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Maritime Authority grows ship registry
The Evolution of the BMA The BMA as an independent body was established on July 1, 1995. It was a part of the general restructuring and reform process the government has been implementing since 1992. Before its formation, the BMA was a subdepartment of The Department for Transportation. "We were getting terrible reports from ship owners, clients of the Ministry of Transport, they were leaving our ship registry to go elsewhere principally because of bad service," said James Smith, ambassador for investment and trade and chairman of BMA.
The group recommended to the government that the subdepartment be spun off into its own semiautonomous body that would have its own board of directors to direct policy with a broad mandate and its own budget. In 1995, the BMA was formed and the government gave the organization some seed money. The BMA established its main office in London, the center of the shipping industry. Two years ago, an additional office was established in New York to accommodate the Western Hemisphere. The BMA also has representative offices in Tokyo, Hong Kong and Greece. Growing a Quality Ship Registry "We have put a new emphasis on being customer driven," reported Smith. The BMA has computerized its systems and worked diligently to provide efficient service. "We decided on the board of directors that while we are interested in having more tonnage, quantity is not our objective, quality is. We have insisted on registering ships that are fewer than 12 years old and above 1,600 net tons," said Smith. While some older ships can be registered, they must obtain special permission from the board. The same is true for ships weighing under 1,600 net tons. By doing this, The Bahamas ensures that it only lists ships that are in good condition, lessening the number of detentions for maintenance and repair purposes. Smith reported that larger ship registries list ships of all ages but that many of the ships are "rust buckets." These ships have difficulty entering certain ports because of lack of equipment or environmental concerns. Ships are detained and this causes problems for the jurisdictions in which they are registered. Smith noted that ship owners look at the number of detentions a certain flag has before they register a ship in a jurisdiction, "if we keep down detentions it makes our registry more attractive." The BMA reports that Bahamian flagged ships pass Port State Inspection 97 percent of the time. The BMA hires seven of the top classification agencies worldwide to classify ships and ensure that they are the quality of vessel that should be flying the Bahamian flag. Ships registered in The Bahamas must undergo an annual inspection. To serve their customers, the BMA has 250 inspectors in 200 of the world's largest ports in 70 countries. Jones reported that ship owners have indicated to him that doing business in the Bahamas is very easy and straightforward. These strategies have paid off. Ranked 11th in the world a few years ago, The Bahamas Ship Registry is now the third largest ship registry center in the world and continues to be one of the fastest growing. The Ship Registry in the Bahamas has grown more than 1,500 vessels carrying more than 27 million gross tons (GRT). Among ships flying the Bahamian flag are Chevron, Exxon International, Maersk Line, Cunard Lines, Texaco, Holland-America Cruises, Finnlines, Teekay Shipping, Lauritzen Reefers, Smit International and the East Asiatic Company. The Bahamas is number one in cruise ship registry. It also has more passenger ships listed on its registry than any other jurisdiction. According to Smith, 90 percent of BMA's business comes from London. Many ship owners are European or Asian and London's time zone is convenient. "Since 1995, we have been very successful in attracting reputable ship owners, particularly Europeans," explained John Mervyn Jones, director of the Maritime Authority, based in London. "European ship owners prefer to register in the Bahamas flag for several reasons: The Bahamas legislation is significantly based on the U.K. legislation, which has a long history and tradition in shipping; it is an open register; the country is politically stable; and The Bahamas is less than 60 miles away from the United States." The significance of an open registry is that when ships register in a country, they have to register their mortgages. The Bahamas has a good reputation with the banking industry, which gets a sense of financial security knowing that it has recourse if legal action is necessary. This gives the industry more confidence in lending a ship owner money. According to Jones, "The Bahamian flag is desirable because it is seen as a neutral entity. The quality of the ship registry is making it more attractive everyday." Additionally attractive is that the operations and income associated with Bahamas Flag vessels are entirely tax free, as are capital gains on the sale of vessels. Foreign-owned vessels of more than 150 GRT are also exempt from Bahamas customs duties and documentary stamp taxes. World Acknowledgement for BMA's Success Recently the Bahamas was elected to the council of the International Maritime Organization, a U.N. body. Because of its position and growing registry, The Bahamas pays 40 percent of the IMO's budget, allowing the BMA to have a larger voice for its customers. Economic Impact of a Growing Ship Registry BMA's direct contribution to revenue is seven million dollars per year. While that may not seem significant, Smith noted that it is part of a growing service industry. "An owner of a ship can charter to the Bahamas, use the transshipment port in Freeport, Grand Bahama and bring business to whomever operates the terminal. They need banking services, maritime lawyers who have to do documentation, and so on. The major service industries all have a relation to the maritime industry." The BMA is currently contributing to creating a Maritime Cadet Program. BMA is planning to work with students in grade 10 and up, signing them up for a cadet program that will allow them to get practical training in the marine environment. Smith noted that the BMA is currently in dialogue with some of the ships that fly the Bahamian flags to allow these young people to serve on ships. "We would like to put Bahamians on the fast track so that they can serve on ships at a higher than entry level.” Parallel to the cadet program, the BMA has also been running a type of technical college, certifying individuals in the first level of Standards of Training Certification for Watchkeepers, an IMO minimum requirement, which instructs participants on safety regulations and basic reading of instrumentation. The first group of participants has recently graduated. According to Smith, this training will become standard for the staff of inter-island marine traffic. |
In the last five years, the Bahamas has become the third largest
ship registry in the world. This has been accomplished by the formation
of The Bahamas Maritime Authority, a semi-autonomous, government-owned
corporation, which has streamlined registry procedures and opened
itself to be responsive to the needs of the maritime community.
Smith
explained that a group of experts was brought in to examine operations
and recommend how things could be improved. It was found that the
government was slow to react to the needs of the ship owners, that
systems were outdated and needed to be computerized and that there
was too much red tape.