APPENDIX F: FISHING VESSELS OPERATING UNDER OPEN REGISTRIES AND THE EXERCISE OF FLAG STATE RESPONSIBILITIES: INFORMATION AND OPTIONS^[77]

Judith Swan^[78]

INTRODUCTION

The "Post-UNCED"^[79] decade, since 1992, has ushered in a new era of responsibility for States in respect of their fishing fleets. The rules requiring them to secure compliance by fishing fleets flying their flags with national laws, treaties and international conservation and management measures have multiplied and solidified in a range of international instruments. The term "flag State responsibility" has taken on some compelling new dimensions.

The reason for this was growing global concern about the state of the world's fish stocks and the associated problem of poorly controlled fishing fleets. Action was needed to address irresponsible fishing activity, both in areas of national jurisdiction and on the high seas. Practices undercutting sustainable management included reflagging vessels to evade controls, undermining international conservation and management measures, illegal fishing in areas of national jurisdiction and unreported fishing.

The action taken by the international community to address the alarming situation caused by these activities rested on two complementary pillars: strengthened law, and strengthened management over the resource.

The way forward for such action was identified:^[80] for strengthened law, to enhance the requirements of the 1982 United Nations Convention on the Law of the Sea (the 1982 UN Convention) in new international legal instruments; and for improved fisheries management to identify agreed new approaches in instruments developed under the auspices of the Food and Agriculture Organization of the United Nations (FAO).

The 1982 UN Convention had itself adopted and in some respects enhanced many of the provisions of an earlier convention - the 1958 Geneva Convention on the High Seas (1958 Geneva Convention) relating to flag State rights and responsibilities on the high seas.^[81] First among these was freedom of the high seas, including freedom of fishing. ^[82] This was a basic tenet of the 1958 Geneva Convention, regarded as codifying existing international law but which never entered into force.

The historic right of each State to sail ships under its flag on the high seas first appeared in the 1958 Convention.^[83] The ship was subject to the exclusive jurisdiction of the flag State on the high seas.^[84] The retention - or loss - of nationality was to be decided by the State from which nationality was derived.^[85] The duty of the flag State to "effectively exercise its jurisdiction and control in administrative, technical and social matters over ships flying its flag,"^[86] also appeared under both Conventions.

This was the basic legal framework upon which the post-UNCED legally binding international instruments were built. These core "rulebooks" contain a range of requirements relating to flag State responsibilities, duties, compliance and enforcement and are the:

· 1993 Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas (the FAO Compliance Agreement);

· 1995 Agreement for the Implementation of the Provisions of the United Nations Convention on the Law of the Sea of 10 December 1982 relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks (the 1995 UN Fish Stocks Agreement);

The post-UNCED international instruments that are voluntary, and management-oriented, were formulated to be interpreted and applied in conformity with the relevant rules of international law. They address threats to the long-term sustainability of fisheries and contribution of fisheries to food supply, including over-exploitation of important fish stocks, modifications of ecosystems, significant economic losses and international conflicts on management and fish trade. Irresponsible fishing activity that directly undermines management efforts is clearly identified, together with flag State and other measures that should be taken to counter such activity. They are the:

· 1995 Code of Conduct for Responsible Fisheries (FAO Code of Conduct);

· 2001 International Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing^[87] (FAO IPOA-IUU).

Information relating to the development and provisions of these instruments is described in the full FAO Fisheries Circular No 980. A summary table of requirements relating to flag State responsibility that are common to two or more instruments is in Appendix F.1.

Other agreements and documents to implement the above instruments on regional, sub-regional and bilateral levels have been developed.^[88] In addition, many regional fisheries management organizations or arrangements (RFMOs) are implementing these instruments according to their mandates, and States are incorporating the requirements into their national laws.

The number of instruments incorporating flag State responsibility reflects the considerable international concern about the proportions of the problem, but the operative question is - are these instruments effective; in particular, are they effective in view of the operation of open registries by an increasing number of States?

A State that operates an open register will accept vessels owned by nationals from other States, which will then fly the flag of the open registry State.^[89] The 1982 UN Convention ^[90] provides that the flag State assumes jurisdiction in respect of administrative, technical and social matters concerning the ship, as well as other matters such as labour conditions and seaworthiness. The flag State is responsible for the diplomatic and naval protection of its flag vessels. And, under the post-UNCED international instruments, the flag State is responsible for the vessel's compliance with applicable laws and international fisheries conservation and management measures, including on the high seas.

However, for many States, open registries are just another way to make money. While some States that operate open registries have taken positive steps to fulfill international flag State compliance responsibilities in respect of fishing vessels, others have yet to engage in the process, and do not exercise these responsibilities. Most of these States do not belong to, or cooperate with, any RFMO that has adopted international conservation and management measures. This makes it very attractive for fishing vessels that would otherwise have to comply with such measures to buy a "flag of convenience" (FOC) from an open registry State that does not exercise effective flag State compliance responsibilities over fishing fleets.^[91]

While use of the term "flag of convenience" is widely used and recognised, whether a flag is "convenient" is a matter of interpretation. Some States operating open registries have adopted laws and administrative practices that are not as relaxed, or convenient to shipowners, as others. Some flags are considered to be FOCs by common consent,^[92] and a more extensive list has been established by the International Transport Workers Federation (ITF).^[93] However, although a vessel may fly what is considered a FOC, it may be genuinely owned and operated by nationals of the flag country.

Countries maintaining open registries that currently include or may have included fishing vessels are indicated in Appendix F.2.

What is the scope of the "flag of convenience" problem? One view was expressed cogently at the Commission on Sustainable Development (CSD 7)^[94], during the review of oceans and seas at its Seventh Session in April 1999. The Chair of CSD 7 stated that:

"... fishing activities continue to take place in contravention of the applicable regional conservation regimes and States are not meeting their obligations under the Law of the Sea Convention to control the activities of their flag vessels. Even more problematic is the use of flags of convenience. When fishing companies based in countries that have signed fisheries agreements and conventions then design arrangements that allow ships under their control to go to sea and ignore those agreements under cover of the flag of a non-signatory they make a mockery of the agreement. Governments have to respond."^[95]

This concern followed swiftly on the heels of a March 1999 report by the ITF that the flag of convenience fishing fleet was growing dramatically - from 11 open registries in 1980 to 29 in 2000^[96] and the EU reports that the 392 fishing or fish transport vessels flagged outside the EU are distributed among 48 different registries.^[97]

On a global level, estimation of the size and impact of the open register fleets can be difficult as they are very fluid, with vessels changing names and flags easily and frequently, moving from fishery to fishery and using a series of "shell" companies to conceal the real identity of their owners.^[98] It has, however, been estimated that fishing vessels operating under open registries represent less than 10 percent of the world fishing fleets.^[99] Although their numbers are relatively low, these vessels have a disproportionately negative impact on fisheries conservation and management measures.^[100]

The majority of open registry States are not bound by the many international instruments that require the exercise of flag State control over fishing vessels, nor do they exercise flag State control on a voluntary basis. Therefore, some fishing vessel owners are able to circumvent international requirements by flagging their vessels in non-party States that do not exercise flag State responsibility.^[101]

The CSD review^[102] highlighted the issue of flag State responsibilities and the need for FAO and the International Maritime Organization (IMO) to cooperate on solving problems related to IUU. fishing. Significantly, port State responsibilities were also included in the review; i.e. States where a port is located and a fishing vessel registered in another State is geographically located at a given time. Further, the UN General Assembly urged IMO, FAO and regional fisheries organizations and other relevant organizations to collaborate in defining the concept of a "genuine link" between fishing vessels and the flag State.^[103]

Agreement on a clear definition of what constitutes a "genuine link" between the vessel and the flag State could assist in the implementation of Article 91 of the 1982 UN Convention regarding the nationality of ships. This gives a State the right to fix the conditions for the:

· grant of its nationality to ships;

· registration of ships in its territory; and

· right to fly its flag.

