Transcript
BEVAN MARTEN: "It's quite significant given the size of their fleet. Basically, as ships travel around the world they're inspected by these organisations which are basically information sharing arrangements. So the Paris MoU covers Europe and North America, so anywhere from France across to Canada and the US. And the ships arriving there are assessed against a sort of risk profile. So if you're on one of these grey or black lists then you're more likely to have your ship inspected and what they're doing is they're inspecting the ships against a bunch of international standards. So if they think the ship is likely to be one that's going to come up with problems, they'll have a look at it and check on board for potential deficiencies and that's when you can get detained. Say for example if there's not enough liferafts they'll say 'right, we're not letting you leave port until you've purchased more liferafts'. So that's the background to it."
MACKENZIE SMITH: So really it's not a surprise then that they've gone from a grey list to a black list because the grey list in the first place would have more inspections for them than other rankings.
BM: That's right, yeah. And these ships are already, the flags in question are already at the bottom of the grey list so they've just gone down a few places to the black list. The difference between grey and black is just one of degrees. So you don't want your flag to be on either of them but if you're on the black list in particular then you're going to be stopped more often than any other ship. So for example, the Paris MoU has demoted Vanuatu and Palau to the black list but the Cook Islands is already on the black list. The one for our region, it's called the Tokyo MoU, and the Tokyo MoU includes the Asian area as well as Australia and New Zealand. So we have on the black list for example, Niue and Kiribati are both on the blacklist for Tokyo and on the grey list, Cook Islands Vanuatu and Palau. So the Pacific flags do fare quite poorly in those regards.
MS: And what is the incentive to get out of these lists other than preventing being stopped so often?
BM: At one end there's a little bit of international naming and shaming going on. So if your country consistently appears on the black list that's not a good look for you as a country, that you run a really poor quality register. But that obviously isn't, it's not like being named and shamed for drink driving on the front of the Queenstown newspaper or something, it's a bit more subtle than that. But across the industry, you're really looking at, people who are choosing their flag for their ships, and it's a commercial decision these days, they'll be looking to meet their requirements. So if you're a large shipping country you want to have a respectable flag so that your ships aren't held up all the time in port. But as the ships get older and the standards get lower, you might go to a cheaper flag which you don't think is going to have much regulatory oversight, if any. And so if you think of Niue for example, I mean Niue as a flag state is going to be run out of, there'll be a guy with a laptop in Singapore doing it. It's got virtually nothing to do with the island of Niue but if you sign up with Niue for your ship, Niue gets a bit of money for the registry fee and you can think 'well Niue's not going to give me any problems if my ship slips out of top condition'. You're talking about the ships that are reaching the end of their life, the low end of the industry and not the sort of ships that are trading around New Zealand, taking containers and our fruit and meat and things like that. They'll be doing little hops between poorer areas of the world and they won't turn up in New Zealand much at all but it's really just in terms of the cost of the industry, choosing a cheaper flag is one option when you're really getting to the really penny pinching end when you can drive your costs down.
