What Caribbean registries could learn from Panama

Many think that the Caribbean is just the group of independent islands that used to be British Colonies and part of the British Commonwealth, where English is spoken and the British Shipping Act is enforced. However, there are more countries which also are part of the Caribbean, they are independent but they were Spanish or French or Dutch. In fact, some are still part of France and The Kingdom of the Netherlands.

Not all of their ship registries are the same. After studying the most important registries in the region, we find that there are mainly four types: The Red Ensign Group (see panel), the full national registries where the government runs the registry; private registries where the management is given to a commercial entity, and the semi-private regime, where there is a mixture of government and private management with local/national presence and sometimes the employees are designated by the government to be employed by the private company.

Most of the Caribbean registries have their own specialities and tend to attract similar types of vessels like cruise ships in The Bahamas registry, or yachts in the BVI and Cayman Islands, etc.

These registries need to ensure that individuals have not used their ships in the past or transported cargo from UN-sanctioned countries, shipowners and charterers.

Vulnerable

With the UN sanctions lists being published constantly, ship registries are now more vulnerable. From what was merely a pure commercial transaction, nowadays registries have to be more conscious in the delicate work they have to do. Registries are even employing due diligence companies that can dig deeper than the previous CSRs of a ship or cargo manifest.

I will not be surprised if in the near future, registries may start charging for due diligence costs, as it is expensive and time consuming, especially if it is done externally.

Difficulties
During a recent discussion about the differences among registries, we discovered that one of the main difficulties is that once the IMO has approved a new convention, or there is the need to change the national legislation in a country, the changes are not done in the manner required or as fast as needed. This will create a delay and even the dynamic and momentum in a registry can be lost due to the wait passing the new laws required.

Panama has the largest registry in the world, so what could the Caribbean registries learn from Panama? There is no magic formula, instead, registries should be prepared to grow steadily, to operate efficiently, embrace new technologies and invest in training. Encourage participation in international forums, not only IMO, but also ILO and private conferences.

One of the differences between Panama and the Caribbean island registries is the high volume of work. Nowadays, registries have become more efficient than 30 years ago, as with the touch of a button the whole history of the ships appear, and they do not need to dig or maintain them manually.

Registries need to monitor their ships constantly; annual tonnage tax and annual safety inspection keep the tab on the ships. Registers should be like Swiss Bankers; they need to know their client. Trust in the client is paramount to a registry. Obviously in a registry as large as Panama, how can the registrar know over 8,000 shipowners? Very easy, through the local consulates and the lawyers. Panama has about 60 offices around the world. The Panama registry never sleeps, there is always an office open 24/7, even on Christmas Day. Caribbean island registries should take this into consideration, as they grow.

Maritime lawyers

Many would call maritime lawyers a liability, intermediaries, brokers. I call them doers. They move the registry; in the past they were globetrotters and promoted the flag and their offices. They were a symbol of things done. Unfortunately, like in all business, you find lawyers that are not professionals; they do not have experience or simply their offices have so much work that you become a number not a name. Let’s face it, how many times you think you have properly filled in a form and the registry turns around and says, sorry it is wrong, do it again, you receive the message overnight and, in the morning, all is delayed? A good lawyer will ensure you have your registration as required.

So how can a registry cope with so much demand and work? This is the million and a half question. During a study and benchmarking I did for Panama in 2007 and 2010, I discovered that the Panamanian Registry receives every year about one and a half million applications. These vary from registration, radio licences, seafarers’ licences, CICAs, inspections, certifications, lost CSRs, DPA endorsements. This is a lot of paperwork. Although some of the applications are now done online, there is still a need for someone to review the applications and press the OK to issue the e-certificate. Therefore manpower, training and commitment to deadlines are paramount.

Big private or semi-private registries have invested a lot of resources and have a commitment to their countries and shareholders, small registries should look at big registries and follow their growth while analysing what are they doing differently. They are constantly innovating and creating new strategies and programs. National registries follow the political agenda of their government in office, private registries follow mainly their business plan.

Many ask me if there is a plan or winning formula that registries could apply. There are a set of non-written rules that can be followed, they make sense for a good business strategy and customer service and have no political consequences.

First, know your client and what your client needs, registries must be prepared to go the extra mile in exceptional circumstances to help the client without breaking the law.

Second, ensure that the manpower is fully trained to work under pressure and high volumes.

Third, efficient communication by phone or email.

Fourth, provide assistance, guidelines, information and clarity to users; apply the international conventions and follow and participate actively in IMO and other international government organizations to ensure the registry keeps abreast with the constant changes we are living these days.

Fifth, think that there are more registries, they may be targeting certain type of ships, but a shipowner will go where he is welcome, a banker will go where his loan is secured, and a lawyer will go where he can get his case solved fast. Make their life easier.

Final word…

From the top 35 flag states listed on the ICS major shipping flags, five are from the Caribbean basin: Antigua & Barbuda, The Bahamas, Bermuda, the Cayman Islands and Panama.

We have not compared fees in detail; however, this is an element that may be working against some Caribbean registries. For example, a Minimum Safe Manning Certificate in Panama costs USD 150 whilst the same document in a Caribbean registry costs USD 700. Therefore, registries should also consider reviewing and benchmarking their charges.

Registries should not be shy. They need to talk to everyone in the industry; attend conferences, visit lawyers, bankers, shipping companies, engaged in what they do and respond positively to the pressure they are exposed to. Ensure that the classification societies do a good job, have a healthy fleet and ask shipowners to give flag testimonials.

There is no reason why the Caribbean island registries can’t grow further, they have all the ingredients, they just need to ensure they apply them at the right time in the right place. Manage time, training, manpower, ships and PR.

Registries should ensure that they are in the press for the good reasons, and above all have a crisis management agency ready to step in to help, because shipping is the industry with the worst publicity in the papers.

What is the Red Ensign Group and to which many Caribbean island registries are a part?

It is a group of British shipping registers. In the Caribbean, this group comprises the UK overseas territories in the wider region: Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Montserrat, and the Turks & Caicos Islands, which operate shipping registers from their jurisdiction. Vessels registered in those countries are considered ‘British ships’ thus entitled to fly the Red Ensign flag. However, these registries have certain restrictions. The registers are divided into two categories: Category 1 registers in the Caribbean are Bermuda, British Virgin Islands (BVI), and Cayman Islands, which can register ships of unlimited tonnage and type. Category 2 registers in the Caribbean are Anguilla, Montserrat, and the Turks & Caicos Islands, which can only register commercial ships, and pleasure vessels of up to 150 gross tons (GT). This limit can be extended to 400 GT with a special agreement with the UK.

About the author

Maria Dixon is the CEO of ISM Shipping Solutions Ltd in UK, she has been in shipping registration and accreditation for 40 years, and is an expert in Panama shipping. She has done benchmark studies for the Panamanian Registry prior the IMO voluntary audit. Maria was elected President of WISTA-UK during 2008/14 and in 2019 received the Panama Maritime Lifetime Achievement Award.