In this context, Article 91 also provides that "...Ships have the nationality of the State whose flag they are entitled to fly. There must exist a genuine link between the State and the ship."^[104]

The fact that the State has the right to fix the conditions noted above, including the grant of nationality to ships, provides the basis for the flag State's right to grant nationality to the ship. But this right is accompanied by the requirement that a genuine link must exist between the State and a ship. The purpose of the genuine link requirement has been in issue especially because many open registry States do not require any such link, and its scope is not defined. In fact, the difficulties of defining the scope are compounded by the reality that a ship can, and often does leave a trail of nationalities in its wake - of the owner, operator, charterers, corporate headquarters and others.

At issue is whether the purpose of the genuine link requirement to ensure that effective flag State control can be exercised, ^[105] or to set the conditions for recognition of the nationality of ships by non-flag States - States other than the State of registration.

In fact, the development of the concept of genuine link in international law is deeply rooted in the nationality of persons.^[106]

In the mid-1950's, the International Court of Justice (ICJ)^[107] considered whether a State's grant of citizenship to a person who had a tenuous connection to it would entitle it to represent his claim against another State - and require that other State to recognize the grant of nationality. In concluding that the other State was not obligated to recognize the grant of nationality, the ICJ described nationality as a "legal bond having as its basis a social fact of attachment, a genuine connection of existence, interests and sentiments, together with the existence of reciprocal rights and duties."^[108]

This decision was handed down shortly before the 1958 Geneva Convention on the High Seas (1958 Convention) required a ship to have a genuine link to the flag State,^[109] in language identical to the current requirement in Article 91 of the 1982 UN Convention.^[110]

More recently the International Tribunal on the Law of the Sea (ITLOS) concluded^[111] that the purpose of the provisions of the 1982 UN Convention^[112] on the need for a genuine link between a ship and its flag State is to secure more effective implementation of the duties of the flag State and not to establish criteria by reference to which the validity of the registration of ships in a flag State may be challenged by other States. The Tribunal also found no support in the 1986 Convention on the Conditions for the Registration of Ships (not yet in force) that a State could refuse to recognize the right of a vessel to fly the flag of a State on the ground that there is no genuine link between the ship and the flag State.

It therefore does not appear productive to focus on what constitutes a "genuine link" as a prerequisite for vessel registration; instead, current jurisprudence views flag State duties and responsibilities as a consequence of the grant of ship's registration. As noted above, the genuine link requirement was imported from the relationship between individuals and States, and the situation between ships - with their trail of nationalities - and States is dramatically different.

The Joint FAO/IMO Ad Hoc Working Group tasked by the General Assembly^[113] with establishing the criteria for defining a genuine link did not do so. They agreed there was little benefit in attempting to define the concept of "genuine link" between a vessel and the State whose flag it flies and instead addressed the key issues that might constitute effective flag State control of a fishing vessel." ^[114] In addition, the FAO IPOA-IUU simply provides that: "A flag State should ensure, before it registers a fishing vessel, that it can exercise its responsibility to ensure that the vessel does not engage in IUU fishing."^[115]

This approach, applying to all flag States, indicates it is not just the open registry flag States that avoid responsibilities. In fact, some of them are taking positive steps towards effective flag State control.

The purpose of this paper is to review activities relating to the fishing fleets of States that operate open registries, and in particular to assess the extent to which flag State control measures are being implemented by those States.

The post-UNCED international instruments reflect the increasing international consensus that the effective exercise of flag State responsibilities is key to the future of the global fisheries resource. A review of the provisions in the international instruments relevant to the exercise of flag State responsibility is in FAO Circular 980.

The rationale for the operation of open registries is addressed below, noting the interests of and benefits to open registry States, shipowners and fishing vessels. Effective flag State control is then addressed. For open registry States, general information relating to registration procedures is set out, and national policy, laws and administrative arrangements described, with a view to assessing the effectiveness of flag State control. The experience of key RFMOs with fishing activities by open registry flag vessels, and open registry States is presented, noting the sanctions and enforcement action that has been taken against open registry States and fishing vessels. Available information on offences by vessels operating under open registries, and their disposition by the flag State and the RFMOs is also described.

RATIONALE FOR THE OPERATION OF OPEN REGISTRIES

The rationale for the operation of open registries can be described in terms of the benefits to the open registry State and the shipowner. Not surprisingly, these benefits are, for the most part, economic. But may be too simplistic to describe the rationale for open registries simply in terms of cash: two other undercurrents influence the operation of open registries by States: one is the political will of States to comply with international requirements, and the other, for those that are not inspired by such a will, is the cost of non-compliance in terms of trade and related sanctions.

Therefore, even if the rationale for operating open registries is largely based on economic benefits for both open registry States and shipowners, it can be tempered to varying degrees by compliance with international instruments and standards. The rationale underlying such compliance is also a significant factor in assessing options for the way forward.

Operation of open registries by States

Approximately 29 States maintain open registries that include fishing vessels. Whether an open register is State owned^[116] or franchised out to a commercial entity,^[117] a compelling rationale for the operation of open registry systems is the economic benefits they bring to the flag State.^[118] Economic benefits could be realized in the following ways:

· tonnage taxes and registration fees;

· franchise and/or royalty fees; and

· reduced government expense due to outsourcing.

Secondary, although much less significant, benefits may be sourced from the revenue arising from incorporation, taxes and other fees associated with meeting residency requirements^[119] and potential job creation.^[120]

Data from Lloyd's Maritime Information Services, detailed in FAO Circular 980, shows revenue received from all vessels by 21 States operating open registries. Of the 21 open registry States, with a total of 1335 fishing vessels (representing 7% of all vessels registered in these States), the revenue from fishing vessels totals US$ 3 083 100 or 4.9% of the gross revenue from all vessels.

Even considering that these values are most certainly underestimates,^[121] the data demonstrates that the percentage of revenue from fishing vessels is relatively small but revenue received from all vessels by open registry States is not insignificant.

Some States have introduced offshore, or international registries in order to give their national fleet owners access to the same conditions of trade that are enjoyed by the open registries, without diverting their business to another flag State.^[122] The offshore registries generally have less stringent conditions than the national registries, but are a responsible response to the flag of convenience alternative.

Some international registries operate as businesses designed to make a profit and can be bought and sold just like any other business. These businesses operate on market economies - the more vessels registered the cheaper the administration cost. It can result in a win-win situation for the register and the shipowner.^[123]

However, the realization of profit doesn't always mean investment in an effective control system. There can be an economic downside because some open registry States lack the means, will or resources to put in place effective control systems for fishing vessels. Some practical difficulties have been experienced by some countries that have decided to establish a separate register for fishing vessels include the lack of expertise and capacity in fisheries administrations that are tasked with operating a ship's register.

