San José, Costa Rica
From Jalapa we travel a thousand miles southeast, through the countries of Central America, and head to Costa Rica. The word that brings us here is one of the most peculiar on our list – and, admittedly, it’s a word that we could have stopped in Liberia, Honduras, or else carried on to Panama, to talk about. That’s because all four of these countries’ names are bundled together in the obscure maritime term Panlibhonco.
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Dating back to the 1950s, Panlibhonco is a seafaring and traders’ term for a so-called ‘flag of convenience’ – a somewhat shady practice whose recent origins date back to 1919, and the age of Prohibition in the United States.
Under a ‘flag of convenience’, the owner of a ship records a vessel in the registry of a country not his or her own. The ship then flies the ensign of this host country – known as its ‘flag’ nation – regardless of its geographical origins.
On the surface, that might not seem too scandalous a custom. But if that ‘flag’ country happens to have looser regulatory laws than that of the ship owner’s home country, then the implications (and, for that matter, motives) of a vessel using one of these ‘flags of convenience’ begin to become apparent. As the maritime registries of Panama, Liberia, Honduras and Costa Rica all happen to be among the most frequently used for precisely this kind of shady re-registering, it is these nations whose names have been ran together in the term Panlibhonco:
Since the end of World War II, shipping circles in the maritime countries have been watching with apprehension the increasing amount of merchant tonnage registered in Panama, Liberia, Honduras and Costa Rica (Panlibhonco), countries whose laws allow – and indeed make it easy for – ships owned by foreign nationals or companies to fly these flags.
The practice of ships flying false flags is an ancient one, although historically the motive behind it was less driven by trade and more the need to secure victory in battle: ships flying the flag of their enemy could ultimately sail unnoticed amid enemy vessels, before launching a more close-quartered, and therefore more devastating, attack.
As a means of evading trade laws, however, the merchants’ ‘flag of convenience’ is a much more recent invention. Its modern resurgence can be traced back to the USS Zafiro, a former collier and US Navy cargo ship that was reregistered in Panama in 1919 as the Belen Quezada, and used to transport alcohol into Prohibition America. Thus the Belen Quezada is credited with being the first modern vessel to fly under a flag of convenience, but it was by no means the last.
In the 1920s, many ship owners frustrated with the rising costs and increased regulation that followed the First World War began using flags of convenience to sidestep the most punishing maritime rules and protocols. As the practice grew, ever more countries around the world commenced their own open registries, attracted by the potential financial gains that an increase in trade could bring them. By the 1950s, the four nations bundled up in the name Panlibhonco had emerged as world leaders in this practice; by 1968 Liberia had surpassed even the UK as the world’s largest marine registry.
Today, it’s believed that around one fifth of the world’s flags of convenience – more than eight thousand vessels – are still registered in Panama, while in terms of deadweight alone some 40 per cent of the gross tonnage of all ships at sea is registered in either Panama, Liberia or, now outdoing Honduras and Costa Rica, the Marshall Islands. Whatever the current world rankings, it is under the name Panlibhonco that vessels like these, and the questionable flags they fly, continue to be known.
Speaking of Panama, it’s there that we’re heading to next, continuing our journey south by another three hundred miles or so, into the southernmost country in mainland North America.