Africa

Opinion: Liberia Maritime Industry Is Liberia’s Engine For Growth & Employment

Few years ago, two very valuable Liberian maritime experts, Charles N. Wolo and Christian G. Herbert, both my personal friends and heroes, lost their lives.

Maritime Registry

Maritime Registry

They died working in professions that were not their calling and first choice. Charles died, having served as math teacher for more than fifteen years with a Texas School District, while Christian died working as an official at the Ministry of Public Works.

These two Liberians were among only 4,654 World Maritime University (WMU) graduates from 167 countries across the globe and thousands of others from its sister institution, International Maritime Law Institute (IMLI) in Malta and smaller maritime institutions around the world, including the Regional Maritime University in Ghana.

They were trained for leadership at the highest level in the industry to shape the maritime sector of today and lead its development into the future.

In his two-year stay at the World Maritime University, Christian G. Herbert became one of its most important and impactful students, admired by his fellow graduates all over the world. He headed the student government and as such was part of the university’s governing board. His dissertation, “The Liberian Shipping Registry: Strategies To Improve Flag State Implementation And Increase Market Competitiveness” is perhaps, the most comprehensive narrative of the Liberian Registry and best compilation in defense of the concept of Open Registry.

Although significant resources were expended on the training of Christian, Charles and many like them, Liberia failed to put to work these highly trained and recommended maritime professionals; probably because the Liberian idea of maritime affairs remains locked in the outdated 1948 model advanced by Edward Stettinius to President Tubman: the registration and handling of ship matters by a private agent in exchange for compensation in tonnage and corporate taxes.

The maritime industry in Liberia has remained virtually stagnant and almost solely dependent on the annual receipts of its share of tonnage and corporate taxes. Liberia is the second largest maritime registry in the world with 204m dwt, closely followed by its clone, the Marshall Island Registry, with 196m dwt. There is no meaningful presence of Liberian nationals on any of the 2871 vessels above 10,000 dwt flying the Liberian flag.

Deadweight Tonnage Registry

Deadweight Tonnage Registry

The Liberian Maritime Authority has been headed by none maritime trained executives for years.  The Permanent Representative of Liberia to the IMO is a none maritime trained official in a sea of Permanent Representatives who are graduates of the World Maritime University (WMU) or the Internal Maritime Law Institute (IMLI). To develop the Liberian maritime sector and create jobs and more income for Liberia, the existing maritime institutions need not be headed by political appointments. Since the change of the Registry Agent from International Registry Incorporated (IRI) to Liberia International Ship and Corporate Registry (LISCR), growth in the registry has remained mostly stagnant when compared to its main competitor, the Marshall Island, which continues to experience double digit growth rate. Relying on the comparative growth trend between the two countries, it is easy to assume that the Marshall Islands will very soon surpass Liberia as the world second largest ship registry.

The story of Liberia’s decline as an open registry country finds its best expression in Liberia’s philosophy about its growth and prosperity. The core thinking behind Liberia’s outlook has been undue reliance on the assistance of outsiders. The Liberia Maritime Program is a product of that mindset. After World War II, most American companies seeking to invest in Liberia had, as their motive, the desire to aid and assist in the improvement of the health and education of the people of Liberia.

One of the most impactful of such companies was the Liberia Company, organized by Edward Stettinius, U.S. Secretary of State. In September 1947, one hundred years after Liberia’s independence, Stettinius Associates-Liberia Inc., signed a Statement of Understanding with the Republic of Liberia, according to which, the company was granted an eighty-year concession to exploit any line of business in Liberia except that which was already expressly granted to other concessionaires. Never had such an all-inclusive concession been granted to any company, probably anywhere. Mr. Stettinius emphasized that he was driven to advance the welfare of the people of Liberia and that with American techniques and know-how combined with Liberia’s natural resources, it was not necessary for Liberians to live poorly (McLaughlin, R.U., Foreign Investment in Liberia 1966, 56).