In addition, maritime administrations must cope with a constantly changing legal landscape in respect of all vessels. The implementation of changes to international rules, particularly those impacting seafarers welfare, ship safety and marine pollution,^[124] the increasingly complex application of these rules^[125] and the often vague technical requirements^[126] to apply these rules make it difficult for these administrations, small and large, to keep abreast of developments.

For these changes to be effective, national lawmaking systems must also keep pace. This can be difficult where backlogs and procedural quagmires exist in national legislatures. With limited resources, maritime administrations, particularly smaller ones, are often not able to keep pace with changes and meet new international standards. One result is that a State may avoid the morass by not participating in the relevant conventions.^[127]

The increasing regulatory burden extends to fisheries conservation and management measures. For example, implementation of the UN Fish Stocks Agreement requires States to take certain measures regarding their vessels that fish on the high seas, including with respect to licensing and enforcement.

In summary, the operation of open registries by States may be profitable but there are two limiting factors in relation to fishing fleets:

· the revenue from fishing vessels appears to be relatively small compared to that from the merchant fleet; and

· the operation of open registries is subject to a range of changing requirements, including those applicable to fishing vessels, which may lead to an increase in administrative costs and a need for capacity-building.

Use of open registries by shipowners

The rationale for use of open registries by shipowners is both legal and economic. Stringent regulatory requirements and the burden of social charges on employers are clear factors contributing to the growth of the use of open registries.^[128] Having the choice of flag, and therefore nationality, allows vessel operators to control operational costs of the vessel.^[129]

Benefits to shipowners of using an open register are, for the most part, economic in nature and derive from:

· low or no vessel restrictions;

· favorable tax environment;

· low administration and registration fees;

· no (or easy-to-meet) nationality requirements;

· quick and efficient registration process;

· flexible manning requirements;^[130]

· lower operational costs of the vessel.^[131]

Some of the benefits advertised to shipowners of registering in open register States are detailed in FAO Circular 980.

Use of open registries by fishing fleets

The principal rationales underlying the use of open registries by all shipowners, discussed above, would also apply to shipowners of fishing fleets: the impressive range of economic and administrative incentives to sharpen their competitive edge and simplify their business obligations. Recent trends show an increasing use of open registries by fishing fleets of all sizes, ^[132] and these and other possible rationales are discussed below.

Increase in number of fishing vessels on open registries

There is an increasing number fishing vessels registered on open registries, but no figures are available to show if this also represents an increasing proportion of the global fishing fleet. FAO Circular 980 details the number of fishing vessels on some open registries from 1997 and 2001. It shows an increase of 208 fishing vessels registered in that period, bringing the total to just over 1500 vessels. The number of vessels registered with individual open registries has shifted dramatically in some cases. With more information, this could afford some indication as to the rationale for registration. Unfortunately, information regarding the origin of any reflagged vessels is not available. Some observations between 1997 and 2001 are:

· the number of fishing vessels on Belize's register has more than tripled in size to 481 vessels (an increase of 332%);^[133]

· the decrease of fishing vessels on Panama's register was about 54% by number and about 70% by percentage;

· Honduras' register changed little;

· the number of fishing vessels on the registries of Saint Vincent and the Grenadines, Cyprus, Vanuatu, and Netherlands Antilles increased with a corresponding increase in the percentage of fishing vessels registered;

· there was little or no change in the smaller registries: Malta, Bahamas, Barbados, Singapore, Liberia, Isle of Man, Antigua and Barbuda, China, Hong Kong, Special Administrative Region (SAR), Gibraltar.^[134]

Vessel size

There does not seem to be a correlation between vessel size and use of an open register by fishing vessel owners. For vessels between 100 and 1 000 GRT, there are between 100 and 300 vessels registered in each of the five divisions shown in FAO Circular 980, and there are almost 100 registered in the 1 500 to 4 000 GRT category. This shows a relatively even distribution of registered vessels, not size-dependent.

Unfortunately the information does not show the proportion this represents of fishing vessels worldwide in each category, so it is not possible to deduce whether a rationale for registration depends on the vessel size.

The opposite conclusion might be drawn: size is probably not a factor, especially when compared to "all vessels" as shown in FAO Circular 980, which shows that the bulk of all registered vessels ranges from 1 500 to more than 30 000 GRT.^[135] This reflects the larger size of merchant vessels, but also ties in with notions of maximum returns for big investments.

Possible rationales

A possible rationale for fishing vessels to migrate to, or enter an open register is the freedom of unregulated fishing because of the absence of any flag State control. Some factors which should be considered in assessing this rationale are whether the originating or national State is party to international instruments and/or RFMOs, and implements its obligations on the one hand, and the open registry State is not party to such instruments or RFMOs and does not implement any provisions or requirements.

Originating State Party to International Instruments

In order to assess whether the rationale for migrating to an open register is because the originating State - or State of registration prior to migration - is party to relevant international instruments, it is useful to review the ratification "scorecard". While most States, even most open registry States,^[136] are party to the 1982 UN Convention, many vessels that re-flag to open registry States originate in States that are not party to the UN Fish Stocks Agreement or the FAO Compliance Agreement. For example, vessels originating in Greece, Spain, Germany, France and Portugal, which have signed, but not ratified the UN Fish Stocks Agreement and have not signed the Compliance Agreement, are apt to re-flag to open registry States.^[137]

Open Registry State Party to International Instruments

A number of open registry States have either ratified or signed the UN Fish Stocks Agreement: eight have ratified,^[138] and nine have signed.^[139] Four open registry States have accepted the FAO Compliance Agreement.^[140]

Notably, Belize, Panama and Honduras, three of the largest fishing registries, have not ratified the UN Fish Stocks Agreement (although Belize has signed it) or the FAO Compliance Agreement. Morocco, with the third largest number of fishing vessels on its register, has not signed the 1982 UN Convention but has accepted the FAO Compliance Agreement.

No firm conclusions can be drawn establishing a motivation by the shipowner to select an open register State based on the State's ratification, or not, of international instruments.

Implementation of International Instruments by open registry States

Would a shipowner move away from an originating or open registry State that implements the instruments, even if it is not party?

Practical implementation of compliance measures is discussed below in relation to actions taken by open registry States and RFMOs. As a result of these actions, open register States such as Belize, Malta, Vanuatu and Panama have been active in encouraging flag State compliance through strategies such as deregistration and prosecution for offences. But still, the number of fishing vessels on open registries continues to grow.

It would seem that practical implementation of the instruments by the flag State, whether or not it is party, may not, in some cases, be a contributing factor to the shipowners' choice of flags.

Avoidance of International Conservation and Management Measures of RFMOs to which the originating State is Party

Membership in RFMOs by the originating State may provide the rationale for originating States to flag into open registries. Based on EU data,^[141] France, Germany, and Spain are members of CCAMLR;^[142] France is also a member of IATTC, IOTC and GFCM.^[143] As discussed below, CCAMLR has been proactive in implementing conservation and management measures and encouraging flag State control. IATTC and IOTC have also implemented compliance measures for flag States. This suggests that, at least for vessels from originating States which are members of RFMOs and which fish in the relevant Convention Areas, there may exist a rationale for its vessels to flag under a State which is not a member of the relevant RFMO and thereby avoid compliance requirements.

This analysis, however, does not hold true in all cases. For example, the majority of Spanish vessels which flag out are flagging into Honduras, Panama and Morocco which are members of ICCAT and are required to implement the conservation and management measures under ICCAT.

