Accidents on the High Seas and Flags of Convenience: Whether the Bbnj Draft Treaty Will Address Insufficient Regulatory Compliance by Open Registry States

• Citation: Vol. 50 No. 3
• Publication year: 2022
• topic: Admiralty,Environmental Law

Accidents On The High Seas And Flags Of Convenience: Whether The BBNJ Draft Treaty Will Address Insufficient Regulatory Compliance By Open Registry States

Kaitlin O'Hara

[Page 704]

TABLE OF CONTENTS

I. INTRODUCTION.....................................................................................705

II. BACKGROUND.....................................................................................708

A. Accidents At Sea...................................................................709
B. Registration of Ships and Flags of Convenience....................711
C. Current Treaty Iterations......................................................712

III. SOLUTIONS.........................................................................................713

A. Treaty Content and Applicable Language..............................714
B. The Genuine Link..................................................................716
C. Port State Control.................................................................716
D. Potential Likelihood of Passage............................................718
E. Suggested Changes and Critiques ......................................... 719

IV. CONCLUSION......................................................................................719

[Page 705]

I. INTRODUCTION

The high seas experienced many catastrophic events in the past year. Starting in March 2020, the COVID-19 pandemic ravaged nations across the globe while leaving cruise ships and their stranded employees, who were forbidden to access ports, abandoned at sea for months.¹ On August 4, 2020, a massive explosion rocked Beirut, Lebanon, leaving hundreds dead and thousands injured, and causing approximately $15 billion of damage.² Two days after the explosion, Mauritius declared a national emergency over a cargo ship that initially ran aground in late July that leaked over one thousand tons of fuel oil into the reefs of Mauritius, one of the world's most precious and protected areas of biodiversity.³

These apparently random tragedies piled upon an already calamitous year are more closely related than they initially seem. A common thread unites these events, a global governance failure that allows actors to exploit and abuse the high seas with devastating consequences not only to the environment, but to the lives, property, and basic human rights of uncountable individuals. The failure is a practice commonly referred to as "flags of convenience," a term relating to the registration and nationality of ships that allows some shipowners to avoid adhering to international standards for ship operations.⁴

The ocean, like space, is an international common resource.⁵ As humanity globalizes, our oceans are a classic tale of the "tragedy of the commons, whereby collective resources are more easily exploited than

[Page 706]

conserved, ignored than managed, and depleted than replenished."⁶ The ocean "supplies more than half of the oxygen we breath and provides food and livelihoods for billions of people worldwide." ."⁷ But now, "[c]enturies of overuse and neglect threaten to leave us with a vast blue wasteland."⁸ Our oceans and those who depend on them for food, transportation, or employment face unprecedented threat.⁹ Unsustainable fishing, inadequate protection of marine areas, the shipping industry, pollution from oil and gas, climate change, and other problems threaten to destroy this valuable resource.¹⁰ Beyond the environmental consequences, these problems pose an enormous threat to the safety and security of people around the world, illustrated by both the Beirut explosion and the COVID-19 cruise ship debacle.¹¹

Many countries assisted in gradually depleting the ocean's health and resources, but no individual country has the capacity to singlehandedly remedy the damage.¹² International cooperation is the sole solution to this collective action problem, but current international agreements and regulatory schemes fall short.¹³ An example is the failure of the international community to remedy the Great pacific Garbage patch, an accidental aquatic landfill floating in the Pacific Ocean that contains immeasurable quantities of plastic waste from around the world.¹⁴

The UN previously implemented international agreements to protect and conserve the world's deteriorating oceans.¹⁵ However, these international agreements yield slow results because they often "either lack or have inadequate [measures for] monitoring or enforcement."¹⁶

Flags of convenience are a prime example of the "lowest common denominator" taking advantage of regulatory gaps in international agreements to exploit the high seas.¹⁷ Under international law, vessels must sail under the