In retrospect, the vision for an all-inclusive development of Liberia through business investments under the custody of a Taipan like philanthropist, Edward Stettinius, did not materialize, probably because Stettinius died on October 31, 1949, barely two years after he set his sights on Liberia. To his credit, he created the Liberia Maritime Program, the International Trust Company and its subsidiaries, ITC Bank, IRI, Cocopa Rubber Plantation and the Roberts International Airport under PAN America after his brother-in-law, American aviation pioneer and founder of Pan American Airways, Juan Terry Trippe, took over the leadership of the Liberia Company.  Also, influenced by the vision of Stettinius was Robert G. LeTourneau of Texas, the famous manufacturer of earth-moving equipment who, in 1955, established his company R.G Letourneau of Liberia, Inc in Liberia.

R.G LeTorneau

R.G LeTorneau

In 1951, LeTourneau visited Liberia and decided that the best way to teach the gospel was by teaching basic American production skills to Liberians. An eight-year lease on up to 500,000 acres of land was granted to the company in 1952 for general agriculture, mining and timber operations. The agreement provided for the reinvestment of all the profits of the company during the first five years. In 1952, the first shipment of $500,000 in earth moving equipment, food for one year for the American staff, 500 New Testaments Bibles and twelve technical missionaries arrived at the company’s site in Baffu Bay, Sinoe County. In addition to the production of rice, fruits and palm oil, R.G. LeTourneau of Liberia Inc., was responsible for most of the road construction works in the southeastern parts of Liberia. The concept of foreign management of Liberia’s enterprise remained the hallmark of the management of Liberia’s maritime program and the modus operandi for how Liberia exploits her natural resources, even today.

Three sets of events can be attributed to the decline in the size of Liberia’s ship registry:  International Competition, political instability and international relations, Liberia’s Ship Owners resentment over their ill-treatment by former Maritime Commissioner Benoni Urey in 1998/99 and a combination of the insincerity of International Registries Inc. (IRI), strengthened by Liberia’s hands-off approach and the subsequent changing of the agency to LISCR.

The decline of Liberia’s ship registry started in 1979 because of competition in the industry; the rise of other open registries such a Malta, Cyprus and Singapore and the realignment of some closed registry countries by opening parallel registries with characteristics of open registry, to retain ships owned by their nationals. The political instability of Liberia which started after the rice riot of 1979 sent the first strong signal to the market. In 1983, the decline was further exacerbated by the Arab League boycott of Liberia flag ships in retaliation for Liberia’s renewal of diplomatic relations with Israel. Tankers flying the Liberian flag were prevented from doing business with oil producing Arab countries. So naturally, many tanker owners took their ships out of the Liberian ship registry. Liberia’s negative image and fear of the decline of the Liberia registry may have driven her agent, IRI, to create a new registry like Liberia in the Marshall Islands in 1990, in breach of her contract with Liberia. Gradually, the IRI started to populate the Marshall Island ship registry at the expense of Liberia, using resources that belonged to the Liberian Registry.

When Charles Taylor became President of Liberia in 1997, Liberia was indebted to the International Maritime Organization (IMO) in unpaid dues amounting to just over U.S.$3 Million. The new Maritime Commissioner, Benoni Urey, asked the Liberian Ship Owners Council for a meeting to seek their assistance in paying Liberia’s bill to the IMO. In a meeting held in Sweden in 1999, the ship owners agreed to open a special fund for the sole purpose of paying Liberia’s IMO bill and supporting Liberia’s participation at international maritime events. The funds were to be administered by the agent, IRI. By mid-1999 the designated funds had accumulated to more than U.S. $27 Million, mainly from additional fees charged to the ship owners.

A dispute ensued between Commissioner Urey and the IRI over control of the funds. The Commissioner argued that as sovereign government, it was only proper that Liberian authorities handle the administration of the funds. After some consultation, it was agreed that control of the funds be turned over the Liberian maritime authorities. By the beginning of 2000, the allocated funds had been depleted but the IMO debt for which the funds were established remained unpaid. When the Ship Owners Council asked Commissioner Urey to account for the funds, he was dismissive of their inquiry. He is quoted to have told the ship owners, “How dare you question how a sovereign country makes it decisions?”

