What Are the Flags of Convenience?
According to the Oxford Companion to Ships and the Sea, when ship owners wish to avoid regulations that govern ships in their home countries, they may register with a foreign country, allowing them to fly the flag of that particular country. The term "flags of convenience" refers to this practice.
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Early History
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It is believed that the practice of flying flags of other countries in order to avoid penalties and danger dates to ancient times. More recently, during the Prohibition era in the U.S., it was not uncommon for owners of American cruise ships to register with "outside" countries in order to permit the selling and consumption of alcohol on board.
Recent History
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Following World War II, the practice of using flags of convenience became much more common. Many ship owners--wishing to avoid inspections of ships and crews, currency restrictions, and taxes--opted to register their ships with "outside" countries such as Panama, Liberia, Honduras, and Costa Rica.
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Problems with Flags of Convenience
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Flags of convenience are now viewed in negative terms by many countries and organizations. Companies and ship owners are often accused of adopting the practice in order to employ cheap labor, pay low or no taxes, avoid registration fees, and engage in activities, such as fishing in certain waters, that are prohibited by their own nations.
Watchdogs
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The International Transport Workers' Federation (ITF), which represents 654 unions and more than five million workers worldwide, monitors and reports on flags of convenience countries and companies. Other monitoring organizations include the Environmental Justice Foundation and the Maritime International Secretariat Services.
FOC Countries and Companies
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According to the ITF, there are currently 32 countries that permit their flags to be flown on foreign ships. The ITF also maintains a "blacklist" of companies using flags of convenience whose labor practices are considered unacceptable.
Other Names
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Some agencies, countries, and companies use other names for flags of convenience, such as "flags of necessity" and "flags of responsibility."
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