This situation suggests that some originating States are not re-flagging to avoid the implementation of compliance provisions of conservation and management measures of RFMOs.

Reregistration after deregistration of vessels by originating States to reduce capacity

Fishing fleets that exceed set limits will suffer economically if required to reduce capacity. To circumvent this problem, where some States deregister their vessels to reduce capacity, the vessels are re-registered on an open register that is not subject to the same capacity requirements.

The extent of this process is not known and therefore its basis as a rationale for reflagging is also not known. However, it is known that EU vessels receive public aid to leave the EU Community register and often re-flag to a flag of convenience. Exactly how many vessels receive subsidies for this purpose is not known, but preliminary investigation found that at least one Member State which re-flagged to the Côte d'Ivoire received Euro 1.1 million. Its current flag is Belize but the owner is the same.^[144]

Currently, there is no provision to prohibit the granting of subsidies for transfer to FOCs. However, a new proposal by the EC would prohibit public funding from being used for transfer of EU-flagged vessels to countries which are not Contracting or Cooperating Parties to the relevant regional fisheries organization, and which have been identified by such organizations as permitting fishing in a manner which jeopardizes the effectiveness of international conservation measures. This proposal would discourage reflagging to avoid capacity limitations and would build on regional efforts to identify the States that do not exercise effective flag State control.

Other possible rationales

Other motivations for fishing vessels to use open registries may include:^[145]

· the realization of short term profit offered by certain fisheries;^[146]

· the avoidance of financial difficulties fitting vessels with regulatory gear;

· securing a return on major investment; and

· the perceived weight of tradition where such fishing has taken place for generations.

A fishing vessel's competitiveness, the source of its income, is improved by greater access to resources and avoiding constraints imposed in a vessel's originating State. These benefits are even more important to a participant in those fisheries where fishing capacity exceeds the resource.

The growing percentage of fishing vessels in open registries is perhaps the best evidence of the benefits underpinning the rationale for registration - whether they are based on considerations of safety, labour, or freedom to fish. There appears to be no specific rationale that would apply to all vessels which use open registries. The rationales may be linked directly to fisheries, including the avoidance of fisheries conservation and management measures under international instruments implemented by the originating State or by RFMOs to which an originating States belongs. Alternatively, the rationale may relate to operational costs of owning and/or operating a ship which are generally lower in open registry States, or to the fact that many open registry States are attractive tax havens. It is likely a combination of any one or all of the rationales discussed which motivates vessels to use open registries.

Economic motivations for open registry States to implement flag State compliance measures

If the rationale behind maintaining an open register is largely economic, it would follow that open registry States are motivated to implement their compliance responsibilities when they are economically adversely affected. Several economic-related initiatives have been implemented which have encouraged some open registry States to take compliance action.

For example, ICCAT restricted international market access for catches from vessels engaging in IUU fishing in the Convention Area. ICCAT collected information on illegal fishing activities based on market data, vessel sightings and other relevant data and implemented import bans into all ICCAT Contracting Parties for:^[147]

· bluefin tuna from Belize, Equatorial Guinea and Honduras;

· swordfish from Belize and Honduras; and

· bigeye tuna from Belize, Cambodia, Equatorial Guinea, Honduras and St. Vincent and the Grenadines.

This tactic has proven effective; a range of actions has been taken by States which have been warned that they may be subject to import bans if they do not control their fishing fleets. These include initiating control programs, taking actions against some offending vessels and canceling fishing licenses. Panama and Honduras joined ICCAT and Panama rectified the situation sufficiently to have its import ban on bluefin lifted.

Other positive steps taken by open registry States include:

· Honduras requires international fishing vessels to sign an affidavit not to fish for tuna before being registered;

· Belize requires a fishing vessel data form to be filed with an application for registration, and has also taken initiatives to "clean up" its register;^[148] and

· Malta requires its vessels to have a fishing authorization prior to registration.

Some States, including Honduras and Belize, have removed vessels from their register. Without additional action, the act of deregistration alone simply exports the problem as those vessels re-flag in another more lenient State.

Similar trade-related actions have been taken by CCAMLR and CCSBT which also produced successful compliance results.^[149]

EFFECTIVE FLAG STATE CONTROL

Introduction

The purpose of this Part is to evaluate the effect of fishing vessels from open registry States on fisheries management when effective flag State control is and is not applied.

To assist in this evaluation, questionnaires were distributed to open registry States and RFMOs. The extent of implementation of flag State responsibilities as agreed in international instruments and the effectiveness of existing flag State control measures were assessed through responses to these questionnaires. The objectives of the questionnaires were to describe the:

· activities that result from States not exercising effective flag state control over fishing fleets; and

· extent and effectiveness of implementation of flag State control measures prescribed under international instruments.

Responses to the questionnaire provide an idea of the scope for strengthened flag State control and a realistic basis for future action to achieve the objective of long-term sustainable use of the fisheries resource. Copies of the questionnaires appear in FAO Circular 980.

For information, a table of fishing vessel registration by national register is in FAO Circular 980. Approximately 8 per cent by number, or 11% of registered fishing vessels over 100 GRT operate under open registries.^[150] Of the 11 largest fishing registries in the world, 3 are operated by open registry states.

Open registry States

The extent of flag State control by open registry States is influenced by a number of factors including the type of fishery, presence of international pressure exerted through other States^[151] or RFMOs, and whether the State is a member of an RFMO. It is difficult to draw any conclusions linking the shipowner's selection of an open register State with that State's ratification, or not, of international instruments. However, the implementation and enforcement of international conservation and management provisions by States directly or through RFMOs may influence the register a vessel owner chooses.

Input on effective flag State control was sought from 25 open registry States in the form of a questionnaire. A summary of the States polled appears in FAO Circular 980, as does contact information for the open registry States that register fishing vessels.

States identified as operating an open register^[152] were asked to comment or provide information on the following:

· general information on registration procedures;

· national policy, legislation and administrative arrangements; and

· international instruments and agreements.

Responses were received from 12 States, eight of which indicated that they do not register fishing vessels.^[153] Belize, Cook Islands, Malta and Vanuatu provided substantive information in response to the questionnaire. Limited information on other open registry States^[154] was obtained from public sources and is included where available.

General information on registration procedures

The States were asked to provide information on the following subjects respecting the requirements for vessel registration:

a) What are the requirements for vessel registration?
b) Are there any restrictions on registration?
c) Can a vessel be de-registered for violating the law?
d) What information is required for an application?
e) How are applications received and processed?
f) What is the timing and how is a decision made to approve an application?

A summary of their responses is provided in FAO Circular 980.

In 2002, there were 6 fishing vessels registered and 10 under review for registration on Cook Island's register, 88 on Malta's register, 122 on Vanuatu's register and 402 on Belize's register, making Belize among the ten largest fishing vessel registries worldwide (detailed information in FAO Circular 980).

All four States have administrative arrangements and legislation in place to manage the registration process for fishing vessels. The Cook Islands Registry has undergone some recent changes and in May 2001 was taken over by the Cook Islands Maritime & Shipping Registry (CIMSRL). If the application and accompanying documents are in order, registration can be accomplished in less than a day^[155] but may take up to three weeks.^[156]

Prior to awarding permanent registration, some open registry States require an applicant to provide a certificate or other evidence that the vessel has been deleted from its previous register.^[157] A certificate of deletion is an important means of ensuring vessels are not registered on more than one registry.

