30 May 2013

State Responsibility and Flag State Duties

Symposium on the Law of the Sea and the Law of Responsibility, cross-posted on Opinio Juris

Sovereign nations have the right to extend their nationality to non-state actors who agree to adhere to national laws. But is there any broader international state responsibility associated with the granting of flag state status to known problematic non-state actors? Take the example of the South Korean flagged F/V Premier. This vessel licensed to the Dongwon company, the parent company of Starkist Tuna, was recently accused by Liberia of illegal fishing in the coastal waters of Liberia. In April, the Dongwon company settled with the government of Liberia for somewhere between one million and two million dollars. An interesting question has arisen over whether the government of Korea now has the obligation to list the F/V Premier as an Illegal, Unreported and Unregulated fishing vessel which would mean that the vessel would not be permitted to operate in regional fishery management areas such as those regulated by the Indian Ocean Tuna Commission. Within the IOTC waters, contracting parties and cooperating non-contracting parties are expected to demonstrate that vessels permitted to fish “have no history of IUU fishing activities or that, if those vessels have such history, the new owners have provided sufficient evidence demonstrating that the previous owners and operators have no legal, beneficial or financial interest in, or control over those vessels…”

Granting the use of the flag and vessel registration are not part of an unconditional sovereign right. While Article 91 permits every State to “fix the conditions for the grant of its nationality to ships, for the registration of ships in its territory, and for the right to fly its flag”, this right is conditioned by Article 94 which provides that “[e]very State shall effectively exercise its jurisdiction and control in administrative, technical and social matters over ships flying its flag.” When read together, Article 91 and Article 94 suggest that among the necessary conditions for granting nationality or issuing registration is a State’s demonstration of effective jurisdiction and control over “technical matters” which would include vessel safety and “social matters” which in addition to labor practices might also include enforcing sustainable fishing practices. Healthy fisheries should be considered today a “social matter” since so many people globally depend on marine fisheries for basic animal protein and employment. A State is, of course, not required to fix structurally unsound ships or to staff fishing vessels with reliable fishing crews who understand conservation practices—but it is required to exercise control over those who might own unsound ships or practice unsound fishing practices. One easy way to exercise effective control over “problem ships” is simply to refuse to grant such vessels nationality or to allow registration of these ships.

This posting argues that States granting their nationality to or providing ship registration for any vessels that are 1) known or suspected IUU fishing vessels or 2) structurally unsafe cargo vessels violates erga omnes customary international legal duties as well as discrete treaty obligations. International law empowers States to issue their flag to an individual merchant ship or fishing vessel. But as part of their responsibilities to other States, each State has the obligation to do adequate due diligence before issuing any registration and must deny or revoke registration to “problem ships”—many of which are repeat offenders. Here “problem ships” are those who are engaged or have been engaged in the internationally prohibited practices of Illegal, Unreported and Unregulated Fishing as well as those that fail to comply with technical safety standards designed to protect the safety of the crew and to prevent catastrophic at sea accidents. Old ships, in particular, can become problematic from years of use and lack of maintenance. In 2011, 25.3% of the merchant ships were 25 years or older carrying about 10% of the world’s cargo (ships are often retired at 25 years of age); 10% of these operating geriatric ships were oil and chemical tankers. Age can lead to problems such as corrosion which led to accidents such as the 25 year old Maltese flagged MV ERIKA sinking off the coast of France spilling 20,000 tons of oil along hundreds of miles of coastline and the 26 year old Bahama flagged Prestige sinking off the coast of Spain spilling 64,000 tons of oil.

No vessel with a history of IUU fishing activity or suspected to have structural faults due to age or poor maintenance should be able to be registered to ply the seas without triggering some review by a State’s registration agency of its own obligations to effectively exercise jurisdiction and control. A State should calculate its own potential risk of being the registration State for a “problem ship.” Because IUU vessels are often repeat offenders and structurally unsound vessels may not be repaired until it is too late because of cost-saving measures, one means of avoiding future claims of State responsibility would be for individual States to either deny registration in the case of an initial application or revoke existing registration for “problem ships”. The State avoids responsibility for the actions of private actors that might otherwise be able to be imputed to the State depending on the State’s knowledge about a given vessel.

Here, South Korea in exercising its flag state responsibility to prevent and prohibit IUU fishing, should not simply list the vessel as an IUU vessel but should also consider removing the Premier’s registration as a South Korean vessel while informing all other States of the reason for its decision. If other countries were to do their due diligence regarding the ship’s history, few other States might be willing to provide registration to the F/V Premier because it could potentially expose their State to future claims of state responsibility unless something materially changes with the operation of the vessel. If States were to exercise zero tolerance for IUU fishing as part of their State responsibilities to protect and conserve marine resources by refusing their nationality to a ship found to be participating in illegal fishing activities, this might result in an IUU fishing vessel becoming stateless and inoperable. It is now the vessel owner who must manage IUU fishing as a primary business risk. Given that IUU fishing is claimed to account for possibly 1 out of every 5 fish landed and assuming that many of these landings are by flagged ships rather than stateless ships, the threat of global deregistration could provide new impetus for improving the corporate governance culture among industrial fishing fleets. Losing registration on a vessel and the possibility of operating the vessel could be an expensive business proposition and negate the current monetary benefits of IUU fishing for fleets.

State responsibility has an exceedingly important role to play in ensuring that the Law of the Sea achieves its objectives to conserve the oceans resource and protect the oceans from threats posed by private operators. We need a State or group of States to take the lead in challenging States whose flagged vessels are identified with IUU fishing practices or who continue to flag dangerous ships for operation. If some key maritime States were willing to demand that other States assume responsibility for natural resources damages alleged to have been caused by their flagged IUU vessels or by their structurally unsound commercial vessels, then some States might think more carefully about their current and future flagging operations.

Take the examples of the old tankers of the Erika and the Prestige, why shouldn’t Malta and the Bahamas have some state responsibility for continuing to flag these vessels without doing their own due diligence regarding the seaworthiness of these ships? Why don’t these flag States owe something to France and Spain for their failure to exercise effective control? Why shouldn’t States who issues flags of convenience also be held responsible for offering their flags to IUU vessels over which they do not effectively exercise control? State responsibility provides an excellent lens for taking a hard look at antiquated admiralty practices that endanger the environmental health of our oceans.

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