— I —

INTRODUCTION

Much of our modern understanding of the nation-state and the balance of power has been based on land geography: the solid territorial boundaries of a country define the limit of its sovereignty. However, at the global scale, sovereignty is less clear and these boundaries of power seem to get distorted. By looking beyond the territory of land to the question of ocean governance we can see how “normal” forms of sovereignty get stretched or even turned inside out for the purposes of states, corporations, NGOs, and individuals. The oceans reveal that sovereignty is not a permanent, symbolic status, but rather a liquid strategy of constantly re-written rules.

In this essay, I will look at this problem through the lens of two kinds of ocean going vessel, both used to extend power from land onto the high sea: the flag of convenience and the flag of naval supremacy. Although both flags signify national identity, these two types of vessels have important differences as well: one is run by cash-strapped nations and the other one by great powers. Their duality shows how sovereignty and international relations are being performed in open waters. The ocean no longer serves as the romantic personification of freedom at sea: it is the place where sovereignty is transformed and extended. In my interpretation of these two case studies, I will use ideas of sovereignty drawn from Carl Schmitt and Giorgio Agamben, particularly Schmitt’s definition of the state of exception and Agamben’s interpretation of the paradox of sovereignty, adapting these ideas to a critique of global ocean governance.

— II —

FIRST FLAG: FLAG OF CONVENIENCE (FOC)

In contrast to the politics of land, sea is a space where multiple jurisdictions can overlap as ships with different nationalities move in the same space. Astonishingly enough, unlike humans on land, the distribution of national flags has no proportional correspondence to the total number of countries. The top ship-owning economies do not necessarily correspond to the flags of registration — which are often from countries with comparatively few actual shipowners. In other words, the shipping routes are not evenly divided among the existing 195 countries^{The United Nations (UN) recognizes 195 sovereign countries}into equal parts: 42% of the world’s fleet^{December 2016 Flags of convenience, New Maritime World, Louis Bellemare, 2017}is registered in three tiny countries, tax havens operating open registries which are, in order of register size, Panama, Marshall Islands and Liberia.^{Due to its status as a flag of convenience, Liberia has the third-largest maritime registry in the world behind Marshall Islands. It has 3500 vessels registered under its flag accounting for 11% of ships worldwide.}

How can the Marshall Islands, the seventh smallest country in the world, be accountable for 12.5% of the world fleet tonnage? According the United Nations Convention on the Law of the Sea (UNCLOS) every merchant ship needs to be registered with the flag of a particular state under whose responsibility and regulatory control it consequently falls. The flag state’s register is responsible for the inspection of the vessel and its seaworthiness, ensures safety and environmental regulation, and certifies the crew. They are a crucial factor in determining the enforceability of international standards. Usually, a shipowner would register the fleet in their home country, but with globalization, flags of convenience - often conducted by tax havens - made their appearance. They allow shipowners to register their fleet in a foreign country to avoid regulations, safety standards and fees, a business practice which is highly criticized especially by those based in developed countries.

Changing the flag of a ship in order to reduce costs and circumvent the law is in fact very common. As David Cockcroft of the International Transport Workers’ Federation explains, "Globalization has helped fuel this rush to the bottom. In an increasingly fierce competitive shipping market, each new flag of convenience is forced to promote itself by offering the lowest possible fees and the minimum regulation."^{Michael Richardson. 2003. Crimes Under Flags of Convenience. YaleGlobal Online, para. 10.Retrieved from yaleglobal.yale.edu/content/crimes-under-flags-convenience.}

FOCs have been accused of enabling substandard regulations on a number of fronts: it allows unscrupulous shipowners to remain legally anonymous, hiding involvement in drug trade and human trafficking; it allows for substandard ship conditions and extremely low working conditions onboard; it creates loopholes for unregulated fishing and harm to the environment. Nonetheless there is a profit to be made, and many countries do enough business in FOC registration that they outsource the work to private companies who have offices outside the actual flag state (Panama has registration offices worldwide; Mongolia has an office in Singapore) or operate from different branch offices run by agents. Sometimes, the registration and collection of fees can happen through the embassy. Typically, the profits are shared between the company and the state of registration.^{NGO Shipbreaking Platform – Flags of convenience shipbreakingplatform.org/issues-of-interest/focs/}Aside from the financial incentive of registration fees, it is also true that the more ships a nation state has under its flag, the more power it has at the UN International Maritime Organization. Selling the flag under the lowest regulations possible and the cheapest price therefore enables any country — small, weak, “underdeveloped” — to have a say at international conferences, even though it might be criticized by other more stringent flag states.

