The Flag of Convenience (FOC) system is a systemic driver of human and labour rights risk in maritime transport. The FOC system enables shipowners to choose the country to flag a ship, with little or no connection to where the ship is owned or operated, in order to reduce regulatory oversight and enforcement, lower costs and avoid tax obligations.
Under international law, a ship is subject to the national laws and jurisdiction of its flag state. In practice, this allows companies to choose the legal and regulatory regime that applies on board, and to select jurisdictions with lower standards and weaker enforcement capacity. Although the UN Convention on the Law of the Sea requires a ‘genuine link’ between shipowner and flag state, states operating ‘open’ international registries widely ignore it.
Complex and opaque ownership and management structures further obscure accountability, making it hard to establish who is responsible for human and labour rights violations. Seafarers on FOC ships face systemic abuses, including low or unpaid wages, excessive working hours, denial of rest, unsafe working and living conditions, and lack of access to healthcare and compensation for injury. In the worst cases, abuses include wage theft, abandonment and forced labour.
FOC shipping exposes companies to risks that compliance alone cannot address. They must be actively identified and addressed through robust HREDD, engagement with trade unions, and enforceable mechanisms – particularly collective bargaining agreements covering FOC ships (known as ITF Agreements).
ITF Agreements are the only internationally recognised system of collective bargaining on FOC ships, currently covering around 15,000 vessels – roughly half of all FOC ships and around 15% of the entire merchant fleet. Negotiated with the ITF and our affiliated unions, they set enforceable minimum standards on wages, working conditions and protections, providing companies with an assurance of decent, enforceable working conditions on the shipping services they contract.
The ITF Inspectorate enforces these agreements through a network of more than 130 inspectors and contacts in over 100 ports across 55 countries. ITF inspectors board ships to monitor and enforce ITF Agreements, verify wages and conditions, recover unpaid wages, resolve disputes, support seafarers to access remedy, and take action against non-compliant operators.