all statutory certifications (including audits for the ISM/ISPS codes and Maritime Labour Convention) in addition to its own annual safety inspections, ostensibly owing to the need to ‘keep maritime trade moving in this time of global crisis’. 80 Furthermore, both Panama and Liberia have, in recent years, implemented digitalised practices of record-keeping. In 2017, the Panama registry created the Seafarer’s Automated Application, an electronic system to process various certificates relating to the International Convention on Standards of Training, Certification and Watchkeeping (STCW), 81 while in 2018, the Liberian register created an electronic oil record book for MARPOL compliance, in order to ‘facilitate maritime operations. . .and reduce administrative burdens’. 82 Such measures undoubtedly seek to satisfy shipowners’ demands for greater digitalisation; according to BIMCO, this is driven by, jointly, ‘competitive pressure for cost efficiency. . .environmental factors and regulatory compliance requirements. . .[and demands for] digital operations from. . .business partners’. 83
In an interview in 2017, John Ramage asserted that open registers consider themselves to have a ‘dual role’ in maritime affairs, ‘as administrator and enforcer of rules and regulations’ and provider of ‘support and assistance to owners’. 84 In reality, however, it is impossible to disentangle regulatory enforcement, the provision of commercial services and measures that ease compliance burdens, and by extension the complexity of the emergent governance terrain that re-constituted open registers are part of. As spaces of all kinds are now defined by the politics of ‘incessant circulation’, where ‘speed is the characteristic of the era’, 85 regulatory compliance, port state detentions or the inherent challenges of sea transport represent hurdles to rapid circulation, and open registers have become (in part on the basis of their distinctive legal authority as flag states) global hubs of practice based on extensive epistemic and bureaucratic architectures to enable such hurdles to be flattened. As ‘accelerating the circulation of capital. . .decreasing the costs of transport and communication’ is a ‘recurrent’ source of enhanced profits for corporate actors, 86 open registers have been at the centre of institutional and technical ‘currents of innovation’ 87 that promise the acceleration of capital turnover. Clearly, therefore, the view of flag states as solely organs of regulatory enforcement (and more specific arguments that ‘flags of convenience’ represent simple voids of regulatory authority) is overly simplistic. The next section of this article will explore the translation of the client-service provider relations that underpin the aforementioned practices to the processes through which FoCs engage in international maritime policy processes.
Flags of convenience and international policy processes
In the International Maritime Organization (IMO), the primary global regulatory authority for shipping, flag states are the sole actors with voting power, and are likewise important players in committee, sub-committee, working group and council proceedings of all forms. Often, discussion of private interests in the IMO have focused on ‘consultative status’; currently, 85 NGOs, industry associations, trade unions and other actors have this status, and consequently are able make written submissions and contribute to discussion across the organisation.
Possibly more impactful, however, is the operation of private interests through flag states in IMO. Across IMO committees, sub-committees and working groups, flag states participate through delegations, which can vary widely in size and composition. Generally, delegations are led by a Head of Delegation, and are made up of some combination of Representatives, Advisers, Alternates and Observers. Heads of Delegation are often officials from transport or maritime ministries or diplomatic services, but it is a long-standing practice for a broad range of stakeholders and experts to be included as advisers or observers; delegations often include personnel from research institutes, classification societies and navies, as well as representatives of shipping companies and shipowner associations. Generally, delegates from industry are most numerous in the delegations of states with substantial domestic maritime industries. For countries such as China or South Korea, for example, which are home to significant shipbuilding sectors, the presence of industry representatives ostensibly ensures that domestic economic interests factor into decision-making.
However, in line with the scale of their financial contributions to IMO (which are determined by volume of flagged tonnage), the largest flag states – in particular, Panama, the Marshall Islands and Liberia – have increasingly become important actors in IMO policy processes. While, as alluded to above, neither the participation of shipping industry representatives in flag state delegations nor industry interests playing a role in policy decisions is unique to any set of flag states, open registers’ engagement with private interests have constituted distinctive governance terrain in international maritime policy processes.