However, to be effective, all States should require them. If a State does not require a deletion certificate, then it becomes much easier for vessels to flag-hop - i.e. be flagged in more than one State and avoid a State's enforcement measures. For example, Belize has found that vessel owners are not obtaining deletion certificates from Belize, implying the vessel is flag-hopping. This imposes constraints on Belize's enforcement activities.

All four registries have restrictions as to the age of the vessel which may be registered. Some registries refuse to accept vessels over a certain age (e.g. Belize)^[158] while others may subject the older vessels to conditions prior to registration (e.g. Cook Islands).^[159]

Two of the registries also have nationality requirements respecting ownership of the vessels.^[160]

Two of the registries have special requirements for fishing vessels. Belize requires a Fishing Vessel Data Form to be completed as part of application process and Malta requires that a fishing vessel be licensed to fish prior to registration.^[161] Prior to registering an international fishing vessel, the Honduras registry requires that the vessel submit an affidavit not to fish tuna.^[162] This requirement is in accordance with a resolution adopted by ICCAT. If the affidavit is not presented, a clause prohibiting fishing for tuna will be included at the back of the certificate for registry.

Belize, Malta and Vanuatu have legislative provisions regarding the deregistration of vessels for non-compliance.

In Belize, registration may be cancelled if a vessel is:

· registered in another State without the consent of IMMARBE (Belize's registry);

· engaged in illegal activity or in the event of violation of International Convention ratified by Belize; or

· in serious violation of bilateral or multilateral agreements to which Belize is a signatory or cooperating party.^[163]

In response to international pressure, mostly exerted through ICCAT, Belize has de-registered vessels for illegal fishing in conservation areas. Belize has also deregistered vessels for non-compliance with safety regulations, not responding to requests for inspections, and drug trafficking. The deregistration process is part of Belize's quality initiatives.^[164]

Malta's "Closure of Registry" provisions allow the deregistration of vessels where "it is in the national interest or in the interest of Maltese shipping".^[165] No specific language requires deregistration in the event of failure to comply with fisheries conservation and management measures or relevant international agreements. In practice, however, in the past two years, three fishing vessels have been de-registered due to administrative reasons.

In Vanuatu, vessels can be deregistered for violations of the Maritime Act^[166] or other international agreements relating to fishing. Deregistration may be based on requests by owners, but also may be implemented for violations of fishing agreements or failure to respond to inquiries from the registry.

Although no vessels have been de-registered since May 2001 when CIMSRL took over the Cook Islands registry, CIMSRL recognizes there is a gap in the legislation in this respect and reports it is attending to the matter.

In response to a letter of complaint by ICCAT that Honduran flagged vessels were fishing for tuna in contravention of the ICCAT Convention and from pressure due to import restrictions imposed on Honduras by ICCAT, the Merchant Marine of Honduras took immediate steps to cancel the registration of all international fishing vessels denounced by ICCAT. ^[167] Furthermore, the General Directorate of Honduras took the irrevocable decision of cancelling or suspending all the international fishing vessels included in its registry. Up to October 2000, of a total of 269 vessels included in the Honduran fleet, 228 vessels have been cancelled and 41 have been suspended.^[168]

The Merchant Marine of Honduras will maintain a registry closed to international fishing vessels while the pertinent authorities of Honduras takes measures towards compliance with the ICCAT Convention. The Merchant Marine also made a formal commitment not to proceed to the registration of any international fishing vessels without first informing the competent body of ICCAT and assuring that those vessels that are registered comply with ICCAT Convention.^[169]

National policy, legislation and administrative arrangements

The States were asked several questions respecting the existence of national policies, legislation and administrative arrangements that implement international requirements, and enable flag State control to be exercised over vessels listed on the registry. States were also asked to provide information on their involvement, if any, in RFMOs.

Policy

All four responding open registry States have some form of policy, official or otherwise, and legislation respecting flag State control. Malta did not provide any details on its policy.

Belize derives its policy respecting flag State control from the 1982 UN Convention^[170] and other international agreements. The policy statement is contained in the Registry's ISO 9002 approved Quality Manual. In addition, on November 1, 2001, Belize introduced a multi-phase Action Plan^[171] in an attempt to "clean up its ship register's tarnished image."^[172] As a result of this initiative, 668 ships were deregistered from Belize's books in 2001.

The Cook Islands does not have official government policy respecting flag State control, however, CIMSRL intends to become a desirable flag for the registration of high quality fishing vessels. To this end, CIMSRL is currently undergoing a legislative review with the intention of introducing legislation to enable the Cook Islands to seek accreditation for EUR1 certificates of origin. CIMSRL has also an internal policy to exert maximum control over its fleet. CIMSRL intends to achieve this by dealing with vessels only through its own staff for purposes of registration and appointing its own independent inspectors to act for it.

Vanuatu does not have a policy in place, but does have new draft fisheries legislation which covers flag State responsibilities, including the monitoring of vessels by use of transponders.

Legislation

The legislation for all four States provides for offences and enforcement action for non-compliance. In Belize, enforcement includes prohibition from sailing, fines up to US$50 000, deregistration, and notification to IMO.^[173]

Cook Islands legislation^[174] provides for various offences, including failure to meet safety standards, which are punishable, if convicted, by fines.^[175] Compliance is enforced through inspectors who are located in ports where Cook Island vessels operate. No enforcement actions have been taken since CIMSRL took over the registry. No information was available on Cook Island's sanctions to secure compliance with international conservation and management measures as this matter is not within CIMSRL's jurisdiction.^[176]

Enforcement action by Malta includes deregistration and fines. ^[177]

In Vanuatu, enforcement is provided in draft legislation and action will be carried out by the Ship Registry and Vanuatu Maritime Authority.

All States identified constraints to taking enforcement action. For Belize, the problem is vessels re-flagging to another registry without seeking a deletion certificate from Belize's registry and thereby avoiding Belize's penalties and enforcement measures. Malta identified the need to improve the monitoring of fishing vessels' operators.^[178]

In its attempts to introduce higher standards to the small fishing register, CIMSRL is experiencing resistance mostly in the form of objections associated with the cost of meeting the standards. Since CIMSRL's involvement in the registry, more vessels have been refused registration than accepted.

Vanuatu indicated that enforcement may be hampered by geographic isolation of the fishing vessels from Vanuatu and/or the Registry. Accurate reporting and positive identification are critical and in some cases have not been provided to the Registry in the past from enforcement agencies.

Sanctions are imposed according to legislation, which may include fines and deregistration. In Belize fines range up to $50 000 US$ and in Malta they range from 200 to 25 000 liri.^[179] All States indicated that deregistration is a potential measure to address non-compliances.

Administrative arrangements

All responding States have administrative arrangements in place that implement flag State responsibilities. In the Cook Islands, the new CIMSRL administers registration and safety standards and the Ministry of Marine Resources administers fisheries matters. Belize has several administrative arrangements including: General Safety Inspectors, Deputy Registrars, Recognized Organizations, Director-General, Solicitor General/Attorney General, Ministry of Foreign Affairs. The Merchant Shipping Directorate of Malta Maritime Authority (a Government agency) performs the duties of a Maritime Administration in Malta. New legislation in Vanuatu, aimed at implementing flag State responsibilities, will include inspections and important electronic monitoring of fishing fleets using transponders. A new tuna management plan has been drafted and implemented for Vanuatu as a first start on a local basis. It provides that Vanuatu flag vessels will not be considered local for the purposes of fishing licence issuance unless they fulfil ownership criteria.^[180]

All responding States are involved in RFMOs: the Cook Islands is a member of the FFA, Belize is currently an observer in ICCAT, but intends to join as a cooperating member in the near future, Malta is a member of two RFMOs^[181] and Vanuatu is a member of a number of RFMOs and regional arrangements.^[182]

International Instruments and Agreements

The States were asked whether they had ratified, accepted or acceded to and implemented the 1982 UN Convention, the 1995 UN Fish Stocks Agreement, the FAO Code of Conduct, the FAO Compliance Agreement and the FAO IPOA-IUU. The States were asked to identify any other arrangements or agreements they were party to.

