Why flag to New Zealand and cabotage
Benefits of flagging to New Zealand
New Zealand is a signatory to the Tokyo MOU and has a good reputation in the region, which is beneficial for ships trading internationally.
Ships operating on the New Zealand coast are subject to cabotage limitations. These are set out in Section 198 of the Maritime Transport Act. It is easier for a New Zealand ship operating on the coast to comply with these regulations. It also reduces the complexity of dealing with both Flag State and Port State requirements.
Maritime NZ’s Maritime Inspection Team is responsible for undertaking Flag State Inspections and ISM audits on New Zealand ships. Made up of former Master Mariners, Chief Engineers, Surveyors and Naval Architects, the team is committed to safe, secure, clean and sustainable New Zealand coastal shipping. The team and the wider Maritime NZ organisation work with operators of New Zealand ships in a way that adds value, is collaborative and takes a risk-based approach to ensuring high standards of regulatory compliance are achieved.
Coastal shipping cabotage requirements
Coastal shipping is the carriage, loading and unloading of passengers and goods from one New Zealand port to another New Zealand port. The only ships authorised to carry coastal cargo in New Zealand are:
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New Zealand ships
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foreign ships on demise charter to New Zealand-based operators
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foreign ships whose primary reason for being in New Zealand waters is to load or unload international cargo.
If none of these ships are available, the Minister of Transport can authorise any other ship to carry coastal cargo.
There are three alternatives for ships operating on the New Zealand coast:
1. New Zealand ships (New Zealand-flagged)
‘New Zealand ship’ means a ship registered under the Ship Registration Act 1992. It includes a ship that is not registered, but which is required or entitled to register, under that Act.
Registering on the New Zealand Ship Register and flagging to New Zealand gives the ship New Zealand sovereignty and makes it subject to the same legislative and regulatory requirements as a domestic ship. When that ship travels overseas, it has the protection of the New Zealand government.
2. Foreign ships on demise charter (Foreign flagged)
Under s198 of the Maritime Transport Act 1994 (MTA), a demise charter is where a New Zealand-based operator charters a foreign commercial ship for the purposes of coastal shipping. This operator has possession and control of the ship for the duration of the charter and is responsible for:
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health and safety on board the ship
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all environmental impacts of the ship resulting from the actions of the master or crew. For example, oil spills, damage in an accident
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the employment conditions of the crew. For example, pay, working conditions
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ensuring the ship’s safety standards comply with New Zealand law.
The operator may employ suitably qualified New Zealand crew, or foreign crew with certificates or qualifications recognised by Maritime NZ.
The operator must get approval from the Ministry of Transport before it can carry out coastal shipping with a ship on demise charter.
The ship owner is entitled to flag the ship to New Zealand for the duration of the demise charter, in which case it will become a New Zealand ship. (See point 1 above.)
3. Foreign ships wishing to carry out coastal shipping in New Zealand
There are some limited circumstances where a foreign-owned and foreign-flagged ship whose primary reason for being in New Zealand is to load or unload international cargo can carry coastal cargo in some limited conditions under s198(1)(c). These conditions include being on a continuous journey from a foreign port to another foreign port, with the carriage of coastal cargo being ‘incidental’ to its overall journey.
If these conditions do not apply, a foreign-owned and foreign-flagged vessel can seek an authorisation under s198(2) of the MTA to also carry out coastal shipping. The ship’s owner or operator must first apply to the Ministry of Transport for this authorisation.