The cost of this trade in national sovereignty can be tragic. On April 20, 2010 the Deepwater Horizon caused the largest marine oil spill in the United States, killing 11 crewmembers and gushing an estimated 12,000 to 19,000 barrels of crude oil a day into the Gulf of Mexico. Located in the Gulf of Mexico in a U.S. Exclusive Economic Zone, 50 miles off the coast of Louisiana, the rig was built in South Korea for a Swiss company called Transocean^{In 1999, Transocean shifted the corporate headquarters from the US to the Cayman Islands which cut the firm’s marginal tax rate from 31.6% to 16.9%. In 2008 Transocean moved its corporate headquarters from the Cayman Islands to Switzerland, again as an act to cut down costs.}under contract to British Petroleum (BP) in the United Kingdom. Primary responsibility for safety and other inspections rested not with the U.S. government but with the Republic of the Marshall Islands — a tiny, impoverished nation in the Pacific Ocean and also the second largest flag of convenience — because this was its port of registry. It turned out that after approximately 3 years, 25% of the required monthly inspections on Deepwater Horizon were skipped.^{Michael Kunzelman and Garance Burke. 2010. Deepwater Horizon Inspections: MMS Skipped Monthly Inspections On Doomed Rig. AP/Huffington Post. Retrieved from yaleglobal.yale.edu/content/crimes-under-flags-convenience}It is also known that BP has one of the worst safety records among major oil companies in the United States. BP consistently cut corners to push down expenses and tax liability using an FOC to avoid regulations, earning the company massive profits and tax benefits. Marshall Islands shipping registry (a private company called International Registries Inc.) was partly responsible for ensuring compliance with quality standards for construction, equipment and operation on the rig. The exact amount of savings for BP is not known, but it raises questions regarding the efficacy of these precarious flags: to date, BP’s cost for the cleanup of environmental and economic damages and legal penalties has reached $54bn.

Whereas BP’s use of an FOC might be viewed as merely a temporary profit-seeking loophole, many entrepreneurs have begun to think about the ambiguous legal status of the high seas as the very basis for new business models. In 2011, a startup called Blueseed was created that planned to evade U.S. immigration laws by placing a vessel outside the territorial seas of the United States, 12 nautical miles from the coast of California, in the so-called "contiguous zone”^{The United Nations convention on the law of the sea allows to be present in the contiguous zone as long as it does not engage in the exploitation of natural resources, and exhibits no intent of infringing on the customs, fiscal, immigration or sanitary laws and regulations of the United States.}which would enable non-U.S. startup entrepreneurs to work on their ventures without the need for a U.S. work visa.^{Wikipedia, s.v. “Blueseed”, last modified Aug. 8, 2019, en.wikipedia.org/wiki/Blueseed.}

They would still live in proximity to Silicon Valley and use short-term business and tourism visas to travel to the mainland. Foreign workers would be housed on a converted cruise ship that provides living accommodations, co-working space, and entertainment facilities and wouldn’t be attached to U.S. labor laws. The Blueseed ship would fly the flag of an open registry such as the Marshall Islands or the Bahamas, both tax havens, which will determine the laws that apply on board. Blueseed does not impose tax; however, individuals are responsible for paying their financial dues according to their country of residence. Corporate tax will be paid by startups located on board based on the country of incorporation. Although the idea never launched due to investment issues, the scheme was technically legal and demonstrated the wide range of possibilities available to any individual or corporation through the use of flags of convenience.

