Flags of Convenience

A flag of convenience (FOC) vessel is one that flies the flag of a country other than the country of ownership.

Ships must be registered with a single country, even though they often operate in international waters. That country, the flag state, is legally responsible for ensuring that shipowners meet certain basic standards on safety and crew welfare. A flag of convenience (FOC) vessel is one that flies the flag of a country other than the country of ownership. It is attractive to shipowners who care more about their bottom line than the welfare of their seafarers, because it can save them money.

An FOC registry offers shipowners cheap registration fees, and low or no taxes. Once a ship is registered under an FOC, many shipowners then recruit the cheapest labour they can find, pay minimal wages and cut costs by lowering standards of living and working conditions for the crew.

FOCs offer countries without their own shipping industry a way to make easy money. They set up ship registries and charge fees to shipowners, while having none of the crew safety and welfare responsibilities of a genuine flag state. Some registers have poor safety and training standards, and place no restriction on the nationality of the crew. In many cases these flags are not even run from the country concerned.

Since FOC ships have no real nationality, they are beyond the reach of any single national seafarers’ trade union. As a result, most FOC seafarers are not members of a trade union. For those who are, the union is often powerless to influence what happens on board.

The ITF believes there should be a genuine link between the real owner of a vessel and the flag the vessel flies, in accordance with the United Nations Convention on the Law of the Sea (UNCLOS). There is no genuine link in the case of FOC registries. That is why it continues to campaign against FOCs. In 2024, there were 43 countries declared as FOC registries by the ITF.

How the ITF supports FOC seafarers

Negotiating ITF agreements

The ITF has a unique and powerful influence on the wages and conditions of seafarers working on FOC ships, through negotiating ITF agreements with shipowners. There are two types of ITF agreement.

The most common form is the International Bargaining Forum (IBF) framework agreement, negotiated every two years by the ITF and specific shipowners’ associations. These IBF agreements apply only to seafarers on vessels owned by companies belonging to those associations, and they can only be signed by ITF unions. Unions use them to negotiate national agreements with companies in their country, and sometimes company-level agreements.

The total crew cost agreement must be approved by the ITF and signed by the shipowner (the beneficial owner, operator or ship manager) and either a union in the country where the beneficial owner is based, or a union in the countries providing the labour. This ensures that the agreement considers any national laws and customs, and that the crew members are able to join their national union.

The benefits of an ITF agreement

ITF agreements legally bind the employer to the collective bargaining agreement (CBA),

which details all the terms and conditions of the crew employed on the ship. It also provides the seafarer’s employment contract (SEA) for each crew member. The SEA states the details of the seafarer, the employer, the vessel, and the CBA terms and conditions that apply to that particular crew member.

In 2022, there were 11,862 live ITF agreements, of which 10,953 were on FOC flagged vessels. The five flags with the most vessels covered 
by ITF agreements were Panama, Marshall Islands, Liberia, Malta and the Bahamas.

Policing ITF agreements

The ITF’s inspectors police and enforce these agreements. They can legally board a vessel with an ITF agreement to carry out an inspection to check that the agreement is being complied with, and that the seafarers have decent pay, working conditions and living standards.

In 2022, the ITF’s 130 inspectors and contacts in more than 111 ports in 56 countries carried out 8,763 inspections of FOC vessels, and recovered more than USD36.5 million in owed wages. Of these inspections, 3,640 were of vessels not covered by an ITF agreement, and they yielded the bulk of the recovered wages, USD28.2 million.