REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

on the application of Directive 2009/21/EC on compliance with flag State requirements

(Text with EEA relevance)

1. Introduction

Directive 2009/21/EC on compliance with flag state requirements[1] was part of a package of measures, known as the 'third maritime safety package', adopted in March 2009 to improve the competitiveness of the sector, benefiting only those operators who respect maritime safety and increasing pressure on owners of sub-standard ships.

The purpose of this Directive is twofold:

(a) to ensure that Member States effectively and consistently discharge their obligations as flag States, notably by making the International Maritime Organization's flag State audit scheme mandatory under EU law and introducing certification of the national maritime authorities' operational management systems; and

(b) to enhance safety and prevent pollution from ships flying the flag of a Member State, in particular by ensuring that none should be blacklisted or on the grey list of the Paris Memorandum of Understanding on port State control.

The requirements imposed on Member States as flag States introduced by this Directive are presented in Section 4 of this report, together with the Commission's observations.

The Member States also made a joint statement, agreeing to be bound by international conventions imposing obligations on flag states and to apply the IMO code on the implementation of its mandatory instruments, designed to ensure that national authorities have the resources and powers needed as flag States to assume their international obligations.

2. Transposition

10 Member States[2] transposed the Directive on time i.e. by 17 June 2011 (1 July 2013 for Croatia), 11 did so by the end of 2011, while the rest of the Member States exceeded the transposition deadline by more than 6 months. Thus the transposition was effected by the majority of Member States within or close to the deadline.

3. Input for the report

Article 9 of the Directive requires the Commission to present a report to the European Parliament and to the Council on the application of this Directive, which is to contain an assessment of the performance of the Member States as flag States.

Information received from 25 EU Member States[3] contributes to this report.

4. Status and commission observations

4.1. Application of Articles 4 and 6 as regards transparency in the transfer of a ship flying a Member State flag

Article 4 requires Member States to ensure that ships under their flag comply with the applicable international rules and regulations. It also sets out basic safety checks when a ship transfers into the flag and requires prompt provision of data on deficiencies and safety-related information to the receiving flag State when a ship transfers out. Within the recitals, recital 6 refers to similar provisions on the transfer of ships recommended by the International Maritime Organization (IMO) in its circular MSC/Circ.1140/MEPC/Circ. 424 of 20 December 2004 on the transfer of ships between states. The aim is to increase transparency in the relationship between flag States in the interests of maritime safety.

In terms of ships flying a Member State flag, Article 6 sets out the minimum information to be held and made readily accessible. It includes:

– The particulars of the ship;

– The dates of surveys;

– Identification of the recognised organisations (ROs) involved in certification and classification;

– Identification of the competent Port State Control authority which has inspected the ship and the dates of such inspections;

– The outcome of such inspections;

– Information on marine casualties;

In addition, Article 4(2) states that whenever another flag State requests information concerning a ship which was previously flying the flag of a Member State, that Member State shall promptly provide details of outstanding deficiencies and any other relevant safety-related information to the requesting flag State. Article 6(g) also requires Member States to retain records of ships previously under their flag for 12 months.

Most Member States have made the information listed in Article 6 publicly available. Even Hungary, which no longer has seagoing merchant vessels under its flag, has confirmed that the information on their formerly flagged vessels remains publicly accessible. For 10 Member States, it can be found on their administration's website and for a few administrations (Belgium, Finland and the Netherlands) where this responsibility is shared with an agency or inspectorate, it is to be found on both organisations' websites. Indeed the Netherlands had stipulated that the recognised organisations working on their behalf should also make such information available on their own respective websites.

However, a few administrations (Cyprus, Portugal and Sweden) queried the need to have all such data on public websites, pointing out that the Directive only stipulated that it should be readily accessible, allowing Member States to determine the appropriateness of any public request for information.

Assessment of the performance of Member States In terms of the availability of information and hence also the transparency of the performance of ships flying the flag of a Member State, the situation has become clearer since the date of applicability of the Directive, with a sizeable number of Member States posting the data on their administration's website(s) or at least confirming that it can be made readily accessible to the public. Moreover, it seems that this exercise has encouraged a reassessment of the viability of maintaining a maritime register in the case of some Member States – a significant development.

