Flags of convenience are the scourge of the maritime industry. Under this international rule of law, the owners of sea going ships register their vessels in countries with the lowest ship and labor standards. At a recent Transportation and Infrastructure Aviation Subcommittee hearing on the State of American Aviation , Rep. DeFazio explained that this legal construct is the reason why the US shipping industry is dying and expressed concerns as to threats to follow the same lowest common denominator approach in aviation.
ALPA has found such a case by carefully scrutinizing the application of Norwegian Air International for a US foreign air carrier permit. Its analysis points to the airline’s registering its aircraft in Ireland (allowed under the rules of the European Union) and its use of employment contracts under the laws of Singapore. ALPA’s president Lee Moak makes the following argument:
“If NAS is permitted to pick and choose the countries in which it establishes its subsidiaries and employs its flight crews, U.S. carriers will be put at a severe competitive disadvantage because the United States has one set of laws and regulations for all of its airlines…The U.S.-EU air services agreement was never intended to allow this type of scheme, which games the system for competitive economic advantages.”
That is an important legal issue. Usually, the presentation of an application of a carrier authorized by a sovereign nation, with which the US has a bilateral aviation agreement, ends the fitness discussion. That international relationship respects the action of the other government as to fitness of its citizen carrier. ALPA is challenging Norway’s approval of the NAI/NAS structure.
The AFL-CIO leadership is aware of this specific instance of a flag of convenience. It has opined that the EU will attempt to break down the US internal statutory requirements as to domestic ownership as well as attempt to gain global acceptance of fact situations like this. The union believes that the EU’s strategy is to “backdoor” the insertion of this flagless approach through the Transatlantic Trade and Investment Partnership (TTIP) negotiations.
The current system of bilateral agreements depends on a finding that the foreign government’s standards and enforcement of those rules meet the US minimums. If, as ALPA alleges, Norway has permitted its carrier to avoid its national standards, the DoT will face the question of having to call into question that exercise of another sovereign’s basic legal criteria. If the DoT does not challenge Norway, then Rep. DeFazio’s vision of the negative consequences of flags of convenience will become a real problem. Safety is a real issue here.Share this article: