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Govt reports suggest these incidents have shown that the abuse of Flags of Convenience (FoC) is not just a loophole but a deliberate strategy for profit at the expense of safety.
The MV Wan Hai 503 had 22 crew members on board — 8 Chinese, 6 Taiwanese, 5 Burmese, and 3 Indonesians. (X/@indiannavy)
India is facing significant ecological and social costs due to the mishandling of ships by third countries, government sources have told CNN-News18. Government sources have raised serious concerns following recent coastal accidents. The sinking of the MSC Elsa 3 in May 2025 and the MV Wan Hai 503 fire in June 2025 have highlighted significant flaws in the maritime system.
The fire on the MV Wan Hai 503 poses a severe risk to Indian coasts. Government reports suggest that these incidents have shown that the abuse of Flags of Convenience (FoC) is not merely a loophole but a deliberate strategy for profit at the expense of safety. Currently, 45 per cent of global tonnage sails under FoCs, creating a conflict between sovereign accountability and negligent convenience.
The MV Wan Hai 503, carrying 2,000 tonnes of fuel oil and 240 tonnes of diesel, is a significant oil spill threat. Government sources warn that a breach in the vessel could lead to a catastrophic spill, contaminating Kerala’s coastline from Kozhikode to Kochi during the monsoon season. Additionally, the ship has 157 containers of hazardous materials, including pesticides (Class 6.1), lithium batteries (Class 9), and flammable liquids (Class 3), posing risks of toxic cargo leakage. These substances could leach toxins into marine ecosystems and be carried ashore by monsoon waves, threatening fish stocks and coastal habitats. Already, 40–50 containers have fallen overboard and are drifting towards Kerala’s coast, sources said.
Government inspections have been criticised for being perfunctory, often relying on paperwork over physical checks. For example, the MSC Elsa 3 had 21 deficiencies noted in Rotterdam but was never declared unseaworthy. Inadequate risk profiling allows ships with repeated violations, like the MSC Elsa 3 with its flag-hopping history, to evade scrutiny. Although the Sea Cargo Manifest and Transshipment Regulations (SCMTR) of 2018 mandate digital manifests for hazardous goods, the MV Wan Hai 503 carried undeclared explosives among its hazardous cargo. Local authorities in Kerala were also criticised for failing to issue timely public advisories regarding the MSC Elsa 3’s calcium carbide cargo.
There are serious accountability gaps in the system, with FoC abuse being very common. According to government data, 45 per cent of global shipping tonnage is registered under Panama, Liberia, and the Marshall Islands, enabling regulatory evasion through lax oversight, tax avoidance, and weak labour enforcement standards. For instance, the MSC Elsa 3, which sank with 13 undeclared hazardous containers, was registered under the Liberian flag. Similarly, the Wan Hai 503 was Singaporean-flagged but owned by Taiwanese interests, with hazardous cargo misdeclaration suspected in the explosions.
FoC states often lack the resources for thorough investigations, delaying liability attribution and compensation. Liberia, for example, ignored India’s probe into the MSC Elsa 3 incident. FoC states like Panama, Liberia, and the Marshall Islands outsource vessel inspections to private agencies, leading to cursory checks and certification. The MSC Elsa 3, despite its 21 deficiencies, was never declared unseaworthy. The Wan Hai 503, carrying 157 containers of hazardous materials including undeclared explosives and lithium batteries, also exemplifies this issue.
These incidents reflect broader systemic problems, including the hiring of cheap, inexperienced labour to cut costs, sources point out. The Wan Hai 503’s crew, lacking training in hazardous cargo management, delayed fire containment efforts, leading to the loss of four crew members during evacuation and inadequate emergency protocols. The MSC Elsa 3’s underwater fuel tanks posed a significant oil spill risk affecting 200 km of coastline.
FoC states often avoid funding cleanups, shifting the burden to coastal states. Following these incidents, Kerala banned fishing, severely impacting communities during peak season and causing a 40% drop in tourism revenue post-Elsa 3 due to pollution fears. Furthermore, the MSC Elsa 3 criminal case remains stalled due to Liberia’s non-cooperation, while the Wan Hai 503 owners delayed sharing cargo manifests.
AIS manipulation is another issue, as FoC vessels often deactivate trackers to hide their locations. Government sources report that GPS jumps increased from 600 km in 2024 to 6,300 km in 2025, raising collision risks. Shadow fleets under FoCs like Panama are known to transport illegal goods, with 29 per cent of global vessels using FoCs to facilitate arms and drug smuggling.
The mishandling of ships by third countries under FoCs poses significant ecological and social risks to India, necessitating urgent systemic reforms and stricter regulatory oversight.
Group Editor, Investigations & Security Affairs, Network18
Group Editor, Investigations & Security Affairs, Network18
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