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Sunday, July 5, 2015

Marshall Islands call for Greenhouse gas reduction ~ ship registration and flag

Just like Motor vehicles registered in Regional Transport Office, Ocean going ships are also registered.  Ship registration is the process by which a ship is documented and given nationality of the country that the ship has been documented to. The nationality allows a ship to travel internationally as it is proof of ownership of the vessel.  International law requires that every merchant ship be registered in a country, called its flag state.   The organization which actually registers the ship is known as its registry. A registry that is open only to ships of its own nation is known as a traditional or national registry. Registries that are open to foreign-owned ships are known as open registries, and some of these are classified as flags of convenience.

 ‘Marshall Islands’- is located near the equator in the Pacific Ocean; geographically, part of the larger island group of Micronesia. The country's population is spread out over 24 coral atolls, comprising 1,156 individual islands and islets. It is reported that  the tiny island republic in the Pacific Ocean, made an impassioned plea to the International Court of Justice (ICJ) seeking initiation of proceedings against India for not pursuing nuclear disarmament, but India is yet to file response to it.

Flag of convenience [FOC]  is the business practice of registering a merchant ship in a sovereign state different from that of the ship's owners, and flying that state's civil ensign on the ship. Ships are registered under flags of convenience to reduce operating costs or avoid the regulations of the owner's country.  This term has been in vogue since 1950s and vessels with FOC are considered inferior. In 1968, Liberia grew to surpass the United Kingdom as the world's largest shipping register and, as of 2009, more than half of the world’s merchant ships were registered with open registries, with Panama, Liberia, and Marshall Islands flags accounting for almost 40% of the entire world fleet as calculated by tonnage.

To the Q whether it is – Flag, Crew or Cargo, which determines the definition of a US flag ship – the answer would be the ship flying the U.S. flag. But such a ship has to use an American crew, follow U.S. safety rules, and be built in a U.S. shipyard. That's very expensive. So many ships become "flags of convenience." These are the flags from countries that typically have no restrictions on what nationality your crew should be (or how much they should be paid) or where such  ship should be built or repaired.

U.S. has a lot of government-related cargo moving around the world, like military supplies or disaster relief aid funded by U.S. tax dollars.  The politicos an decision makers feel that those cargoes should move on U.S. ships. And so over the decades laws have been enacted to require just that. Paradoxically, the U.S. does not have enough home-grown shipping capacity to handle all its cargo. Some foreign lines are allowed to fly the U.S. flags on portions of their fleet in exchange for a retainer and a guarantee of ship space when needed.  Another complication, is ship may be owned by one, operated by another and chartered to another. 

On April 28, the government of Iran seized the Maersk  Tigris cargo ship in the Strait of Hormuz. The ship and its 24 crew  were held captive and released much later. The ship was flying the flag of the Republic of the Marshall Islands, and the United States has a treaty obligation to defend the Marshall Islands the same as the United States. The Tigris is owned by Oaktree, an American private equity fund, and has been leased long-term to the Danish company Maersk Line; its daily operations are conducted by Rickmers Shipmanagement, a company with offices in Germany and Singapore. The Tigris crew is Asians and Europeans. It is registered as a Marshall Islands ship, as a “flag of convenience.”     The  Pentagon lawyers had a plausible argument that the Compact’s obligation that the U.S. defend the Marshalls “as the United States and its citizens are defended” does not encompass the Tigris Maersk.

In another perspective, NY Times reported that the tiny Republic of the Marshall Islands has taken on a vital role in international shipping, with its flag flying over the third-largest number of ships in the world.Its  foreign minister showed up at a recent meeting of the International Maritime Organization and proposed limiting the amount of climate-warming gases that the shipping industry could emit,  causing a stir.  “It’s a matter of survival for us,” Tony de Brum, the minister of foreign affairs, said by telephone. The Marshall Islands consist of low-lying coral atolls that could be swamped by rising sea levels associated with climate change. “We cannot address climate change without looking at all the components that are contributing to the problem of emissions,” Mr. de Brum said.

The Marshall Islands’ call for greenhouse gas reduction targets for shipping failed to win approval at the I.M.O., which is a United Nations agency that establishes rules for international shipping. But it has reinvigorated the debate about how to control carbon pollution from shipping, which accounted for about 2.8 percent of global greenhouse gas emissions between 2007 and 2012, according to a report last year by the I.M.O. Emissions from the sector are projected to rise anywhere from 50 percent to 250 percent by 2050 under “business as usual” scenarios, the report found. In April, the European Union approved a regulation, scheduled to take effect in 2018, that will allow it to collect information on the energy use and greenhouse gas emissions from large ships docking in its ports.The European Union does not cover international shipping in its greenhouse gas cap-and-trade system.

The shipping industry resisted the European Union rule, saying that it would reveal proprietary information about ships and their cargo. More broadly, shipping officials maintain that their industry is already highly efficient, compared with other forms of transportation, and contend that measures are in place to increase the energy efficiency of ships.Shipowners and builders need to  take measures to increase energy efficiency. Currently many large ships are steaming across the ocean more slowly than their engine capacity allows, which saves fuel, though experts say that could change as demand, which has been lagging, picks up. The designs of ship parts like the propeller, the hull and the engine are likely to become more efficient.  Most ships run on diesel, but the world’s first container ship capable of running on liquefied natural gas will make its inaugural commercial voyage around mid-October, between the United States and Puerto Rico.

For the Marshall Islands, the clash between shipping and stopping climate change has recently been thrust into the spotlight by accidents involving drilling rigs registered to the nation.

With regards – S. Sampathkumar
26th Jun 2o15.


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