1. The legal framework
Maritime transport is subject to, or at any rate influenced by, the rules of international, Community and domestic law governing:
This chapter deals with the first three of these areas.
2. The freedom of navigation principle (40)
During the seventeenth century, at the time when international law as we know it was being formulated, a dispute between the adherents of Mare clausum - most importantly the Englishman Selder - and those of Mare liberum, forcefully upheld by the Dutchman Grotius, finally ended in victory for the latter. The outcome was to have important consequences for maritime transport in the centuries that followed.
The principle espoused by Grotius informs the main tenets of the commercial and military (and, in times gone by, colonial) systems, which are primarily based on the idea that navigation consists of states being able to make use of the seas for their purposes. In international maritime law, this concept of navigation has been translated into a delineation of maritime zones in order to resolve the fundamental conflict of interests between maritime powers and coastal states. As a criterion, this is generally accepted, though there may be disagreement over boundaries. The continuation of this form of maritime dominion from 1600 until the present day has led, on the one hand, to the emergence and consolidation of the absolute and inviolable principle of freedom of the high seas and, on the other, to the sovereignty of coastal states over the adjacent zones, except in cases of hot pursuit or innocent passage.
The codification of international maritime law, which began during the second half of the last century (41), has largely upheld the precepts of customary law in regulating dominion over the sea. As part of this continuing process, the Third United Nations Conference on the Law of the Sea opened in Montego Bay in 1982, at a time when maritime interests were in a state of considerable flux. This was due both to the emergence of new states following decolonization and to new ways of exploiting the sea and its biological and mineral resources. The clash of interests was therefore no longer between maritime and coastal states, but between industrialized and non-industrialized countries, themselves subdivided into countries with highly developed coastal areas and those with restricted access to the sea. The newly established countries not yet equipped with effective navies, in trying to find outlets to the sea or seeking to exploit the marine resources over the widest possible offshore area, were not particularly disposed to uphold the inviolable principle of Mare liberum, which interfered with their ambitions to extend their economic zones out to sea. Nor did they have any particular interest in extending or maintaining the sovereign rights of the coastal states. In the search for new sources of wealth from the sea, the latter wished to delimit territorial waters on the basis of productiveness rather than extent. As a result, sovereign rights now have a more practical application, and this has altered what they stand for.
This new concept underlies the United Nations Convention on the Law of the Sea, also known as the Montego Bay Convention, which was signed on 10 December 1982 and entered into force on 16 November 1994. By the end of 1995 the convention had been signed by 158 countries, including the European Community and 14 Community countries - the exception being the United Kingdom - but not the USA. It has been ratified by 82 countries. On 13 June 1996, only five Community countries had ratified. These were Germany, Greece, Italy, Austria and Sweden.
The Montego Bay Convention regulates the various uses of the sea, of which those related to the exploitation of biological and mineral resources are probably the most politically sensitive. With regard to freedom of navigation, the major difficulty is delimiting the territorial sea and contiguous zones.
International law in the seventeenth century fixed the limit at three nautical miles, according to the principle of usque ad arma ruant, in other words on the basis of the range, at the time, of a cannon-shot from the shore. It amounted to the recognition of military might as a criterion for defining sovereignty. This definition is still recognized by all states, though many have tried to extend their sovereignty. Nor was the Montego Bay Convention any more successful in eliciting agreement on extending territorial waters. Article 3 therefore contains the following compromise: that every state has the right to extend its own territorial sea to up to 12 nautical miles from the baseline (42). This compromise is not watertight in so far as the rule cannot be imposed on states that were not party to the convention, among them the United States, and which are claiming freedom of navigation up to the three-mile limit.
The contiguous zone was introduced into international law through the 1958 Geneva Convention. Article 24 defines the contiguous zone as a zone of the high seas contiguous to its territorial sea, in which the coastal state may exercise the control necessary to prevent infringement of its customs, fiscal, immigration or sanitary laws and regulations. Article 33 extended the contiguous zone from 12 to 24 miles, as a logical consequence of extending the territorial sea to the same distance. Inside the contiguous zone, the authorities of the coastal state have the power to ensure that there is no infringement of its laws, as mentioned above. Provision is made for punishing infringements of the above laws and regulations committed within its territory or territorial sea. In other words, inside this maritime zone, and within the limits indicated above, the laws of the coastal state override those of the flag state.