As with the practices described in the previous section, the reality of ‘client-service provider relationship[s]’ 88 between shipping companies and flag states looms large in this process. Where registers’ income is ‘reliant on. . .intimate ties to shipping fleet operators’, 89 the system of open registers, according to John Maggs, President of the Clean Shipping Coalition, ‘puts a disproportionate influence in the hands of the shipping industry’ 90 in respect of maritime policymaking. Of some importance here is the fact that many open registers, most notably Liberia and the Marshall Islands, are represented directly by the companies contracted to operate the registry rather than anyone connected directly to the state – because, according to one IMO employee, they ‘basically run shipping in that country’. 91 A 2018 report by the Nordic Council of Ministers found that payment for attendance at IMO meetings, and attendance itself, is specifically assigned to private registry operators in some contracts with flagging states. 92
Additionally, the largest FoCs, because of their generally being small states whose primary interest in maritime affairs is in their ship registers, are generally not subject to the same competing political imperatives in their IMO activity compared to other maritime nations. While many matters under discussion in IMO exist outside the effective oversight and remit of domestic political authorities, IMO delegations generally remain subject to some degree to policy direction from and accountability to bureaucracies at home. For open registers, however, and particularly those represented in IMO by private companies with minimal connection to the flagging state, this is far less often the case. One interviewee with significant experience of IMO deliberations spoke of ‘traditional registries [being] much more politically encumbered [than open registers] with maritime related concerns for other elements of governance’. 93 Others described open registers as ‘largely influenced by shipowners’, for whom the primary concern is with cost – of open registers ‘saying what industry probably wants them to say’. 94 As another interviewee highlighted, ‘Panamanian representation at the IMO is heavily influenced by the Japanese shipowners [because] 42% of the entire fleet is Japanese owned. . .if an issue’s coming up in the IMO to deal with bulk carrier regulation, you know that the Panamanians are [going to] have a view on that, [because] the Japanese ship owners have a very high concentration stake in that sector’. 95 As one example of the close relationship between shipping and open registers in the IMO, the Liberian registry, INTERTANKO and the International Chamber of Shipping worked in concert in MEPC 69 in 2016 to protest decisions made by the US Government on the regulation of ballast water management technologies in American waters; these decisions were perceived to be unfriendly to shipowners seeking to invest in future-proofed technologies for their vessels. 96 In such settings, shipowners are able to take advantage of links to a number of states. The UK Chamber of Shipping, for example (which prides itself on its links to the UK’s IMO delegation) is open to shipowners who use any flag. On this theme, open registers often collaborate closely with states in which ship ownership is concentrated. Combinations of Japan and Liberia, the Marshall Islands and Panama (as well as BIMCO, the ICS and a number of other shipping industry associations) have made numerous joint submissions to MEPC in recent years, including a 2016 item that highlighted the ‘commercial distortion’ that would arise from uneven enforcement of proposed regulations on sulphur emissions. 97
The occasional dislocation between open registers’ activity in IMO and the interests of the flagging state has been laid bare by tensions between IRI, the company that operates the Marshall Islands register, and officials from the Marshallese Government. In 2015 then-foreign minister of the Marshall Islands, Tony De Brum, arrived at IMO to emphasise the need for shipping to decarbonise to prevent sea level rises, only to find IRI employees representing the country – he lamented afterwards that ‘we had some difficulty convincing the people who were sitting in our seats, literally, that we were the representatives of the Marshall Islands’. Thereafter, according to Margot Gibbs, ‘[IRI] registry officials advised the [Marshallese] government that the 2016 IMO meeting was “technical” and not suitable for ministerial attendance’. 98
Moreover, it is clear that, as in the fields of ‘support and assistance’ and regulatory compliance, expansive bureaucracies have developed in open registers to facilitate greater influence in IMO policy processes. As Bill Gallagher of IRI said in an interview in 2017, ‘we used to send a taxi over to IMO and now we send a bus. . .our regulatory guys say, ‘If you’re not in the working groups, you’re not impacting what happened. . .so we’re not. . .just sending a couple guys to sit in a chair; we actually are very active in the working groups’’.