State of Exception

One way that we might better understand this seemingly contradictory relationship between states and corporations at sea is the concept of the “state of exception.” Carl Schmitt articulates the basic concept of the state of exception in the first chapter of Political Theology. He defines it as any kind of political emergency that presents the state with an imminent threat to its existence. The book begins with Schmitt's famous definition: "Sovereign is he who decides on the exception."^{Carl Schmitt. 2005. Political Theology: Four Chapters on the Concept of Sovereignty, trans. George Schwab. Chicago and London: The University of Chicago Press,5.}By "exception", Schmitt means the appropriate moment for stepping outside the rule of law in the public interest. It is the individual case that is outside the norm. Schmitt critiques other theorists for only talking about the norm and not about what happens or what the state should do in the case of an exception. For example, a state is able, in case of emergency, to temporarily suspend in part or in whole the entire constitution. To deal with an imminent threat, the sovereign can suspend the system of rights and, if necessary, use armed forces. Schmitt’s work appears in the interwar period, and according to Giorgio Agamben’s interpretation, Schmitt’s argument was subsequently put into practice during the Nazi regime in Germany as they initiated a system used for the deportation and extermination of Jews in order to enforce “order” within the state. What we would now see as a war crime or humanitarian crime was by their logic an act of authority in a crisis situation in the name of public good. The exception, together with the production of what Agamben calls “bare life,” led to the creation of concentration camps, which he argues constitutes the state of exception par excellence. According to Agamben, the camp is the space opened when the exception becomes the rule or the normal situation: “the decisive fact is that, together with the process by which the exception everywhere becomes the rule, the realm of bare life — which is originally situated at the margins of the political order — gradually begins to coincide with the political realm, and exclusion and inclusion, outside and inside, bios and zoe, right and fact, enter into a zone of irreducible indistinction.^{Giorgio Agamben. 1998. Homo Sacer: Sovereign Power and Bare Life, trans. Daniel Heller- Roazen. Stanford, CA: Stanford University Press,12.}Further, what is characteristic of the camp is the indistinguishability of law and life, in which bare life (the exception) becomes both the subject and the object of the new political order in modern democracy.

Although the work of Schmitt and Agamben is primarily concerned with state sovereignty and state violence, the example of Deepwater Horizon and Blueseed already begin to show us how these concepts can be seen to operate not just within states, but through the actions of corporations. Powerful corporations judiciously choose which laws are more suitable to them, by opting for either their national identity or a foreign one, as we see with the flag of convenience, or other situations such as offshore headquarters, tax havens, etc. In this sense, the corporation demonstrates its power by choosing the appropriate moment to step outside the boundaries of the state (both physically and legally) in pursuit of the company’s economic interest in the same way a nation state exercises its sovereignty when it steps outside the law in the name of public interest.

Paradox of Sovereignty

In his reading of Schmitt, Agamben also introduces the idea of the “paradox of sovereignty,” a term that might help us to understand another aspect of ocean governance. “The paradox of sovereignty consists in the fact that the sovereign is, at the same time, outside and inside the juridical order.^{Giorgio Agamben. 1998. Homo Sacer: Sovereign Power and Bare Life, trans. Daniel Heller- Roazen. Stanford, CA: Stanford University Press,17.}The sovereign is outside the juridical order, or legal system, because he has the power to suspend it and inside because he is part of the whole state machinery, whilst practically living under its rule. Through the state of exception, the sovereign creates and guarantees the situation in which the law can function validly. The state of exception is a state that naturally deconstructs itself and loses its tensions between outside and inside and creates with the state of exception a zone of indistinguishability between outside and inside, namely the juridical chaos that the sovereign controls. There is no rule applicable to chaos. In order for a legal system to make sense, order must be established, and the sovereign is the one who decides when order actually exists, which means that as soon as the sovereign decides to change the law he is outside the law and this is where the paradox lies.

In regards to the flag of convenience, the notion of nationality is on one level useful and on another level obsolete in a process where the only drive is purely economic (which explains its “convenience”). Shipowners using a flag of convenience inhabit the very essence of being outside the legal order of their native country and in so doing establish a state of exception. The sovereign of the flag state and the sovereign of the office of registration suddenly take charge of totally foreign entities (people, objects, vessels) as opposed to taking care of its own, which shows the control over the collective "bare life" through globalized agencies. Sadly, it is to the shipowner’s advantage that labor rights for crewmembers are intentionally mediocre and the flag of convenience often enables negligent practices. Abdicating best practices, the flag does all the work, loosening regulations and transferring responsibilities to the absentee flag state.