Outside the contiguous zone, and leaving aside the other maritime zones over which the coastal state has rights that do not interfere with navigation (43), there is the high sea, where certain activities may be carried out in accordance with customary international law and that laid down in the international conventions. In international law, therefore, the high sea has legal standing only as a place for carrying out subjective activities: it has never had an independent legal status. In other words, it is only through the activities carried out at sea, which are themselves regulated by laws, that the high sea has any legal standing.
As a result, the sea is exempt from territorial sovereignty, but not from legal sovereignty, because of the powers which states, through their national authorities, exercise over the activities carried out there by their own citizens. The fact that seafarers are citizens of a particular state overcomes the problem of territorial sovereignty, since the principle that all human activity is legally regulated can be applied to the high seas.
With regard to navigation, the notion that a ship belongs to a legal system is given practical form in the flag principle. According to this principle, ships are subject to the law of the state whose flag they fly. The process of registration enables ships to be identified. They are listed in a register which is held by the state in accordance with its own internal law. Registration invests in the state a responsibility for ensuring that ships obey its laws, which must be in keeping with international law. To this end, it can employ the services of its navy and naval auxiliaries. A state's jurisdiction over its ships has been defined as the power of policing on the high seas (44). This power can also be exercised in respect of ships registered in other countries either on the basis of customary law or under the relevant conventions (especially as regards fisheries), or in the context of a unilateral claim by a state to protect its own legitimate interests.
The right of recognition - warships can request any ship to identify itself - and the right of hot pursuit have been established by usage and partially codified and can be exercised, at least in contiguous zones. The conventions have also extended the right to exercise control where particular conditions or circumstances obtain, generally for the purposes of preventing or suppressing particularly unpleasant crimes. Finally, unilateral claims will usually be contested in the courts of the flag state. It is, however, becoming customary to extend the use of controls provided for in the international rules of war to certain internal disputes.
3. The flag principle and registration in international law
In order to clarify the position of ships in international law, it must be emphasized that whereas under domestic law (though not in the case of flag of convenience countries), the genuine link between ship and flag state is based on certain socio-economic factors (construction, ownership, agent, crew, etc.), in international law, the genuine link consists of the effective control of the state over the ship. The problems associated with "shadow" flags are summed up in this definition, since the countries where they exist have neither the apparatus nor the will to exercise that control.
The 1958 Geneva Convention and the more recent Montego Bay Convention elevated ship registration from domestic to international law. Given the freedom which states have to formulate their registration requirements, they are obliged to exercise administrative, technical and social controls. In this respect, Article 94 of the Convention refers explicitly to safety, work on board ship and marine pollution, and lays down the international rules that govern navigation. The responsibility of the state in this respect is thus defined in this context.
UNCTAD prepared a draft text for a convention aimed at harmonizing registration requirements for ships. But the approach was not right. As has already been stated, the genuine link, which is important from an international point of view, is the existence of control procedures, and these are sadly lacking in the majority of the 130 countries which make up the "Group of 77" shadow flag states. The ability to exercise control presupposes an efficient maritime administration, an adequate navy and a comprehensive consular network. The response of the international community to the widespread absence of control procedures has been to develop the law of the sea in the direction of port state control and coastal state control.
4. Navigation: legal relations (45)
The branch of domestic law dealing with navigation - in other words the legal subjects, means and activities, both public and private, which play a part in maritime transport - belongs both to private and public law, as a description of its purposes will demonstrate. This is not the place to enlarge on issues concerning the independent nature of the relevant legal framework: for our purposes, let it suffice to say that the special characteristics of navigation make it an economic activity requiring some intervention on the part of the authorities, and thus impossible to deal with under civil law alone. In this section, we shall try to give an overview of the main legislative bodies governing the legal relations of navigation; the following section will seek to provide a profile of the public bodies involved in the sector which goes beyond purely national characteristics; and, finally, we shall try to show how public activity regulates private activity (rules of conduct) in terms of the market, safety and environmental protection.
