The oil tanker Prestige, which sank Tuesday about 133 miles off the Spanish coast, was owned by a company registered in Liberia. But the ship was flying the Bahamian flag when it split apart. So which country signed off on the creaky vessel?
The flagging confusion has everything to do with the Prestige’s muddled pedigree. The vessel’s formal owner is Mare Shipping Inc., based in the Liberian capital of Monrovia. Registering in Liberia is a popular tactic among shipowners, who favor the nation’s relatively lax environmental and safety regulations, as well as the alacrity of its maritime bureaucracy—once a registration application is filed, approval can take only a few hours.
According to international law, ships are supposed to fly the flag of their nation of registry—so if the ownership trail ended at Mare, then the Prestige would have displayed the Liberian flag. But the tanker was later leased to a Greek company called Universe Maritime Ltd., under a contract known as a “bareboat charter.” Bareboat charterers are responsible for every detail of a vessel’s operation, including finding a crew and assuming liability for accidents. They also often like to re-register the ship in a different country, either to put its flag in line with the rest of the company’s fleet or to minimize taxes by finding an even cheaper “flag of convenience.” Such dual registrations—also known as double flaggings—are largely illegal, but some countries make exceptions for bareboat charters. Universe Maritime apparently found one of these nations in the Bahamas.
The Bahamian re-registration may have saved Universe Maritime a few bucks in taxes in the short run, but with 2 million gallons of oil already spilled, the convenient flag won’t save the company from some stinging damage claims.
Explainer thanks Robert Jarvis of NovaSoutheasternUniversity.