Bill Gallagher, President, International Registries, Inc.
(Article originally published in May/June 2016 edition.)
Explain for our readers what a ship registry is.
A Flag State, or ship registry, confers nationality on ships and implies what rights the ship enjoys, the obligations it may be subject to, and the law of the State that governs it. A Flag State has certain rules and regulations for vessels that fly its flag and has primary responsibility for ensuring that its vessels meet all established national and international requirements. These may include crew nationality, crew composition, and shipbuilding standards, among others.
Okay, how does it differ from a classification society?
There’s a big difference. Remember, I’m a lawyer, so I’m going to get a little technical here, but in legal terms the Republic of the Marshall Islands (RMI) Maritime Administrator delegates authority to classification societies (Class) with respect to the performance of statutory certification and statutory plan review, surveys, audits, and inspections for vessels registered in the RMI. The Administrator recognizes all International Association of Classification Societies (IACS) members as Recognized Organizations (ROs), i.e., those authorized to carry out the necessary certifications and inspections on its behalf. A Flag State is not required to delegate this authority to ROs; however, it is very common.
Is the Marshall Islands registry the world’s largest?
The RMI Maritime Registry, commonly known as the Marshall Islands registry, is currently the third largest in the world.
Where does it rank in terms of tonnage and number of vessels?
The RMI Maritime Registry has maintained its status as the third largest registry in the world, surpassing 3,785 vessels and over 131 million gross tons (GT) at the end of April 2016. According to the January issue of Clarksons Research’s World Fleet Monitor, the RMI Registry had a 12.5 percent increase in GT in 2015, the largest percentage growth among the top ten registries.
Tell us a little about its history.
IRI traces its origins to 1948 and has been involved in Flag State administration since then. The RMI Registry program was initiated by the RMI government in 1988. IRI was formed in 1990 as the parent corporation for its various affiliates and entered into an agreement with the RMI to develop a new maritime and corporate program. With the adoption of the RMI Maritime Act of 1990, the maritime laws of the RMI were aligned with the many changes in ship registration, financing, and seafarers’ licensing and documentation that had occurred. Since its formation, IRI has expanded quite rapidly and now provides administrative and technical support to one of the largest maritime registries in the world.
How many offices and employees are there?
IRI operates 27 offices in major shipping and financial centers around the world with over 360 employees worldwide.
Who owns IRI?
In 1993 IRI became privately held, owned, and operated by its senior employees.
You have been opening new offices and expanding existing offices at a rapid clip. Where is all the growth coming from?
Nearly 60 percent of the registrations last year were from newbuilding tonnage, and that figure increased to 70 percent in this year’s first quarter.
Has the decline in the dry bulk sector hurt IRI’s business?
The global shipping industry has undergone a long period of volatility caused largely by and remain the number one vessel type in the Registry, and the decrease in demand for dry bulk certainly has an effect on both the global shipping industry and the Registry. But we engage with all sectors of the industry, paying particularly close attention to those sectors impacted the most during this period of volatility to assist in whatever way we can, and our business continues to grow.
What other services does IRI offer?
All IRI offices have the ability to register a vessel or yacht, including those under construction, record a mortgage or financing charter, incorporate a company, issue seafarer documentation, and provide technical and marine safety support services.
What is meant by an “open registry”? Is there such a thing as a “closed registry”?
There are three categories of Flag States: national registries, open registries, and hybrid registries. National registries are the traditional Flag States and typically have national restrictions in terms of ownership, shipbuilding, crewing, and trading. Open registries, like RMI, generally have few restrictions concerning nationality of crews, where vessels may be financed or constructed, or ownership limitations. Hybrid registries have the appearance of a traditional registry but have adopted many of the operating characteristics of open registries.
Are there “good” registries and “bad” registries?
There are quality flags, such as RMI, that are committed to the safety and security of personnel, vessels, and the marine environment. These flags are consistently included in MoU White Lists. They actively participate in the formulation of regulations at the IMO, and they enforce all relevant national and international requirements for vessels in their fleets.
What are MoU White Lists?
The Paris and Tokyo Memorandums of Understanding (MoUs) are organizations made up of Member States that share the common goal of eliminating the operation of substandard ships through harmonizing Port State Control (PSC) processes. The Paris and Tokyo MoUs publish annual reports summarizing the PSC activities of Flag States and assessing the performance of each flag. Based on these results, Flag States are assigned White List, Grey List, or Black List status. White List indicates those flags with the lowest ratio of substandard ships while Black List references those flags with the highest ratio of substandard ships.
RMI has received the highest ratings in PSC international rankings and is included on the White Lists of both the Paris and Tokyo MoUs. It has also met the flag criteria for a low-risk ship registry under the New Inspection Regimes for these MoUs.