4.2. Article 7 (Flag State auditing process)

By Resolution A.946(23) the IMO approved the establishment and further development of a Voluntary IMO Member State Audit Scheme (VIMSAS) in December 2004. Resolution A.974(24) adopted in December 2005 set out the framework and procedures for the Scheme. Its objective is to determine to what extent IMO member states are implementing and enforcing the applicable mandatory IMO instruments.

The audit is undertaken by senior maritime experts drawn from different IMO member state's maritime administrations and takes the form of a peer review including a week-long inspection of the administration concerned. The final report highlights any non-conformities or observed weaknesses. It also identifies best practices as well as areas for further development. It includes a corrective action plan agreed with the administration to address any identified weaknesses.

Directive 2009/21/EC stipulates that Member States shall take the necessary measures for an IMO audit of their administration at least once every seven years and shall publish the outcome in accordance with the relevant national legislation on confidentiality.

4.2.1. Requests for a voluntary IMO audit

A number of Member States were amongst the first to request and undergo an IMO audit in 2006, namely Denmark, Cyprus, Spain and the United Kingdom. The United Kingdom, France and Cyprus took part in the development of VIMSAS through undergoing an earlier screening. Denmark was the first IMO member state to be officially audited and Cyprus the second.

Apart from Portugal, all EU coastal EU flag states have undergone an audit. This is confirmed by a recent IMO Circular on the subject[4]. In addition, seven EU Member States have asked for or intend to request a second audit.

4.2.2. Outcome of audits

Most Member States indicated a positive outcome from the audit, with a corrective action plan being agreed for all non-conformities, observations and weaknesses identified. These included addressing the need for a strategy to meet IMO obligations; updating national legislation, guidelines and checklists, as well as agreements with recognised organisations; reallocating human resources and providing evidence of training. Such deficiencies have been or are being addressed through a corrective action plan. A few have commented that the means to achieve the corrective action might not be immediately available: thus Belgium indicates that such action is being taken in as far as the federal state has the power to do so; for Ireland, progress in relation to national legislation on outstanding Conventions is dependent on legislative priorities and timetable.

The audits have given the opportunity to those Member States undergoing them to identify areas for possible improvement in their administration and to formulate ways of addressing such weaknesses. As such they represent a means of raising standards within Member State administrations that can only be welcomed. As the audit is done by peers, it also can be a mutual learning experience for those involved in the audit assessment, which they can then take back to their own administrations.

4.2.3. Publication of results

A large proportion of Member States make available the audit report on their administration's website. That said, in some cases, access to the document is not so simple. For other Member States - Belgium, Spain, France and Ireland, access to the report is restricted, in line with the freedom given to IMO member states as to the extent to which the document should be made public and also in line with the limits recognised in the Directive as regards the rules on national confidentiality.

Assessment of the performance of Member States The Commission sees any identification of non-conformities or observations as a means to improvement, so that Member State administrations are in a better position to discharge their responsibilities as flag States, particularly in relation to maritime safety and environmental protection. Member States have used the corrective action plan drawn up following the audit to improve their operation as flag states. Of those Member States which have not undergone an IMO audit, only Portugal has an active register. The Commission will actively pursue PT to subscribe to VIMSAS.

4.3. Article 8: Certified Quality Management System

Article 8(1) requires the development, implementation and maintenance of a quality management system for the operational parts of the flag State-related activities within the administration and for this to be in place by 17 June 2012. Such a system should be certified to international standards.

Most administrations, which provided feedback, indicated that they had done so, many obtaining certification in 2012. Some, such as Greece, Spain, Lithuania, Luxembourg, Latvia and the United Kingdom emphasised that they had had quality management systems in place for some time, prior to the requirement introduced by the Directive for certification; in the UK's case, previous QMS certificates under ISO 9001:1994 and ISO 9001:2001 had been held. Others indicated that they had obtained a particular distinction – Belgium noted that it was holder of a Corporate Flag State Governance Award. For others, the process had had a helpful effect: Poland noted that its maritime offices in Gydnia and Szczecin had obtained certification in 2008, with a third office in Słupsk doing so in 2009 – harmonisation and certification of the quality management system in all offices was achieved in 2011.