99
Significantly, these bureaucracies have been constituted in part by the technocratised character of maritime policy discourse. It is a constant refrain among those who have worked in IMO that the organisation is a ‘technical’ body, and that debates within it invariably hinge on the relative persuasiveness of different accounts of technical knowledge.
100
Accordingly, open registers’ IMO activity has frequently mobilised the epistemic infrastructure alluded to in the previous section of this article. One interviewee asserted that the large open registers are known for having ‘very good technical experts’,
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and frequently defer to expertise in attempting to frustrate regulatory initiatives; according to one IMO representative, ‘if [a new initiative] does cost something [for shipowners], then they will find a million ways of saying it should be looked at in greater detail. We haven’t got enough evidence. We need another survey. We need another study. We need at least 10 other studies. . .just to, to make sure that. . .any impetus dies’.
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According to Aalbu and Longva, on this theme, the institutional preference for ‘evidence-based’ decision-making in the IMO has allowed some actors to frustrate the regulatory process by ‘continuously call[ing] for more data before developing new regulations’.
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Others have written that the expertise that private registry companies have in ‘understanding and applying international law to shipping fleets’ puts them at a substantial advantage in ‘shap[ing] state positions and develop[ing] the technical details of international maritime law’.
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Per a message from the President of IRI on Ballast Water Management (BWM) from January 2017 –
Listening to the questions posed by industry stakeholders at our seminar on BWM regulations in London this November, it was clear to me that the industry needs practical answers, fast. To ensure owners’ collective BWM concerns are dealt with and clearly heard at the International Maritime Organization (IMO), we have a dedicated BWM team, led by Simon Bonnet, Safety & Technical Manager (London), Richard Dias, Regional Technical Manager (Hong Kong), Rear Admiral Robert North, United States Coast Guard (Retired)/Consultant (Washington, DC/Reston), and Thanos Theocharis, Regulatory Affairs, European Liaison (Piraeus). They are able to give advice on any issues owners might have and are backed by well-resourced technical teams in our regional offices.
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Assembling the flag of convenience
Activity in both these fields speaks to the re-constitution of flags of convenience. In both cases, new practices have emerged, and existing ones re-imagined, such that open registers have been intricately embedded into the endeavour of easing and accelerating commercial circulation. According to the Liberian registry, on this theme, its staff are ‘industry experts not bureaucratic regulators’ and the registry, overall, ‘is a unique value-added partner for quality shipowners and shipmanagers in the demanding and ever-changing environment of the global shipping industry’. 106 In respect of commercial services, global bureaucracies have emerged in open registers that act in various ways to flatten frictions associated with maritime commerce and transport; whether this is providing support via helpline, re-designing compliance certification processes to be more accessible, or reducing administrative burdens through the rolling out of digital technologies. In the case of maritime policy processes, conversely, certain open registers have not only come to be reliable advocates for their shipowners’ interests, but have also sought to mobilise emerging epistemic infrastructures in shaping international maritime policy.