All four responding States have accepted and implemented the 1982 UN Convention. The Cook Islands, Malta and Vanuatu have accepted and implemented the 1995 UN Fish Stocks Agreement. Belize is in the process of introducing new legislation and ratifying the 1995 UN Fish Stocks Agreement. ^[183] Belize's new legislation will also implement the FAO Compliance Agreement and the FAO IPOA-IUU. Malta recently passed legislation implementing the 1982 UN Convention, the 1995 UN Fish Stocks Agreement and the FAO Code of Conduct.^[184] Malta has ratified the FAO IPOA-IUU and is in the final stages of ratifying the FAO Compliance Agreement.^[185] Vanuatu has agreed to the FAO Compliance Agreement as well as several other regional agreements.

Summary

Some open registry States are being proactive in implementing effective flag State control over their fleets, as follows.

· Belize:

- Action Plan to raise the quality of its register.

- Deregistration of several vessels found to be engaging in activities contrary to international conservation and management measures.

· Cook Islands:

- New registry administration in place which is actively working towards raising the quality of its register as well.

· Malta and Vanuatu

- New legislation to implement international fisheries conservation and management measures.

· Honduras

- Deregistration or suspension of all international fishing vessels on its register.

- Implementation of a requirement that each vessel registered sign an affidavit not to fish for tuna.

To a great extent, actions taken have responded to pressures created by the previously unregulated activities of their fishing fleets, but they also are proactive in encouraging compliance by their fleets with international, regional and subregional fisheries conservation and management measures.

Regional fisheries management organizations (RFMOs)

RFMO Secretariats and members are increasingly active in promoting compliance with their respective international conservation and management measures, and implementation of the international instruments. Effective flag State control measures have been implemented by several of the RFMOs. These range in degree according to the RFMO and the problems experienced.

The following activities of RFMOs have served to promote effective flag State control:

· implementation by RFMOs of conservation and management measures through their Conventions;^[186]

· implementation by RFMO Members of international instruments;^[187]

· membership in RFMOs by open registry States;^[188]

· encouragement by RFMOs of non-Contracting Parties to adopt laws and regulations consistent with the provisions of the implementing Convention and/or international, regional or subregional conservation and management measures;

· RFMO rules requiring authorizations to fish, e.g., the IBSFC Fishery Rules^[189] provide that all fishing can only take place with an authorization of a Contracting Party;^[190] and

· exchange of information between RFMOs and non-Contracting Parties, including those from open registry States.^[191]

Input was sought from RFMOs on the actions they took to address the issues associated with the activities of fishing fleets of open registry States was sought from RFMOs by questionnaire, included in FAO Circular 980. A list of the RFMOs polled is in FAO Circular 980; they were asked to provide information relating to the following general areas:

· fishing activities by open registry flag vessels;

· open registry States and the RFMO;

· sanctions and enforcement against open registry fishing vessels.

Of the organizations that responded, ^[192] ten provided information for use in this review. This information is summarized below.

Fishing activities by open registry flag vessels

The RFMOs were asked to comment on the following matters respecting fishing activities by open registry flag vessels:

a) Identify activities of open registry vessels that are of concern to the organization.

b) Indicate whether such activities undermine conservation and management measures.

c) Identify the flags flown by open registry vessels.

d) Provide, if available, information on fleet size and vessel type.

e) Indicate whether fleet activities would be affected by the exercise of flag State responsibilities.

f) Indicate examples of effective flag State controls being exercised by open registry States over fishing vessels.

Seven of the responding RFMOs indicated an ongoing concern arising from vessels flagged in States operating an open registry.^[193] The concerns include those activities which undermine fisheries conservation and management measures, including IUU fishing,^[194] increasing volumes of fish being taken,^[195] unlicensed fishing, unreported catches, lack of control of by-catch, and fishing in excess of allocations.^[196] Failure to comply with international safety and marine pollution prevention measures also created ongoing concerns.^[197]

CCAMLR reports that over the past five years the percentage of catch that is unreported has been as high as 98%. The extent of the problem in the CCAMLR Convention Area, which reports that flags of ten open registry countries fish in the Area, is shown in FAO Circular 980.

Six respondents identified the flags flown by open register vessels of concern to their region.^[198] Belize, Honduras and Panama were cited by five of the respondents as fishing illegally, St. Vincent was cited by four respondents, Seychelles and Vanuatu by three respondents, and Cambodia, Cayman Islands,^[199] Malta, Sao Tome and Principe, and Singapore^[200] by two respondents. Fishing vessels operating under the following open register States were cited by the respondents as fishing illegally: Bolivia, Equatorial Guinea, Liberia, Mauritania, Mauritius, Morocco, Netherlands Antilles, Sierra Leone, Togo, and Venezuela.

Six organizations provided information on fleet size and/or type of fishing vessels that are of concern to that organization's area.^[201] The type of vessels of greatest concern are longliners^[202] and purse seiners.^[203]

All responding RFMOs indicated that fleet activities would be affected by the effective exercise of flag State responsibilities. Five respondents identified Belize, Panama, Seychelles, and Vanuatu as open registry States which exercise flag State control.^[204] Seychelles, Panama and Vanuatu are members of RFMOs^[205] and Belize is considering joining an RFMO.^[206]

Respondents reported that flag State control was exercised where RFMOs exerted pressure on an open registry State or its fishing vessels, including the imposition of trade measures and fines. For example, ICCAT and CCSBT implemented trade measures which pressured open registry States to comply with the respective RFMOs' conservation and management measures.^[207]

Actions were also taken by Panama in 1993 against Panama-flagged vessels on the basis of evidentiary material provided by NAFO. Panamanian authorities imposed fines of approximately $2000 CDN against 11 Panamanian flagged vessels that had been sighted in the NAFO Area. Eventually, the Panamanian Government withdrew registration of these vessels.

Open registry States and the RFMOs

The organizations were asked to respond to the following questions respecting the interaction between RFMOs and open registry States.

a) Do member States operate open registries?

b) Does the organization require the exercise of flag State responsibilities in its Convention or other establishing instrument?

c) Does the organization support the implementation among its members of the relevant international instruments?

d) Does the organization seek ways of cooperating with open registry States to work towards more effective flag State control?

e) Has the organization taken measures in relation to open registry States such as adoption of resolutions, refusal of allocations or implementation of sanctions if there is no effective flag State control?

Four of the RFMOs had member States that operate open registries.

Nine of the responding organizations require the exercise of flag State responsibilities in its Convention or other establishing instrument.^[208] For example, NPAFC's Convention Article V-1 provides that "Each Party shall take all necessary measures to ensure that its nationals and fishing vessels flying its flag comply with the provisions of this Convention." And in Article IV-3, "Each Party shall take appropriate measures aimed at preventing vessels registered under its laws and regulations from transferring for the purpose of avoiding compliance with the provisions of this Convention."