On February 17, 1998, the Government of Liberia filed a lawsuit against its maritime agent, the International Registries Inc.(IRI) and its affiliates at Fairfax County Court in Virginia. In the Bill of complaint, the Government of Liberia accused IRI of:

  1. Wrongful transfer of Liberian shipping registrants to the Marshall Islands registry with the view to operate and manage the same freely without Liberian oversight and retain a large percentage of the net revenue accrued therefrom;
  2.   Management and operation of competing shipping registries – Liberia and Marshall Islands – using Liberia’s assets, personnel and other resources;

iii.     Diversion of both Liberian-flag ships and new ships to the Marshall Islands registry;

  1. Wrongful utilization of Liberian registry offices at 11495 Commerce Park Drive, Reston, Virginia, personnel and equipment to operate the Marshall Islands registry;
  2. Illegitimate use of Liberia’s proprietary information in the form of registrants’ lists, methods of operation and administration, computer software and other confidential documents for the Marshall Islands registry;
  3. Joint marketing of the Liberian and Marshall Islands flags and the employment of forms, rules, regulations and licenses identical to those used by Liberia;

vii.    Construction of a large new facility in the Marshall Islands intended to be used as base of operation to complete the transfer of new ships and Liberian ships to the Marshall Islands registry;

viii.    Misappropriation and mismanagement of finances and trade secrets

(Source: RL vs. IRI et al, 1998.)

The Liberian Government asked the court to award damages upward of US$70 Million. In the middle of litigation, the Government of President Charles G. Taylor terminated the maritime extension contract signed between Liberia’s Interim Government of National Unity (IGNU) headed by Dr. Amos Sawyer and the agent, IRI/ITC and on February 27, 1999, submitted a draft agreement to the Liberian Legislature to enter a maritime agency agreement with a new company, the Liberian International Ship and Corporate Registry (LISCR), to manage the Liberian ship registry beginning January 1, 2000. The agreement was ratified by the Liberian Legislature on March 5, 1999. The creation of the new company, LISCR, was not done under the best of circumstances. IRI, the old agent who had been dealing with the ship-owners, classification societies and all the relevant maritime firms, the IMO and foreign governments, and was still in custody of all Liberia’s proprietary assets. Simply put, Liberia’s Bureau of Maritime Affairs did not have corroborated documentation of the number and class of ships registered under the Liberian flag during this critical period.

Secondly, the core executives of the new company were mostly persons who had been peeled off the old agency because of some disagreements with the principals. As part of its claims in a subsequent lawsuit filed by IRI against LISCR on January 7, 1999, they asserted that the Liberian Ship Registry was literally stolen from them. They identified among others, Mr. Lester Hyman, Chairman of LISCR at the signing of the new agency agreement who was also a part of the Swindler and Berlin Law Firm that represented Liberia in its lawsuit against IRI (Herbert, C. World Maritime University 1999). On May 4, 1999, Lloyd’s List reported that the Liberian Government’s lawsuit against IRI had been withdrawn from court and all claims and counterclaims were set aside. In exchange for the transfer of the vital operational and other assets and co-opting of some IRI employee into the new LISCR, a substantial payment was made to the IRI (Lloyd’s List. 4.05.99.1) and the path was cleared for LISCR to officially assume the role of agent, which it did on January 1, 2000.

The net effect of these events was that IRI, the Liberian agent for fifty-two years, became the sole agent of the Marshall Islands (RMI) Shipping Registry. Overnight, the Marshall Islands Shipping Registry expanded and has since continued to experience double digit growth. The dispute over Liberia’s ship-owners funds with Commissioner Benoni Urey did not incentivize owners to keep their ships under the Liberian flag and her new agent. Many owners transferred their flags to the Marshall Islands opting to remain under IRI. Overnight, the decline in Liberia ship registry reached a low point. The entire interplay surrounding the departure of IRI and entry of LISCR was a spoilers’ paradise for all but the new owners of LISCR. The IRI lost her treasured position secured fifty-two years earlier by the work of Edward Stettinius and Liberia lost more than half of her annual revenue from the ship and corporate registry.

Container Vessel

Container Vessel

Liberia’s total reliance on foreign prescriptions and management of her vital source of income has always provided temporary comfort for the country. Suffice to say, the maritime registry as a source of income for a non-ship owning country is rapidly becoming obsolete. In 1948, it was understandable and profitable for Liberian flag to be used by American ship owners as a tax haven following their dispute with the Panamanian government. The fact that Liberia was one of only two African countries and had a traditional relationship and common orientation with America made income from the Liberia ship registry just about free money.