Is Qualship 21 a similar kind of ranking?
Yes, Qualship 21 is the U.S. Coast Guard’s Quality Shipping for the 21st Century initiative to eliminate substandard shipping. Qualship 21 identifies high-quality ships and their respective Flag State administrations and provides incentives to encourage quality operation. RMI has maintained Qualship 21 status with the USCG for 11 consecutive years. Recently, at the Connecticut Maritime Association’s Shipping 2016 conference, we received preliminary recognition from the USCG indicating that RMI will maintain its status on the Qualship 21 list for the 12th consecutive year in 2016, which is unprecedented. RMI is the only one of the top three Flag States that will hold Qualship 21 status after June 2016.
Are fees comparable across all ship registries?
Generally speaking there are few differences in terms of cost among the leading registries. The differentiating factors often have to do with service and a worldwide reach.
What are the obligations of a ship registry, or Flag State, in the event of a crime on board, or a hijacking or kidnapping?
The obligations of the Flag State can be found in national legislation and in the various international conventions to which the country is signatory, such as the United Nations Convention on the Law of the Sea (UNCLOS), the International Convention for the Safety of Life at Sea (SOLAS), and the Code of the International Standards and Recommended Practices for a Safety Investigation into a Marine Casualty or Marine Incident (Casualty Investigation Code). The Administrator conducts investigations of marine casualties and incidents in accordance with these laws and conventions to promote the safety of life and property at sea and the prevention of pollution. The Administrator provides industry stakeholders with up-to-date information regarding piracy, armed robbery, and suspicious activity through its Marine Safety Advisories and Marine Notices.
What has been the impact of the Maritime Labour Convention on how you do business?
RMI ratified MLC, 2006 on 25 September 2007 and in January 2010 established a program of voluntary inspection and certification to allow compliance with MLC requirements prior to its entry into force. As of 20 August 2013, when MLC entered into force, all RMI-flagged vessels subject to MLC were required to be inspected and certified in accordance with national laws and regulations. Newbuild vessels and those transferring into the RMI Registry must undergo inspection and certification accordingly.
Let’s talk about you now. Tell our readers a little bit about your background and education.
I received my Bachelor of Arts from Indiana University of Pennsylvania, my Master of Arts in International Relations from the University of Maryland, and my Juris Doctor at the University of Baltimore School of Law. Prior to joining IRI’s Legal Department in 1991, I specialized in legal compliance in the securities industry. I served as an intern in the U.S. Senate and in the German Bundestag where I was able to enhance my proficiency in German.
What attracted you to the maritime business?
My father worked in a shipyard, and so I have always been interested in the maritime industry. When the opportunity came along, I grabbed it.
What is a typical day like for you?
Honestly, there is no typical day for me. Probably 50 percent of the time I am on the road engaging with industry stakeholders either in face-to-face meetings, attending conferences, or speaking. When I am in the office, I am engaged in the day-to-day administration of the RMI Registry.
How would you describe your management style?
I allow capable people to do their jobs. I am always available when problems arise, but I personally find micromanagement at all levels counterproductive
What do you like most about your job?
I work in one of the most vibrant industries in the world and that is always challenging. I learn something new every day. At RMI and in the industry as a whole, I am surrounded by very motivated and intelligent people, which stimulates the work environment, keeps things fresh, and challenges me to be a better leader.
What is your biggest challenge right now?
With the rapid growth of the RMI Registry, my biggest challenge is integrating the worldwide offices and staff to make sure we are all pulling together and not going in different directions.
Tell us about some of your extracurricular activities, both in the industry and the community.
I participate in a local softball league as a pitcher and infielder. I am the father of four children, and their sports and dance activities keep me busy. I am constantly engaged with industry stakeholders through various memberships and organizations.
What do you like to do in your spare time?
I am an avid sports fan and enjoy watching the Baltimore Ravens, Baltimore Orioles, and Maryland Terrapins. I also enjoy going to the movies and am fond of visiting historical sites, particularly those related to the American Civil War.
Have you read any good books lately?
I recently read the The Heart of Everything That Is: The Untold Story of Red Cloud, An American Legend. It is a biography of Red Cloud, the great Sioux warrior. I am also finishing the book Killing Patton: The Strange Death of World War II’s Most Audacious General, which is a fascinating read.
Thank you for your time. Is there one final message you’d like to leave for our readers?
We at the RMI Registry greatly appreciate all of the support we have received from the industry over the years. We do not take it for granted and will continue to earn people’s trust. – MarEx
Jack O’Connell is the magazine’s Senior Editor.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.