Flag of convience

The advent of open
registers, or flags of
convenience, has led to
competition between
classification societies and
to a relaxation of their
standards.
The first open register was
Panama in 1916. Fear for
political instability and high
and excessive consular fees
led the president of Liberia,
William Tubman, in 1948 to
start an open register with
the help of Edward
Stettinius, Jr.. The World
Peace of Stavros Niarchos
was the first ship in that
register. In 1967 Liberia
passed the United Kingdom
as the largest register.
Nowadays, Panama,
currently the largest
register, and Liberia have
one third of the world
fleet under their flag.
Flags of convenience have
lower standards for vessel,
equipment, and crew than
traditional maritime
countries and often have
classification societies
certify and inspect the
vessels in their registry,
instead of by their own
shipping authority. This
made it attractive for ship
owners to change flag,
whereby the ship lost the
economic link and the
country of registry. With
this, also the link between
classification society and
traditional maritime
country became less
obvious - for instance
Lloyd's with the United
Kingdom and ABS with the
United States. This made it
easier to change class and
introduced a new
phenomenon; class
hopping. A ship owner that
is dissatisfied with class can
change to a different class
relatively easily. This has led
to more competition
between classes and a
relaxation of the standards.
In July of 1960, Lloyds
Register published a new
set of rules. Not only were
scantlings relaxed, but the
restrictions on tank size
were just about eliminated.
The other classification
Societies quickly followed
suit.This has led to the
shipping industry losing
confidence in the
classification societies, and
also to similar concerns by
the European Commission.