This speaks to the reality that flags of convenience are hubs of practice that are intertwined with maritime commerce in a multitude of ways. It is undoubtedly the case that the traditional narratives associated with FoCs (which foreground the financial advantages of tax/regulatory avoidance or the ability to exploit global labour pools) are not invalid. After all, there are many ship registers classed as FoCs by the ITF whose attraction to shipowners likely hinges on a lack of regulatory enforcement – Togo, Comoros and Moldova all feature on the Black List of the Paris MOU. 107
Nonetheless, these narratives in isolation provide an unhelpfully restricted means of understanding many FoCs’ roles in contemporary maritime commerce and governance. As in Abrahamsen and Williams’ study of the re-configuration of the state in policing, the evolution of new practices in maritime affairs are the result of processes of assembling with other elements; for example, the norms relating to the IMO as a ‘technical’ organisation, the unceasing need for speedier cargo transit, port state control regimes or ITF-led boycotts, the inherent unpredictability of travel over the oceans, and even more recent ‘events’ such as the COVID-19 pandemic. In merchant shipping overall, third-country ship registration is a practice that has ultimately engendered the entrenchment of an ‘FoC regime’ in which flag states are entities that primarily serve to ease and accelerate capital flows across the oceans. However, due to the multiplicity of practices through which this easing and accelerating is enacted, it is clear that the concept of ‘flag of convenience’ as used by scholars and practitioners provides relatively little guide to what FoCs do. FoCs may represent forms of ‘terraqueous territoriality’ 108 that enable labour exploitation, just as they may represent global corporate service providers whose added value is in flattening frictions associated with regulatory compliance rather than enabling their evasion; they may be both at the same time.
The practice of traditional maritime nations
Countries with shipping heritage have responded to the loss of tonnage to FoCs in a multitude of ways, such that it is difficult to generalise across states and over time periods. Notably, as Mansouri writes, ‘the Roosevelt administration encouraged American firms to flag out to Panama’s registry’ during the 1930s and 1940s, when its consular support to US-owned, Panama-flagged vessels ‘render[ed] . . .] Panamanian ship registration [. . .] an adjunct of American officialdom’. 109 At the same time, in the years following the Second World War, many established shipping nations sought to resist the entrenchment of FoCs in institutions of maritime governance. In 1958, most notably, a group including the UK, Norway and France (although not the US, which took the opposing side) attempted to prevent Panama and Liberia joining the first Maritime Safety Committee in the then-Inter-Governmental Maritime Consultative Organization. However, by the late 1970s, the prevalence of flagging out was such that traditional maritime states largely no longer sought to undermine the FoC system in international institutions. In the UN Conference on Trade and Development, OECD states came to oppose efforts by the G77 to entrench the principle of ‘genuine link’ in international law, and the 1986 United Nations Convention on Conditions for Registration of Ships (which sought to accomplish this task) correspondingly remains unratified to this day.
It is clear that many developed states retain an interest in (re-)establishing some control over merchant shipping, for various reasons; these states have sought to do this in a number of ways. For those states aiming to protect against grand strategic coercion by great power rivals, for example, this process is not as straightforward as simply building a large flag, as flagging vessels does not necessarily confer state control of shipping; China’s approach has centred on constructing a large Chinese-owned shipping sector, many of the largest companies being owned by the state itself. More straightforwardly, many states interested in the perceived economic benefits of larger domestic fleets 110 have sought to out-compete FoCs for commercial tonnage by providing similar financial benefits to prospective customers in the shipping industry. These have included the implementation of tonnage taxes and the creation of international registers that loosen tax and labour restrictions; as an example, the Danish International Ship Register aims to ‘strengthen Danish shipowners’ competitiveness by providing tax relief. . .and allowing shipowners to employ third-country seafarers’. 111 In this environment, the practice of flag statehood by these states has evolved, laying bare the reality that the practices of doing flag statehood at large are far from fixed.
The recent evolution of the UK ship register provides a good example of this. In Maritime 2050 (a government strategy for the UK maritime industry), the UK Department for Transport stated that it sees the UK flag ‘as an integral part of [the country’s] maritime package’, noting that the UK ship register (UKSR) ‘can be an attractor of maritime businesses and specifically shipping companies to the UK’. 112 Taking the lead of the major open registers, the UK register now operates a system of dedicated Customer Service Managers, ‘highly experienced MCA (Maritime and Coastguard Agency) surveyor[s] for all. . .technical enquiries. . .supported by an on call technical expert’, available 24/7. 113 In 2021, the MCA set up a UK Shipping Concierge Service, which seeks to enable maritime businesses to access support and expertise across the UK government – the service, which is also accessible 24/7, claims its ‘connections with academia and shipping experts. . .can provide a wealth of support on key business challenges’. 114 Tellingly, the UK register claims to be a flag state that ‘adds value to operations, not just regulates’. 115 Attempts to attract overseas shipowners for whom the flag is ‘convenient’ are not limited to FoCs, and neither are bureaucratic efforts to ease circulation through the provision of support services.