Liberia, however, never evolved out of the same role she had been set into in 1948, notwithstanding the extremely lucrative industry in which her flag had become a prominent fixture. Liberia stagnation and slow decline in the maritime industry is a function of the neglect of succeeding Liberian Governments to exercise effective control over the operations of the company to which it had delegated authority to perform certain Flag State functions. Initially, the Maritime Bureau was under the Department of Commerce later to become the Ministry of Commerce, Industry and Transportation. When the Ministry of Transport was enacted, the Bureau move to the new Ministry but under President Doe, an autonomous Bureau of Maritime Affairs was created and made accountable to the President. The focus of the Bureau and for the most part the new Liberia Maritime Authority has been a narrow path of domestic function including the most heralded beach cleaning.

Liberia’s idea of the ship registry has been almost jealously focused on the tonnage and corporate taxes as a portion of national revenue; not much more. When the Liberian government neglects to train and deploy capable Liberia professionals to the IMO and in the offices of the agency around the world, the foreign agents will naturally have a field day structuring system to cater to their own profits. In the fifty-two years of relationship with Liberia, the IRI and its affiliate companies underwent several corporate transformations. By the 1990s, Archibald Stewart became head of ITC and established a peculiar international network of companies, unprecedented in the history of open registry shipping. The International Registries, Inc. (IRI), the Marshall Islands, Maritime and Corporate Administrators Inc.(MIMCA), the Trust Company of the Marshall Islands, Inc. (TCMI), the Administrative Control Services Inc. (ADCON) and DUNOON were companies formed and operated by Stewart and his associates, in addition to ITC, to administer the Liberian and Marshall Islands registries simultaneously.

All the companies, including ITC, operated from the same office and bore the identical address at 11495 Commerce Park Drive, Reston, Virginia 22091 (RL vs. IRI), paid for from proceed from the Liberian tonnage and corporate taxes.  This is possible when the only interest of the Flag State, Liberia, is the annual remittance which is calculated as gross revenue from corporate and tonnage taxes minus operating and other expenses, minus 20% agency fee. It becomes more interesting when the Flag State, Liberia, does not know or is not interested in the intricacies of how many and what types and sizes of ships constitute the registry or what actual maritime services are being provided over the accounting period, etc. etc. The Flag State, Liberia, has showed little interests in leveraging other opportunities for technical training of its nationals for employment onboard vessels, or sourcing opportunities for procurement and other services for its small businesses related to the huge fleet under its national flag.

Flag of Registration

By now you may have noticed that no mention has been made about the performance of the technical maritime duties by the agents. As a matter of fact, both agents, IRI and LISCR have done excellent by international standards in the execution of their delegated functions. The Liberia Ship Registry, although an open registry, is among the most respected in the industry both for adherence to the relevant international conventions and response to the needs of the ship-owners. It is, however, time for a new thinking in how Liberia manages its assets, capabilities and natural advantages to enhance the prosperity of the larger part of its small population. To quote Edward Stettinius seventy years ago, “…it was not necessary for Liberians to live poorly.”

To be simplistic, the most certain element of progress is ownership. For any family, community, organization or country to progress, it must own up to its existence and advancement. Liberia has been slow to own up to its existence and as such has continued to depend, both implicitly and explicitly, on the action of others for its existence and advancement. Our marine resource is our most abundant and certain resource base. But it must be harnessed to bring value to our country. We have been blessed with 350 miles of coastline and 70,000 square nautical miles of ocean resources, mostly untapped. Our maritime policy is narrowly focused on ship registry which in the large scheme of things constitute a small part of the industry. The only obvious reason why Liberia has not evolved is because we have restricted our scope. The maritime industry is knowledge centric, that is why the quality of the training of Liberians leading the industry is cardinal to its viability.

The most important resource of any good functioning organization is its qualified people. The International Maritime Organization (IMO) is the best example of this reality. More than 90% of Permanent Representative of governments to the International Maritime Organization(IMO) are graduates of either the World Maritime University or other maritime institutions. Graduates of the World Maritime University hold senior positions in the industry, serving as top managers, ministers of transport, directors of shipping companies, heads of maritime academies, managing directors of seaports and officers in navy, coast guard, merchant marine vessels, as well as representing their home countries at international forums and organizations. The Secretary General of the International Maritime Organization (IMO), Kitack Lim from the Republic of South Korea, is a Maritime Administration graduate of the World Maritime University (WMU).

