Dáil Éireann debate -
Thursday, 20 Nov 2003

Vol. 575 No. 1

Flags of Convenience.

Mr. Broughan

I thank the Minister of State for attending. The term "flag of convenience" has always held very negative connotations regarding corporate ownership and governance, the wages and conditions of mariners, the condition of ancient vessels and the damage sometimes done to the environment. Yet the Minister for Communications, Marine and Natural Resources, Deputy Ahern, stands accused in recent weeks of allowing the Irish tricolour to become a flag of convenience.

During October 2003, five elderly foreign vessels have been placed on the Irish Register of Shipping and I am informed that a sixth similar vessel is in the process of being added. The owner companies of these ships and their managers are based abroad, and Ireland is therefore taking on a classic flag of convenience role.

These ships have been described to me as "six superannuated bangers". They include the B. Europa,which is 21 years old, owned by a company in Madeira, Portugal with business connections in Lugano, Switzerland, the Bio Bio,26 years old, owned by Navalmar of the UK with a manager based in Marina di Carrara, Italy, the Med Lerici,25 years old, owned again from Marina di Carrara in Italy, the Silkeborg,25 years old, again owned from Marina di Carrara; and finally the Vigo Stone, an amazing 31 years old, also owned by the B Navi Spa company and managed by Mr. Lorenzo Klun. All five of these vessels are now registered to the port of Cork. A sixth vessel, the Med Salvador from the old Malta and Turkey registers, is also said to be in the process of registering under the Irish flag.

The Irish tricolour flag has always been regarded as a small quality operator with around 32 ships owned by Irish-based companies such as Irish Ferries, and the Nolan and Arklow companies. Foreign operators are registering vessels here who do not even have a brass nameplate in Cork or any other Irish port and the registrations of the past month seem like a sudden descent by Ireland into flag of convenience status. These operators seem to have been attracted to Ireland by the tonnage tax changes introduced by the Minister for Finance, Deputy McCreevy, a few years ago. The Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, has singly failed in his responsibility to introduce the necessary regulatory changes with regard to company and management location and other aspects of maintaining the standards of the Irish registry of shipping.

The matter was brought to my attention through the concerns of Irish master mariners and marine insurers. There are concerns over the ability of Irish marine surveyors to inspect ancient bulker ships which may never even visit Ireland and there are also grave worries with regard to the pay and conditions of crews. The environment could be in danger if anything happened to any of these ships. Given the Minister's recent public gyrations with regard to ancient US ships being towed through Irish waters, I regard it as amazing incompetence by the same Minister to permit equally elderly vessels to be registered in this country.

The national maritime flags which the International Transport Workers' Federation has declared to be flags of convenience include the flags of Belize, Bermuda, the Cayman Islands, the Comoros, Gibraltar, Lebanon, Liberia, Malta, Mauritius, Panama, Sri Lanka, St. Vincent and the Grenadines and Tonga. Sadly the Irish tricolour is in danger of being added to this list. Over the past 50 years, ITF, the global union federation of transport workers, represented in this country by SIPTU, has waged a strong campaign against the use of flags of convenience. It has compiled a fine report on this subject. The review committee on the future development of the Irish register under Mr. Paraic White, the distinguished former public servant, advocated some measures for the expansion of the Irish registry but I do not think the committee included what happened in the last six weeks. Unfortunately now, many badly-paid and badly-treated workers and mariners will be allowed to work in these conditions under the flag that stands behind the Chair in this Chamber and is the symbol of our nation.

Mr. Callely

I wish to apologise for the absence of my colleague the Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, who is out of the country on official business.

The operation of the Irish ship register is governed by the Mercantile Marine Act 1955, as amended by the Merchant Shipping (Miscellaneous Provisions) Act 1998. Last July the Government approved the drafting of legislation to overhaul existing ship registration procedures. The proposed legislation will take account of developments in the shipping industry in recent years and will maintain the Irish ship register as a quality register meeting the highest international standards. So called "flags of convenience" are, inter alia, ship registers with lenient requirements regarding crewing of ships and documentation on ownership of ships. Private companies run these registers and some countries allow their flags to be flown on such ships. I reject the suggestion that the Irish flag is becoming a flag of convenience following recent additions to the Irish ship register. Unlike the lax control regimes normally associated with flags of convenience, Ireland operates a high quality and highly regulated regime in accordance with best international practice.

In order for a ship to be registered on the Irish flag there are two parallel processes required. The first of these is for the owner to contact the registrar of shipping at the chosen port of registry. The customs and excise officials of the Revenue Commissioners are the designated registrars of shipping on behalf of the Department. The registrar establishes the owner's eligibility to register, including whether they are Irish or EU citizens or bodies corporate. Once the owner's eligibility to register has been established, the ship is subject to a risk analysis and detailed survey by the Department's maritime safety directorate. Under this assessment and survey process the ship's present flag of registration, its age and current and previous histories are examined. The ship's compliance with international and EU requirements and conventions are assessed through the very detailed technical survey that takes place. It is only after this process that a decision to accept registration of the ship on the Irish flag is taken.

As the Deputy will be aware, under EU law any EU citizen or body corporate can place a ship on any EU ship register. This means that any EU-based company or operator can place a ship on the Irish ship register if the operator and the ship meet our stringent regulatory requirements. I stress that all ships recently placed on the Irish ship register have satisfied these requirements. Once accepted and on the Irish flag, all ships are subject to annual surveys in accordance with EU and international requirements. Irish flagged ships are also subject to port state control inspections when they enter ports of other states. Ireland has a good record in this regard and it is in the top ten of international flag states, which I am confident will be a source of pride for the Members of the House.

If Deputy Broughan has any specific allegations to make concerning the infringement of any of the stringent criteria here outlined, he should substantiate them fully. Ireland operates a high quality and highly regulated regime in accordance with best international practice.