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24-Aug-2005
Last Edited

July 3, 2004 - Landlocked Mongolia takes to the waves (via Cambodia!)

James Brooke NYT
Saturday, July 03, 2004

ULAN BATOR, Mongolia Down an avenue named after Genghis Khan, up to the third floor of a Soviet-era government ministry building and down a creaking wooden hallway, its carpet frayed and faded with the dust and the sun of the steppes, one office door has a freshly minted sign: Maritime Administration.

In a one-room office, with computers, a fax machine at the ready and model ships for decor, two civil servants oversee the Mongolia Ship Registry, an international service that offers quite competitive fees and no restrictions on the ownership of any ship.

Mongolia, the world's largest landlocked country, with its capital almost 1,600 kilometers, or 1,000 miles, from an ocean, is the latest entry in the business of flags of convenience. With Mongolia's red, yellow and blue colors now flying on 260 ships at sea, this unlikely venture is part business, part comedy and part international intrigue.

"We earned the treasury about $200,000 last year," Bazarragchaa Altan-Od, head of the Maritime Administration, said, slightly tense for his first interview with the world press. "We have 20 to 30 new registrations every month. The number is increasing."

New international shipping security rules, which went into effect July 1, require that ships and ports adopt verifiable, uniform security plans. Intended to prevent hijackings of large vessels for terrorist attacks, the rules are promoted by the International Maritime Organization, a UN body with no enforcement powers.

The U.S. Coast Guard has said it will check compliance by boarding selected major ships approaching American ports.

It was an unexpected twist of fate that brought Mongolia, a nation of nomadic herders, to the high seas.

In the 1980s, a Mongolian university student known only as Ganbaatar won a scholarship to study fish farming in the Soviet Union.

But the state functionary filling out his application put down the course code as 1012, instead of 1013. As he later told Robert Stern, producer of a documentary on the Mongolian Navy, that bureaucratic error detoured him from fish farming to deep-sea fishing.

Upon graduation, he was sent to work with the seven-man Mongolian Navy, which patrolled the nation's largest lake, Hovsgol. Its lone ship, a tugboat, had been hauled in parts across the steppes, assembled on a beach and launched in 1938.

After the collapse of Communism here in 1990, Ganbaatar wrote Mongolia's new maritime law, which took effect in 1999.

The registry opened for business in February 2003. Perhaps to play down any negative connotations of being landlocked, the glossy color brochure of the Mongolia Ship Registry shows Mongolia surrounded on three sides by a light blue blob that, on closer inspection, turns out to be China.

The registry's international intrigue may be found in its management - and its management's relations with North Korea.

Sovereign Ventures, a Singapore-based classification company, handles the Mongolia Ship Registry, and Chong Koy Sen handles the business.

According to Lloyd's List, the maritime trade publication, Chong is a major shareholder in Korasia Shipping and Trading, the Cambodia Shipping Corp. and Sovereign Ventures. Korasia operates ships for North Korea and, through Sovereign Ventures, explores for oil and gas in North Korea.

Cambodia Shipping registered foreign vessels - many of them North Korean - for Cambodia, until 2002, when the French Navy seized the Winner, a Cambodian-flagged cargo ship, for cocaine smuggling.

The seizure, the latest in a series of mishaps for Cambodian-flagged vessels, prompted the Cambodian government to cancel its contract with Cambodia Shipping.

North Korea, which has revived relations in recent months with the ruling Mongolian People's Revolutionary Party, the former Communist party, plans to reopen its embassy here in the fall.

Vessels under the North Korean flag increasingly are watched around the world. Under the Proliferation Security Initiative, the United States and a dozen nations started last year to monitor North Korean vessels for illicit cargoes such as drugs, missiles or nuclear weapon fuel.

Here at the one-room office of the Maritime Administration, the cheerful calendars illustrated with pictures of tropical fish and coral were not enough to break the tension caused by a question about flagging ships from North Korea.

"Within international agreements, some countries have friendly relationships with Mongolia," Altan-Od said. He declined to specify where most registered vessels originated, but did note, "We have one to two American ships."

With or without North Korean vessels, critics say Mongolia is registering anything that floats and can pay the fee.

Mongolia "is indicative of the larger, growing trend of the weakening of the nation state on the high seas," William Langewiesche, author of "The Outlaw Sea: A World of Freedom, Chaos and Crime," a new book, said in a phone interview.

Over the last 25 years, he said, the use of flags of convenience has grown from a small portion of the roughly 40,000 large vessels at sea "to account for a large percentage of shipping worldwide, over half."

Critics say that safety is the victim of an international shipping system that leaves enforcement of international rules to countries that register vessels and to ports where they drop anchor.

For example, last Nov. 21, 13 Russian sailors were rescued from the Fest, a 40-year-old Mongolian-flagged ship loaded with logs that was sinking in the Sea of Japan. In 6-meter, or 20-foot, waves, the ship's main engine had failed.

And on Dec. 9, the Indonesian Navy seized the Mongolian-flagged MV Bravery Falcon because it had no documentation to prove that its load of 17,000 cubic meters, or 600,000 cubic feet, of tropical hardwood had been legally logged.

The New York Times