Seven of the responding RFMOs also support the implementation among its members of the relevant international instruments.^[209] Two RFMOs did not answer this question directly^[210] and one RFMO indicated that it supported the implementation of the substance of the international agreements, although the organization itself had not implemented any of the identified international instruments.^[211]

Seven of the responding RFMOs indicated ways they cooperate with open registry States to work towards more effective flag State control.^[212] Six organizations have taken measures in relation to open registry States. Examples of these cooperative measures include:

· the implementation of action plans;

· the passage of resolutions or the creation of committees to promote compliance;

· the implementation of programs to encourage effective flag State control; and

· communication with the open registry States to provide information and data on the relevant fishery. ^[213]

Six RFMOs also regularly invite open registry States to participate in the RFMO.^[214] Two RFMOs^[215] indicated that cooperation with open registry States was not an issue.

Sanctions and enforcement against open registry fishing vessels

The RFMOs were asked to provide information on sanctions and enforcement where effective flag State control is not exercised. The questions appear below.

a) Has the organization adopted any policies, resolutions or sanctions in respect of open registry fishing vessels where there is no effective flag State control?

b) Does the organization have any information on enforcement measures that have been taken in relation to offences committed by open registry fishing vessels?

Five organizations identified sanction measures they had implemented against open registry States not exercising effective flag State control.^[216] Sanctions included trade related measures^[217] and diplomatic actions.^[218] The trade-related actions implemented by CCAMLR, CCSBT and ICCAT have had significant positive impacts in securing compliance with respective Convention conservation and management measures. These are briefly reviewed below.

In 1999 CCAMLR introduced an innovative catch certification system^[219] to address the increasingly serious illegal fishing of Patagonian toothfish.^[220] The system "traces" the Patagonian toothfish from the moment it is caught until it is bought by the consumer. This compulsory labeling is monitored and validated at every step of the process. If it is not in conformity, the RFMO Member States are required to reject the product.

Data provided to CCSBT indicated that up to 1999 there had been significant and increasing volumes of southern bluefin tuna (SBT) (up to 15% of the catch) being taken by open registry vessels. To deter this IUU fishing, the CCSBT implemented a Trade Information Scheme (TIS)^[221] which denies access to markets for SBT.

The TIS provides that all members of the CCSBT maintain requirements for all imports of SBT to be accompanied by a completed CCSBT Statistical Document.^[222] Shipments not accompanied by this form must be denied entry by the member country. All exports of SBT from countries and entities without responsibilities as flag State into member countries of CCSBT are basically refused by the import country. Considering that Japan is a Member State and is effectively the only importing country in the world, this is a very effective management system for SBT. The volume of trade from the countries identified by the CCCSBT has declined significantly since the introduction of the TIS.

ICCAT has taken non-discriminatory and non-restrictive trade measures against non-Contracting^[223] and Contracting Parties.^[224] In 1993 and 1994 ICCAT established a Bluefin Tuna Statistical Document (BTSD) Programme which requires that all bluefin tuna imported into a Contracting Party must be accompanied by a BTSD, validated by an authorised government official.^[225] ICCAT has been able to compile considerable information on unreported catches through this programme.^[226]

These measures and other associated measures^[227] (detailed in FAO Circular 980) have had considerable impact. The BTSD identified all bluefin tuna caught illegally by flag. The trade measures resulted in many impacted States initiating measures to monitor and control the vessels registered to them. For example, Panama has cancelled all the licences of fishing vessels for tuna and new licences are only granted to those that obtain an international fishing licence from Panamanian authorities. The Panamanian Government has also prohibited the catch of bluefin tuna.

These ICCAT measures have also resulted in increased membership in ICCAT and investigation by flag States whose vessels appeared in ICCAT's IUU list.

Three organizations provided information on enforcement measures taken against vessels which had committed offences.^[228]

Summary

IUU fishing activities by open registry vessels undermine the conservation and management measures of many RFMOs. Effective flag State control would significantly improve the situation. To this end, RFMOs have taken a number of actions over the past decade to address the problems posed by flag of convenience vessels and IUU fishing. They are well positioned to do this both as a Secretariat and through its members.

Key pressures imposed by RFMOs which activated flag State control include trade-related measures,^[229] deregistration^[230] and the imposition of fines.^[231] These have successfully persuaded States to become members of RFMOs or comply with conservation measures. ^[232] The trend of increasing cooperation among RFMOs is particularly effective in the campaign to prevent and deter the undermining of conservation and management measures. ^[233]

Enforcement measures

Recipients of both questionnaires - open registry States and RFMOs - were asked to provide information on enforcement measures taken in respect of offences committed by open register fishing vessels during the period 1995-2001. All responding open registry States and three RFMOs provided the information described below.

Open registry States

A summary of offences for Belize, Cook Islands and Vanuatu is provided in FAO Circular 980. It shows seventeen offences by Belize vessels, one each by a vessel from the Cook Islands and three flying the Vanuatu flag. Unfortunately, in most cases information was not submitted on the type of fishing vessel involved. Most vessels were found guilty of violating fishing regulations or measures (and one for drug trafficking), in various locations. Fifteen of Belize's vessels and all three of Vanuatu's were deregistered.

Significantly, where fines were imposed, they ranged from US$10 000 to US$30 000, which may be relatively modest in relation to the value of the resource fished.

Malta reported that during 1995-2001 there were no reports of offences in respect of Maltese fishing vessels.

Regional Fishery Management Organizations

CCAMLR

The enforcement measures taken by CCAMLR in relation to offences committed by open register vessels are detailed in FAO Circular 980. Belize deregistered four vessels that engaged in IUU fishing, and issued a warning to one other.

CCAMLR issued several submissions to Panama on IUU fishing activities by its flag vessels, and Panama provided CCAMLR with a list of all its vessels licensed to fish on the high seas in the Southern Oceans. Panama advised that no licences had been issued for the CCAMLR Convention Area.

CCAMLR advised Vanuatu of sightings of Vanuatu-flagged vessels in the Convention Area in 1997 and 1998, and Vanuatu notified CCAMLR that vessels proved to have committed an offence will be considered for suspension or deletion from its registry.

NPAFC

NPAFC reported illegal fishing by a Honduran flagged vessel in 2000. The vessel was seized by the US Coast Guard with the Honduran Government's cooperation and forfeited under the U.S. District Court decree. The crew was repatriated and the vessel was ordered to be sold at a public auction.

FFA

Information on reported violations of fisheries legislation held in the FFA Violations and Prosecutions (VAP) database provides an indication of the level and type of violations that have occurred over the past 20 years in the EEZs of member countries. ^[234] It also indicates the relative success of the combination of legal and technical elements of fishing vessel administration and monitoring in creating a strong compliance environment in the Western and Central Pacific Ocean region.

While the number of reported violations has fluctuated with the rise and fall of fishing activity in recent years, it appears that the compliance environment that has been created in the region has had a positive effect in reducing the illegal activities of fishing vessels in the waters of FFA member States. Throughout this period, it also appears that the background level of IUU fishing, while low, has been relatively constant.^[235]

The number of recorded violations for the period 1978-2001 is dominated by Taiwanese vessels (40 per cent), particularly longliners. Japanese longliners (14%) and Korean (9%) and Taiwanese (8.5%) purse seiners also figure prominently. FOC vessels (Belize, Panama, Honduras) do not contribute significantly to the total number of violations.^[236]

However, the percentage rate of violations (number of violations by flag compared with the size of each fleet active in the region) shows that some of the smaller fleets, such as Belize, have a higher percentage violation rate than the larger fleets of Japan and China. For example, in 1995, 30% of Belize's fleet and 20% of Vanuatu's fleet were involved in violations compared to 3.8% of Korea's and 1.8% of China's fleets.

A summary of violations by flag and type of violation^[237] indicates that illegal fishing accounts for 64% of the recorded violations, while non-compliance with licences accounts for 25%. Breach of national law and international law account for 9% and 0.6% respectively.

At least USD12.4 million has been received during the period 1978-2001 in fines by FFA members.^[238] Approximately 7.5% of these fines were paid by vessels operating under the open registries of Belize, Honduras, Marshall Islands and Panama.

Summary

Of the 20 offences described by open registry States, 16 resulted in deregistration of the offending vessel(s), five resulted in fines up to US$50,000, four resulted in fines and deregistration, and two had no follow-up action. RFMOs reported that open registry States took similar actions (i.e. deregistration and payment of fines) for violations in the relevant Convention Areas. In the FFA region, a higher proportion of fleets registered in open registry States were cited for violations compared to other fishing fleets.

CONCLUSION

The United Nations Open-Ended Consultative Process on developments in ocean affairs concluded in its April 2002 discussion on IUU fishing that: ^[239]

Despite a decade of progress in establishing instruments and programmes related to oceans, the international community continues to confront urgent and serious challenges and sustainable fisheries is a further action for priority action, owing to the fact that approximately 75 per cent of the world's fisheries are either fully exploited or overexploited.

The progress in establishing instruments and programmes related to oceans in the post-UNCED era is considerable. These instruments have progressively agreed on a tighter weave relating to the duties and responsibilities of the flag State in respect of its fishing vessels. An important objective of these instruments in this regard, reinforced by recent jurisprudence of the ITLOS, is to secure more effective implementation of the duties of the flag State.

Considering the rising number of fishing vessels on open registries, and States that operate open registries, the real issue is whether the instruments available provide an adequate framework for flag State control, what are the consequences of open registry States that fail to exercise their duties and what more can be done to avoid unwanted consequences?

While the international instruments provide the legal mechanism to achieve effective flag State control, a central issue is whether their implementation by some States provides an impetus for vessels to operate under open registries; do the legal and practical realms converge, or are they separate?

In the legal realm, the adoption of international instruments by flag States in itself does not appear to be the primary motivating force behind the use of open registries by fishing fleets. In addition, in many cases the actions of open registry States do not appear to be directly related to adoption or implementation of international instruments, or participation in the work of RFMOs.

A more likely rationale underlying the choice of registries - open, or not - is the implementation of the international instruments, including through trade sanctions and other measures adopted by RFMOs and their member States. It is clear that the international instruments provide a comprehensive foundation for the exercise of flag State responsibilities by the international community, including open registry States. They way ahead may depend on identifying how to encourage effective implementation of those responsibilities.

Ratification or adoption of the international instruments and implementation in national law would be an obvious first step. In addition, initiatives being taken by open registry States, RFMOs and non-flag States serve as useful precedent on a practical level. Some open registry States are requiring compliance by their vessels with the international instruments and international conservation and management measures. Their actions include:

· implementing requirements of international instruments in national legislation;

· establishing an application process which requires an authorization to fish;

· deregistration of vessels for non-compliance;

· implementation of fines or other sanctions for non-compliance; and

· membership or participation in RFMOs.

RFMOs are taking significant steps involving communications with non-member open registry States including to cooperate and participate in the organization. They are implementing strategies through their members to secure compliance with international conservation and management measures. Some successful strategies noted above involve port access, trade-related measures, fines and deregistration.

Action taken by non-flag States to discourage unregulated activities of open registry vessels can include:

· restricting the fishing companies registered within their jurisdiction from owning and operating open register fishing vessels;

· conducting rigorous inspections of open register vessels when landing their catch or resupplying; and

· imposing trade or other sanctions if they are the ultimate destination of fish caught by the open register fleets.

It is evident that the overriding benefits of open registries - and therefore the rationale for their establishment and use - are largely economic for the open registry States and the fishing vessel owners. However, as noted earlier, the economic benefits for the open registry States to include fishing vessels on their registries appears to be limited, while the incentive that some open registries provide for IUU fishing is great. This situation could provide an impetus for serious efforts to control the registries in respect of fishing vessels. Such efforts could be made by FAO-IMO collaboration, in accordance with the FAO IPOA-IUU,^[240] and might include:

· further study on whether measures that have been used to improve the management of open registries for commercial shipping could be adapted to fishing vessels;

· additional measures that States should take to deter business between their insurers, bankers, service suppliers, etc. and vessels identified as engaged in IUU fishing, as provided in the FAO IPOA-IUU.^[241]

· consideration of extending to fishing vessels, for compliance purposes, an IMO initiative that would require a "continuous synopsis" record to be carried on board vessels for safety purposes - the record would show the complete history of the owners and flags of the vessel, but the issue of requiring such private sector information to be publicly available may arise.

In addition, guidelines for fishing vessel registration and compliance mechanisms could be developed by FAO under the Code of Conduct, in collaboration with IMO and other agencies. Relevant provisions of the 1986 Convention on the Registration of Ships could provide precedent for such guidelines, as well as successful policy, administrative and legal practice of States and RFMOs.

Collaboration could take into account the genuine link requirement (that States ensure that they can exercise their responsibilities effectively before registering a fishing vessel, and authorizing it to fish), and tools developed to date such as an effective information and data base, application process, fishing authorization process and cost-effective monitoring, control and surveillance strategies. Significant fines and other penalties such as deregistration could be reviewed.

The implementation of flag State responsibilities in the international instruments represents "work in progress", including for open registry States in respect of their fishing fleets. Positive steps to elaborate and implement existing provisions could assist in meeting the urgent challenges in achieving sustainable fisheries.

APPENDIX F.1

KEY FLAG STATE RESPONSIBILITIES IN RECENT INTERNATIONAL INSTRUMENTS

APPENDIX F.2

OPEN REGISTRY STATES THAT INCLUDE FISHING VESSELS ON REGISTER

Following are 32 States operating open registries that include or have included fishing vessels, as sourced in March, 2002.

Antigua and Barbuda*
Bahamas
Barbados*
Belize
Bermuda*
Cambodia
Cayman Islands
China, Hong Kong, SAR*
Cook Islands
Cyprus
Equatorial Guinea
Gibraltar
Honduras
China, Hong Kong, SAR
Isle of Man**
Kerguelen
Liberia*
Malta
Marshall Islands
Mauritania
Mauritius
Morocco
Netherlands Antilles
Panama
Samoa
Sao Tome and Principe
Seychelles
Sierra Leone
Singapore*
Saint Vincent and the Grenadines
Tonga
Tuvalu
Vanuatu

* These States responded to the questionnaire that they do not currently register fishing vessels, but fishing vessels registered as of December 31, 2001 were reported in Lloyd's Register Fairplay - World Fleet Statistics 2001.

** The Isle of Man only includes small local vessels fishing in Manx territorial waters and owned and operated by Manx fishers.