At last week's Seatrade Middle East Money and Ships Conference held in Dubai, the recently formed UAE Ship Owners Association gave public support to a move to make it more attractive for shipowners to fly the United Arab Emirates flag on their vessels. The association is keen to promote the UAE flag internationally and has stated it intends to propose amendments and changes to existing procedures in order to streamline the registration process and to make things less obstructive for foreign shipping interests.

At present there is a requirement for the ship owner to be at least 51 per cent owned by a UAE company, a requirement that is tending to push many prospective UAE flag-flyers to the large open registers such as Panama, Liberia and Marshall Islands. The term 'open register' is also known as 'flag of convenience' (FOC) but this term is disliked by several of the quality 'open registers'.

The benefits of an open register to ship owners are various. They are offered registration for their ships (not necessarily in the country of their principal place of business) and include tax advantages, absence of restrictive labour laws and no stringent requirements on nationality of officers and crews. Furthermore, well over half of world shipping now flies such flags - an increase of around 20 per cent over the past 10 years.

Such an increase has been dictated by the market conditions and financial constraints to which shipowners have been subjected in recent years. The days when shipping lines automatically flew their domicile flag are long gone, since the associated costs of registration as a function of tonnage operated, with all of the associated regulation and hassle, became prohibitive in many cases.

Of course, the downside of the increase in open registers has undoubtedly been that of an erosion of standards - particularly regarding safety in ships that operate under 'less-reputable' flags. However, with increasing international pressure through the International Maritime Organisation (IMO) and the compilation of its 'white list' of 'acceptable' Flag States, and with stringent action by Port State Control authorities, rogue flags are slowly being pressured from the high seas - certainly from the ports of the developed world. Open registers are therefore thriving, despite opposition from 'closed' registers and a determined campaign to oppose them by the International Transport Workers Federation (ITF) that passed a resolution in 1958 for a boycott, because they perceived that the rights of seafarers were being jeopardised by such arrangements. However, that boycott has never achieved its aim to persuade operators away from open registers.

The practice of open registry is thus here to stay - it is a product of a globalised industry in every sense, with multinational crews, multinational companies financed from one country, possibly managed in another and flagged in a third. The constraints imposed by many of the traditional 'closed registers' are now totally out of step and will need to undergo radical change if those flags do not wish to end up with mere fleets of coastal craft operating in inshore waters.

Argument

It is against this backdrop that there is an argument for the UAE flag to be 'reinvented' - not necessarily as an open register but as a competing flag that will attract UAE (and perhaps GCC) based shipping companies to promote the UAE 'brand' by flying its flag. The present bureaucratic process and stringent qualification (in terms of company ownership) must be relaxed to promote attractiveness to ship operators that have chosen to base themselves here but at present choose to flag their vessels elsewhere, for the reasons already stated.

The process facing leisure vessels owners is also tedious. Requirements for non-UAE registered craft are difficult to understand and tend to be restrictive - for instance, without a UAE navigation licence non-UAE registered boats and yachts are not permitted to sail from one UAE port to another without clearing in and out of territorial waters - such an imposition being out of step with the rapid development of marinas in the region and a desire to attract yachts into these places.

A revision of the requirements for vessels of all types to fly the UAE flag would also be in keeping with the ethos that has permitted the various Free Zone areas to develop, so why not apply the same philosophy to ship registration?

- The writer is a Dubai-based marine consultant specialising in safety management, security and training.