Between 2006 and his election to the position of Secretary General of the IMO in 2016, he served as Director General of the Maritime Safety Bureau of the Ministry of Land, Transport and Maritime Affairs (MLTM), then as a Senior Maritime Attaché at the Embassy of the Republic of Korea in London and led all IMO work for the Republic of Korea, serving as a Permanent Representative to IMO up to August 2009. Following that, he was re-appointed Director General for Maritime Safety Bureau (MLTM). In March 2011, Mr. Lim was appointed Commissioner of the Korean Maritime Safety Tribunal (KMST) and in July 2012, he assumed the position of President of Busan Port Authority, a position he served until his country submitted his name into contention for the position of Secretary General of the international Maritime Organization (IMO) in 2016. All the other contenders for the position were also graduates of the World Maritime University (WMU).

Leadership at the Liberian Maritime Authority, Liberia Maritime Training Institute, positions for Liberian nationals in LISCR, Permanent Representative to the IMO in London, the National Port Authority, designated national positions in port concessions including APM Terminals and any positions reserved for Liberians in International Maritime Organizations (IMO) and other conferences must be filled by Liberians who have acquired the requisite training in Maritime Affairs and Maritime Law from the World Maritime University (WMU), International Maritime Law Institute (IMLI), Regional Maritime Institute in Ghana and other maritime training institutions around the world, if our country is to take advantage of the unlimited opportunities for growth, employment and wealth creation in this lucrative sector. Maritime is a specialized industry, but it is also a conservative institution that gives value to its affiliates.

Liberia Maritime

This work represents a direct appeal to the President-Elect George Mannah Weah and his team as they assume leadership of Liberia. The Maritime industry is one of the few industries that has the potential to provide the much-needed economic relief that is being demanded by our people. That relief has its best chance of reality with the industry in the hands of our best trained nationals and their international network of colleagues willing and able to collaborate for Liberia’s advancement. I submit the names and qualification of the following maritime trained experts for the consideration of the new government for leadership in the Liberia Maritime Authority, Liberia Permanent Representative to the IMO, LISCR, Liberia Maritime Training Institute, Liberia National Port Authority and Liberia Coast Guard.  These are the names of our maritime experts available locally.