By contrast, certain Member States had not yet implemented this requirement. For some – Malta, the Netherlands and Slovenia, certification is expected by the end of 2013 or pending in the case of Cyprus, while for others, it is not being pursued due to either lack of staff and IT resources (Ireland), or internal administrative difficulties (Portugal). The Commission is actively following up with the Member States concerned on this requirement. The external certification of a quality management system provides another means of ensuring that Member State administrations as flag States are in a position not only to provide quality services to their fleet but also to require and enforce the highest safety and environmental standards at international and EU level. More practically, Member States have commented that fulfilment of this requirement may also make it possible to rationalise flag management, making better use of human resources and freeing some for other tasks, such as port state inspection.

During the legislative process on the proposal for a Directive concerning certain flag State responsibilities for compliance with and enforcement of the Maritime Labour Convention, 2006, the Commission asserted that Article 8 of Directive 2009/21/EC concerning the certified quality management system should be applicable to any operational flag State related activities, whether based on IMO or on other Conventions. In the Commission's view, therefore, the requirement for a certified quality management system does apply to those operational activities related to the implementation of the MLC 2006. As a result, this should be reflected in Member States' implementation activities.

Assessment of the performance of Member States This requirement provides another independent quality check on the systems and procedures used by Member States when operating as flag States. Concrete improvements have been notified. For six Member States, external certification confirmed the quality management system already in place. For several Member States external certification is expected shortly, while for Ireland and Portugal this is a pending issue, and the Commission will actively pursue the Member States concerned. External certification of all EU maritime administrations for all relevant international conventions is therefore still outstanding and the Commission will take action to ensure this is rectified.

4.4. Article 8: Black and Grey Lists

Article 8(2) requires those Member States that appear on the black list or which appear for two consecutive years on the grey list as published in the most recent annual report of the Paris Memorandum of Understanding on Port State Control (PMoU) to provide the Commission with a report on their flag state performance, which would identify and analyse the main reasons for the lack of compliance that led to the detentions and deficiencies resulting in the grey or black status. The status of a Member State as being black or grey listed is determined on the basis of statistics for the ships of each flag State over a rolling three-year period. Thus the 2013 PMoU report details averaged results per flag State for the period 2010-2012.

There are currently two grey-listed states: Bulgaria and Slovakia. Both Member States concerned have provided an analysis of the reasons for their continued exclusion from the PMoU's White List of countries. In both cases, since 2007, the number of vessels flying these flags has significantly reduced: in Bulgaria's case by more than 2/3. Slovakia decided not to renew the certificates of its registered seagoing ships after1 November 2012.

In Bulgaria's case, although the overall fleet has become smaller , newly registered ships are even older than the ones already registered increasing the average age of the fleet. The higher number of deficiencies in the fleet reflects this older average age, despite increased Flag State inspections per ship. Bulgaria has now drawn up a list of seven actions to rectify the situation.

Member States indicated the following best practices which may be implemented in order to attain White List status:

– Flag State inspections take the PMoU criteria into account when surveying vessels under their flag;

– Ships are not registered if in the two preceding years they had been detained more than 3 times by the Paris or Tokyo MoUs member states or by the US Coast Guard;

– Detained ships are required to report to the Ministry or Recognised Organisation and receive a special visit, additional inspections and audits;

– Operators of vessels with deficiencies are required to give account to the competent authorities concerning the reasons for their lack of compliance;

– Targeted inspections of one's own flagged vessels when entering a flag state port;

– Smaller ships are encouraged to undergo non-statutory surveys.

Overall there has been a significant improvement in ships under EU Member State flags in the period leading up to and subsequent to the introduction of the Directive. Within the PMOUs Grey list of flag states over the past four years, the number of Member States and candidate countries concerned has fallen from six to the current two Member States, while there are now no Member States on the Black list.

