Panama maritime administration strengthens the ship registry

With a record that from the past century earned it the title of a “flag of convenience”, the Panamanian ship registry was facing a great challenge at the end of 1999, on the eve of the handover of the Canal to Panama.

The great challenge was to correct the shortcomings of the past and raise the level of the registry to that of the Canal: a company of first world prestige.

But the inspiration did not last long. In March 2001, the then secretary general of the International Transport Workers’ Federation (ITF), David Cockroft, reported in the newspaper Trade Winds of buying a license as a Panamanian marine officer for $4,000 without having had any formal training or experience in sailing a ship. He just had to give his name, a photograph, address and pay the amount indicated.

The scandal was reminiscent to the maritime community of the old practices that gave Panama the name of a “flag of convenience”.

In 2008, the then administrator of the Panama Maritime Authority (AMP) Fernando Solorzano, led a hopeful effort to modernize the agency and its ability to regulate, oversee and promote the implementation of the National Maritime Strategy.

Solorzano ran the fledgling effort “to systematize information on the registration of ships and certification of seafarers and officers on ships under Panamanian registry, including the issuing of “fraud-proof” licences (Panama Maritime Handbook 2008, pp. 144-150). But the process was interrupted after the election of former President Ricardo Martinelli (2009-2014), five years in which the maritime administration experienced a setback of at least 20 years, according to experts.

In that period the AMP, under the responsibility of Roberto Linares, gave all kinds of concessions arbitrarily in maritime activities. The landmark case was the exclusive concession granted to Orion Maritime Training Center for the issue and recognition of marine officers’ certificates under the Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW). On this case, as denounced by the Panamanian Association of Marine Officers (APOM) the experience reported by Cockroft in 2001 was replicated, selling licenses at $5,000. The case was reported by the current administrator of the AMP, Jorge Barakat, to the Attorney General, on January 30, 2015

But even so, main competitor countries are very distanced from Panama. Liberia, the traditional adversary of Panama, was recorded in June 2015 with a total of 3,093 ships with 129.1 million gross tons, representing growth of 1.0% in number of vessels and 1.6% in tonnage. The Marshall Islands flag has the biggest growth in quantity and quality, registering 2,750 ships (+ 6.6%) in June 2015 with 116.4 million gross tons (+ 6.3%).

The AMP said its strategy is to strengthen the record, both in tonnage and quality, focused on optimizing the service according to the needs of shipowners and operators. For that it has implemented training programs for staff, both in the technical field as well as in English proficiency, becoming more flexible in procedures to accelerate the processes within the framework of the agreements and the general law of merchant shipping, adapting electronic support and acquiring technological tools to optimize performance and restructure processes in order to reduce paperwork platforms.

In terms of innovation, Barakat said that as an incentive to attract newly built ships, on July 30, 2015, the AMP approved Resolution 106-67 DGMM establishing special discounts for newly built vessels that register before December 31, 2016. “This strategy is defined in response to the economic crisis affecting the industry,” he said.

The resolution provides additional rebates under Act No. 57 of August 6, 2008 on the general merchant marine, with a waiver of up to 100% on newly built ships exceeding 10,000 gross tons (GRT). The incentive covers registration fees, annual consular costs, accident investigation, inspection and of 0.03% per net ton.

In addition, the resolution sets a 25% discount on the annual registration fees and consular costs for the term of one year for ships with over 10,000 GRT to enroll in the Panamanian merchant marine before December 31, 2016. From The Bulletin Panama