But now we turn to quite a different situation, in which the state of exception and the paradox of sovereignty can be understood not as a weakness or a loophole, but as the central expression of state power. With the flag of supremacy^{Not to be confused with the confederate flag, which symbolizes white supremacy.}, it is the ship itself that shows power — through its size,armament, aircraft carrier availability, ability to stay in dangerous zones, etc. Where the flag of convenience can cloak all manner of powerful enterprises in the guise of a weak state, the flag of supremacy is a direct expression of a nation state through naval power and aggression in international waters.

— III —

SECOND FLAG: "FLAG OF SUPREMACY" (FOS)

Equivalent to air supremacy, naval supremacy or command of the sea, is a national navy’s spatial expression of superior power and authority. Depending on the capabilities of the vessel, it can control anything from a regional body of water to an entire ocean on the high seas. In the latter case, it is called a blue-water navy and usually entails aircraft carriers, capital ships or nuclear submarines, which implies force protection from sub-surface, surface, and airborne threats.^{Wikipedia, s.v. ” Blue-water navy”, last modified Sept. 14, 2019 en.wikipedia.org/wiki/Blue-water_navy}These advanced navies have a strong surveillance system and large scale submarine detection systems and specialize in their defensive performance. A green-water navy has comparatively less territorial power but still controls its national shorelines, and can be deployed in a regional context for specific missions and for short periods of time. The brown water navy is considered the least powerful because it can only operate within its own national waters and does not project power abroad.

Only few countries have blue-water navies because of their incredible expense and until now at #1 is the United States, whose navy is capable of “global-reach power projection.”^{Sarah Kirchberger. 2015. Assessing China's Naval Power: Technological Innovation, Economic Constraints, and Strategic Implications. Heidelberg: Springer. p. 60.}France and the United Kingdom also have limited global-reach power projection.^{Kirchberger, 2015, p. 60. | Other blue-water navy owning countries Multi-regional power projection (Power projection to regions adjacent its own): India, Italy, Russia, Spain, Brazil; Regional power projection (Limited range power projection beyond Exclusive Economic Zone (EEZ)): China, Japan, Australia, South Korea, Germany, Canada}These blue-water navies operate under the premise that global command will prevent conflicts from ever threatening their home nation. Overseas bases extend the reach of supply lines, provide repair facilities and amplify the power of a fleet in foreign waters beyond the nation’s homeports. The US navy has been very active in the Persian Gulf since WWII and in Vietnam in the 1960s and 70s. While power projection typically involves military forces in combat (hard power), it also refers to the capacity of a state to project political, economical and informational power internationally (soft power) and abides by many international agreements and institutions such as G7, G20, NATO, Commonwealth, and EU. This also includes humanitarian help abroad, peacekeeping, and the protection of economic security.

Under conditions of Naval Supremacy, the flag and the nation have a singular identity, representing unassailable power, with global reach, projected by the vessel that flies the flag. In contrast to the open market of the flag of convenience, vessels operating under a blue-water navy only fly the flag of their home nation. Part of a blue-water navy’s “paradox of sovereignty” while operating in a global context is that even within the territorial boundaries of another state, the blue-water navy also projects a certain territorial sovereignty of its own. There are rules about boats approaching these ships. Under normal circumstances, all vehicles are supposed to stand off 500 yards, creating an invisible boundary around the ship. From 0 to 500 yards, the ship’s captain can judge the situation, but in most cases any foreign vessel that is within 150 yards of a blue-water navy vessel will be subject to assault if their presence is interpreted as hostile. In each case, only the blue-water naval vessel decides when the rules apply and when they do not. In general, when a Navy like this is present, say if the Russian navy is in the Black Sea, there is a conceptual sense in which the whole outline of that body of water becomes Russian territory. It becomes like land. It isn’t, but it is like land because of the presence of this idea in action.

