Early reports suggest that the company listed as the owner of the “Prestige” may not be the final “beneficial” owner, as that company is a single vessel company with no other apparent assets. The company may only be a subsidiary of another corporate entity in a different jurisdiction.
To get past the spider’s web of corporate connections and find the real owner is like peeling the many skins of an onion. In fact, a ship owner may have as many as 100 ships each registered as a separate company, each with its own owner and stockholder.
The OECD is investigating the means ship owners use to hide their identities and avoid being held liable when something goes wrong. Hiding the identity of owners is a far too common international business practice which has already been investigated by the OECD in work on the “Corporate Veil” in response to tax havens and money laundering. As in the “Prestige” case, the same principles apply to shipping. In uncovering the mechanisms used by some unscrupulous owners of substandard ships, the OECD hopes to increase shipping accountability and make it harder for dishonest shippers to operate globally.
The OECD undertook this project primarily for security reasons after the events of 11 September. But the increased transparency and accountability that it will afford could prove useful in the follow-up to disasters like the “Erika” off the coast of France in 1999, and now the “Prestige”. The OECD project supports and is complementary to the activities of the UN body responsible for regulating the maritime sector, the International Maritime Organization (IMO).
The IMO can create the rules, but it cannot enforce them. This is the responsibility of the “Flag State” countries where the vessels are registered. The OECD hopes that lifting the corporate veil will help them enforce the rules. How to dismantle the mechanisms is an important part of the work ahead. The message to owners of floating disasters is clear: shape up or ship out!
©OECD Observer No 235, December 2002