[Page 707]

flag of a particular nation, and that nation inspects the vessels and their seaworthiness, ensures safety and pollution prevention, and certifies the crews.¹⁸ Flag nations are primarily responsible for enforcing international standards for the ship and crew.¹⁹ However, some states fall short on the compliance and enforcement aspects of regulation, often intentionally, to attract shipowners looking to reduce operating costs and increase profit margins, as countries earn revenue from their fleet.²⁰ Non-complying states employ open registry systems that allow ship owners in other countries to register their ships in a foreign state.²¹ A ship registered on the open registry would sail under a "flag of convenience," a term describing a ship sailing under a flag state with lax enforcement of international regulations, lower taxes, and easy, low-cost vessel registration procedures.²²

Flags of convenience epitomize the common resource problem of the ocean, and though the practice is widely criticized, it remains a common method by which shipowners avoid taxes, regulations, and liability.²³ Flags of convenience undercut the myriad of aspirational and environmentally responsible regulations set forth by international governing bodies.²⁴

The UN, in drafting a new treaty designed to protect and conserve "marine biodiversity of areas beyond national jurisdiction," signals to the world that the international community recognizes the need to finally address the common resource problem of the high seas.²⁵ The treaty, abbreviated as the BBNJ Treaty, will cover a large portion of the ocean ("50 percent of the planet's surface and all the water below") and intends to encourage the "conservation and sustainable use of marine resources."²⁶

To effectively promote such conservation and sustainability, the treaty must address flags of convenience. The international community must

[Page 708]

hold accountable countries that fail to meet international standards. Otherwise, countries will continue the same practices to achieve a competitive edge in exploiting the ocean's resources, at the ever-increasing expense of everyone else.

This Note will analyze the probability that the BBNJ Treaty will eliminate or regulate flags of convenience, the effects the agreement might have on flags of convenience, and thus whether the treaty will successfully achieve its goals. Without directly mentioning and addressing open registries and enforcement of regulations, it appears unlikely that the treaty will fully achieve its intended results of environmental protection and conservation. Part II of this Note will describe accidents at sea that occurred because of flags of convenience, discuss past treaty iterations, and propose the incorporation of a more extensive and robust regulatory scheme for enforcement and accountability in the language of the treaty. Part III of this Note will recommend that the drafters of the treaty directly include language regarding open registry states and call for increased oversight of those countries' fleets by the flag state.

II. BACKGROUND

As markets continue to globalize, the use of international shipping grows and shifts.²⁷ As ships become larger and more numerous, the need for effective regulation and oversight becomes even more pressing. More ships result in more trafficked shipping routes and a greater potential for accidents. With more ships than ever sailing around the world, safety and environmental responsibility matters more than ever, drawing greater attention to countries with open ship registries.²⁸

Open registries allow vessels to register under a country's flag despite a lack of real connections between the ship and the country.²⁹ Vessels choose to operate under flags of convenience primarily for economic and regulatory reasons—flags of convenience states offer lower taxes, fewer regulations, lower registration fees, and cheap labor.³⁰ With almost seventy-three percent of the world's vessels registered in a country different than that of its

[Page 709]

ownership,³¹ many ships likely fail to meet the minimum ship regulation standards implemented by the UN.³² This raises significant concerns in terms of safety, pollution, and human rights, as vessels may be inherently unsafe or owners choose to cut corners to maximize profit.³³ Additionally, flags of convenience allow companies to avoid liability for their unscrupulous practices by increasing owner anonymity, and avoid oversight by registering in states without the resources or incentive to actively monitor their fleet's operations.³⁴ Ultimately, flags of convenience are a primary culprit behind many maritime incidents and environmental disasters, and must either be fully eliminated or greatly reformed to protect the oceans and establish a safe, well-regulated shipping industry.

A. Accidents at Sea

Flags of convenience lie at the heart of many accidents at sea.³⁵ These accidents manifest in both expected and surprising ways, as illustrated by the following oil-related incidents. In 1978, a 228,513-ton supertanker named the Amoco Cadiz, operated by a subsidiary of the American-owned Standard Oil Company and sailed under the Liberian flag, ran aground off the coast of France, leaked 220,000 tons of crude oil and raised...