New report examines increasing use of FOC in Australia

The Rural and Regional Affairs and Transport References Committee of the Australian Senate issued a report concerning the increasing use of Flag of Convenience (FOC) in Australia.

FOC shipping refers to those vessels that travel internationally, but are not registered to the state it is most closely associated with. Regardless of where a ship may be operating, the national registration determines the applicable laws governing all the activities on the ship.

It is often argued that FOC registration is used by shipping owners to maintain anonymity, and avoid the employment, tax and environmental requirements and restrictions in place at what would normally be considered the ship’s country of origin.

The report reveals that in 2016, there were 27.516 ship arrivals in Australian ports, by 5.719 foreign‑flagged vessels. Port Hedland was the busiest Australian port for foreign vessels, accounting for a total of 10.3 per cent of nationwide ship arrivals.

On the arrival of foreign-flagged and other vessels, Port State control (PSC) activities are undertaken by the Australian Maritime Safety Authority (AMSA), including vessel inspections. In 2016, PSC undertook 3675 inspections of foreign‑flagged vessels, at 54 Australian ports, and detained 246 vessels. Intervention and detention occurs if a ship does not adhere to the applicable maritime conventions, and is not allowed to sail until it no longer presents a danger to the vessel, its crew, or the environment, regardless of scheduled departures.

Of all inspections, five flag states accounted for 65 per cent of the vessels inspected:

• Panama – 942 vessels;
• Hong Kong – 426 vessels;
• Singapore – 368 vessels;
• Liberia – 360 vessels; and
• Marshall Islands – 358 vessels.