In this seaport of Athens, a simple action by the faraway Pacific kingdom of Tonga sent ripples of panic and consternation through seamen here and in about 200 vessels plying the world's oceans.
Tonga panicked and cancelled its flag of convenience registry here shortly after the Israeli navy seizure of the Tonga-flagged freighter Karine A. on Jan. 3. The Karine A was carrying 50 tons of weapons and munitions that Israel and the ship's Palestinian captain claim were destined for Yasser Arafat's beleaguered Palestinian Authority.
Then there was a 17-hour U.S. Navy search of another ship flying the red-and-white Tonga ensign, the Rasha J., in the Mediterranean near Sicily. The search revealed nothing suspicious, but still, it added to the swirl of suspicions surrounding an island whose reigning king is under media attack for allegedly harboring secret foreign bank accounts of more than $350 million.
That was the last straw for Tonga — which began flagging operations in December 2000 — a relative new member of a not-very-exclusive club of these havens.
These flag of convenience vessels are owned in one country — let's say the United States, Britain or Australia — and registered in havens like Liberia, Panama, Cyprus or even the Cayman Islands — to avoid international safety and tax regulations and maximize the shippers' profits.
American Seamen Feel Vindicated
As shipowners in Greece, the United States and other countries wrung their hands, the deputy ship registrar in Piraeus, where Tonga's ships were registered, said, "We feel picked on." But American seamens' unions and other bodies who perennially fight the flags of convenience chalked up what they felt was a minor victory.
Shipping company executives, writes Dr. Z. Oya Ozcayir, a Turkish maritime law consultant, "take all decisions in order to achieve the common aims of minimizing private costs and maximizing private revenue."
This is especially bad news for the dwindling merchant fleet: attracted by the low fees of the flagging states and their often-negligent regulations. Hundreds of owners of ships, from spiffy cruise vessels to ageing rust-bucket freighters, have abandoned the U.S. flag for exotic registries like Vanuatu, Cyprus, Belize or the Marshall Islands.
The biggest fleet in tonnage and number of vessels, was at last count administered by Panama, a country of about 2.7 million people that now controls the formerly U.S.-held Panama Canal, but which is still recovering from the U.S. invasion to oust dictator Manuel Noriega and imprison him on drug charges in Miami, Fla., in 1989.
The second largest is administered from an office building in Reston, Va., in the Washington, D.C., suburbs, on behalf of Liberia, the West African nation founded by ex-American slaves and still recovering from a 1990s civil war.
If you visit the ports in Houston, Los Angeles or Baltimore, you are more likely to see a Cypriot, Greek or Ukrainian flag on a freighter — even if the real owner is, say, an Australian or an American — than an American flag.
More than 90 percent of oceangoing cargoes entering or leaving U.S. ports move on foreign-flagged ships. Many of these ships, such as Greek-flagged and flag of convenience ships, officially called "open registry ships" and operating out of Piraeus and many other ports, employ low-wage seamen from developing states such as Pakistan, Burma, China or the Philippines.
A Trap of Their Own Making
What this spells for American and many European merchant seamen could be massive unemployment.
The U.S. nationals who are still professional seafarers — fewer than 300 U.S.-flagged, deep-water ships remain in a fleet that once exceeded 3,500 — spend long hours hanging around union halls.
Many swap tales of memorable voyages, some of them apocryphal, pausing only to glance hopefully at job boards. Some of the more seasoned ones might get lucky and find work on a Sea Land or American President Lines container ship, although many of these no longer fly the American flag.
In a book published in 1996, William Lovett, a professor of law and economics at Tulane University in New Orleans, explained a situation, which ship captains ruefully admit, still exists today.
The maritime unions, he wrote in United States Shipping Policies and the World Market bear some of the blame for their own troubles. "Flags of convenience," he observed, prospered partly because "our mariners were too damned expensive. The unions wouldn't give on crew size and wages. We became non-competitive."
The Deadly Consequences
Through the latter years of the 1990s, ships flying the flags of convenience of Panama, Cyprus and Malta had a far worse than average safety record. In one year, 1996, data published by the Institute of London Underwriters showed that 93 people died as a result of ship casualties as in nine months.
Deregulation of coastal safety standards in some states has combined with the lax safety regulations for convenience-flagged vessels to produce disasters. For example, last year the 2,887-ton Tonga-flagged dry cargo ship, the Tavake Oma, developed a crack in a fuel pipe and leaked oil into the bay at Sydney, Australia.
Australian Maritime Safety Authority inspectors had checked the vessel earlier and found nine deficiencies, not corrected by owners and operators who allowed her to continue sailing.
"The history of flags of convenience," as the Turkish law consultant Ozcayir observes, "dates back to the Roman Empire." Today's terrorism-linked fears and such related setbacks as the suspension of the Tonga registry are unlikely to change what has become a familiar pattern in world shipping, or alter the human motivation of opportunism, which shapes it.