In some cases, the shoreline itself can pose a political paradox. In October 2000, the USS Cole was attacked by suicide bombers while in port for refueling in Aden, Yemen. The Cole was operating under an alert level that warns of an increased and more predictable threat of terrorist activity but with no particular target. The standard list of anti-terrorism measures includes: "unauthorized craft should be kept away from the ship.”^{Steven Lee Myers. 2000. Inquiry fault the Cole’s Captain and Crew. The New York Times. para. 18. Retrieved from nytimes.com/2000/12/09/world/inquiry-faults-the-cole-s-captain-and-crew.html}As the bombers approached the USS Cole in a small boat, one would assume that the US Navy would have enforced its territorial security by preemptively attacking the boat. However, since the USS Cole was in port, it was subject to different rules of engagement. There, two sailors were ordered to patrol the ship with pistols, with instructions not to load their weapons or fire unless fired on, and after being given the captain's permission. There was no outward sign of hostility until the two suicide bombers aboard stood up and gave a salute moments before the craft exploded. A senior petty officer said "that's the rules of engagement: no shooting unless we're shot at.”^{Stephen Robinson. 2000. Bombed US warship was defended by sailors with unloaded guns. The Telegraph, para. 9. Retrieved from telegraph.co.uk/news/worldnews/middleeast/yemen/1374316/Bombed-US-warship-was-defended-by-sailors-with-unloaded-guns.html}are also situations where naval supremacy is expressed not by projecting territorial power through the threat of violence but actually by extending humanitarian aid. In fact, one of the qualities of naval supremacy is that a blue-water navy can independently pursue missions in multiple territories for an indefinite amount of time without help from foreign powers. For example, in 2014 the United States Navy was able to quickly respond to the disappearance of Malaysia Airlines Flight 370 and continue operations in the region with relative ease even though the search area covered the entire Indian Ocean.^{2014. Navy assists search for Malaysian airliner. U.S. department of defense. Retrieved from archive.defense.gov/home/features/2014/0314_flight370/}that, the 2004 Indian Ocean earthquake was an example from the same region where the US Navy dispatched P-3C Orion patrol aircraft containing disaster supplies and an aircraft carrier to assist with relief operations. The Australian government built an air bridge to move materials and personnel, while other nations were sending in medical supplies, water purification units, blankets and bottled water. The closeness to the disaster location enabled the United States to offer help from their troops based in Japan and Hong Kong to provide assistance with hospital ships and ships producing fresh water.^{Wikipedia, s.v. ”Humanitarian response to the 2004 Indian Ocean”, Americas, last modified Sept. 2, 2019, en.wikipedia.org/wiki/Humanitarian_response_to_the_2004_Indian_Ocean_earthquake#cite_note-10}Here, aid and ocean supremacy are not incompatible, but rather an extension of power.

— IV —

VERDICT

Although ocean governance complicates the space and hierarchy of different sovereignties, the flag of the nation state remains essential. You can’t have a ship without a flag and you can't have naval supremacy detached from a nation state.^{Pirates and private militias break this rule of course}Through both flags – convenience and supremacy – sovereignty is projected beyond territorial boundaries and the ship itself comes to represent a small nation floating on the sea, a state of exception in relation to its environment because it carries its own legal system. In a sense, the flag of convenience navigates through territory in an effort to avoid regulation, while the flag of supremacy creates territories where it acts as a regulator. In both examples, a certain interpretation of the state of exception operates. On the one hand, we have seen that many shipowners register under foreign flags where fees, taxes, regulations and laws protecting seafarers are often minimal or non-existent. Countries offering a flag of convenience are in many ways engaged in a race to the bottom. Being ranked among the largest open registers is not a symbol of control but rather an act of economic and political weakness. A Blue-Water Navy, on the other hand, provides no market for its flag, has a highly regulated fleet, and shows total command and control (soft and hard power) over the region they are supervising. The concept of sovereignty, then, is used by both the weak and the powerful in distinct ways through economic and political globalization. In fact, these flags seem to suggest that the very idea of the nation state is a flexible concept – a floating symbol of power and identity.