2 Compliance with maritime safety conventions. The ship is subject to any safety
regulations laid down for the construction and operation of ships. Registration
under a flag state that has ratified the 1974 Safety of Life at Sea (SOLAS)
Convention and rigidly enforces it leaves the shipowner with no choice but to
maintain high standards in the operation of his vessel. Conversely, registration
under a flag state that has not ratified SOLAS, or does not have the means to
enforce it, may allow shipowners to cut corners, thereby saving on equipment
and maintenance.
3 Crewing and terms of employment. The company is subject to flag state
regulations concerning the selection of crew and their terms of employment.
Some flag states, for example, insist on the employment of nationals.
4 Naval protection. The oldest reason for adopting a flag was to benefit from
the protection of the flag state. Although less important today, there were
examples during the war between Iran and Iraq in the 1980s when shipowners
changed to the US flag to gain the protection of US naval forces in the Gulf.
Any of these factors may be sufficient to motivate shipowners to seek a commercial
advantage by changing their flag of registry. Table 12.3 shows that this has a long
history, and one that has gathered momentum during the twentieth century as
taxation and regulation have come to play an increasing part in the shipowner’s
commercial operations. This naturally raises the question, ‘Is a shipowner free to
change his flag?’ To answer this question we need to look briefly into the procedure
by which ships are registered. In some countries the shipowner is subject to the
same legal regime as any other business, while in others special legislation is
introduced covering merchant shipping companies.