Shipping law is based on the notion of the ship as the good which enables navigation to take place. In fact, however, the ship cannot be unequivocally considered as a good. In international law, according to certain jurists, the ship assumes the status of a community. However, taking all the cases where, in strictly legal terms and leaving aside political considerations, the ship is the point of contact with international law, it would be more appropriate to define it as a unit of production characterized by a high degree of independence which, in commercial law, would make it a branch of a company.
In domestic law, however, the ship is considered to be an instrumental good of navigation, which can be defined as any construction (floating and mobile) intended for sea or inland waterway transport, for any purpose and in particular for commerce, towage, fishing and sport. At the time of its launching, the construction becomes a ship and is thereafter suitable for navigation. At the time of registration, certain technical features related to ocean and inland waterway navigation, tonnage (46), and sometimes to type and category are of particular importance.
Leaving aside for the moment the conditions which require intervention by the authorities and which fall within the domain of public law, it would be appropriate to mention the ship's papers at this point. Despite their undoubted public law implications, these documents, described as certificates and log-books, are relevant as regards both private commercial law and labour law.
The ship's certificate of registry records the name, type, characteristics, gross and net tonnage, owner's name, place of registration and crew duties. It also contains basic information on all shipboard personnel.
The most important document among the ship's papers is the official log-book, comprising the ship's inventory, the general and accounts log, the ship's log and the cargo log. The official log-book contains details of technical, administrative and day-to-day shipboard activities and is the responsibility of the master. It provides visible proof of an efficient service in the best interests of the ship operator.
Owning a ship is the same as owning other property as regards the law, but with special provisions for joint ownership with certain institutions. In terms of navigation, the ship operator is the most important figure, since it is he who commits the ship for one or more voyages or shippings, equipping it with the necessary provisions and placing it under the control of the master. The ship operator, as distinct from the shipowner, from whom he receives the ship on the basis of a right in rem or through a binding relationship, employs the ship for an economic purpose. He is therefore an entrepreneur engaged in shipping. A particular feature in shipowning is the shipping company, which is a group made up of the co-owners of a ship.
The operator has shore-based and shipboard collaborators who form the crew, the human element in the ship's organizational framework. Individual states, generally in accordance with IMO recommendations, establish the minimum number of crew members and their rank, and define their professional duties. A proportion of the crew is generally from the country of registration. In general, there is a quota system in favour of the country of registration for crew members and for certain roles.
In accordance with the principle of free movement of workers in the Community, such a quota applies to Community nationals in the case of ships belonging to Member States. Other special rules concern working conditions at sea.
The master occupies the central role and is the most important crew member. He is in charge of manoeuvres and navigation; the condition of the ship is his responsibility, as are the ship's papers. He represents the ship operator and, in some instances, the owner and carrier. The law gives certain powers to the master in his role as head of both shipping and the travelling community. He is also responsible for policing activities and maintaining discipline; in some cases, such powers revert back to the shipowners themselves. For the above reasons, the law lays down certain requirements with which the master has to comply.
From a legal viewpoint, three types of contract apply to shipping: leasing agreements, charter agreements and transport contracts. A leasing agreement is a do ut des contract by which the lessor (generally the shipowner) agrees to release the ship to the lessee, in return for payment. The ship can be leased on the basis of bare boat charter or fitted out, but in general, leasing out for carrying cargo is on the basis of bare boat charter to an operator.
A charter agreement, on the other hand, is a do ut facias contract whereby the charterer, the operator, agrees to complete one or more voyages in a specified ship on payment of a charter fee. The charter agreement may be on a time basis - where the charterer is able to specify the number of voyages a ship will make within a given period - or on a voyage basis, where the number of voyages is predetermined by the contract. It is the practice in maritime law to use the so-called charter party, which is different for time charter and voyage charter. A number of standard forms have been developed by organizations, associations and conferences for particular goods and routes.
Charter agreements and charter parties apply to non-liner voyages. Transport contracts can apply to any voyage and are also do ut facias contracts, whereby the carrier (who may be different from the operator) is obliged to carry persons or goods from one place to another.
5. The public authorities
Because of its nature and political importance, maritime transport is subject, unlike other commercial activities, to substantial official intervention, so that the relevant bodies constitute a genuine maritime administration whose influence, in some cases, extends beyond national boundaries.
