As the maritime industry is facing competition issues, the following article will show how Flag States are related to Classification Societies and why it is important for competition.
What is a Flag State?
The term ‘flag State’ originated in the past when ships were using flags as symbol of the nation or tribe they belong to. With time, flags became an officially sanctioned and very powerful symbol of the State and the visible evidence of the nationality to the ships registered under a nation’s law. Today, a flag State is the country under whose registration a ship operates. However, for a country to be a flag State, it has to have the necessary financial and technical maritime infrastructure and it must adhere to all the norms and regulations established by the International Maritime Organisation (IMO).
Flag States are obliged to implement and enforce international maritime regulations for all ships flying its flag under the United Nations Convention on the Law of the Sea (UNCLOS). The IMO is responsible for implementing the regulation but it does not check its enforcement. This is a task for the Flag State, with the help of Classification Societies and Port State Control. UNCLOS also provides a non-exhaustive list of duties for Flag States: ensuring the safety at sea, preventing, reducing and controlling pollution of the marine environment, among others.
Flag States also have obligations under other international conventions. For example, MARPOL states that Flag States must preserve and protect the marine environment. The reason behind this double obligation is that MARPOL is regularly amended to fit in with new technological developments, while UNCLOS is rarely changed.
Why delegate responsibilities?
Not all flag States have the necessary infrastructure needed to fulfill all of their obligations laid down in UNCLOS, so they delegate some of their activities to Classification Societies. This practice is common in the industry, especially when it comes to inspecting the seaworthiness of a ship. Such surveys are required both before and after granting a vessel the right to fly a flag. Because of this lack of technical, human or financial resources, flag States have the liberty under international maritime law to delegate such responsibility after getting approval from the relevant international organisations, usually the IMO and the International Labour Organisation (ILO).
What is the relationship between Flag States and Classification Societies?
The most interesting aspect is the way Flag States aim to implement and enforce their international obligations. The main issue is the double role of Classification Societies. On one side, they are private entities which work for-profit and survey ships to ensure they stay in class. On the other side, they perform tasks on behalf of the Flag State, undertaking statutory surveys to ensure that the vessels comply with international standards. In the second case, they are referred to as Recognised Organisations.
In the interest of safety and pollution prevention, the Flag State can authorize Classification Societies to check the compliance of ships with international norms. At the same time, ship owners pay Classification Societies to survey the seaworthiness and technical fitness of the ships. While Classification Societies are responsible for checking whether ships are safe and clean, they can also be influenced by ship owners to provide more lenient treatment because strict surveys may result in higher costs for the ship owner. This raises the question of whether Flag States are indeed fulfilling their obligation and whether this double role of classification societies is the best way to approach the issue.
In conclusion, it is necessary to raise awareness on the this practice in order to ensure that the conflict of interest will not negatively affect competition, safety and environmental safeguards within the industry. Competition in the maritime industry is excessive both between ship owners and between Class Societies. Having this in mind, the effectiveness of the current system can be put into question.
For more information on the double role of Classification Societies, you can read our article here: