Guarding against phantom ships

N. K. Kurup

GUARD against phantom ships flying national flag! This could be the guiding factor for the Indian maritime administration while trying to simplify the rules governing registration of ships.

Phantom ships are those registered with inadequate or false information of ownership. Such ships usually are those sold by pirates with false documents.

The concern over phantom ships has surfaced again with rising incidents of piracy and attacks on ships. The issue assumed greater importance after the September 11 incidents and reports about many merchant ships having links with Osama Bin Ladens Al-Qaeda terrorist outfit.

There are reports about the detention of a bulk carrier owned by the UK subsidiary of Great Eastern Shipping Company in London on Saturday following suspected terrorists links. Though details are not available, reports said Scotland Yard detained a ship following a tip-off that it has on board some dangerous materials.

Though this may be an isolated incident and one cannot make any conclusion without details, such incidents will have wide ramifications to merchant shipping globally.

There are several ships registered with Flag-of-Convenience (FOC) countries that operate regular services. It is difficult to verify the ultimate beneficiary of an FOC carrier. These are single ship-owning entities whose real beneficiaries may be different. These ships are registered only on payment of a lump sum fee. Other details are seldom sought by FOC registries.

The International Maritime Organisation (IMO) has already urged member-countries to be wary of phantom ships getting registered under their flags.

Indian maritime administration is understood to be reviewing the rules regarding registration of Indian flag ships with a view to simplifying them. This follows complaints from shipping companies that the existing procedures are time-consuming and difficult to comply with. When an Indian company buys a second-hand ship from abroad, until the ship is registered and the title transferred to the buyer, banks and financial institutions do not release funds. Shipowners say the procedures now take over a month, as after a ship is registered with the registrar of ships under the Indian Merchant Shipping Act, the mortgage documents also have to be registered under the Companies Act.

If the procedures are time-consuming and difficult, they need to be simplified. There is no two opinions about it. But the task may not be easy now for the Indian authorities if they have to follow the advice of the IMO.

The IMO guidelines say: ...Registration of a ship that has not previously been registered should not take place until sufficient evidence of it not being registered has been received. Prior to registration of a ship, the government should verify its identity, including the IMO ship identification number and other records of the ship so that it does not fly the flags of two or more states simultaneously.

The IMO has also asked member-nations governments to give particular attention when accepting documents for registration especially proof of ownership and only accept either original paper documents or electronically submitted whose authenticity is has been verified.

Though complying with these stipulations takes time, it cannot be avoided. The incidents of piracy have shown a sharp increase last year in Indian waters. There were 45 incidents reported in 2000, mainly in areas near Kandla, Chennai and Kochi ports. Though these were minor incidents, and no major piracy was reported on Indian waters in the recent past, the future cannot be predicted. To ignore or be complacent about the situation could lead to major incidents in the future.

Yes, easy procedures are the rule of the day. They are welcome. But they should not make things easy for phantoms to enter Indian waters and carry men and material for Osama bin Laden.