New flag performance rankings reveal false narratives of nationalists and anti-shipping lobbies

It’s that time of year again when the European port state control association, the Paris MOU, releases its latest White-Grey-Black list, which squashes myths put out by nationalists and the anti-shipping lobby.

It is proven, once again, that there is no link between the safety of ships and whether or not the flag state is an open or national registry.

What is the Paris MOU and its list?

The Paris MOU is the European version of one of several associations-of-organisations around the world that monitor and inspect the safety and maintenance performance of ships that call within their geographical area of responsibility. Their members are government bodies that carry out the “port state control” function – they inspect ships for deficiencies, order correction of the same, and even detain ships if necessary to make sure that repairs are carried out and that the vessels are safe.

Port state controllers thereby create data about ship safety, which they report to their local MOU. The Paris MOU’s White-Grey-Black List ranks the safety and maintenance performance of flag states based on the total number of, and results of, inspections and detentions of ships by their government Port State Control authorities over a three year period.

In 2022 the Paris MOU members carried out 17,289 inspections; in 2021, there were 15,387; and in 2020, there were 13,148. That’s nearly 46,000 inspections.

Therefore the Paris MOU’s White-Grey-Black List is, and should be regarded as, a completely convincing ranking that is created by disinterested*, independent, third parties based on a very solid dataset.

The current List proves is exactly what we have said before: there is no link between a flag’s open, national, or hybrid (more on that below) status and the safety performance of the ships under that flag.

A flag state is not a bad flag state merely because it is an open registry. A bad flag is a bad flag because it is bad. It is bad because it doesn’t have any or some combination of the right staff, processes, inspections, controls, and values to ensure that the ships on its register are good ships.

Conversely, a good flag is a good flag because it is good. It is good because it does have the right staff, processes, inspections, controls and values to ensure that the ships on its flag are good.

What’s the difference between flags?

A national flag, or a national register, is a country that that only allows its own citizens to register ships. Some bad flags are national flags. Some middle-ranking flags are national flags. Some good flags are national flags. An open flag, also called an “open” register, is a country that allows citizens from other nations to register ships. Open registries are pejoratively called a “flag-of-convenience” by those who either anti-shipping or who have some other bias or motive against the current structure of the international shipping industry. Open flags can also be bad, middling, or good.

Then there are the hybrid flag states, like the United Kingdom, which allow nationals (legal or natural) from a restricted number of countries other than their own to register. But they don’t allow any national from any country to register ships. Believe it or not, hybrid flags can also be bad, middling, or good. There’s a plausible argument that all EU flags could be regarded as hybrid flags because EU law forbids discriminations between nationals of member states. Any EU national can (or should be able to) register ships in any other EU state.

So if it were true that non-national flags are bad because they are non-national flags, then surely we would expect to see few, if any, EU states on the White List? Surely they’d nearly all be on the Grey List or the Black List? But that’s exactly what we don’t see. The White List is chock-a-block full of EU flags. Funny that. It’s almost as if there is no connection between a flag’s national / open / hybrid status and the quality of the performance of ships on its flag.

Incidentally, we can’t really say what kind of flag Australia is… because the international register doesn’t have any ships! Nor, to the best of our current belief, has it had any… ever. Which probably tells you everything you need to know about the allure (or lack thereof) of the Australian International Register.

Back to the new White-Grey-Black List

Anywho, back to the Paris MOU’s new White-Grey-Black List. It takes a bit of time to get the data together, so the newly-published list relates to the the 2022 calendar year. Remember, this data relates to vessels from all over the world calling in Europe. Other regional areas have their own data. Our port state control authority, AMSA, is simultaneously part of the Tokyo MOU and the Indian Ocean MOU.

As the Paris MOU notes: “The White, Grey and Black (WGB) List presents the full spectrum, from quality flags to flags with a poor performance that are considered high or very high risk. It is based on the total number of inspections and detentions during a 3-year rolling period for flags with at least 30 inspections in that period. The “White List” represents quality flags with a consistently low detention record”.

So, if a shipowner’s ship is flying a White List flag it will very likely be regarded as a low-risk ship in terms of safety. It is less likely to be inspected. A ship flying a Grey List flag, more risky, and ship flying a Black-listed flag will be regarded as very risky and is highly likely to be inspected when it calls at port.

There are 39 countries on the 2023-published list, but, to keep it manageable, let’s have a squint at the top 15 on the White List:

A completely-busted false narrative

A quick eyeballing of the lists here completely busts the false narratives of the nationalist and anti-shipping lobby.

Some national registries have stayed at the same rank e.g. Denmark, which was ranked number 1 in both years. Some national registries have gone up in rank e.g. Belgium (which wasn’t even in the top 15 in the previous year). Some national registries have gone down in rank e.g. Japan was ranked at 10 and it went down to 15. The same can be said for hybrids – the UK rose from 13 to 10. Similar statements can also be made of open registers. Malta was 14 but it is no longer in the top 15 (it’s number 20 in the most recent list) while Singapore has risen from rank eight to six.

Remember being listed anywhere in the White List is “good”. If we venture outside the top 15 (a completely arbitrary line drawn by Shipping Australia just for the purpose of creating this article) there are numerous open registries in the White List including Hong Kong (14), Cayman Islands (16), Marshall Islands (18), Gibraltar (19), Malta (20), Bermuda (23), Liberia (25), the Isle of Man (33) and more.

Or, to put it another way, the pattern of changes in ranking we are seeing is exactly the kind of pattern of changes that we would see if there was absolutely no link between flag state performance and the open / national status of a registry.

By way of comparison, if there was a strong link between ship performance and national / open / hybrid status of the flag then we would expect the White list to be composed near-wholly of national registries and the Grey and Black Lists to be composed of open registries.

But that is exactly what we DO NOT see.

Most tonnage is on White-Listed, open registries

Coupla valid points to make on statistics… no, please wait, don’t go away, come back… we see a lot more national registers in the White List than open registers simply because there are about 190-ish countries in the world and most of them are national registries.

But what’s really interesting is that the vast majority of the world’s merchant fleet is registered with open registries. Have a look at the 2022 merchant fleet by deadweight tonnage (Table 2.6, UNCTAD Review of Maritime Transport) and you will find that 84.3% of the total is registered in the top 15 flag states. At least 72% of the total world fleet is registered in open registries. That’s 10 of the top 15 flag states by deadweight tonnage are all open registries. And nine of the ten, accounting for 56% of the total, are on the White List. Only one of those ten, Panama (15.9% of the total fleet by deadweight) is on the Grey List.

Stop regurgitating the false narrative

Look, we understand. Although we don’t agree with it, lots of people do not like the fact that nation-states have the right to offer ship registration services to non-nationals. They have the right not to like that fact.

Although we don’t agree with it, we also understand that, for whatever reason, lots of commentators believe that countries should not be able operate open registries. They have the right to think that way.

And many people believe that all ships ought to be registered in the same country as their owners. Again, we don’t agree with it, but they have the right to think that way.

But that’s not the same thing as openly and repeatedly engaging in, and regurgitating, a narrative that has been openly and repeatedly proven to be false.

It’s a simple fact: ship safety performance is completely unrelated to whether or not the ship is a national registry, an open registry, or a hybrid registry.

Policy proponents who are calling for reform of the international flagging system should not argue their case on the basis that ships are safer simply because the owner / operator has the same passport as the ship.

Because that argument is Simply. Not. True.

__________

Note: *”disinterested” in the sense of being unbiased, or having no financial interest, or a stake in an outcome rather than “uninterested” i.e. indifferent.