What are flags of convenience? Flags of Convenience are flags that are flown on ships to indicate the country in which they are registered, and so taxed!
Which countries supply flags of convenience? While countries worldwide register their own shipping, the term ‘flag of convenience’ indicates a flag that does not necessarily relate to where the ship was made or is based. The countries most often associated with flags of convenience are not great seafaring nations but places like Liberia, Panama and the Bahamas.
Why these countries? They have fewer regulations, ask fewer questions and demand less tax.
How are they used and by whom? Major Cruise line companies find this system very amenable as it reduces costs and ‘red tape’.
Who benefits from using flags of convenience?
Do tourists benefit? NO – as a tourist your health and safety regulations and legal rights are less likely to be upheld.
Do the crew and all those who work on the ship? NO – lack of regulation results in less protection, poorer conditions, lower pay and longer working hours.
Do the destinations? NO – these ships are less accountable in regards to their environmental impact.
Does the environment? Poor environmental practices; from high energy emissions and poor waste disposal to long lasting effects to marine life.
Do the owners? YES – with cheap labour, fewer regulations, less environmental responsibility – their profit margin is increased.
Does this help the wider cruise/tourist industry? Surely not! It damages the reputation of all cruises, suggests that low standards prevail, and that nobody in authority cares; everybody turns a blind eye to Flags of Convenience to the detriment of all.
What can be done?
Recent attention to the problem of tax havens has highlighted how they work to the disadvantage of most citizens in the world. Countries that issues flags of convenience should surely be urged not to do so, while companies that exploit this business strategy for their ‘convenience’, should be suspect, if not avoided.
Please help us to create awareness of these issues and build pressure on our government to play its part in improving regulation of this industry. We also want to put pressure on those cruise liners that fly under such flags. Follow the link to sign our petition.