The ITF classifies a flag a Flags of Non-Compliance (FONC) where any one of the following applies:
- The flag state does not prevent IUU fishing and labour abuse, and lacks proper measures for the safety and welfare of fishers regardless of where beneficial ownership sits
- The flag state denies or fails to protect fishers' fundamental labour and human rights
- The beneficial ownership of a vessel is in a different country from the flag it flies
- Wages on board fall below either the ILO minimum basic wage for an able seafarer or the minimum wage of the flag state
These are testable criteria. A company sourcing seafood can ask which flag a vessel flies, where its beneficial owner is registered, where the crew are form and what they are paid.
The FONC system enables operators to choose the country to flag a vessel, with little or no connection to where it is owned or operated, in order to reduce regulatory oversight and enforcement, lower costs and to access fishing rights. Operators can move between flags to escape scrutiny, selecting states that run their registries as commercial enterprises and cooperate little with international efforts against IUU fishing.
Complex and opaque ownership and vessel management structures further obscure accountability, making it hard to establish who is responsible for human and labour rights violations.
Labour abuse and illegal fishing go hand in hand: operators cutting costs through tax and trade union avoidance, exploitation of migrant labour and no social security for crew are frequently the same operators associated with IUU fishing. Vessels operating outside fisheries regulation, as a rule, do not comply with labour standards either – so a company's exposure to one is a reliable indicator of exposure to the other.