In drawing up the black, grey and white lists, there are difficulties involved for states with small fleets when establishing an acceptable method by which the performance of fleets can be compared. For statistical reasons, for such states a single poor port State control result can have a disproportionately negative effect on the flag state performance – as the fleet size is small, the poor result cannot be diluted by good results elsewhere, since there are fewer ships to inspect. Indeed Recital 15 of Directive 2009/16/EC on port State control acknowledges such difficulties; however until now no Member State has identified a means of performance assessment acceptable to all and comparable across the various port State Control bodies. The PMoU has set up a task force (TF 31) to look into the issues of implementation of the current port State Control New Inspection Regime, while a parallel group has been established within the EU, which will also address this issue, amongst others.

Assessment of the performance of Member States For the final period reported in 2013, namely 2010-2012, out of the original 7 Member States or candidate countries (AT, LT, LV, PL and SK, plus BG and RO) noted as having a significant number of non-compliant ships on their register, none are now on the black list and only 2 remain on the grey list. This marks considerable progress in encouraging all Member States to address the need to ensure the ships under their flag are compliant. Indeed 6 out of the top 10 flag states on the latest white list are EU Member States, with 15 being in the top 30 flag states. The Commission will continue to monitor progress of the two remaining EU Member States still on the grey list.

4.5. Ratification of International Conventions

On 9 December 2008, all Member States made a declaration, by which they took a firm commitment to express no later than 1 January 2012 their consent to be bound by a certain number of International Conventions, as set out in the Annex to this report. Member States also took the same commitment to express, no later than 1 January 2013, their consent to be bound by the Nairobi International Convention on the Removal of Wrecks, 2007, or in the case of land-locked countries, to take the necessary measures to ensure that ships flying their flag are holding a certificate issued by a Party to the convention.

By a note dated 29 November 2010, circulated to the Council, the Commission reminded Member States of their previous commitment, noting those Member States which have yet to ratify certain of the International Conventions and calling on Ministers to fulfil the commitments undertaken by Member States in due time. The situation as regards the ratification of the international conventions by each Member State in 2010 and in 2013 is set out in Tables 1 and 2 respectively of the Annex.

In addition to the Conventions, to which Member States had originally committed themselves to ratify in their declaration, the Commission sought information on the ratification of the HNS[5] Convention 96 and its Protocol 2010, as well as the ILO Maritime Labour Convention (MLC) 2006, elements of which have been brought into EU law through Directive 2009/13/EC[6]. These are also reflected in Tables 1 and 2 in the Annex.

Finally, individual Member States referred to their position on other Conventions, such as the 2002 Athens Convention on the carriage of passengers and their luggage by sea, the 2001 Ballast Water Management Convention and the 2009 Hong Kong Ship Recycling Convention.

Commission observations Member States have generally been true to their commitments to consent to be bound by the Conventions contained in their declaration, with only two landlocked Member States not seeming to take active steps to ratify the Protocols of certain Conventions (SOLAS, Load Lines) dating back to 1988. It is noticeable that for the Nairobi Wreck Removal Convention 2007, from a situation where none of the Member States had ratified it in 2010, 3 Member States have now ratified it and 12 are in the process of doing so. Similar activity can be seen with the HNS Convention 96 and its 2010 Protocol where 4 Member States have ratified it and 12 are taking steps to do so. The uptake in ratifications and preparations to ratify is an encouraging development, although Member States should recognise that the deadlines to which they committed themselves in 2009 have now passed and redouble their efforts to make good their declaration. An incentive to do so may be required and the Commission would point out that it proposed such a mechanism when last revising Directive 2009/16/EC on port State control, which eventually was dismissed by the legislator. For the Maritime Labour Convention 2006, 14 Member States have already ratified it and all remaining Member States are expected to swiftly follow suite. The quality management systems provisions, which apply to any operational flag State-related activities, will also apply to non-IMO conventions such as the MLC, so Member State ratification of the MLC is even more essential. Furthermore, in order to ensure that Directive 2009/13/EC which implements the Agreement concluded by the European Community Shipowners' Associations (ECSA) and the European Transport Workers' Federation (ETF) on the Maritime Labour Convention, 2006, is properly enforced, a Directive concerning certain flag State responsibilities for compliance with and enforcement of the Maritime Labour Convention, 2006 will be adopted soon, so as to ensure that ships flying EU Member State flags comply with those parts of the MLC that have been implemented by Directive 2009/13/EC. The Commission intends to be more active at international level in the relevant maritime organisations in which such Conventions are administered.