Such is the case with registration, a complicated procedure whereby the ship becomes part of a country's merchant fleet and is allowed to fly its flag, with all the advantages and responsibilities that this entails. The issuing of the ship's papers is connected with registration, but the latter is more than a simple licensing procedure.
While a ship is still being built, but prior to its launching, the state intervenes through inspections and financial concessions. Through registration and technical control procedures, the state monitors the legality of the ship's condition and activities throughout its life. These controls are sometimes transferred by the country of registration to the port state or coastal state. This practice has already been mentioned, but we would highlight the organizational aspect of such a transfer of functions from the registration authority to the port authority, which has come to involve the offices of both port and maritime surveillance services.
One or more authorities may manage ports, depending on the flag state. These authorities are responsible for administering the following: the movement of shipping; professional and handling activities; and the use and policing of the port area, the territorial sea and the contiguous zone.
6. Registration
The role of the flag has been mentioned many times in the preceding pages. Through the act of registration, a state confers its flag upon a ship, thereby according rights to, and imposing certain responsibilities on, the owner and operator. It follows that the latter will tend to register their ships in the most convenient registry. We shall consider the concept of convenience in its broadest sense, rather than in purely economic terms. For example, during periods of international crisis, it is a fact that ships are transferred from open registers to those of the chief naval powers so that they can enjoy the protection of their navies (47). In order to deal with convenience in economic terms, we firstly need to define open registers. The conclusions of the Rochedale Commission are helpful in this respect. It succeeded in identifying the following characteristics which, since 1970, have been common to all open registers:
The lower running costs associated with open registers provide a considerable inducement (49).
A major disadvantage, however, is that the credit facilities which some countries offer to operators flying their own flag are not generally available to operators from open registers. The latter are also excluded from certain kinds of transport which, in domestic law, are reserved for a country's own ships (50). However, these disadvantages, which also apply to the Community, are disappearing.
Flags of convenience have a detrimental effect on safety and the environment. To counteract these effects, the powers of the coastal state and state of destination have been enhanced and the international conventions strengthened. From a purely economic point of view, flags of convenience represent an external threat to the Community fleet both in terms of competition and a reduction in the number of its ships. The Commission's communications (51) emphasize this problem. In the author's opinion, however, it would appear that the competitiveness of the Community is suffering because of the lower costs of merchant shipping in third countries, regardless of the fact that they use flags of convenience. The flags of convenience, however, are primarily responsible for the reduction in the Community merchant fleet.
The problem continues to exercise the minds of the Member States of the Union for the political and military reasons described above, and also because of employment and financial considerations. They have therefore come to the rescue on two fronts: firstly by offering support, which must comply with the provisions of the Treaty regarding state aid, and by setting up their own special shipping registers (52). Denmark, France (53), Finland, Portugal and Spain have gone down this path. Germany has established an international register which provides exemptions from German law for the maritime sector. These new registers now take precedence over the regular registers in the countries where they exist.
Among the other Member States, Italy is considering setting up a special register, whereas the United Kingdom and the Netherlands do not feel any need to do so since their operators have access to open registers in their overseas territories or dominions (54).
These special registers, in fact, signal the end of the legal unity that underlies the flag principle in its traditional sense. The only difference between these registers and the open registers lies in the enforcement of international safety and environmental standards.
In 1989 the Commission put forward a proposal for a regulation, which was amended in 1991, to establish a Community fleet (55) and a Community shipping register named EUROS. However, the proposal was not as well received by Member States as had been hoped, even though the Community register would not have replaced national registers but would have operated in parallel and on a voluntary basis. The proposal foundered because of the reluctance of some Member States to agree to any such policy on the sea, as well as dissent over specific points. The Commission therefore stated that it would withdraw its proposal and replace it with a directive establishing criteria for domestic registers (56). In the author's opinion, this would seem more in keeping with the principle of subsidiarity. It would also seem to be a logical development of Regulation No 613/91 on the transfer of ships from one register to another within the Community (57), which furthers the aim of removing technical obstacles hindering completion of the internal market and mainly provides for mutual recognition of the certificates issued in accordance with the SOLAS and MARPOL Conventions, and other international rules.
