Monday, January 01, 2007A New Age for Shipping

Susanna HennighanThe Virgin Islands Shipping Registry

On a sunny day in September, 2006, senior officials from the BVI’s financial services sector, marine industry, and central government gathered in an office building in downtown Road Town to herald what many believe will be a new age for shipping in the British Virgin Islands.

“Today is an important step in placing the BVI at the very pinnacle of the maritime world,” His Excellency the Governor, David Pearey, told the audience, which had gathered for the official opening of the Virgin Islands Shipping Registry. The Registry is a new department under the Chief Minister’s Office, and the amalgamation of what was once two independent departments, the BVI Maritime Administration and the Shipping Registry.

The new department has overall authority for the registration and inspection of BVI vessels, as well as the regulation of the Territory’s maritime industry.
And as a “one-stop-shop” for all marine-related matters, the Registry is in a position to meet the demands of the Territory efficiently and consistently. Governor Pearey said that this will provide benefits for residents and visitors to the BVI.

“It is good for the BVI government because it provides assurance that BVI registered vessels are well regulated,” he said. “In addition, it provides the BVI public with the assurance that a BVI flagged vessel is a safe vessel to travel on.”

But the benefits do not end there. One of the greatest benefits of the combined VI Shipping Registry is that it sets the stage for the Territory to qualify as a Category One jurisdiction of the Red Ensign Group, one of the world’s most prestigious flags of the sea.

The Red Ensign is a symbol of prestige in the world maritime community. The red flag with the Union Jack in the upper left-hand corner is the marker of a British ship, and the marker that the ship has met the high standards of the Group. The Red Ensign Group, which falls under the authority of the UK’s Maritime and Coastguard Agency (MCA), includes the United Kingdom, its Crown Dependencies of the Isle of Man, Guernsey, and Jersey, and the UK Overseas Territories of Anguilla, Bermuda, the Cayman Islands, Falkland Islands, Gibraltar, Montserrat, St. Helena, Turks and Caicos, and the British Virgin Islands.

In 1995, a new UK Merchant Shipping Act was passed, which allowed for the members of the Red Ensign Group to be categorised according to the tonnage, size and type of vessels which they were authorised to register. The UK, Bermuda, Cayman Islands, Isle of Man and Gibraltar were named Category One registries and were designated able to register ships of unlimited size, tonnage, and type. The remaining jurisdictions, including the BVI, were designated Category Two registries, and were limited to commercial vessels of up to 150 gross tonnes, or pleasure vessels of up to 400 gross tonnes.

Captain Baboucar Sallah, the director of the Virgin Islands Shipping Registry, and a major player in the Territory’s shipping registry for the past two decades, said that it has been the aspiration of the BVI to move from Category Two to Category One status for several years.

He described discussions with officials from the UKMCA at Red Ensign Conferences held in the BVI in 1996 and again in 2003, where BVI officials made their case for the Territory to be upgraded to Category One status. In 2001, the Territory passed its own Merchant Shipping Act, a comprehensive piece of legislation that addresses every aspect of national maritime matters. In 2002, an audit of the BVI’s shipping registry system was conducted giving officials a guide as to the work that remained ahead.

New focus on the need to upgrade the BVI to Category One status was found when Chief Minister Dr. D. Orlando Smith took office in 2003. Chief Minister Smith and his colleagues saw Category One status as an important part of their government’s drive to broaden the BVI’s economic base. He saw connections between Category One status, the expansion of the BVI’s mega-yacht industry, and the further growth of the financial services sector.

“It is hard to overstate the importance of this accomplishment,” the Chief Minister said. “Once we achieve Category One status, we will be able to register all kinds of ships that currently we cannot register on our shores.”

The Chief Minister said that in addition to the benefits of added business and government revenue, such an achievement would also help to further another of his Government’s priorities – that is the strengthening of BVI pride.

“I have said many times before that the BVI is stepping up and taking its place on the world stage,” he said. “Our students are competing and winning at the highest level with their peers at universities throughout the world. And soon, our shipping registry will be able to compete and win with the largest shipping registries in the region.” And so, in early 2006, work began in earnest to set up the Shipping Registry which would pave the way for Category One status.

In January 2006, Executive Council formally approved the establishment of the Registry as a new, separate department under the Chief Minister’s Office. It would combine the BVI Maritime Administration and the Financial Services Commission’s Shipping Registry. It would also attract senior marine surveyors who would provide necessary technical guidance for the first several years of the department’s existence, and until BVIslanders could be trained in the highly specialised field. Nearly nine months later, and after many meetings, the transfer of files, and amendments to necessary legislation, the Registry was formally opened to the public. In mid-October 2006, a team from the Maritime and Coastguard Agency arrived in the Territory to review the Registry and determine whether it meets the standards for Category One status. Key officials were optimistic that it would not be long before the BVI would realise its dream of Category One shipping status. “Obtaining Category One status would be an important achievement for both the financial services and tourism sectors,” Lorna Smith, executive director of the BVI International Finance Center, said. “International business in the area of financial services includes funds, investment business, banking, corporate services and insurance. An international shipping registry is a natural compliment,” she said.

Presently, there are more than 2,500 ships registered in the BVI, even with the 400 gross tonne limitation. “Category One status will mean that ships of any size can register in the territory. This would also form a natural compliment to tourism, our other economic pillar as we will then have the capability to register ships of any size including large crewed yachts and the like.”

Mrs. Smith noted too that attainment of Category One status would lend to the overall reputation of the BVI. She said that the standards set by the UK’s Maritime and Coastguard Agency, which regulates the Group, are among the highest in the world. “So meeting the criteria is no easy feat,” she said. “On the other hand, their stringent rules mean that ships on the Registry would be ones with which the BVI can always be proud to be associated.”

Chairman of the BVI Tourist Board Russell Harrigan said that the achievement of Category One status would mean an added incentive for large luxury yachts, often called mega-yachts, to register and base themselves in the BVI. “We have been making some important investments in mega-yacht infrastructure over the past few years, and expect more in the coming years,” he said. “The addition of Category One status would help considerably in our goal to attract more luxury yachts to our shores.”

“There is also the positive conceptual link between the BVI as the sailing capital of the world and our attainment of Category One shipping status,” he said. “It is a perfect marriage, and one that we will be able to market on many fronts”

For Chief Minister Smith, the success of the Virgin Islands Shipping Registry is important to the overall future development of the BVI. Although he sees its importance to the tourism and financial services industries, the Chief Minister is focused more on the impact that the Registry will have on the quality of life of everyday citizens and residents of the BVI.

“The BVI intends to compete for every vessel we can. We will spare no effort to make sure the international maritime community knows the value of registering their vessels in the BVI,” he said. “Fees from outside the Territory will enter our treasury and subsequently be used to help pay for the modernization of our schools, healthcare services, roads, and more. That is what this is all about.”

Oyster Publications Inc, PO box 3369, Road Town Tortola, British Virgin Islands, VG1110