5. Overall Assessment of the performance of Member States as Flag States

The Directive's requirement for readily accessible information and transparency of data on the performance of ships under Member State flags is largely applied and can help in facilitating the transfer of ships between registers. Any potential weaknesses in the fleet are also more easily exposed and the need for corrective action identified.

In terms of the IMO flag state audit, by making the report publicly available, Member States are open about their strengths as well as their weaknesses and the means by which they are addressing the latter. They become more publicly accountable and may have a case internally for obtaining the means to redress any deficiencies so that they can discharge their responsibilities.

The requirement for a certified Quality Management System may also provide an opportunity for flag management rationalisation and better use of human resources.

The gradual elimination of EU Member States from the Paris MoU Black and Grey lists from 2007 onwards is a signal that maritime administrations are taking their responsibilities seriously, such that for the two remaining Member States on these lists, one no longer has sea-going vessels included in its register.

In terms of international maritime conventions, the coastal states have shown themselves to be active in pursing ratification, although their declared deadlines for acceding to specific conventions have not been respected in every case. This is important to facilitate the early entry into force of such instruments and to ensure a level playing field on maritime issues at a global level. It is also a sign of commitment to the aims of the conventions and ensures that EU flag states maintain a high standard in each of the areas covered by the conventions.

6. Conclusion

The majority of Member States currently comply with the requirements set out in Directive 2009/21/EC and the Commission encourages Member States to ensure that this level of commitment will be maintained and further progress achieved.

Indeed, a continued high level of performance is even more necessary, with the entry into force on 20 August 2013 of new important rules in the field of living and working conditions of seafarers, through the Maritime Labour Convention 2006 (MLC) and Directive 2009/13/EC, which includes substantial elements of the MLC. The role and responsibilities of EU Flag States in terms of checking compliance with the minimum living and working conditions of seafarers will be significantly extended with the entry into force of Directive 2009/13/EC.

Moreover, the role of recognised organisations and any other organisations to be delegated an inspection role by the Flag States in the areas of the MLC and Directive 2009/13/EC will have to be closely assessed by the EU flag States. Key to proper enforcement will be that organisation's knowledge of these specific issues, yet another reason for ensuring that applicable quality management systems also cover such new flag State responsibilities.

At the time of adoption of Directive 2009/21/EC, the Commission regretted that its original proposal[7] for compliance with flag state requirements had not been taken up by Member States. Should circumstances warrant it in the future, the Commission may consider the merits of proposing further measures to ensure Member States continue to effectively and consistently discharge their obligations as flag States. With this in mind, the Commission would therefore encourage Member States to continue their work in fully complying with the current directive.

Annex

Table 1

Status of ratification by Member States of IMO relevant Conventions as at 30 September 2010

(Source : Council Document ref 15978/1/10 Rev 1 of 29 November 2010)

*Inclusion of the Croatia (candidate country) as well as the HNS Convention 96 and Protocol 2010 plus the Maritime Labour Convention 2006 to facilitate comparison with Table 2.

Table 2

Status of ratification by Member States of IMO relevant and ILO International Conventions

(Source : IMO, Status of Conventions as at 30/6/2013 and ILO, Status of MLC Convention as at 30/6/2013)

Note: inclusion of Croatia as a Member State from 1 July 2013.

[1] OJ L 131, 28.5.2009, p.132.

[2] BE, DE, DK, ES, FI, HR, MT, NL, RO, SE

[3] BE, BG, CY, DE, DK, EE, EL, ES, FI, FR, HU, IE, IT, LT, LUX, LV, MT, NL, PL, PT, RO, SE, SL, SK, UK

[4] IMO Circular letter 3372 of 3.5.2013

[5] International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea

[6] Directive 2009/13/EC of 16.2.2009 implementing the Agreement concluded by the European Community Shipowners’ Associations (ECSA) and the European Transport Workers’ Federation (ETF) on the Maritime Labour Convention, 2006, and amending Directive 1999/63/EC

[7] COM (2005) 586 final of 23.11.2005