This legislation proposed by the Commission regarding Member States' shipping registers is the internal reflection of a political and diplomatic move to make the registration of ships subject to control at international level, in order to ensure that maritime transport is safe, environmentally friendly and observes the rules of free and fair competition.
FOOTNOTES
40. This and the following section are largely based on U. Leanza, Nuovi saggi di diritto del mare, Turin (Giappichelli) 1988.
41. The codification of the law of the sea has been a long and complicated process which could be said to have started during the Congress of Paris, convened to negotiate the ending of the Crimean War in 1856, at which the Declaration of Paris, containing certain principles of the law of the sea, was adopted. Leaving aside all the conferences convened to mark the end of a series of armed conflicts, where principles governing maritime traffic in time of war were ratified, the most significant step towards codification, from our legal standpoint, took place when the League of Nations codified freedom of transit and the regime for international navigable waterways (Barcelona Conference of 1921), maritime ports and the concept of merchant navies (Geneva Convention of 1923). Following the Second World War, the United Nations organized three conferences on the international law of the sea. The First, held in Geneva in 1958, went some way towards codifying the customary law but did not succeed in defining the limits of the territorial sea. The Second (Geneva, 1960) was convened to deal with the issues left unresolved by the First Conference, and was equally unsuccessful. The Third Conference was held in Montego Bay in 1982.
42. The baseline is a line which generally follows the coastline but from which special land features, such as inlets, estuaries and so on, are excluded. It is from this line that the breadth of the different zones over which coastal states enjoy particular rights or exercise particular powers is calculated. Defining this line is therefore crucial and was central to both the difficult negotiations that took place during the Montego Bay Conference and the convention of the same name. However, it is outside the scope of this document to enlarge on this issue.
43. Mostly associated with exploitation of marine resources.
44. It is not within the scope of this document to develop the issue of whether the power of policing on the high seas is exercised by states as members of the international community, or whether the power devolves directly on these states from their sovereignty over their own citizens, whereby it is incumbent on them to ensure compliance with international regulations.
45. This and the following section are largely based on Lefebvre-Pescatore-Tullio, Manuale di diritto della navigazione, Milan (Giuffré) 1990 (7).
46. Tonnage means the internal capacity of the ship, expressed in tonnes equivalent to 2.832m 3. Tonnage can be either gross or net, depending on whether the space not used for cargo (or passengers) is included in the calculation. Displacement, as distinct from tonnage, is the difference between the weight of the ship when empty and when it is fully loaded, as indicated by the load line which shows how deep the ship may lie in the water. Gross loading is the maximum amount of cargo on board, including that needed for navigation (functional cargo) and not charged. Net loading is the maximum amount of paid cargo. This may be more or less according to the amount of functional cargo, which generally depends on the length of the voyage.
47. This phenomenon occurred during the Gulf War in 1991.
48. The findings of the Rochedale Commission are dealt with in E. Berlet, Le pavillon national: référence économique affaiblie, référence politique forte, in "Transports" 1994 (No 368), p. 370.
50. For instance the transport of food aid, probably because countries wish it to be known where the aid is coming from. In another example, France obliges its refineries to use ships flying the French flag to carry a proportion of their oil supplies.
51. In particular Towards a New Maritime Strategy
52. These registers date from the intergovernmental agreement of the 1980s between the United States and Liberia. The United States was particularly concerned about the adverse effects caused by flags of convenience on the environment, following the 1967 Torrey Canyon and 1978 Amoco Cadiz disasters, which spread alarm throughout the whole international community. Under this agreement, Liberia lost all its rights over ships flying its flag, which the United States was willing to reinstate under its own flag. The contracting states thus succeeded in combining the economic benefits enjoyed by operators under flags of convenience with respect for safety standards and the environment. This type of agreement is known as dual flag registration.
53. In 1995, the French Council of State declared the Kerguelen register to be illegal.
54. See Towards a New Maritime Strategy, p. 61.
55. COM(89)266 and COM(91)483; OJ C 263, 16.10.1989, p. 11 and OJ C 19, 25.1.1992, p. 10 respectively.
56 . Towards a New Maritime Strategy, pp. 5 and 16
European Parliament: 09/1996