Ship Registry Now Under Gov’t Control

Amid mounting international criticism of Cambodia’s maritime safety record, Cambodian ship registration has been transferred from the embattled Cambodia Shipping Corp to the Ministry of Public Works and Transport, officials said this week.

The shipping registry was returned to state control late last month after the government canceled its agreement with the Singapore-based Cambodia Ship­ping Corp, which has privately administered ship registration since 1995.

CSC has been at the center of a government investigation since the seizure in June by French commandos of cocaine aboard a Cambodian-registered freighter, the Winner.

The drug bust and several other recent maritime incidents involving Cambodian-registered ships have brought scathing international criticism of Cambo­dia’s “flag of convenience” and the CSC.

In a July 30 Council of Min­isters letter, the government “agreed on the basic suggestion to cancel the agreement with CSC.”

Sent to several ministries and Prime Minister Hun Sen’s Cab­inet, the letter states that the government will be responsible for paying annual fees to the International Maritime Organization and will work with ship owners whose vessels were registered by CSC.

Police monitoring of Cambodian-flagged ships will receive priority attention, the letter adds.

“The Ministry of Interior must continue to investigate company and ship offenses, take legal action and cooperate with involved countries to crackdown on offenses of Cambodian-flagged ships,” Secretary of State Sum Manit wrote on behalf of the Council of Ministers.

Ministry of Public Works and Transport officials said earlier this month that Hun Sen had given the green light to transfer CSC’s work to the ministry’s Merchant Marine Department. But officials at that time had not yet received official notification.

A shipping official said on Tuesday that CSC was in the process of handing over the shipping registry to the marine department.

The CSC’s former chair, Funcinpec parliamentarian Khek Vandy—who is also husband of Minister of Culture Princess Bopha Devi and father of current chairman Khek Sakara—confirmed that the registration contract was canceled and said he was relieved by the move.

“I am happy that the government will be handling this from now on. There might be less criticism once ship registration is managed by the government,” Khek Vandy said on Thursday.

Khek Vandy said Singaporean investors own more than half of CSC and the company is working on a “formula” for the smooth transfer of the registry back to Cambodia.

The ship registration contract was due to expire in 2004, Khek Vandy said. CSC will cease operating in Cambodia, but no decision has been made on the future of the company, which has offices in Singapore, he said.

International law stipulates that all sea vessels must sail under the flag of a sovereign state. But ships registered under a flag of convenience, such as Cambodia’s, need no connection to the registering country and operate with little or no oversight by the registering authorities, critics claim.

Flags of convenience have boomed in the past 20 years as ship owners are drawn to countries where registration fees are low, tax liabilities relaxed or non-existent and their ships are free of many restrictive laws.

Sixty percent of the world’s merchant fleet capacity operates under flags of convenience. In 2000, four of the top five registries in the world were open registries, US government officials said.

But flag-of-convenience countries—whose vessels have been involved in incidents ranging from safety breaches to human smuggling, drug trafficking and arms shipments—have come under increased scrutiny since the Sept 11 attacks on the US.

Fears that militant groups may use sea vessels to deliver crude weapons of mass destruction have prompted US involvement in efforts to put pressure on flag-of-convenience countries.

But diplomats in Phnom Penh said they do not expect Cambodian-flagged ships to radically improve their checkered maritime record following the registry’s transfer to the transport ministry. Ship registration is a lucrative business, and the lure of profit will likely supersede reform efforts, they said.

A second diplomat noted that CSC’s links to Funcinpec mean that an important finance supply for the royalist party may have been cut off ahead of next year’s general election.

Khek Vandy declined to comment on a political motive for the cancellation of the CSC contract. However, he did note that eight CPP parliamentarians requested that the company be investigated.

But calls have also mounted from outside Cambodia for tough action against CSC, a company that was more concerned about increasing revenue than maritime safety, according to critics.

The Lloyds of London shipping intelligence service wrote in an opinion piece last month that Cambodia’s ship register should be shut down along with other “under performers” such as Bolivia.

“How many more people have to die in incidents involving Cambodian-flagged vessels, or its ships detained for illegal activities, before something is actually done about it?” Lloyds said.

The Paris MOU, an international consortium on port control in Europe and North America, has placed Cambodian ships on a “blacklist” of “very high risk” flags, and CSC’s launch of the world’s first Internet ship registration presented the possibility of phantom ships being registered online, Lloyds said.

Cambodian-flagged ships accounted for 49 of 332 port detentions, 14.7 percent, in the first four months of this year, statistics from the Tokyo MOU port control authority in the Asia-Pacific region revealed.

This is a very high figure for a small country such as Cambodia, Lloyds said.

CSC Chairman Khek Sakara said earlier this month that his company was committed to working with the government and international authorities to improve Cambodia’s shipping registry.

Khek Sakara and a senior marine official said Cambodian-flagged ships were statistically still low on the ladder of ship involved in maritime incidents.

A government investigation—led by the Interior Ministry—into Cambodian shipping and the CSC will be concluded this week, ministry spokesman General Sok Phal said on Tuesday.

The report recommends that ships registered under the Cambodian flag—an estimated 900—have their registration canceled unless they prove they are in possession of all proper maritime documentation.

(Additional reporting by Michelle Vachon)


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