NO. NAME SPECIALIZATION GRAD.YEAR
International Maritime Law Institute (IMLI)
1. Margaret Ansumana Master of Law / International Maritime Law 1998
2. Jeffrey George Master of Law / International Maritime Law 2008
3. Isaac Lysor Jallah Master of Law / International Maritime Law 2010
4. Nya Sannagon Gbaintor Master of Law / International Maritime Law 2012
5. Adolphus Dorwoan Karnuah II Master of Law / International Maritime Law 2013
World Maritime University (WMU)
1. Lamii A. Kromah Msc. General Maritime Administration 1985
2. Simond Raymond Bruce, Sr. Msc. Maritime Safety Administration (E) 1985
3. G. Richie Greenfield Msc. General Maritime Administration 1987
Nyepan J. Bropleh Msc. General Maritime Administration 1987
Jefferson C. Moore Msc. General Maritime Administration 1987
G. William Sharpe Jr. Msc. General Maritime Administration 1988
James Dogba-Yassah Msc. Port & Shipping Administration 1989
Julius J. Gooding Msc. Port & Shipping Administration 1989
John Wynston Stewart Jr. Msc. Port & Shipping Administration 1990
Lawrence Dehniah Barchue Msc. Maritime Education & Training 1991
Thomas Kpardeh Wilson Msc. Port Management 1997
Joyce Lucretia Reeves-Woods Msc. Port Management 1998
Yvonne Kaulah Clinton Msc. Maritime Safety Administration 1998
Charles A. Gono, Jr. Msc. Maritime Safety & Environnemental Protection 1999
Jebeh Paasewe Msc. Port Management 1999
Romeo R. Clarke Msc. Port Management 2000
Cyrus L. Gray Jr. Msc. Shipping Management / MS Logistics Project Mgmt 2000/2006
Alvin N. Jones Msc. Port Management 2000
Julius N. Nyangbeh Msc. Port Management 2000
Amos Lasannah Zanwonjah Msc. Port Management 2000
John F. Harvey Jr. Msc. Maritime Education & Training 2008
Jerry Suakollie Mulbah Msc. Maritime Safety & Environmental Administration 2010
Mohamed Lavalie Msc. Shipping & Port Management (SPM) 2012
Mulbah K. Yorgbor Jr. Msc. Maritime Education & Training 2014
Daniel Tarr Msc. Marine Environmental & Ocean Management 2014
Sheck Abdul Sheriff Msc. Marine Environmental & Ocean Management 2014
Matthew Opah Sulon Msc. Martime Safety & Environmental Administration 2014
Emmanuel Mezoh Dolakeh Msc. Martime Safety & Environmental Administration 2016
33. Charles Paul Vah II Msc. Maritime Law & Policy 2016
34. George Senator Siebo Msc. Maritime Law & Policy 2016
35. Grace M. Vaye Msc. Martime Safety & Environmental Administration 2017
36. Roger Mengistu Teah Msc. Maritime Law & Policy 2017
37 Herron Bledee Msc. Maritime Education & Training 2017
38. Emmanuel Mentee Redd Sr. Msc. Maritime Law & Policy 2017
39. Emma C. Metieh Glassco Msc. Ocean Sustainability, Governance & Management 2017
40. Debbie Porlee Cooper Msc. Martime Safety & Environmental Administration 2017
Regional Maritime University (RMU)
1. Abraham Attoh BSc. Port & Shipping Management
2. Abubakar Sheriff BSc. Marine Engineering
3. Ausgustine Manoballah MSc. Port & Shipping Management
4. Anthony T. Twe BSc. Electrical & Electronic Engineering 2008
5. Boersen Hinneh BSc. Port & Shipping Management
6. Fidel Dole Diploma, Port & Shipping Management
7. Daniel Tarr BSc. Electrical & Electronic Engineering 2008
8. Ddarius Diahn BSc. Port & Shipping Management
9. Donald Gwaikolo BSc. Marine Engineering
10. Emile S. Wollo BSc. Marine Engineering
11. Emmanuel Mezoh Dolakeh BSc. Electrical & Electronic Engineering 2008
12. Emmanuel Tony Doe BSc. Port & Shipping Management
13. Emmanuel Zawolo Sendolo BSc. Port & Shipping Management
14. Ernest Keleko Boakai BSc. Marine Engineering
15. Frederick Varnie BSc. Port & Shipping Management
16. Garnioe Kardoh BSc. Nautical Studies
17. Grace Maweaha Vaye BSc. Marine Engineering 2008
18. Phillip Samuels BSc. Electrical & Electronic Engineering
19. Julius Woodson BSc. in Marine Engineering
20. Mathias K. Bernard BSc. in Marine Engineering
21. Michael Toayen BSc. in Marine Engineering 2008
22. Okasa Bigboy Samah BSc.  Port & Shipping Management 2008
23. Oscar Tarpeh BSc. in Marine Engineering
24. Roger Teah Diploma, B.Sc., M.Sc.  Port & Shipping Management 2010
25. Samuel Gwyan BSc.  Nautical Studies
26. Samuel Torh Tugba BSc.  Nautical Studies
27. Smith Jallah BSc.  Nautical Studies
28. Spurgeon Clarence Capehart BSc.  Port & Shipping Management
29. Stephen Saliah Kowo BSc.  Port & Shipping Management
30. Tarnue Kpangbala BSc. in Marine Engineering
31. Mulbah Gayku Gweseh BSc. Electrical & Electronic Engineering 2009
32. Theophilus Yanford BSc.  Nautical Studies
33. Varnie Baffie BSc. Electrical & Electronic Engineering
34. Eric Bruce BSc. Port & Shipping

Management

2008
Author Cyrus M. Gray

Cyrus M. Gray

CYRUS L. GRAY, JR., MSc. MSc.

The Author is an International Transportation Expert of nearly 20 years with training, expertise and experience in Maritime and Civil Aviation in both the public and private sectors and the global logistics theater. He is author of two books and the Publisher of the Business and Public Policy Magazine, The New Liberian (www.newliberian.net)

Disclaimer: The views expressed herein are not necessarily endorsed by West African Journal Magazine