Panama: International shipping trust and recognition

Panama’s unprecedented lead  –

In this interview, the recently appointed Panamanian Ambassador to The Court of St. James,   H.E Ana Irene Delgado, very simply explains to John Faraclas the success of the Panamanian Flag and Registry.  As her country is certainly the major player in the maritime world and beyond, given the advantages of geopolitical and trading positions, the Panama Canal and its new “heir”, there is no doubt that this tradition will continue and continuously improve for the benefit of international shipping and trading.

On the first question:  “Why the Panamanian Flag still maintains by far the lead in the world’s 20 top flags?, she said: “With Government stability, reliable legal system and a high profile Maritime Court that works 24/7, strong banking system, a large network of Panamanian consular offices around the world and the existence of a range of benefits help Panama to maintain its position. Panama does not apply income tax as a result from the ship operation and there is a limit on minimum tonnage for ship registration”.

On what further improvements the Government is introducing so as to maintain this lead given concessions from other flags? the Ambassadress mentioned that: “The Administration continues tointroduce improvement in the quality of the service provided. These measuresinclude a strong commitment with the International Maritime Organization to ensure practical and realistic regulations, monitoring our fleet through inspections and a network of professional Recognized Organizations, as well as 24/7 support from our Maritime Safety and Seafarers Documentation Offices in Asia, Europe and America. The results are demonstrated with the inclusion of Panama in the main Port State Control Regimes such as Paris and Tokyo”.  She continued by saying that: “The systematization of the service as a whole, the introduction of measures to comply with the latest international regulations and new incentives related to those regulations, such as discounts for green operating vessels, are examples of further and continuous improvements having been introduced”.

We continued by asking her issues on the Safety, Manning, Education and Training fronts, which are very essential forthe shipping industry, what further is being done? “Look, the introductions of new procedures to guarantee ships compliance with international regulations, the ratification on new conventions such as SUA Protocols, Maritime Labour Convention and the implementation of the STCW amendments are just a few aspects that demonstrate the activities taken to improve safety, manning and training within the registry, as a whole, ” she said,  adding that: “As it has been mentioned before, the service is further strengthened with the regional Maritime Safety and Seafarers Documentation Offices which help provide customers with a professional and efficient 24/7 service”.

Your Excellency, g iven thecurrent ship financing crisis as a result of the credit crunch are Panamanian banks going to enter this specialist field? Very clearly she responded saying: “ The Superintendence of Panamanian Banks is the national entity that overviews banking activities in our country. This entity maintains and updates national legislation in accordance with international regimes. This national entity has succeeded in reducing the risks, ensuring security and strengthening the Panamanian International Banking Centre. It has also been able to provide an economic environment favourable to local and international private investments, procuring undoubtedly, to offer and service that is attractive to a competitive and globalized world”.

Thank you; and now please tell us, what is the best way in your view to tackle piracy at sea? What are thecontingency plans that the Maritime Office in Panama has? Are armed guards thebest solution? Will this decrease the piracy incidents and arrest of ships, torturing of crew and demands for ransom etc., etc? How the flag state factorworks here? To this five-fold question she explained that: “ Panama recognizes the problem that piracy, particularly off the coasts of Somalia, represents to the shipping industry, and as such, has participated actively inthe discussions at the UN level as well as the IMO and have adopted and implemented all recommendations agreed on both organizations, and continues to actively gather information for better ways to implement such recommendations, including the recently agreed guidelines for Flag States on the use of private arms guards on board vessels”. Additionally, she said that: “Panama supports the implementation of the Best Management Practices, developed by the shipping industry, and the actions taken by international naval agencies such as EUNAVFOR and NATO operating in the area, considered as main assets for a safeand secure transit of vessels in the High Risk Area, taken into account the experience of the parties involved in the development of this measures.”

Our next question was on the World Economy and Panama’s position; “Panama’s geopolitical position is key to the world economy and in particular to transport; how the new Panama Canal will further enhance this asset and what this would mean to Panamanians and Panama’s economy at large?” Very eloquently she said: “The Panama Canal represents one of the main sources of revenue for the Government and the expansion project would not only enhance the safety of the waterway but it will also allow for larger number of transits of ships, including post Panamax ships and at the same time, it will help the reduction of GHG emissions from vessels”, adding that: “The expanded Panama Canal will also have a positive impact in our ports, services, logistics, suppliers, legal advice and other contributions which will attract more investment to the country”.

On What developments, such as free trading and commercial zones, factories etc., are planned for furthering the economy using the new canal as a strong lever? She said: “The Government has invested heavily in the development of an Economic Special Area called Panama- Pacific, which is only 15 minutes away from Panama City. The project will be developed over the next 40 years, providing more than 40, 000 jobs and building 20, 000 new homes in a micro city with business parks, apartments, tourist attractions and logistic areas.” And that  “Multinational companies such as DELL, 3M and Caterpillar have already established operations in this area. There are also awide variety of tax incentives and logistical facilities to further enhance access to the fiber-optic submarine cable system that connects North America, Central America, South America, the Caribbean, Asia and Europe.”

Obviously we wouldn’t resist the advancement of Panama as a tourist’s destination and asked: “Lately conventional tourism is high on the agenda of many nations; given the position, climatic environment and facilities, what is Panama’s response that will also boost tourism? Very emphatically she replied: “Do please note that Panama’s international airport is currently being expanded and refurbished in order to provide a comfortable and secure environment to all passengers and a new international airport terminal is under construction which will be 10 minutes away from the biggest beach resorts in the country. Also, the road system can allow travellers through the country in six hours to experience the wide range of tourist options available with a local tropical climate.”, ending that “The medical and health service have international recognition and equipped with the latest medical technology.”

Finally we asked “What is the best though way to protect the environment although shipping is the less polluting industry? Will the levy case be better than the stockmarkets emissions projects and vice versa? The response was:  “In relation to the protection of the environment, even though it is recognized that shipping is the least pollutant industry, it also important to find ways to keep the industry’s green credentials and in this respect, any solution that can be agreed at the international level, on either a levy case or a market emissions trade would be acceptable, as long as it does not impose unnecessary burdens or distort the market as a whole.”

A brief and to the point response and we look forward to our readership’s comments.-