Additionally, the UK ship register frames its value to the shipping industry partly in view of ‘new disruptions’ emerging in the marketplace 116 ; chiefly, the imperative to decarbonise shipping, but also the potential for new technologies (in particular, autonomous ships) to upend existing market hierarchies. The UKSR sees its access to UK-based expertise and innovation on maritime technology as a key point of differentiation from its competitors; the MCA hosts a specific Maritime Future Technologies team, which seeks to offer clients support in respect of the testing, implementation and regulation of new technologies. Additionally, it is clear that the MCA seeks not only to use UK R&D as an incentive to attract shipowners to the UK flag, but also to effect the decarbonisation of shipping through the access to the UK financial and technology industries provided by the UKSR. As part of the UK’s attempt to ‘lead international efforts to decarbonise the maritime sector’, 117 the UKSR has begun to work with financial institutions to provide cheap finance for green shipping technologies, seeking to create a ‘positive cycle’ 118 of UK ship registration, investment in green technology and decarbonisation. 119
Where the UK ship register has become a hub of practices that aim to integrate green technology and finance into shipping, others may be interlinked with the different elements of maritime assemblages in innumerable ways (as this article has sought to demonstrate). Much as the appearance of the state itself is the product of ‘unstable and constantly renegotiated power relations’, 120 flag states are integrated into ‘highly specialized, cross-border assemblages. . .beginning to function as formal or informal entities for both operational and governance tasks in a growing range of global processes’. 121 Likewise, classification societies, insurance providers, international organisations, shipping unions, shipbuilders, non-governmental organisations and other actors all have roles to play in this assemblage, even while they may be similarly unfixed. Many insightful studies of such roles already exist. Lobo-Guerrero, for example, frames maritime insurance providers as ‘stewards’ of global circulation, working through a risk management apparatus centred on practices of underwriting, research and claims adjustment 122 ; Bueger, likewise, explores the role of the IMO as a ‘laboratory’ that renders threats to maritime security knowable to other actors. 123
Conclusion
This article has sought to make two contributions to the literature. Firstly, it has provided a more up-to-date and theoretically informed account than currently exists of ‘flags of convenience’ in maritime affairs. While it acknowledged that, as many have written, the structural conditions of maritime governance – in particular, capital mobility – enable flag-hopping for the purposes of tax or regulatory avoidance, the article argued that this account understates the complexity of the relations that knit together flags of convenience and the shipping industry. It demonstrated that amid ongoing competition between registers for tonnage, emerging practices in the largest open registers reflect new entanglements of certain flags of convenience in assemblages of maritime commerce and governance; in particular, the emergence of distinctive practices through which these flags flatten frictions in and accelerate commercial circulation.
In making this case, the article offered a fresh account of the ontology of public-private relations in maritime affairs. Extant scholarship on maritime affairs has primarily framed state and corporate actors as separate axes of governance, and deferred to narratives from early global governance literature in accounting how corporate actors engage with states. This article, however, has demonstrated that such perspectives’ account of the public-private relations of maritime affairs is theoretically and empirically incomplete, failing to capture the nuances and complexities of the interaction of different elements of maritime governance. In its final section, the article sought to highlight that flag state relations, at large, are highly contingent. In line with recent scholarship on the re-configuration of the state in various fields, it argued that flag states should (like other actors in maritime affairs) be considered hubs of practices whose role in maritime affairs is unfixed and ever-changing. More broadly, it is clear that the application of novel theoretical tools used in global governance research can yield many insights for literatures on maritime affairs.
Footnotes
Funding
The author received no financial support for the research, authorship, and/or publication of this article.
