Law & Society

The Nigerian Oil and Gas Content Act have come into effect recently and the Coastal and Inland Shipping Act (Cabotage Law) is taking shape both depends heavily on shipping. This article addresses the issues involved in the successful running of the shipping aspect of the business as far as the local and international law is concerned. Flag state denotes the government whose flag the ship is entitled to fly and by extension the department of such country responsible for the administration of ships and shipping activities. A vessel will usually bear the flag of the country which she has the closest connection lex loci. Although other considerations such as commercial interest or in some cases the terms of a ship’s charter in government contracts could determine the flag to be flown by a vessel. A ship may also fly ‘flag of convenience’. The essence of these is to address legal questions that might arise in the course of shipping trade. Some scholars have argued for vessels to have their sovereignty. The maritime administration of a state has overall responsibility for the implementation and enforcement of international maritime regulations for all ships granted the right to fly its flag. Ships like citizens according to the International Maritime Organization standards must have a name and nationality. The flag which a ship flies hence its state of origin will affect patronage to its fleet due to its substance, also such vessels may reduce turnaround time at other ports due to inspection if they have established a reputation of compliance with regulations as there may be no need for scrutiny.
While it is shipping companies that have primary responsibility for the safe operation of their ships and the safety and welfare of their crews, the flag state plays a critical role with regard to the safety of life at sea and the protection of the marine environment. It is the flag state that has overall responsibility for the implementation and enforcement of international maritime regulations for all ships ‘flying its flag’. Effective regulation by governments of the technical and social aspects of shipping is therefore vital to ensure safe, secure and pollution-free ship operations and good employment conditions for seafarers. Flag states also have responsibility for the implementation and enforcement of rules adopted by other intergovernmental bodies, including the International Labor Organization (ILO) and the International Oil Pollution Compensation (IOPC) Fund. ILO governs standards of seafarers’ employment. The IOPC Fund ensures that victims of any major maritime oil pollution incident receive adequate compensation without undue delay. The flag state which a ship flies its flag has varying degree of effect on its commercial enterprise. Two parties are therefore dependent upon each other on the issue of flag state administration; the shipping company and flag state authority. The shipping company, and not least its charterers, may also have general concerns about the implications for its corporate reputation of being associated with a poorly performing flag, even if the company’s ships are fully compliant. But the overriding interest in promoting high performing flag states is that they are less likely to tolerate sub-standard operators. Where a shipping company fly the flag of states with higher than average non-compliance vessels the tendency for port delays due to inspection will be high too and can mean unnecessary delays, plus greater potential for charterers’ penalties. The shipping company, and not least its charterers, may also have general concerns about the implications for its corporate reputation of being associated with a poorly performing flag, even if the company’s ships are fully compliant.

In this regard a flag sate should have sufficient infrastructure in terms of offices, qualified and competent staff, and equipment to meet international obligations in ensuring compliance with and maintenance of standards to qualify for an effective and good flag authority and to meet its obligations under international treaties. As a minimum, flag states should be expected to have ratified the following core international maritime conventions: International Convention for the Safety of Life at Sea, International Convention for the Prevention of Pollution from Ships, International Convention on Load Lines, International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, International Labor Organization Merchant Shipping (Minimum Standards) Convention 1976, International Convention on Civil Liability for Oil Pollution Damage. The Merchant Shipping Act is the local law that stipulates regulations for ships and shipping. A responsible flag state should be able to provide a valid explanation for not having ratified any of the above, and in practice should be expected to implement and enforce national regulations that comply with the vast majority of the detailed requirements contained within these international regulations. It is reasonable to expect flag states to have implemented the detailed requirements of the international maritime treaties listed above, and to have established effective mechanisms for their enforcement. For example, SOLAS, amongst other conventions, provides for regular ship surveys and the issue of certificates of compliance by the flag state, while STCW requires certification of crew competence.

In order to achieve standards implementation a flag state should in accordance with IMO Resolution A.739, establish appropriate controls over organizations, such as classification societies, nominated to conduct statutory surveys of ships on their behalf. Such controls should include determining that the organization has adequate resources for the tasks assigned, and entering into a formal written agreement covering the issues specified in A.739. Flag states should specify instructions detailing actions to be followed in the event that a ship is not found fit to proceed to sea, and provide information concerning national regulations that give effect to international maritime conventions. A verification and monitoring system should also be established to ensure the adequacy of work performed by organizations acting on a flag state’s behalf. Usually flag states will prefer members of International Association of Classification Societies. Similarly flag states shall be responsible for overseeing the International Safety Management Code through issue or withdrawal of ships Safety Management certificate (SMCs). Further the flag state will oversee maritime security, seafarers’ competence standards, employment standards, safe manning and seafarers working hours, casualty investigations, movement of ships between flags, repatriation of seafarers, participate in flag state audits of the IMO, and ILO meetings and work in consultation with ship owners.

As the twin Acts of Cabotage and Local Content take center stage in Nigerian it behoves her that, conventions that have not been ratified be ratified and those already ratified be domesticated into our laws to give the flag state authority, the Nigerian Maritime Administration and Safety Agency which is already working hard at capacity building the teeth to enforce standards. Private ship owners as well as service, technical and financial providers such maritime lawyers, banks, ship surveyors, ship and dock yards etc also owe a duty to build capacity and do appropriate consultations in order to ensure compliance with these requirements so as to assist the flag state in keeping standards and in that way the whole economy gains. We must all gird our loins!